FEDERAL COURT OF AUSTRALIA

Norm Engineering Pty Ltd v Digga Australia Pty Ltd (No. 2) [2006] FCA 732

PRACTICE AND PROCEDURE – consideration of scope of discovery concerning documents going to access and use of the applicant’s article by a respondent for the purposes of copyright proceedings. 

Clarendon v Henley Arch (2000) 46 IPR 309

Blackie & Sons Ltd v Lothian Book Publishing Co. Pty Ltd (1921) 29 CLR 396

S W Hart & Co. Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; 5 IPR 13 Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278

NORM ENGINEERING PTY LTD (ACN 010 799 943) v DIGGA AUSTRALIA PTY LTD (ACN 010 443 875)

QUD285 OF 2005

GREENWOOD J

9 JUNE 2006

BRISBANE

THE COURT ORDERS:

1.             That the Respondent make further and better discovery of all email correspondence containing:

(a)          any comparison between the Applicant’s 4-in-1 bucket and any other 4-in-1 bucket; and

(b)          any comment on the Applicant’s 4-in-1 bucket,

by 4.00pm, 16 June 2006.

2.             Costs of the Notice of Motion issued 7 June 2006 are reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT DELIVERED EX TEMPORE AT 10.45AM

1                     I have before me a Notice of Motion filed by the Applicant on 7 June.  By paragraph 3 of the Notice of Motion the Applicant seeks an order that the Respondent make further and better discovery of all email correspondence containing:

(a)                any comparison between the Applicant’s 4-in-1 bucket and any other 4‑in‑1 bucket;

(b)                any comment on the Applicant’s 4-in-1 bucket,

by 4.00pm, 16 June 2006. 

2                     In support of the application for that order, the Applicant relies upon the affidavit of Justin James Twigg sworn 7 June which annexes an email dated 1 December 2003 from Mr Alan Wade who was at that date an employee of the Respondent to Mr Alan Wade at an email address alan@digga.com.  In that email Mr Wade, under the head “New Product – 4-in-1 says:

“New product (4-in-1)

Is there a call in England or Europe for a 4-in-1 Skid Steer Bucket.  We have produced our first prototype here and are putting it to the field for testing.

The call in Australia came to us from dealers searching for another supplier other than the current (Norm, Hughes etc).  I will send you some photos for you to look at.  I viewed the first couple on Friday and in comparison they are every bit as good as the Norm and Hughes if not better.  They should be, as we have taken all the good points from both of these, added pieces, at the request of dealers and contractors, and produced our own.  You mentioned to me before about staying out of certain markets.  I did not know if this fell into that category.  I needed to inform you regardless.”

3                     Mr Twigg says in paragraph 2 of his affidavit that a copy of the email transmission from Mr Wade was recently provided to him.  The trial of the action is to commence on Monday, 19 June and is set down for five days with an additional day should that be required. 

4                     In these proceedings, put simply, the Applicant contends that the Respondent has infringed the copyright subsisting in a number of drawings of the Applicant.  A question of fact to be determined is whether the Respondent has reproduced a substantial part of the Applicant’s work in a material form.  The Respondent says that such a question is to be determined simply, in the circumstances of the case, by an examination of whether objective similarity is established between the material features of the Applicant’s work and those evident upon an examination of the plans of the Respondent.  Since it is not disputed by the Respondent that in formulating the expression of the Respondent’s idea for a 4‑in‑1 bucket by the development of plans for the manufacture of such a bucket, the Respondent had “access” to the Applicant’s bucket and had “regard” to the features evident in the Applicant’s bucket, emails which go to establishing that access and that regard are not relevant because, to that extent, that matter is not in controversy between the parties. 

5                     However, the question is not simply one of objective similarity.  The question involves an application of the test of objective similarity in the circumstances of the case.  In circumstances where there has been deliberate copying of the Applicant’s work by the Respondent albeit in circumstances where other features and characteristics thought desirable in the formulation of a plan for a 4‑in‑1 bucket have been adopted, emails commenting upon those features of the Applicant’s bucket which were thought by employees of the Respondent to be good and ought to be taken or have been taken, are relevant in determining whether in expressing the formulation of the Respondent’s plan, the Respondent has reproduced in its plan for a 4‑in‑1 bucket, features of the Applicant’s plan which are regarded as substantial, viewed from the standpoint of objective similarity. 

6                     The extent to which the Respondent set about a course of consciously taking particular features of the Applicant’s plans is relevant to the question of whether objective similarity is made out.  In Clarendon v Henley Arch (2000) 46 IPR 309 at page 316 at paragraph 28, their Honours Heerey, Sundberg and Finkelstein JJ observed.

‘[28]       Further, in a case where there has been deliberate copying, the Court will not look kindly on a defendant when the plaintiff seeks to establish that what has been copied is sufficiently objectively similar to the plaintiff’s work.  In Blackie & Sons Ltd v Lothian Book Publishing Co. Pty Ltd (1921) 29 CLR 396 Starke J said at 404:

                     “It is not for the Court to make the way of the taker of copyright matter easy.  It is a sound principle of copyright law that the court should not allow one man to take away the result ‘of another man’s labour, or, in other words, his property’, unless it is satisfied that the part taken is ‘so slight, and the affect upon the total composition was so small’, ‘as to render the taking perfectly immaterial’, or what is much the same thing, that the part taken is an unsubstantial part [citations omitted].” 

See also S W Hart & Co. Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466 at 484; 5 IPR 13 at 25 where Wilson J referred with approval to the judgment of Street J in Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278 where his Honour acknowledged that his finding of infringement had been coloured by the unmeritorious use made by the defendant of the plaintiff’s work.’

7                     Such evidence is relevant if it could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings (s 55(1) Evidence Act 1995). 

8                     Accordingly, emails going to that question ought to have been discovered by the Respondent.

9                     The Respondent says by an affidavit of Mr Kenneth Philp sworn 7 June 2006 that an order in terms of paragraph 3 of the Notice of Motion would essentially be impossible to comply with because the Respondent’s IT system has historically been functionally inadequate for a number of reasons with the result that it would be very difficult to identify emails in the period March 2003 to February 2005 and the order would have the effect of causing the Respondent to conduct searches under certain fields which would inevitably reveal a vast number of emails to be physically examined.  There are approximately 711,000 emails stored in Digga’s electronic archive system. 

10                  Notwithstanding this evidence, I am essentially unsympathetic to it.  It has been clear for a long time that the question of conscious copying is a central allegation in the case and documents going to the extent to which the Respondent may have set about a course of seeking to consciously appropriate material elements of the Applicant’s plans and therefore substantially reproduce those plans notwithstanding other features of objective dissimilarity, have been relevant to that issue from the outset. 

11                  Although it may prove difficult and in the end result the Respondent may not be able to identify, after reasonable inquiry, particular documents, the Respondent ought to make comprehensive inquiries to determine whether any such communications exist and give discovery of them.  Clearly enough, such documents may fall within the scope of the documents contemplated by order 15, rule 2, sub-rule (3). 

12                  According, I make an order in terms of paragraph 3 of the Notice of Motion and reserve the costs of the  motion.

I certify that the preceding twelve (12)

numbered paragraphs are a true copy of the

Reasons for Judgment herein of the

Honourable Justice Greenwood.

Associate:

Dated:  9 June 2006