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Burden v ESR Group (NZ) Ltd

Burden v ESR Group (NZ) Ltd

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002456 [2016] NZHC 1542

BETWEEN
IAN JAMES BURDEN

First Plaintiff

AND

PLANTATION GROWN TIMBERS (INTERNATIONAL) LIMITED Second Plaintiff

PLANTATION GROWN TIMBERS (VIETNAM) LIMITED

Third Plaintiff

ESR GROUP (NZ) LIMTIED First Defendant

MORROW MARKETING MANAGEMNT LIMITED Second Defendant

CRAIG MORROW Third Defendant

GALAXY HOME (VIETNAM) LIMITED

Fourth Defendant

CHIEF EXECUTIVE OF NEW ZEALAND CUSTOMS

Fifth Defendant

Hearing:
7-11, 14-16, 18, 21-24, 28 September 2015

Further submissions filed 6, 7 & 8 October 2015

Counsel:

G Hazel, S Rosanowski & R Stone for the Plaintiffs
A J Pietras for the Defendants

Judgment:

7 July 2016

JUDGMENT OF DUFFY J

BURDEN & ORS v ESR GROUP & ORS [2016] NZHC 1542 [7 July 2016]

This judgment was delivered by me on 7 July 2016 at 4.30 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar

Solicitors:
James & Wells, Ellerslie, Auckland for Plaintiffs
A J Pietras & Co Ltd, Lower Hutt, for Defendants

[1] Together the plaintiffs are involved in the business of designing, producing and exporting furniture products, the main markets for which are North America, Europe and Australasia. They claim copyright in the artistic works that underlie the designs of their furniture. To protect their copyright in their designs they have filed copyright notices with the New Zealand Customs Service (NZ Customs).1

[2] The first defendant, ESR, is a New Zealand registered company that has imported furniture products from a competitor of the plaintiffs’ for the purpose of sale in New Zealand. On arrival in New Zealand, these products were identified by NZ Customs as pirated goods under the copyright notices and so the products were
seized and detained.2

[3] When the plaintiffs learned that NZ Customs had seized the furniture imported by ESR they commenced the present proceedings against ESR and others claiming that ESR is liable as a secondary infringer for breach of copyright. They further claimed that ESR’s conduct constitutes misleading and deceptive conduct under ss 9 and 10 of the Fair Trading Act 1986 (FTA) and involves the making of false and misleading representations in breach of s 13 of that Act.

[4] ESR counterclaims that the plaintiffs’ copyright notices are invalid. ESR denies the plaintiffs’ claims in copyright and under the FTA. It also makes counter- allegations against the plaintiffs’ copyright claims by challenging the originality of the works in which the plaintiffs claim copyright and their ownership of any copyright that might subsist in those works, as well as disputing the second and third plaintiffs’ eligibility to enforce copyright in New Zealand.

[5] The plaintiffs elected to proceed to trial against ESR only. The fifth defendant, NZ Customs, abides the decision of the Court. The claims made against
the second, third and fourth defendants are yet to be heard.3

1 These notices were filed pursuant to s 126 of the Copyright Act 1994.
2 The plaintiffs had filed notices with NZ Customs pursuant to s 136 of the Copyright Act. Acting in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 1542
Decision Date: 7 July 2016

CaseChat Overview and Summary

The plaintiffs in the case of Burden v ESR Group (NZ) Ltd were involved in the design, production, and export of furniture products. They claimed copyright in the artistic works underlying the designs of their furniture. When the plaintiffs learned that New Zealand Customs had seized furniture products imported by ESR, a competitor, they commenced proceedings against ESR and others, alleging that ESR was liable as a secondary infringer for breach of copyright. The plaintiffs also claimed that ESR's conduct constituted misleading and deceptive conduct under the Fair Trading Act 1986 (FTA) and involved making false and misleading representations in breach of s 13 of that Act. ESR denied the plaintiffs' claims in copyright and under the FTA, and challenged the originality of the works in which the plaintiffs claimed copyright and their ownership of any copyright that might subsist in those works. The court found that the second and third plaintiffs were not eligible to enforce copyright in New Zealand. The court also found that the plaintiffs had failed to establish that the alleged copyright works were original or that they owned the copyright in those works. Therefore, the copyright claims made by the second and third plaintiffs were dismissed. The court found that ESR had the necessary knowledge for it to be liable for breach of copyright as a secondary infringer. However, the plaintiffs' claims under the FTA were unsuccessful, as the court found that the plaintiffs had not proved that ESR's conduct was likely to mislead or deceive. The court granted Mr Burden, the first plaintiff, the relief sought in the statement of claim, including declarations, injunctions, and orders for delivery up of goods. Judgment was entered in favour of Mr Burden against ESR, and the copyright claims made by the second and third plaintiffs, as well as the claims under the FTA, were dismissed. ESR's counterclaim was also dismissed.

Orders