Oraka Technologies Ltd v Geostel Vision Ltd - [2010] NZCA 232

IN THE COURT OF APPEAL OF NEW ZEALAND
CA145/2009
[2010] NZCA 232
BETWEENORAKA TECHNOLOGIES LIMITED
First Appellant
ANDORAKA GRADERS LIMITED
Second Appellant
ANDMICHAEL WILLIAM SCHWARZ
Third Appellant

ANDGEOSTEL VISION LIMITED
First Respondent
ANDPAUL DAYNES AND GORDON ROBERTSON
Second Respondents
ANDNAPIER TOOL & DIE LIMITED
Third Respondent

Hearing:23 February 2010

Court:Glazebrook, Hammond and Randerson JJ
Counsel:B P Henry and A E McDonald for Appellants
E J Hudson for First and Second Respondents
K J Crossland and P Verboeket for Third Respondent

Judgment:8 June 2010 at 11 am

JUDGMENT OF THE COURT

A The appeal is allowed.
BWe make a declaration that the appellants are the owners of copyright in the drawing of 3 February 1993 and the three drawings of 10 February 1993 which are the subject of this proceeding.
CThe third respondent is to pay costs to the appellants (jointly and severally) on a Band A basis and usual disbursements on this appeal. The costs in the High Court are to be fixed in that Court.
DWe remit the proceeding to the High Court for determination of the remaining issues in the proceeding.

REASONS OF THE COURT
(Given by Hammond J)
Table of Contents

Para No
Introduction  [1]
The artistic works  [12]
The pleadings  [14]
The law on commissioning  [19]
This case  [40]
The tooling drawings  [63]
Relief  [64]

Introduction
[1]       The appeal concerns the ownership of the copyright in certain industrial drawings. The particular issue is whether those drawings were commissioned by the appellants in terms of s 9(3) of the Copyright Act 1962 (the 1962 Act).
[2]       Since the early 1980s the appellants have been committed to developing a machine for the automatic grading of asparagus spears by reference to their weight, colour, size and appearance. To this end, Mr Schwarz, the third appellant, evolved a machine called the “Oraka grader”. This comprises a conveyor belt with a specialised cup assembly that receives individual asparagus spears. The conveyor belt carries the cups along to a camera/illumination station at the rate of about 12 spears per second. The image of each individual spear is captured by the camera, and processed by a computer. Each spear is then graded by the computer according to its length, colour and quality, depending on the demands of the market for which the crop is destined. When the asparagus spear reaches a designated collection chute for its grade, that cup assembly automatically trips. The spear drops from the cup into the particular collection chute from where it is packaged, with other spears, as part of the machine’s delivery of a programmed weight of spears.
[3]       This is a relatively sophisticated machine. Mr Schwarz did not personally develop every aspect of the Oraka grader. As only one instance, the necessary computer software to operate the machine was developed by others under what Allan J, the trial Judge, described as “appropriate contractual arrangements”.[1] Mr Schwarz was however directly involved with the development of the cup assembly used to transport and grade individual asparagus spears as well…

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: [2010] NZCA 232
Decision Date: 8 June 2010

CaseChat Overview and Summary

The appeal in Oraka Technologies Ltd v Geostel Vision Ltd revolves around the ownership of copyright in specific industrial drawings related to an asparagus grading machine. The appellants, Oraka Technologies Limited, Oraka Graders Limited, and Michael William Schwarz, claim ownership of the copyright, while the respondents, Geostel Vision Limited, Paul Daynes, Gordon Robertson, and Napier Tool and Die Limited, dispute this claim. The central legal issue is whether the drawings were commissioned by the appellants under the Copyright Act 1962, section 9(3), which vests copyright in commissioned works in the commissioner.

The Court of Appeal held that there was indeed a lawful commission. The appellants had requested Napier Tool to create the drawings, and although no specific payment for these drawings was made, the agreement to pay for the manufacturing work if the drawings were satisfactory was sufficient to constitute an agreement to pay for the drawings themselves. The Court found that Napier Tool's policy of offering a "free design service" did not negate the implied obligation to pay for the drawings if they led to the manufacturing work, which they did. The Court rejected the High Court's division of the events into two separate transactions, finding it artificial and not reflective of the commercial realities.

As a result, the Court allowed the appeal, declared the appellants as the owners of the copyright in the drawings of 3 February 1993 and the three drawings of 10 February 1993, and ordered Napier Tool to pay costs to the appellants. The Court also remitted the case back to the High Court to determine the remaining issues, including the specific allocation of copyright ownership among the appellants and the remaining copyright disputes.

Orders