Hoyle v Hoyle
[2017] NZCA 516
•14 November 2017 at 4.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA24/2017 [2017] NZCA 516 |
| BETWEEN | PAUL DAVID HOYLE |
| AND | DAVID STANLEY HOYLE TRANSPREAD INTERNATIONAL LIMITED |
| Hearing: | 16 and 17 August 2017 |
Court: | French, Miller and Gilbert JJ |
Counsel: | P C Dengate-Thrush and G M Richards for Appellant |
Judgment: | 14 November 2017 at 4.00 pm |
JUDGMENT OF THE COURT
AThe appeal is allowed in part. We set aside the injunction entered in the High Court.
BWe make an order restraining the appellant — whether by himself or by his servants, agents, contractors, or associates or otherwise howsoever —from infringing the plaintiff’s copyright in the artistic works by any of the means set out in para A to the respondent’s amended statement of claim (other than subpara h), dated 7 April 2015.
CThe appeal is otherwise dismissed.
DThe appellant must pay the respondent costs for a complex appeal on a band B basis and usual disbursements, with an uplift of one third. We certify for second counsel.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
The High Court found that there subsists in the respondent, David Hoyle, copyright in drawings of fertiliser spreaders, side tippers and drawbars,[1] and that his copyright was breached by his son, Paul Hoyle, the appellant.[2] From that judgment Paul appeals.
[1]Hoyle v Hoyle [2016] NZHC 3120 at [126].
[2]At [216]–[219].
Clark J denied Paul, on pleadings grounds, the ability to advance two defences: that the spreaders form part of a design continuum, the element of originality being much older and no longer protected by copyright; and that the copyrights were owned not by David personally but by family businesses.[3] Against the possibility that she was wrong, the Judge went on to address and reject the defences, finding that David had copyright in his pleaded works, which comprised electronic drawings and laser cutting files, and Paul had infringed it.[4] She made declarations accordingly and issued an injunction (to expire, so far as it concerned spreaders, on 22 December 2017).[5] A claim for damages or an account of profits has not yet been decided, pending this liability appeal.
Narrative
[3]At [62]–[63].
[4]At [133] and [216]–219].
[5]At [219] and [273].
The background described by Clark J is not in dispute. She recorded that David began designing and building agricultural machinery in the 1950s, and in 1969 set up DS Hoyle & Co Ltd to manufacture and market spreading and transport machines. By the mid to late 1970s he had some 20 to 30 employees. He continued to design machinery, formally licensing the manufacture, marketing and sale of his designs to the company, which went into receivership when agricultural subsidies were removed in the 1980s.
The machinery which concerns us is: spreaders, which are mounted on a truck or trailer and comprise a large bin, a set of rotating spinners at the rear, and a conveyor system to move the fertiliser to the spinners; side tippers, which are trailers to carry additional fertiliser and tip it from a raised position into the spreader; and drawbeams, which are fitted to truck spreaders so they can tow side tippers.
The business extended to Australia, where Transpread Pty Ltd was incorporated in 1979 and managed by Keith Hoyle, another of David’s sons. It marketed and manufactured machines to David’s designs from 2000 to about 2004 or 2005, but then ceased trading.
Between 1984 and 1992 David traded in partnership with his wife and Keith. David designed spreaders and the partnership manufactured and licensed their manufacture. From 1982 to 1993 he developed a wide belt spreader, known as the 830 for the width (in mm) of its belt conveyor.
Transpread International Ltd, the second respondent, was incorporated in 1992 to licence the manufacture of David’s designs. It continues in business, with four licensees in New Zealand and 15 in other countries.
In 1995 David began to design the Transpread 730 chain spreader. The number 730 refers to the width of the conveyor (again in mm), which uses chains and bars rather than a belt. We record that other spreader designs were used, but the proceeding focuses on the 730 and the 830. David designed the 730 using AutoCAD, a design software application. In the same year he established Transpread Co Ltd to market his designs and supply parts to licensees.
Paul worked with David and Transpread Pty Ltd in Australia in the mid‑1980s for around two years but then left, saying that he was exhausted by overwork and was not paid enough to live on. He returned to New Zealand in 1997 and resumed contact with his father. He then worked for Transpread Co Ltd from 1997 to the end of 1999, manufacturing spreaders from a house and workshop in Maungaturoto, Northland.
The first 730 spreader, named the Trotter spreader after its purchaser, was manufactured and delivered in 1998. It was a single-chain spreader, the subject of a patent granted to David on an application made on 21 September 1998. There are variations on the design. Some have two chains.
In 2002 Paul returned to the business, agreeing to provide “contract labour” manufacturing services to Transpread Co Ltd through Palrik Engineering Ltd, a company he formed with an associate. Palrik provided manufacturing services to Transpread until June 2004. Negotiations between David and Paul for Paul to take over the manufacturing side of Transpread’s business came to nothing, and Paul left to set up a business on his own account in July. His departure was not harmonious, as the Judge put it.[6] David says that before leaving Paul copied David’s drawings, laser cutting shape files and construction and operating manuals.
[6]At [14].
Paul built spreaders, side tippers and drawbeams that very closely resemble David’s machines. He was selling them by late 2004. David says that the designs are copies of his own. In particular, he says that Paul copied the 730 spreader. It is of moment that by this time the 830 was no longer copyright-protected because it had been sold in numbers for more than 16 years.[7]
The pleadings issue
[7]Copyright Act 1994, s 75.
As noted, Clark J held that Paul’s claim that the pleaded works lacked originality was an affirmative defence that had not been pleaded.[8] Although she went on to decide the claim on the merits, this pleadings issue was Paul’s first and principal ground of appeal. That is so because Paul argued that originality could only be shown by reference to earlier drawings from which the pleaded works were in part derived and David did not discover such drawings. In particular, it was said that the 730 spreader was part of a “design continuum” beginning with the 830. The Judge rejected the premise of this argument,[9] but also held that the failure of pleading on Paul’s part justified David’s failure to disclose prior art, which had not been put in issue.[10]
[8]Hoyle v Hoyle, above n 1, at [61]. As noted, she reached the same conclusion regarding ownership of copyright. We address that issue below.
[9]At [99].
[10]At [62].
The Judge correctly found that Paul changed his case shortly before trial, and did so without notice.[11] His pleading in answer to David’s claim to originality was that he had no knowledge and therefore denied the claim. His case, as developed in a further amended defence and counterclaim dated 20 April 2015 and explained by the evidence he exchanged before trial, was that the 730 was indeed original but Paul and his brother designed it.
[11]At [58].
In his opening at trial on 30 November 2015, Mr Dengate Thrush for Paul raised the design continuum argument for the first time. Objection was taken at once. In hindsight it can be seen why Paul changed tack. The sequence is:
(a)In his principal brief, exchanged in August 2015, Paul claimed that “the first 730 spreader was designed by me”. It was the Trotter spreader, which was sold in 1998. He deposed that David was overseas at the time.
(b)In a reply brief dated 23 September 2015, David produced a set of 730 drawings which had been modified in August 1996, when Paul was living and working in Australia.
No prior warning of this change of defence had been given before trial. In a rejoinder brief dated 20 October 2015, Paul took issue with the authenticity of some of the drawings David had produced, but he did not abandon the claim that the 730 was his own original work.
We accept Mr Dengate Thrush’s submission that lack of originality is not strictly an affirmative defence. Paul’s denials put David to proof of both originality and ownership. However, nothing turns on this. A defence cannot be evasive, but must answer the claim in substance. Rule 5.48 of the High Court Rules relevantly provides that:
5.48 Requirements of statement of defence
…
(2)A denial of an allegation of fact in the statement of claim must not be evasive. Points must be answered in substance. If for example, it is alleged that the defendant received a sum of money, it is not sufficient to deny receipt of the particular amount. Rather, the defendant must deny receipt of that sum or any part of it, or set out how much was received. When a matter is alleged with circumstances it is not sufficient to deny it as alleged with those circumstances. In all cases a fair and substantial answer must be given.
…
(5)The statement of defence must give particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances sufficient to inform the court, the plaintiff, and any other parties of the defendant’s defence.
Paul’s defence did not comply with the rule, if he intended to show by reference to prior art that the pleaded works were not original. Indeed, it was positively misleading.
It follows that we agree with the Judge, though for slightly different reasons, that the pleading was defective. We agree with her that in consequence no adverse inference should be drawn against David for his failure to discover prior art, notably the 830 drawings, that was never put in issue.
We further agree with the Judge that the pleadings issue rests on the false premise that only by producing the prior art could David prove originality. The argument proceeds on a misinterpretation of the Supreme Court’s judgment in Henkel KGaA v Holdfast New Zealand Ltd.[12] In that case the plaintiff had failed to plead the copyright work on which it relied. The Court held that a cause of action for breach of copyright required that the work in issue be clearly and accurately identified.[13] The plaintiff had failed to plead the drawing on which it ultimately relied, pleading rather a type of packaging based on the drawing. In this case David did plead the works on which he relied, being AutoCAD drawings and laser cutting files. He might prove their originality by any admissible and probative evidence.[14] It is true that caution is required where a derived work (such as the 730 spreader) is said to be original, but the Judge correctly reminded herself of that principle.[15]
Conduct of the appeal
[12]Henkel KGaA v Holdfast New Zealand Ltd [2006] NZSC 102, [2007] 1 NZLR 577.
[13]At [29]–[30].
[14]LA Gear Inc v Hi-Tec Sports Plc [1992] FSR 121 (CA) at 136.
[15]Interlego AG v Tyco Industries Inc [1989] AC 217 (PC) at 263.
Before turning to the substance of the appeal, it is necessary to say something about the manner in which it was conducted. This entails criticism of solicitors and counsel that we would rather avoid, but we must explain certain rulings that circumscribed the case Mr Dengate Thrush wished to present before us.
The record is very large and much of it was presented in electronic form in the High Court. We were told that only by viewing some of the files on a screen in three dimensions can the drawings be appreciated. However, no attempt was made on appeal to co-operate with David’s solicitors about the content and form of the case on appeal. Paul’s solicitors acted unilaterally, preparing and filing the case in paper form without reference to the respondent. There was no suggestion that an electronic casebook would be prepared under the Higher Courts Electronic Protocol. This behaviour contravened r 39 of the Court of Appeal (Civil) Rules 2005, which prescribes that the appellant must prepare the case in consultation with the respondent. The immediate objective of this rule is to ensure that the case includes all documents relevant to the issues on appeal, and none that are not. Since the criterion for inclusion is relevance, the process of settling the case should also ensure that all counsel understand what is to be argued. Compliance with the rule is not optional.
On 9 August 2017, shortly before the hearing before us, and without prior warning to David’s solicitors, Paul’s solicitors filed an application to adduce further evidence on appeal. It took the form of affidavits from Paul, a Gary Bell and a David Hatfull. It was said that this went to originality of the pleaded works, and hence David’s credibility. The evidence was contentious, necessitating a response from David and cross-examination. No acceptable explanation was given for the delay in making the application. The evidence might have been obtained long before; indeed, it appeared that some of it might have been called at trial had Paul disclosed his defence earlier than he did. Lateness of notice inevitably prejudiced the respondent. After hearing from counsel in a conference call on 14 August, two days before the hearing, we advised that were we to admit the evidence an adjournment must follow. Mr Dengate Thrush then withdrew the application.
During the conference call Mr Dengate Thrush disclosed, in response to an inquiry from the Court about the drawings, that he intended to provide us with electronic copies of a subset of the drawings and appropriately-equipped laptops to view and manipulate them onscreen. (Specialised software is required.) No reference had been made to this in a memorandum of 27 July in which counsel explained that certain further exhibits from the trial record would be added in the form of an additional volume of the case, though it appears that the volume comprised some of the drawings that counsel intended to produce electronically. It ought to have been patent that Mr Johns must protest this ambush, and he did. Faced with the inevitability of an adjournment so that process could be followed, Mr Dengate Thrush retreated. In the result, the appeal was argued by reference to the paper record only. This places us at a disadvantage to the trial Judge, who viewed the documents on screen and with the aid of experts, but that is a consequence for which counsel must accept responsibility.
Finally in this unhappy saga, we record that when he commenced his argument at the hearing of the appeal on 16 August Mr Dengate Thrush attempted to hand up “speaking notes” of 31 pages in length, which is longer than the maximum prescribed for the written arguments exchanged before the hearing. We refused to receive them. The Court does receive short summaries or “roadmaps” at hearings, but these are seldom longer than a page or two.
Observations
Before turning to the issues, we make three points about the appeal. These apply generally to originality, ownership and infringement.
First, the appeal focused on the pleading issue; that is, whether Clark J was correct to refuse to allow Paul to advance originality and ownership defences.
Second, the Judge’s factual findings against Paul turned in substantial part on credibility. Mr Dengate Thrush had to show that the Judge was wrong to find David credible, and Paul not. Though we must come to our own view, an allowance must be made for the advantages of the trial Judge.
Third, the appeal sought to exploit undisputed evidence that not all parts of the 730 spreader are original. Some parts are identical to parts of the 830, which is no longer copyright-protected. Mr Dengate Thrush criticised the Judge for failing to identify with particularity which specific parts were original, and he contended that the appeal must be allowed for the reason that David had failed to prove which specific parts were original.
This argument rests on a misconception. In large part this is a collocation case.[16] The pleaded works comprised drawings and laser cutting files. Each drawing typically shows a number of parts. The layout ultimately results in efficient use of steel when the parts are laser cut, and therein may lie the art. It was David’s case that the combination of some new parts and their layout in the drawing sufficiently established the element of originality. And the Judge satisfied herself that some parts were indeed new by comparing 21 spreader components.[17]
Originality
[16]A collocation case is one where “the plaintiff relies on a collection of individual features, none of which on their own would attract copyright”: Bonz Group (Pty) Ltd v Cooke [1994] 3 NZLR 216 (HC) at 220.
[17]Hoyle v Hoyle, above n 1, at [156].
It is not in dispute that the Judge correctly directed herself that copyright may subsist in derived works so long as each meets the low bar for copyright originality. As she put it:
[67] An expression of an idea or thought may attract protection even if the work draws on the ideas of others ...
[68] There is no need for particular inventiveness or novelty. A work must simply have been created independently, using skill, judgment, labour or effort. The threshold is low. Applying these principles the issue is whether the pleaded works have sufficient originality for copyright to subsist.
By that measure the Judge concluded without difficulty that the pleaded works she had identified earlier in the judgment were David’s original works and that copyright subsisted in them.[18]
Spreaders
[18]At [127].
The Judge’s findings about spreaders were:
[72] I accept David Hoyle’s evidence of his authorship of the drawings. I found the evidence of his background in design and manufacture of machinery pertinent to my consideration of his claims of authorship of the pleaded works.
…
[75] By 1995 when David began designing the Transpread 730 chain spreaders using AutoCAD he had been designing and developing machinery for approximately 35 years.
…
[77] It was in 1995 when David was visiting GVM, a Transpread licensee in Pennsylvania, that the idea of a new type of chain spreader occurred to him. He stayed in a caravan on the premises of GVM for six months assisting GVM with its Tructor. He saw a certain type of chain being used on salt spreaders which was not available in New Zealand at the time and had not been used on fertiliser spreaders in New Zealand or Australia. All the spreader chains in New Zealand had been “c188” (88mm) combination chains with what was referred to as an “over the top” return.
[78] David’s evidence was that from the time he started work on the designs until the first 730 chain spreader was built in 1998 it took about two years and hundreds of hours, probably over 1000, of designing components, nesting components, making construction manuals and testing.
[79] I accept David Hoyle’s evidence. He impressed me as a very careful witness. In the face of evident hostility towards him from the defendant he was a co-operative and dispassionate witness throughout. He was fulsome in his responses under cross-examination and concessionary. He was also very clear about the questions that were asked of him in cross-examination in particular and in his responses. Where necessary he corrected terminology and sought clarification.
[80] Paul Hoyle contrasted significantly at times in terms of his answers and presentation. He was defensive and less co-operative …
[81] The plaintiffs pleaded that because of the defendant’s failure to discover the drawings from which the defendant’s infringing machines were made comparisons could not be made of drawings with drawings. This was an area of contention and the judgment which I issued on 30 November required Paul Hoyle to re-swear an affidavit as to the inquiries that had been made to locate the relevant documents. He maintained they did not exist and that he kept his designs in his head. His demeanour and answers during cross-examination tended towards defensiveness and lack of cooperation. By way of further example:
Q.Okay. It won’t be fruitful for us to argue out what ‘some time’ means but you did — you also said you do not currently have the laser shape files for the single chain on your system. We can agree that that’s a lie can’t we?
A. That would be incorrect, yes.
Q.And you can understand why they were wanting these can’t you?
A No. I still cannot. I can understand why David wants them.
[82] The notes of evidence show that it took four pages of cross‑examination for Paul Hoyle to agree a fact which was not able to be credibly disputed namely the issue of whether he had design files for spreaders on a particular date, contrary to representations made in correspondence that he did not have such files. Paul Hoyle’s defensiveness was such that it was necessary for me to remind him that counsel have an obligation to put propositions to witnesses and that it was not personal. Nevertheless Paul Hoyle’s bitterness and resentment continued to manifest itself with such answers as:
My father has never been concerned about anybody except himself his whole life so I do not believe that [his father was concerned about his welfare] for a second.
[83] When cross-examined about the time it would take to design and manufacture the Trotter spreader and elements of drawings were put to Paul Hoyle, he answered defensively with replies such as “you can suggest whatever you like” and “if you say so” on at least seven occasions during a 20 minute period.
[84] On the basis of David Hoyle’s evidence, which I accept, the plaintiffs have demonstrated that there was sufficient skill, labour and effort involved in David Hoyle’s creation and development of the spreader drawings and that there is sufficient originality for copyright to subsist.
She went on to find that although some components of the 730 were copied from the 830 there was sufficient originality in the 730 to make the totality an original work:
[92] While several features of the 730 were similar to the 830 and other earlier spreaders the evidence demonstrates significant differences between the machines such that I am able to conclude there has been sufficient material alteration or embellishment to make the totality of the work an original work. I find that “chainwid.dwg” and the later versions, iterations and developments of that drawing as well as the drawings of various components for the 730 spreader, are original drawings authored by David Hoyle.
Mr Dengate Thrush sought to persuade us that the Judge was wrong on credibility. He submitted that Paul was subjected to sustained attack in cross‑examination and became defensive. His account had support from industry witnesses and his brothers. David did not have support, and there was evidence that he had improperly obtained a patent for the 730 spreader by misrepresenting the priority date. Evidence from a Rodney Bird that Paul admitted taking Transpread’s designs was not credible and ought to have been rejected (as the Judge did, when discussing infringement). We accept that Paul was subjected to sustained attack on credibility grounds, as was David. Allowances may be made for that. But the Judge’s conclusions were not based on demeanour. The circumstantial evidence amply sustained her findings, in relation to both originality and infringement.
Side tippers
The Judge also found that originality subsisted in drawings for the side tippers:
[101] The principal copyright works relating to the side tippers, “side08.dwg” and “SIDE10.dwg”, were created at some point in 1994, though the metadata dates the files to 1 January 1995. These documents have been through a number of iterations, snapshots of which have been preserved by David Hoyle’s backup system.
[102] I accept David Hoyle’s evidence of his authorship of the drawings for reasons similar to those that lead me to accept his authorship of the spreader drawings.
…
[104] I am satisfied that the plaintiffs have demonstrated that there was sufficient skill, labour and effort involved in David Hoyle’s creation and development of the side tipper drawings and that there is sufficient originality for copyright to subsist.
She also found that if she could not rely on the drawings, the side tipper had evolved over time and was sufficiently distinctive in each iteration to be original:
[114] I consider that each of the profiles represented in the “evolution” document is sufficiently different to be an original work. Each is different in dimension, general geometries and features. Originality does not require novelty so much as the application of labour, judgement and skill which are evidenced in these differences. Paul Hoyle’s evidence relating to the different shapes in the later bin profiles was that although the differences appear minor the improvement in function is major and that entails a measure of real difference. Of course the merit of the difference is not significant when assessing originality, though the evidence of difference in merit supports the view that more than minimal skill and judgement were necessary to create the design differences that increased the design’s merit.
We have dealt with credibility issues above. Paul’s submissions did not otherwise challenge these findings directly.
Drawbeams
Similarly, the Judge found that originality subsisted in drawings for the drawbeams:
[124] I consider the evidence establishes that there has been sufficient skill, labour and effort involved in David Hoyle’s creation and development of the drawbar drawings and that there is sufficient originality for copyright to subsist. I am strengthened in my view when I consider the creditworthy nature of David Hoyle’s evidence.
We have dealt with credibility issues above. Paul’s submissions did not otherwise challenge these findings directly.
Conclusion on originality
We are not persuaded that the Judge was wrong to find the pleaded works sufficiently original. Some of the parts undoubtedly were, and the arrangement of new and old in the drawings was capable of possessing sufficient originality. We accept that where the element of originality is low the plaintiff may need to prove that their work was copied exactly, but that is a separate question.[19]
Ownership
[19]Land Transport Safety Authority of New Zealand v Glogau [1999] 1 NZLR 261 (CA) at 271; and Bonz Group (Pty) Ltd v Cooke, above n 16, at 220.
The pleadings issue also affects this ground of appeal. Paul ought to have particularised his defence to make it clear that he said ownership vested in other family entities, but he did not. In the result, David’s discovery and evidence was not directed to this defence.
Mr Dengate Thrush argued that under s 9 of the Copyright Act 1962, which is applicable through the transition provisions of the Copyright Act 1994, copyright vested in David’s employer, in whose service the design was done. He traversed the history of the family companies and partnerships and the history of licences both formal and allegedly informal. Ultimately, he submitted, copyright vested in Transpread Company Ltd, whose employee David was, and it has never been assigned to David. He submitted that Paul or Palrik (Paul’s company through which he provided contract labour) own copyright in some modifications to the spreader and side tipper.
The Judge rejected these arguments. She found that David was prejudiced by the want of notice and was never asked in cross-examination whether he was an employee of Transpread Co Ltd.[20] She accepted David’s evidence that he was the owner.[21]
[20]Hoyle v Hoyle, above n 1, at [131]–[132].
[21]At [133].
We are not persuaded that the Judge was wrong. The failure to particularise a defence when Paul undoubtedly knew of the family entities was prejudicial, and David’s evidence that he was the owner was not challenged in cross-examination. David never said that he was an employee. He said rather that he designed on his own account and licensed his designs to the family entities, which were responsible for manufacturing and licensing. It was never put to him that (contrary to the licensing arrangements) he acted as an employee. The inference is available that although he may have operated within a family business, David was conscious of ownership and careful to retain it himself.
Infringement
It is not suggested that the Judge misdirected herself on infringement. She recorded that the elements are objective similarity, causal connection and substantiality.[22] She acknowledged that substantiality serves to limit claims to those that are real and substantial. After traversing the evidence in detail she found, not by a small margin, that infringement was proved. She concluded that Paul took and copied David’s drawings. She described the similarities between their machines as “overwhelming”.[23]
[22]Wham-O MFG Co v Lincoln Industries [1984] 1 NZLR 641 (CA) at 666; and Oraka Technologies Ltd v Geostel Vision Ltd [2013] NZCA 111 at [85]–[86].
[23]Hoyle v Hoyle, above n 1, at [216].
The Judge assessed infringement by reference to the design of 21 component parts. For spreaders the principal components were drawings, bin rears, bin fronts, side plate, front floors, and front chain covers. For side tippers and drawbeams infringement rested on drawings.
We need not review the Judge’s findings about each of these items separately. We illustrate her approach by reference to one item, the spreader drawings:
(a)She compared drawings and was satisfied on her own assessment and having regard to expert evidence, that they were objectively similar; for example, five vertical slots on a bin rear (used to align parts in assembly) matched perfectly.[24]
(b)She satisfied herself of the causal connection, finding Paul’s explanation of how he happened to possess what David said was a copy of a drawing of an identified Transpread customer’s 730 spreader rear “completely unsatisfactory”,[25] and his claim to have drawn identical parts from memory implausible.[26]
(c)She found that Paul had copied the drawings, relying on the circumstantial evidence and the evidence of Mr Bird, whom she found reliable.[27]
(d)She concluded that the degree of reproduction was substantial.[28]
[24]At [157].
[25]At [164].
[26]At [174].
[27]At [177]–[180].
[28]At [198].
We can find no fault with the Judge’s approach. The important point is that the drawings were taken and copied exactly. Mr Dengate Thrush challenged the Judge’s conclusion that the drawings were taken and copied. For example, he argued that Paul never claimed to have designed from memory. But the conclusion that Paul did copy David’s drawings was manifestly open to the Judge. Indeed it is inescapable. And our attention was drawn to no material differences between the machines. Even if it were true that a low level of originality attaches to the drawings, the extent of reproduction in this case clearly amounts to infringement.[29]
Counterclaims
[29]Land Transport Safety Authority of New Zealand v Glogau, above n 19, at 271.
The Judge dismissed counterclaims for unjustified proceedings, unlawful interference with business relations, injurious falsehood and breach of the Fair Trading Act 1986, all arising out of David’s actions in telling Paul’s customers of the dispute.[30] Mr Dengate Thrush accepted that the appeal against these findings depended on Paul succeeding on David’s infringement claim. Accordingly, we need say no more about them.
Injunction
[30]A further counterclaim for revocation of patent succeeded and was not the subject of appeal.
However, something must be said about the injunction. It was in the following terms:[31]
[273] An injunction is granted in the terms sought at paragraph B of the statement of claim except that in respect of the plaintiffs’ spreaders the injunction does not extend beyond 22 December 2017 (being 16 years from the manufacture of the 50th spreader).
It will be seen that the injunction expires for spreaders on 22 December 2017, the Judge having adopted that date as the 16th anniversary of the manufacture of the 50th 730 machine.
[31]Hoyle v Hoyle, above n 1.
The order incorporates and modifies para B of the statement of claim, which sought:
B.An injunction restraining the defendant, whether by himself or by his servants, agents, contractors, or associates or otherwise howsoever from infringing the plaintiffs’ copyright in the artistic works by any of the acts listed above, including manufacturing, selling or offering for sale in New Zealand the defendant’s spreaders and tippers.
The “copyright works” comprised defined spreader, side tipper and drawbeam drawings, and the acts listed comprised copying, reproducing, adapting, issuing copies to others, possessing or dealing with infringing copies, and manufacture and sale by Paul of his spreaders, tippers and drawbeams.
The appeal challenged the injunction expiry date. This claim must fail. The date of production of the 50th machine was not in dispute. The appeal could succeed only if a successful challenge to originality had been mounted.
The appeal also challenged the terms of the injunction. We find it appropriate insofar as it prohibits copying and dealing with the copyright works. However, it also restrains manufacture of Paul’s machines. Not every component part of those machines infringes copyright and the injunction cannot extend so far. Paul is free to manufacture spreaders that do not infringe David’s copyright in the copyright works.
To achieve this, we modify the injunction entered in the High Court based on para B of the respondent’s statement of claim. The order is effectively the same, but with the phrase “including manufacturing, selling or offering for sale in New Zealand the defendant’s spreaders and tippers” deleted. If any spreaders and tippers manufactured by Paul do infringe any of David’s copyrights then the order as amended will still prevent that infringement.
Result
The appeal is allowed in part. We set aside the injunction entered in the High Court.
We make an order restraining the appellant — whether by himself or by his servants, agents, contractors, or associates or otherwise howsoever — from infringing the plaintiff’s copyright in the artistic works by any of the means set out in para “A” to the third amended statement of claim (other than subpara “h”) dated 7 April 2015.
The appeal is otherwise dismissed.
Having succeeded in substance, David will have costs. The appellant must pay costs for a complex appeal on a band B basis and usual disbursements, with an uplift of one third. We certify for second counsel. The uplift is made to recognise the additional costs imposed on David by the conduct of the appeal.[32] Mr Johns sought indemnity costs for some steps, but we decline to award them.
[32]Court of Appeal (Civil) Rules 2005, r 53E(2).
Solicitors:
McCabe and Company, Wellington for Appellant
Baldwins Law Ltd, Auckland for Respondent
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