FEDERAL COURT OF AUSTRALIA

Tonnex International Pty Ltd v Dynamic Supplies Pty Ltd [2012] FCAFC 162

THE COURT ORDERS THAT:

1.    The interlocutory application for leave to amend the notice of appeal is dismissed.

2.    The appeal is dismissed.

3.    The appellant is to pay the respondent’s costs of the interlocutory application referred to in order 1 on an indemnity basis.

4.    The appellant is otherwise to pay the respondent’s costs of the appeal on a party/party basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

Introduction

1    This is an appeal against orders made by the primary judge in a proceeding brought by the respondent to the appeal (Dynamic) against the appellant (Tonnex) for copyright infringement and contravention of ss 52, 53(a), 53(c) and 53(eb) of the Trade Practices Act 1974 (Cth). The appellant does not appeal against any of the orders made by the primary judge based upon the latter provisions. Hence, the appeal is concerned only with the findings and orders made by the primary judge in respect of copyright infringement.

2    The primary judge found that Tonnex infringed Dynamic’s copyright in an original literary work consisting of a compatibility chart embodied in an electronic file referred to as the “March 2008 CSV file”. The substantive question in the appeal is whether the primary judge was in error in finding that copyright subsisted in the compatibility chart.

3    Subsequent to the hearing of the appeal, Tonnex filed an interlocutory application seeking leave to amend its notice of appeal. The proposed amendment seeks an order remitting the proceeding to the primary judge for further hearing of the copyright claim. We will return to the matter of the interlocutory application later in these reasons.

4    Both Tonnex and Dynamic compete in the same market as wholesale distributors of printer cartridges and other computer consumables. The compatibility chart embodied in the March 2008 CSV file includes information which enables a person to ascertain what type of printer cartridge or other consumable is suitable for use on a particular type of printer or other device.

The Copyright Work

5    A CSV file is a text file that can be used to update a database table. “CSV” stands for “comma separated values”. Each entry recorded in the file is separated by means of a comma, although other symbols can be used in place of a comma to avoid conflict where the entry itself is or includes a comma. By the time of the trial it was clear that the work in suit was a compatibility chart for printer and computer consumables in the form of the March 2008 CSV file. The primary judge described the work in suit in these terms (at para [13]):

The compatibility chart represented by the March 2008 CSV file comprises nine columns containing, respectively, the following information: Dynamic’s product code, the vendor or original equipment manufacturer (OEM) code, the OEM of the product, a description of the product, ink colour, product yield, the product category, product models (including other OEMs’ competing compatible products) and, where available, an image of the product. The file does not have, however, column headings. The March 2008 CSV file contains some 2,800 product line entries. The arrangement of the columns is designed to facilitate the cross-referencing of information within the columns.

The primary judge found that the work in suit was created by Mr Campbell who was, at all relevant times, an employee of Dynamic.

6    It is important to observe that the work in suit was, as the primary judge expressed it, the compatibility chart represented by the March 2008 CSV file. Implicit in his Honour’s description of the work in suit, and his Honour’s ultimate finding on the issue of subsistence, is the proposition that the work in suit came into existence when it was first fixed in material form, namely when it was created and saved by Mr Campbell in the form of a CSV file in March 2008.

The Pleadings

7    It is desirable to say a little about the pleadings. Included in the appeal book were the further amended application and the second further amended statement of claim both of which were filed on 25 August 2010. Relevantly, paragraph 3 of the further amended application sought a declaration that Tonnex had infringed copyright in Dynamic’s compatibility chart.

8    The second further amended statement of claim filed on 25 August 2010 alleged (at paragraph 17) that Dynamic had published a compatibility chart for printer and computer consumables. The particulars given stated that “[t]he compatibility chart has, subject to modification, been published on [Dynamic’s] website since 2007”. It also alleged (at paragraph 18) that the compatibility chart had been compiled by employees of Dynamic from numerous sources in the course of their employment, and that it was (at paragraph 19) an original literary work.

The primary judge’s REASONS

9    It was common ground at the trial that the question whether copyright subsisted in the compatibility chart depended upon whether it possessed the degree of originality necessary to attract copyright as a compilation. This in turn depended upon whether Mr Campbell had exercised sufficient skill, judgment or labour in creating the compatibility chart.

10    There was no issue before the primary judge as to the relevant legal principles. His Honour’s judgment includes a careful statement of the relevant principles which drew upon well known authorities including, in particular, Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 (HL) and IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 239 CLR 458. His Honour referred to the following principles as being of particular relevance (at paras [48]-[51]):

[48]    First, original works emanate from authors. The test for originality is whether the work originated from the author in the sense that it was not copied by the author: Robinson v Sands & McDougall Pty Ltd (1916) 22 CLR 124 at 132-3; Sands & McDougall Pty Ltd v Robinson (1917) 23 CLR 49 at 52; Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 291; Bookmakers’ Afternoon Greyhound Services Ltd v Wilf Gilbert (Staffordshire) Ltd [1994] FSR 723 at 731. That question is directed to the thing to which it is said the legislation attributes copyright protection: Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491 at [92]. In the present case that is the March 2008 CSV file.

[49]    Secondly, the particular work must be the product of human intellectual endeavour. It must have required some independent intellectual effort or the exercise of sufficient effort of a literary nature for its creation. However, neither literary merit nor novelty or inventiveness as understood in patent law is required in that regard: IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 239 CLR 458 at [33] and [48]; [99].

[50]    Thirdly, although compilations expressed in words, figures or symbols are plainly literary works in which copyright can subsist, copyright does not protect mere facts, ideas or information contained in a compilation. Copyright protects the particular form of expression that is the compilation itself: IceTV at [26], [28], [40] and [102]. Thus it is important when assessing the originality of a work for copyright purposes to have regard to the whole of the identified work, rather than to a particular aspect or particular aspects of it viewed in isolation. In particular, one should not confuse the arrangement of a work in a particular form with the individual elements that go to make up that form: Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 at [19]-[20]; Ladbroke at 277, 285, 290 and 291.

[51]    Fourthly, a compilation (as with other works of a copyright nature) may be brought into existence by the efforts of more than one individual. In IceTV Gummow, Hayne and Heydon JJ (at [99]) said:

    Where a literary work is brought into such existence by the efforts of more than one individual, it will be a question of fact and degree which one or more of them have expended sufficient effort of a literary nature to be considered an author of that work within the meaning of the Act. If the work be protected as a “compilation”, the author or authors will be those who gather or organise the collection of material and who select, order or arrange its fixation in material form …

11    All of the information contained in the compatibility chart was extracted from what was referred to in evidence as the “Navision database”. This database is populated from what were referred to in the evidence as “item cards” which are created for each of Dynamic’s products. These item cards are electronic records completed by Dynamic employees using information obtained from the original equipment manufacture (OEM) of each product, internet searches, customers or other distributors or suppliers. Each item card has 47 different fields. These fields make provision for the insertion of various information including:

    item number;

    product description;

    comments;

    colour;

    yield;

    product introduction date;

    pallet size;

    carton size;

    selling price;

    landed cost;

    inventory levels;

    vendor item number;

    compatibility information.

12    The primary judge found that, beginning in about June 2007, the Navision database was updated by various employees of Dynamic, principally Ms Alicia Sacristan, but also by Mr Campbell and other employees of Dynamic. His Honour said (at para [25]):

In about June 2007 (in circumstances to which I will refer later) a decision was taken within Dynamic to undertake a review of the information in the Navision database, with a view to improving how that information was stored. The review included adding information (such as information relating to yields and colours) and revising the product descriptions. It also involved ordering the information alphabetically and numerically in the product reference field. This is now the usual practice adopted by Dynamic’s employees engaged in the entry of data into the Navision database. If a new printer model is to be included in the product reference field for the item card of a particular product, the new printer model is not added to the end of the list, but is inserted into the list where it fits alphabetically and numerically. Ms Alicia Sacristan has been principally responsible for undertaking this work, but other employees of Dynamic have been involved, including Mr Campbell, to whom further reference will be made.

13    One of the submissions made to the primary judge by Dynamic was that Ms Sacristan was a joint author with Mr Campbell of the compatibility chart. His Honour rejected the argument that Ms Sacristan, or any other employee of Dynamic, was a joint author of the compatibility chart. An important consequence of that finding was that the originality of the work in suit as a compilation had to be assessed on the basis of Mr Campbell’s contribution alone, and his selection and arrangement of information extracted from the Navision database.

14    The key elements of the primary judge’s decision on the issue of originality appear at paras [77] to [84] of his Honour’s reasons where he said:

[77]    Although the selection of information was from a single source (namely, from the Navision database), I am satisfied that skill and judgment – intellectual effort – was brought to bear by Mr Campbell in making the selections he did.

[78]    First, those selections were informed by Mr Campbell’s personal assessment of what information might be valuable to a customer searching a website and would be used to initiate a search for other information relating to the products. This was so even though some of the columns repeated information. For example, the information in the column relating to ink colour was sometimes also present in the column relating to the product description. Similarly, the information in the column identifying the OEM was also present in the column relating to the product description. Another author might have considered these features to present redundant information which was undesirable to be included in such a chart. Yet, for the purpose of undertaking his selection, Mr Campbell obviously considered this presentation to be informative and useful, particularly for a work that was to facilitate searching by a customer on a webpage.

[79]    Secondly, Mr Campbell’s selection was also informed by an appreciation that the greatest utility to customers would be achieved by expressing the information in a particular form. It is true that the form of expression of the product description and compatibility information in the Navision database resulted from the separate work of the person who entered that information in that form into the Navision database. Despite this, the utility of that information in that form, and thus the desirability of its selection in that form for inclusion in the March 2008 CSV file, was, to that extent, properly attributable to Mr Campbell’s intellectual effort. That aspect of intellectual effort thus stands as a separate contribution by Mr Campbell towards the originality of the compatibility chart as a literary work for copyright purposes. It is to be remembered in this regard that the revision of the Navision database was attributable to his desire to use particular information, and particular information in a particular form, in the compatibility chart he was endeavouring to compile.

[80]    In this connection one must not be beguiled by the submission that the compatibility chart was merely an obvious or prosaic arrangement of information dictated essentially by the nature of that information. Simplicity itself may be a virtue and does not deprive a work of originality for copyright purposes, unless that simplicity is a demonstration of the absence of skill or effort in the circumstances. For example, the time and title information of television programs in a broadcast schedule may bear that characterisation simply because, given the context in which that information is to be expressed, it can only practically be expressed in that limited form, such that fact and expression are, for practical purposes, co-extensive: IceTV at [42] and [170].

[81]    However, that is not the present case. In the present case, the expression of the compatibility chart, in the form of the March 2008 CSV file, was not dictated by the nature of the information in it. There was nothing in the product descriptions or compatibility information that required that information to be expressed in the particular form in which it was expressed in the March 2008 CSV file. Fact and expression were not co-extensive.

[82]    Thirdly, intellectual effort was also used in the particular columnar arrangement of information in the March 2008 CSV file. This arrangement of the information was devised by Mr Campbell to best present, sequentially, the information in a way that he considered would be helpful to Dynamic’s customers as a compatibility chart that could be searched in a web-based environment.

[83]    The evidence shows that, at around the same time as the new compatibility chart was initially created by Mr Campbell, other forms of compatibility charts existed for printer and computer consumables which, while obviously dealing with the same general subject matter, were quite different in presentation and form to the compatibility chart compiled by Mr Campbell. That evidence included the OEM-produced compatibility charts of a kind that Tonnex itself incorporated in its earlier price lists.

[84]    The cases make clear that originality, for copyright purposes, is a matter of degree depending on the amount of skill, judgment or labour that has been involved in making the compilation: Ladbroke at 277-278, 282, 285, 292. Whilst negligible skill and labour will not suffice to sustain a claim of originality, I am satisfied in the present case that, cumulatively, the skill and labour employed by Mr Campbell in creating the compatibility chart in the form of the March 2008 CSV file was more than negligible and that that work was, accordingly, an original literary work for copyright purposes.

(emphasis in original)

15    There are several observations to make concerning his Honour’s assessment of the evidence in relation to the issue of originality. First, the primary judge was careful to distinguish between the skill, judgment and labour required to create and maintain the Navision database from the skill, judgment and labour necessary to create the compatibility chart. Secondly, the primary judge was careful to focus on the intellectual effort brought to bear by Mr Campbell in selecting and arranging the information contained in the compatibility chart. Thirdly, the primary judge rejected Tonnex’s argument that, for any practical purpose, the information contained in the compatibility chart could only be expressed in one form. His Honour undertook a detailed examination of the nature of the intellectual effort expended by Mr Campbell in creating the compatibility chart and found that this involved making choices as to what information would or would not be extracted from the Navision database for use in the compatibility chart based upon Mr Campbell’s appreciation of customers’ needs.

Grounds of Appeal

16    At a general level, Tonnex’s grounds of appeal challenge the primary judge’s finding that the intellectual effort involved in the creation of the compatibility chart was sufficient to render it an original literary work for the purposes of s 32(2) of the Copyright Act 1968 (Cth). In particular, it is contended by Tonnex that the primary judge erred in concluding that the skill, judgment and labour employed by Mr Campbell in creating the compatibility chart was more than negligible.

17    Tonnex’s grounds of appeal also challenge the primary judge’s assessment of Mr Campbell’s evidence. It is contended that Mr Campbell’s evidence established that the intellectual effort that went into the selection and arrangement of the information contained in the compatibility chart was expended in the course of creating and maintaining the Navision database rather than in the course of creating the compatibility chart.

18    The specific challenges to the primary judge’s assessment of Mr Campbell’s evidence are found in grounds 5 and 6 of the notice of appeal which state:

5.    The learned trial judge erred in concluding that Campbell exercised skill and judgment and intellectual effort in selecting, arranging and expressing information for the CSV file/compatibility chart, in circumstances where:

    (a)    the thrust and substance of his evidence, considered as a whole, was that intellectual effort was exerted solely in the selection and ordering of materials for the Navision database;

    (b)    there was no evidence of any intellectual effort in the selection or ordering of material derived from the Navision database for insertion into the CSV file, and

    (c)    even in the case of the Navision database there was minimal or prosaic intellectual effort in selecting and ordering material for insertion into the database because that selection and ordering was achieved largely by means of item cards, in the design and construction of which Campbell had no role.

6.    The learned trial judge erred in giving any or any adequate weight to the viva voce evidence of Campbell, and to the fact that his viva voce evidence –

    (a)    was fundamentally inconsistent with his third affidavit, and

    (b)    was consistent with his first and second affidavits in which he deposed substantially to the effect that his intellectual efforts involved the selection and ordering of material for the Navision database.

19    Thus, Tonnex advanced two distinct challenges to the primary judge’s assessment of the evidence. First, it contended that Mr Campbell’s evidence revealed that the intellectual effort involved in selecting and arranging the information contained in the compatibility chart was undertaken as part of the development or maintenance of the Navision database rather than the compatibility chart. Secondly, it contended that the contents of Mr Campbell’s third affidavit were inconsistent with his earlier affidavits and contradicted by his oral evidence and should not have been accepted by the primary judge.

Mr Campbell’s evidence

Mr Campbell’s first affidavit

20    Mr Campbell’s evidence in chief was given in three affidavits. The first of Mr Campbell’s affidavits (14 December 2009) referred to three types of price list used in Dynamic’s business. One of these was what he described as a “tab delimited price list” in which information appears in plain text in fields separated by tabs. All three types of price list, including the tab delimited type, incorporated a compatibility chart. In paragraph 9, Mr Campbell deposed:

It is my recollection that Dynamic first utilised the tab delimited form of price list in its current form in or about September 2007. Since that time, the information contained in the tab delimited price list is extracted directly from the Navision system which is used by Dynamic so that the information contained in the tab delimited price list, including the compatibility chart, directly replicates the information which is contained in the Navision system at the time that it is exported. The information contained in the tab delimited price list, including the compatibility chart contains the most up to date information which Dynamic has available to it.

21    In paragraph 11, Mr Campbell said that while the new form of tab delimited price list (with information extracted directly from the Navision database) was first issued in September 2007, and again in October and December 2007, a decision was taken not to distribute it in subsequent months. He said that the current form of tab delimited price list (which we understand to be the same as the new form first issued in September 2007) has been distributed since March 2008.

22    The evidence does not include a copy of the tab delimited price lists for any month other than November 2009. However, we have assumed, for the purposes of our consideration of Tonnex’s application for leave to amend its notice of appeal (see paras [45]-[51] below), that the tab delimited price list for March 2008 was in the same format as the tab delimited price list for November 2009 to which we were taken by Counsel for Tonnex during oral argument.

Mr Campbell’s second affidavit

23    Mr Campbell first referred to CSV files in his second affidavit (26 July 2010) in the course of explaining how he used them to update Dynamic’s website. In paragraph 5, he referred to a number of CSV files which he used to update information on Dynamic’s website. The first of the CSV files referred to by Mr Campbell was a file which he saved as “080307 Update”. He said that the name of this file indicated to him that he used it to update Dynamic’s website on 7 March 2008. Of the three particular CSV files identified in Mr Campbell’s second affidavit, it seems that the file named “080307 Update” was the first to come into existence.

24    It is apparent that the main purpose of Mr Campbell’s second affidavit was to establish what information included in these CSV files was accessible at Dynamic’s website as at 23 April 2009. None of the paragraphs in Mr Campbell’s second affidavit expressly refer to a compatibility chart, but it is clear that the compatibility chart dated 7 March 2008 is that which is embodied in the CSV file saved as “080307 Update”.

Mr Campbell’s third affidavit

25    Mr Campbell’s third affidavit (31 August 2010) was served either the day or the day after it was sworn, which was either the Wednesday or Thursday immediately prior to the Monday trial date. At the commencement of the trial, Counsel for Tonnex objected to the affidavit due to the late service. In response, the primary judge allowed Tonnex some additional time to consider and respond to the affidavit before embarking upon a hearing of the copyright issues.

26    Mr Campbell’s third affidavit appears to reflect a shift in Dynamic’s approach to its copyright case, because it plainly suggests that the case which Dynamic would seek to make good at trial would be founded upon its copyright in “the compatibility chart dated 7 March 2008” said to be referred to in paragraph 5 of Mr Campbell’s second affidavit. On the other hand, that Dynamic’s copyright case was founded upon the compatibility chart (albeit one published on Dynamic’s website since 2007) was clearly apparent from a reading of the second further amended statement of claim which, so far as we are aware, was in all relevant aspects in precisely the same terms as the original statement of claim filed at the time of the commencement of the proceeding.

27    In his third affidavit, Mr Campbell said that he had been asked to elaborate on the process by which he developed the compatibility chart dated 7 March 2008. He then explains how in about June 2007 he began developing a compatibility chart that could be used by customers visiting Dynamic’s website. In particular, he explains how the columns that appear in the compatibility chart were selected by him for inclusion in the compatibility chart. At paragraph 14 he said:

The layout of the information was also an important consideration in the development process. While the information needed to be sufficiently comprehensive to satisfy customer needs, it was important that the information was arranged in a format that was easy to read and easy to navigate. It is my recollection that I prepared various layouts of the information which I revised following a process of consultation with my colleagues in marketing and the management of Dynamic Supplies to ensure that the information finally appeared in a form which was most beneficial to customers.

28    Mr Campbell then identified the twelve columns that are included in the compatibility chart. He said that four of these columns (columns 9-12) were not included in the compatibility chart “when it went live in August 2007” and were not included until November 2008. Mr Campbell said in his affidavit that he decided upon the eight columns that would be included in the compatibility chart in 2007. At paragraphs 29-30 of his affidavit Mr Campbell said:

29.    Ultimately, the format that I selected was one that structured the information in the compatibility chart on the basis of its likely significance to the customers and also ensured the look of the compatibility chart did not become cluttered and thereby reduce the ease of reference for customers.

30.    It was an easy decision to exclude some information from the compatibility chart such as pricing information. Some information which I omitted could have been included because it is relevant to customers. However I had to determine which information was core to customer needs. Some of the relevant information which I decided to exclude was:

(a)    Information contained in the ‘Comments’ field of Navision. This field is used to incorporate comments about pack sizes, carton quantities, volume of cartridges which are a combination of matters which are relevant for both customers and internal use;

(b)    The weight and dimension of products. This is information which is often asked for by customers as it is relevant to shipping of products;

(c)    Old Dynamic Supplies codes and vendor codes.

29    In the final paragraph of his third affidavit Mr Campbell made a correction to paragraph 11 of his first affidavit. He said that the new form of tab delimited price list was not issued in December 2007 as stated in paragraph 11 of his first affidavit. It follows, as we understand this evidence, that the new form of tab delimited price list was issued in September 2007, October 2007 and March 2008, and thereafter on a monthly basis. He also explained that he created a tab delimited file on 7 March 2008 which was the tab delimited price list issued by Dynamic in March 2008. He added that when creating this tab delimited file he deleted the pricing information to create the CSV file and also included image links in the CSV file which do not appear in the tab delimited file.

Mr Campbell’s cross-examination

30    Mr Campbell’s cross-examination was relatively brief. A significant portion of the cross-examination was devoted to the topic of the Navision database and the way in which information stored in the Navision database was collected and sorted.

31    Approximately half way through the cross-examination (T 114) Mr Campbell was asked about his role in relation to the Navision system and who at Dynamic was responsible for entering data into the Navision system. Mr Campbell gave evidence that data entry and, in particular, creation of item cards, was mainly handled by purchasing officers. The following exchange then occurred (at T 115):

So would you say that you have no significant role to play or no role to play at all in supervising the people who create item cards?---In terms of supervisory, no. I have - certainly in terms of when Alicia was doing the update back in mid-2007, I gave instructions in terms of how I’d like to have the data sorted, so that it would provide the best clarity and ease of use for customers.

Yes. But that wasn’t directly to do with item cards, was it? That was to do with the transfer of information from the Navision system to the compatibility chart?---No. It was how the data was put into the item card in terms of order, alphabetical and numerical, plus structure of descriptions.

I see. So your role was really right at the beginning, and the questions that you considered that you’ve just outlined, ordering and arranging and alphabetical order and matters of that kind, all of that is relevant to the entry of information into the Navision database, isn’t it? Is that what you’ve - - -?---In terms of the ordering of the information, it was relevant to the item card in Navision.

Yes, I see. So in your third affidavit where you provide details of this process, the process you’re describing is the process of ordering data in the Navision system?---Which process are you describing? Sorry, which part of my affidavit?

Well, the process of ordering material and deciding on an arrangement. You’ve given evidence about that, haven’t you?---Well, I believe I spoke to Alicia in regards to that. I did speak to Alicia in regards to that, in terms of how it was put into Navision in terms of order. So for the product references, it was in alphabetical and numerical.

So, you spoke to Alicia about these matters. Is that right?---Her and others, yes.

Was Alicia the one primarily responsible for determining how data would go into the Navision system?---I have spoken to her with regards to it and we spoke about a particular format and how I would like to have it in there. She was primarily responsible for entering the data in there.

32    Apart from the fourth question in the extract of the cross-examination set out above, Mr Campbell was not asked any questions about his third affidavit. It certainly was not suggested to Mr Campbell that any part of his third affidavit was untrue. Nor was it suggested to him that any part of his third affidavit was inconsistent with his earlier affidavits or that any answer given by him in cross-examination contradicted what he said in any of his affidavits or, in particular, his third affidavit.

TONNEX’s Submissions

33    The principal submission of Tonnex was that the primary judge fell into error in finding that there was sufficient intellectual effort by Mr Campbell in creating the March 2008 CSV file to justify a finding of originality. In support of this submission it was said that the expression of the data in the March 2008 CSV file was “fixed” at the time of the insertion of that data into the Navision system, and that every decision made in relation to how such data would be expressed was made prior to the completion of item cards. All of the product and compatibility information, according to this submission, was extracted and reproduced in the March 2008 CSV file exactly as it had been inserted into the Navision database.

34    In his oral submissions, Counsel for Tonnex argued that the evidence in Mr Campbell’s third affidavit was inconsistent with what appeared in his earlier affidavits and “manifestly incorrect”. The Court sought an indication from Counsel for Tonnex as to whether this argument was advanced before the trial judge. We were taken to a written submission provided to the primary judge which raised what was said to be “the profound inconsistency between Mr Campbell’s viva voce evidence and that in his third affidavit.” The written submission to the primary judge contended (at paragraph 10):

… The thrust of the evidence in his third affidavit was the compilation authorship or original work in planning and compiling the Compatibility Chart; whereas the thrust of his oral evidence appeared to be the authorship and work that went into planning the selection and ordering of data in the Navision database itself.

35    Tonnex’s written submissions to the primary judge (also at paragraph 10) included a summary of what were said to be the particular points of inconsistency between Mr Campbell’s oral evidence and his third affidavit. The following nine points of inconsistency were postulated:

(a)    the material, prior to the reception of the third affidavit of Mr Campbell, suggested that the Navision database was the work in which copyright was asserted; and, indeed, Mr Campbell’s evidence was broadly consistent with his earlier affidavits. But it was entirely inconsistent with his third affidavit, for the reasons asserted.

(b)    Campbell gave instructions to Alicia Sacristan as to how data was to be sorted, for the purposes of the Navision database, so as to achieve clarity and convenience to customers [T115].

(c)    Alicia Sacristan was doing the update in the Navision database in 2007 [T115].

(d)    Campbell denied that the instructions were given in relation to the Compatibility Chart and said that those instructions related to the entry of data into the item cards [T115].

(e)    Campbell was ignorant of the function of the Navision software [T108, 109 and 112]

(f)    Campbell said competitors’ price lists were not on the Navision database [T112], but Oscar Sacristan said he believed they were [T124].

(g)    Campbell said that he did not manage Navision, but did manage the applicant’s website [T114].

(h)    Campbell said that he did not order the fields in Navision, or create the fields in the item cards [T116-118].

(i)    Oscar Sacristan, when asked whether any particular person in Dynamic Supplies made the relevant decisions about the way in which material should be put into Navision, said that he did not think there was any particular person: “It was just an agreed thing that came about” [T122].

36    Another submission was made by Tonnex in the appeal (but not put to the primary judge) by reference to Dynamic’s tab delimited price list dated 7 March 2008. We will return to this submission when considering Tonnex’s application for leave to amend its notice of appeal.

Consideration

37    Tonnex did not contend that the primary judge’s formulation of the relevant legal principles was erroneous in any respect. Nor did Tonnex contend that it was not open to his Honour to find that the compatibility chart represented by the March 2008 CSV file was an original literary work if it was open to his Honour to accept the evidence set out in Mr Campbell’s third affidavit. Thus, Tonnex’s appeal turns on whether or not it was open to the primary judge to accept the evidence in Mr Campbell’s third affidavit.

38    It is convenient at this point to consider grounds 5 and 6 of the notice of appeal. In substance it is contended by Tonnex in those grounds that the primary judge should not have accepted the evidence in Mr Campbell’s third affidavit because it was contradicted by, or at least inconsistent with, his other evidence. In our view these grounds are without substance.

39    It is apparent that the primary judge accepted Mr Campbell’s third affidavit as accurate and as providing a proper basis for inferring that the skill, judgment and labour employed by Mr Campbell in creating the compatibility chart in the form of the March 2008 CSV file was sufficient for it to constitute an original literary work in the nature of a compilation. This is unsurprising given the way in which Tonnex conducted its case before the primary judge.

40    It was never suggested to Mr Campbell in cross-examination that any part of his third affidavit was incorrect. The transcript of the cross-examination (if taken at face value) reveals that the cross-examiner assumed that the third affidavit described the process of ordering data in the Navision system, even though the third affidavit was plainly directed at explaining how the information in the compatibility chart was selected and arranged by Mr Campbell. This approach to the cross-examination of Mr Campbell reflects the general tenor of the submission made to us which was that copyright could not subsist in the compatibility chart because the information included within it was extracted from the Navision database.

41    Mr Campbell’s evidence established that he was the author of the compatibility chart because it was he who determined what information would be included in the compatibility chart and how such information would be arranged. It was never suggested by Dynamic that the information appearing in the compatibility chart was not extracted from the Navision database. To say that the information contained in the compatibility chart was extracted from the Navision database does not provide an answer to Dynamic’s case. As the primary judge pointed out, there is a considerable amount of other information in the Navision database (as is apparent from the 47 different fields in the item cards) which Mr Campbell chose not to include in the compatibility chart. The fact that the data reproduced in the compatibility chart represented by the March 2008 CSV file was also extracted from the Navision database is beside the point. It was Mr Campbell’s selection and arrangement of that data in the compatibility chart that was critical to the outcome of this case.

42    We have considered the alleged inconsistencies identified by Tonnex in its submissions to the primary judge. None of them reflect any actual inconsistency. Rather, they reflect what seems to us to be a misunderstanding on the part of Tonnex as to the effect of Mr Campbell’s evidence.

43    We expressly reject Tonnex’s submission that the evidence in Mr Campbell’s third affidavit was manifestly incorrect, and observe that no proper foundation for this submission was laid in cross-examination. Further, we do not accept that this submission was put to the primary judge. In particular, we expressly reject Counsel’s assertion that the submission was made in paragraph 10 of his written submissions to the primary judge.

44    We are satisfied that it was open to the primary judge to accept Mr Campbell’s evidence as set out in his third affidavit. Grounds 5 and 6 must be rejected and, with them, all other grounds relied upon by Tonnex.

Tonnex’s Application for leave to amend the notice of appeal

45    After the Court reserved its decision in this matter, Tonnex filed an interlocutory application seeking leave to amend its notice of appeal. The interlocutory application was supported by an affidavit sworn by Tonnex’s solicitor. The precise order sought by Tonnex in its interlocutory application was as follows:

That the appellant have leave to amend its notice of appeal to seek an order remitting the issue of subsistence of copyright in the March 2008 CSV file to the primary judge for further consideration in light of further evidence as to the authorship of the tab delimited file.

46    The proposed amendment does not seek to raise any additional ground of appeal. Rather, it merely seeks a different order to those sought in the existing notice of appeal. If each of the existing grounds of appeal is rejected (as we have already decided they must be) then the proposed amendment is futile. This is because Tonnex is, in substance, inviting the Court to remit the proceeding to the primary judge for further hearing even though Tonnex has failed to establish that the primary judge’s decision was affected by error. It is not open to the Court to remit the proceeding to the primary judge in such circumstances.

47    Moreover, the proposed amendment seeks to have the Court remit the issue of subsistence of copyright to the primary judge for reconsideration “in light of further evidence”. There was no application made during the course of the hearing of the appeal for us to receive further evidence pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth). Instead, Tonnex seeks to have the proceeding remitted to the primary judge so that his Honour may reconsider the question of subsistence of copyright in light of further evidence including, we infer, further evidence which might be elicited from Mr Campbell in a new trial on the issue of subsistence of copyright.

48    Various arguments were raised by Tonnex in support of a new trial. Reference was made to the late service of Mr Campbell’s third affidavit, the suggestion being that this may have given rise to a miscarriage of justice. Significantly, however, the primary judge granted Tonnex additional time to consider and respond to Mr Campbell’s third affidavit and, critically, Tonnex did not seek to appeal the primary judge’s decision to receive the third affidavit.

49    An order providing for a new trial, albeit limited to the issue of subsistence of copyright, would be inconsistent with fundamental principles which explain and qualify the general rule that a controversy, once resolved by a final judgment, may not be re-opened except in certain narrowly defined circumstances. In D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, Gleeson CJ, Gummow, Hayne and Heydon JJ said (at paras [34]-[35]):

[34]    A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances. That tenet finds reflection in the restriction upon the reopening of final orders after entry and in the rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud. The tenet also finds reflection in the doctrines of res judicata and issue estoppel. Those doctrines prevent a party to a proceeding raising, in a new proceeding against a party to the original proceeding, a cause of action or issue that was finally decided in the original proceeding. It is a tenet that underpins the extension of principles of preclusion to some circumstances where the issues raised in the later proceeding could have been raised in an earlier proceeding.

[35]    The principal qualification to the general principle that controversies, once quelled, may not be reopened is provided by the appellate system. But even there, the importance of finality pervades the law. Restraints on the nature and availability of appeals, rules about what points may be taken on appeal and rules about when further evidence may be called in an appeal (in particular, the so-called “fresh evidence rule” are all rules based on the need for finality. As was said in the joint reasons in Coulton v Holcombe [(1986) 162 CLR 1 at 7]: “[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial.”

(some citations omitted)

50    Tonnex’s submissions in support of its application to amend the notice of appeal continued to assert that there could be no copyright in the compatibility chart because it merely replicated what was in the Navision database. We have already explained why that is not so. But Tonnex also raised the similarities in the form and layout between the tab delimited price lists referred to in Mr Campbell’s evidence and the work in suit. The time and place for exploring this issue was, of course, at the trial when Mr Campbell could have been cross-examined about it. Nevertheless, we make the following brief observations, lest it be thought that there is any substance to the suggestion that there may have been a miscarriage of justice in this case attributable to the failure of Tonnex’s Counsel to cross-examine on the point said to justify a new trial.

51    It cannot be known for certain what Mr Campbell might have said if it had been suggested to him that the evidence contained in his third affidavit was inconsistent with the fact that there was what we will assume to be an obvious and close similarity between the selection and arrangement embodied in the tab delimited price list for March 2008 and the selection and arrangement embodied in the compatibility chart represented by the March 2008 CSV file. What seems to us to be tolerably clear, however, is that the selection and arrangement of information, which is substantially (but not precisely) the same in both works (or earlier iterations of them), were the product of Mr Campbell’s “non-negligible” intellectual effort. It is possible that one of these works was created before the other, but it is also possible that they were initially created by Mr Campbell as one work from which he then created either the tab delimited price list or the compatibility chart. Either way, it was Mr Campbell’s intellectual effort that determined the selection and layout of information in both works. In the circumstances, there is no reason why copyright could not subsist in both works. At the very least, however, copyright subsisted in one or other of the two works, and Tonnex infringed Dynamic’s copyright in at least one or other of those works.

Costs

52    Dynamic is entitled to its costs of the appeal. However, so far as the costs of the interlocutory application are concerned, Dynamic submitted that these should be awarded on an indemnity basis. We accept that submission for two reasons. First, the application to amend the notice of appeal should have been made at the hearing of the appeal at the very latest. Secondly, the proposed amendment, and the rationale behind it, reflected a fundamental misunderstanding as to this Court’s appellant function: see, for example, Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at 435.

Disposition

53    The application for leave to amend the notice of appeal will be dismissed. The appeal will be dismissed. Tonnex must pay Dynamic’s costs of the appeal. Tonnex must also pay Dynamic’s costs of the application for leave to amend the notice of appeal on an indemnity basis.

Associate:

Dated:    16 November 2012