Vanwake Investments Pty Ltd v New-Stat Nominees Pty Ltd
[2005] QDC 57
•24 March 2005
DISTRICT COURT OF QUEENSLAND
CITATION:
Vanwake Investments Pty Ltd v New-Stat Nominees Pty Ltd & Ors [2005] QDC 057
PARTIES:
VANWAKE INVESTMENTS PTY LTD
Plaintiff
v
NEW-STAT NOMINEES PTY LTD
First Defendant
and
JOHN GRAY
Second Defendant
and
ROWE SHOPFITTERS PTY LTD
Third Defendant
and
ADRIAN CLIVE ROWE
Fourth Defendant
and
ROWE PTY LTD
Fifth Defendant
FILE NO/S:
D4221/2000
DIVISION:
PROCEEDING:
Trial
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
24 March 2005
DELIVERED AT:
Brisbane
HEARING DATE:
24 – 27 May 2004
JUDGE:
McGill DCJ
ORDER:
Judgment that the third, fourth and fifth defendants pay the plaintiff $84,480.
CATCHWORDS:
COPYRIGHT – Infringement – plan of shop – whether reproduction – whether copying – damages – measure of
Copyright Act 1968 s 115.
Archer Mortlock Murry & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278 – applied.
Bailey v Namol Pty Ltd (1994) 30 IPR 147 – followed.
Designers Guild Ltd v Russell Williams (Textiles) Ltd [2003] 1 WLR 2416 - considered.
Dixon Investments Pty Ltd v Hall (1990) 18 IPR 490 – followed.
S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 – applied.
Tamawood Ltd v Henley Arch Pty Ltd (2004) 61 IPR 378 – considered.COUNSEL:
L D Bowden for the plaintiff
D J Kelly for the third, fourth and fifth defendantsSOLICITORS:
Creswicks Lawyers for the plaintiff
Tucker & Cowen solicitors for the third, fourth and fifth defendants.
This is an action for damages for infringement of copyright. The plaintiff and the fifth defendant are shopfitting companies both of which specialise in fitting out newsagencies.[1] The third defendant is a company associated with the fifth defendant, which at the relevant time manufactured product for the fifth defendant to use in fitting out customers’ premises, and held the builder’s licence: pp.271, 370. The fourth defendant was a director of both companies, and personally controlled the newsagency fitout business: p.270. In the latter part of 1999 the third or fifth defendant fitted out a newsagency in premises leased by the first defendant, a company controlled by the second defendant Mr Gray. By the time of the trial, the first defendant was in liquidation and the second defendant was bankrupt: p.3. The trial proceeded against only the third, fourth and fifth defendants.[2]
[1]As to the plaintiff, p.30; as to the fifth defendant, p.270. This was admitted on the pleadings: statement of claim paras 2, 6B; defence para 1(a).
[2]I shall for convenience refer to them as “the defendants”.
The plaintiff’s allegation is that the plans prepared by the fifth defendant for the first defendant’s newsagency were copies of earlier plans for that newsagency drawn for the first defendant by the plaintiff; alternatively, the plans drawn by the fifth defendant and the newsagency as constructed by the third defendant were substantial copies of the plaintiff’s plans prepared for the first defendant, or the plaintiff’s plans of another newsagency previously constructed by it, at Strathpine. The plaintiff claimed damages for breach of copyright including additional damages under s 115(4) of the Copyright Act 1968 (Cth); in the written submissions on its behalf the plaintiff elected to recover damages as opposed to seeking an account of profits.
Jurisdiction
The Copyright Act 1968 confers jurisdiction expressly on the Federal Court with respect to actions under Part 5, dealing with remedies: s 131C. There is nothing in the wording of that section which suggests that jurisdiction is intended to be exclusive. Section 131A contains a provision dealing with the jurisdiction of the Supreme Court of a state or territory under Part 5, and s 131B dealing with appeals speaks of a decision of a court of a state or territory under Part 5. Plainly therefore the Act does not contemplate that the jurisdiction of the Federal Court under Part 5 will be exclusive.
The Act does not expressly confer jurisdiction on the District Court to deal with an action for damages for breach of copyright; however, s 39(2) of the Judiciary Act 1903 confers jurisdiction on the several courts of the states within the limits of their several jurisdictions whether as to locality, subject matter or otherwise, in all matters in which the High Court has or can have original jurisdiction, except as provided in s 38, which does not apply here. It seems to be generally accepted that the effect of this provision is that a court such as the District Court of Queensland can entertain an action for breach of copyright, at least when the only relief sought is payment of damages or another sum of money: see Halsbury’s Laws of Australia, “Copyright”, para 240-2760; Lahore “Copyright and Design” volume 1 para 36455. It was not submitted on behalf of any of the defendants that this court lacks jurisdiction. In these circumstances, I accept that I have jurisdiction to entertain the action.
The Strathpine newsagency
For practical purposes the story begins when a company controlled by Mr and Mrs McFarlane secured a lease on premises at Strathpine which was about twice the normal size of a newsagency at that time, and invited the plaintiff and the fifth defendant to submit plans for fitting out: p.165. There were a couple of broad requirements Mr McFarlane had, but essentially he gave the shopfitters a free hand on design. The plaintiff submitted a plan, drawn by Mr Cameron McConaghy, (Exhibit 3),[3] and the fifth defendant a plan.[4] Mr McFarlane preferred the plaintiff’s plan, but gave the fifth defendant the opportunity to provide a further plan or plans, which opportunity was taken: Exhibit 58. Nevertheless Mr McFarlane still preferred the plaintiff’s plan (p.285), and essentially that plan was adopted.
[3]It is not entirely clear whether this is the plan submitted initially (p.32) or the final, as constructed version of the plan (p.33).
[4]This plan is not in evidence: pp.289, 290.
That is not to say that what was ultimately constructed was precisely in accordance with the initial design, or that everything in that design was the original creation of Mr McConaghy. Like all newsagencies the shop was also to operate as an agent for Golden Casket, and therefore had to comply with the requirements of that organisation in relation to the counters and artwork. These however were (apart from signs which would be copyright) essentially a form of distinctive style, and something which could obviously be applied to a wide variety of shop layouts. The proposed newsagency was one of a group of associated newsagencies operating under the “Nextra” name, and that group had some distinctive logos and artwork which were to be incorporated into the design.[5] The landlord of the shopping centre required that the design be submitted to it for its approval, and as Mr McFarlane said (p.166): “Westfield are notoriously difficult with a shopfitting and no matter what you submit to them they want higher and higher standards. There were some difficulties.” Apparently Westfield’s architect suggested a particular design company, and an employee of that company, Ms McBride, became involved.
[5]B McFarlane p.169. See also Merchant p.235, who also claimed the sail soffits for Nextra.
The defendant submitted that the store had been essentially designed by her rather than by Mr McConaghy, but that was plainly not the case. I do not intend any adverse comment on Ms McBride’s artistic ability, but in my opinion her contribution to the layout and general presentation of the newsagency as constructed was essentially superficial and inconsequential. Insofar as she provided anything, it was in the form of ideas, but copyright is not concerned with the protection of ideas, but rather with the protection of a specific expression of an idea.[6] The particular expression of any ideas contributed by Ms McBride in the final version of the design for the Strathpine newsagency was produced by Mr McConaghy on behalf of the plaintiff. Accordingly the plaintiff owned the copyright in the design of that store.
[6]Archer Mortlock Murry & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278 at 283; Designers Guild Ltd v Russell Williams (Textiles) Ltd [2003] 1 WLR 2416 at 2422.
After the Strathpine shop had been fitted out and was operating,[7] on one occasion while Mrs McFarlane was working in the office there, which had a view of the shop, she saw Mr Rowe and Mr Mather, who operated a newsagency at Mt Ommaney, at the front of the shop: p.171. One of them had a tape measure and was measuring somewhere at the front of the shop. They were there for some time, and had not sought her permission to do what they were doing, but just turned up at the shop. She did not challenge them, but told her husband that night: p.172. He was unhappy about this and telephoned Mr Rowe to complain: p.163. He said (p.164) that Mr Rowe’s response was: “Well, I’m sorry about that, I thought that Mather might have got the approval.”
[7]It received some favourable publicity: Exhibit 49. See also Rowe p.292.
In cross-examination of Mr McFarlane it was suggested that Mr Mather had made arrangements for him and Mr Rowe to inspect the store, which was firmly denied: p.168. It was further suggested that when Mr Rowe attended the store he met Mr McFarlane with Mr Mather, and that Mr Mather introduced Mr Rowe to Mr McFarlane: p.168. That was also denied; Mr McFarlane said that he was not there on the occasion when Mr Rowe and Mr Mather were at the store. Bearing in mind that it was common ground that the fifth defendant had done work for Mr McFarlane previously, and indeed Mr McFarlane spoke of earlier conversations with Mr Rowe (p.165), it would not have been the case that Mr Mather would have been introducing Mr Rowe to Mr McFarlane at that time. Mr Mather gave evidence which was consistent with that of Mr McFarlane.[8] Mr Rowe gave evidence that Mr Mather had asked him to develop his shop along the lines of the Strathpine newsagency, to follow the theme lines the same as Strathpine: p.292. Mr Rowe said that he rang Mr McFarlane and Kevin Mather rang Mr McFarlane, and he welcomed us into his shop: p.297. He said we went to his shop and we shook his hand: p.298.
[8]Maher p.223. He was called by the defendants for other reasons.
The evidence of Mr Rowe is clearly inconsistent with the evidence of Mr and Mrs McFarlane. They gave their evidence in a straightforward and natural way. The fifth defendant had done other work for Mr McFarlane, before the Strathpine store and, in early 2000, at another store: pp.164, 282. In relation to this conflict, I prefer the evidence of Mr and Mrs McFarlane to the evidence of Mr Rowe.
Mr McFarlane said that he subsequently saw Mr Mather’s newsagency at Mt Ommaney, and said that it was very similar to the store at Strathpine: p.164. That was also the evidence of Mr McConaghy. The plaintiff’s plan for the Strathpine store is Exhibit 3, and the fifth defendant’s plan for the store at Mt Ommaney is Exhibit 67.[9] Photographs of the Strathpine store are Exhibit 4, and photographs of the Mt Ommaney store are Exhibits 70, 88 and 90. I shall deal subsequently with some of the matters which need to be borne in mind when considering whether there are relevant similarities between two plans, or for that matter two stores. It is not necessary for me to make any finding about the Mt Ommaney store. Although there are some similarities between the plans, particularly in the shape of the main counters, overall the plans are quite different.
[9]Dated 19 April 1999. This was after the Strathpine store opened: p.223.
Plaintiff’s dealings with Mr Gray
The plaintiff did some other work for Mr Gray in the late 1980’s: p.31. Mr Gray contacted Mr McConaghy in February 1999 with some preliminary enquiries in relation to a fitout. At an early stage Mr McConaghy showed Mr Gray and his wife the store at Strathpine: p.37. Subsequently a number of plans were prepared and provided to Mr Gray; the first one that went into evidence was Exhibit 5, apparently faxed on 3 February 1999. A bundle of subsequent plans, showing different layouts, prepared by Mr McConaghy and forwarded to Mr Gray, became Exhibit 6: p.40. This also included some shopfronts and elevations. At some stage the plaintiff received, either from Mr Gray or from the architects for the shopping centre, a plan showing the space available for the newsagency; a similar plan became Exhibit 8.[10]
[10]This was actually the one obtained by the fifth defendant.
A number of drawings were prepared by the plaintiff for Mr Gray, with various different layouts, as he came up with different ideas about how he wanted the store arranged.[11] Mr McConaghy found this a frustrating process, and regarded Mr Gray as a difficult client.[12] By July it seemed to Mr McConaghy that a final plan had been achieved, and something he described as a final plan[13] was forwarded by the plaintiff to Mr Gray under cover of a letter dated 12 July 1999: Exhibit 16. That also included a design consultation agreement for Mr Gray to sign, and a form of contract to do the work (a standard form provided by the Australian Shopfitters Association Inc) which had been executed under the common seal of the plaintiff, but was otherwise uncompleted. The letter reveals that the plaintiff at that stage was working towards fitout dates from 7 August to 26 September 1999.
[11]Apart from Exhibits 5 and 6, others in evidence were Exhibit 7, Exhibit 9, Exhibit 11, Exhibit 12, Exhibit 13, Exhibit 14, Exhibit 15, and Exhibit 54.
[12]McConaghy p.36; he also had to deal with a Melbourne architect retained by Mr Gray, which he also found unhelpful: p.61. Mr Griffin, from the Nextra newsagency group, who was also involved in the design of the Mackay store over a long period of time, said Mr Gray was very difficult to deal with: p.133. Even Mr Rowe described him as very demanding, and “a little bit difficult:” p.310; “difficult to deal with:” p.371.
[13]To some extent this was an exercise in getting Gray to commit to a particular plan: p.62. The plaintiff’s concern appears to have been that it was applying considerable resources to this project without any assurance that it would be proceeding.
There was a fax from Mr Gray on 16 July, which did not directly respond to the letter but sought further information: Exhibit 17. In response the plaintiff’s office manager declined to give any measurements of particular fixtures until the design agreement had been signed and returned: p.64, Exhibit 18. However some additional information, mainly the dimensions of display racks, was provided by fax on 20 July 1999: p.68, Exhibit 19.
On 27 July 1999 the plaintiff forwarded a quotation for the construction of the newsagency for a total price of $367,743: Exhibit 20. A good deal of detail was provided.[14] This quote was based on the plan Exhibit 21: p.73. A follow up letter on 2 August 1999 seeking confirmation of the fitout works was sent: Exhibit 23. Concern was expressed about being able to do the work in the period 7 August to 26 September. There was a reply from Mr Gray on 3 August 1999 which said among other things that the project requires “much more detail than has been provided by your office so far”: Exhibit 24. On 6 August there was a further letter from him seeking to arrange a meeting on 9 August, and again seeking more detail: Exhibit 25. That followed discussions with Mr Roger McConaghy, another director of the plaintiff: p.118.
[14]Some work was not included; an explanation for some of the exclusions is at p.70.
Prior to the meeting on 9 August Mr Gray said that the fitout costs were too high: p.74. There was some discussion about changes which would make the job cheaper: p.76. He was at that stage still pressing to have the job done quickly. Following that meeting a revised quote was sent to Mr Gray, Exhibit 26, for a total of $315,967: p.77. This was based on a modified plan, Exhibit 22: p.74. Mr McConaghy said that Mr Gray accepted this quote and asked for a contract to be sent to him, and that was done: p.78. Mr Gray’s reply in a letter of 11 August 1999 proposed very extensive amendments to the standard form of fitout contract: Exhibit 27. The further quote was said to be subject to further investigation, some further details were being sought, and a meeting on the site was proposed on 13 August 1999. There was a further conversation on the telephone on 18 August 1999 between Mr Roger McConaghy and Mr Gray, which did not result in an agreement being reached for the work to be done. Mr Gray was prepared to agree to the plaintiff’s terms of contract, but wanted the job finished in three weeks, which the plaintiff could not do: pp.119, 127. Mr Roger McConaghy then said that in those circumstances the plaintiff would not proceed with the project. Although Mr Gray was still willing to have the work done, he wanted it to happen in a way not acceptable to the plaintiff. In the circumstances, it is understandable that the plaintiff was not willing to proceed further.
Mr Gray sent a further fax following this conversation (Exhibit 28) asking the plaintiff to reconsider its position to withdraw and request the plaintiff to “proceed with the job on the current terms.” It is certainly not clear to me what was meant by that, but presumably it included the term as to time specified by Mr Gray, which was not acceptable to the plaintiff.
There was a further conversation on 18 August between Mr Gray and Mr Roger McConaghy: p.119. Again Mr Gray asked that the plaintiff do the job. There was some discussion about the timeframe. The plaintiff was willing to do the job (apparently on its terms) only if the work was scheduled for completion four weeks later than Mr Gray was seeking, and this was not acceptable to him. He claimed that the landlord required the work to be done sooner, but Mr McConaghy telephoned the project manager for the landlord, and was able to negotiate a four week delay so that the plaintiff would be able to do the job: p.120. However, on 19 August Mr Gray informed Mr McConaghy that the job was off: p.120. In fact he proceeded with the work using the defendants.
Contact between Gray and Rowe
It is not clear when Mr Gray first made contact with Mr Rowe,[15] but they met on 23 August 1999, at the fifth defendant’s premises in Brisbane. Prior to this there were at least two, and possibly three calls from Mr Gray: pp.311-3. The calls were prior to 21 August 1999, as on that day Mr Gray wrote to Mr Rowe referring to recent telephone conversations: Exhibit 120. The letter said that the shop had been ready for the shopfitter from 7 August, and the lease required the work to be completed by 26 September 1999. There was a budget of $300,000 for the project. Reference was made to the use of certain tradespeople for particular work, and in relation to design the letter said: “Our preferred plan for the fitting and fixture layout is very clear in what we wish to achieve. Adoption of the Nextra corporate image, as we currently understand it, is totally acceptable to our site particulars and also acceptable to the landlord’s property consultants. We are able to provide you with contact names if you require. The Golden Casket Lottery Corporation, we believe have approved the preliminary designs. Our trade suppliers are supportive of this project ie cards and gifts, stationery and pens etc, together with circulation product etc, including ABC product as well.”
[15]In relation to this project; he had done work for Gray previously: p.308.
This is certainly consistent with Mr Gray’s having a plan available which he wanted the defendant to build. Furthermore, there was evidence that Mr Gray brought the plaintiff’s plans to the meeting of 23 August 1999 and produced them. Mr Rowe said that when they began to talk about the fitout he asked for the lease plan, that is the plan of the area in which the shop was to be constructed, and Mr Gray put a pile of plans and papers on the table: p.314. From this he produced the lease plan, the document which eventually became Exhibit 8. Mr Rowe claimed that he said to Mr Gray (p.314): “I do not want to see any plans from Arkells,[16] I have never ever copied plans and I never will,” and that to his knowledge there were plans on the table and “I was rather disgusted and I asked John to – I said, “If they are plans of your previous dealings with other people,” I said, “I don’t want to deal with them, put them away.”” He said that: “At some point in time, it wasn’t long, he put back into his briefcase all the non-relevant material …” One document which he did keep out was the fitout manual produced by the lessor (Exhibit 46), which Mr Rowe looked through quickly.
[16]The name of the plaintiff’s business; the transcript refers erroneously to “Mark Ellis.”
Mr Rowe said he then asked his CAD operator designer, Mr Dillon, to come into the office, gave him the lease plan and asked him to produce an AutoCAD shell, that is, redraw the lease plan to a scale of 1:50: p.315. He said that within an hour Mr Dillon came back with that blank plan, on which he proceeded to do a pencil sketch. That sketch was produced and became Exhibit 39: p.316. He said that Mr Gray told him where he wanted the sink located, where he wanted the office to be positioned and how he wanted it laid out, that he wanted the counter on the right hand side in the centre, an island counter: p.317. He said an obvious position for the counter was off a particular column, marked on the plan. Mr Gray said he wanted stationery gondolas in a particular place and his stationery to run along the wall across the back. He said he wanted the book section at the other mall entrance, and the cards to the left of the larger entrance: p.318. He said Mr Gray knew exactly how many modules of gondolas he wanted. He said Mr Gray indicated where the magazine displays were to be, and he drew them running across the page rather than up and down: p.319.
He said he knew that it was to be a Nextra newsagency, and he was familiar with the curved soffit, and what he said was described as a small egg-shape with a square edge which he said was a concept taken out of Eastgardens which was designed by Ms McBride: p.319. The Nextra concept involved extra signs and displays at the sides of the entrance. Mr Gray was specific that he wanted a counter near the other mall entrance, where he wanted the book display and where he wanted an ABC counter. He said he found Mr Gray very precise and concise on exactly what he wanted: p.316. In the course of the day he drew a pencil sketch on the blank plan produced by Mr Dillon, which became Exhibit 39. Mr Gray was in his office all day, having arrived around 9.00am (p.314); in the late afternoon he drove Mr Gray back to town: p.322. There had also been a discussion about costing. The following day he went through the pencil sketch with Mr Dillon, who proceeded to translate it into a plan using the CAD machine.
Mr Dillon also gave evidence. He said he worked with the defendant from 1998 until 2000 preparing newsagency plans using an AutoCAD machine, a computerised drafting system: p.176. He said about the events of 23 August (p.177): “When John Gray arrived first thing in the morning, [Mr Rowe] gave me a lease plan to put into our CAD and print out a lease plan.[17] I took it back into him and then they were in a meeting most of the morning and came out with a pencilled up outline plan.” He said he then converted the pencil sketch into a computer drawing; he did not recall making any changes himself: p.179. He said he would expect to take a couple of days to finish drawing it up using that computer system: p.181. That is consistent with his having, on 25 August, faxed some plan to Mr Gray: Exhibit 40.
[17]What he produced was essentially a copy of the lease plan, but this had the effect of putting it into the computer system. Mr Dillon said it would take half an hour or less to do this: p.181.
Mr Dillon under cross-examination was shown one of the plaintiff’s plans, Exhibit 22: p.183. He said that there were apparently some of the plaintiff’s plans in the room where Mr Gray was meeting Mr Rowe on 23 August, that Mr Gray had some: p.184. He said: “I went in there to give [Mr Rowe] the lease plan. John Gray was in the state of unfolding something and [Mr Rowe] told him to put it away.” He saw that it was a plan and he could see the plaintiff’s logo on it. He said that they probably had bits of paper all over the table. Later in cross-examination he said that what Mr Rowe had said was something along the lines of “put it away, John, I don’t want to see it.” (P.189).
There is a significant inconsistency between the versions given by Mr Rowe and Mr Dillon, in relation to Mr Gray’s production of the plaintiff’s plans. On Mr Rowe’s account they were produced at the beginning of the meeting when the other documents were produced, and Mr Gray was told immediately to put them away, and did so. It was only the relevant material, such as the lease plan and the lessor’s fitout guide, which he looked at. On Mr Rowe’s account, the plans were put away well before Mr Dillon came into the room even for the first time to collect the lease plan. Mr Dillon has the plan being produced when he returned to the room, having put the lease plan on the computer, half an hour to an hour later. That is the point at which they have something on which they can begin to draw up the plan for the shop, and it is therefore precisely the point at which one would expect Mr Gray to produce the plaintiff’s plans if his intention was that the fifth defendant would build a shop essentially in accordance with the plaintiff’s plans. Mr Rowe’s statement to put the plan away may have been said simply for Mr Dillon’s benefit, or because he did not want Mr Gray to produce the plaintiff’s plan while Mr Dillon was actually in the room. Mr Rowe of course denied that he looked at the plaintiff’s plans at that stage, (or at any stage which is relevant to the question of breach of copyright) let alone that he copied them. Nevertheless the plaintiff’s primary case is that the first sketch which Mr Rowe produced, Exhibit 39, was essentially produced by copying from the plaintiff’s plans.
There was certainly the opportunity for copying. The plaintiff’s plans were actually in the room at the time when Exhibit 39 was produced. Furthermore, the two men proceeded from a bare lease plan to Exhibit 39, which contains quite an amount of detail, in at most one day. Although there was some subsequent refinement, the final plan prepared by the fifth defendant was essentially the same as the initial sketch Exhibit 39.
I have to resolve the question of whether Exhibit 39 was copied from the plaintiff’s plans, but before doing so I will say something about the applicable law, and the approach indicated by the authorities to the resolution of such a question. I prefer to leave that until after I have completed the sequence of events in relation to the shop.
Subsequent events – the defendants’ plans
It is a little difficult to trace the sequence of the defendant’s plans after Exhibit 39, and I am not at all sure that I have all the versions up to the time when the shop was actually built. What was described as “the plans so far” was sent by fax to Mr Gray by Mr Dillon on 25 August 1999: Exhibit 40. Unfortunately it is not clear just what the other three pages of this fax comprised. That this was the first version sent to Mr Gray would be consistent with Mr Dillon’s evidence about how long it would have taken him to put the information on Exhibit 39 into the computer.
During Mr Rowe’s evidence another copy of Exhibit 40, with three other pages and a transmission verification report (confirming that four pages were sent on 25 August), was put in evidence: Exhibit 101, p.334. However, I am not at all confident that the three pages of copy plan which are currently stapled to that fax header are what was actually transmitted to Mr Gray on that occasion. It is apparent from the large number of staple holes in the fax header that it is a much stapled document, which makes me suspicious about whether what is now stapled to it has always been stapled to it. In addition, there is a plan, Exhibit 97, in evidence which looks to me to be an earlier version, after Exhibit 39 than the version which is currently in three parts as part of Exhibit 101. Exhibit 97 does not include a number of labels, “feature column,” “showcase,” “illuminated Nextra bulkhead,” “Lotto bench,” “illuminated Casket signage,” “letter board,” “illuminated Nextra bulkhead,” and “feature column” which are present in the plan which is part of Exhibit 101. That also has a lot more detail about the right-hand end of the lower wall. Exhibit 97 includes a sail soffit at the smaller entrance, but only pencil sketches of the sail soffits for the larger entrance, which were presumably put on afterwards, whereas Exhibit 101 has these as part of the computer drawing. There were changes in the display windows on either side of the wider entrance, and, significantly, the plan in Exhibit 101 incorporates what appears to be magazine tierage on what was otherwise a gap on one wall next to the ABC wall unit and the listening post. The gap appeared on Exhibit 97, although provision for the magazine tierage has been drawn in in pencil. The other change is that the area of tiles around the main counter is not part of Exhibit 97, but has been shown in Exhibit 101, for which there were a number of pencil lines on Exhibit 97.
Overall Exhibit 97 does appear to be the earliest version of a computer drawn plan based on Exhibit 39, at least the earliest version that I have.[18] There is not much difference between Exhibit 39 and what was drawn by the computer in Exhibit 97 (there have been some further changes to Exhibit 97 in pencil). The main difference is that the front curved counter was extended out to the line of the rear curved counter, so that the opening from the counter became in effect a gap in the rear curve, rather than simply an open end. There was also more detail shown for the counters, the boxing around the column from which the counters run had been changed to something which was less like the plaintiff’s design, and the writing bench outside the lease line which was in the plaintiff’s design had been dropped, and replaced by a writing bench which was built onto the other column, which had been boxed in. As a result the arrangement for the Golden Casket feature tiles had been changed to something which followed a sign line, rather than something which essentially just followed the plaintiff’s plans.
[18]See also Rowe p.326.
If Exhibit 97 was the first version of the plan produced, it is strange if copies of it were not sent to Mr Gray under cover of the fax Exhibit 40. If however it was the next plan which I have, the plan within Exhibit 101, which has magazine tierage in the gap on the wall in Exhibit 39, this demonstrates that Mr Rowe’s explanation for that gap, at p.391, that Mr Gray had wanted the listening post at that point and that was why there was a gap or blank at that stage, was not correct. If Mr Gray had specifically wanted that left blank, it is unlikely that magazine tierage would have been put in there before the plan was first sent to him.[19]
[19]The gap reappeared in Exhibit 35, dated 7 September 1999, probably in order to cut costs – this plan was after the second, lower quote on 2 September. It is also possible that Gray’s instruction to leave this clear came at this stage, but that would not explain why the gap was left in Exhibit 39.
Exhibit 98 appears to be the next plan after the Exhibit 101 plan. This incorporated details of the storeroom and office, included a foot rail around the display windows, and had a good deal more labelling, particularly around the main counter, and a bit more detail on the second counter, but otherwise was quite similar to the plan in Exhibit 101. On 26 August 1999 the defendants sought a quote for some metal stationery units, enclosing a copy of part of Exhibit 98. That suggests that Exhibit 99 was produced after 2.15pm on 26 August.
The next plan appears to be Exhibit 99 which had some further detail, some elevations, as well as a title block and some other standard material. What was on Exhibit 98 seems to be reproduced on Exhibit 99, but the latter had some more detail and more labels. There were then some further changes marked on Exhibit 99 in pencil, and they appear to be incorporated in the next version of the plan, Exhibit 100. The changes however are quite minor. Both Exhibit 99 and Exhibit 100 are dated 30 August 1999, and are numbered plan 1370/01-A.[20] There is also a ceiling plan dated 30 August 1999 in evidence, drawing 1370/02-A, Exhibit 114. Exhibit 53, the plan which was used for the purpose of comparison by Mr Hobman, is a monochromatic version of Exhibit 100: p.333.
[20]Rowe thought Exhibit 99 was earlier: p.332.
The next plan I have in the series is plan 1370/01-B, dated 7 September 1999: Exhibit 35. This is a curious plan in some respects; although it has a later date, in some areas there is less detail than in Exhibit 100; for example in the office and in the showcase on the right-hand side of the wider entrance. The counter design had been adjusted back to something which was more like Exhibit 39, with the extension of the front counter being lopped off again, although the area around the column remained as it was on Exhibit 97. In addition the magazine tierage next to the ABC listening post had disappeared. A square display unit which first appeared on Exhibit 39, but not on the plaintiff’s plans, at about a line between the two parts of the shop, had disappeared. The explanation appears to be that the plan at this stage was simplified to cut costs; a second, lower quote was sent to Mr Gray on 2 September, as set out below. It seems that it was a copy of this plan which was sent by the defendant to the Golden Casket organisation by fax on 8 September 1999 seeking that organisation’s approval for the design: Exhibit 102.
The next plan I have, and the last of the defendants’ plans, is drawing 1370/01-D, dated 14 September 1999: Exhibit 36. This is quite similar to Exhibit 35, although with some minor changes. The position of the sink in the storeroom was changed, the back counter of the main counter has been made wider, but otherwise it was very much the same. This is the last plan that I have for the shop. There is also a ceiling plan number 1370/02-C, also dated 14 September 1999: Exhibit 37. It follows that the defendants’ plans in evidence are, in sequence, Exhibits 39, 97, 101, 98, 99, 100, 35 and 36. Exhibit 53 is a copy of Exhibit 100.
- Correspondence with Mr Gray
Some plan was faxed to Mr Rowe on 25 August 1999: Exhibits 40, 101. Mr Gray sent Mr Rowe a fax on 26 August 1999: Exhibit 121. The fax is very difficult to understand, but seems to be concerned with the need for some urgency if the project is to proceed at all. It does not provide anything in the way of feedback on either the plans faxed the previous day or any other designs prepared by the defendant which Mr Gray had seen. On 28 August some further drawings were faxed by Mr Dillon to Mr Gray: Exhibit 41. Unfortunately only the first page of this document is available, and I do not know what the other three pages contained. On 30 August a copy of Exhibit 100 (drawing 1370/01-A, 30.8.99) was sent by fax by Mr Dillon to Mr Gray, referred to as “an amended plan of your store:” Exhibit 42. On 30 August 1999 the defendant sought a quote for some sign work: Exhibit 111.
On 31 August a quote was sent to Mr Gray: Exhibit 43. This contained various totals, including three options which together totalled $8,910.35, and the card and gift display areas were priced separately and totalled $35,341.84, presumably because these were commonly paid for by others. The balance of the quote came to $325,738.27. An amended quote Exhibit 119 was sent on 2 September 1999, where the gift and card display and the option amounts were unchanged, but the other part of the quote was reduced to $312,285.80. This was signed and presumably returned by Mr Gray, although he did make some amendments, including writing “subject to variation” against a number of figures. Either that was acceptable to Mr Rowe or any differences were resolved orally, but this is the only signed document in evidence in relation to this work.
After this steps were taken to obtain various approvals.[21] On 8 September 1999 a copy of the plan Exhibit 35 was sent by fax to the Golden Casket organisation for their approval: Exhibit 102. On 9 September 1999 a schedule of works was drawn up for the installation to occur between 8 September and 15 October 1999: Exhibit 122.[22] The same day Mr Dillon sent Mr Gray a fax suggesting a change to the design of the counter, which produced some feedback by telephone the same day. This change is reflected in Exhibit 36. On 13 September some additional material about magazine display areas, and other matters, was sent by fax to Mr Gray: Exhibit 60. The following day a colour schedule was sent to him by fax (Exhibit 62), which he signed and returned on 17 September 1999: Exhibit 118. On 15 September 1999 the Golden Casket Lottery Corporation approved the plans: Exhibit 104. On 17 September 1999 some additional elevations were sent by fax to Mr Gray (Exhibit 63), and a copy of the plan for the Megabooks area was sent to someone on behalf of that organisation: Exhibit 107. On 20 September 1999 further drawings in relation to the counter were sent to Mr Gray (Exhibit 105), and details of the card areas at the store were sent to the greeting card company (Exhibit 64). On 22 September 1999 a further diagram of the counter was sent to Mr Gray: Exhibit 112. On 24 September a diagram showing additional details was sent to Mr Gray: Exhibit 24. A further version of the counter was sent on 27 September 1999, which Mr Gray approved: Exhibit 113. The same day he was sent a quick sketch of the Megabooks mobile bulk unit: Exhibit 115.
[21]There are a number of approvals required: Merchant, p.233. Presumably all were obtained, although I do not have evidence for all of them; eg there is nothing about the approval of the landlord.
[22]The first page of this document refers to 8 September to 15 September, but it is apparent from the balance of the document that the latter date is a mistake.
On 27 September a list of the category signage was provided by the Megabooks people: Exhibit 109. At some stage further details of signage requirements were received from Megabooks, and these were forwarded to Mr Gray on 28 September: Exhibit 66. The same day similar details were sent by fax to the Megabooks organisation, seeking confirmation that this was what was required: Exhibit 108. Further signage details were sent to Mr Gray the same day: Exhibit 106. On 29 September a sign manufacturer was sent details of some of the signage required: Exhibit 103. On 30 September some further information was provided to Mr Gray and he was told that there would be around seven men working in the store that weekend: Exhibit 61.[23] On 5 October 1999 the Mackay City Council approved the plans for the work, which approval was sent to the defendant: Exhibit 117.
[23]Attached to this fax header is another copy of Exhibit 118, demonstrating that I cannot rely on these documents as being correctly assembled.
- Correspondence with the plaintiff
Apparently the plaintiff heard something through the industry grapevine, and on 24 August 1999 sent a fax to the first defendant seeking payment of a design fee, or return of all the plans and related documents. There was no response, and on 3 September the plaintiff’s solicitors wrote to the first and second defendants claiming copyright in the documents prepared by the plaintiff, and seeking their return and payment of the design fee: Exhibit 29. In a reply the same day the solicitor for the first defendant offered the plaintiff the opportunity to collect its plans and sketches, but denied any liability to make any payment: Exhibit 30. By 15 September 1999, the plaintiff had obtained copies of two of the fifth defendant’s plans, apparently Exhibit 35 and a ceiling plan: p.83.[24] The plaintiff’s solicitors wrote on that day to the fifth defendant claiming copyright in respect of its drawings and seeking information as to whether the fifth defendant had been provided with the plaintiff’s plans: Exhibit 31. The letter asserted that the plaintiff retained copyright in its plans and that the defendants were not entitled to use them. In reply Mr Rowe on 15 September sent a fax strongly denying any impropriety regarding the matter, and asserting that the project was based on the client’s requirements and previous Nextra corporate image fitouts at Mt Ommaney and in Sydney: Exhibit 32.
[24]The ceiling plans in evidence are numbers 1370/02-A, Exhibit 114 and 1370/02-C, Exhibit 37. The second plans referred to on p.83 was 1370/02-B.
Reference to Mt Ommaney would be a reference to the newsagency fitted out for Mr Mather, to which I have already referred. The counter in Exhibit 67 (Mt Ommaney) looks elliptical but is otherwise much less like the counter in Exhibit 39 than is the plaintiff’s counter. The Sydney project involved reconstructing a newsagency at Eastgardens, shown on the plans Exhibit 92 and in the photographs in Exhibit 91. That did use the Nextra logo and some other artwork distinctive of that group of newsagencies, and a display box with three elliptical windows and something like a sail soffit, but otherwise the plans are nothing like any of the plans for the first defendant’s newsagency.
After a follow up letter from the plaintiff’s solicitors (Exhibit 33) the solicitors for the fifth defendant wrote to the solicitors for the plaintiff on 28 September 1999 asserting that the fifth defendant had not been previously provided with copies of the plaintiff’s plans nor had they been produced to them previously, and denying having made any use of the plaintiff’s plans: Exhibit 34. That letter said that the fitout of the first defendant’s shop had commenced. It appears that the work was essentially completed around mid October,[25] in accordance with the defendants’ plans: p.381.
[25]Invoices for work were sent between 11 and 14 October: Exhibit 45. Work on site may not have begun until after local authority approval was obtained on 5 October 1999: p.371.
General principles
It is well established that architects or builders plans are artistic works for the purposes of the Copyright Act.[26] The plans prepared by Mr McConaghy were prepared in the course of his employment and hence the plaintiff obtained copyright in the plans prepared by him.[27] If a plan which is an original artistic work is subsequently modified by the copyright owner, that owner will hold the copyright also in the modified version of the plan.[28] There was no suggestion that the plaintiff’s copyright in those plans had ever been lost. This applies to all the plans relevant to this matter, namely the two plans of the plaintiff for the Strathpine newsagency, (Exhibit 3) and the plaintiff’s plans for the newsagency for the first defendant; in relation to this, the plans that were particularly relied on were Exhibits 21 and 22.
[26]See s 10, definition of “artistic work” para (a), and definition of “drawing”. See also S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 472; Ownit Homes Pty Ltd v D & F Mancuso Investments Pty Ltd (1988) AIPC #90-488 at 38,238.
[27]Copyright Act s 35.
[28]Ownit Homes (supra) at p.38,239.
It was submitted on behalf of the defendants that the plaintiff did not have copyright in these designs, because they incorporated design elements which originated with others and which were required to be incorporated, and because they were dictated by functional and commonsense considerations rather than the product of original creativity on the part of Mr McConaghy. But that submission in my opinion mistakes the nature of copyright. Copyright operates by reference to works, and a particular plan will be a work. There will be copyright in it if it is an original work. The requirement of originality was explained by Dixon J in Victoria Park Racing and Recreation Grounds Company Ltd v Taylor (1937) 58 CLR 479 at 511: “Some original result must be produced. This does not mean that new or inventive ideas must be contributed. The work need show no literary or other skill or judgment. But it must originate with the author and be more than a copy of other material.” Originality therefore is used in contrast to mere copying. But it may be entirely functional.
It is also irrelevant that there were design requirements of Golden Casket, or the landlord or the Nextra group, or indeed that some specific features required by the Nextra group were incorporated. If the way in which those features were applied and incorporated into the overall plan was original, then the plan which was produced by Mr McConaghy, as a specific expression of the way in which those features were incorporated, would be an artistic work in which copyright exists.
It is also important to bear in mind the distinction between ideas on the one hand, and a specific expression of an idea on the other. I have already referred to the exposition of this principle by Street J in Archer Mortlock Murry & Woolley Pty Ltd v Hooker Homes Pty Ltd (supra), which is lengthy and which I will not quote. It is a concept which is essential to the operation of the Copyright Act. This is why it is irrelevant for the purposes of determining whether copyright exists that the Golden Casket organisation required certain design features to be incorporated, and for certain artwork to be displayed.[29] Design features fall into the category of ideas, and even if the artwork required is sufficiently specific to amount to a particular expression of an idea, so that copyright in the actual artwork would remain with the Golden Casket organisation, where a plan is drawn purportedly in compliance with the requirement of the Golden Casket organisation, and displaying its artwork in certain specified locations, that plan will be an original work of whoever drew it.
[29]See Exhibit 47, and the comments of Mr McConaghy at p.99.
The same applies to the requirements of the Nextra group. Insofar as this involves the use of artwork in which Nextra would hold copyright,[30] what matters is the particular way in which that is displayed within the overall plan. The situation with two other matters relied on by the defendant is a little more complicated. These were distinctive display cabinets with elliptical windows used on one or both sides of the Nextra stores, and a ceiling feature where parts of the ceiling, near the entrance, is lower than the rest of the ceiling, with a distinctive shape, in the shape of a triangle with curved sides, with the base and edge of this part of the ceiling painted bright red.[31]
[30]See McConaghy p.101.
[31]Photographs of these features as applied to the Strathpine newsagency appear in Exhibit 4. In plans this feature looks roughly sail shaped, and they were referred to in the evidence as sail soffits: eg at p.235.
Ms McBride was called, and she produced drawings which she had sent to the fifth defendant for the Eastgardens project in Sydney, with drawings showing a sail soffit and a wall display with elliptical windows: Exhibit 68, 69. It is clear from her evidence however that this material was produced after the designs for Strathpine had been approved by the lessor, Westfield.[32] What was produced by her in relation to Strathpine was not put in evidence. She did say that what she produced for Strathpine would have been hand drawn: p.202. She said she could remember working on the display with the oval shaped windows on the left-hand side and she continued (p.201): “I know that there were elements in this shopfront like the sails and whatnot that had been done to a certain degree and then they were further worked upon. It was really only a concept stage that we were employed to do.” She said she could not recall whether the sail shapes were on the original drawings or not (p.203), presumably a reference to the drawings originally prepared by Mr McConaghy and sent on to her by Westfield. Mr McConaghy said that he had incorporated the sail soffit idea in his plans before they were shown to Westfield, and hence Ms McBride, and she was not in a position to contradict that: p.205. His evidence is consistent with her recollection that her principal contribution was the display cabinet with the oval windows. Her emphasis was on the shopfront (p.206), no doubt because that was the principal concern of the landlord. She said later that the Nextra logo was an oval and she turned that into a display window, and that was basically it: p.207.
[32]She was relying on Westfield’s approval of Strathpine as a basis for expecting similar approval in Sydney: p.203. See also p.204.
There is no clear evidence here that even the idea of the sail soffit came from Ms McBride; in these circumstances there is no reason for me to reject the evidence from Mr McConaghy (p.33) that the idea came from him. As a design concept, or idea, it was subsequently applied in other designs as a result of Ms McBride’s involvement, in particular in Eastgardens. That is in my opinion an example of the sort of thing that Street J was talking about, the application in different forms of the same idea, which does not amount to copying for the purposes of the Act.
With regard to the oval windows in the display cabinet, I am prepared to accept that that was Ms McBride’s idea, but the particular application of that idea in the drawings of the Strathpine store, for example, the way in which the display cabinets are incorporated in the plaintiff’s design Exhibit 3, differs from the way in which the display cabinet is set out in the sketch which is part of Exhibit 68; in Exhibit 3 the cabinets are flush with the lease line facing outwards, whereas in Exhibit 68 it is set well back into the shop, closer to the line of the side wall. In accordance with the approach of Street J, this was an idea from Ms McBride which was incorporated into Exhibit 3, but that did not mean that the plaintiff did not have copyright in Exhibit 3 as a whole. Of course, Ms McBride’s involvement in the propagation of these ideas, and the fifth defendant’s awareness of them, are matters which need to be borne in mind when considering whether the existence of a specific expression of such ideas in the defendant’s documentation provides an explanation other than copying for some similarity between those documents and the plaintiff’s drawings.
Infringement – general principles
The crucial significance of copyright is that it gives the holder the exclusive right, in the case of an artistic work, to reproduce the work in a material form: s 31(1)(b)(i) of the Act. That includes the reproduction of a substantial part of the work in a material form: s 14(1). A plan can be reproduced either by the production of another plan, or by its reproduction in a three dimensional form, that is to say, by building something using that plan: s 21(3)(a). In the present case however it is alleged that the plaintiff’s plans were copied by the production of plans by the defendants. It was not suggested that the shop as actually constructed by the defendants was in accordance with the plaintiff’s plans rather than the defendants’ plans; the plaintiff did not dispute that the shop as finally constructed was constructed in accordance with the defendants’ plans. Accordingly for the purposes of this action the allegation that the shop is a three dimensional reproduction of the plaintiff’s plans does not really add anything to the allegation that the defendants’ plans were an unauthorised reproduction of the plaintiff’s plans.
A reproduction of an artistic work in which copyright subsists which is not authorised by the holder of the copyright is prima facie an infringement of the copyright holder’s rights under the Act. Such an infringement is actionable in accordance with the Act: s 115. It was not suggested that the defendants were authorised to reproduce the plaintiff’s plans, and the crucial question therefore is, did they do so? There are two steps involved in determining whether this occurred. The first is to determine whether the defendants’ plans are in fact, that is objectively, a copy of the plaintiff’s plans. The second is to determine whether the defendants’ plans were the product of copying, that is, whether there was some relevant causal link between the plaintiff’s plans and the defendants’ plans. As I shall indicate, some authorities suggest that these two questions are not entirely independent. Nevertheless I think it is better if I consider them separately.
The first question, was there a copy, depends on whether there is a sufficient degree of objective similarity between the two plans: S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 472. There have been a number of cases involving similar issues, where plans, usually house plans, have been copied with some degree of variation. Indeed I had such a case once myself.[33] I am therefore following a well-beaten path.
[33]Carlisle County Homes Pty Ltd v Brown (1999) 22 Qld Lawyer Reps 1.
The decision of whether or not the defendants’ plan is a copy of the plaintiff’s plan is a matter for the court, although evidence including expert evidence may be given which involves drawing attention to particular similarities or particular differences.[34] In the present case some evidence of these matters was given by Mr McConaghy[35] and Mr Rowe,[36] and by Mr Hobman, an architect who had some experience in the design of shops in shopping centres, having been employed by Westfield as specialty shops architect overseeing design criteria for new shops and upgrades of Westfield shopping centres in Queensland: p.146. That involved his working on plans for upgrading newsagencies in the order of 15 times. I am satisfied he has sufficient expertise to give such evidence. His report became Exhibit 52.[37] Some of his evidence is of assistance in drawing my attention to features which I might otherwise have missed, but most of the similarities and differences are fairly obvious to me simply from inspection of the plans. Of course neither Mr McConaghy nor Mr Rowe was independent.
[34]Archer Mortlock Murry & Woolley Pty Ltd (supra) at p.286.
[35]From p.86 in chief.
[36]From p.349 in chief.
[37]Sections 3, 4 and 5 of this report were excluded: p.145.
One of the matters which must be borne in mind when comparing plans is that the more commonplace and straightforward the plan the more precisely the supposed copy has to adhere to the original before it can properly be found to be a copy of the original: Dixon Investments Pty Ltd v Hall (1990) 18 IPR 481 at 483; 490 at 496. Conversely, where there is an unusual or special feature of the original, reproduction of that feature will strengthen the argument that the supposed copy is in fact a copy. Another general proposition which appears from the cases is that minor differences in detail, such as minor changes in dimensions which do not affect the general layout or the overall proportions of what is shown are not of any real significance.[38] Such matters are not uncommonly dismissed by other judges in a few words.
[38]S W Hart & Co (supra) at p.474.
It is also necessary to bear in mind that the plans are going to have some degree of similarity anyway simply because they are both plans of a newsagency to be constructed within the same leased area. Since the leased area is given, the boundaries of the leased area will be the same in both plans, which provides some element of distinctiveness to the shape and general layout which has nothing to do with copying. The fact that they are newsagencies also produce some practical considerations about design which are likely to produce similarities, at least at a general level.[39] Newsagencies sell newspapers, magazines, greeting cards, books and stationery, so one would expect that they would have around the walls display racks for these products, and there would be free-standing display racks within the store. One would also expect the products to be grouped together. There are also other practical requirements, such as a counter where sales and other transactions can take place, an office/storeroom, and, in this case given two entrances, the desirability of a second counter located near that entrance.
[39]McConaghy p.102.
There was a great deal of evidence led on behalf of the defendants about general principles of newsagency design, and about various constraints which applied as a result of the requirements of third parties. The intention appeared to be to seek to show that designing a newsagency to occupy a particular space was something that happened more or less automatically as a result of the application of these principles and requirements,[40] with the result that to a large extent there would necessarily be a similarity between any two plans for a newsagency within the same shop space. Obviously there is some truth in that, but I think that the defendants sought to take it far too far. That there is scope for some considerable variation in planning a newsagency within the same space, and hence in the way in which a plan for a particular newsagency can be drawn, is shown by the various different plans which were produced for the same newsagency space at Strathpine. The defendants produced a number of plans, four of which make up Exhibit 58, all of which are quite different, and all of which are quite different from the plaintiff’s plan Exhibit 3. In addition, the defendants put in evidence a series of comparisons where plans had been drawn by the fifth defendant and another company, Interfit, for the same newsagency for a particular site.[41] Again within each set the plans are obviously not copies of each other, although they are newsagencies occupying the same space. What is required in order for one document to be a copy of another for the purposes of the test for infringement of copyright is something far more specific than simply the degree of similarity produced by considerations of this nature. In my opinion evidence about these general considerations was essentially irrelevant.
[40]See for example p.111, p.186.
[41]The Interfit plan, and the corresponding defendant’s plan were for Indooroopilly, Exhibits 72 and 73, for Springwood, Exhibits 74 and 75, for Toowoomba, Exhibits 76 and 77, for Burstall Avenue, Exhibits 78 and 79, for Helensvale, Exhibits 80 and 81, for Manly, Exhibits 82 and 83, and for Shailer Park, Exhibits 84 and both 85 and 86. Similarity in the counters in Exhibits 76 and 77 is because the existing counter was to be retained, and appears in both plans: p.242. The job at Springwood involved retaining many existing features, and it appears the main counter was only modified: p.256. Much the same occurred with some other jobs. Merchant, the designer from Interfit, was taught newsagency design by the fourth defendant: p.252.
As I said in Carlisle County Homes, in my opinion it follows from the fact that copyright protects the particular embodiment of the idea that a general visual comparison of two plans is likely to be of greater significance than a minute examination of detail, and the unusual or significant features which, if reproduced, are particularly likely to stamp the reproduction as a copy should be features which are of unusual or striking visual significance rather than functional significance. That in my opinion is applicable in the present case as well. What matters most is not the functional significance of the various aspects of the plans; what matters is what they look like.
Comparison of the plans
It is appropriate therefore to compare the plaintiff’s plans Exhibits 21 and 22 with the first plan produced by the defendants, the sketch Exhibit 39. I am conscious of the fact that both plans are occupying the same space so that inevitably there will be some superficial similarity. Apart from that, they are both plans of newsagencies, and again one would expect that to produce some degree of similarity. One area where there is scope for individual creativity however is in the design of the principal counter.[42] This is apparent from the many and varied different counter shapes and layouts which I have seen in the course of this trial. There are even a number of diagrams for this shop which show that, on the assumption that the counter will be in the middle of the wider opening, there are different ways of designing a counter.[43]
[42]Merchant p.254.
[43]See Exhibits 6, 13, 14,
Another consideration is whether this really did represent loss of profit, in the sense that, because the plaintiff was not doing this job, it was able to devote its resources to other jobs which acted as an alternative source of profit. Mr McConaghy said that they had been making some allowance in their programming to do this job (p.120), and when it fell through they had some difficulty in keeping work up to employees: p.121. That suggests that it was not the case that the profit which would have been earned on this job was simply earned on some other job instead. On the whole I do not think that this is the sort of case where other transactions in practice made up in other ways the profit which would have been earned from this job had it gone ahead.
Nevertheless, I think that that figure needs to be treated with some caution even as an estimate of profit. There is always a prospect of things costing more than anticipated; indeed, one of the items allowed for in the quote was a figure of $21,000 “spare,” which was for contingencies: p.123. I suspect that there could well have been additional costs, or additional difficulties, because of the continuing problem of dealing with Mr Gray, and that one way or another the final profit would probably have been less than that built into this quote. In my view it is appropriate to make some reduction to the profit figure already obtained to account for this risk. This is not something which can be calculated, because essentially it is a matter of discounting for contingencies, but for example 20 percent of the profit figure, $19,402.89, might have been consumed in cost overruns, even on top of the allowance of $21,000. In all the circumstances, and with some rounding, I will adopt a figure of $80,000 as the profit which would have been made on the job had it proceeded.
Assessing damages in this way therefore I should take a figure of 80 percent of $80,000, or $64,000. This is substantially more than any alternative amount which would be allowed by way of damages, on a “notional licence fee” basis. In relation to this, the evidence did not suggest that there is in practice any market for licensing of plans of this nature. The evidence was that in practice design work of this nature undertaken by companies such as the plaintiff is undertaken on a speculative basis, I suppose essentially as a marketing tool, or as a means of securing the work, and is not charged for separately: p.130. There is also the consideration that this is not really a case suitable for a licence fee approach, in circumstances where the design in question was so specific that it would not be useful for anything other than this particular shop.
In Carlisle County Homes (supra) I reviewed a number of earlier decisions where amounts have been assessed on this basis, various sums between $50 and $2,500, and noted that there ought to be in damages of this nature an element for vindication of the plaintiff’s property rights. I adhere to those views, but assessing damages on that basis would not produce an award of anything like $64,000. In that case I assessed damages of $500, for a fairly unsophisticated house plan. There is I think more skill and effort of designing involved in the plans in the present case, and, particularly in view of the amount of effort the plaintiff put into working up this design with Mr Gray, I would be inclined to make a relatively generous allowance for vindication of the plaintiff’s property rights. Accordingly if damages were assessed on this basis it is more reasonable to think in terms of compensation for the effort that the plaintiff put into the design. That however is also difficult to quantify. There were certainly a lot of plans drawn, but there was no evidence of the number of hours involved, and in circumstances where designers’ time is not charged for as such it is difficult to attribute a particular figure to it. On the whole however I think a reasonable figure for assessment on this basis would be $10,000.
Additional damages
The question then arises whether additional damages should be allowed under the Act. This depends on whether the court is satisfied that it is proper to do so having regard to the matters specified in s 115(4)(b) of the Act, which are as follows:
“(i) the flagrancy of the infringement; and
(ii) whether the infringement involved the conversion of a work or other subject-matter from hard copy or analog form into a digital or other electronic machine – readable form; and
(iii) any benefit shown to have accrued to the defendant by reason of the infringement; and
(iv) all other relevant matters.”
As to the first of these, this was a fairly flagrant infringement. The plans were identified as the plaintiff’s plans, and in the circumstances as I have found then Mr Rowe must have known that he was copying the plaintiff’s plans. It is apparent from his evidence that he knew that this was wrong, and as early as 15 September there was correspondence from the plaintiff’s solicitors claiming copyright. This was after all the plans had been drawn, but before any of the work was done. I think it unlikely that that correspondence would have come as a surprise to the defendants, but in any case the third and fourth defendants proceeded with the construction of the shop on the basis of the plans after the correspondence.
This did not involve the conversion of the work into a digital format, something which is significant because it enables widespread and easy dissemination of it. The defendants obtained the benefit of the profit from doing the work, which I suppose would have been roughly comparable with the sort of profit the plaintiff would have earned. Exhibit 123 contains a profit margin figure of 24.46 percent. Mr Rowe said that this was a figure of gross profit, not net of overhead costs, but there is no other evidence to confirm that. Nevertheless, the defendants would on the overall job have made a profit substantially in excess of the damages which would otherwise be allowable on this basis. That is certainly a factor favouring an award of additional damages. Apart from these factors, there was nothing about the conduct of the defendants which would have aggravated the harm done to the plaintiff by the infringement. Nevertheless, having regard to the matters referred to in the subsection, I think this is a proper case for an award of additional damages.
Additional damages are typically awarded in the same order of magnitude as compensatory damages: Raben Footwear Pty Ltd v Polygram Records Inc (1997) 145 ALR 1 at 15. The examples quoted in that case[76] also suggest that where the compensatory damages are relatively small the additional damages may be somewhat larger, but where the compensatory damages are relatively large the additional damages are usually somewhat smaller. Nevertheless, that case establishes that the statutory discretion is not to be fettered in any arithmetic or mechanical way. In the present case, the third factor referred to in the subsection suggests a relatively large award of additional damages relative to the amount of damages awarded on a “notional licence fee” and a vindication of property rights basis, and if the damages were to be awarded on that basis I would award additional damages of $25,000. However, if damages are to be awarded essentially on the basis of the plaintiff’s loss of profit, it would not be appropriate to award additional damages on top of that, because the plaintiff’s compensatory damages in those circumstances would already sufficiently consume any benefit otherwise accruing to the defendants by reason of the infringement.
[76]To which may be added Universal Music Aust Pty Ltd v Miyamoto (2004) 62 IPR 605.
In my opinion the notional licence fee and vindication of property right assessment is essentially one which is applied in circumstances where it cannot be shown that the plaintiff has suffered actual loss in a greater sum. Where however a greater actual loss can be shown, that in my opinion is the appropriate approach for the assessment of damages. For that reason I assess damages of $64,000. For reasons given earlier, each of the defendants is jointly and severally liable for this amount.
It was submitted for the defendants that the damages should be further reduced by the amount of the company tax rate of 30 percent. But damages in this case are being assessed essentially on the basis of loss of earnings, and damages which are of that nature are ordinarily taxable in the hands of the plaintiff. There is therefore no reason for a further reduction on that basis.
There is also a claim for interest in the statement of claim. This claim did not receive a great deal of attention in submissions on behalf of either party. The effect of the provisions in the Judiciary Act is that s 47 of the Supreme Court Act 1995 is applicable. These days I usually allow interest at eight percent under that section, from the time the cause of action arose, but in this case that was five and a half years ago. This matter does seem to have taken a relatively long time to come to trial. The action was commenced as long ago as October 2000, and I note that a mediator’s certificate was filed in June 2002. Some time of course has now elapsed since the trial, but in all the circumstances I confine an award of interest to a period of four years. Interest therefore comes to $20,480.
There will therefore be judgment for the plaintiff against the third, fourth and fifth defendants for $84,480. I will publish these reasons and invite submissions in relation to costs but unless some other order is appropriate those defendants should also pay the plaintiff’s costs of the action to be assessed.
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