Oraka Technologies Ltd v Geostel Vision Ltd

IN THE COURT OF APPEAL OF NEW ZEALAND

CA271/2011
[2013] NZCA 111

BETWEEN  ORAKA TECHNOLOGIES LIMITED
First Appellant

AND  ORAKA GRADERS LIMITED
Second Appellant

AND  MICHAEL WILLIAM SCHWARZ
Third Appellant

AND  GEOSTEL VISION LIMITED
First Respondent

AND  PAUL DAYNES AND GORDON ROBERTSON
Second Respondents

AND  NAPIER TOOL & DIE LIMITED
Third Respondent

Hearing:         11-12 July 2012

Court:             Glazebrook, Randerson and Stevens JJ

Counsel:         B P Henry and A E McDonald for Appellant
K J Crossland and R J Robertson for Third Respondent

Judgment:      18 April 2013 at 11.00 am

JUDGMENT OF THE COURT

A        The appeal is allowed in part.  Judgment is entered for the first appellant in respect of the claim of copyright infringement. 

BThe matter is remitted to the High Court for an inquiry into damages.

C        The cross appeal is dismissed.

DThe third respondent must pay the appellants costs for a standard appeal on a band A basis plus usual disbursements.

REASONS OF THE COURT

(Given by Glazebrook J)

Table of Contents

Para No
Introduction	[1]
Background	[7]
The Oraka grader	[7]
Development of the grader	[10]
Companies involved with the Oraka grader	[14]
Background to alleged infringement	[20]
Issues with the Geostel design	[32]
Procedural history	[38]
The copyright infringement judgment	[41]
Copyright ownership	[41]
(a)   Application for grant	[44]
(b)     Kinder and Bell arrangement	[48]
Infringement of copyright	[52]
(a)   The parties’ submissions	[53]
(b)     The legal test	[55]
(c)   Reproduction of substantial part of copyright work	[56]
(d)     Causal connection	[57]
(e)   Sufficient objective similarity	[63]
The costs judgment: flagrancy	[64]
Structure of our judgment	[66]
Ownership of copyright	[70]
Submissions of Napier Tool	[70]
Our assessment	[75]
The law on infringement by copying	[83]
The evidence in the High Court	[93]
Schwarz evidence	[93]
Stevens evidence	[91]
Witham evidence	[96]
Hanlon evidence	[105]
Objective similarity	[109]
Causal connection	[113]
The law	[113]
Submissions	[116]
Our assessment	[119]
Substantial part	[129]
The law	[129]
Submissions of the appellants	[134]
Submissions of Napier Tool	[137]
Our assessment	[139]
Flagrancy	[147]
The parties’ submissions	[147]
Our assessment	[151]
Remedy	[152]
Result	[157]

Introduction

1. Mr Michael Schwarz developed a machine for the automatic grading of asparagus spears (the Oraka grader).  Oraka Technologies Ltd (Technologies) and Oraka Graders Ltd (Graders) are companies in which Mr Schwarz has a significant shareholding and which played a role in the development of the Oraka grader.  They assert that the respondents infringed copyright in a cup assembly forming part of the Oraka grader, the Schwarz cup assembly.

2. The copyright works are a drawing dated 3 February 1993 and three drawings dated 10 February 1993.  The first drawing depicts an asparagus carriage constituting three assembled components, a chassis, a tilting cup and a trigger.  The other drawings each represent one of those individual components.  The drawings were prepared by Napier Tool & Die Ltd (Napier Tool) but commissioned by Mr Schwarz.[1] 

   [1]See this Court’s earlier finding on this point below at [40].

3. It was alleged in the High Court that, from 2001 onwards,…