ESR Group (NZ) Limited v Burden - [2023] NZCA 335

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA439/2022
[2023] NZCA 335

BETWEEN	ESR GROUP (NZ) LIMITED Appellant
AND	IAN JAMES BURDEN First Respondent PGT RECLAIMED (INTERNATIONAL) LIMITED Second Respondent PLANTATION GROWN TIMBERS (VIETNAM) LIMITED Third Respondent

Hearing:	8 and 9 February 2023
Court:	Miller, Brown and Katz JJ
Counsel:	J G Miles KC and A J Pietras for Appellant A H Brown KC, J Oliver-Hood and J R E Wach for Respondents
Judgment:	31 July 2023 at 10.30 am

JUDGMENT OF THE COURT

A The appeal is allowed.

BThe respondents must pay the appellant costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

____________________________________________________________________

Table of Contents

Para No
Introduction  [1]
The key statutory provisions  [4]
Factual overview  [9]
The High Court judgment  [14]
Issues on appeal  [18]
The derivation of the distribution right  [23]
         The right to publish a work  [24]
         Infabrics v Jaytex  [28]
         Copyright, Designs and Patents Act 1988 (UK)  [32]
Copyright Act 1994  [40]
Can the sale or distribution of an imported product (not previously
put into circulation) constitute primary infringement
notwithstanding the absence of the knowledge component in
ss 35 and 36?  [43]
         ESR’s contention  [43]
         The Judge’s analysis  [50]
         “Mere” importation  [52]
         Discussion  [56]
Is the distribution right spent only when the copies of a work are
put into circulation by the copyright owner or with their consent
or licence?  [63]
         The Judge’s analysis  [63]
         The parties’ contentions  [66]
         The s 29(1) argument  [69]
         The role of downstream developments in statutory interpretation    [81]
         The particular “related developments”  [89]
         Conclusion  [103]
If a copy is first distributed abroad has it been “previously put into circulation”?      [104]
         The notion of extraterritoriality  [104]
         The text of s 9(1)  [109]
         “Subsequent importation”  [113]
         Conclusion  [127]
The consequences of our interpretation  [128]
Does the act of exporting or otherwise dispatching infringing
copies to New Zealand constitute “previously [putting] into
circulation” in New Zealand?  [130]
Result  [135]

REASONS OF THE COURT

(Given by Brown J)

Introduction

One of the exclusive rights conferred by the Copyright Act 1994 (the 1994 Act) on the owner of the copyright in a work is “to issue copies of the work to the public”,[1] an activity defined in s 9(1) of the 1994 Act as “the act of putting into circulation copies not previously put into circulation”.
[1]Copyright Act 1994, s 16(1)(b).
The first respondent (Mr Burden) contended that the sale and offering for sale in New Zealand by the appellant (ESR) of infringing copies of Mr Burden’s artistic works, which copies had been acquired by ESR in Vietnam, was an infringement of Mr Burden’s right of first circulation of such copies in New Zealand. In the High Court Downs J accepted Mr Burden’s contention, construing s 9(1) in this manner:[2]
References in this Act to the issue of copies of a work to the public mean the act of putting into circulation copies [in New Zealand] not previously…

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: [2023] NZCA 335
Decision Date: 31 July 2023 at 10.30 am

CaseChat Overview and Summary

ESR Group (NZ) Limited appealed against a decision of the High Court which found it liable for primary infringement of the copyright of Ian James Burden. The High Court found that the sale and offering for sale in New Zealand by ESR of infringing copies of Mr Burden’s artistic works, which copies had been acquired by ESR in Vietnam, was an infringement of Mr Burden’s right of first circulation of such copies in New Zealand. The key issue was whether the sale or distribution of an imported product (not previously put into circulation) constituted primary infringement notwithstanding the absence of the knowledge component in ss 35 and 36. The Court found that, contrary to the finding of the High Court, the sale or distribution of an imported product (not previously put into circulation) could constitute primary infringement notwithstanding the absence of the knowledge component in ss 35 and 36. The Court also found that the distribution right was spent when the copies of a work were put into circulation by the copyright owner or with their consent or licence. The Court found that if a copy was first distributed abroad, it had been “previously put into circulation” and that the act of exporting or otherwise dispatching infringing copies to New Zealand did not constitute “previously [putting] into circulation” in New Zealand. The appeal was allowed, and the respondents must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.

Orders