Napier Tool & Die Ltd v Oraka Technologies Ltd - [2013] NZSC 86

IN THE SUPREME COURT OF NEW ZEALAND

SC 46/2013
[2013] NZSC 86

BETWEEN

NAPIER TOOL & DIE LIMITED
Applicant

AND

ORAKA TECHNOLOGIES LIMITED
First Respondent

ORAKA GRADERS LIMITED
Second Respondent

MICHAEL WILLIAM SCHWARZ
Third Respondent

Court:	Elias CJ, McGrath and Arnold JJ
Counsel:	K J Crossland for Applicant B P Henry and A E McDonald for Respondents
Judgment:	12 September 2013

JUDGMENT OF THE COURT

AThe application for leave to appeal is dismissed.
BThe applicant must pay the respondents (collectively) costs of $2,500 plus all reasonable disbursements, to be fixed, if necessary, by the Registrar.

____________________________________________________________________

REASONS

The applicant, Napier Tool & Die Ltd (Napier Tool), applies for leave to appeal a decision of the Court of Appeal[1] holding that it infringed the copyright of the first respondent, Oraka Technologies Ltd, in drawings of a cup assembly forming part of a machine for the automatic grading of asparagus spears.[2] In making this finding, the Court of Appeal overturned the finding of Allan J in the High Court that no breach of copyright had been established.[3]
[1]Oraka Technologies Ltd v Geostel Vision Ltd [2013] NZCA 111 [Oraka (CA)].
[2]The Court of Appeal describes the copyright works at [2].
[3]Oraka Technologies Ltd v Geostel Vision Ltd HC Hamilton CIV-2005-419-809, 7 April 2011 at [176] [Oraka (HC)].
Allan J had held that, although there was clear evidence of the use of the respondents’ design as the starting point for the design of the competing work, the differences in detail between the two works were sufficient to rebut an inference of copying, given the fact that the similarities in design were largely dictated by functional constraints or by industry requirements.[4] By contrast, the Court of Appeal disagreed with the view that the similarities were explained sufficiently by functional constraints. It held that infringement was established because the competing cup assembly was a copy of a substantial part of the original, a conclusion that it considered was supported by agreement between the parties’ expert witnesses that the competing design appeared to be a “second generation” of the original.[5]
[4]Oraka (HC), above n 3, at [176].
[5]Oraka (CA), above n 1, at [146].
Napier Tool argues that an appeal to this Court is justified under s 13 of the Supreme Court Act 2003 on two bases. First, it submits that the Court of Appeal approached the three elements for breach of copyright identified in Wham-O MFG Co v Lincoln Industries[6] (substantial reproduction, sufficient objective similarity, and causal connection) in the wrong sequence, by beginning with derivation. Secondly, it argues that the Court of Appeal was wrong to overturn the trial Judge’s assessment and exceeded its proper appellate function by substituting its own assessment on an overbroad application of the approach required by this Court in Austin, Nichols & Co v Stichting Lodestar.[7]
[6]Wham-O MFG Co v Lincoln Industries [1984] 1 NZLR 641 (CA) at 666, as cited in Oraka (HC), above n 3, at [53]; and Oraka

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: [2013] NZSC 86
Decision Date: 12 September 2013

CaseChat Overview and Summary

Napier Tool & Die Limited applied for leave to appeal against a decision of the Court of Appeal which found that it infringed the copyright of Oraka Technologies Limited in drawings of a cup assembly for an asparagus grading machine. The Court of Appeal had overturned the finding of Allan J in the High Court that no breach of copyright had been established. Napier Tool argued that the Court of Appeal erred in its approach to the three elements of copyright infringement and exceeded its appellate function. The Supreme Court held that the Court of Appeal had not erred in its approach and that its conclusion on the facts was justified. The grounds for leave to appeal had not been made out. Napier Tool must pay the respondents' costs of $2,500 plus reasonable disbursements.

The legal issues were whether the Court of Appeal correctly approached the three elements of copyright infringement and whether it properly exercised its appellate function. Napier Tool argued that the Court of Appeal considered derivation before substantial reproduction and objective similarity, and that it substituted its own view for that of the High Court. The Supreme Court held that the three elements are interlinked and may be addressed in a different sequence depending on the context. It also held that the Court of Appeal was entitled to form its own view on the facts and came to a different conclusion based on its assessment of the significance of functional constraints.

The Supreme Court dismissed Napier Tool's application for leave to appeal and ordered Napier Tool to pay the respondents' costs of $2,500 plus reasonable disbursements. The Court found that the Court of Appeal had not erred in its approach and had properly exercised its appellate function by coming to a different conclusion on the facts. The Court of Appeal had identified design elements that Napier Tool had copied and held that in combination they involved a substantial copying.

Orders