Geostel Vision Ltd v Oraka Technologies Ltd - [2020] NZCA 256

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA254/2018
[2020] NZCA 256

BETWEEN	GEOSTEL VISION LIMITED First Appellant
AND	PAUL DAYNES AND THE ESTATE OF GORDON ROBERTSON Second Appellant
AND	ORAKA TECHNOLOGIES LIMITED First Respondent
AND	ORAKA GRADERS LIMITED Second Respondent
AND	MICHAEL WILLIAM SCHWARZ Third Respondent

CA261/2018
BETWEEN	NAPIER TOOL & DIE LIMITED Appellant
AND	ORAKA TECHNOLOGIES LIMITED First Respondent
AND	ORAKA GRADERS LIMITED Second Respondent
AND	MICHAEL WILLIAM SCHWARZ Third Respondent

Hearing:	2 March 2020
Court:	Courtney, Ellis and Brewer JJ
Counsel:	K T Glover and P R Casey for Appellants in CA254/2018 P G Skelton QC and C D Herbert for Appellants in CA261/2018 B P Henry and A R Kenwright for Respondents
Judgment:	25 June 2020 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed. The High Court’s damages award of $510,000 is quashed and we substitute damages in the sum of $47,000.
BThe costs award in Technologies’ favour in relation to the 2017 High Court hearing is set aside, with the issue of costs for that hearing remitted back to the High Court to be reassessed in light of this Court’s judgment.
CThe appellants are entitled to costs in this Court for a standard appeal on a band A basis plus any disbursements.

____________________________________________________________________

Para No.
BACKGROUND
Facts	[6]
Background to the infringement	[11]
Procedural history	[20]
THE USER PRINCIPLE	[21]
THE SECOND DAMAGES HEARING	[23]
The plaintiffs’ evidence	[24]
Mr Schwarz	[25]
Mr Black	[26]
Mr Davies	[30]
The defendants’ evidence	[35]
Mr Beach	[36]
Mr Yorke	[43]
Mr Hussey	[55]
THE HIGH COURT DECISION	[63]
Approach	[64]
Factual findings	[66]
The damages calculation	[67]
Interest and costs	[75]
THE ISSUES ON APPEAL	[76]
APPROPRIATE APPROACH ON APPEAL	[78]
WAS THE HIGH COURT WRONG TO FIND THAT THE REASONABLE LICENCE FEE WAS $6.00 PER CUP ASSEMBLY?
Was Napier the appropriate notional licensee?	[84]
Discussion	[92]
Exclusivity	[103]
Discussion	[106]
Weight given to the relative bargaining power of the notional licensor and licensee	[109]
Alternatives available to the parties	[110]
Competition in the market for asparagus grading machines	[124]
The summary judgment against Technologies and its state of insolvency	[132]
The level of originality in the cup assembly design and its overall importance to the grading machine	[136]
What is the reasonable licence fee payable in respect of each infringing use?	[138]
Preliminary observation	[141]
Disregarding evidence about comparable licence fees	[145]
Calculations based on Geostel’s anticipated – rather than actual – profits	[148]
Rejection of the 25 per cent rule	[150]
Conclusions	[153]
Result	[157]

REASONS OF THE COURT

(Given by Ellis J)

Following appeals to this Court in 2010 and again in 2013, Napier Tool & Die Limited (Napier), Geostel Vision Limited (Geostel) and Geostel’s owners (Mr Paul Daynes and Mr Gordon Robertson[1]) were found to have infringed the copyright in the designs for a cup assembly used in a machine which sorts and grades asparagus.[2] Put simply, the infringing cup assemblies…

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.

Keep reading for free

Create a free CaseChat account to read Geostel Vision Ltd v Oraka Technologies Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2020] NZCA 256
Decision Date: 25 June 2020

CaseChat Overview and Summary

In Geostel Vision Limited v Oraka Technologies Limited, the Court of Appeal of New Zealand considered an appeal against a High Court decision that awarded $510,000 in damages for copyright infringement. The appeal was brought by the defendants, Geostel Vision Limited and Oraka Technologies Limited, who were found to have infringed the copyright in the designs for a cup assembly used in a machine that sorts and grades asparagus. The Court of Appeal found that the High Court had made several errors in its assessment of the evidence, which led to an erroneous assessment of damages. The Court of Appeal concluded that the notional licence fee should have been based on the 25 per cent rule, adjusted for relevant factors, and that the damages award should be reduced to $47,000. The Court of Appeal also set aside the costs award in favour of the plaintiff in relation to the 2017 High Court hearing, and remitted the issue of costs for that hearing back to the High Court to be reassessed in light of the Court of Appeal's judgment.

Orders