FEDERAL COURT OF AUSTRALIA
Sheldon v Metrokane [2004] FCA 19
COPYRIGHT – work of artistic craftsmanship copyright – claimed by United States company (respondent/cross-claimant) – work related to handle enclosing mechanism of corkscrew – mechanism subject of recently expired international patent – United States company exports corkscrew product to Australia – Australian company (applicant) imports corkscrew made by another overseas manufacturer having similar handle enclosing same mechanism – whether Australian importer committed secondary infringement of copyright claimed by United States company for work of artistic craftsmanship relating to handle enclosing the mechanism of corkscrew imported by Australian company from the other manufacturer – authorship of copyright claimed by United States company and its designer not established – artistic craftsmanship not demonstrated in respect of United States company’s corkscrew for qualification as artistic work copyright – if affirmative finding of joint authorship and of copyright had been established then finding of infringement of copyright would have been established – finding of no secondary infringement by Australian company as importer in any event – meaning and implications of work of artistic craftsmanship
PASSING OFF – DECEPTIVE CONDUCT – not established by United States company against Australian company
DECEPTIVE CONDUCT – not established by Australian company against United States company
Copyright Act 1968 (Cth) ss 10(1) (various definitions), 14(1), 22(1), 31(1), 32(4), 33(2), 35(2), 36(1), 37(1), 38(1), 74, 75, 76, 77(1), 77(2), 115(1), 115(3), 115(4), 184, 202(1), 218(2) and 249
Copyright (International Protection) Regulations 1969 (Cth)
Trade Practices Act 1974 Cth ss 52, 53(a), 53(c) 53(d) and 53(g)
Designs Act 1906 (Cth)
Patents Act 1990 (Cth) s 67
Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450
Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273
SW Hart & Co. Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466
Zeccola v Universal City Studios Inc (1982) 46 ALR 189
Milpurrurru & Ors v Indofurn Pty Ltd & Ors (1994) 54 FCR 240
Interlego AG & Anor v Croner Trading Pty Ltd (1992) 25 IPR 65
Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88
Performing Rights Society Ltd v London Theatre of Varieties [1924] AC 1
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Express Newspapers v News (UK) Ltd (1990) 18 IPR 201
George Hensher Ltd v Restawhile Upholstery (Lancs.) Ltd [1976] AC 64
Merlet v Mothercare plc (1984) 2 IPR 456
Cuisenaire v Reed [1963] VR 719
Walter v Lane [1900] AC 539
Commissioner of Taxation (Cth) v Murray (1990) 21 FCR 436
Coogi Australia Pty Ltd v Hysport International Pty Ltd & Ors (1998) 86 FCR 154
Bulun Bulun v R T Textiles Pty Ltd (1998) 41 IPR 513
Redwood Music Ltd v B Feldman & Co Ltd (1979) 48 RPC 385
Apple Computer Inc & Anor v Computer Edge Pty Ltd (1986) 161 CLR 171
Bonz Group (Pty) Ltd v Cooke (1994) 3 NZLR 216
Schott Musik International GMBH & Co v Colossal Records of Australia Pty Ltd (1997) 75 FCR 321
Jones v Dunkel
Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] 1 All ER 700
Warwick Film Productions Ltd v Eisinger [1967] 3 All ER 367
Millwell Pty Ltd v Olympic Assessments Pty Ltd (1991) 43 IPR 32
International Writing Institute Inc v Rimila Pty Ltd and another (1994) 30 IPR 250
AG v Croner Trading Pty Ltd (1992)25 IPR 65
Payne v Parker [1976]1 NSWLR 191
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) 33 ALR 394
Dr Martens Australia Pty Ltd v Rivers (Australia) Pty Ltd (1999) 95 FCR 136
Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90
SHELDON AND HAMMOND PTY LTD v METROKANE INC
N 634 of 2002
CONTI J
23 JANUARY 2004
SYDNEY
| IN THE FEDERAL COURT OF AUSTRALIA |
|
| NEW SOUTH WALES DISTRICT REGISTRY | N 634 OF 2002 |
| BETWEEN: | SHELDON AND HAMMOND PTY LTD APPLICANT
|
| AND: | METROKANE INC FIRST RESPONDENT
METROKANE INC FIRST CROSS-CLAIMANT
EDWARD KILDUFF SECOND CROSS-CLAIMANT
SHELDON AND HAMMOND PTY LTD CROSS-RESPONDENT
|
| JUDGE: | CONTI J |
| DATE OF ORDER: | 23 JANUARY 2004 |
| WHERE MADE: | SYDNEY |
THE COURT DECLARES THAT:
1. Pursuant to s 202(1) of the Copyright Act 1968 (Cth), and in the events which have happened, Metrokane Inc was not justified in making the threat or threats pleaded and particularised in the Amended Statement of Claim.
THE COURT ORDERS THAT:
1. Proceedings brought by Metrokane Inc and Edward Kilduff against Sheldon and Hammond Pty Limited by way of cross-claim for secondary infringement of copyright, passing off and contravention of the Trade Practices Act 1974 (Cth) be dismissed.
2. Further claim brought by Sheldon and Hammond Pty Ltd against Metrokane Inc for contravention of the Trade Practices Act 1974 (Cth) be dismissed.
3. The hearing of submissions upon orders to be made as to costs of the proceedings, inclusive of any reserved costs, be stood over for determination on a date to be fixed.
4. The parties provide written submissions as to costs three clear days in advance of the adjourned hearing.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
Sheldon v Metrokane [2004] FCA 19 Index to Reasons for Judgment
|
|
| IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY | N 634 OF 2002 |
| BETWEEN: | SHELDON AND HAMMOND PTY LTD APPLICANT
|
| AND: | METROKANE INC FIRST RESPONDENT
METROKANE INC FIRST CROSS-CLAIMANT
EDWARD KILDUFF SECOND CROSS-CLAIMANT
SHELDON AND HAMMOND PTY LTD CROSS-RESPONDENT
|
| JUDGE: | CONTI J |
| DATE: | |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
Background to the design, assembly and marketing of the Rabbit corkscrew by Metrokane
1 This litigation has its origins in a corkscrew product called Rabbit, the development whereof was initiated in the United States of America, in or about September 1997 by the Respondent/Cross-Claimant Metrokane Inc (‘Metrokane’), a company established in 1983 in the United States. Metrokane conducts the business of designing and selling unique houseware products. The marketing director and one of two substantial shareholders of Metrokane has been at all material times Robert Larimer (‘Mr Larimer’), who gave evidence in the proceedings by affidavit and by video link from New York.
2 In about October 1997, Metrokane engaged Edward Kilduff, (‘Mr Kilduff’) being the second cross-claimant and a citizen of the United States, and then associated informally with Daniel Winigrad (‘Mr Winigrad’) under the business name Link Product Design and Development of New York, to develop a new design for a corkscrew having a lever-action. His instructions were to produce a design which would be refined and elegant yet be ‘utilitarian and homely’. It was also to have award winning aesthetics, with a distinctive design and an aesthetically visual appeal, rather than something merely utilitarian and functional. Mr Kilduff is, and was at all material times, an industrial designer, as also apparently was Mr Winigrad. Their business relationship was not formalised by documentation. The mechanism of the corkscrew was to be based upon the technical principles of a patent for lever action corkscrews, owned by the multinational manufacturer Le Creuset, which was due to expire in July 1999. The trade name of the Le Creuset corkscrew was and apparently still is Screwpull. Mr Larimer informed Mr Kilduff that he expected that a number of lever-action corkscrews would be produced and arrive on the market after the expiry of that patent.
3 Mr Kilduff initially produced to Metrokane for approval a two-dimensional drawing, referred to in the evidence as the Kilduff drawings. The Kilduff drawings are Exhibit ‘R3’ in the proceedings. Mr Kilduff explained that he incorporated into the design certain elements intrinsic to the Screwpull product, including a lever handle and two gripping handles. Those elements were said by Mr Kilduff to be necessary to the operation of an effective lever-action corkscrew. He then drew the shape of the housing for the elements of the mechanism, which were not to be visible in the contoured body designed to cover and obscure the mechanical elements. Mr Kilduff also drew contoured curves ‘as aesthetically pleasing as possible’, with the resemblance of a rabbit head. Mr Kilduff determined that the coating of the plastic components be that of ‘an easy-to-grip rubberised finish of Japanese manufacture’, comprising ‘transparent spray-on material with the ability to actually “texturise” a smooth plastic surface’, said by him to contribute to the ultimate rabbit-like appearance of the product by giving it a ‘furry’ look and feel. He asserted that such ‘finish’ on the body and three handles tended to ‘unite the parts into one aesthetic whole’.
4 The drawings when completed were submitted to Metrokane for approval, and Mr Kilduff was thereafter instructed by Mr Larimer to move to the next phase of his retainer, namely the transformation to a three dimensional model of the completed two-dimensional drawing. That transformation was completed in December 1997, and comprised the first prototype of the Rabbit corkscrew, being identified in the proceedings as the Renshape prototype. A photograph or photocopy thereof is Exhibit ‘R4’ in the proceedings. It could not apparently be any longer located in the factory in China and therefore could not be tendered in evidence. In the course of that transforation, he added two distinctive features to the lever-action handle, being grip pads on the top and bottom of the handle, and the encasement of a magnifying lens on the top of the corkscrew. The Renshape prototype was a rough semi-working model and took two to three weeks to construct. It was made out of material called Renshape, which is similar to compressed foam, by using an exacto blade (or razor blade), a dremel (a mechanical piece of sandpaper that oscillates), and bondo (an auto body filler used to correct mistakes). It had a lever action style and an internal mechanism adapted by Metrokane from the Screwpull corkscrew. To cite Mr Kilduff’s oral evidence, ‘[i]t was pretty much an exact use of that mechanism’. It could move but was not functional as a corkscrew. Mr Kilduff said that the moulding of the Renshape prototype ‘… wasn’t an easy process, a lot of trial and error… but I had the guts of the Screwpull mechanism and I would attach the Renshape compressed foam material encompassing the mechanism and a combination of those two materials and the bonds and myself sculpting away…’.
5 Mr Kilduff next prepared design control drawings to enable Metrokane’s manufacturing factory in China to build the product and ‘to figure out how to inject mould in all three pieces and make all these pieces snap fit’. The dimensions of the prototype were measured with electronic callipers to ensure the dimensions in the design control drawings would be the same size as the prototype. Mr Kilduff entered the data into a computer program called ‘Ashlar Vellum’. The Renshape prototype was not tendered into evidence.
6 After the design control drawings and the prototype had been sent to the factory in China, they were redrawn in a three dimensional wire-frame shape, using thereby an AutoCAD computer program. That shape did not undergo subsequent alteration, at any rate, to any significant extent. After the wire-frame drawing was completed, the factory hooked it up to a milling machine and made another prototype of the shape; this was referred in the evidence as the ‘CNC Model’. That was done before the factory began cutting the moulds for the tools of the product. The CNC Model was then sent to Mr Kilduff in the United States for approval. The CNC Model was also not tendered into evidence.
7 Mr Kilduff thereafter instructed the Metrokane factory in China to make the Rabbit corkscrew black in colour by using black plastic, and to apply a rubber coating called Whale. He said that he oversaw the design and assembly in the factory in China, in order ‘… to make sure it is what I had in mind’. Although the Rabbit corkscrew is a so-called ‘functional or utilitarian article’, Metrokane’s case was that the same had nevertheless ‘real aesthetic qualities’, being described by Metrokane as having the following artistic features:
‘(i) contoured body, which resembles the head of a rabbit presenting a “bunny profile” – the lever handle being the profile of a rabbit’s ears, the body being the rabbit’s head and the end of the lever axel serving as the rabbit’s eye;
(ii) rubberised finish supporting the rabbit analogy with a “fury” texture;
(iii) rubberised finish applied to the three handles as well as the body uniting the four parts into a single aesthetic whole;
(iv) soft grip pads (of neoprene) inserted in the top and bottom of the lever handle to facilitate a good grip in use; and
(v) Metrokane logo.’
Mr Kilduff said in evidence that ‘… most of the aesthetics were followed off my original design, I would say all of them’.
8 It was in January 2000 when Metrokane first introduced and displayed the Rabbit corkscrew to the public. That occurred at the International Housewares Show in Chicago. Orders were taken from buyers for delivery in May 2000. The first shipments from China to the United States were in fact made by that time. The Rabbit corkscrew was first displayed in Australia in February 2000 at the Reed Gift Trade Fair conducted in Darling Harbour, being a display undertaken for giftware wholesale buyers and not for the general public.
9 Since May 2000, Metrokane has sold and distributed throughout the world, including Australia from about September 2000, approximately one million Rabbit corkscrews. The distributor of the Rabbit corkscrew in Australia has been Argyle Wine Accessories Pty Ltd, and the national stores which have sold the same have been Myers, House, King of Knives and Executive Chef. The product has been advertised in Australia via the Metrokane website and in various magazines. About 2000 Rabbit corkscrews were imported into Australia between September 2000 and September 2001, which reduced to 1000 or thereabouts between September 2001 and August 2002, following the entry into the Australian market of the Pull It corkscrew.
10 The design of the Rabbit corkscrew received the following two awards in 2001:
(i) The IDSA 2001 Award for design excellence in consumer products, which was judged by the Industrial Designers Society of America, and sponsored by Business Week Magazine; and
(ii) The Good Design Award from the Chicago Athenaeum Museum for ‘The World’s Best and Most Innovative New Product Designs’.
The IDSA press release described the Rabbit corkscrew as having ‘… an ergonomic design that sets a new standard for ease of use without sacrificing beauty’.
Background to Sheldon and Hammond and the importation of the Pull It corkscrew into Australia
11 Sheldon and Hammond Pty Limited (‘S & H’), being the applicant and cross-respondent, is an Australian incorporated company which has been engaged since 1975 in the distribution of a large range of products. S & H has been appointed since May 2001 as the exclusive distributor in Australia for Pacific China Industries Ltd (‘PCI’) of a lever style corkscrew known as Pull It. The name Pull It is a registered trade mark in Australia belonging to S & H. The first importation of the Pull It corkscrew into Australia occurred on 21 June 2001, and since about that time, S & H has sold in Australia about 50,000 units. S & H has about 100 employees, whereof 20 are sales and marketing personnel.
12 The Pull It corkscrew was originally priced by S & H at $89.95 in June 2001 for retail sale in Australia, the wholesale price then being $47.45 (including GST). The recommended retail price was reduced to $59.95 as a 2001 Christmas promotion, and to $49.95 in early 2002, and yet again to $39.95 by June 2002. The recommended retail price of the Pull It for Christmas 2002 was further reduced to $35.95, based on a normal wholesale price to S & H by then of $19.97. The managing director of S & H, Mr Angus, who testified in the proceedings, said that the reason for those price reductions of the Pull It corkscrew was competition in the market from competing lever style corkscrews. During those times, S & H has been also selling two other lever style corkscrews, imported into Australia by PCI under the trade marks The Wasp and Avanti Cellar Wiz.
13 Mr Angus recalled seeing the Metrokane corkscrew in late 2000, or early 2001, at a trade fair or a retail outlet. He said that he did not spend time considering its shape or other features, other than to observe that it had a lever style corkscrew similar to the Screwpull lever style corkscrew, which he then understood to be the subject of the patent belonging to Le Creuset (identified in [2] above), which was about to lapse. He did not then purchase a Metrokane corkscrew.
14 In the course of his visit to the Hong Kong trade fair in April 2001, Mr Angus was shown the Pull It corkscrew at a stand operated by PCI. At the time he was shown, and was considering the distribution by S & H of the Pull It product, he claimed he had no recollection of the shape of the Metrokane corkscrew, or of any of S & H’s customers saying there was any similarity between the Metrokane and the Pull It corkscrews. He also said that between April and May 2001, when conducting negotiations with Mr Kushner of PCI for the distribution of the Pull It corkscrew in Australia, no mention was made by or to him of the Metrokane corkscrew. It is understandable, in the light of circumstances later to be examined, why Mr Angus would not have done so, but the fact that Mr Kushner did not do so is potentially damaging to his credibility, for reasons which will later become apparent in the course of my review of Mr Kushner’s evidence.
15 The Pull It corkscrew is imported by PCI pre-packaged into Australia, and the pre-packaging prominently incorporates the Pull It trade mark, being a trade mark registered in favour of S & H in Australia. The only changes made to the packaging of the Pull It product, prior to its importation into Australia, have been the incorporation of a bar code, a product number, and a reference on the packaging to the fact that the Pull It product is made of solid polycarbonate, zinc alloy and a hardened steel teflon coated screw. Mr Angus testified that there were many differently branded lever style corkscrews available on the Australian market, ranging in price from the Screwpull Elegance,the retail price whereof at the time he made hisaffidavit being over $300.00, to a number of significantly cheaper lever style corkscrews which were then selling for prices between $30.00 and $50.00. He identified three differently branded lever style corkscrews available in Australia which were said by him to be identical to the Pull It corkscrew, and which were not made by the manufacturer of the Pull It model.
Commencement of the litigation and the respective cases pleaded by the parties
16 Mr Larimer first became aware of the Pull It corkscrew at the International Housewares Show in Chicago in January 2001, about one year after the launch of the Rabbit corkscrew. At that time the Pull It corkscrew was called Just Pull It. A letter dated 17 January 2001 was promptly sent by Saidman Design Law Group of Silver Spring in the United States, on behalf of Metrokane, to the President of Beau International Inc of Inwood, New York, which described Metrokane as the exclusive manufacturer and distributor of the Rabbit corkscrew, and asserted infringement of the product design of the Rabbit corkscrew. That product design was identified as ‘US Pat. No Des. 430,944’ issued by the US Patent & Trademark Office on 19 September 2000. The letter also asserted infringement of the trademark Rabbit by the United States Patent & Trademark Office (‘Ser No. 75/846,419’). It demanded removal of the Just Pull It from the market by 26 January 2001. By letter in response dated 8 February 2001 of Cobrin & Gittes, patent etc attorneys of New York, marked ‘for settlement purposes only’, infringement and likelihood of confusion was denied, for reasons set out in detail. Their letter concluded to the effect that ‘[a]s a matter of precaution, however, and in the interest of avoiding any doubts, Beau is in the process of redesigning the Just Pull It corkscrew in order to further distinguish it from Metrokane Inc’s the Rabbit corkscrew’, no retail sales having allegedly been made up to that time of the Just Pull It corkscrew.
17 About sixteen months later on 7 June 2002, the Australian solicitors for Metrokane wrote to S & H and alleged infringement of Metrokane’s copyright in the Rabbit corkscrew as an artistic work, and in particular as a work of artistic craftsmanship, within par (c) of s 10(1) of the Copyright Act 1968 (Cth) (‘Copyright Act’), by reason of S & H’s importation into, and distribution within Australia of the Pull It corkscrew, and demanded that S & H immediately cease and forever desist from, inter alia, the importation and distribution of the product. The solicitors for S & H responded by letter of 24 June 2002 to the effect that there was no basis for Metrokane’s claim of copyright, and further that there were a number of differences between the Rabbit and Pull It products such as to indicate that S & H’s product was not a copy of Metrokane’s product. The solicitors for S & H demanded that Metrokane cease making groundless threats of infringement of copyright. In the result, the subject proceedings were commenced by S & H on 28 June 2002 for declaratory and injunctive relief pursuant to s 202(1) of the Copyright Act, and also for breach of ss 52 and 53(g) of the Trade Practices Act 1974 (Cth) (‘TP Act’).
18 S & H submitted that having regard to the undisputed circumstances in which Metrokane had threatened to bring an action against S & H for copyright infringement, and also to Metrokane’s subsequent admission in the ensuing pleadings filed by Metrokane that S & H was a ‘person aggrieved’ within s 202 of the Copyright Act and there was no discretion in the Court to refuse relief to S & H pursuant thereto, unless Metrokane satisfied the court that the acts in respect of which Metrokane’s proceedings were threatened constituted, or, if done, would constitute, infringement of copyright.
19 The ensuing pleadings of Metrokane in these proceedings took a protracted course, and were not finalised until after the hearing in Court had concluded. Those of Metrokane were generally framed in line with the allegations, and later the evidence, which emerged at the instance of Metrokane before and during the hearing, concerning the creation of a prototype for what became the ultimate manufacturing line of the Rabbit corkscrew, and the other functions and processes undertaken by Mr Kilduff. The final version of the initiating pleading of S & H comprised an amended statement of claim dated 18 July 2002, which set out the circumstances why the Rabbit product was said to be neither an artistic work, nor a work of artistic craftsmanship, within the Copyright Act, and which alternatively asserted that the Pull It product did not constitute a reproduction or adaptation of the whole or a substantial part of the Rabbit product. The first of those contentions comprised the first of the two main defences of S & H to Metrokane’s claim for breach of copyright, and the second comprised the other main defence.
20 Further or alternatively, S & H pleaded that the importation, offer for sale, and sale of the Pull It product did not infringe any copyright of Metrokane, for the following reasons:
(i) a corresponding design to any artistic work reproduced by the Rabbit product had been applied industrially in Australia with the licence of S & H;
(ii) on or after 1 October 1990, articles to which that corresponding design had been so applied had been sold in Australia and elsewhere;
(iii) at the time of those sales, the corresponding design had not been, and at no time had it since been, registered under the Designs Act 1906 (Cth) (‘Designs Act’);
(iv) by reason of the foregoing matters, and of s 77 of the Copyright Act, it was not an infringement of the alleged copyright of Metrokane to reproduce Metrokane’s work by applying any such corresponding design to an article; and
(v) accordingly the importation, offer for sale and sale of the Pull It product did not infringe Metrokane’s alleged copyright.
In addition, S & H maintained its averments of breach of the TP Act on Metrokane’s part, based on the same circumstances as those which S & H pleaded in support of its denial of copyright.
21 The initial pleadings of Metrokane in response comprised a defence, which put in issue the allegations of S & H’s amended statement of claim, and a cross-claim. The defence was not subsequently altered, but Metrokane’s cross-claim underwent extensive amendments, most comprehensively after the commencement of the final hearing of the proceedings. The facts and circumstances pleaded in Metrokane’s cross-claim from the outset, concerning the design, development and sale of the Rabbit corkscrew in the United States, and subsequently sale in Australia, referred to Mr Kilduff as author of the design, and to the sale and distribution since May 2000 of about one million Rabbit corkscrews throughout the world, and of about 3000 in Australia through Argyle Wine Accessories Pty Ltd as authorised distributor, and by Myer, House, King of Knives and Executive Chef stores as retailers.
22 The causes of actions pleaded by Metrokane’s cross-claim against S & H are for infringement of copyright of the Rabbit corkscrew as a work of artistic craftsmanship, for breaches of ss 52 and 53(a), (c) and (d) of the TP Act, and for passing off.
23 The features of the Rabbit corkscrew were pleaded by Metrokane from the outset to be as follows:
(a) lever-operated corkscrew device;
(b) flat interior surface of the frame;
(c) outline shape of an inverted mushroom;
(d) having a stern bearing straight parallel vertical sides;
(e) having a head with a straight horizontal bottom and semi-circular top;
(f) rubberised finish giving the corkscrew a ‘furry feel’;
(g) upper portion of the frame resembling the head of a rabbit, and having an egg shaped bulge which is tilted;
(h) larger end of the egg shaped bulge representing the nose of the rabbit and being higher than the small end representing the back of the head;
(i) ends of the operating handle projecting rearward from the top of the ‘head’, being shaped to resemble a rabbit’s ears;
(j) operating handle pivoting on a pin approximately at the centre of the egg shaped bulge;
(k) pins or screw heads resembling two small circles appearing on both sides of the flat surface of the head, resembling the eyes of a rabbit; and
(l) underside of the egg shaped bulge being inwardly sloped and gradually tapering and merging with the vertically extending lateral surface of the lower portion of the frame, in order to represent the body of a rabbit.
24 Ownership of Metrokane’s copyright was asserted to have been derived by Metrokane by deed of assignment in its favour from Mr Kilduff dated 3 September 2002. That assignment was purportedly effected after the issue of the original and amended statement of claim of S & H. Further and better particulars dated 27 September 2002 were also filed by Metrokane, which referred to the distribution of the Pull It corkscrew in the United States, and subsequently in the United Kingdom, under the name ‘Just Pull It’, the manufacturer thereof being PCI, the change of name thereafter to ‘Pull It’, and the later Australian distributorship of the Pull It corkscrew by S & H.
25 Ultimately Metrokane belatedly produced to S & H and to the Court its Defence and Further Further Amended Cross-Claim bearing date 31 March 2003, being seven days after the commencement of the final hearing of the proceedings on 24 March 2003. That very belated pleading was formally filed in Court on 1 April 2003. It effected comprehensive changes to the previously pleaded defence and amended cross claim, being amendments claimed by Metrokane to be necessary in the light of oral evidence by then tendered at the final hearing, in particular from Mr Kilduff by way of addition to his affidavit evidence. The consequences of the last of those amendments to Metrokane’s cross-claim in the proceedings were pleaded by Metrokane to be mainly as follows:
(i) copyright in the Rabbit corkscrew had subsisted at all material times in the following alternatives in temporal sequence of creation or assembly:
(a) the Renshape prototype of the Rabbit corkscrew; or
(b) the CNC Model of the Rabbit corkscrew; or
(c) the first manufactured Rabbit corkscrew;
each being said to comprise a work of artistic craftsmanship, the critical term referred to in the Copyright Act definition of artistic work; and
(ii) Metrokane had been the legal owner of copyright in the ‘Rabbit’ corkscrew, or alternatively the equitable owner thereof, at least since the execution of certain instruments of assignment provided in favour of Metrokane by Mr Kilduff, Mr Winigrad and Pollen Design Inc, in circumstances to which I shall later refer in more detail.
Mr Kilduff was added as a party to the proceedings as second cross-claimant (Metrokane being the first cross-claimant), pursuant to Metrokane’s Defence and Further Further Cross-Claim dated 31 March 2003.
26 By virtue of the addition of Mr Kilduff as an additional cross-claimant with Metrokane, what S & H thereafter described as ‘the Metrokane parties’ were asserted to have been placed in the position, as at the close of the hearing, whereby ‘they owned any relevant copyright’. S & H submitted that as a consequence, if the Court was to find in principle in favour of Mr Kilduff and/or Metrokane as cross-claimant for copyright infringement, the issue as to which those parties had valid title to sue for damages, and from what point in time, would still fall for determination, as well as additional issues as to appropriate orders for the costs of the proceedings, in the light of such belated amendments to Metrokane’s cross claim. For reasons which will later become evident, I have not found it necessary so to do.
27 In S & H’s Reply and Defence to the Further Further Amended Cross-Claim subsequently filed by S & H on 9 April 2003, which was filed understandably after the conclusion of the viva voce hearing of the proceedings on 28 March 2003 by reason of the belated amendments made by Metrokane to its cross-claim, S & H pleaded, inter alia, that any copyright in Metrokane’s alleged work of artistic craftsmanship was owned by Link Product Design & Development (see [2] above), and not by Metrokane or Mr Kilduff. As already indicated however, Link Product Design & Development was not a legal entity, but constituted merely a business or firm/partnership name used by Mr Kilduff, and perhaps also for a limited period of time by Mr Winigrad as his purported or informal partner, or stated perhaps more precisely, his tentatively proposed partner. It was alternatively denied by S & H in that concluding pleading in the proceedings that Metrokane was an equitable owner of the copyright in dispute. It was further thereby pleaded by S & H that until it received the letter of demand of 7 June 2002 from Metrokane’s solicitors referred to in [17] above, S & H was not aware, and had no reasonable grounds for suspecting, that its importation into and sales made in Australia of corkscrews under the name of ‘Pull It’ involved any infringement of copyright.
28 After the close of the hearing of the proceedings, the parties engaged in the provision of comprehensive and extensive written submissions, in the following sequence:
(i) S & H submissions in chief filed on 9 May 2003, comprising 7 pages;
(ii) Metrokane submissions on defence and cross claim filed on 2 June 2003, comprising 91 pages;
(iii) S & H submissions on defences to cross claim filed 3 July 2003, comprising 51 pages; and
(iv) Metrokane submissions by way of reply to defences to cross claim, filed on 18 July 2003 comprising 25 pages.
The submissions of both parties reflect considerable credit upon the industry and competence of the legal representatives for the parties to the proceedings. In order to keep these reasons for judgment within such parameters as can be reasonably managed, I have not found it necessary or appropriate to refer to every single submission which has been made, much less every piece of evidence referred to in those 174 pages of written submissions.
The Australian copyright legislative scheme and the respective submissions of the parties as to the operation thereof
29 It is common ground that Australia and the United States are parties to the Berne Convention for the Protection of Literary and Artistic Works, originally made at Berne on 9 September 1886, and signed by Australia on 14 April 1928, and subsequently signed by the United States on 1 March 1989, and further that the effect of Regulation 4 of the Copyright (International Protection) Regulations 1969 (Cth), made pursuant to ss 184 and 249 of the Copyright Act, is that the Copyright Act potentially applies in relation to the Rabbit corkscrew in like manner as the provisions thereof apply in relation to artistic works first published in Australia, and to citizens or residents of Australia (Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450 at 456-458). It follows that the Court is required to determine the issues here arising as to whether or not copyright subsists in the Rabbit corkscrew, and if so, as to any infringement thereof on the part of S & H in accordance with the provisions of the Australian legislation.
30 A convenient starting point to a discussion of the controversial issues of statutory interpretation arising is the definition of ‘artistic work’ contained in s 10(1) of the Copyright Act, which reads as follows:
‘artistic work means:
(a) a painting, sculpture, drawing, engraving or photograph, whether the work is of artistic quality or not;
(b) a building or a model of a building, whether the building or model is of artistic quality or not; or
(c) a work of artistic craftsmanship to which neither of the last two preceding paragraphs applies;
…’.
As I have foreshadowed, Metrokane propounded its case for breach of copyright upon the footing of the par (c) expression a work of artistic craftsmanship. No definition of artistic craftsmanship appears in the Copyright Act.
31 By s 22(1) of the Copyright Act, a reference in the Copyright Act to the time when, or the period during which, an artistic work was made, shall be read as a reference to the time when, or the period during which, the work was first reduced to writing or to some other material form. By s 31(1)(b) of the Copyright Act, copyright in any artistic work is the exclusive right to reproduce that work in a material form, to publish that work, and to communicate that work to the public. By s 35(2) of the Copyright Act, it is the author who or which is the owner of any copyright subsisting in an artistic work. By s 36(1) of the Copyright Act, copyright in any artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright. However by s 14(1) of the Copyright Act, that exclusive right is qualified as follows:
‘In this Act, unless the contrary intention appears:
(a) a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject-matter; and
(b) a reference to a reproduction, adaptation or copy of a work, shall be read as including a reference to a reproduction, adaptation or copy of a substantial part of the work, as the case may be.’
32 Whether a part is substantial, within s 14(1), must be decided by its quality rather than its quantity: Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 293 (Lord Pearce). Further, as Wilson J said in S. W. Hart & Co. Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 482, ‘…the question whether there has been a reproduction is a question of fact and degree depending on the circumstances of each case. The emphasis upon quality rather than quantity directs attention to the significance of what is taken’. The importance or the essence of the materiality of the part taken must be compared to the whole of the protected work, for there should be a sufficient objective similarity between the original work and the infringing work: Zeccola v Universal City Studios Inc (1982) 46 ALR 189 at 193 (Lockhart and Fitzgerald JJ).
33 Infringement of copyright in any artistic work, and thus of a work of artistic craftsmanship, by the importation of an article into and its distribution in Australia, is addressed by s 37 of the Copyright Act; sub-section (1) thereof reads as follows:
‘37(1) Subject to Division 3, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, without the licence of the owner of the copyright, imports an article into Australia for the purpose of:
(a) selling, letting for hire, or by way of trade offering or exposing for sale or hire, the article;
(b) distributing the article:
(i) for the purpose of trade; or
(ii) for any other purpose to an extent that will affect prejudicially the owner of the copyright; or
(c) by way of trade exhibiting the article in public;
if the importer knew, or ought reasonably to have known, that the making of the article would, if the article had been made in Australia by the importer, have constituted an infringement of the copyright.’
As has been earlier recounted, S & H has imported into Australia and distributed for the purposes of trade the Pull It corkscrew, in alleged breach of Metrokane’s copyright in the Rabbit corkscrew by virtue of the asserted artistic craftsmanship character of the latter. The reference to ‘ought reasonably to have known’ in s 37(1) above is to constructive knowledge: see Milpurrurru v Indofurn Pty Ltd (1994) 54 FCR 240 at 257 (Von Doussa J). To those provisions should be added reference to s 38 of the Copyright Act concerning the sale of goods within Australia the subject of copyright held by another person, sub-section (1) thereof reading as follows:
‘38(1) Subject to Division 3, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, in Australia, and without the licence of the owner of the copyright:
(a) sells, lets for hire, or by way of trade offers or exposes for sale or hire, an article; or
(b) by way of trade exhibits an article in public;
if the person knew, or ought reasonably to have known, that the making of the article constituted an infringement of the copyright or, in the case of an imported article, would, if the article had been made in Australia by the importer, have constituted such an infringement.’
It is the case of Metrokane that at least since S & H received Metrokane’s letter of 7 June 2002 (see [17] above), S & H knew or ought reasonably to have known that its sale or offer for sale of the Pull It corkscrew in Australia would constitute a breach of Metrokane’s copyright in relation to the Rabbit corkscrew.
34 A special defence to a claim for breach of copyright is stipulated by ss 77(1) and (2) of the Copyright Act; s 77 has already been mentioned in relation to the defence of S & H summarised in [20] above; those sub-sections read as follows:
‘77(1) This section applies where:
(a) copyright subsists in an artistic work (other than a building or a model of a building, or a work of artistic craftsmanship) whether made before the commencement of this section or otherwise;
(b) a corresponding design is applied industrially, whether in Australia or elsewhere, by or with the licence of the owner of the copyright in the work in the place where the industrial application happens;
(c) at any time on or after the commencement of this section, articles to which the corresponding design has been so applied (in this section called “articles made to the corresponding design”) are sold, let for hire or offered or exposed for sale or hire, whether in Australia or elsewhere; and
(d) at that time, the corresponding design is not registrable under the Designs Act 1906 or has not been registered under that Act.
(2) It is not an infringement of the copyright in the artistic work to reproduce the work, on or after the day on which articles made to the corresponding design are first so sold, let for hire or offered or exposed for sale or hire, by applying that, or any other, corresponding design to an article.’
The above expression corresponding design is defined by s 74 of the Copyright Act to mean, in relation to an artistic work, and so far as is presently material, ‘… a design that, when applied to an article, results in a reproduction of that work…’. It is common ground that a corresponding design of the Rabbit corkscrew has not been registered by Metrokane as a design under the Designs Act.
35 As indicated in [25] above, Metrokane’s case is that copyright subsists in the first manufactured Rabbit corkscrew, a three dimensional example of which is Exhibit ‘R1’ in the proceedings, as a work of artistic craftsmanship within the s 10(1) definition of artistic work, or in the earlier created CNC Model, or in the yet earlier again created Renshape prototype. Upon those alternative footings, Metrokane claims that the Pull It corkscrew has reproduced a substantial part of Metrokane’s copyright in the Rabbit corkscrew, within s 14(1) of the Copyright Act.
36 S & H put in issue the claims of Metrokane for qualification of its Rabbit corkscrew as a work of artistic craftsmanship, and in any event contended byway of additional defence, largely in line with what was pleaded in S & H’s statement of claim, as follows:
(i) the only real candidate for copyright qualification, even as an artistic work, though only as a drawing within the s 10(1) definition thereof, is the so-called Kilduff drawing, a computer downloaded copy whereof is Exhibit ‘R3’ earlier referred to;
(ii) a corresponding design, resulting in a reproduction of the Kilduff drawing as an artistic work, has been applied industrially by Metrokane within s 77(1)(b) of the Copyright Act by Metrokane as alleged copyright owner;
(iii) articles to which the corresponding design have been applied have been sold in Australia or elsewhere after 1 October 1990; and
(iv) at the time of those sales, the corresponding design, albeit registrable under the Designs Act, had not been so registered by Metrokane.
37 The response of Metrokane to this alternative defence on the part of S & H was that s 77 has no application in the first place, because the Rabbit corkscrew is in any event a work of artistic craftsmanship within the Copyright Act definition thereof, and thus for the purposes of s 77 of the Copyright Act. Metrokane’s case was that if it made good that proposition, the s 77 defence of S & H must fail. It has been unfortunate that I have found it necessary to recount so much from the pleadings of the parties, but the complexity of the issues propounded by the parties, and the protracted course which the pleadings took, need to be explained in order that the convoluted nature and time of emergence of the issues between the parties can be appreciated.
The controversy as to boundaries of statutory protection of copyright and designs
38 S & H drew attention to what was described as the enigma of the so-called copyright/design ‘overlap’ protection provisions, in support of a contention that s 77 could not sensibly have been intended, as a matter of legislative intention, to permit an article, said by S & H to be registrable under the Designs Act, to secure so much longer protection as an artistic work under the Copyright Act. I shall record some observations and submissions of a preliminary nature advanced on that complex topic by counsel for S & H.
39 Copyright protection enures for the life of the author plus 50 years (s 33(2) of the Copyright Act), whereas design protection, dictated by shape, is limited to a maximum of 16 years, even in circumstances where it may be open alternatively to seek copyright protection (I was informed that there is before the Commonwealth Parliament draft legislation which would reduce the latter period to 10 years). Moreover patent protection, dictated by function, is limited to 20 years (s 67 of the Patents Act 1990 (Cth)). Thus in the case of the Rabbit corkscrew, had design protection been sought and obtained by Metrokane by virtue of registration under the Designs Act, Metrokane’s rights to protection would have been available until about 2013. If however copyright protection is available to Metrokane, the duration thereof would be for a period of time expiring not before about 2047, together with the imponderable period of whatever might be the unexpired length of Mr Kilduff’s lifetime from the time of creation of the alleged copyright. Much discussion took place, at the insistence of S & H, as to the enigmatic nature of the protection Metrokane was seeking to establish in Australia.
40 Counsel for S & H asserted the existence of an evolving legislative policy to require that designs that are industrialised, or applied industrially (to adopt the s 77(1)(b) Copyright Act language), be protected either under the Australian designs legislation, or not at all. I was referred to s 22 of the Copyright Act 1911 (Imp), which was applied to Australia by the Copyright Act 1912 (Cth), and to s 218(2) of the present Australian copyright legislation. I was further referred to the scheme of ss 74 to 77 of the Copyright Act being what counsel described as ‘copyright/design overlap provisions’ (I have already extracted s 77(1) and (2) of the Copyright Act). Attention was also drawn to the existence of official inquiries and reports undertaken since the Copyright Act was enacted in 1968.
41 In that context it was submitted by S & H that the legislative policy underlying amendments which have been made to the Copyright Act reveal a steady trend towards ‘closing loopholes’ that have allowed the owners of designs to exploit the operation of s 77 of the Copyright Act, being a policy said to be reflected in the Explanatory Memorandum to the Copyright Amendment Bill 1988 (Cth), which became the Copyright Amendment Act 1989 (Cth), and in particular pars 16 to 25 thereof. It was acknowledged by S & H that an exception to the trend of removing copyright protection for registrable designs, albeit irrelevant to the present case, related to two-dimensional surface designs, which had been unprotected by copyright up to 1990, but for which such protection has been restored from 1990.
42 Consistent with the asserted legislative policy in principle against the availability of dual protection was submitted by S & H to be the circumstance that the Australian Designs Office categorises Australian design applications by using the International Classification for Industrial Designs (Locarno Classification). That was described as a system whereby common mass-produced articles, such as corkscrews, in respect of which design registration may be sought, are classified by that Office into 32 classes, and if appropriate, sub-classes within those 32 classes, some of which are local classifications specific to Australia. Class 7 is described as ‘Household goods, not elsewhere specified’, and contains nine sub-classes. Sub-class 07.06 is described as ‘Other table utensils’, and contains five further sub-classes. Sub-class 07-06D is described as ‘Bottle and jar openers and resealers. Cork extractors’. Accordingly S & H submitted that the design protection in Australia contemplates that corkscrews are items which may be the subject of design protection.
43 It is however apparent that the presence within s 77 of the undefined expression ‘artistic craftsmanship’ has left open for the Courts to determine its parameters. So much was in effect acknowledged by the Gregory Committee Report of 1953 in the following terms:
‘It is clear that some protection of this kind is required to cover works of art other than such things as works of painting, drawing and sculpture, which are mentioned by name. We are here concerned not with articles manufactured under conditions of ordinary industrial production (artistically meritorious as many of these are) which can secure their own appropriate protection under the Registered Designs Act, but with the works of craftsmen working in many media (silversmiths, potters, woodworkers, hand-embroiderers and many others) in circumstances for which that Act does not provide appropriate protection. We do not think it will be questioned that original works of the kind we have in mind are fully entitled to protection and but for the Copyright Act this would be lacking. We believe that copyright provides the proper basis for protecting these works and to ensure this protection we believe that it is necessary to retain the term “works of artistic craftsmanship” in the Act. It is by no means certain that full preliminary sketches or drawings are prepared for all kinds of articles made by the craftsman (in which case copying the article itself might infringe copyright as a reproduction of the sketch), or, even where there is a full design, that the finally finished article as it leaves the craftsman’s hands would unquestionably be regarded in every case as a reproduction of that copyright design. In these circumstances the only safe way to ensure protection is by making specific mention of this class of work. In doing so, it will be necessary, we believe, to retain the word “artistic” in conjunction with “craftsmanship”, but we do not believe it is practicable to draft a statutory definition equally applicable to each of the whole range of activities and of the varieties of materials used. Faced with these almost endless possibilities we feel that, as now, the decision in doubtful cases must be left to the courts to decide on the facts before them, and we recommend that while the protection given to “works of artistic craftsmanship” should remain, the term should not be defined in the Act.’
It would appear that the copyright protection which Metrokane seeks to enforce in the present proceedings is conceptually beyond the scope of what was envisaged by the Gregory Committee Report, unless Metrokane could establish its claim as one of the ‘doubtful cases’ which the Report seemingly had in mind. To that observation I would add reference to dictum in Interlego AG v Croner Trading Pty Ltd (1992) 25 IPR 65 at 97, where Gummow J, with whom Black CJ and Lockhart J agreed, said as follows, in terms of the distinction between the principles of protection respectively afforded by the general law as to copyright, designs and patents:
‘It is well established that in copyright law originality is a concept distinct from novelty in design law and patent law and from obviousness in patent law. Whilst the author of what is claimed to be an original artistic work must have expended a significant amount of his skill and labour, “originality” does not mean novelty or uniqueness and does not require inventiveness in the sense of patent law … The degree of skill and labour required of the artist will vary with the nature of the work.’
44 Of the four conditions or requirements of s 77(1) which would be required to be established by S & H, in order that Metrokane’s infringement proceedings be thereby not sustainable in principle, only one relates to registrability or absence of registration under the Designs Act, namely that contained in par (d) thereof. Although two of the remaining three conditions of s 77(1) may also be made out by S & H in the circumstances of the case, namely par (b) by virtue of the Rabbit corkscrew having been applied industrially, and par (c) by virtue of a ‘corresponding design’ having been sold and exposed for sale, nevertheless the remaining condition would remain to be fulfilled, namely par (a) to the effect that copyright subsists in an artistic work other than a work of artistic craftsmanship. Hence the first principal issue arising in the proceedings falls for resolution, namely whether the Rabbit corkscrew is an artistic work in the nature of a work of artistic craftsmanship. It is that issue of qualification or otherwise as a work of artistic craftsmanship to which I shall shortly turn, subject to disposal of threshold issues of a preliminary nature raised by S & H as to purported ownership, as distinct from existence, of the alleged copyright in the Rabbit corkscrew, which I will first address. It is convenient to adopt that course, because of the complexity of the latter, in terms of legal principles as well as the particular circumstances of this case.
Copyright ownership of the Rabbit corkscrew – standing of Metrokane to bring the cross-claim as variously amended
45 The issues as to the ownership of the alleged copyright in the Rabbit corkscrew have been foreshadowed above. Sub-section 35(2) of the Copyright Act provides that ‘[s]ubject to this section, the author of a[n] …artistic work is the owner of any copyright subsisting in the work by virtue of this Part’, being Part III comprising ss 31 to 83. Sub-section 115(1) of the Copyright Act provides that ‘[s]ubject to this Act, the owner of a copyright may bring an action for an infringement of the copyright’, including an application for injunction and damages or an account of profits. The contention of S & H is that Metrokane’s threat of copyright infringement proceedings, which led to S & H’s institution of the present proceedings pursuant to the ‘groundless threats’ provisions of s 202 of the Copyright Act, was made without statutory foundation, because apart from no infringement of copyright having occurred, Metrokane was not the owner of any relevant copyright at the time of making threats, whether in law or in equity. S & H pointed out in that regard that Metrokane’s case from the outset had been that Mr Kilduff was the author of the artistic work in issue, irrespective of whether that artistic work should be categorised as Mr Kilduff’s final two-dimensional drawings, or the Renshape prototype model, or the later CNC Model, or the first manufactured Rabbit corkscrew. Two statutory provisions are material to the arguments of S & H, which are reproduced below.
46 Section 196 of the Copyright Act provides for the devolution or transfer of title to copyright as follows:
‘(1) Copyright is personal property and, subject to this section, is transmissible by assignment, by will and by devolution by operation of law.
…
(3) An assignment of copyright (whether total or partial) does not have effect unless it is in writing signed by or on behalf of the assignor.
…’.
Sub-section 202(1) of the Copyright Act provides, as follows:
‘202(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he or she has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright.’
47 In Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 at 94, the following appears in the joint judgment of Mason CJ, Deane and Gaudron JJ:
‘… there is something to be said in support of the view that the threat of proceedings for infringement must, if it is to be justified, have been of proceedings by a person competent to maintain them. That precise point did not, however, seem to us to be fully explored in argument and, in view of the conclusion which we have ultimately reached in relation to other matters, it is unnecessary that we form a final view in relation to it’.
Dawson J (at 105) said that ‘…there is much to be said for the view that Avel … has no standing under s 202…’. McHugh J took a different view (at 118-119) as follows:
‘… The evident object of the section is not to determine whether the threats are justifiable in some general sense but to provide a curial mechanism for a “person aggrieved” by threats of legal proceedings to obtain a determination as to whether the acts in respect of which the action or proceedings was threatened constituted or would constitute an infringement of copyright. In my opinion, the distributor was entitled to defend the action brought against it under s.202(1) by establishing that the acts in respect of which the action or proceeding was threatened constituted or, if done, would have constituted an infringement of Williams’ copyright.’
Moreover to complicate matters further, in Performing Right Society Ltd v London Theatre of Varieties [1924] AC 1, Viscount Cave spoke (at 13-14) of the need to have the legal owner of copyright joined in proceedings as a party, where the applicant has only equitable title, since the successful defendant might otherwise have to face further proceedings by the legal owner after having defeated the claim of the equitable owner; nevertheless his Lordship recognised the entitlement of the equitable owner alone to initiate proceedings for interlocutory relief. That principle has been restated in subsequent authorities.
48 Metrokane asserted that it held at the material time or times sufficient title to the alleged copyright subsisting in the Rabbit corkscrew as a work of artistic craftsmanship, such as to authorise the bringing of its cross-claim in the proceedings. Title in law was said to have been acquired by Metrokane pursuant to certain deeds of assignment of copyright executed by Mr Kilduff in favour of Metrokane respectively on 20 December 1999, and/or 9 January 2001, and/or 20 March 2003, and/or pursuant to further deeds of assignment of copyright respectively executed by Mr Winigrad on 27 March 2003 and by Pollen Design Inc on 3 September 2003. Mr Kilduff’s relationships with Mr Winigrad, and their involvement together in the unincorporated firm Link Product Design and Development, and subsequently in Pollen Design Inc, have already been identified. Metrokane additionally asserted that prior to the execution of those instruments, title was held by Metrokane pursuant to the trade custom and practice in the design industry in New York that designers would assign copyright/intellectual property rights in respect of designs authored by them to clients who retained them, if called upon to do so, unless otherwise agreed. It is readily apparent from the evidence that no such contrary agreement was ever contemplated, much less made.
49 In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226, the High Court addressed principles as to the existence or otherwise of custom or usage that might authorise the implication of a contractual term or condition, an issue said to be one of fact to be resolved by evidence. An entitlement by trade custom or usage to an assignment of copyright, upon making a call or demand for assignment of copyright, would be in the nature of equitable ownership of copyright. The response of S & H was to the effect that Mr Kilduff should be treated as having merely ‘… later claimed copyright in his drawings by placing “Pollen Design Inc” stamps on them when printing them out, even in 2003’, thereby allegedly indicating an absence of any earlier intention on his part to transfer the copyright therein to Metrokane. The evidence which emerged in the course of Mr Kilduff’s cross-examination was that Pollen Design was a business name which he adopted, subsequently to discontinuing his association by way of informal partnership with Mr Winigrad, and that his company Pollen Design Inc. was not incorporated until 16 March 2000, by which time his association with Mr Winigrad, however it might have been earlier characterised in law, had ceased altogether, and had been replaced by his association with Mr Dean Chapman, which seems to have been as non-definitive or unclear in legal terms as that which Mr Kilduff had earlier conducted with Mr Winigrad.
50 The inference available from the evidence adduced on behalf of Mr Kilduff and Metrokane as cross-claimants, including the affidavit and viva voce testimonies of Mr Larimer and Mr Kilduff, is that both Mr Kilduff and his former associate Mr Winigrad, from the outset of the retainer by Metrokane of the unincorporated firm of Link Product Design and Development, held on behalf of Metrokane beneficially all right, title and interest in such copyright as may have subsisted in the Rabbit corkscrew, at least pursuant to the principles of the general law of Australia as to constructive trusts, and in particular, constructive trusts of copyright. That implication of law follows in my opinion from the circumstances of Metrokane’s respective retainers of those persons/entities for reward, irrespective of the instruments of legal assignment subsequently entered into, and thus irrespective of the times when those instruments purportedly took effect. No suggestion has been advanced that the law as to constructive trusts is relevantly different in the United States to that in Australia, and in the absence of evidence to the contrary, a presumption as to that general effect being applicable to Australia should be readily drawn, and to the extent (if at all) Metrokane may need to do so.
51 The account given by Mr Kilduff of his subsequent business relationship with his later associate Mr Chapman bore some of the constituent imprecision as that given by Mr Kilduff in relation to his association with Mr Winigrad. The relationship with Mr Chapman appears to have been constituted, ultimately by about March 2000, in the form of an equality of shareholding held between Mr Kilduff and Mr Chapman in Pollen Design Inc. The relationship so structured may be described on the evidence as being in the nature of a partnership in corporate form.
52 Metrokane and Mr Kilduff are of course parties together in the proceedings as cross-claimants, and are pursuing the same relief by common legal representation. Whilst neither Mr Winigrad, nor Mr Chapman, nor Pollen Design Inc were joined as additional cross-claimants in the proceedings, the inference open to be drawn is that Mr Kilduff and Mr Winigrad, were informal partners of the firm of Link Product Design and Development, and that Mr Kilduff’s conduct was relevantly that of the informal partnership (I use the expression ‘informal’ in the sense at least of an absence of legal documentation). The inference is further open to be drawn that Mr Kilduff, initially as sole proprietor of Pollen Design, and subsequently as the corporator or dominant corporator of Pollen Design Inc, succeeded to any preceding purported partnership practice of Messrs Kilduff and Winigrad.
53 It is to be readily inferred from the evidence that in relation to all relevant issues arising in these proceedings, Mr Kilduff’s design and manufacturing activities in relation to the Rabbit corkscrew, such as purportedly took place, were undertaken by him physically in and from New York, and presumably in the course of his visits to China, under the business name of Link Product Design and Development, and later under the business name of Pollen Design, and later still under the corporate name of Pollen Design Inc. These activities were carried out on the implicit footing of Metrokane’s beneficial ownership as principal of whatever copyright might have subsisted or been acquired in relation to the Rabbit corkscrew, notwithstanding the absence of any formal instrument or instruments of assignment of copyright in Metrokane’s favour. Those activities were undertaken for the sole benefit of, and were financed by, Metrokane for its benefit, as principal. The resulting beneficial ownership in Metrokane’s favour as principal, arising from the outset by virtue of the relationship constituted between Metrokane and Mr Kilduff, and subsequently Pollen Design Inc, respectively, as agents for reward, inevitably followed pursuant to the law of constructive trusts prevailing at least in Australia. When referring to Mr Kilduff, it may be taken that he also stood in the shoes of any purported or informal partner of his for the time being, whether that might have been Mr Winigrad or possibly Mr Chapman (if of course any such partnership relationships ever in law existed). No challenge was made by S & H to the authenticity of the various deeds of assignment of copyright made in favour of Metrokane, to which reference has earlier been made.
54 Therefore to the extent that it might have been the case, that Metrokane did not get in legal title such relevant copyright as may have subsisted at any material time, I would nevertheless conclude that by virtue of Metrokane’s purported retainer for reward of Mr Kilduff as designer, instructed by and at all times accountable to Metrokane as principal, and subsequently by virtue of the status of the corporate vehicle Pollen Design Inc as his apparent or possible successor in corporate form, Mr Kilduff (and if necessary Pollen Design Inc) held as constructive trustee on behalf of, and for the benefit of, Metrokane beneficially, all right title and interest in whatever copyright has existed in relation to the Rabbit corkscrew: see generally Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 392-398 (Gibbs J) and 408-413 (Stephen J). As I have foreshadowed, no evidence was adduced to the effect that the law of Australia as to constructive trusts differed relevantly at any material time from that of the United States.
55 Returning then to the operation of s 202(1) of the Copyright Act, I think that given that an equitable owner of copyright can institute proceedings for an interlocutory injunction for the protection of that copyright, it would be curious indeed if an equitable owner could not have standing to threaten to bring such proceedings in respect of specified infringement of its copyright. Moreover, in the events which happened and which I have described, Metrokane got in legal title prior to any entry of judgment in these proceedings, and indeed prior to the close of the written submissions of the parties.
56 It follows also in my opinion that at least the locus standi of Metrokane as a cross-claimant in the proceedings against S & H should be recognised as having prevailed at all material times, irrespective of the belated addition of Mr Kilduff as an additional cross-claimant during the hearing of the proceedings, and irrespective of the absence of Mr Winigrad, Mr Chapman and Pollen Design Inc as cross-claimants.
57 For completeness I should add that in the course of the hearing, there was marked for identification 1, 4 and 5 respectively the following instruments tendered by Metrokane:
(i) MFI-1: Certificate of registration of authorship of Mr Kilduff of ‘Corkscrew Pictograms’ in the United States Register of Corkscrew Pictograms (dated 25 January 2001);
(ii) MFI-4: Assignment of patented invention known as Cork Extractor registered in the US Department of Commerce (dated 22 December 1999); and
(iii) MFI-5: Deed of Assignment from Daniel Winigrad in favour of Metrokane of the Australian copyright in a so-called new design for a corkscrew later known as the ‘Rabbit’ (undated).
Ultimately after the conclusion of the hearing, no objection was pressed by S & H as to those documents being admitted in evidence, subject to argument as to costs. The informality or possible lack of efficacy or lack of ultimate relevance of those documents is apparent, but in any event, the same are consistent with the imputation of constructive trusts on the part of the relevant United States individuals involved in favour of Metrokane which I have established for other reasons.
The meaning of work of artistic craftsmanship – review of authorities
58 Whether the Rabbit corkscrew qualifies as a work of artistic craftsmanship, within par (c) of the subs 10(1) definition of artistic work, by reference to any one or more of the three alternatives referred to in [25(i)] above, ranks as one of the two central issues in the proceedings. If it does not, Metrokane’s case for breach of copyright inevitably fails. As I have earlier also mentioned, incidentally, the Rabbit corkscrew has not been registered as a design under the Australian Designs Act.
59 Metrokane conceded that if the three dimensional Rabbit corkscrew is to be characterised as no more than a reproduction of Mr Kilduff’s original design drawings and that those drawings therefore constitute the only artistic work on which Metrokane can rely, the provisions of s 77 of the Copyright Act would defeat Metrokane’s claim to copyright. That is because that claim is based on the existence of a work of artistic craftsmanship, being one of the three bracketed exceptions appearing in s 77(1)(a). The two dimensional design drawings could not be rightly described of course as works of artistic craftsmanship, and hence Metrokane’s recourse to any one of the three-dimensional articles identified in [25(i)] above as potential candidates.
60 Because the Copyright Actdoes not define what constitutes a work of artistic craftsmanship, it has been necessary for the courts to throw light incrementally upon the meaning and operation of that statutory expression.
61 A convenient starting point for clarification of the principles appertaining to, inter alia, a work of artistic craftsmanship, is the need for originality. This derives from s 32 of the Copyright Act (infra).
Where the form of expression of a work indicates the application of some degree of knowledge, judgment, skill or labour by the author, that work will be original for the purpose of establishing the subsistence of copyright: see Express Newspapers v News (UK) Ltd (1990) 18 IPR 201 at 206-207 (Browne-Wilkinson V-C), being a case which involved the literary copyright of a newspaper subsisting in the original work of its reporter. In relation to what may be described as mass produced articles intended for sale to members of the public for frequent or everyday use, such as lever operated corkscrews having their mechanisms visually encased by attractive materials, any attraction of the description of artistic craftsmanship to those encasements is attended with conceptual difficulty. The leading authority in the United Kingdom governing the meaning of artistic craftsmanship, in the context of manufactured goods, is to be found in the speeches of the House of Lords in George Hensher Ltd v Restawhile Upholstery (Lancs.) Ltd [1976] AC 64. The report contains the reasons for decision of the Court of Appeal in rejecting the claim by the manufacturer for qualification as a work of artistic craftsmanship, followed by the speeches of each of the five members of the House of Lords which, although containing individual reasoning, nevertheless unanimously dismissed the appeal from the Court of Appeal.
62 The circumstances in Hensher involved a popular style of a manufactured suite of upholstered furniture consisting of a settee and two chairs bearing the mark ‘Bronx’. The chairs had been made from a prototype or ‘mock-up’ designed and produced by the manufacturer’s employees, which consisted of a light frame with upholstery nailed thereto so as to resemble a chair. That prototype was not durable enough to be actually used as a chair, but it served as a sufficient model for the chairs which were manufactured and sold. Several other manufacturers thereafter copied the ‘Bronx’ chairs, including the respondent to the appeal which had succeeded in the Court of Appeal in establishing the absence of copyright. No design had been registered by the appellant manufacturer under the Registered Designs Act 1949 (UK). As earlier indicated, the Rabbit corkscrew is not registered under the Australian Designs Act. The issue arising in Hensher was whether the prototype was a work of artistic craftsmanship. Although all presiding members of the House of Lords were unanimous in their denial of that claim, each wrote speeches which sometimes differed in their respective reasons.
63 Lord Reid’s leading speech set out the following introduction to the issue or principal issue arising (at 77):
‘It is common ground that we must consider the prototype and not the furniture put on the market by the appellants. Apparently this is because the articles put on the market were not works of craftsmanship. But if there was copyright in the prototype then the furniture put on the market by the appellants was copied from it, and the respondents’ products were copied from the furniture which the appellants put on the market. The respondents do not deny that this would be infringement of that copyright.’
Thus his Lordship confirmed the notion that there could not be craftsmanship inherent in the mass production of manufactured goods. As I have already indicated, Metrokane relies upon three candidates for qualification as a work of artistic craftsmanship, as set out in [25(i)] above, one of which bears the description of prototype, but another the first run of manufacture, the latter in reliance upon certain first instance authority of this Court the subject of adjudication after the decision of the House of Lords in Hensher. The prototype of Metrokane’s corkscrew was not available to be exhibited to the Court, the same having apparently been long since destroyed or misplaced in the factory in China used by Metrokane. His Lordship observed (also at 77) that ‘[a] work of craftsmanship suggests to me a durable useful handmade object and a work of artistic craftsmanship suggests something, whether of practical utility or not, which its owner values because of its artistic character’ and further that ‘[i]t appears to me to be difficult to bring within the terms or the intention of the statute an object which, however artistic it might appear to be, is only intended to be used as a step in a commercial operation and has no value in itself’. His Lordship added, ‘I express no concluded opinion on this matter, on which the decision of this case can be of no authority’.
64 Thereafter Lord Reid analysed the statutory meaning of artistic, observing, inter alia, as follows (at 78):
‘But here two questions must be determined. What precisely is the meaning of “artistic” in this context and who is to judge of its application to the article in question? There is a trend of authority with which I agree that a court ought not to be called on to make an aesthetic judgment. Judges have to be experts in the use of the English language but they are not experts in art or aesthetics. In such a matter my opinion is of no more value than that of anyone else. But I can and must say what in my view is the meaning of the word “artistic”.
I think we must avoid philosophic or metaphysical argument about the nature of beauty, not only because there does not seem to be any consensus about this but also because those who are ignorant of philosophy are entitled to have opinions about what is artistic. I think that by common usage it is proper for a person to say that in his opinion a thing has an artistic character if he gets pleasure or satisfaction or it may be uplift [ing] from contemplating it. No doubt it is necessary to beware of those who get pleasure from looking at something which has cost them a great deal of money. But if unsophisticated people get pleasure from seeing something which they admire I do not see why we must say that it is not artistic because those who profess to be art experts think differently. After all there are great differences of opinion among those who can properly be called experts.
It is I think of importance that the maker or designer of a thing should have intended that it should have an artistic appeal but I would not regard that as either necessary or conclusive. If any substantial section of the public genuinely admires and values a thing for its appearance and gets pleasure or satisfaction, whether emotional or intellectual, from looking at it, I would accept that it is artistic although many others may think it meaningless or common or vulgar.
I think that it may be misleading to equate artistic craftsmanship with a work of art. “Work of art” is generally associated more with the fine arts than with craftsmanship and may be setting too high a standard…’
Lord Reid addressed the statutory notion of craftsmanship, adding (at 79) ‘[t]he whole conception of artistic craftsmanship appears to me to be to produce things which are both useful and artistic… A person who only wants, or has only room for, one of a particular kind of household object may be willing to pay more to get one which he regards as artistic; if a work of craftsmanship, it is none the less of artistic craftsmanship because his primary purpose is to get something useful’. In relation to the furniture the subject of the appeal, his Lordship returned to the notion of artistic, concluding (at 74) as follows:
‘… I find no evidence at all that anyone regarded the appellants’ furniture as artistic. The appellants’ object was to produce something which would sell… No doubt many customers bought the furniture because they thought it looked nice as well as being comfortable. But looking nice appears to me to fall considerably short of having artistic appeal. I can find no evidence that anyone felt or thought that the furniture was artistic in the sense which I have tried to explain.’
In the present case, there can be no doubt that the external features of the Rabbit corkscrew at least look ‘nice’, as was also I think the case of the Pull It corkscrew. Both contain however, the same mechanism, built of different material to that of the external features, based of course on that which was the subject of the Le Creuset patent.
65 Lord Morris of Borth-y-Gest queried (at 80-81) the validity of the agreed concession, for the purposes of the litigation, that the ‘knock up’, which appears to have been a paraphrase for prototype, could qualify as a work of craftsmanship, his Lordship observing that ‘I would reserve for future consideration the question whether so transient and incomplete a fabrication as the described “knock-up” did really come within what Parliament had in contemplation as a work of craftsmanship’. As I have already indicated, the prototype here involved constitutes one of Metrokane’s three candidates for copyright protection. Turning then to the meaning of artistic, his Lordship continued (at 81) as follows:
‘… the word “artistic” will be well understood. As a word it can stand on and by its own strength… in this field personal judgment has to be formed: there are no absolute standards: there can be no scientific precision in measurement. Nor can there be unanimity in conclusion though a general consensus of opinion among those whose views command respect will surely be firm ground on which judgment in a court of law can be based…’
And thereafter addressing the meaning of artistic craftsmanship, Lord Morris continued:
‘In deciding whether a work is one of artistic craftsmanship I consider that the work must be viewed and judged in a detached and objective way. The aim and purpose of its author may provide a pointer but the thing produced must itself be assessed without giving decisive weight to the author’s scheme of things… But an effort to produce what is artistic may, if forced or conscious, for that very reason fail. Nor should undue emphasis be given to the priorities in the mind of a possible acquirer. A positive need to purchase an object or thing in order to put it to practical use may be the primary reason for its acquisition but this may be reinforced by a full appreciation of its artistic merits if they are possessed… the object under consideration must be judged as a thing in itself.’
On the subject of adducement of evidence necessary to qualify as artistic,Lord Morris added (at 82) the following as to the role of expert evidence in the determination of disputes such as that presently before me:
‘… as in all situations where a decision is required upon a question of fact the court must pay heed to the evidence that is adduced. Though it is a matter of individual opinion whether a work is or is not artistic there are many people who have special capabilities and qualifications for forming an opinion and whose testimony will command respect. In practice a court will not have difficulty in weighing their evidence and in deciding whether it clearly points to some conclusion. In cases where the court is able to see the work which is in question that will not warrant a decision on the basis of spot opinion formed by the court itself but it will be a valuable aid to an appreciation of the evidence.’
His Lordship was thus of a similar view as Lord Reid as to the admissibility of expert evidence as to whether an item is ‘artistic’ as a work of ‘craftsmanship’. It may be observed that Lord Morris did not purport to establish qualification in respect of a work which a court is not able to view.
66 After making the preliminary observation (at 84) that ‘… I do not think that the presence of distinctive features of shape, form and finish suffices to make a work artistic’, Viscount Dilhorne expressed the following view as to what may satisfy the test as to artistic as follows (at 86):
‘…
I agree that mere originality in design does not make a thing an artistic work of art, I do not think that whether or not a work is to be regarded as artistic depends on whether or not the primary inducement for its acquisition or retention is its functional character. To determine the primary purpose of possession of an article seems to me a very difficult and uncertain test for any court to apply: and I do not think that the words “works of artistic craftsmanship” are to be interpreted as involving the application of any such test. A work which is one of artistic craftsmanship does not, I think, lose that character on account of its functional qualities.’
Nevertheless his Lordship added (at 86-87):
‘… I do not think that it is right to say that every work which has eye appeal is necessarily a work of art, though some may be… If right, it would mean that every design registrable under the Registered Designs Act 1949 is a work of art, or if one prefers the expression, an artistic work… So, in my view, it is simply a question of fact whether a work is one of artistic craftsmanship.’
Thus his Lordship was conscious of the dilemma of possible overlap involved in candidates for registration as designs on the one hand and qualification for artistic craftsmanship on the other.
67 In the speech of Lord Simon (at 90-91), his Lordship observed that the copyright protection of a work of artistic craftsmanship by the United Kingdom 1911 legislation extended to works of applied art that particular protection formerly restricted to works of the fine arts, and did so under the influence of the Arts and Crafts movement, notwithstanding that the aesthetic article of that movement was a handicraft aesthetic, and that the statutory expression a work of artistic craftsmanship was therefore to be construed as a whole. His Lordship further observed that there was nothing to suggest that the statutory description was used in other than its ordinary sense, and further that a work of craftsmanship per se, even though it could be confined to handicraft, at least presupposed special training, skill and knowledge for the production thereof. His Lordship emphasised (at 93) that although the essence of art is that it gives visual pleasure, it does not follow that what gives visual pleasure is artistic, and (at 94) that the statutory phrase is not ‘artistic work of craftsmanship’ but ‘work of artistic craftsmanship’. Moreover his Lordship was of the view that it is misleading to ask, first, is this a work produced by a craftsman, and secondly, is it a work of art. Rather the pertinent question was framed ‘is this the work of one who was in this respect an artist-craftsman?’. The concept of single or unified qualification may be observed. His Lordship continued in similar vein (at 94):
‘Not only is artistic merit irrelevant as a matter of statutory construction, evaluation of artistic merit is not a task for which judges have any training or general aptitude… whether the subject matter is or is not a work of artistic craftsmanship is a matter of evidence; and the most cogent evidence is likely to be from those who are either themselves acknowledged artist-craftsmen or concerned with the training of artist-craftsmen – in other words, expert evidence… It is probably enough that common experience tells us that artists have vocationally an aim and impact which differ from those of the ordinary run of humankind. Given the craftsmanship, it is the presence of such aim and impact… which will determine that the work is one of artistic craftsmanship.’
It is Lord Simon’s speech which has received the predominant citation in Professor Lahore’s loose-leaf work Copyright and Designs. Whether in the circumstances of manufacture relevantly of the Rabbit corkscrew, Mr Kilduff could be described as ‘an artist-craftsman’, to adopt Lord Simon’s phrase, constitutes a critical issue next to be examined.
68 Lord Kilbrandon’s discussion of the statutory notion of ‘artistic’ included the following (at 96-97):
‘It must be possible to deduce the conscious purpose of artistic creation from the work itself or from the circumstances of its creation, but this act arises only when the question whether it is a work of art becomes one for discussion or decision by others than the author. Merit is another matter altogether. It has been said that the courts will be reluctant to make aesthetic appreciations, and that is right, not because so to do is for a judge difficult or unseemly, but because it is a decision which, in this context, is not required.’
And continuing (at 97):
‘Whether a given object is a work of artistic craftsmanship can be posed as a question of fact, but only after the meaning of the word “artistic” has been determined; what that meaning is, is a question of law, since it involves a question of what Parliament meant by the word Parliament used.
I do not believe that it is possible, as [a] matter of law or of exegesis, to arrive at a comprehensive definitive interpretation of such a familiar English word [ie “artistic”], so as to be armed with a test which will enable one, by the application of it, at a glance, to exclude all that does not properly fall within the scope of the simple word itself. It is, indeed, seldom that a simple word can, by translation into some easier or more difficult phrase, be rendered the more capable of furnishing such a test. But it is quite plain, in my opinion, that you cannot get on without exercising, in any case in which this kind of dispute arises, the judicial function of holding whether the facts bring the object within the meaning of the statutory definition… Since the word [artistic] is a word of common speech, it requires, and permits of, no interpretation by experts. It is for the judge to determine whether the object falls within the scope of the common meaning of the word.’
It appears from what I have cited above that his Lordship envisaged the judicial role as dependent largely upon expert evidence, because of the court’s reluctance ‘to make aesthetic appreciations’.
69 Subsequently to Hensher, Walton J in Merlet v Mothercare plc (1984) 2 IPR 456 at 465 purported to reflect the predominant approach in Hensher as that reflected in the speech of Lord Simon, observing as follows:
‘… it is not for the [c]ourt to make a value judgment: the question is primarily the intention of the artist-craftsman. If his intention was to create a work of art and he has manifestly failed in that intent, that is all that is required. It is not for the court to say that he has merely done the equivalent of flinging a paint pot in the face of the public. But, of course, he may have manifestly failed in his object, and his own ipse dixit cannot therefore be the sole, although it is the initial and predominant, test.’
As indicated earlier, Lord Simon paraphrased the critical notion of intention in terms of ‘aim and impact’.
70 In Cuisenaire v Reed [1963] VR 719, a case cited to the House of Lordsin Hensher, but which received explicit reference in one only of the speeches, namely that of Lord Simon (at 91), being a reference made without disapproval,Pape J sitting as a single judge of the Supreme Court of Victoria addressed the subject of authorship of certain manufactured goods, and pointed out (at 731), that the protection given by the Imperial Copyright Act 1911 resides ‘in the author of the work who must be the person whose skill and artistry in execution provides that work’, and that ‘if these skill and artistry in execution are present in the box of rods, that skill and artistry must have resided in the person who actually made the rods and coloured them, and the evidence does not disclose who that was’. I pause to observe that in Professor Ricketson’s loose leaf work entitled The Law of Intellectual Property: Copyright, Designs and Confidential Information, it is nevertheless pointed out that there is no intrinsic reason why craftsmanship attracting copyright must be provided by the same person who supplies the artistic element, copyright law having long recognised the possibility of joint authorship; in that regard, Professor Ricketson observes that ‘… the artistic element is more referable to the design or conception of the work, while the craftsmanship element is more referable to the way in which the work is executed’ (par 7.415). Pape J concluded that ‘[u]pon no view was the plaintiff the author of that work, even though the rods were made for
him on his instructions by some manufacturer…’. Earlier (at 730), Pape J described the test for determining the existence of artistic craftsmanship as follows:
‘In my opinion, the words “artistic” and “craftsmanship” each refer to some quality in the acts performed by the maker or author of the article in which copyright is alleged to subsist in the course of performing the physical operation of making that article as distinct from the earlier cognition and thought which produced the idea upon which the work is based. The true test, I think, is whether the author, in making the article in which copyright is alleged to subsist, was applying his skill and taste to its production with the main object of creating an article which, even if it be utilitarian, nevertheless will have a substantial appeal to the aesthetic tastes of those who observe it … the emphasis is thus upon the object of the author in creating the work, rather than on the reaction of the viewer to the completed work, for it is commonplace in copyright that it is immaterial whether the work has any merit: Walter v Lane [1900] AC 539, per Lord Halsbury L.C. at P.549. In stating that the emphasis is on the object of the author, I do not desire to be taken as saying that the sole test of whether the work of a craftsman is a work of artistic craftsmanship is the intention or object of the craftsman at the time he made the work. As a general rule, the court adjudicating on the matter will apply a purely objective test by an examination of the article itself. When, however, as in the case, such an objective test may be thought to deny that the work is one of artistic craftsmanship, and it is sought to establish the contrary, the object of the creator of that work must, in my view, play a dominant part in the resolution of the question. The best evidence concerning that is the evidence of the creator of the work himself, although, if he were dead, I am inclined to think that evidence from qualified viewers of the work that it had an aesthetic appeal to them may be some evidence from which a court could hold that the creator of the work intended, when he made it, that it should have such an appeal. But evidence that a particular section of the community on viewing the work found that it appealed to their aesthetic emotions cannot be a ground for ascribing copyright to that work if it is clear that its author had no such object in view when he created it.’
71 Justice Sheppard as a member of a Full Court of this Court in Commissioner of Taxation (Cth) v Murray (1990) 21 FCR 436 expressly approved the approach of Pape J in Cuisenaire, which I have sought to encapsulate in the preceding paragraph, in the context of a case concerning sales tax on bowls, platters and vases made by a potter, the question being whether those items were covered by a sales tax exemption relating to ‘[w]orks of art produced in Australia or produced abroad by Australian artists’. In determining this question, Sheppard J had regard to the case law on the meaning of works of artistic craftsmanship, including Cuisenaire and Hensher, and said (at 442) that the ‘intention of the creator must be all important’ in determining that question, whether as a matter of copyright or revenue law. Neaves J agreed with the orders proposed by the Court, and in relation to the word artistic, his Honour cited the passage from the speech of Lord Kilbrandon in Hensher commencing ‘I do not believe…’ lastly extracted in [67] above. Hill J also joined in the orders made by that Full Court, and cited what has been extracted from Cuisinaire in [69] above, as well as extensively from the speeches of the House of Lords in Hensher.
72 The principles enunciated variously in Hensher, Merlet, Cuisinaire and Murray, inter alia, were more recently reviewed in depth in this Court by Drummond J, sitting at first instance, in Coogi Australia Pty Ltd v Hysport International Pty Ltd & Ors (1998) 86 FCR 154. The reasons for judgment occupy forty pages, containing some complex manufacturing detail involving mass produced fabrics. The applicant company, being a designer and manufacturer of machine knitted fabrics and garments, claimed that the respondent infringed the copyright in its XYZ design, which was characterised by a highly textured surface comprising a complex multicoloured three dimensional fabric design. That fabric was created as a result of a program designed for use on a computerised knitting machine, which was able to and did subsequently mass manufacture the fabric. Justice Drummond held that the first manufactured run or roll of the XYZ fabric was a work of artistic craftsmanship. Metrokane seeks to exploit that precedent in the present proceedings. His Honour pointed out that since a work (defined to include an artistic work) is made for the purposes of s 32(1) of the Copyright Act when it is ‘first reduced to writing or to some other material form’ (his Honour thereby lastly referring to s 22(1) of the Copyright Act), it could only be the first expression of fixation of the author’s skill and labour that may constitute the work in which copyright subsists. That work was hence described by his Honour as comprised ‘…only in that portion of the first roll of fabric produced by it in which the XYZ design was first completely embodied, and not in every length of fabric bearing the XYZ design’, or put another way by his Honour, that work represented the first embodiment of the design resulting from the manufacturer’s efforts thereby involved in setting up the process for the mass production of the fabric to that design. Of course, any unauthorised copy of the first roll made by a third party would therefore constitute in principle breach of copyright.
73 Justice Drummond summarised the submission of Counsel for Hysport, concerning the notion of artistic craftsmanship applicable to the circumstances in Coogi as follows:
‘…
the notion of artistic craftsmanship required that the mind of a craftsman must be engaged during the act of production. Once it is recognised that the relevant act of production is that of making the first acceptable run of fabric to the XYZ design, the involvement of the Coogi design team and, in particular, Mr Walker's involvement in producing that particular article, answers this requirement. If Mr Walker had been given a fully developed design for the fabric and had simply written a program to ensure that the knitting machine would produce fabric to that design, he would not, in my opinion, have acted as a craftsman and no part of the fabric so produced could be said to be a work of craftsmanship, however much artistic quality it may have. He would have had no involvement with the materials from which the fabric was made and would not have displayed any skill in the use or understanding of those materials. But Mr Walker performed an entirely different role in the development and production of the first acceptable run of the XYZ fabric. That the initial one, like every subsequent run of fabric produced, is simply one of many identical products of a particular mass production process does not detract from the special quality of the first run of fabric in the circumstances of this case.’
The person identified above as Mr Walker was not just a member of the design team, but was a person additionally skilled in textile machine operation, and he constantly monitored and adjusted the knitting machine for the production of that crucial first run, and was therefore found to be, in his Honour’s view, the craftsman thereof. The concept of a ‘first manufacturing run is picked up in the provisions of subs 22(1) of the Copyright Act, that is to say, ‘… the time when …, [a]n … artistic work … was first reduced to … material form’.
74 In the course of his comprehensive reasons for arrival at the above conclusions concerning the first run of manufactured fabric, Drummond J analysed the authorities bearing upon the meaning of the Copyright Act expression a work of artistic craftsmanship contained in par (c) of the s 10(1) definition of artistic work, his Honour referring in detail to a number of authorities, particularly the speeches in the House of Lords in Hensher. His Honour distilled an area of conflict between Cuisenaire, and the speeches of Lord Reid and Viscount Dilhorne in Hensher, on the one hand, and Lord Simon in Hensher on the other hand, as to whether ‘craftsmanship’, is confined in scope to handicraft, in contrast to machine production. Justice Drummond considered, importantly for present purposes, that Lord Simon provided good reasons for concluding that a ‘mass-produced’ article could still be a work of artistic craftsmanship for the purposes of the Copyright Act, and further, seemingly at odds with the contentions of S & H concerning the ‘overlap provisions’ of s 77 of the Copyright Act, his Honour expressed the opinion that ‘[c]opyright protection is only lost for a work of artistic craftsmanship if the owner chooses to obtain design registration for that work’.
75 Further to the factor of the object of the creator, and in particular the existence of aesthetic intent, Drummond J was troubled by Lord Kilbrandon’s dictum in Hensher (at 96) as to the intention of the creator being determinative of the issue whether a work will have the necessary artistic quality. Professor Ricketson has pointed out at par 7.409 of his loose leaf text that the relevance of intent or objective was accepted in Merlet, Cuisenaire and Murray, yet the effect of his Honour’s view expressed in Coogi is that less importance should be attached to the intention of the maker. In any event in Coogi (at 165), Drummond J expressed the view, as Professor Ricketson has further pointed out, based generally on speeches in Hensher, that expert evidence is admissible as to whether a work possesses the requisite aesthetic quality.
76 A further but related area of debate in the authorities addressed by his Honour’s reasons for judgment in Coogi was whether a work could only qualify as artistic craftsmanship if it was to be produced by an ‘artist-craftsman’. Justice Drummond adopted the expanded view (at 168) namely that ‘[o]nce it is accepted… that works of artistic craftsmanship are not confined to hand-made objects, there is no reason why it should be essential for such a work to be the product of the efforts of a single person, ie of an artist-craftsman, and further that ‘[i]t is enough that it satisfies the two criteria of craftsmanship and aesthetic quality’. His Honour continued (at 169) as follows:
‘There is no necessary difference between a skilled person who makes an article with hand-held tools and a skilled person who uses those skills to set up and operate a machine which produces an article. Such an article can still be a work of craftsmanship even though the creator has used a highly sophisticated computer-controlled machine to produce it, if nevertheless it is a manifestation of the creator’s skill with computer-controlled machinery, knowledge of materials and pride in workmanship.’
77 Justice Drummond then moved to a closer analysis of the manufacturing process involved in Coogi, and distilled the basis for his reason for characterising the ‘first run’ of the fabric in question as a work of artistic craftsmanship, as follows (at 169-170):
‘The procedure by which the first run of fabric in the XYZ design (ie that the subject of the ‘first run’) which was accepted as meeting Coogi’s objective was made cannot be segmented into two discrete processes, the one design and the other production, given the way Mr Walker went about producing the first run of fabric. He can, in my opinion, be fairly described as having used the computer-controlled knitting machine in that first exercise as a tool to enable him to realise, in the form of the first run of acceptable fabric, the creative ideas developed by the Coogi design team, including himself. He is skilled in textile machine operation, including program writing for such machines and in fabric design and he is knowledgeable in the material properties of textiles; he used these skills and knowledge in setting up the machine and monitoring and adjusting it and the program he wrote to control it to produce the trial knitdowns, as he worked towards the stage where he had the machine set up to produce the desired effect. He is therefore entitled to be described as a craftsman and the product of his work as a work of artistic craftsmanship.
The first acceptable run of the XYZ fabric was not a prototype, that is, something developed separately from the mass production manufacturing process itself as a model for a line of mass-produced articles; it was as much a mass-produced item as each subsequent run of the fabric. But in a real sense, it was also a work of “artistic craftsmanship” within the Copyright Act because, first, it was the first fixation in tangible form of the idea of the XYZ design; in that one respect, it was different from every subsequent run of the fabric. Secondly, it was the end result of the efforts of Mr Walker in developing a program over a period during which he had regard to how he could program the kitting machined to produce particular effects, a process that involved trial and error use by him of the knitting machine until he produced a run of fabric that was accepted as meeting their objective by the Coogidesign team, of which he was an important member.’
78 I have extracted at length from the reasons of Drummond J in Coogi because they represent an approach considered by his Honour as open to be taken to the statutory notion of a work of artistic craftsmanship in a modern manufacturing or ‘craftsmanship’ setting. His Honour’s finding represented, incidentally, a phyrric victory for the manufacturer in Coogi, because he went on to find that none of the manufacturing runs of the fabric, subsequent to the first one to bear the XYZ design, were capable of being a work bearing the statutory description. That was because for the taken part of the artistic work to have been a substantial part of the work or other subject-matter within s 14(1) of the Copyright Act, the part taken had to be visually significant to the creation of the original work’s distinctive appearance. Justice Drummond found in that regard that the failure by Coogi to identify the particular colourways in which the XYZ fabric was produced meant that the Court could not compare the visual impact of the XYZ fabric with the respondent’s fabric. Accordingly the Court was unable to determine whether that part of the XYZ design which the respondent took for its fabric design was a visually significant part of the former, and therefore whether the respondent had infringed Coogi’s copyright in the XYZ fabric.
79 Incidentally it was also found in Coogi that no infringement of copyright had occurred in relation to Coogi’s computer manufacturing control program. Since the respondents never had access to any literary form in which the XYZ program was expressed (see again s 32(1) of the Copyright Act), the respondents could never have been in a position to have made a translation, directly or indirectly, of the XYZ program.
80 Since I am unable to draw entire uniformity in approach to the meaning of a work of artistic craftsmanship from the speeches of the Law Lords in Hensher, I am persuaded that the approach in principle of Drummond J of this Court in Coogi, in relation to manufactured goods, should be followed, unless and until a Full Court might adopt a more restricted or perhaps more expansive view. I do not think that the statutory language employed is designed to anchor the statutory meaning into some kind of still-frame, divorced from the techniques of modern manufacturing processes, despite what appears to have been envisaged by the Gregory Report (see again [43] above). Nor do I accept that the artist and craftsman must be the same entity or persons. However, I think that the notion adopted in Cuisenaire by Pape J in relation to a main objective of appealing substantially to the aesthetic tastes of hypothetical observers, whilst nevertheless maintaining utilitarian objectives, provides a practical approach for adoption in circumstances such as the present. The balancing factor in the equation is rather to be identified in the need for restraint and conservatism to ensure that the statutory meaning does not encroach upon or derogate from the integrity of the legislative scheme for design protection.
Whether Metrokane established the existence of authorship of any work of artistic craftsmanship
81 Unless inconsistent with the context, any reference in this segment to Metrokane should be taken to include reference to Mr Kilduff. No challenge was made to Mr Kilduff’s credentials or qualifications as an industrial designer. A critical controversy concerning Mr Kilduff however arises as to whether he has been established by Metrokane as the craftsman of the Rabbit corkscrew. It may be accepted that he was the artist, being the author of the Kilduff drawings. For Metrokane to qualify the Renshape prototype, CNC Model or Rabbit corkscrew as a work of artistic craftsmanship, it became necessary to establish the existence of the author or joint authors of such articles, and the craftsman so established, if Mr Kilduff alone, would have the consequence that he was empowered to enforce the alleged copyright appertaining to the Rabbit corkscrew as a cross-claimant.
82 S & H contended that Mr Kilduff was not the craftsman, or at least not the sole craftsman of the Rabbit corkscrew, as distinct from being merely the designer or architect, and thus the artist, in respect thereof. That was said to be because of the functions and activities of unknown and unidentified persons in the factory in China who engaged in whatever crafting of the Rabbit corkscrew might have occurred, such as to establish the existence of a work of artistic craftsmanship, and thus to sustain the cross-claim. As indicated in Cuisinaire, the craftsman must be identified, and to merely give instructions to the manufacturer is not to be thereby constituted as a craftsman. The craftsman must be closely involved in the manufacture, as illustrated in Coogi. Metrokane has sought to establish copyright in the proceedings, either in relation to the Renshape prototype, or in the subsequently formed CNC Model used as an aid to manufacture the first and subsequent manufacturing runs, or in the first run of manufacture (see again [25(i)] above). A preliminary step in relation to the first two of those alternatives is to determine whether either qualified in principle as a work of artistic craftsmanship, irrespective of authorship. If not, no issue as to authorship need arise in relation to those two candidates, and I can then address the issue as the first run of manufacture in respect of the Rabbit corkscrew. In this context, there tends to be a conceptual overlapping as to whether either of those two alternatives should be disqualified at this preliminary stage from characterisation as works of artistic craftsmanship, irrespective of any issue as to authorship.
83 The Renshape prototype was not tendered by Metrokane into evidence – it was no longer capable of being located in the factory in China where the Rabbit corkscrews have been manufactured. To cite Mr Kilduff’s testimony in cross-examination, as to the present whereabouts of the Renshape prototype, ‘… I tried to get that back a long time ago but when you send models to the factory who knows where it ends up’. I am unable to sufficiently or satisfactorily determine, as a judge of fact, with the assistance of any expert testimony, or otherwise, whether that prototype was a work of artistic craftsmanship, merely from viewing the photocopy thereof, comprising Exhibit ‘4’, or by reading Mr Kilduff’s descriptions thereof, such as they were. Nor could the experts who gave evidence in the proceedings have adequately done so. Their respective testimonies were confined in any event to the manufactured product of the Rabbit corkscrew. Moreover, Lord Morris in Hensher referred to the practical difficulty for a judge to assess, as a work of artistic craftsmanship, ‘so transient and incomplete a fabrication’ as the prototype in that case (see [65] above) and I would think that a similar observation is here applicable. The Renshape prototype was not functional as a corkscrew, but was merely a semi-working model (as Metrokane readily conceded), and hence was not identical in all material aspects with any manufactured run of the Rabbit corkscrew. Further design and construction work was required at the factory in China in order to progress the Renshape prototype initially into the structure of the CNC Model. The Renshape prototype was not apparently as advanced as that prototype addressed by Lord Reid in Hensher (see [63] above), which his Lordship referred to as ‘a step in a commercial operation [having] no value in itself’. In any event, I do not think the Court can determine the aesthetic quality of a work not visually available, irrespective of Mr Kilduff’s descriptions thereof. As pointed out in Hensher and Coogi, the requisite level of aesthetic appeal is higher than mere visual appeal, and hence normally the need for expert evidence discussed in those cases. Although the Renshape prototype was said by Mr Kilduff to have reached the stage of being semi-operational, and to be ‘very, very close to the final injection moulded production piece’, being a description I thought to be somewhat of an overstatement, it would be too difficult, and in any event inappropriate, merely by the descriptive qualities accorded thereto by Mr Kilduff, as the assembler thereof, to satisfy the Court as to the fulfilment of the statutory notion of artistic craftsmanship. As to the element of craftsmanship per se, an incomplete article such as the Renshape prototype could hardly be characterised as ‘durable’ and ‘useful’, or as ‘both useful and artistic’, to adopt for instance Lord Reid’s descriptions in Hensher (see [63-64] above).
84 The CNC Model was also not tendered in evidence, not having been located as well at the factory in China, and was therefore also not physically before the Court. Once again, I am left with the virtually impossible task of hypothesising as to any aesthetic features, as well as its craftsmanship condition for qualification as a work of artistic craftsmanship. I do not even know what ‘distinctive features of shape, form and finish’ existed, which even Lord Dilhorne would have thought to be insufficient (see [66] above). Unlike the Renshape prototype, not even a photograph of the CNC Model was placed before the Court. The CNC Model did represent a further step in the design and manufacturing process, and was thus less ‘transient and incomplete’ than the Renshape prototype, to again adopt Lord Morris’ description in Hensher cited in [65] above. As I have earlier indicated, the factory in China redrew the Renshape prototype into a three-dimensional wire frame shape, which was then connected to a milling machine, from which the CNC Model was constructed. To the extent that Mr Kilduff was not involved in that process, it may be inferred, as S & H rightly submitted, that some unidentified person or persons of unknown skill and craft associated with the factory in China participated as author or authors in respect of the CNC Model. Mr Kilduff does not appear to have supervised in person the assembly in China of the CNC Model, or at least to any substantial extent thereof.
85 What I have observed above is not intended to trivialise or minimise the extent of the work, skill and effort that Mr Kilduff contributed to the manufacture of the Rabbit corkscrew, both by his communications from the United States to the factory in China, and in the course of his supervisory visits to China, in the latter case to the limited extent that they were. The formidable, if not insuperable, difficulty confronting the Court is how to satisfactorily assess the extent and significance of that work, skill and effort on Mr Kilduff’s part, so far as the same related to the element of his asserted craftsmanship of the Rabbit corkscrew of the three candidates propounded by Metrokane. No written communications between the factory in China and Mr Kilduff are in evidence, and his visits to the factory were only few, and then far between in time, as will shortly be detailed. I think that it must be concluded that Mr Kilduff has not established sufficient authorship on his part of at least the craftsmanship of the CNC Model. That is largely because of the input of unidentified persons for the time being involved in the manufacturing and associated activities of the factory in China throughout the unspecified period of time of the creation of the CNC Model in that factory. Mr Kilduff’s last trip to the factory was undertaken in or about June 2000, about two and one half years after the Kilduff drawings were first produced, and in the meantime, he had visited the factory only twice, once in March 1999 and once in March 2000. Those circumstances, in combination with what I have already recorded in this segment of my reasons for judgment, do not seem to me to extend sufficient assistance to Metrokane’s formidable task of demonstrating that Mr Kilduff’s supervision of what took place in the factory in China was of the nature, extent and constancy which the authorities have ascribed to or associated with authorship of artistic craftsmanship. I have already indicated the notion of authorship of craftsmanship is not satisfied merely by the giving of instructions to a manufacturer.
86 I would add, both as to the Renshape prototype and the CNC Model, that Mr Kilduff’s evidence, cited at the conclusion of [7] above, that ‘… most of the aesthetics were followed off my original design, …all of them’, serves to exemplify merely the generality, if not also the vagueness, of description of the respective contributions of himself, on the one hand, and the manufacturers in China on the other, to the manufacture of the Rabbit corkscrew, and in particular, to any asserted craftsmanship on his part thereby involved. Neither appear to have possessed, for instance, the Whale (black rubberised) finish. There must necessarily be an application of the author’s ‘skill and taste to its production’, to cite again from Cuisinaire in the passage extracted in [70] above, or what Drummond J described in Coogi as the ‘first fixation’ of ‘skill and labour’. Areas or aspects of production unsupervised by the designer would seem to produce insufficient qualification in relation to the craftsmanship element of any artistic work.
87 That leaves for evaluation the first manufactured Rabbit corkscrew, being the last of the three candidates set out in [25(i)] above. It will be recalled that an article of that description was found to qualify as artistic craftsmanship in Coogi. The inference open to be drawn is that the same was identical to what appears as Exhibit ‘R1’, being an example of the Rabbit corkscrew as marketed in Australia. The issue thus arising is of a different dimension to the issues arising in relation to the Renshape prototype or the CNC Model, since what is before the Court for assessment in the form of Exhibit ‘R1’ was available for assessment and evaluation by the expert witness for each party. Nevertheless, the admission into evidence of the corkscrew in the same form as was the first manufactured run of the Rabbit corkscrew does not of course resolve the critical issue as to Mr Kilduff’s authorship thereof, since any work of craftsmanship has been undertaken in China, in the apparent absence of Mr Kilduff for most of the period of manufacture.
88 S & H contended that the limited extent of Mr Kilduff’s physical supervision of the construction of the first manufactured corkscrew in the factory in China fell short of the statutory requirement for copyright authorship. As was pointed out in Coogi (at 164), ‘[c]opyright only subsists, pursuant to s 32 of the Act, in an original work of which the author was a qualified person “when the work was made”. I have already summarised certain of the evidence adduced from the cross-examination of Mr Kilduff at [3-7] above, which bears upon the question as to the extent of his physical supervision of the manufacturing process in China. Inevitably and in reality, S & H submitted, it must be inferred that unidentified persons, physically present in the factory in China, supervised the manufacturing process during the protracted periods of time when Mr Kilduff was not in China. Those persons necessarily participated, at least to a significant extent, in any work of craftsmanship of the first manufactured run. Some evidence in that regard has already been referred to in [6-7] above. In addition the following further affidavit and oral evidence of Mr Kilduff bears relevantly upon the issue as to Mr Kilduff’s supervision of the manufacturing process:
(i) Mr Kilduff’s affidavit of 7 November 2002, and in particular pars 25 and 26 thereof, which referred unspecifically to his ‘work with the engineers at the factory in China during the assembly stage to help refine the details of the design, improve the product’s mechanics and make the many technical adjustments necessary to meet the target price for mass production’;
(ii) Mr Kilduff’s affidavit of 2 April 2003, and in particular par 6.5 thereof, which stated (briefly) ‘[i]n 1998 Metrokane’s factory in China prepared a Rabbit sample using the WHALE finish’;
(iii) Mr Kilduff’s unspecific oral testimony in chief that ‘I oversaw the design in the factory’, and further that ‘I oversaw the assembly in the factory, yes’; and
(iv) Mr Kilduff’s further oral testimony in chief as follows -
‘Well when I go to the factory I oversee everything they are doing to make sure it is what I had in mind. And a lot of times I would make a small suggestion… about which way to put a sticker on a label sort of thing. It is always good to be at the factory.’
‘[W]hen… the final moulds were done they made one sample and sent it to us in the States before I went over to China. So, I saw a first shot out of the mould, when the moulds were finished.’
‘As far as the shape goes [he did not make alterations] [b]ecause it was pretty much right on the money, the shape.’
‘In any product you usually go back and forth to the factory a little bit… mostly minor things on this project.’
‘They needed me to approve the design before they would go ahead and start the tooling on it.’
‘Well I told them to make it black…’
‘… I sent them a sample of the rubber spray on a product… and I told them to source it out and… order some material…’.
89 Mr Kilduff’s oralevidence in chief identified the three occasions of his visits to the factory in China, as follows -
‘During the process of putting your design into a manufactured final result did you visit the factory in China?---Yes.
Do you have your passport with you?---It’s in my bag over there.
Could you please let the court know with reference to your passport any relevant trips that you’ve made to China and the purpose for each trip?---Yes, March 21, 1999 was my first trip to China and then I went---
Just one by one if we could deal with them. In respect of each date if you could tell the court what happened and the purpose of your trip?---I can’t remember all the specifics but I’ll tell you what happens every time I go over there. I sit down in the room with the manufacturer and we lay out on the table all the products we’re working on and we go over individually any changes or revisions or modifications that I have to make the product better. So that’s what happened the first time and, let’s see---
Well, in that first trip were any modifications made as a result of your input?--It’s hard for me to recall exactly what specifics were talked about in that meeting because it was a couple of years ago.
In terms of the design, the shape of this product?---The shape was already finished at that point so I didn’t – I didn’t change the shape at all at that point. Probably we just talked about, like, production issues and stuff like that, maybe packaging we talked about because, you know, we also had to do the injection moulded case which turned out to be a little complicated so we probably discussed that in ’99.
Is that part of your design expertise, your input into the manufacturing?---Yes, yes.
When was the next trip?---The next trip? In March 2000. Wait a minute, I think I skipped a trip. Okay, March of 2000 was the next trip and then the trip after was June of 2000.’
In the result, as I have earlier foreshadowed, Mr Kilduff could point to only three trips made by him to the factory in China in relation to the manufacture, or supervision of the manufacture, of the Rabbit corkscrew, namely in or about March 1999, March 2000 and June 2000. His visit in March 1999 would appear to have occurred some time prior to commencement of actual manufacture of the Rabbit corkscrew.
90 I should interpolate to add that it was not disputed by S & H that Mr Kilduff was in principle a candidate for classification as a ‘qualified person’ within s 32(4) of the Copyright Act, notwithstanding his United States residency, by a combination of that sub-section with
s 184 of the Copyright Act, and with the Copyright (International Protection) Regulations 1969 (Cth), to which reference has already been made in [29] above.
91 In light of the evidence of Mr Kilduff which I have reviewed, a factual conclusion is open to be drawn to the effect that Mr Kilduff was not the sole author of whatever copyright might exist in relation to the first manufactured Rabbit corkscrew as an alleged work of artistic craftsmanship. The contribution of an unidentified employee or unidentified employees of the unidentified manufacturer in China to the existence of any craftsmanship element of that work may be inferred from the evidence to have been not immaterial or insignificant, at least by reason of the apparent length of time taken up to, and so it would seem including, the occasion of the first run of manufacture of the Rabbit corkscrew, commencing perhaps from the time of Mr Kilduff’s initial visit to China as far back as March 1999. I acknowledge that a work of artistic craftsmanship may be brought into existence jointly by the efforts of two or more authors. Section 10(1) of the Copyright Act defines work of joint authorship as follows:
‘… a work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors.’
In Bulun Bulun v R T Textiles Pty Ltd (1998) 41 IPR 513 at 525, Von Doussa J observed that ‘a “work of joint authorship” means a work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contribution of the other authors’ and ‘[a] person who supplies an artistic idea to an artist who then executes the work is not, on that ground alone, a joint author with the artist’, and further, that ‘[j]oint authorship envisages the contribution of skill and labour to the production of the work itself’. These principles were not fulfilled in my opinion by the circumstances of Mr Kilduff’s extent of supervision of manufacture, to the extent that evidence has been purportedly tendered by Metrokane. All that is not to imply that work undertaken by any craftsman in the factory in China might have been, not a joint work, but rather a collaborative work, as illustrated in Redwood Music Ltd v B Feldman & Co Ltd (1979) RPC 385. Nevertheless the problem here in the case of a work of joint authorship, in terms of additional parties to the cross-claim, nevertheless arises.
92 If Mr Kilduff was not the sole author of the artistic work within s 35(2) of the Copyright Act, by reason of some one or more persons in the factory in China having jointly contributed to the creation of such craftsmanship as may be inherent in the Rabbit corkscrew, it must follow in my opinion that Mr Kilduff as purported author, and therefore also Metrokane as his assignee, are not qualified to maintain their cross-claims for relief as copyright authors. Such persons in the factory in China who engaged in the craftsmanship of the first manufactured run in China, to the extent that such craftsmanship may be established to the satisfaction of the Court, have not of course been joined as additional cross-claimants for the pursuit of the relief sought. The inference in my opinion open to be drawn, and which I think should be drawn, is that the factory operator in China, or some one or more of its employees, was or were craftsmen of the first manufactured corkscrew, assuming that the same satisfies the description of artistic craftsmanship. I am unable to be satisfied as to fulfilment of that description in relation to the missing Renshape prototype and the CNC Model, and even if the first run of the manufactured Rabbit corkscrew satisfied the notion of craftsmanship, being craftsmanship of the required artistic nature (which I will shortly examine), there are unidentified joint authorship elements involved which are incapable of ascertainment, both in terms of identity and detail of activity capable of satisfying the notion of craftsmanship.
93 It follows in summary that I do not think the acts of authorship of Mr Kilduff, such as they may have been, can be disconnected from the acts of production of the first run of manufacture which occurred at the factory in China during his relatively lengthy periods of absence in the United States, being acts involving skill, judgment and labour of the manufacturer’s employees.
94 The circumstances here involved are distinguishable from those in Bonz Group Pty Limited v Cooke (1994) 3 NZLR 216, where Tipping J found the manufacturer of certain garments had established its claim to copyright in the nature of artistic craftsmanship under the corresponding New Zealand copyright legislation. The findings (at 224) were that one of the factory’s employees was the principal designer of the garments, and that the factory’s employed handknitters could fairly be described as craftsmen of the garments. Here of course there was no evidence to the effect that the factory in China was owned or operated by Mr Kilduff or his principal (though not employer) Metrokane, or that any possible artistic craftsmen there engaged, participated in the first run of manufacture of the Rabbit corkscrew in China (nor for that matter of the CNC Model), and if so, in what respects. Put another way, the limited extent of Mr Kilduff’s supervisory activities at the Chinese factory were not such as to attribute to Mr Kilduff his acts of craftsmanship, if any, involved in those activities. I would add that there may well be difficulty, in the light of this Court’s decision in Coogi, in accepting today that the circumstances in Bonz were sufficient to satisfy the element of craftsmanship in relation to manufactured goods. The nature and extent of the findings in Bonz do not readily compare, on my reading of the reasons for judgment, with the nature and extent of the input of Mr Walker into the manufacturing process in Coogi, as found by Drummond J.
95 More specifically in relation to Coogi, the computer programmer and knitting machine technician employed by the applicant fabric manufacturer, having first planned and written the program from which the design was ultimately developed, and having already had appropriate experience also with his employer’s computer-controlled knitting machine, used the graphs and control programs, which he himself had created, to produce trial runs of fabric, and thereafter made adjustments to both the program and the knitting machine itself, in order to arrive at the stage where he had the program in final form, and the machine precisely set up in order to produce fabric of acceptable design for manufacture. That sort of detail does not appear from the reasons for judgment in Bonz. The fact that during production runs of the fabric, subsequent to the critical first run of manufactured product, that technician (Mr Walker) made further adjustments and changes, both to the program and to the knitting machines, to deal with problems arising from the variations in yarn fibre due to temperature fluctuations and other causes (at 160), does not detract from the significant contrast between what that designer/technician undertook and effected in such a ‘hands on’ way, in order to produce the first run of the manufactured product, and what is known from Mr Kilduff’s unspecified evidence as to the nature and extent of the manufacturing processes that took place in the factory in China. What Mr Kilduff was able to testify as to his activities on behalf of Metrokane, when he visited the factory in China, and as to the nature of his supervising work, such as it was, when not physically present in China, stands in contrast to Mr Walker’s activities involved in the creation of the first run of manufacture of the fabric thereby manufactured. To repeat part of the passage from Coogi in [72] above:
‘… it was the end result of the efforts of Mr Walker in developing a program over a period during which he had regard to how he could program the knitting machine to produce particular effects, a process which involved trial and error use by him of the knitting machine until he produced a run of fabric that was accepted as meeting the objective by the Coogi design team, of which he was an important member…’.
96 It therefore follows that Metrokane has not established its authorship of any work of artistic craftsmanship in relation to the Rabbit corkscrew, for the reason that I think that a material or significant amount or extent of whatever craftsmanship (if any) was applied in relation to the only remaining candidate for qualification, namely the first run of manufacture thereof, must have been undertaken by persons unknown who worked in the factory in China which assembled that first run. Put yet another way, I am unable to form a judgment, from the evidence before the Court, as to the extent of the contribution of the factory in China to such craftsmanship as was applied in the course of the manufacturing activity in China. All that I can conclude is that Mr Kilduff’s limited time spent in China was such as to fall well short of persuading me that his activities in China contributed not just to such craftsmanship as was undertaken in China, but comprised substantially the whole of any such supposed craftsmanship.
Whether the Rabbit corkscrew is a work of artistic craftsmanship – assessment of the expert evidence
97 If my resolution of the authorship issue be correct, the question as to whether the Rabbit corkscrew comprises a work of artistic craftsmanship does not arise. Nevertheless it remains appropriate that I resolve the same. Each of the parties adduced independent expert evidence on this issue, from Mr Geddes on behalf of Metrokane, and from Mr Brown on behalf of S & H. In addition, S & H adduced evidence from Mr Kushner of Hong Kong, whose company (ie PCI as referred to in [11] above) was the designer and promoter of the Pull It corkscrew, and the merchandiser thereof (or versions thereof) in the United States. It will be recalled that S & H is the Australian importer and distributor of the Pull It corkscrew. The difficulty with conclusions proffered by experts generally upon ultimate issues of law for the Court to resolve was referred to by Gummow J in Interlego (at 94). Nevertheless it is appropriate, as the judge at first instance, to make findings in relation to all of the evidence proffered by those three persons. The question falls to be considered by recourse to the Rabbit corkscrew in evidence (Exhibit ‘R1’). It is common ground, at least implicitly, that it is identical to the first manufactured Rabbit corkscrew. In the present circumstances, however, of an undefined concept (ie a work of artistic craftsmanship) appearing in legislation such as the Copyright Act, I observe that both Lord Morris and Lord Simon in Hensher explicitly indicated that expert evidence would assist the determination as to what may satisfy the statutory expression.
98 I have already listed the features of the Rabbit corkscrew, as pleaded by Metrokane, in [23] above. Metrokane submitted that those features were aesthetic in character. For ease of reference, I repeat in perhaps more detail, Mr Larimer’s description of those features as follows:
(i) ‘contoured body resembles the head of a rabbit presenting a “bunny” profile, the lever handle being the profile of a rabbit’s ear, the body being the rabbit’s head and the end of the lever axel serving as the rabbit’s eye;’
(ii) ‘rubberised finish supporting the rabbit analogy with a “furry” texture;’
(iii) ‘the rubberised finish applied to the three handles as well as the body uniting the four parts into a single aesthetic white;’
(iv) ‘soft grip pads of neoprene inserted in the top and bottom of the lever handle to facilitate a good grip in use;’ and
(v) ‘Metrokane logo.’
99 Mr Geddes expressed the opinion that the Rabbit corkscrew has real artistic/aesthetic qualities for the many reasons set out below:
(i) ‘…demonstrates artistic qualities in its aesthetic design as well as a skilled level of workmanship in its functional design and manufacture …’;
(ii) ‘The design with its curved, purposeful form goes well beyond sound craftsmanship or design; it’s a work of sculptural quality’;
(iii) ‘The curvaceous form softens its harshness of the purely functional mechanism and adds ‘personality’ to its product. Termed ‘biomorphism’ there has been a conscious shaping of the form of its product’s elements to create a representation of an animal form. This technique is utilised by product designers to client a positive emotional response to a product, particularly where the form of the product is imposing, threatening or intimidating…’;
(iv) ‘This reference in form to a rabbit conjures up pleasant associations for anyone interacting with this corkscrew design, to purchase or use it without being intimidated by its complexity’;
(v) ‘The reference in form to the rabbit, the elegance of form of individual elements, the shapely handles and body of the corkscrew, the way each element relates to the others to create a product in harmony, all demonstrates an artistic, sculptural quality’;
(vi) ‘The use of the selected materials and finishes also contribute to the overall well-crafted appearance. The contrast between matt black and shiny chrome, and the soft-touch coating or rubber grip inserts and the hard metal surfaces contribute to the complexity and interest conveyed in the crafted form’;
(vii) ‘Even terming the device the Rabbit helps people see an endearing form in the product that generates even more emotive response to the aesthetics of the product. The aesthetic appeal in a three dimensional object also has a sculptural aspect. The weight, balance, flow, gesture, proportions, edges, blends, and many other sculptural attributes contribute to the final elegance and appeal of the form. In my view, the Rabbit corkscrew achieves a quality of craftsmanship in its execution well beyond an adequate level to give a mechanical device appeal’;
(viii) ‘People desire such an object, and crave ownership not simply for the excellence of its utility, but for the emotive aspects of its form, finish and feel, and general aesthetic appeal’;
(ix) ‘Beyond the stylistic appeal, I also find that the Rabbit has an “honest” form. It has an integrity of shape and assemblage which communicates a quality pedigree to a user. This is often conveyed as the “feel” of the product. From my experience this produce has a “solid feel” – by which I mean that it has a sound basis of creation, and is “true” to its purpose. Its design follows its own path rather than the current trend. Such qualities help a product to ensure the favour of the market through change in trends and styles’;
(x) ‘The product as a whole is well proportioned, well weighted and balanced. Its form has a comfortable elegance and flow. Its size is appropriate for the hand and its function. Were the product to actually be a rabbit, its gesture and personality are friendly. These appealing animal-like traits provide counterpoint for the visual harshness of the mechanism. The product’s persona is helped by the sensitive selection of materials and finishes, and the rabbit features found in the form of the device are accentuated by the elliptical shape of the eye and the subtle curvature of the ears, head, face and neck. The use of chrome on the rack and pinion gears highlights the contrast between the mechanism and the more “human” form of the product. The other mechanical components are honest in their representations, communicating a “hands-off” utilitarian role, whilst the bodyform and handles welcome the exploration of touch’; and
(xi) ‘This is a product that people want to touch and feel. This is a work of utilitarian sculpture, as fundamental as a well worn stoneage hand-axe. By the application of sculptural skill its form goes beyond function alone’.
100 In the further opinion of Mr Geddes, expressed in his affidavit evidence, the level of aesthetic appeal of the Rabbit corkscrew went beyond mere visual appeal for the following reasons:
(i) ‘… the form of the Rabbit corkscrew avoids any popular fad or trend instyling which mayappeal to a small sector of the market for a short time. While still very stylish in its own right, this design approach avoids the risk of using product details which are currently appealing, becoming “dated” and out of favour with the buying public’;
(ii) ‘… the Rabbit is more “shaped” than “styled”, whereby the form comes from the whole shape of each component and their interaction in the whole, and does not include applied decoration or stylistic treatment’;
(iii) ‘It is the “modelling” or “sculpting” of the “head” and the “ears” of this product which gives this product its distinctive “rabbit-ness”. This is a singular interpretation of the form of a rabbit head. Another author or artist might create a rabbit-like appearance through a quite different form and yet also create a rabbit-like product’;
(iv) ‘… the satin finish black with chrome detailing has been a mark of sophistication for decades…’;
(v) ‘…. based on my 20 years of experience in the field of new product design, and in the light of my judging experience in the Australian Design Award programme, it is my view that the Rabbit corkscrew demonstrates a high level of artistic design and a skill in crafting the final manufactured product’; and
(vi) ‘… this product has a sculptural quality and presence about it which is beyond that expected in a product. This level of attention to product shape and feel is, however, appropriate for the wine market, although to a standard rarely achieved by the majority of products available’.
101 Mr Geddes concluded by first referring to the awards and press release described in [10] above, and continued thereafter as follows:
‘… the design has met these requirements [refined and elegant with award-winning aesthetics], and not surprisingly has achieved a Bronze award at the IDEA 2001 awards which is held by the professional body for international designers in the USA. This international award has a very high level of judging standards and a strong field of entrants each year. To have achieved a Bronze Award is something that few designs produced internationally can achieve. This attests to the all-round high standard of this product and its appeal to a multi-disciplined judging panel.’
102 Mr Larimer emphasised that he wanted the Rabbit corkscrew to have visual appeal by virtue of its distinctive design, rather than be only a functional utilitarian product. Mr Kilduff’s stated design objective was ‘to create a pleasing exterior that would emphasise its mechanical complexity and appear user friendly to its customers’. Metrokane claimed to have brought itself within the principles of what has been extracted from the dictum of Pape J in Cuisenaire in [69] above. The so-called ‘true test’ then enunciated by Pape J speaks however of a ‘main object’ of aesthetic appeal, with any ‘utilitarian’ function being implicitly incidental thereto, being a test which could not be said to be readily fulfilled by Metrokane.
103 Metrokane submitted that the evidence which I have earlier summarised in [4 - 7] above demonstrated the outlay of Mr Kilduff’s skill and effort over a period of weeks, during which time Mr Kilduff considered how the Rabbit corkscrew could be manufactured in order to produce the desired effect, whilst keeping the preliminary work at a cost effective level until an acceptable design was achieved. I was referred to Mr Geddes’ further opinion that ‘whilst this is strongly a case of “form follows function” – the specific arrangement and basic shape of each component is derived from the task they perform in the corkscrew mechanism – there have been continual design decisions in the exact form that each element might take’. Mr Geddes exemplified that further opinion with the observation that ‘[t]he sculpted parts enclose and expose the mechanism, yet are not a derivative of it’. The elements of observations of Mr Geddes tend to be mutually exclusive. Mr Geddes’ affidavit evidence was further extracted in the Metrokane’s submissions as follows:
(i) ‘the product is well proportioned, has a good weight and balance, is sized to fit the hand, and stands impressively. It does not have an awkward angle, but looks well sculpted from every angle. While its overall form is impressive, its detailing reveals an attentive designer was responsible’;
(ii) ‘Considerable time would have been spent in the generation of the shaping of the surfaces, whether this was done through traditional model making or by utilising sophisticated surface modelling computer software such as used in the automotive industry. This aspect of the design of a sculptured product requires considerable craftsmanship combined with flair. This is not a work of engineering alone, but the combination of applied technology with sculpture’;
(iii) ‘The complexity of the form of the Rabbit components demonstrates the level of attention to detail and the time put in to its creation. This work takes considerable time to craft. The shapes we see in the final product are not simple forms. I believe these forms are derived from the feel for the product and an understanding of the human responses to works of beauty’;
(iv) ‘Craftsmanship is demonstrated in the design of the Rabbit in the materials selection and the sensitive use of materials, design detailing, and processing techniques, such as the applied “velvet” surface finish. The artistic sensitivities in the selection and use of manufacturing processes and materials used shows through the high qualify finished form of the final product’; and
(iii) ‘A review of the original patented mechanism upon which this product was based shows that the form we now see as the Rabbit is not an “obvious” or “pre-determined” form for such a corkscrew. As a result the Rabbit corkscrew is not a purely functional derivative shape’.
104 Mr Geddes’ conclusion was that the Rabbit corkscrew is ‘a work of artistic craftsmanship in the oldest traditions of industrial design’; he considered that ‘considerable time would havebeen spent in the generation and shaping of the surfaces, whether this was done through traditional model making or by utilising sophisticated surface modelling computer software such as is used in the automotive industry’. That aspect of the design of a sculptured product required, in his view, considerable craftsmanship combined with flair. He considered that the Rabbit corkscrew was ‘not a work of engineering alone, but the combination of applied technology with sculpture’.
105 S & H advanced several threshold contentions in opposition to Metrokane’s case for qualification of the Rabbit corkscrew as a work of artistic craftsmanship.
106 The first was that the descriptions of the Rabbit corkscrew advanced on behalf of Metrokane, involving inter alia that of sculpture (see again reference to sculpture in the s10(1) definition of artistic work extracted in [30] above), ‘doomed its case to failure’, since the other three tests of s 77(1) of the Copyright Act, that is to say, those contained in paragraphs (b), (c) and (d) thereof, were said by S & H to be clearly fulfilled and indeed undisputed, with the consequence that s 77(2) provided S &H with an unanswerable defence to the claim for copyright. Metrokane’s rejoinder was to eschew any such characterisation of the Rabbit corkscrew as a sculpture per se, emphasising its intended description as to merely being of ‘sculptural qualities’, and to point out that none of its three candidates for qualification as a work of artistic craftsmanship (see again [25(i)] above) had been put forward for the purpose of sculpture. Mr Geddes gave the following explanation in cross-examination (at T293):
‘It has sculptural qualities. It is not a work of sculpture per se, possibly because of the existence of the functional aspect of it. It is sold as an artefact rather than as an object of art.’
Mr Geddes went on to say nevertheless that if one was to take the corkscrew mechanism out of the Rabbit corkscrew, then ‘… yes, a work of sculpture, it has no function in that case.’ Yet the mechanism of the Rabbit corkscrew is largely shielded from normal view in any event. I do not think all that amounted, however, to an admission by Metrokane which would enable s 77 of the Copyright Act to have an adverse operation in relation to the Rabbit corkscrew’s case for qualification as a work of artistic craftsmanship. In the result, I would withhold from finding that any assertion as to ‘sculpture’ per se can be attributed to Metrokane.
107 The second was that the first manufactured corkscrew had no originality of its own, such as to satisfy s 22(1) of the Copyright Act (see [31] above). I was referred by S & H to Mr Kilduff’s description of the Renshape prototype, in terms of its manufactured proximity to the ultimately manufactured product, which I have earlier set out in [82] above. S & H referred me to the circumstance that such additions as were made to its successor, namely the CNC Model, in order to produce the first run of the manufactured Rabbit corkscrew, comprised only the use of rubber for its grip pads on the top lever, the elliptical shape of the cap, the choice of colour (being black), and the choice of rubberised coating, being additions said by S & H not to involve notions of authorship, or to evidence the application of any creative skill or labour on Mr Kilduff’s part. Once again however, I do not think that any decisive point was here made (cf [10] and [23] above). To my understanding of Metrokane’s case, each of the three bases for artistic copyright (set out in [25(i)] above) is put forward only in the alternative, and in the case of the third, namely the first run of manufactured product, the same falls to be adjudged on the footing that each of the preceding Renshape prototype and CNC Model falls to be treated as a manufacturing step in the process of ultimate establishment of the first manufactured run of the Rabbit corkscrew. As has been earlier explained, the Renshape prototype and the CNC Model could not be located for production to the Court, and thus were not tendered in evidence to enable any visual appraisal to be made by S & H, or ultimately by the Court, as to qualification or otherwise as a work of artistic craftsmanship.
108 The third was that although the first manufactured run of a Rabbit corkscrew had been produced in black colour (Exhibit R1), Mr Latimer conceded that some models had been produced in colours of silver and titanium gold since early 2002, whilst nevertheless maintaining the original design apparent to the eye. Once again however, the ultimate focus of my assessment relates to the first manufactured run of the Rabbit corkscrew, which appears in black colour to the extent of the external plastic components.
109 S & H’s expert witness Mr Brown did not dispute that the Rabbit corkscrew was worthy of the recognition afforded by the awards which it had received (detailed in [10] above). He observed that features of the design of the Screwpull corkscrew (ie that produced by Le Creuset the subject of a patent which expired in July 1999, as to which see again [2] above), included its slightly textured matt black finish, consistent with a design attempt to hide some of the flow lines, and to assist in the grip and in wear and tear, being a finish combined with a satin metal intended to reflect ‘a formula which works extremely well in quality products … common in kitchenware and related items for decades’. At the time he recorded his first impressions of the Screwpull corkscrew, he had not seen either the Rabbit corkscrew or the Pull It corkscrew.
110 Mr Brown next undertook the hypothetical task of outlining the approach he would take to the creation and design of a product having ‘the same engineering principles as the Screwpull but with some design features attaching to it’, bearing in mind that the ‘aesthetic is dictated by the function’; that task involved the following considerations, which bear upon not just the issue as to qualification for artistic craftsmanship, but also that of infringement:
(i) the product was to be used by people, and therefore needed ‘to be comfortable to use and intuitive’; ‘people should be able to look at it and almost by instinct, know how to use it’;
(ii) as to what materials should be used for the hypothetical task, it was likely that he ‘would consider using soft rubber like grips similar to those used in the Oxo “Good Grips” range of products, which were designed by Smart Design, a well known design consultancy, and which had been a widely marketed and well known range of products available from the early 1990’s; that product design was said to involve ‘generous, rounded, rubber-like grips … used across the whole range and thus creat[ing] a visual language that became recognisable’;
(iii) as to particular material, he would be inclined to use elastomers, which can be matched with die cast chrome having a satin finish, or alternatively black chrome; he would also consider the use of aluminium;
(iv) moving then to styling, it would be appropriate to hide the ‘visual clutter’ of the Screwpull working parts (ie knobs, pivot point and bearing surfaces) by creating a smooth, elegant surface, in order to obtain ‘a sleek, streamlined look’; that kind of styling would ‘also assist in the particularities of cleaning and maintenance of the item’;
(v) as to colouring, there should be used either an ‘Alessi’ style pastel set of colours, or, as above foreshadowed, ‘the more traditional matt black and chrome silver design’, which from [his] experience was ‘a hallmark of value-added items, and has an established tradition in the are of kitchenware and related items’;
(vi) thereafter it would be necessary to ‘create some basic sketches detailing the shape and form I wanted to achieve and from those create foam model … test rights … and detailed renderings’, the latter being ‘computer-generated models which demonstrate how the finished product would look and work’; and
(vii) finally there should be tested the foam models, test rigs and renderings on potential users, and once he had settled upon the particular model of the item, a prototype would be created.
111 It is important to keep in mind, in any consideration of the foregoing aspects of Mr Brown’s evidence thus far recorded, that at the time of formulating the above hypothetical task which he set for himself, Mr Brown’s evidence was that he had not sighted the Pull It and Rabbit corkscrews. It was S & H’s contention that Mr Brown’s hypothetical thesis as to planning, creating and testing strongly supported its case that the creation of the Pull It corkscrew, rather than constitute a copy of a substantial part of the Rabbit corkscrew, had been the result of the application of similar design principles.
112 The next step in the process to which Mr Brown submitted himself, for the purpose of his evidentiary investigation, was that of inspecting the Rabbit corkscrew unpackaged, without being yet made aware that it was sold under that mark. His first impression was that the Rabbit corkscrew had similar styling to the ‘Oxo Good Grips’ range of products, with its smooth black surfaces, and possessed an ‘organic design’, being ‘a method of covering over the visual clutter by giving the designed item a cohesive language of organic forms.’ He elaborated upon the notion of ‘organic design’, pointing out that the principles thereof had become more exaggerated towards the late 1990’s, described in the industry as the ‘bar of soap’ factor. It was a process whereby the styling of products became likened to a piece of soap which had been used extensively, and had thus lost its form and ‘melted’, thereby making the products difficult to ‘read’. That process produced examples of styling of manufactured products called ‘organic tension’. A further aspect of the Rabbit corkscrew, which Mr Brown noticed on his initial examination thereof, was that the top lever appeared to be too short, given its leverage function; however he thought that the grip on the top of the Rabbit corkscrew appeared to be easier to use than the more ‘square’ surfaces of the Screwpull corkscrew.
113 The third segment of Mr Brown’s consideration was that of Pull It corkscrew (Exhibit R2), distributed of course by the panel for whom he had been engaged to give evidence, namely S & H. His initial impression thereof was that ‘it had a lot more personality’ than both the Screwpull and the Rabbit corkscrews, and was ‘more modern and original than the Rabbit corkscrew which had a mid 1990’s feel to it.’ By that he meant that ‘the designer of the Pull It corkscrew appeared … to have taken some organic visual language, and applied more curves to the top and side levers’, and that its curves ‘were a very distinctive feature in the overall design’; he also said that he ‘found it easier with this model to name some associated forms, for instance, a tortoise head with legs poking out the back, or an ostrich’; he said further that ‘[s]tanding the Pull It on the side levers and with the top lever up, it looked like a swan or a dinosaur’, he also thought it ‘exhibited plant-like qualities’.
114 Mr Brown postulated the following differences between the Rabbit corkscrew and the Pull It corkscrew:
(i) the shape of the body of the Pull It appeared to be different to that of the Rabbit corkscrew;
(ii) the form of the Pull It corkscrew was simpler and cleaner than the Rabbit corkscrew, with more emphasis being given to the underside of the article;
(iii) the shapes of the top lever and the side levers of the Pull It were different, ‘swooping down and up’; and
(iv) the top lever was longer, overcoming what he saw as a deficiency in the design of the Rabbit corkscrew.
115 Still up to that stage of his thesis, Mr Brown had been unaware that what he had been postulating as the Metrokane corkscrew (but to which, in the course of my account of Mr Brown’s evidence, I have been referring for simplicity as the Rabbit corkscrew) in fact bore the trade name or mark of Rabbit. His reaction upon being so informed was as follows:
‘I was surprised at this. Having exhausted my imaginations on determining what shapes and forms I thought it might appear to be like, I did not identify that it might appear to be like a rabbit. I still have difficulty seeing where the rabbit imagery comes from.’
I must confess to experiencing a similar reaction, even though I knew that what I was then viewing was called a Rabbit corkscrew. However he appeared to accept that the packaging might help to identify to consumers the reason why it might be called Rabbit; he maintained nevertheless his ‘intuitive point of view’ that the Rabbit corkscrew did not resemble the form of a rabbit. Finally I should record that Mr Brown was familiar with the ‘soft’ black finish applied to both the Rabbit and Pull It corkscrews, one of the trade names whereof being ‘Soft One’. He said that it was a form of finish which had been available for about 15 years.
116 Each party submitted that the evidence of its retained expert should be preferred. Particularly upon the area of evidentiary overlap material to the issues, not just as to infringement of copyright, but also as to tortious conduct in the nature of passing-off, and as to contraventions of the TP Act, I have found it appropriate to record in some detail the thrust of the expert affidavit evidence in chief both of Mr Geddes and Mr Brown. I have not recorded their respective oral testimonies, since each adhered to his evidence on affidavit at least for the most part. I would make the preliminary observation that Mr Brown’s methodology of briefing investigation, and of preparing the basis for his conclusions in advance of being aware and presenting his oral testimony, was an efficacious technique to adopt, the same being designed to inhibit any tendency to unconscious conviction in advance of obtaining precise details of the issues arising between the respective parties. It is advantageous in principle for an expert, for the preservation of his independence of thought from the outset, not to be made aware of the thrust of the case being mounted by or against his or her client, in the kind of litigious dispute here involved. The course adopted by S & H, by way of briefing its expert witness Mr Brown, has the tendency or potential to achieve a greater degree of independence of thought and opinion from an expert witness. I refer in particular to the circumstances that as each step in his education of the factual background was revealed to him, Mr Brown had not been informed of any circumstance which might influence his conclusions either way. Moreover, Mr Brown was not presented with a view of applicable or arguably applicable legal principles or precedents. A similar process was not of course adopted by Metrokane in relation to Mr Geddes’ education of the issues conceivably involved, not that Metrokane or its legal representatives was obliged to adopt any similar course in the adducement of its expert testimony from Mr Geddes, and no criticism is intended at all in relation to his briefing. A further observation open to be made however, is that although it is realistic to expect that an expert may unconsciously adopt a measure of colour from the litigious position adopted by the party who seeks to adduce that expert evidence from him or her, the unfortunate impression I gained from Mr Geddes’ testimony was that of a tendency to advocate Metrokane’s cause in the proceedings. So much appears from the sometimes extravagant, if not also hyperbolic, language adopted by Mr Geddes, in the course of his descriptions of the shape and appearance of the Rabbit corkscrew, which I have earlier extracted in some detail.
117 I should record that Mr Geddes’ evidence was of course confined to the manufactured Rabbit corkscrew (Exhibit ‘R1’), and he gave no evidence in relation to the Renshape prototype or the CNC Model, and understandably so, since of course neither could be located in order to be tendered in evidence.
My resolution of the issue as to whether the Rabbit corkscrew constituted a work of artistic craftsmanship
118 The evolution of authority upon the meaning and implications of the statutory notion of artistic craftsmanship, in relation to manufactured goods, reveals the existence of a formidable area of complexity, at least in so far as manufactured goods are concerned. I have already discussed the conceptual enigmas arising in the context of the so-called copyright/design ‘overlap’ protection provisions, as well as examine and cite in detail the authorities. There is something antithetical in the notion of a manufacturer gaining exclusive protection of a mass-produced article by way of copyright, for a period of time substantially longer than that provided by statute law in relation to designs and patents. The circumstances of the present case exemplify the kind of conceptual enigmas which may thus arise. Inferentially essential to the purpose of creation and distribution of this mass-produced Rabbit corkscrew is its function as a corkscrew based upon its lever-action mechanism being the same as or virtually identical to the celebrated Le Creuset mechanism the subject of recently expired international patent protection. No member of the public would have sensibly purchased the Rabbit corkscrew, I would infer, in the absence of its mechanism, or in other words, would have purchased the same merely to enjoy the sight and feel of its handle or body structure, attractive as they may be.
119 The emphasis of the Australian authorities, to which I have earlier referred, is upon the object of the author in purportedly creating a work of artistic craftsmanship, rather than upon the reaction of the viewer to the completed work, the merit or otherwise thereof being immaterial for qualification within that statutory description. That emphasis also appears from what I have cited from the speeches in the House of Lords in Hensher of Lord Reid and Lord Simon. Moreover the related theme as to the inappropriateness of the courts making aesthetic judgments also appears in what I have cited from the speeches in Hensher of Viscount Dilhorne, Lord Simon and Lord Kilbrandon, and has been similarly emphasised in the Australian authorities which I have reviewed, and to which I would add reference to the opening observation in the judgment of Hill J, as a member of a Full Federal Court, in Schott Musik International GMBH & Co v Colossal Records of Australia Pty Ltd (1997) 75 FCR 321 at 325.
120 I am unable to accept the submission of Metrokane that the object of Metrokane in creating the Rabbit corkscrew was for a sole or dominant purpose of creating a work of artistic craftsmanship per se. I would have said likewise in relation to the object of PCI in creating the Pull It corkscrew, if that was a relevant issue in the litigation, which of course it is not. Both corporations are engaged in business as manufacturers and merchandisers of modern kitchenware for profit, and the sale prices mentioned in the evidence suggest that their financial returns from their products have been rewarding. I have encountered no authority to the effect that any such monetary objective would disqualify qualification for copyright, and I think it would require the intervention of an appellate Court to adopt that or a similar view. Of course for its part, PCI has never advanced any copyright claim in respect of the Pull It corkscrew. An area of vulnerability of Metrokane seems to me to reside more in the circumstances that to create a handle or body for a corkscrew mechanism, however sophisticated the appearance afforded to the corkscrew, (here the mechanism substantially the subject of the expired Le Creuset patent), without which mechanism that handle or body would have little or no commercial value, is seemingly inconsistent with an objective of a work of artistic craftsmanship. As I have already inferred, the motivation of Metrokane in manufacturing the Rabbit corkscrew originated in the pending expiration of the Le Creuset patent relating to what appears to have been a somewhat sophisticated corkscrew mechanism. It could not sensibly be postulated, nor was it postulated, that consumers would buy the Rabbit corkscrew without that mechanism. The attraction to consumers, I would infer, has been to acquire an efficient corkscrew mechanism contained within an attractively presented framework.
121 The present circumstances are thus distinguishable from those in Coogi. The manufactured fabric there involved would have been purchased by consumers for use as clothing per se, and not as a framework for an every day consumer facility. What was the subject of the copyright issue in Hensher was household furniture, for use as such, not something which may shield the essential function thereof from sight in the normal course. Similarly in Murray, the ‘work of art’ (being the statutory description in Australian sales tax legislation) comprised per se dishes, pots, goblets, mugs and bowls. In Bonz, the work of artistic craftsmanship comprised hand-knitted garments depicting certain scenes. Those and other cases involving issues of artistic craftsmanship stand apart from the present where the objective of the manufacturer/wholesaler is susceptible to the description of selling corkscrew mechanisms, not incidentally of its own creation or design, within an attractive encasement of its own design, being something capable of attracting a higher price from consumers than other corkscrews in the market place using the same no longer patented mechanism. The latter kind of objective is I think to be distinguished from that which has attracted favourable decisions of the courts relating to a work of artistic craftsmanship. It is thus one thing to create an article, ‘even if it be utilitarian’, to adopt an observation in Cuisenaire (see [70] above). What is here claimed to reflect ‘the main object of appealing to the aesthetic tastes of those who view it’, to cite further from Cuisenaire, consists only of the body or framework of something which would not be acquired by a consumer, at least in the normal course, without the working parts installed within that framework. It is in that respect that I think there is something to be said in favour of the contention of S & H to the effect that the law of copyright should not be afforded an ‘overlapping’ operation, notwithstanding that I have not given effect to that contention. The objective of Metrokane in creating the Rabbit corkscrew may be described, perhaps repetitively, as the reproduction in attractive clothing of the mechanism of an expired, and apparently well known patent earlier developed by a third party (Le Creuset), with a view to mass production for the sole purpose of substantial profit-making by sale. That objective appears to have been achieved.
122 What utility is provided by Mr Geddes’ comprehensive opinions concerning what he termed the Rabbit corkscrew’s ‘real artistic/aesthetic qualities’, and Mr Brown’s responses? If I am wrong in my view as to the significance of the mechanism thereof to Metrokane’s commercial objectives in creating the Rabbit corkscrew, and as to the entire correctness of Mr Geddes’ conclusions as set out in [103] above, and that those conclusions of Mr Geddes are open to be drawn consistently with authority, it would seem, upon the footing at least of Australian authority, that I may also draw conclusions from the ‘evidence from qualified viewers of the work … [as to the existence of] an aesthetic appeal to them …’ (see in that respect the passage cited from Cuisenaire in [70] above). That Australian authority pre-dated of course the speeches of the House of Lords in Hensher, though as has been seen, subsequent Australian authority has continued to cite from the reasons for judgment in Cuisenaire. In Hensher Lord Reid was of the view that ‘a court ought not to be called on to make an aesthetic judgment’ and ‘there are great differences of opinion among those who can properly be called experts’, yet his Lordship recorded that he could ‘find no evidence at all that anyone regarded the appellants’ furniture as artistic’; in so doing, his Lordship intended, by his reference to ‘anyone’, to include at least any expert witness who had testified in that litigation. In his reference to expert testimony, Lord Morris said that ‘[i]n practice a Court will not have difficulty in weighing their evidence and in deciding whether it clearly points to some conclusion’, again apparently a reference to expert evidence. Viscount Dilhorne expressed the view that ‘it is simply a question of fact whether a work is one of artistic craftsmanship’. Lord Simon said that whether the subject matter is or is not a work of artistic craftsmanship is a matter of evidence’, but that ‘the most cogent evidence is likely to be from those who are either themselves acknowledged artist-craftsman or concerned with the training of artist-craftsman’. Lord Kilbrandon said that ‘[i]t is for the judge to determine whether the object falls within the scope of meaning of the word’. At least the majority of the Law Lords explicitly or implicitly vouchsafed the utility of expert evidence to a court’s decision.
123 Both Mr Geddes and Mr Brown were qualified industrial designers. Both gave their evidence under searching cross-examination. The procedure whereby Mr Brown undertook his investigative assignment, which I have already outlined, stamped the same with an initial springboard in persuasive value, to which I have already referred. His approach was perhaps influenced by his view that the Rabbit corkscrew was a work in the nature of an industrial design, rather than one of artistic craftsmanship; he did not recall the statutory term work of artistic craftsmanship ever being used in relation to works of industrial design, such as he would describe the intellectual property underpinning the Rabbit corkscrew. In terms of intellectual property definition, Mr Geddes’ evidence was somewhat tautological, in that he agreed the Rabbit corkscrew ‘is most certainly a work of industrial design’, yet insisted that it was also ‘most certainly’ a work of artistic craftsmanship.
124 Mr Brown’s first affidavit reasoned that something made by mass production cannot be a work of artistic craftsmanship, because it is produced by the use of technology. He explained his reasoning as follows:
‘… the usual method of manufacturing an item like the Metrokane corkscrew is that the metal parts are cast in a die at a die casting factory; the plastic parts are made in a mould in an injection-moulding factory; the screws are made in a wire forming factory and the steel rod, pivot and bearing surfaces are made in a machine workshop. For economics of scale, the manufacturer gathers large quantities of each part (for example, each arm, the main body, the top lever and the neck and screw) separately. Large quantities of each part are then made available to different people who would assemble the article, which is then inspected for quality. None of the persons assembling parts of the article would have any particular concern for the quality (aesthetic or otherwise) of the finished article. The person(s) assigned to quality control would have an interest in ensuring that defective or shoddy products are rejected. That is true of any production line. However the quality controller(s) almost never have any artistic input into the making of the article. It would not be appropriate in my opinion to define any of the persons involved in the manufacturing of the product as ‘craftsman’ or ‘craftspeople’.
125 Specifically in relation to the design of the Rabbit corkscrew, Mr Brown offered the following opinion:
‘While a number of skills come into play in making an article like a corkscrew, and design decisions get made at the beginning as to how it will be designed, nevertheless I do not consider the designer to be exercising the function of a craftsperson. Design decisions, whether made in respect of shape, materials, finish, method of manufacture or any other aspect of the design process, are made in relation to all items which are manufactured, even the most basic items such as plastic cups, or disposable trays. However in my opinion, the persons making those design decisions are not craftspeople, they are industrial designers.’
I would have thought however that industrial designers are not disqualified, upon the basis of present authority, from being artists for the purpose of any work of artistic craftsmanship.
126 Notwithstanding what appears to have been a tentative view of Lord Simon in Hensher, cited in [62] above, referrable to ‘a durable useful handmade object’, the other speeches in Hensher may be thought to implicitly rule out machine produced goods from qualification in principle as a work of artistic craftsmanship. Nevertheless in conformity with the approach taken in Bonz, and subsequently in Coogi and Murray, though with the benefit of the speeches in Hensher, it would appear to be open to a court to hold that so long as an artistic craftsman or craftsmen involved in the manufacture of the first run of product are employees or agents of the same manufacturer, there may be qualification with or fulfilment of the statutory expression on the part of a manufacturers, by virtue of the respective artistic and craftsman contributions of their employees.
127 I think that the descriptions of the plastic covering or cladding are more appropriately, albeit conservatively, described and characterised by Mr Brown, in his examination and description of the Rabbit corkscrew, than by Mr Geddes. As I have foreshadowed, what I have extracted of Mr Geddes’ appraisal of the Rabbit corkscrew tends to overstatement and emotive imaging, which travels beyond what I think is acceptable. As the judge of fact, having weighed the evidence placed before me, including in particular the expert evidence and that of Mr Larimer as chief executive officer of Metrokane, I am unable to identify in the Rabbit corkscrew the aesthetic appeal and features of which Mr Geddes has so expansively spoken. It does not to my mind exhibit aesthetic features, notwithstanding the style and ‘nice’ appearance which it evinces. I express that opinion, irrespective of the fact that what is claimed to have an aesthetic appeal performs the function merely of enclosing the critical working mechanism for a corkscrew.
128 In the result, as a judge of fact at first instance, I would reject the characterisation of the Rabbit corkscrew as a work of artistic craftsmanship.
Upon the assumption that the issue as to existence of copyright had been resolved in its favour, whether Metrokane established infringement of copyright
129 Notwithstanding the conclusions I have reached on the copyright issue of artistic craftsmanship, and also on the issue of authorship, in favour of S & H, it is appropriate that I should also address the issue of copyright infringement. The resolution of that issue requires a focus largely upon the evidence of Mr Kushner, a director of PCI, the corporate distributor to Australia of the Pull It corkscrew (see again [11] above). PCI designs and distributes a large range of household consumer products, most of which are manufactured in China and sold to United States importers. During the years 1995 to 2000, Mr Kushner had working relationships with many factories in China, which enabled him to learn what he described as ‘the basics of engineering, design, production methods and shipping’.
130 Mr Kushner recalled obtaining, at the end of 1998, the Screwpull corkscrew manufactured by Le Creuset. By that time he had been designing and selling household consumer products for a number of years. He was impressed with the innovative character of its mechanism. At the Chicago Houseware Show in January 2000, he saw two or possibly three different corkscrews, which appeared to use similar principles to the Screwpull mechanism, but none of which he initially recalled being the Rabbit corkscrew. However he ultimately confirmed in his affidavit evidence that it was ‘possible’ that he saw there the Rabbit corkscrew, saying ‘I did walk the Show’. At that time he was informed that the Le Creuset Screwpull patent had expired. From January to February, he began ‘sketching out’ various forms for his own design of a lever action corkscrew, taking ideas from the existing Screwpull and the other corkscrews he had seen at the trade shows he had attended. He was particularly attracted to the range of kitchenware manufactured by Oxo, the United States kitchenware company. He had used a silicone spray similar to the Oxo style in some of the household items he was prototyping. He claimed that in accordance with his usual practice, he discarded those initial sketches and drawings as soon as they became superseded, a matter upon which he was cross-examined as to credibility. He entered upon dialogue with his manufacturers in relation to the possible manufacture of a lever action corkscrew.
131 Between June and August 2000, Mr Kushner obtained from sources in China several samples of lever action corkscrews which he exhibited to his affidavit. He also had photographs of what he referred to as the ‘Metrokane Corkscrew’, which he did not retain; he said he did not have an actual sample thereof. He then met with Mr Richard Ho, the managing director of Tact Advertising, PCI’s graphic designer in Hong Kong. A Screwpull corkscrew was tabled, together with several of the other lever action corkscrews which had been exhibited at the Chicago Housewares Show in January 2000, including the Insta-Pull brand. He gave instructions to Mr Ho to design a lever action corkscrew based on the principles of the Screwpull patent, using polycarbonate materials on the surface and the colour black. His further instructions were as follows:
‘I wanted it to have flowing lines, no hard edges and a soft touch look similar to the Oxo range of products … to be different from all of the other corkscrews on the market … to cover the top nut more extensively than the Metrokane model and change the curvature of the profile of the body so that it is different from Metrokane’s. Additionally I want you to make sure the top lever is as long as the Screwpull to give it enough torque. I think the Metrokane model’s top lever is too short’.
132 Mr Kushner was aware that the Oxo organisation had been using for a number of years a black finish made of Santopresse to create black ‘ergonomic’ style kitchen utensils. He said he liked the rounded matt black finish that Oxo used and which he had also used in the past. He was aware that Metrokane had used a black finish on the Rabbit corkscrew. Mr Kushner took the Screwpull, and the pictures and samples produced by Mr Ho, and generated what he described as PCI’s original drawing of 21 August 2000. Dialogue was undertaken with his factory engineers in China on matters of production, assembly, yield loss and other manufacturing concerns. During this period of investigation, Mr Kushner had regard to what he described as ‘a number of the other lever action corkscrews on the market,’ including in particular the Screwpull, the Insta-Pull and the Rabbit. In the case of the Rabbit, he still had only photographs thereof at that time in his possession. What he wanted to create was ‘a product that would distinguish itself in the market place’, and for that purpose to make some changes to his original drawing of 21 August 2000. By 5 October 2000, his factory in China had sent him revised drawings based on the original and the subsequent changes the subject of his instructions. Between 5 and 16 October 2000, in conjunction with his factory, Mr Kushner spent considerable time amending and refining the design based on the original and revised drawings. A further set of revised drawings was provided by his factory on 16 October 2000, which was tendered in evidence.
133 The revised drawings were said to demonstrate the following adjustments made to each of the three main parts of the corkscrew, namely the main body, the side arms and the top lever arms; Mr Kushner’s description of those adjustments is extracted below -
‘(a) I included raised dots to the main body of the corkscrew. While these were in the Original Drawings (page 4 of Exhibit RGK-1), they were not incorporated into the Revised Drawings (page 5 of Exhibit RGK-1) because the Revised Drawings were an alternative to the Original Drawings. The raised dots on the main body are purely ornamental. In my view, they are quite eye catching. The space on the main body is rather large, and the dots serve to “break up” that space. They are also visually connected to the grip on the underside of the top lever arm. I did not have in mind any feature of the Metrokane Corkscrew when I included the dots.
(b) The top lever arm was curved and shaped so that it curved upwards at the end of the lever. This was the intention of the Original Drawings, which was not carried through to the Revised Drawings because I was considering various different options during the time of the Revised Drawings. The Further Revised Drawings demonstrate an even more curved top lever arm than in the Original Drawing. Additionally, I removed the grip on the top of the lever arm. It does not serve a functional purpose there as one’s hand might slip only in the removal of the cork. I also changed the grip on the bottom of the lever arm to match the style of the raised dots on the main body of the corkscrew, mainly for ornamental reasons, although it does serve a secondary purpose allowing some increased hold of the corkscrew when in use. The length of the top lever arm is such that the lever is easier to manoeuvre than a shorter top lever arm. This is a matter of simple physics – more leverage is obtained when the length of the top lever is longer.
(c) In relation to the side arms, I removed the grips on the outside of each side arm, as I did not regard these as functional. This is because the main area in which friction is needed is on the underside of the top lever arm. The functional force is greatest when the top lever arm is rotated up to remove the cork from the bottle.’
134 Mr Kushner asserted that the Pull It corkscrew, as it is manufactured today at least for the Australian market, is chiefly based on the drawings of 16 October 2000, except ‘a change from an elliptical to a round cap surrounding the axle on the side of the main body of the item’.
135 In January 2001, Beau International Inc, one of PCI’s US distributors, purportedly displayed the Pull It corkscrew (then called Just Pull It) to the general public at the annual Chicago Housewares Show. In so doing, it appears to have falsely displayed the Rabbit corkscrew instead (see Exhibit R19). The change of name to Pull It occurred in the following month. A US trade mark application was filed in its changed name in February 2001, and was published in August 2001 and registered in September 2002. No other claim in the nature of intellectual property appears however to have been filed or registered in the Unites States in relation to the Pull It corkscrew. Moreover the pictograms on a sheet used or provided with the Pull It corkscrew were an exact copy of the drawings on the back of the Rabbit corkscrew packaging. Metrokane’s ‘cease and desist’ letter was dispatched to PCI, and received the reaction from PCI described in [16] above. As there foreshadowed, PCI through Beau International Inc thereupon sought to avoid litigation, allegedly in the light of the expense involved, and instructed the factory in China to develop a new mould, by making the following changes, namely giving the side handles and lever arms a flatter design more similar to the original Screwpull design, and altering the cap surrounding the axle from an elliptical shape to a circular shape. The new design was exhibited in the proceedings. The factory then prepared so-called CAD drawings for the new mould, which Mr Kushner said were no longer in his possession, and the ensuing Pull It product was marketed in the United States. No change however was made to the product sold in the Australian market. Mr Kushner interpolated his lengthy narrative of events at this point by adding the following:
‘I am now aware that the picture on the packaging of the Pull It shows a model of the Pull It with a plastic inset over the axle which is elliptical in shape. That picture was taken very early in the design process and appears to me to be a picture of a production model from the United States prior to the change to the circular plastic insert over the axle…’.
136 A further letter of demand of 30 July 2001 was sent on behalf of Metrokane asserting infringement by PCI of design patents, and further that PCI’s pictorial diagrams in PCI’s instruction manual infringed Metrokane’s copyright. Mr Kushner thereupon decided that PCI’s instruction manual should be changed from pictograms to photographs, and further that in order to avoid the cost of litigation, he would seek Metrokane’s views on various different alternative designs of the Pull It. Those proposed designs did not elicit a response from Metrokane. Mr Kushner’s affidavit evidence thereafter continued as followed:
‘I reviewed the status of the current design … and determined that the most cost effective way to effect a change would be to retain the dies for the top and side levers (showing a flatter design) and simply to create a new dye for the main body. … The finish used on the new design is the same ‘soft’ silicone spray finish which was used on the previous designs. The new design is still on sale and still sells well in the United States, with over 100,000 pieces being sold in the United Stated since September 2001. On 3 August 2001, I filed a design patent on this new design … [which] is still pending. To my knowledge Metrokane has never commented or sent a letter to any of my US customers relating to this new design.’
Mr Larimer claimed that the modifications were only slight, involving the placing of convex dots on the sides of the head of the corkscrew.
137 Mr Kushner described PCI’s manufacturing process for the Pull It corkscrew as follows:
‘The usual manufacturing process of an item like the Pull It corkscrew is that I start with line drawings or clay/plaster samples. I then generate (usually through the use of a graphic designer) a series of more refined diagrams that more specifically define the eventual shape of the article. Engineering diagrams in three dimensions are then made (usually by the factory I am working with). These are highly accurate drawings which note every angle and curve, and are, in effect a ‘map’ which the factory can follow to create the mould. From these drawings, dyes for each moulded part of the article are then created by moulding blocks of steel. For an item like the Pull It, there are approximately 8 dyes which go to make up the mould. These dyes include dyes for the top lever, the side handles, the body and the plugs (all plastic components), and dyes for the ratchet, the top bolt and the two small pieces underneath the top bolt (all metal components). The plastic components are then generally made in a plastic moulding factory, while the metal components are made in a metal factory. Additional miscellaneous parts (such as the chrome plating on the top bolt or the screws for the Pull It) may come from yet anther factory. In the case of the Pull It, the ‘spray on’ finish is done in the plastic factory before assembly, which is also done at the plastic factory. However these processes (the finish and the assembly) can be, and often are, done at yet another factory specialising in those processes.’
138 Metrokane denied receiving from Mr Kushner the design variations, but submitted in any event that if anything, those variations showed ‘all the ways in which the Pull It corkscrew could have been designed so as not to resemble and substantially reproduce the Rabbit corkscrew’. In September or October 2001, the Pull It corkscrew appeared again in the United States market, being distributed by Westminster Inc under the name Wine Steward. Metrokane’s attorneys wrote to Westminster Inc and put it on notice of Metrokane’s asserted intellectual property in the Rabbit corkscrew. Mr Kushner said that the Wine Steward did not sell well in the United States, and he decided, after receiving the letter, to sell the remaining stock and cease accepting further orders. In March 2002, Metrokane became aware that the Pull It corkscrew was being distributed by Lakeland Plastics in the United Kingdom. After receiving a letter of complaint from Metrokane’s attorneys on or about 25 March 2002 as to infringement of intellectual property, Lakeland Plastics ceased to include the Pull It corkscrew in its catalogue. Metrokane has been accordingly active in its pursuit of what it claimed to have been infringement of its intellectual property in the Rabbit corkscrew occasioned by Mr Kushner’s various business interests worldwide.
139 It may be observed that following the expiration of the Le Creuset patent relating to the Screwpull mechanism, Metrokane was quicker off the mark than PCI to produce and market a corkscrew which embodied that mechanism, and Metrokane has since pursued with threats of litigation, and indeed with litigation, PCI’s endeavours directly or indirectly to enter that market. Metrokane submitted that inferences should be drawn, from the circumstances which I have outlined, that PCI sought to exploit Metrokane’s copyright in the artistic craftsmanship of the Rabbit corkscrew by its creation and merchandising of the Pull It corkscrew in the United States and elsewhere. Metrokane placed emphasis on PCI’s non-production into evidence of its initial Pull It drawings, the non-attendance of Mr Ho to give evidence in the proceedings, and PCI’s responses overseas to Metrokane’s threats of litigation. Each in my opinion merited that emphasis. Metrokane further submitted as follows:
‘Given that Mr Ho could not communicate well in English it was reasonable to presume that Robert Kushner would have provided him with a Rabbit corkscrew. Robert Kushner denies doing so.
Given the allegation that the Pull It corkscrew was not copied from the Rabbit corkscrew and Mr Ho’s obvious level of involvement in the development of the Pull It corkscrew, an adverse inference regarding the evidence of independent creation, can and should be drawn given [Metrokane’s] failure to call Mr Ho as a witness. Robert Kushner says Mr Ho and the persons at the manufacturing factory used by Pacific China Industries were able to be contacted by [Metrokane].’
140 I am of the opinion that those submissions of Metrokane are not only open to be drawn, but should be drawn. The fact, as just recorded above, that Metrokane could have adduced evidence from Mr Ho, and persons at the factory used by PCI is not persuasive. The fact that Mr Ho was resident overseas does not assist S & H’s submission that no adverse inference can be drawn by reason of Mr Ho’s absence from the witness box or at least his failure to provide affidavit evidence. Moreover, I do not think that S & H gains any support from the dictum of Glass JA in Payne v Parker [1976], NSWLR 191 at 200-202, and in particular, his Honour’s observation that ‘[t]he explanation tendered may be that the witness is overseas’. PCI was directly concerned financially in the present proceedings; so much is further exemplified by the fact that not only did he come to Australia to testify, but he or his company PCI contributed the sum of $50,000 to S & H’s legal costs of the proceedings. Moreover, Mr Ho undertook design work for PCI in relation to the Pull It corkscrew, and the impression I gained was that he enjoyed a professional relationship on a wider scale than merely in connection with the Pull It corkscrew. I am satisfied that it is open to me to draw a Jones v Dunkel inference in favour of Metrokane’s case on the issue as to copying, by reason of the absence of Mr Ho from the witness box. Nevertheless the findings which I make adversely to Mr Kushner, and thus to PCI, are not dependant on that absence. My impression of Mr Kushner, in the course of his giving evidence, was that of an astute and intelligent person. Like Mr Larimer, he had obviously formed an appreciation of the significance of the expiration of the Le Creuset patent, and of the opportunity thus presented to kitchenware manufacturers, being an opportunity which had been already exploited by Metrokane. It is unlikely that Mr Ho did not in fact have a sample of the Rabbit corkscrew virtually from the outset of its market introduction, and it is also unlikely that Mr Kushner did not provide Mr Ho with a sample thereof for the purpose of Mr Ho’s design of the Rabbit corkscrew. I think that on this particular issue, Mr Geddes’ evidence to the effect that from an analysis of the various drawings of the Pull It corkscrew, the same were derived from the Rabbit corkscrew, should be accepted, partly for the reason that the first drawing of the Pull It corkscrew was close to that of the Rabbit corkscrew, or to use Mr Geddes’ precise account, ‘[t]he first drawing shows details which are very clearly almost identical to the Rabbit’. As was also said by Mr Geddes in his evidence in chief, I think correctly, he ‘would find it very difficult to believe that you could come up with something so identical independently… There are just so many features here which are identical. It’s not just a few, it is largely every feature [that] is identical to the Rabbit’. In relation to the infringement issue, Mr Geddes’ expert testimony did not reflect the concerns I have expressed in relation to his evidence on the artistic craftsmanship issue the subject of the previous segment of these reasons.
141 Mr Geddes was asked, in his oral evidence in chief, to assume that it was Mr Kushner’s evidence that the first drawing (dated 21 August 2000) of the Pull It corkscrew (Exhibit ‘A14’ (page 4) and annexure RGK-1 (page 4) to Mr Kushner’s affidavit of 5 December 2002) was made by Mr Ho and sent to Mr Kushner’s factory, and that from it, together with some oral instructions, the initial drawing at annexure RG4 to Mr Kushner’s affidavit was produced. Upon that basis, Mr Geddes said as follows:
(i) there were a number of items visible in Mr Ho’s sketch which had not been reproduced in the engineer’s sketches contained in the first drawing of RG4, for example, the handle features;
(ii) a factory would need other views of the product than a single view, because ‘[i]t doesn’t show enough. Dimensions of the product, other aspects of the function, this is clearly a device which functions, to undo the corkscrew, what [sic] is the function of that device. So there would be a lot of other information requested or required by the manufacturer for him to be able to proceed to his next stage’; and
(iii) ‘[l]argely, in most of the world the methods are that the designer takes the design through to mechanical drawings before handing it over to the factory whereas in some areas of the world, Hong Kong being one of them, it is more commonplace. I don’t know if it is the majority of the situation (sic) but it is more commonplace – that the design is not taken to full mechanical drawings but it would go further than the drawing of Mr Ho here.’
I think that these observations of Mr Geddes should be accepted.
142 Moreover, when asked how likely it was that the designer’s three dimensional shape could be produced by the factory, without being provided with a Renshape model or three dimensional drawings, and simply being given something like that which appears on page 4 of the lengthy exhibit RGK-1 to Mr Kushner’s affidavit, Mr Geddes replied:
‘Extremely unlikely, almost impossible, its certainly impossible to get a repetition of the design that you had in mind because it shows so little of the contour and shape and form even if this was a far better reproduction if you could see the shape and form and contour of the product from this angle, you can’t see it from other angles, you don’t know what is going on in other parts of the product.’
143 As to the extent to which oral instructions (ie from Mr Kushner to Mr Ho) could assist, if other instructions did not involve the giving of detailed measurements, Mr Geddes said, again I think persuasively, ‘[t]hey would help marginally but it is still a very long way from defining the shape that the designer is after’. Moreover, Mr Geddes did not think that the provision of the Screwpull corkscrew from Mr Kushner to his factory would require any alteration to the opinions he had expressed, adding the following:
‘Were this to be supplied in conjunction with the illustration in March 4 (sic), that would go a long way to the mechanical function of the device, certainly. The operation of the functional aspects and the general arrangement of the centres of rotation, the relationship between various levers and those sorts of mechanical things which go to the function of the device. Where it would be difficult to continue into manufacture is the actual shaping, the moulding of the form of the device.’
144 As to the changes said by Mr Kushner to have been made subsequent to the letter of demand from Metrokane to Beau International Inc (see [133] above), Mr Larimer described the same and their implications as follows:
(i) ‘… minor cosmetic change of adding dots [which] required only punching tiny indents into the mould which could be done quickly and without cost’;
(ii) alteration of the ‘eye’ from a round cap to an elliptical cap being ‘two minuscule to affect either the overall appearance of the product, or consumer confusion’; and
(iii) changes to the handles notwithstanding, the Pull It corkscrew retained the ‘bunny profile’ of the Rabbit corkscrew.
I think that Mr Larimer’s first two propositions above are correct, but having given the matter much consideration, I would agree with Mr Brown’s firmly expressed doubt as to the third proposition; there is much to be said for the view that one tends to identify a rabbit like appearance, after having been first told of that designation, or having first seen the packaging. Indeed Mr Kilduff’s evidence was that it was not his intention to make a corkscrew that looked like a rabbit. Nevertheless it is appropriate to record Mr Brown’s view, given of course as an expert presented by S & H in the proceedings, that ‘[t]here are clearly similar shapes in the body [of the Pull It corkscrew] and the Rabbit [corkscrew]’, and further that ‘[t]hey are much more similar than they are to the original Screwpull’.
145 I have already set out in [23] above the eleven matters pleaded by Metrokane to constitute the features of the Rabbit corkscrew. In Mr Brown’s opinion, the differences between the Rabbit corkscrew and the Pull It corkscrew are as follows:
(i) there is more material used in the body of the Pull It corkscrew;
(ii) the top lever and side levers are of different shape, in that the top lever of the Pull It corkscrew swoops down and then up, is longer and curves in different directions;
(iii) there is a difference in styling ovaloid or elliptical forms, repeated throughout the main body, top lever and side levers in a ‘common signature thread’ in the Rabbit corkscrew, which can only be seen in the main body of the Pull It corkscrew; and
(iv) there is a downward curve of the side levers in the Rabbit corkscrew.
Those observations of Mr Brown are perhaps correct, so far as they extend, but are not to my mind of ultimate compelling significance in favour of his thesis.
146 Mr Geddes rejoined to the effect that the differences between the Rabbit corkscrew and the Pull It corkscrew isolated by Mr Brown were to do with:
(i) size;
(ii) the main lever handle of the Pull It corkscrew being longer, curved differently and with a grip on one side only; and
(iii) there being no Metrokane badge on the Pull It corkscrew.
On the other hand, Mr Geddes considered that ‘… the two products are strikingly similar in their overall appearance and in much of their detailing’, and that ‘[e]ven considering the [Screwpull] … might have been the common basis for these two designs, the striking similarities are to each other rather than to the patent [Screwpull]’. Moreover he ‘[w]ould concur that the Pull It corkscrew has a body with a form which utilises the “Signature Style” of the Rabbit corkscrew, and further, it is so strikingly similar to the Rabbit as to be a substantial reproduction of that design’, and that it is only the handle in the overall assembled [Pull It corkscrew] which is materially different to that of the Rabbit corkscrew. I think that those propositions of Mr Geddes are substantially correct, except that the statement as to ‘substantial reproduction’ addresses an ultimate issue for the Court to reach if, as is not, of course the case, that issue ultimately arises in the light of my resolution of the authorship and also the qualification for artistic craftsmanship issues.
147 Mr Geddes further considered that ‘the general appearance of these two corkscrews is generally the same, and that both the Rabbit and the Pull It device have rounded, full form main sections’, and further that no other lever action corkscrew except the Pull It corkscrew took ‘the sculpting of their form quite as far as the Rabbit device’; moreover he considered that of all the lever action corkscrews that he looked at, none had rounded full form main sections, other than the Rabbit and the Pull It corkscrews. Mr Geddes further observed that ‘the moulding, swap and curvature of the main portion or head of the [two corkscrews] are substantially the same’, and in particular:
(i) the contour of the head moulding is substantially the same;
(ii) the line of the profile of its head follows the same path;
(iii) the line of the top view profile of the head follows the same path; and
(iv) the line of the rear view profile of its head follows substantially the same path.
Again I think that those observations of Mr Geddes are substantially correct, but are of significance only to the issue of infringement.
148 As to the internal mechanism of the Rabbit and Pull It corkscrews, based in each case of course upon the Screwpull patent, Mr Kilduff testified that the housing thereof in the Rabbit corkscrew is not to be seen in any other corkscrew, apart from the Pull It corkscrew. That is in my opinion a factor of potential significance, though Mr Kushner pointed out that the Cisco corkscrew used a rounded mound-like covering to mask the internal mechanism. Mr Kilduff maintained however, in my opinion correctly, that while the internal mechanism, on which all lever action corkscrews have been based since the expiration of the Screwpull patent, has an effect on its shape, it does not have to be enclosed, as in the case of the Rabbit corkscrew. Mr Kilduff observed in particular in that regard that the ‘[t]he Le Creuset Screwpull does not use that technique, and in my view the decision to encase the body of the mechanism within the body of the corkscrew (which requires the use of the technique) is not an obvious or natural design choice. The “natural” or “obvious” choice would be to have the mechanism protruding beyond the body of the corkscrew as in the Screwpull’. On this important subject, Mr Geddes for his part gave the following evidence, which I again think to be correct:
‘In relation to the main body of each corkscrew being substantially the same, Mr Brown sees that they “follow a similar form”… directly as a result of its function to cover the circular form of the pinion gear on the fixed end of the main lever handle. While this is the line that most of the lever action corkscrews follow it is not necessary for it to be that shape – any smooth shape which protrudes beyond the teeth of the pinion would perform in the same way. This however does not explain why the remainder of the body shape of the two designs are substantially the same form.’
149 Other matters material to the issue of objective similarity of the Rabbit and the Pull It corkscrews, distilled by Mr Geddes as evidencing copying, were as follows:
(i) the pins or screw heads (sometimes referred to in evidence as ‘eyes’), resembling two small circles appear on both sides of the flat surface of what is sometimes called the ‘head’ of both corkscrews in issue, contain plugs to retain the grip handle pivot pin;
(ii) in contrast to all other lever action corkscrews in evidence, both corkscrews feature a so-called ‘elliptical eye’;
(iii) the top handle designs of both products transform in cross-section from a rectangle at the pinion, necking down to a small circle, and become elliptical in their thick handle section before they taper to a rounded point (reference was made by Mr Geddes in particular to the Pull It drawings in evidence in that regard); and
(iv) despite the distinct downward curve of the side handles of the Pull It corkscrew emphasised by Mr Brown, there are similarities of form as follows:
(a) both side handles have similar shapes that curve to a tapered, rounded end and both are convex on the outside and concave on the inside;
(b) while from the side there is no dip in the top line of the handle of the Pull It, from above the dip is apparent;
(c) when the two side handles are gripped together in the action of removing a cork, the handle of the Pull It forms a very similar bulbous form to the Rabbit handles when similarly gripped;
(d) while the Pull It has a wider square end to the Rabbit, and the ‘soft-touch’ coating is on the inside of the handle where it is not on the Rabbit, the overall so-called ‘rabbit ear’ appearance shows more in common than what is different between the two designs;
(e) while the lever handles of the Rabbit and Pull It corkscrews are not identical, the design of those of the latter corkscrew does little to avoid the ‘signature thread’ of the prior former design, but reproduces the same, albeit in different dimensions;
(f) while the Rabbit corkscrew grip pads were said (by Mr Brown) to be brush-like pads, whereas the Pull It corkscrew grips on the bottom of the lever handles are raised dots, and while there are differences in the materials, design and position of the grips of the two corkscrews, there are still similarities not to be seen on any other lever action corkscrews, namely:
· both areas of each grip are set in oval shaped zones and both sets of grips have an array of upstanding dots;
· both products have inserted rubber bottle grips in the grip handles;
· the grip on the main lever handle of the Pull It corkscrew is reminiscent of the grip on the Rabbit corkscrew; the ergonomic shape of the handles and levers, as well as grip features, have strong similarities, although the grip features on the Pull It seem to be misguided; and
· although those grip pads can also be found on the Screwpull, the shape and arrangement of the grips on the top handle were derived from the Rabbit corkscrew;
(g) the finish and colour are almost identical, and the use of black and chrome is similar in both products;
(h) although the polycarbonate finish was said by Mr Kushner to be commonly used in household items, and has a nicer finish and is more versatile, of all the lever action corkscrews viewed by Mr Geddes, only the Rabbit and Pull It corkscrews use that finish and a soft black colour combination; and
(i) the internal working mechanism of the Pull It corkscrew is exactly the same as of the Rabbit corkscrew.
150 It is largely in the light of the foregoing evidence, including expert opinions, that I must determine whether S & H, as the importer into Australia of the Pull It corkscrew for the purpose of trade, has indirectly infringed or reproduced Metrokane’s asserted copyright in its Rabbit corkscrew as a work of artistic craftsmanship, assuming (contrary to the findings I have already made) that any such copyright has been established. I have earlier set out the relevant legislative scheme, and the authorities, relating to what may constitute a substantial part of a work of copyright, which refer of course to an emphasis on quality of the significance taken, rather than quantity, and as involving questions of fact and degree as to objective similarity (see [31-32] above). I am of the opinion that the question which I have framed on those assumptions should be answered in the affirmative, both in terms of the quality and quantity taken, largely for the reasons advanced by or on behalf of Metrokane which I have already recorded above. I exclude of course from those reasons any purported reliance upon the mechanism of the Rabbit corkscrew, notwithstanding Metrokane’s reference thereto recorded in the last preceding sub-paragraph (i) of these reasons.
151 I do not accept that it is correct for S & H to assert, or for it to be asserted by Mr Brown on its behalf, that S & H ‘simply design[ed] an article using similar design vocabulary … to one already in the market place’, or that the Pull It corkscrew and the Rabbit corkscrew are merely ‘common in their “organic” design styling’, being a ‘common design styling since the mid-1990’s’, particularly having regard to Mr Brown’s view, correctly put forward, that none of the other corkscrews addressed in his evidence have completely adopted that styling. A comparison of the two critical corkscrews under scrutiny in this litigation demonstrates how closely the Pull It corkscrew resembles the Rabbit corkscrew, and the numerous other ways in which the Pull It corkscrew could have been designed to avoid any such resemblance. As I think Metrokane rightly submitted, Mr Kushner could have used one of the other versions of the Pull It design which he said he prepared. Moreover as Mr Geddes further correctly pointed out:
(i) only the Rabbit and Pull It corkscrews are both black with chrome detailing, and both feature a textured grip zone on the lever handle;
(ii) the core characterising element of the Rabbit corkscrew is retained in the Pull It, and the method of creating that element has been reproduced by it; it is those factors which reflect the unique, identifying and market differentiating feature of design in the Rabbit corkscrew; and
(iii) while a similar design might result, when designing a corkscrew based on the mechanical principles of the Screwpull, it is not pre-determined that a similar design would so result.
152 I do not think that I should accept the credibility of Mr Kushner’s evidence that his sending to the engineer at PCI’s factory in China the drawing at RGK-1/page 4 (see [141] above) was only for the purpose of obtaining accurate pricing, and I am unable to accept the credibility of Mr Kushner’s denial that the same could have assisted the manufacturer to understand the details of the design for what was wanted for manufacturing purposes. I would infer, from the evidence I have earlier reviewed, that the factory in China created the drawing at RGK-1 page 5 as a result of having received the drawing at RGK-1 page 4 (Exhibit A14) from Mr Kushner, and as a further result of his having discussions with that factory, and further that his purpose of making the changes to the design was to attempt to defeat any allegations of infringement of the Rabbit corkscrew that might subsequently be made. Mr Kushner did agree that some aspects of the shape of RGK-1 page 5 were more like the Rabbit shape than what appears as RGK-1 page 4. I accept the submission of Metrokane that the similarities between the Rabbit corkscrew and the Pull It corkscrew are such that no inference should be drawn, other than one of derivation, and thus of copying a substantial part of the Rabbit corkscrew, being of course the part comprising the enclosure of the mechanism. In reaching those conclusions, I have borne in mind, and have sought to apply, the principles enunciated by Lord Millet in Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] All ER 700 at 708-709 which are reproduced below -
‘It must be borne in mind that this is an action for infringement of copyright. It is not an action for passing off. The gist of an action for passing off is deceptive resemblance. The defendant is charged with deceiving the public into taking his goods as and for the goods of the plaintiff. A visual comparison of the competing articles is often all that is required. If the overall impression is that ‘they just do not look sufficiently similar’ then the action will fail.
An action for infringement of artistic copyright, however, is very different. It is not concerned with the appearance of the defendant’s work but with its derivation. The copyright owner does not complain that the defendant’s work resembles his. His complaint is that the defendant has copied all or a substantial part of the copyright work. The reproduction may be exact or it may introduce deliberate variations – involving altered copying or colourable imitation as it is sometimes called. Even where the copying is exact the defendant may incorporate the copied features into a larger work much and perhaps more of which is original or derived from other sources. But while the copied features must be a substantial part of the copyright work, they need not form a substantial part of the defendant’s work (see Warwick Film Productions Ltd v Eisinger [1967] 3 All ER 367, [1969] Ch 508). Thus the overall appearance of the defendant’s work may be very different from the copyright work. But it does not follow that the defendant’s work does not infringe the plaintiff’s copyright.
The first step in an action for infringement of artistic copyright is to identify those features of the defendant’s design which the plaintiff alleges have been copied from the copyright work. The court undertakes a visual comparison of the two designs, noting the similarities and the differences. The purpose of the examination is not to see whether the overall appearance of the two designs is similar, but to judge whether the particular similarities relied on are sufficiently close, numerous or extensive to be more likely to be the result of copyright than of coincidence. It is at this stage that similarities may be disregarded because they are commonplace, unoriginal, or consist of general ideas. If the plaintiff demonstrates sufficient similarity, not in the works as a whole but in the features which he alleges have been copied, and establishes that the defendant had prior access to the copyright work, the burden passes to the defendant to satisfy the judge that, despite the similarities, they did not result from copying.
…
Once the judge has found that the defendant’s design incorporates features taken from the copyright work, the question is whether what has been taken constitutes all or a substantial part of the copyright work. This is a matter of impression, for whether the part taken is substantial must be determined by its quality rather than its quantity. It depends upon its importance to the copyright work. It does not depend upon its importance to the defendant’s work, as I have already pointed out. The pirated part is considered on its own (reference at this point being made to Ladbroke referred to in [32] above) and its importance to the copyright work assessed. There is no need to look at the infringing work for this purpose.’
Whether Metrokane established secondary infringement of copyright
153 This next issue arising was not of course one of alleged actual reproduction of the Rabbit corkscrew in the form of Pull It corkscrew neither Mr Kushner nor PCI being respondents to the proceedings. It was a case of so-called secondary infringement of copyright on the part of S & H, pursuant to ss 37 and 38 of the Copyright Act, which are extracted in [33] above. S & H asserted in response that if Metrokane did have copyright in the Rabbit corkscrew as a work of artistic craftsmanship, its incorporation which of course I have already found to the contrary in any event, S & H did not know, nor ought reasonably to have known, that into Australia and sale in Australia of the Pull It corkscrew would have constituted an infringement of that copyright. Nevertheless s 115(3) of the Copyright Act stipulates a measure of certain adverse consequences to S & H, if Metrokane were to have established its claim to copyright, irrespective of its unawareness etc of Metrokane’s alleged copyright, in the following terms:
‘Where, in action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under the section or not.’
Metrokane asserted an entitlement to additional damages pursuant to s 115(4) of the Copyright Act, upon the basis that S & H’s alleged infringing conduct was even flagrant, the same reading (so far as is relevant) as follows:
‘Where, in an action under this section:
(a) an infringement of copyright is established; and
(b) the court is satisfied that it is proper to do so, having regard to:
(i) the flagrancy of the infringement; and
(ii) …
(iii) any benefit shown to have accrued to the defendant by reason of the infringement; and
(iv) all other relevant matters;
the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances.’
154 The evidence of Mr Angus (first identified herein at [12] above), which I think I should accept, was directly and emphatically that S & H, and himself as its chief executive officer, did not have any such requisite knowledge. Consistent with that denial, Mr Angus said that he had been expressly advised in mid 1991, in relation to another new lever action corkscrew being sold in Australia under the name Baccarat, and resembling the Pull It corkscrew, that it was unlikely that S & H would have any claim against the company marketing the Baccarat corkscrew. In those circumstances, S & H submitted that Mr Angus could not, as a lay person, reasonably have suspected that another party could make a claim against S & H for infringement of copyright of artistic craftsmanship in respect of a corkscrew design. I was left with no doubt, from my observation of his demeanour in Court during the hearing, and his reactions under cross-examination, that his evidence in denial in effect of the statutory prescription as to ‘know or ought reasonably to have known’ contained in ss 37(1) and 38(1) of the Copyright Act should be accepted for the benefit of S & H’s case, and that consequently no flagrancy of infringing conduct on the part of S & H had occurred. For what it may matter in the light of my finding in favour of S & H in relation to the non-existence of copyright. I should record that in my approach to the resolution in any event of the s 115(3) issue tendered by Metrokane, I bore in mind the following dicta of the Full Federal Court in Millwell Pty Ltd v Olympic Assessments Pty Ltd (1991) 43 IPR 32 at [52]:
‘To obtain the protection of s 115(3), a defendant must establish (i) an active subjective lack of awareness that the act constituting the infringement was an infringement of the copyright, and (ii) that, objectively considered, he or she
had no reasonable grounds for suspecting that the act constituted an infringement.’
155 I would record, in that latter regard, that Metrokane made no claim to any copyright, either on the packaging of the Rabbit corkscrew, or on the website of Metrokane, or by way of copyright registration in the United States, such as to have put, or conceivably to have put, S & H on notice as to any claim to copyright in any Metrokane design or work of artistic craftsmanship,prior to the letter of demand sent to S & H by Metrokane’s lawyers of 7 June 2002 (see again [17] above which also refers to what intellectual protection Metrokane applied for in the United States).
I also accept the contention of S & H that the mere importation of the Pull It corkscrew by S & H, without the requisite knowledge, cannot be deliberate in the sense viewed by authority: see International Writing Institute Inc v Rimila Pty Ltd and another (1994) 30 IPR 250 at 255 (per Lockhart J).
156 Moreover in the circumstances of this complex dispute, the period of time between actual receipt by S & H of the letter of demand of 7 June 2002, and the commencement by Metrokane of the proceedings on 21 June 2002, could hardly be described as an adequate period of time within which to substantiate the ownership of copyright by a United States resident company in a corkscrew manufactured in China, and sold in and distributed from the United States that letter of demand required written undertakings of the directors of S & H to be furnished within 14 days, not just to cease importation of the Pull It corkscrew into Australia, but also to withdraw from sale all such stocks in S & H’s control, to deliver up all such stocks in its possession to Metrokane, to provide a statutory declaration as to a substantial amount of business information, and perhaps most startling of all at that stage of absence of prior communication, to ‘pay, at the option of [Metrokane], damages on an account of profits relating to the infringement of our client’s copyright’.
157 I do not accept that S & H had actual knowledge, or ought to have known, that it was infringing Metrokane’s claimed copyright, by reason of its receipt of the above letter of demand, and given that S & H had no earlier such knowledge. To ascertain whether a demanding non-resident stranger has copyright in the nature of a work of artistic craftsmanship (which of course I have found not to have been established in any event) requires no small feat of judgment, as for example the speeches in Hensher which I have earlier extracted at some length duly tend to exemplify. I duly acknowledge the principles as to the operation of s 39 (and consequently of s 38 as well) of the Copyright Act, enunciated in Milpurrurru (at 225-6) by Von Doussa J, as follows:
‘ “Knowledge”, for the purposes of s 37, refers to notice of facts such as would suggest to a reasonable person having the ordinary understanding expected of persons in a particular line of business that a breach of copyright was being committed … Constructive knowledge is sufficient. Knowledge of the law is not required. It is sufficient that there be actual or constructive knowledge that intellectual property rights would be infringed, without knowing the precise nature of those rights.’
But even in the case of constructive knowledge, the recipient of any constructive notice should normally be entitled to a reasonable time to consider the basis for a previously unforeshadowed demand, if also an unanticipated demand, of a putative overseas resident copyright owner, before adequately responding thereto, particularly an infringement demand of the nature here involved, without prior warning. Notice of a claim in the kind of circumstances here involved, without prior warning cannot sensibly mean that the recipient must ‘close down the shutters’, to use the traditional description, without being allowed reasonable enquiry and investigation. It is of course readily apparent that mere claims of breach of copyright are not always soundly based.
158 Counsel for Metrokane acknowledged Mr Larimer’s concession that other than with respect to the pictorial diagrams located on the packaging, and in the instructions booklet, for the Rabbit corkscrew:
(i) there were no copyright certificates of registration available or provided in relation to the design of the Rabbit corkscrew as a product;
(ii) no claim was made to copyright on the packaging of the Rabbit corkscrew;
(iii) no one involved in preparing Metrokane’s website had been apparently instructed to ensure that its alleged copyright in the Rabbit corkscrew was claimed thereby; and
(iv) so far as he understood, copyright did not subsist in the Rabbit corkscrew design in the United States.
Counsel for Metrokane submitted that none of those circumstances were material to the issue of constructive notice, but I do not think there is force in the submission (cf what I have recorded in [57] above).
159 Metrokane nevertheless submitted that apart from the content of the letters of demand, the following matters were known by S & H, or ought reasonably to have been known by S & H, prior to the writing by Metrokane of the letter of demand, such as to have put S & H on actual or at least constructive notice:
(i) both the Pull It and the Rabbit corkscrews were on display at the Reed Gift Trade Fair in either Melbourne or Sydney in or about September 2001;
(ii) Mr Angus testified in his affidavit evidence that he recalled seeing the Rabbit corkscrew in late 2000 or early 2001 at a trade fair or retail outlet, and that he did not become aware of the Pull It corkscrew until later at Hong Kong trade fair in April 2001, yet when he next saw the Pull It corkscrew, he did not by then recall having the Rabbit corkscrew at that later time; given the number of manufactured corkscrews exploiting the Le Creuset mechanism which entered the market, following upon the expiration of its patent relating thereto, that absence of recollection is in my opinion by no means surprising or startling; indeed the very circumstance that Juerg Haertel of Victorinox, in an email dated 5 June 2001, after having been provided with a sample of the Pull It corkscrew, observed that there were ‘a few of these models on the market already’, tends to support the bona fides of the explanations proffered by Mr Angus;
(iii) the advertising of Rabbit corkscrews in five newspapers/journals in Australia in July, August (two of the journals) and December 2001, and in February 2002, each using the slogan ‘pulls a cork in 3 seconds’;
(iv) Mr Kushner’s reference to the Rabbit corkscrew in a fax to Mr Angus of 4 July 2002, which enclosed a copy of Metrokane’s US Design Patent for the Rabbit corkscrew (ie 27 days after the letter of demand, and 13 days after commencement of the subject proceedings);
(v) the admission of Mr Angus that he did not make any inquiries or cause any inquiries to be made as to the whereabouts of Mr Ho, the alleged designer of the Pull It corkscrew on the instructions of PCI , it being contended by Metrokane that its allegations against PCI were such as to render it reasonable and prudent that he do so; and
(vi) the knowledge of Mr Angus, through conversations with Mr Kushner, that threats had been made by Metrokane in the United States ‘regarding infringement of the Rabbit’ (the cross-examination did not however specify the nature of the intellectual property the subject of those threats of infringement), yet he did nothing to ascertain the truth of the allegations being made by Metrokane or reason why the shape of the Pull It was altered.
In my opinion, none of the foregoing matters, cumulatively or otherwise, realistically constituted requisite notice to Mr Angus in the circumstances in which he was realistically placed, and thus to S & H And in particular, notice of a claim of constructive notice of copyright of the controversial nature of artistic craftsmanship. Mr Angus was plainly entitled to think that Metrokane’s claim merely reflected on example of the kitchen manufacturers overseas to exploit the expired Le Creuset patent.
160 Nevertheless, once the subject proceedings were commenced on 21 June 2002, there can be no dispute that S & H was thereupon placed on notice of the basis of Metrokane’s claim being advanced against it, namely for breach of copyright in a work of artistic craftsmanship. It may be readily inferred however that S & H did not thereupon acknowledge Metrokane’s claim of copyright, by reason of the legal advice doubtless bona fide given to and received by S & H, being advice apparently unrelated to the earlier advice received in respect of the Baccarat corkscrew (ante). The fact that such privileged material was not put in evidence does not in my opinion matter, it being in my judgment obvious to all concerned from the outset that the present claim of copyright was going to be highly controversial. It was in my view an uncharted course for Metrokane to have pursued a case for copyright entitlement in the nature of artistic craftsmanship, in relation to the handle of a corkscrew, albeit attractively presented, which merely embodied however the mechanism the subject of a recently expired patent held virtually worldwide by an unrelated and famous French manufacturer. If I am wrong in my conclusions as to the absence of qualification for copyright of that nature in relation to the Rabbit corkscrew, and as to authorship in any event of that alleged copyright entitlement, I would not, in any event, have reached a conclusion in favour of Metrokane for exemplary damages against S & H, having regard to all the circumstances of the case which I have reviewed.
Claims advanced by Metrokane based upon passing off and the Trade Practices Act
161 I agree with the contention of S & H that these claims face formidable hurdles, irrespective of the conclusions I have already reached on the copyright issues arising. The following passages from judgments of the High Court in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 exemplify that observation:
‘… the sale by one manufacturer of goods which closely resemble those of another manufacturer is not a breach of s 52 if the goods are properly labelled. There are hundreds of ordinary articles of consumption which, although made by different manufacturers and of different quality, closely resemble one another. In some cases this is because the design of a particular article has traditionally, or over a considerable period of time, been accepted as the most suitable for the purpose which the article serves. In some cases, indeed, no other design would be practicable. In other cases, although the article in question is the product of the invention of a person who is currently trading, the suitability of the design or appearance of the article is such that a market has become established which other manufacturers endeavour to satisfy, as they are entitled to do if no property exists in the design or appearance of the article. In all of these cases, the normal and reasonable way to distinguish one produce from another is by marks, brands or labels. If an article is properly labelled so as to show the name of the manufacturer or the source of the article its close resemblance to another article will not mislead an ordinary reasonable member of the public’ (per Gibbs CJ at 149 CLR 191 at 199-200).
‘Therefore, a manufacturer who exercises his freedom to manufacture goods according to a design which is not protected by valid registration does not engage in conduct which is misleading or deceptive or which is likely to mislead or deceive. If consumers or potential customers believe that all goods of a particular design are manufactured by him who first establishes a market reputation as a manufacturer of those goods, that belief is or may be erroneous. The error may be attributed to a preconceived belief that the manufacturer who first establishes a market reputation has a monopoly in the manufacture and sale of goods of that kind but, unless the manufacturer has acquired a statutory monopoly, that belief is also erroneous and the error flows from a misconception of law. A later manufacturer who does no more than exercise his freedom to manufacture and sell goods made in accordance with a design in the public domain does not mislead or deceive; and if a consumer has an erroneous preconceived belief that the first manufacturer has a monopoly, a false assumption by the consumer as to the source of the later manufacturer’s goods is self-induced. That was the approach taken by the full court of the Federal Court with respect to trade names in McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) 33 ALR 394, and I respectfully agree with it’ (per Brennan J at 149 CLR 191 at 225).
162 For the reasons I have earlier outlined in the segment relating to infringement, the evidence discloses in the present proceedings that both the Rabbit and Pull It corkscrews are sold within differing and well marked and labelled packaging, notwithstanding that the products may ‘closely resemble’ one another, to adopt the expression used by Gibbs CJ above.
163 Two authorities of Full Courts of this Court have also addressed the theme of similar or almost identical goods marketed under or by their respective or different labels. Thus in Dr Martens Australia Pty Ltd v Rivers (Australia) Pty Ltd (1999) 95 FCR 136 at [41], Sundberg, Emmet and Hely JJ, after referring to Puxu, said as follows:
‘If the appellants in Puxu could copy the respondents’ claims provided they labelled them so that it was clear they were not the goods of the respondents, we can see no reason why the appellants cannot do the same with their footwear…’
And subsequently in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90, in finding that the passing off and TP Act claims concerning a rotary shaver, with a similar appearance to the appellant’s rotary shaver, should fail, Burchett J, with whom Branson and Hill JJ agreed, said (at 281) as follows:
‘Nor is there any more reality to the suggestion that the mere similarity of goods … might lead some persons to assume the Remington shaver is produced under licence, or is a sub-brand of Philips … The public is thoroughly accustomed to competing brands of almost identical products, which may or may not have some link…’
164 In my opinion, however closely identical the Pull It corkscrew is to the Rabbit corkscrew for the reasons I have earlier set out relating to the issue of infringement of copyright, the different packaging of both products, in which the same are sold in Australia, is such as not to mislead consumers in Australia or potential consumers by reason of any deceptive resemblance, or of having any endorsement, approval, licence or sponsorship of Metrokane, consequential upon any conduct of S & H in the nature of passing off. In any event, essentially for the reasons appearing in the earlier segment above headed ‘Secondary infringement of copyright’, I would reject the contention of Metrokane that the conduct of S & H complained of was carried out with the intention of appropriating and taking advantage of the reputation and goodwill of Metrokane.
165 The claims made by Metrokane under s 52 and 53(a), (c) and (d) of the TP Act, as in the case of the claim for passing off, were of course made independently of, and not linked to, the success or otherwise of the claims made by Metrokane for infringement of copyright. Obviously enough, the importation, distribution and sale by S & H of the Pull It corkscrew constituted conduct in trade and commerce within the meaning of that expression as used in the TP Act. The untrue representations allegedly made by S & H to members of the public is said by Metrokane to be that the Pull It corkscrews are the products of Metrokane, or alternatively products licensed or approved by, or otherwise associated with, Metrokane, or that the Pull It corkscrew has a sponsorship and approval of Metrokane, or an association with Metrokane, which the Pull It corkscrew does not have.
166 Metrokane further asserted that it had established substantial goodwill and reputation in the Rabbit corkscrew in Australia, such that members of the public throughout Australia recognised the features of the Rabbit corkscrew as being that of Metrokane, and thus emanating from a single source. Moreover Metrokane claimed that the advertising, promotion, importation, sale and supply in Australia of Pull It corkscrews having the features of the Rabbit corkscrew, have signified, or are likely to have signified, to persons in Australia, that the Pull It corkscrew is made by and/or sold with the licence or approval of Metrokane.
167 Essentially for the same reasons as I have dismissed Metrokane’s cause of action for passing off, I would dismiss the causes of action of Metrokane based on the TP Act. Metrokane acknowledged the significance, potentially adverse to its TP claims, referrable to the different packaging of the Rabbit and Pull It corkscrews, but contended that both corkscrews were often displayed outside their packaging, and that people often tend to take away with them imperfect recollections of those displays. No evidence was specifically cited in support of that submission. Moreover in that context, Metrokane submitted that what consumers ‘take away with them when they have seen an item in a store is this rabbit-like profile, or even if they don’t think of it as a rabbit, that distinct moulded shape, and that it is very easy to confuse the two’. It was further submitted by Metrokane that ‘[i]f one goes to a dinner party and sees the Pull It or Rabbit corkscrew it would be very easy to confuse the two when you saw it [later] in a store’. Some reservations I have with those submissions are first, that it is unlikely that any display of either corkscrew outside its packaging is equally likely to be so displayed upon or immediately adjacent to that packaging, and in the example of the dinner party hypothesis, observers would still have to later buy the product in, or in association with, its packaging when he or she might decide to acquire the product with which he or she was supposedly impressed. The hypothesis assumes in any event that what may be observed on a social occasion may involve a representation made by or on behalf of S & H, which may not be readily established in any event. For all those reasons, I do not think that Metrokane can avoid the impact of the reasoning that has underpined authorities such as those cited above albeit in the immediate context of unsuccessful passing off causes of action.
168 Metrokane formulated the following matters in furtherance of its contention as to confusion, or likely confusion, by reason of the similarity of the two corkscrews, which I have earlier established in my segment relating to infringement of copyright:
(i) since May 2000, approximately one million ‘Rabbit’ corkscrew have been sold and distributed throughout the world;
(ii) Argyle Wine Accessories Pty Ltd (first identified in [21] above (‘Argyle’), appointed the exclusive distributor of the Rabbit corkscrew in Australia in February 2000, distributed throughout Australia between June 2000 and 31 October 2002 approximately 3,778 Rabbit corkscrews;
(iii) whereas initially from June 2001, Argyle distributed the Rabbit corkscrew through approximately 500 retailers in Australia, by November 2002 the number of retailers through which Argyle distributed the Rabbit corkscrew had reduced to approximately 187;
(iv) S & H for its part distributed the Pull It through some of the same retail stores as Metrokane, including Myers, House, King of Knives and Executive Chef;
(v) S & H has distributed and sold approximately 70,000 Pull It corkscrews in Australia since 21 June 2001;
(vi) Argyle’s director Mr Symons first became aware that the Pull It corkscrew was being sold in Australia in June 2001, after it was on display at the Reed Gift Trade Fair; he testified that his ‘initial reaction was that it was strikingly similar in appearance to the Rabbit corkscrew, he recalled both existing and potential retail customers, at the Reed Gift Trade Fair, telling him they were going to buy ‘a rabbit’ somewhere else’;
(vii) Mr Symons further said that ‘a number of his retail clients informed him that they stopped buying the Rabbit corkscrew simply because they had a cheaper alternative available’;
(viii) strong evidence of actual confusion was reflected in the circumstance that Argyle had actually experienced a Pull It corkscrew being returned to it ‘by the agent that sells the ‘Rabbit’ corkscrew’, on account of claimed defects;
(ix) Argyle had twice received Pull It corkscrews from Myers for repair by persons describing them as Rabbit corkscrews, when in fact they were Pull It corkscrews;
(x) items such as corkscrews are nearly always sold by retail together; and
(xi) sales of the Rabbit corkscrew made by Argyle reduced by one half in the first year following the initial sale of the Pull It corkscrew in Australia, and are now less than one eight of the number of sales achieved when first introduced into Australia.
The difficulty for Metrokane is whether any of that evidence establishes the breaches of the provisions of the TP Act on the part of S & H purportedly relied upon.
169 As in the case of the cause of action for passing off, Metrokane is faced with the hurdle of the distinct, and I might add, attractive packaging of each of the two products which would be evident to prospective buyers at the point of sale. It is deception at the point of the sale which is critical, not for instance at the point of return of goods for repair of defects. I think that authorities which I have cited above present insuperable obstacles to the causes of action propounded by Metrokane against S & H under the TP Act. In particular the circumstance that consumers stopped buying the Rabbit corkscrew, because they had the option of the cheaper alternative of the Pull It corkscrew (see sub-para (vii) immediately above) does not establish that they were misled or deceived in any of the circumstances addressed by ss 52 and 53(a), (c) and (d) of the TP Act. The market indications as to increasing popularity of the Pull It corkscrew, and the declining market popularity of the Rabbit corkscrew, does not establish that consumers were misled and deceived in the circumstances of the different packaging of the respective two products at the point of sale. Particularly would that be so in the circumstances of the market penetration of other manufactured corkscrews which entered the Australian market with the benefit of adoption of the mechanism the subject of the expired Le Creuset patent. I do not think that the circumstances set out in [168] are sufficiently probative of any of those claims (as to which, see for instance [12] and [15] above). Moreover the loss of major market support for the Rabbit corkscrew could conceivably have been attributable to pricing circumstance which I have earlier featured. Moreover I do not think that there is a case to be made by Metrokane by reference to the circumstances that some retailers may have displayed Pull It corkscrews out of their respective packaging; that seems to me to be something for which a manufacturer cannot be held accountable under the TP Act or for passing off. There is no evidence to the effect that S & H instructed its retailers to display the Pull It corkscrew for sale in any manner which might tend to mislead or confuse prospective buyers.
170 I would therefore also reject the claims of Metrokane based upon the TP Act.
Claims advanced conversely by Sheldon and Hammond pursuant to provisions of the Trade Practices Act
171 The S & H case for breaches on the part of Metrokane of the TP Act, being referrable to ss 52 and 53(g) thereof, is said to follow from the circumstance of Metrokane’s groundless threats of contravention of s 202 of the Copyright Act, which I have found to have occurred by reason of Metrokane’s absence of any entitlement to copyright in relation to the Rabbit corkscrew. The case for the existence of such statutory breaches seems to me however to be misconceived. S & H has not established that it was misled or deceived by reason of any such representations on the part of Metrokane. On the contrary, it rejected from the outset Metrokane’s allegations of breach of copyright, and also of such breaches of the TP Act as Metrokane later claimed. There is moreover no evidence of loss or damage sustained by S & H caused by any such supposed breaches on Metrokane’s part of the TP Act. As in the case of Metrokane, S & H’s pursuit of causes of action for breach of the TP Act must fail.
Conclusions and Costs
172 S & H has achieved substantial success in the proceedings. My tentative view is that in the exercise of my discretion, S & H should not be entitled to an order for the whole of its costs of the proceedings. I have found in favour of Metrokane on one of the major issues in the proceedings, namely whether Metrokane established infringement of copyright (referrable of course to the conduct of Mr Kushner and his company PCI) upon the assumed basis of course that the issue as to existence of copyright in the first place had been established in its favour. Coupled with the circumstance that PCI had contributed $50,000 to S & H’s cost of the proceedings (see [140] above), it may well be unjust that such sum should be in effect made available for recoupment to Mr Kushner and PCI, directly or indirectly, by virtue of an award of the costs of the entire proceedings in favour of S & H. I have made certain adverse findings concerning the conduct of Mr Kushner and PCI in relation to that substantial issue of infringement. What I tentatively have in mind would be to make orders that the costs of the proceedings be paid by Metrokane on the usual party and party basis, less the sum of $50,000. I would add that whilst Metrokane has been also wholly successful in relation to the counter-claim of S & H based upon the TP Act, what was involved in relation to that counter-claim was relatively insignificant, in terms of cost and expense. I should add that even if there be in fact no arrangement for the return of that sum of $50,000 by S & H to PCI, I tentatively am of the view that in principle, my proposal would be equitable in all the circumstances of the case. However I wish to have the benefit of submissions of the parties upon any costs proposals.
| I certify that the preceding one hundred and seventy two (172) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R. Conti. |
Associate:
Dated: 3 February 2004
| Counsel for the Applicant: | Mr R Cobden |
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| Solicitor for the Applicant: | Spruson & Ferguson Lawyers |
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| Counsel for the Respondent: | Mr A Crowe SC and Ms D K Grigg |
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| Solicitor for the Respondent: | Gadens Lawyers |
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| Date of Hearing: | 24-28 March 2003, 21 July 2003 |
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| Date of Judgment: | 23 January 2004 |
