T R Flanagan Smash Repairs Pty Ltd v Jones

[1999] FCA 1324

FEDERAL COURT OF AUSTRALIA

T R Flanagan Smash Repairs Pty Ltd v Jones [1999] FCA 1324

No question of principle

T R FLANAGAN SMASH REPAIRS PTY LIMITED v BRUCE JONES
N 993 OF 1999

HELY J

20 SEPTEMBER 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 993 OF 1999

BETWEEN:	T R FLANAGAN SMASH REPAIRS PTY LIMITED Applicant
AND:	BRUCE JONES Respondent

JUDGE:	HELY J
DATE:	20 SEPTEMBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an application for an interlocutory injunction to restrain infringement of copyright which the applicant claims in certain works.  The subject matter of the interlocutory orders sought is the vehicle directory and the parts database as displayed in Annexures A and B to the affidavit of Terrence Rodney Flanagan, sworn 7 September 1999 (to which I shall refer as “the material”).  The material comprises both a motor vehicle directory and a list of motor vehicle parts.  It is expressed as a compilation of words, numbers and alphanumeric codes which is stored in electronic form. 

2. The first issue is whether the applicant has established a prima facie case that copyright subsists in the works in question. It will do so in terms of s 32(1) of the Copyright Act 1968 (“the Act”) if the material is original and if it consists of a literary work. The requirement of originality is directed not to ideas, but to their expression. Originality is a matter of degree, depending upon the amount of skill, judgment or labour that has been involved in making the relevant work. The authorities establish that the level of skill, labour or judgment involved in producing a compilation, or lists of products with names and prices, could attract copyright protection for the material in issue.

3. In the present case, the form in which the material is expressed was developed by the applicant.  The expression of the material, on the evidence so far filed, is the product of some skill, judgment and labour.  The material has been selected, is organised into categories; each item listed is designated a code.  Vehicle part numbers and price lists are provided.  The information is voluminous and is arranged in a particular manner suited to the purpose for which the information is compiled.

4. Whilst the material contains the names of vehicles and parts in which copyright would not belong to the applicant, it also contains novel codes, thereby combining existing and new information in a unique way.  It follows that the applicant has established a prima facie case that its material is original in terms of s 32(1) of the Act.

5. Section 10(1) of the Act, defines a literary work so as to include "a table, or compilation, expressed in words, figures or symbols (whether or not in a visible form)". The material fits this description, it being a compilation expressed in words, figures and alphanumeric codes stored in electronic form. I am therefore satisfied on a prima facie basis that copyright subsists in the material.

6. The second question is whether the applicant has established, to the requisite degree, that it is the owner of the copyright in that material.  The evidence is that the applicant is the author of the material and therefore prima facie, it owns the copyright in the material.  The applicant has granted to Auto-Quote Australia Pty Limited, a licence to enter into licence agreements permitting approved licensees to use the Auto-Quote software upon certain conditions.

7. The evidence establishes that there are currently about 1,000 licensed users of the Auto-Quote system.  One such licensee is Wilson's Holden Pty Limited, which on the applicant's evidence, executed a document, styled “disclaimer of warranty” which contains the following stipulations:

   "The software described in this Manual is furnished under a license agreement or nondisclosure agreement and is of a confidential nature the copyright which is owned by Auto-Quote.  The software may be used or copied only in accordance with the terms of that agreement.

   It is against the law to photocopy this Manual or to copy the software in this package on magnetic tape, disk, or any other medium for any purpose other than backing up your software."

8. Licence agreements have been executed with other users in similar and different form, but none of the licence agreements introduced into evidence in any sense abrogates the prima facie ownership on the part of the applicant of the copyright in the material.

9. The third question is whether there has been an infringement of the copyright. Copyright is infringed if any act comprised in the copyright is done by a person who, not being the owner of the copyright, is without the licence of the copyright owner: s 36(1). The acts comprising the copyright in a work are listed in s 31 of the Act, and relevantly, s 31(1)(a)(i) provides that copyright in a literary work includes the exclusive right to reproduce the work in a material form. Section 10(1) defines material form to include:

   “... any form (whether visible or not) of storage from which the [relevant] work ... can be reproduced.”

10. It seems to me that the material introduced by the applicant shows a prima facie case of reproduction by the respondent of the material.  Indeed the respondent filed an affidavit which really admits that he "converted/transferred" the material in which the applicant has copyright.  That affidavit also establishes that the respondent intends to continue to do so.  The affidavit and the submissions which Mr Jones put on his own behalf indicates a belief on the part of Mr Jones in the lawfulness of his conduct because he has been authorised, for example, by Colin Wilson to conduct the conversions and/or transformations which he has effected.

11. The problem is that if those conversions and/or transformations infringe the applicant's rights, no licensee such as Colin Wilson is entitled to authorise an infringement of the applicant's proprietary rights.  Accordingly, it seems to me that Mr Jones has acted on a misconception of the legal position.  What he has done involves the reproduction of material in which the applicant has copyright without the licence of the applicant.  That is an infringement of the copyright.  Prima facie an interlocutory injunction should go to restrain that conduct, subject to balance of convenience considerations.

12. Before turning to those considerations, I should also add that there is some material in an affidavit of Mr Flanagan of 17 September 1999 which suggests that the respondent has provided copies of the applicant's parts database to persons not licensed to use the Auto-Quote material.

13. The final question is the balance of convenience.  It seems to me that the applicant has established a strong prima facie case of infringement.  The balance of convenience favours the applicant.  The value of the applicant's copyright in the material is likely to be diminished if an injunction is not granted.  In addition the applicant is unlikely to be compensated by damages if it is ultimately successful in its application.  The respondent has either not commenced to trade in his new product which utilises the applicant's material, or, if he has commenced to do so, it is a comparatively recent development.  That means that the effect of the injunction will be substantially to preserve the status quo.  For those reasons, I think that the applicant is entitled to interlocutory relief.

14. Upon the applicant giving the usual undertaking as to damages, I order that the respondent, whether by himself, his servants or agents, be restrained until the hearing of these proceedings or further order from reproducing, publishing or authorising the reproduction or publication of the applicant's Auto-Quote Vehicle Directory and the applicant's Auto-Quote Parts Database.

15. I think that this outcome is consistent with the approach adopted by Mason J, as he then was, in Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39, where his Honour said at page 58:

    “Infringement of copyright is ordinarily restrained by injunction, and this because equity has traditionally considered that damages are not an adequate remedy for infringement.  Of course this does not mean that damages are an inadequate remedy in every case or that an injunction should be granted to restrain every infringement.  But it does mean that, in general, the plaintiff will be more effectively protected by an injunction which stops the defendant from copying than by damages or an account of profits.” 

16. That is particularly so in a case such as the present, where the respondent has stated in open court that he has little in the way of assets or in way of income. 

17. I direct that the applicant file a statement of claim, and any further evidence on which it wishes to rely at a final hearing of this matter by Wednesday, 29 September 1999.

18. The applicant has sought an order that it be permitted to issue a notice to produce returnable this Friday compelling production of the operating program employed by the respondent.  I am not prepared to make an order to that effect at this stage of the proceedings or on the basis of the evidence which is currently before me.  It seems to me that the program, the production of which is sought, lies outside the issues as currently formulated in these proceedings.  If that position changes once a statement of claim has been filed then so be it, and I will reconsider the matter then, or if it is said that there is some other basis, such as preliminary discovery, upon which production of the program should be ordered, then an appropriate application can be formulated and filed, and if formulated and filed I will consider it.

19. It would be a necessary part of any such application that there be a precise formulation as to the basis upon which it is said that the applicant is entitled to production of the program, and it should be accompanied by a description of what measures are proposed to preserve the confidentiality of anything which is produced in response.  I am not prepared simply at the request of the applicant, without any clear articulation of the basis on which it says it is entitled to production of this material, to order that material which is prima facie confidential in character should be produced for inspection by a competitor.

20. Mr Jones has appeared unrepresented.  I have done my best to explain to him at least in outline the nature of the procedures which are applicable in this Court.  He has brought forward a document called "Short Minutes of Order" which details claims which he has told me that he wishes to make.  Included in those claims are three claims headed "Defamation Incident  #1", "Defamation Incident #2" and "Defamation Incident #3".  As currently expressed, those claims are claims for defamation, and Mr Gelbart, counsel for the applicant, has submitted that if those claims are to proceed they should be pleaded by way of cross-claim, and he should have an opportunity of raising, if he considers it appropriate, the issue as to whether this Court has jurisdiction to entertain those claims as well as any other matters upon which he wished to rely in defence.

21. I think that that is a well-grounded claim, and what I propose to do is to direct that if Mr Jones wishes to persist with his three defamation claims, then on or before 29 September 1999 he should file and serve a cross-claim in which each of those claims is pleaded.

22. The issue of the accrued jurisdiction of this Court is a complicated one.  It is one which I really could not expect any layman to come to grips with properly.  There are very real problems in working out just what the ancillary jurisdiction of the Court is, and it certainly does not have, what might be called, direct or original jurisdiction in matters of defamation.  I could only determine defamation claims if they were part of the accrued jurisdiction of the Court, having regard to the scope of the matter.  Once again I can only urge Mr Jones to get some legal advice if he can, because he will surely be in need of it if one has to come to grips with issues such as the extent of the accrued jurisdiction of this Court in relation to cross-claims.

23. The document which I have referred to as "Short Minutes of Order", in addition to raising the three defamation claims, outlines a further claim based upon the installation by Mr Jones of his FoxQuote program on the applicant’s computers.  I gather from evidence which Mr Jones filed on 17 September 1999 that the case which he wishes to put is that this program was installed on the applicant’s computers for a limited purpose and for a limited time, each of which has now expired.  On 6 April 1999 he wrote to computer programmers employed by the applicant notifying them that the FoxQuote program should have been deleted from all Auto-Quote computers by 29 November 1998, and counselling them against reproducing matter included in that program or copying ideas derived from the program.

24. In response to that claim, Mr Gelbart stated on behalf of the applicant in Court this morning that if the FoxQuote program has not already been deleted from those of the applicant's computers with respect to which it was installed, it will be deleted forthwith, and any hardcopy reproductions of the material contained in that material will be delivered forthwith to Mr Jones.

25. I am not prepared upon the basis of the materials before me to make any further orders at this particular point in time in relation to the FoxQuote program.  I direct that if Mr Jones wishes to propound a claim in relation to the installation of that program, he should file and serve a cross-claim by Wednesday 29 September 1999 setting out the precise claim which he wishes to make, because again that may raise issues as to the jurisdiction of this Court and the extent of its accrued jurisdiction.

26. That I think covers all of the matters which have been the subject of agitation this morning.  The only other order which I propose to make is that I direct that the matter be relisted before me at 9.30 on Tuesday, 5 October 1999 for further directions with a view to carrying the matter forward to a final hearing.

    (Mr Gelbart seeks an order for the costs of the motion.)

27. I am not prepared to make an order for costs against Mr Jones at this stage of the proceedings.  I order that the costs of this application be reserved.

    (Mr Jones seeks orders in terms of sections C and D of the Short Minutes of Order.)

28. I am not prepared to make any orders in relation to details of claim C.  It does not identify any cause of action or claim for relief, and I am not prepared to make any order in terms of details of claim D.

    (Mr Jones seeks production of the original employment contract.)

29. An issue has arisen as to whether annexure G to the affidavit of Mr Flanagan of 7 September 1999 is a true copy of an original document executed by Mr and Mrs Jones, or whether it has been cobbled together in such a way that it is not in truth their document.  I am not sure that that issue will necessarily lead anywhere so far as the resolution of these proceedings is concerned, but nonetheless I propose to direct that on or prior to 29 September next Mr Jones be permitted to inspect the original of that document at a time and place to be notified to him by the applicant's solicitors.  I think probably the most convenient place for inspection to take place would be at the office of the solicitors for the applicant.

    (Mr Jones seeks production of the document to the Court.)

30. I will direct that the original of that document be produced to the Court at the directions hearing on 5 October 1999.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.

Associate:

Dated:             23 September 1999

Counsel for the Applicant:	A Gelbart
Solicitor for the Applicant:	Colin Daley Quinn
Counsel for the Respondent:	The respondent appeared in person
Date of Hearing:	20 September 1999
Date of Judgment:	20 September 1999