FEDERAL COURT OF AUSTRALIA

Dynamic Supplies Pty Limited v Tonnex International Pty Limited

[2011] FCA 362

THE COURT ORDERS THAT:

1.    The proceeding will stand over for a directions hearing at a time and date to be arranged with my Associate.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    In this proceeding the applicant, Dynamic Supplies Pty Limited (Dynamic), claims relief for contravention by the respondent, Tonnex International Pty Limited (Tonnex), of ss 52, 53(a), 53(c) and 53(eb) of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and for copyright infringement.

2    The claims relating to contravention of the Trade Practices Act concern a number of representations identified in the pleadings as:

(a)    the genuineness representation;

(b)    the first reliability representation;

(c)    the second reliability representation; and

(d)    the tax free representation.

3    The pleadings also identify two innominate representations which can be called, respectively, the Australian-made representation and the Australian jobs representation.

4    These representations are said to have been made by Tonnex on its website or in its promotional literature. Dynamic’s claims arise in a context where Tonnex is a wholesale supplier of printer and computer consumables to resellers of such products in Australia.

5    Despite recent amendments made by the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth), the Trade Practices Act continues to apply to this proceeding: see Sch 7 Subitem 7(1) of the amending Act.

6    The copyright infringement claim is in relation to a compatibility chart for printer and computer consumables supplied by Dynamic.

7    On 30 April 2010 I made an order that all issues of liability other than in respect of damages or other pecuniary relief under the Trade Practices Act and the Copyright Act 1968 (the Copyright Act) were to be determined separately and before all other issues in the proceeding. These reasons relate to that separate question.

8    It is convenient to deal with the copyright infringement claim first.

the copyright INFRINGEMENT claim

The nature of the copyright work

9    As I have noted, the work is a compatibility chart for printer and computer consumables.

10     Dynamic has characterised the work as a compilation in which the features of originality comprise the layout and format of information relating to the consumables by reference to specified ordered columns, the arrangement and order of information within the columns (particularly with respect to compatibility information) and the descriptions of the products.

11    The form of the work is identified as a file called the March 2008 CSV file.

12    A CSV file is a file in simple text format. It can be used to update a database table. The letters “CSV” stand for “comma separated values”. Each field value of a record in the file is separated from the next with a comma, although, to avoid conflict with existing commas in the text, other symbols can be used. A CSV file can be uploaded to a website where the information in it can be accessed in its entirety or searched to obtain specific information within the file.

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

14    Before dealing with the circumstances in which the compatibility chart was created in the form in which copyright is claimed, it is necessary to say something about the computer system used by Dynamic in the conduct of its business.

Dynamic’s computer system

15    Dynamic uses Navision enterprise resource planning software in a computer system which it calls “the Navision system”. The Navision system contains information relating to all the products that Dynamic supplies. This information is stored in a database (the Navision database). Dynamic has used this system since at least 2001. The information contained in the Navision database is continually maintained, with the aim of ensuring that it is as comprehensive as possible.

16    Dynamic creates, in electronic form, an “item card” for each of its products. These item cards can be viewed from a computer terminal which has access to the Navision system. The item card contains certain fields for information about, or relating to, the product. For example, there are fields for an item number, a product reference, a product description, colour/type information, yield information, supplier identification, manufacturer identification, pricing information, inventory information, and sales and purchase ordering information (by reference to certain States). The item card also has fields relating to the prices offered by a number of other competitive suppliers of the product. There is, for example, a field for Tonnex’s price for the product and a corresponding date field referable to that offered price. Each item card has 47 fields.

17    The “item number” field is used for a product code that is generated by Dynamic. In most cases the product code used by Dynamic will differ from an OEM’s own product code, although there are occasions when the two product codes will be the same.

18    The “description” field is used for a description of the product that is usually unique to Dynamic. Although it is common for OEMs to provide a description of a particular product, Dynamic usually amends this description to ensure that it is consistent with information already stored in the Navision database. The information in this field is restricted by the number of characters permitted in the Navision database.

19    The “product reference” field is used to identify the machine or machines for which the product in the item card is compatible.

20    The fields in the item card are populated by Dynamic’s employees engaged in data entry. The Navision system does not allow the “pasting” of information which has been copied from another source. The information must be entered manually. The Navision system includes a function which enables a user to run a report called a “Change Log” which identifies all changes made to the information in certain fields in the system. Information in the product reference field is usually entered alphabetically and numerically, although there are no formal guidelines in place in this regard. It is Dynamic’s practice to update item cards or, as the case may be, create a new item card, as soon as relevant information becomes available to it.

21    The information used to populate the fields in an item card is derived from a number of sources, including information received from OEMs with whom Dynamic has a distribution arrangement, Internet searches, customers, other Australian distributors and overseas suppliers. Each employee who plays a role in entering information into the Navision database is likely to have different sources of information for the material which he or she enters. There is no fixed method by which the information derived from the various sources is entered into the Navision database.

22    Dynamic obtains product information from OEMs in a number of ways. It is common practice for OEMs to issue product literature in a variety of forms containing product specifications in relation to existing, new and upgraded products. Sometimes this information is in the form of an Excel spreadsheet. Information from an OEM is usually distributed by email and relates to such things as product codes, product descriptions, compatibility information, yield information and customer buying prices. Sometimes an employee of Dynamic will make direct contact with an OEM by telephone to obtain information. Sometimes Dynamic will obtain information from product packaging. The information from OEMs for which Dynamic is an authorised distributor is Dynamic’s primary source of information entered into the Navision database in respect of those products.

23    Dynamic obtains information from a number of sources using the Internet. The sources include OEMs’ websites and even the websites of Dynamic’s own customers. On some occasions in the past, Dynamic has even used the eBay website to obtain product information. There is no “pattern” to the websites that provide the information that Dynamic uses. Dynamic usually undertakes a general search by reference to criteria such as part numbers or codes, machine models or product names, using the Google search engine. Dynamic does not regard all websites as providing accurate information and will usually seek confirmatory information from an alternative source if the initial source is considered to be unreliable.

24    Dynamic obtains information as a result of customer feedback. This is usually obtained through Dynamic’s sales staff, who send information by email which is then used to update the Navision database or to initiate inquiries which yield information that is entered into the Navision database. Sometimes direct contact is made by a customer providing information to Dynamic, such as by notifying Dynamic that a new model of printer has been released which is compatible with an existing product supplied by Dynamic, or by informing Dynamic that certain products do not work with machines listed in Dynamic’s compatibility charts.

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

26    Dynamic issues three forms of price list: a “tab delimited” price list, an Excel price list and a PDF price list. Each price list contains a compatibility chart. Each price list is issued by email. Each price list has varied functionalities that enable recipients to select their preferred format.

27    The tab delimited price list enables information to be imported into it while still preserving its format. The information appears in plain text form with different fields separated by tabs. Since about September 2007 the information in the tab delimited price list has been extracted directly from the Navision database. The information contained in the tab delimited price list, including the compatibility chart, is the most up to date information that Dynamic has available to it.

28    The information contained in the Excel and PDF forms of the price list is not extracted directly from the Navision database. These forms of price list are managed separately and require information (including the compatibility charts) to be entered manually. The information is not always as comprehensive or as up to date as the tab delimited price list. Nevertheless, the information that is stored in the Navision database is the primary source for the information in these price lists.

29    Dynamic maintains a website. The website contains a search function that enables users to search all products that are sold by Dynamic. The website does not contain prices, but does contain a compatibility chart similar to that which appears in the tab delimited form of price list.

30    The compatibility information that is made available to the public by searching the website is extracted from the Navision database and provided to the website by the following steps. First, information is exported from the Navision database into a text file. Next, the text file is corrected for errors and then formatted. Lastly, the text file is uploaded to Dynamic’s web server.

The creation of the work in suit

31    Mark Campbell commenced employment with Dynamic in 2001. At that time he performed a sales function. In 2004, while still working in sales, he assumed the role of managing Dynamic’s price lists. In this role Mr Campbell was involved in updating the price lists, creating various versions of the price lists and arranging for their distribution in printed and electronic form. By 2007 his role had expanded to include responsibility for the graphic design of all printed materials used by Dynamic to promote its business, and the co-ordination and maintenance of Dynamic’s website. He continued to perform a sales function, albeit in a more limited way.

32    In about June 2007, Mr Campbell decided that it would be convenient and beneficial for Dynamic’s customers and sales staff to have searchable compatibility information in a simple form on Dynamic’s website. To accomplish this, he commenced a development project in which he considered how information contained in the Navision database might be extracted and displayed on Dynamic’s website. This task involved him deciding what information should be included in the compatibility chart and, correspondingly, what information should be excluded, to achieve his intended goal. In this task he relied on his own sales experience in deciding what information was relevant and important to customers. He also consulted other sales employees of Dynamic.

33    Whilst the information in this new compatibility chart needed to be sufficiently comprehensive to satisfy customer needs, Mr Campbell realised that the information also needed to be arranged in a format that was easy to read and, when presented in the medium of a webpage, easy to navigate. Mr Campbell said that he prepared various layouts of information which he subsequently revised after consultation with Dynamic’s management and his colleagues in marketing.

34    Mr Campbell gave evidence about why the information in the columns of the new compatibility chart was selected by him from the Navision database, and why other information was excluded by him. It is to be recalled in this regard that each item card in the Navision database has 47 fields. Mr Campbell’s evidence was as follows:

(a)    Dynamic’s product code. Dynamic publishes its product codes in price lists and other promotional material. While it is possible for a customer to purchase products from Dynamic without quoting Dynamic’s product code, this code must nevertheless be used and entered by Dynamic when an order is processed. It is essential information for the ordering process. The compatibility chart can therefore be used to ascertain Dynamic’s product code by entering other information supplied by the customer in the search function on Dynamic’s webpage at the time the product is ordered.

(b)    The OEM code. Mr Campbell gave evidence that it was his experience that a customer will usually have the OEM code for a product because it will appear on the packaging for that product. The OEM code is therefore one important means by which Dynamic’s corresponding product code can be ascertained in the ordering process.

(c)    OEM. Mr Campbell gave evidence that this information is particularly important for the functionality of the search tool used with the compatibility chart. If a person wishes to limit a search to a particular OEM, the separate identification of the OEM in this column enables the information to be filtered to produce only results for the selected OEM. The inclusion of this column is also important because it enables a customer to easily identify the OEM when looking at the results of a search, if that search is conducted across a number of OEMs. Mr Campbell said that the ease of identification of information was an important goal in his development process.

(d)    Product description. The information in this column is restricted by the number of characters used in the corresponding field of the Navision database. The purpose of this information is to provide a description of the product in a simple form, but one which still enables the product to be identified. Sometimes an OEM uses an abbreviated form of the OEM code on the packaging of the product. Mr Campbell gave the example of the vendor code for a Hewlett Packard product “C8721WA” where the packaging for the product also uses the code HP #02 Black. The description for this product in the product description column of the compatibility chart is “HP #02 Black Ink Cart C8721WA”. Mr Campbell’s evidence was that if an OEM uses an abbreviated form of code, it will most likely appear in the product description column of the compatibility chart. If the customer only has the abbreviated form of the OEM code, the compatibility chart would enable the customer, or one of Dynamic’s employees, to identify Dynamic’s product code.

(e)    Colour. This column is used for the identification of the colour of the ink or toner product. It is also used to reference products which are neither ink nor toner products, such as drum units. Mr Campbell separated this information in a distinct column for ease of identification.

(f)    Yield. While a person using the search function would not use the yield information as a search tool, Mr Campbell nevertheless regarded it as useful information for customers and, hence, relevant and appropriate information to be included in the compatibility chart.

(g)    Product category. This column represents how Dynamic categorises a product in the Navision database, for example, as fax, ink, toner or hardware.

(h)    Printer models. The information in this column has been extracted from the product reference field in the Navision database. This column gives information about printer models that are compatible with the product sold by Dynamic. Mr Campbell’s evidence was that, in conjunction with the OEM code, this column was probably the reference field most used by customers. A feature of this column is the inclusion of information about compatible models from other OEMs where this information has become available to Dynamic. A product may be compatible with printer models from another OEM because of shared componentry. For example, the Hewlett Packard product with the Dynamic product code HT12 has both Hewlett Packard and Canon printer models listed in this column. Mr Campbell’s evidence was that, to the best of his knowledge, OEMs do not promote cross-compatibility with the competing products of other OEMs. The provenance of this information lies in the information-gathering undertaken by Dynamic’s employees. The most prevalent examples are certain Canon and Hewlett Packard laser cartridges which are interchangeable. The benefit to a customer is that it may select a cross-compatible cartridge which is cheaper or available.

(i)    Image. This column indicates whether there is an image of the product available for viewing by a customer. An image, where available, may be used by a customer to confirm the identity of the product by visual reference.

35    Mr Campbell gave evidence that it was easy to exclude some information in the Navision database from the compatibility chart. Information on pricing, for example, was foreign to the purpose for which the chart was to be created. Some other information, which was excluded, could have been included in the compatibility chart because it would have been relevant information about Dynamic’s products and, therefore, of potential use to customers. This included information contained in the “Comments” field of the Navision database about pack sizes and carton quantities, as well as information about the weight and dimensions of a particular product (important for shipping purposes). However, Mr Campbell had to determine what information was “core” to customer needs, to ensure that the compatibility chart did not become cluttered with information.

36    Mr Campbell’s evidence was that, in the course of determining what information should be included in the compatibility chart, he reviewed all the product data in the Navision database before settling on the information contained in the columns (other than the image column) to which I have referred. He said that he was aware from this work that some of the information was incomplete, particularly information on yields and colours. He was concerned that, in this state of affairs, the compatibility chart would present poorly unless this information was made complete in the Navision database. He was also concerned that the printer model compatibility information had not been entered in the Navision database in a systematic or ordered way.

37    With these concerns in mind he approached Dynamic’s management to suggest that this information in the Navision database be updated. He also suggested that the information in the database on printer model compatibility be arranged to follow a hierarchy of letters and numbers. This approach led to the review of the Navision database, to which I have earlier referred.

38    On 15 August 2007 the compatibility chart went “live” on the website. It was uploaded to Dynamic’s website in the form of a CSV file. A number of separate CSV files have since been created by Mr Campbell for this purpose, to take account of changed information as a consequence of the Navision database having been updated from time to time with new products and new information. Dynamic has retained some, but not all, of these files. Once a CSV file has been used to update the website, there is no specific business reason why it needs to be retained.

39    In November 2008, three additional columns were added to the compatibility chart to give “stock on hand” information for each product in Brisbane, Melbourne and Perth, respectively. These columns are not of present relevance because, as I have indicated, the work in suit is the March 2008 CSV file. This file was uploaded to Dynamic’s website on 7 March 2008. However, the “core” columns I have identified have been elements of all iterations of the CSV file used to provide the compatibility chart on the website.

40    Mr Campbell gave evidence of the procedure he followed when preparing a CSV file to update the compatibility chart. He expressly related this evidence to the creation of the March 2008 CSV file. The substance of that evidence is as follows.

41    The words and symbols used by Mr Campbell to populate the columns of the compatibility chart (with the exception of the image column) were chosen by him from selected fields in the Navision database and extracted into a text file. He then opened the text file using Microsoft Excel.

42    The information appearing in the text file contained some extraneous information. The extraneous information included, for example, information on promotional products (“Christmas hampers”, “vouchers” and “IT items” (such as laptop computers and televisions)) and customer-specific products (including products with customer branding). It also included some pricing information.

43    This extraneous information was “cleaned out” by Mr Campbell. He also made formatting changes. For example, he sought to ensure that spacing was consistent in the file. He also deleted inverted comma symbols out of concern that these might cause problems when uploading the compatibility chart (in the form of the March 2008 CSV file) to Dynamic’s website. He then saved the text file as an Excel file and as a CSV file before uploading the March 2008 CSV file to Dynamic’s website where it could be viewed and searched.

44    He created another CSV file of this type on 9 April 2008. A person who conducted a search of all products on Dynamic’s website between 7 March 2008 and 9 April 2008 could “cut and paste” text displayed on the website into another file. In so doing, all of the content of the website represented by the compatibility chart (in the form of the March 2008 CSV file) could have been reproduced.

45    The evidence shows that the new compatibility chart was well-received by Dynamic’s customers at the time of its initial launch on Dynamic’s website in August 2007. The evidence also suggests that the new compatibility chart was responsible for a significant increase in the number of visits to the website.

Does copyright subsist in the compatibility chart in the form of the March 2008 CSV file?

46    At the hearing the parties were in agreement that the compatibility chart, as represented by the March 2008 CSV file, was a compilation expressed in words, figures or symbols and, hence, a literary work for the purposes of the Copyright Act. The issue that divided the parties at the hearing was whether the compatibility chart was an original literary work which attracted copyright: see s 32 of the Copyright Act.

47    The relevant legal principles are not in doubt. It is sufficient for me to merely note the following matters of particular relevance to the present case.

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

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

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

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

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

52    Where the efforts of more than one individual are involved, the question arises whether the work is a “work of joint authorship”. Section 10(1) of the Copyright Act defines a “work of joint authorship” as:

… 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.

53    This definition makes it clear that collaboration and contribution are the central underpinning characteristics of a work of joint authorship. It also makes it clear that the contribution must be of a special type: it must be “not separate” from the contribution of others properly considered to be authors. The precise additional limit intended to be imposed by that requirement is not clear.

54    In Cala Homes (South) Limited v Alfred McAlpine Homes East Limited [1995] FSR 818 Laddie J, in dealing with the similar (but not identical) definition of “work of joint authorship” in s 10(1) of the Copyright, Designs and Patents Act 1988 (UK), said (at 835-836):

… where two or more people collaborate in the creation of a work and each contributes a significant part of the skill and labour protected by the copyright, then they are joint authors.

55    Other cases have suggested that when two persons collaborate with each other and, with a common design, produce a literary work, they should be regarded as joint authors: Levy v Rutley (1871) 6 LRCP 523 at 528, 529, 530; Najma Heptulla v Orient Longman Limited [1989] FSR 598 at 608.

56    These cases do not, in terms, address the requirement that, in relation to a work, the contribution of each author be “not separate” from the contribution of the other author or authors. However, one matter is clear: the contribution must be to the work that is the particular subject of copyright protection, not some other work.

57    In order to address the issue of copyright subsistence, as presented for trial, it is necessary to understand the precise way in which Dynamic put its case on the question of originality.

58    Dynamic submitted that Mr Campbell “composed” a “unique layout” presenting nine columns of information, having “both vertical and horizontal relationships”, with each column arranged so that, for each line entry, “interconnected” cross-referencing was available. Dynamic submitted that each column by itself was of little utility; it was the “cross-referencing of information in multiple columns that impart[ed] the necessary information to customers”.

59    Dynamic placed particular significance on the column containing the product description and the column containing the description of the printer models for which the particular product was compatible.

60    With respect to the product description, Dynamic drew attention to the fact that the restricted number of characters in this column provided a description of the product in its simplest form but which still enabled identification of the product in question.

61    With respect to the description of the compatible printer models, Dynamic drew attention to the fact that, according to Mr Campbell, this column of information was the one most utilised by customers and that the information had been obtained “by painstaking effort after a process of selecting information from a range of sources”.

62    Dynamic also referred to Mr Campbell’s involvement in seeking to have the “colour/type” and “yield” fields in the Navision database populated where that information was missing, and in seeking to have the printer compatibility information in the database populated in a particular way (specifically, alphabetically and numerically) rather than the unordered way in which that information had been presented previously.

63    In this connection Dynamic also pointed to the work undertaken, principally, by Ms Sacristan and, to a lesser extent, by other employees of Dynamic who had contributed by making entries in the Navision database.

64    Therefore it can be seen that, for originality, Dynamic relied not only on the selection of information and its arrangement by reference to columns dealing with different subject matter (being selected identifiers or characteristics of each product) in the March 2008 CSV file, but also the original gathering of the information and its form of expression and arrangement within the Navision database, particularly with respect to the product description and printer models fields in that database.

65    Dynamic submitted that the gathering, selection and arrangement of information and its fixation in material form (in the form of the March 2008 CSV file) was primarily the result of the efforts of Mr Campbell and Ms Sacristan. It submitted that “their efforts culminated in the intersection of content and arrangement which is represented in the whole of the [March 2008 CSV file] and which gives the work its essential character”. In short, it submitted that they were joint authors of that work. It also submitted that other employees of Dynamic who had been involved in entering information with respect to products in the Navision database might also be joint authors. There was an implicit suggestion in this submission that it was not necessary to determine who the authors of the March 2008 CSV file were because, on any view, the range of possible authors had been identified as employees of Dynamic, with the consequence that Dynamic owned the relevant copyright, by dint of s 35(6) of the Act.

66    As an alternative but secondary submission, Dynamic submitted that Mr Campbell was the sole author of the work. It contended that acceptance of this alternative submission did not materially affect the analysis or conclusions for which it contended in relation to either the subsistence of copyright or its infringement.

67    Tonnex, for its part, submitted that originality could only exist in the selection of material and in the way the material was ordered or laid out. It submitted that the skill and labour involved in that task was minimal. It submitted, in particular, that there was no real selection of material to be incorporated into the compatibility chart: the material was “obvious” and applied to every new product released by manufacturers whose products were supplied by Dynamic. Similarly, it submitted, that there was nothing “original” in ordering or laying out the information within each column: the information was laid out logically, and in alphabetical and numerical order.

68    In this latter regard, Tonnex relied specifically on the following passage of the judgment of French CJ, Crennan and Kiefel JJ in IceTV at [43]:

… Whether a selection or arrangement of elements constitutes a substantial part of a work depends on the degree of originality of that selection or arrangement. In this case, a chronological arrangement of times at which programmes will be broadcast is obvious and prosaic, and plainly lacks the requisite originality.

69    In considering the significance of this passage to the present case, it is to be remembered that, in IceTV, the subsistence of copyright in the relevant work (the Weekly Schedule in respect of particular television broadcasts) had been conceded. The question of originality in that case arose in relation to the issue of infringement, specifically whether the impugned work reproduced a substantial part of the claimed copyright work. In that context the degree of originality of the particular form of expression allegedly taken is critical to the issue of whether a substantial part of the copyright work has been reproduced. However, it remains that the question of the subsistence of copyright in the Weekly Schedule was not the issue in that case.

70    Tonnex also submitted that there was confusion in Dynamic’s case in relation to the issues of authorship; in relation to the identity of the work the subject of the copyright claims, and in relation to the identity of the protectable expression. In essence, Tonnex submitted that there was confusion in Dynamic’s case between a claim for copyright in the compatibility chart and a claim for copyright in the Navision database.

71    There is substance to this criticism. It is true that there is some connection between (a) the work that was undertaken to review (or, to use Mr Campbell’s expression, to “overhaul”) the Navision database from about June 2007 by completing certain information in the database and by reordering, in certain respects, the information in it, and (b) Mr Campbell’s work in creating the compatibility chart itself. The Navision database was, after all, the source from which Mr Campbell proposed to make his selections, and he wanted the information from the item cards that he intended to use in the compatibility chart to be as complete as possible and to conform to certain conventions. But the Navision database did not exist simply to be the source of information for use in a compatibility chart. It existed for the purpose of managing Dynamic’s inventory of products, regardless of the means by which those products might come to be promoted to Dynamic’s customers.

72    Therefore, it is necessary to keep firmly in view Dynamic’s case that it was the copyright in the March 2008 CSV file that had been infringed. The question of copyright subsistence must be addressed by reference to the creation of the March 2008 CSV file, not the Navision database for which no copyright claim has been made.

73    The evidence establishes that the desirability of adding to the Navision database and arranging the compatibility information alphabetically and numerically was Mr Campbell’s conception, but that the intellectual endeavour in undertaking those tasks fell substantially to others, and to Ms Sacristan in particular. The change logs for the period 1 July 2007 to 7 March 2008 are in evidence. They show that, by far, Ms Sacristan made the most changes (Dynamic submitted 75% of those changes). Mr Oscar Sacristan also made changes (Dynamic submitted 10% of those changes). All other changes were made by other employees, including Mr Campbell. In its written submissions Dynamic characterised the work of this last mentioned group as being de minimis. Beyond the change logs themselves (which, for the relevant period, are voluminous), no attempt has been made by other evidence or by submissions to analyse the changes that were made and to assess their relevance or extent so far as concerns the information that was actually selected by Mr Campbell for use in compiling the compatibility chart. On this state of the evidence I am unable to make any more definite finding than that, on a perusal of the change logs, most of the changes to the Navision database appear to have been made by Ms Sacristan.

74    While the motivation for some of that work was to provide data in a form that Mr Campbell could readily select for use in the compatibility chart, the evidence does not establish, in my view, that Ms Sacristan was a joint author of the compatibility chart itself. Still less does the evidence establish that any other employee of Dynamic was a joint author of the compatibility chart.

75    As I have noted, 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 or others. The evidence shows that Ms Sacristan (and others performing relevant data entry work relating to the Navision database) were engaged in a task that was really separate from the work that Mr Campbell was doing in creating the compatibility chart, which was conceived on his own initiative and brought to fruition by his own labours, albeit with the approval of Dynamic’s management. Neither Ms Sacristan nor any other person collaborated with Mr Campbell or played any role whatsoever in creating the compatibility chart, save for the indirect role of carrying out changes generally to the Navision database. Insofar as the changes to the database were concerned, each person making a change was carrying out his or her own separate work in that regard, albeit sometimes in accordance with conventions he or she was instructed to observe, against the background knowledge that some of this information would likely be used in the compatibility chart that Mr Campbell was compiling. But none was an author of the compatibility chart or, more specifically, of the March 2008 CSV file, which was created solely by Mr Campbell.

76    This finding, however, is not fatal to Dynamic’s case that copyright subsists in the March 2008 CSV file. Although the information in the file dealt with known facts about known products, it represented a collection of information brought together in a particular convenient arrangement by Mr Campbell that was designed to facilitate the searching and cross-referencing of information relating to a particular universe of products (namely, printer and computer consumables supplied by Dynamic).

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

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

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

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

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

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

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

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

85    I should record that Tonnex did not contest the issue of copyright subsistence on the basis that relevant connecting factors did not exist: see s 32 of the Copyright Act. I am satisfied on the evidence that first publication of the compatibility chart in the form of the March 2008 CSV file was in Australia when it was uploaded to Dynamic’s webpage on 7 March 2008 and thus made available to Dynamic’s Australian customers. Additionally, I am satisfied that Mr Campbell was the author of that work and, as such, was a person resident in Australia at that time. One or more of the connecting factors identified in s 32 of the Copyright Act are present.

86    As Mr Campbell was an employee of Dynamic at the time that the March 2008 CSV file was created, and as that work was created by Mr Campbell in pursuance of the terms of his employment, Dynamic is the owner of the copyright in the March 2008 CSV file: s 35(6) of the Copyright Act.

The alleged infringing works

87    Dynamic alleged that Tonnex had reproduced a substantial part of the March 2008 CSV file in the Tonnex International 2008 QTR 2 Price List, the Tonnex International February 2009 Price List and the Tonnex 2010 Price List. Each of these publications contain separate price lists (which also include some compatibility information) and separate compatibility charts, arranged together according to manufacturer. In order to understand the issues in this case, it is important to distinguish between the compatibility information included as part of the separate price lists and the separate compatibility charts arranged with those price lists. The relevant subject matter in this case is the separate compatibility charts.

88    In cross-examination Mr Rendell (to whose evidence I will refer in more detail) accepted that the separate compatibility charts in the Tonnex International 2008 QTR 2 Price List were also in the other two price lists. Dynamic’s submissions on the question of infringement were directed, therefore, to the compatibility charts in the Tonnex International 2008 QTR 2 Price List. For convenience, I will refer to those compatibility charts collectively as “Tonnex 2008”.

89    In this form, each compatibility chart adopted the same format. The information was arranged in five columns headed, respectively: OEM Code, Description, Yield, Product Type, and Printer Models. The columns and the information in this compilation dealt with the subject matter to be found in the second (OEM code), fourth (product description), sixth (yield), seventh (product category) and eighth (printer models) columns, respectively, of the March 2008 CSV file.

90    It is convenient at this stage to turn to Tonnex’s evidence of how Tonnex 2008 came to be compiled. This evidence was given by Mr Rendell.

Tonnex’s evidence

91    James Rendell is the National Marketing Manager for Tonnex. In July 2006 he took over responsibility for the production of Tonnex’s price lists. He made three affidavits which were read as part of Tonnex’s evidence in chief.

92    The thrust of Mr Rendell’s evidence in his first affidavit was that the information in Tonnex’s price lists, including the compatibility charts interspersed therein, was obtained through a lengthy process “which involved filtering through the previous product descriptions and product code data which was contained in both our Software Application inventory database and previously created inventory data files as stored on [Tonnex’s] network at the time”.

93    He referred to the “natural evolution of [Tonnex’s] operations” and the engagement of staff employed in the roles of inventory management “who were charged with the duty of adding new products into [Tonnex’s] systems, removing obsolete products, updating product details in accordance with vendor changes and updating product descriptions”.

94    He said that Tonnex gathers information from vendors, customers and the Internet in compiling its price lists and compatibility charts.

95    He said that the information in compatibility charts for these products would, by and large, be the same because this information is generally available from a variety of sources.

96    He specifically denied that Tonnex’s price lists and compatibility charts had been “formulated or developed by reference to [Dynamic’s] price lists and compatibility charts”.

97    In a subsequent affidavit (made as a consequence of the late service by Dynamic of additional affidavit evidence which I permitted to be read in chief), Mr Rendell elaborated on the process by which Tonnex’s price lists and compatibility charts were created. In this affidavit Mr Rendell recounted the history of the production of Tonnex’s price lists in PDF form since the first price list of that kind came to be produced in September 2006. This price list included various OEM-produced compatibility charts which were stored in various file formats in electronic form. Although Mr Rendell considered this price list to be well-designed and laid out, he found that it could not be updated quickly because of the fact that the file was created in Adobe Illustrator format. He also found the file size to be unduly large for email transmission to customers.

98    The next price list that was produced by Tonnex was in October 2007. This price list was produced in electronic form in Microsoft Excel format, making it easier to email to customers. The file contained hyperlinks to various documents and webpages. Mr Rendell estimated that he spent approximately 100 hours in re-designing and reformatting the structure of this price list. This work, however, was largely spent in designing a graphical interface which included images and buttons. After testing the file, Mr Rendell decided to omit the OEM-produced compatibility charts because of their file size. However, after receiving feedback from employees in Tonnex’s sales department in the months following the publication of this price list, he came to the realisation that it would be of benefit to provide a CSV version of the price list, containing a user-friendly compatibility chart. Mr Rendell’s evidence was that it then became necessary to source information to compile such a chart. It was this work that led to the compilation of Tonnex 2008.

99    Mr Rendell said that multiple sources were involved in compiling Tonnex 2008, including Tonnex’s inventory management system, information stored on Tonnex’s “network” and “various other information compiled by internal staff across our purchasing, sales and marketing departments”. Mr Rendell said that the task of compiling the information was shared between himself and a marketing officer, Nigel Furtado. Mr Furtado worked under Mr Rendell’s general supervision. Mr Furtado did not make an affidavit in this proceeding relating to the work that he did in that regard. Mr Rendell said that Mr Furtado was no longer employed by Tonnex, having moved overseas earlier in 2010.

100    Mr Rendell said that online searches were also conducted to obtain information “where we could not establish sufficient information from our existing sources”. Mr Rendell said that he and Mr Furtado “resorted to a simple web search as it allowed an easy copy and paste of required data in our Excel file”. In cross-examination he said that the “cut and paste” operation involved, on occasions, selecting multiple products and relevant compatibility information in relation to those products, in the one step, and then incorporating selections of that kind into the Excel file, thereby allowing the information to be “cleaned up” into a format that matched the style guide he had created. In his affidavit Mr Rendell referred to the creation of this file as “a work in progress over many weeks until its completion in early April 2008”, involving feedback from internal sales and purchasing staff. In short, his evidence was that Tonnex 2008 was a work that was created independently of whatever information could be accessed from searching Dynamic’s (and, indeed, any other competitor’s) website.

Dynamic’s case on infringement

101    Dynamic disputed Mr Rendell’s claim that Tonnex 2008 had been independently created in the way described by him. It submitted that, when Tonnex 2008 was compared with the March 2008 CSV file, the Court should conclude that Tonnex 2008 had been indirectly copied from the March 2008 CSV file, by Mr Rendell and Mr Furtado cutting and pasting entries obtained from searching the compatibility information on Dynamic’s website, provided by means of the March 2008 CSV file.

102    Dynamic pointed to the fact that five of the nine columns of information in the March 2008 CSV file had been repeated, in the same sequence, in Tonnex 2008 and that each of the 1,683 product line entries in Tonnex 2008 was matched by an equivalent entry in the March 2008 CSV file (representing 60% of the product line entries in that file).

103    In respect of these entries, Dynamic pointed to the following matters:

(a)    The information in the OEM Code column in Tonnex 2008 was expressed in the same letters and numbers in the equivalent column in the March 2008 CSV file (including idiosyncratic hyphens and errors), in all but 58 cases.

(b)    The wording of the product description in the Description column in Tonnex 2008 matched the wording of the product description in the equivalent column in the March 2008 CSV file, except for what appear to have been systematic changes to certain terms which were likely to have been brought about by “global” corrections or changes having been made. In its written closing submissions, Dynamic produced a schedule describing the nature of these changes. It exemplified these changes in a separate document. I will return to the question of “global” changes.

(c)    The information in the Yield column in Tonnex 2008 was expressed in identical terms in the corresponding column in the March 2008 CSV file, except in one case.

(d)    The words and numerals appearing in the Printer Models column in Tonnex 2008 (which gave the compatibility information) were identical to those appearing in the corresponding column of the March 2008 CSV file, except in four cases.

104    Tonnex did not dispute the details of this analysis. Its submissions were directed to other considerations to which I will refer.

105    One answer to these submissions could be that the information in Tonnex, being factual in nature, was quite capable of being obtained from a variety of sources in the way that Mr Rendell described in his evidence. However, Dynamic provided detailed particulars (56 pages) of 471 instances of what it described as indicia of copying (the copying indicia). It submitted that the copying indicia represented idiosyncratic features of the March 2008 CSV file that had found their way into Tonnex 2008. Dynamic submitted that the presence of these idiosyncrasies in Tonnex 2008 was only consistent with wholesale copying by Mr Rendell and Mr Furtado of the March 2008 CSV file indirectly from Dynamic’s website.

106    A small number of examples will serve to illustrate Dynamic’s submission:

(a)    OEM Code: In the March 2008 CSV file Dynamic used variously a hyphen between letters and numbers in the code. For example, in relation to Brother products, the code in the March 2008 CSV file was sometimes expressed using a hyphen (such as TN-2025 or TN-2130 or TN-2150) and, in other cases, without a hyphen (such as TN100 or TN200). Also, in relation to some of the OEM codes for Epson products, the letter “O” had been incorrectly used for the numeral “0”. The same variances in expression are shown in Tonnex 2008 with respect to the same product line entries.

(b)    Description: In cases where hyphens were used in the OEM code listed in the March 2008 CSV file, it did not follow that hyphens were used in the corresponding product description. To use the examples previously given, for OEM code TN-2025 the product description was Brother TN2025 Toner; for OEM code TN-2130 the product description was Brother TN2130 Toner, and for OEM code TN-2150 the product description was Brother TN2150 Toner. In other cases, where an OEM code included a hyphen, the hyphen was carried over into the product description. For example, for OEM code TN-12BK the description was Brother TN-12 Black Toner. Similarly, sometimes the letter “O” had been used incorrectly for the numeral “0” in the product description. Where this error was present, it was not necessarily reflected correspondingly in the OEM code. The same variances in expression are shown in Tonnex 2008 with respect to the same product line entries.

(c)    Yield: In cases where yield information was missing in relation to a particular product in the March 2008 CSV file, the same information was correspondingly missing in Tonnex 2008.

(d)    Printer Models: This information yielded an extremely large number of different examples of idiosyncratic expression in relation to compatibility information. Despite Dynamic’s attempt to systematically order the compatibility information in the product reference field in the Navision database, it is clear on examining the corresponding compatibility information in the printer models column of the March 2008 CSV file that this information was not always entered in an alphabetical and numerical sequence in the Navision database. Also, the information was not always expressed in a consistent form. Capitalisation was used variously (for example FAX/Fax; STYLUS PHOTO/Stylus Photo; PictureMate/Picturemate; E-Studio / e-studio / e-Studio / E Studio / Estudio). Sometimes a product descriptor was used before each compatible model number and sometimes the descriptor was used only at the beginning of a sequence of product model numbers (for example, FAX 2850, FAX 8070P, and so on, compared with Fax 1010, 1020, 1025, 1030, and so on). There were variances in spelling (for example, Colour/Color). There were variances in abbreviation (for example, Clr/Col for colour; BK/Bk/Blk for Black; Mag/Magent for Magenta; Yel/Yell for Yellow). There were variances in the use of complete words and abbreviations. There were variances in description (for example, Laserjet/LaserJet/Laser Jet/LJ/HP Laser Jet; Deskjet/DeskJet/deskjet; Officejet/OfficeJet/OJet/Oj). Quite apart from these matters, the compatibility information in the relevant column of the March 2008 CSV file contained misspellings, inconsistent spacing, erroneous product references (including non-existent products) and obviously erroneous or redundant punctuation. Also within this column of information in the March 2008 CSV file there were numerous instances of multiple idiosyncratic expression. The same variances in expression are shown in Tonnex 2008 with respect to the same product line entries.

107    When one works through all instances of the copying indicia (as I have done), the following matters become abundantly clear.

108    First, in relation to the March 2008 CSV file there are a great many examples of the use of idiosyncratic expressions, including multiple idiosyncratic expressions present within and across columns in relation to the one product line entry. Given the evidence that data was entered into the Navision database manually, rather than by a “cut and paste” operation, and given that the particularised examples of these indicia are so numerous, I am satisfied that these idiosyncrasies arise from either data entry errors or decisions deliberately but inconsistently made by Dynamic’s employees as to how the data should be entered in the Navision database.

109    Secondly, one cannot help but be struck by the sheer number of instances of precisely the same expression used within and across columns in relation to the very same products itemised in Tonnex 2008. It is inconceivable, in my view, that the same idiosyncrasies, in the same number and combination, and in relation to the same products, found their way into Tonnex 2008 by chance.

110    Mr Rendell said that the sources of information he used to compile Tonnex 2008 included Tonnex’s own database of information collected by Tonnex’s employees. This information was said to have been used in Tonnex’s price lists (which, as I have noted, also include compatibility information). However, it was persuasively demonstrated in Mr Rendell’s cross-examination that there were clear differences between the compatibility information in the price lists and the compatibility information in Tonnex 2008. I am satisfied that the Tonnex database was not the source for the expression of compatibility information that found its way into Tonnex 2008. Indeed, in his oral evidence, Mr Rendell referred to the fact that compiling Tonnex 2008 was a separate exercise to compiling the other compatibility information in Tonnex’s price lists.

111    As I have noted, Mr Rendell denied that he had used a competitor’s website (and Dynamic’s website in particular) to “cut and paste” information into the file that was used to create Tonnex 2008. He said that the website information he used came from “e-commerce” websites. However, he could not remember what sites he had used; nor could he provide any working papers which showed the investigatory trail that either he or Mr Furtado followed at the time. Indeed, he could only describe in broad terms the general process that he undertook (and the process he believed that Mr Furtado undertook) in compiling Tonnex 2008.

112    Mr Rendell sought to illustrate this general process by undertaking an exercise in August 2010 in which he selected examples of the expression of information from the copying indicia, as well as some other entries in Tonnex 2008. He made a general web search against these examples and then charted the results. The conclusion which Tonnex sought to demonstrate from this exercise was that, for each selection, the expression of the information was either an exact match for the expression of the same information in Tonnex 2008 and in the corresponding column of the March 2008 CSV file or, if not an exact match, an illustration that the same information could be obtained from numerous sources by undertaking the general process he had described.

113    This exercise did in fact show what Mr Rendell had sought to illustrate. But there were a number of deficiencies in his methodology which show that Tonnex’s defence is not significantly advanced by the results of the exercise.

114    First, the exercise did not purport to represent what Mr Rendell or Mr Furtado actually did at the time they compiled Tonnex 2008. Specifically, the exercise did not purport to identify the websites from which Mr Rendell or Mr Furtado actually obtained information and carried out the “cut and paste” operations to which Mr Rendell referred.

115    Secondly, Mr Rendell’s exercise in August 2010 involved searching against a known form of expression (that is, the information in a particular column with respect to a particular product item in Tonnex 2008) rather than searching for separate items of information that, collectively, might go to make up the expression adopted by Tonnex in Tonnex 2008.

116    Thirdly, in carrying out his exercise, Mr Rendell looked at particular alleged instances of idiosyncratic expression by reference to a discrete column of information in Tonnex 2008. He did not look at multiple columns in Tonnex 2008 with respect to a particular product line entry. However, as I have noted, the idiosyncrasies identified by Dynamic included, in many cases, multiple idiosyncrasies across columns in relation to the one product line entry. Mr Rendell’s exercise did not address this feature of the comparison between Tonnex 2008 and the March 2008 CSV file.

117    Fourthly, the exercise carried out by Mr Rendell in August 2010 was undertaken at a time far removed from the time when Tonnex 2008 was compiled. It is simply not known on the evidence whether the information extracted from the websites as part of Mr Rendell’s exercise in 2010 was information that was displayed on those websites at the time that Mr Rendell and Mr Furtado compiled Tonnex 2008 or, indeed, whether the particular websites themselves were even in existence. For example, in the course of Mr Rendell’s cross-examination Dynamic showed that at least one of the results obtained by Mr Rendell as part of this exercise related to a product that was not even part of the particular supplier’s catalogue until 13 April 2009. Plainly enough, the website of this supplier could not have been a source of information for Mr Rendell or Mr Furtado in relation to that product at the time that Tonnex 2008 was compiled. This example left open the question of how many similar instances might exist in Mr Rendell’s exercise.

118    Fifthly, the source of the e-commerce suppliers’ information, as shown on the websites visited by Mr Rendell as part of this exercise, is not known. It may be, for example, that the expression of this information was itself taken directly or indirectly from Dynamic’s own earlier published compatibility charts, such as the March 2008 CSV file.

119    What the exercise did not show was that, given the multiple idiosyncrasies to which I have referred, those same idiosyncrasies existed in relation to the same products in the same number and in the same combinations in a source of information that did not originate with Dynamic but which was nevertheless accessible to Tonnex for copying, in that form, at a time prior to 7 March 2008, into an Excel file by “cut and paste” operations.

120    There are, however, other features of Tonnex 2008 to which reference should be made.

121    It was part of Tonnex’s case that it only supplied OEM products as opposed to generic or “white box” products that were compatible with or substitutable for OEM products. This was made clear in Mr Rendell’s evidence. It was also made clear by Mr Kozman, one of Tonnex’s directors.

122    Dynamic supplies generic products as well as OEM products. Both generic and OEM products were listed in the March 2008 CSV file. The entries for generic products were cross-referenced against the OEM codes for the products with which they are compatible. Thus a search made on Dynamic’s website (after the March 2008 CSV file had been uploaded) against the OEM code for a particular product would throw up both the OEM product and corresponding compatible generic product that Dynamic supplied at that time. The product description in the line entry for the generic product used the word “compatible” (or some form of it) to indicate the compatibility of the generic product with the printer models of the OEM.

123    There are instances in Tonnex 2008 where references to certain products listed under a particular OEM code have been duplicated. These instances relate to Canon and Kyocera products. In the case of the duplicated entries, the product description is the same as that appearing in the corresponding column in the March 2008 CSV file with respect to the generic product supplied by Dynamic, including use of the word “compatible” (or some form of it). There are a number of examples of this.

124    Mr Rendell was unable to explain this apparent duplication in Tonnex 2008 and the fact that the word “compatible” (or some form of it) was used in the product description in the duplicate entry. Mr Kozman disputed that there was duplication for some Canon products listed in Tonnex 2008. His explanation was that Canon had different code numbers for different regions and that the apparently duplicated entry must have been referring to the same Canon product from a different region. Mr Kozman said that, in those instances, it was appropriate to use the word “compatible” as part of the product description. I do not accept this explanation. It defies a commonsense reading of the relevant entries in Tonnex 2008 and ignores the fact that the obviously duplicated entries in Tonnex 2008 did not use different OEM codes for different regions, but the same OEM code.

125    From this I conclude that: (a) in Tonnex 2008, Tonnex duplicated certain entries it had made; (b) these entries were in fact redundant because, by the product description, they plainly relate to products of a kind that Tonnex said it does not supply (that is, generic compatible products); and (c) these redundant entries correspond with actual entries in the March 2008 CSV file which were separately listed by Dynamic because they were separate product items in Dynamic’s catalogue which it, unlike Tonnex, does supply as generic products that are compatible with OEM products. I am satisfied that these entries in Tonnex 2008 have been copied from Dynamic’s website and thus indirectly copied from the March 2008 CSV file.

126    Another feature relates to the question of “global” changes. As I have noted, Dynamic submitted that the wording of the product descriptions in Tonnex 2008 matched the wording of the product descriptions in the equivalent column of the March 2008 CSV file, except for what appear to have been systematic “global” changes. Many instances of this were noted. I will not describe all of them in these reasons. It will suffice to refer to some examples as illustrations. Examples include, in a number of instances:

(a)    references to “Cart” after the word “Ink” being replaced with “Cartridge”;

(b)    references to “Cart” or “Cartridge” after the word “Toner” being deleted;

(c)    references to “Mag” being replaced with “Magenta”; and

(d)    references to “Yel” being replaced with “Yellow”.

127    Dynamic submitted that the making of these “global” changes by Tonnex was evident from some anomalous product descriptions in Tonnex 2008. It submitted that these anomalies could be explained by Tonnex having copied product descriptions from the March 2008 CSV file (including demonstrable examples of inconsistencies in Dynamic’s own form of expression) and then having applied “global” changes to them when, in some cases, it was inappropriate to do so.

128    For example:

(a)    In the March 2008 CSV file the description of the Lexmark product identified by OEM code 10S0063, was “Lexm 10S0063 Toner Cartridge” (the abbreviation “Cart” for the word “Cartridge” not being used by Dynamic in this particular instance). Dynamic submitted that the corresponding description in Tonnex 2008 was corrupted when, in making a global change, Tonnex deleted the word “Cart” after the word “Toner”, so that “Toner Cartridge” in the March 2008 CSV file became “Tonerridge” in relation to the corresponding entry in Tonnex 2008.

(b)    In the March 2008 CSV file the description of the Xerox product identified by OEM code 106R01145 was “Xerox Phaser 6350 Magent Toner” (the abbreviation “Magent” rather than “Mag” being used by Dynamic in this particular instance). Dynamic submitted that the corresponding description in Tonnex 2008 was corrupted when, in making a global change, Tonnex replaced “Mag” with “Magenta”, so that “Magent” in the March 2008 CSV file became “Magentaent” in relation to the corresponding entry in Tonnex 2008. Similarly, when Dynamic used “Yell Toner” rather than “Yel Toner” the resulting global replacement by Tonnex of “Yel” with “Yellow” resulted in “Yell” in the March 2008 CSV file becoming “Yellowl” in the corresponding entry in Tonnex 2008.

129    Dynamic submitted that systematic “global” changes were also evident in the compatibility information in Tonnex 2008. In some instances Tonnex 2008 refers to “Deskjet PortaBlacke*” as a compatible product. The description “Deskjet PortaBlacke*” is plainly anomalous. There is no product so described. The corresponding compatibility information in the March 2008 CSV file refers to a “Deskjet Portable*”. The anomalous expression in Tonnex 2008 is consistent with global editing by the substitution of the word “Black” for the abbreviation “bl”, so that “Portable*” in the March 2008 CSV file became “PortaBlacke*” in the corresponding entry in Tonnex 2008. The presence of the asterisk in “Deskjet PortaBlacke*” in Tonnex 2008 is also significant in light of the description “Deskjet Portable*” in the March 2008 CSV file.

130    I am satisfied that these examples show that, in compiling Tonnex 2008, Tonnex not only made global changes but applied these changes to extracts from the March 2008 CSV file that had been copied by Tonnex.

131    It is clear on the evidence that a copy of the March 2008 CSV file was published on Dynamic’s website before Tonnex 2008 was created. Mr Rendell accepted that he kept an eye on Dynamic’s website in 2006, 2007 and 2008 and that, in 2008, Dynamic had moved from what he called a “typical website” to one that had a search function. He accepted that it was possible that he could have seen this new search function in March 2008 and that he “saw how it operated and how it worked and how it derived data”.

132    On the objective evidence, the similarities between Tonnex 2008 and the March 2008 CSV file, as to layout and format and the expression of information and its arrangement, are so numerous that I am satisfied, on the balance of probabilities, that large parts of Tonnex 2008 have been copied indirectly from the March 2008 CSV file. This copying occurred by a process which involved “cutting and pasting” from the compatibility chart on Dynamic’s website. This took place relatively shortly after the March 2008 CSV file had been uploaded to Dynamic’s website on 7 March 2008.

133    Although Mr Rendell gave his evidence in a careful and considered manner, and responded directly to questions put to him, his evidence in relation to the process that was undertaken in compiling Tonnex 2008 simply cannot stand with the overall and compelling picture presented by the detailed objective evidence adduced by Dynamic on the issue of copying. In the circumstances, I prefer the objective evidence. It follows from this conclusion that I reject Mr Rendell’s explanation that Tonnex 2008 was compiled only from information that was sourced from Tonnex’s own database and computer system or otherwise from websites that did not include competitors’ websites (particularly Dynamic’s website).

134    Tonnex submitted that, in light of all the evidence, Dynamic has not shown, on the balance of probabilities, that Tonnex had reproduced a substantial part of the March 2008 CSV file in Tonnex 2008. It submitted that the question of infringement overlapped the question of copyright subsistence and that it was necessary to show that Tonnex had appropriated the expression of the author’s (in this case, Mr Campbell’s) creative and intellectual effort, not merely individual items of information that were in the public domain. Tonnex stated the question for resolution as follows: Has, therefore, the respondent appropriated the selection and ordering of items which originated with the author?

135    Having considered and reflected on the objective evidence, I am satisfied that that question must be answered affirmatively. For the reasons I have given, I am satisfied that copying of the March 2008 CSV file has taken place. I am satisfied that, considered quantitatively and qualitatively, a substantial part of the March 2008 CSV file has been reproduced in Tonnex 2008.

136    In that regard, I am satisfied that the indicia of copying reflect, in a broad way, the minimum extent of the copying that has taken place. I conclude that the indicia of copying show that, more likely than not, Tonnex copied the OEM code, product description, yield information and printer models (compatibility) information with respect to each product line entry in the March 2008 CSV file to which the indicia relate. However, I infer that the extent of copying was far greater than that and, more likely than not, included substantial parts of the March 2008 CSV file not marked out by the use of idiosyncratic expression. It is not possible for me to be any more precise as to the extent of copying.

137     Also, although not all of the March 2008 CSV file was copied in Tonnex 2008, qualitatively important elements of it were copied. I refer in particular to the combination of the OEM code and the corresponding, particularly expressed, product descriptions and compatibility information that Mr Campbell had selected for the March 2008 CSV file. It was the selection of these elements that gave the March 2008 CSV file its essential character as a meaningful compatibility chart in relation to the products to which it referred. Equally, these elements gave Tonnex 2008 its essential character as a meaningful compatibility chart in relation to the products to which it referred. I do not ignore the yield information that I have found was also likely to have been copied. That element of the March 2008 CSV file does not, however, have the same qualitative significance for a compatibility chart as the other elements to which I have referred.

138    Elements not taken from the March 2008 CSV file were either obviously surplus to Tonnex’s requirements (such as Dynamic’s own product code or the separate identification of the manufacturer (given that Tonnex 2008 is arranged according to manufacturer)) or unnecessary, albeit possibly helpful, information, such as the information in the separate columns in the March 2008 CSV file giving manufacturer and colour information. The fact that this possibly helpful information (which itself contributed to the originality of the March 2008 CSV file as a literary work) was not taken does not mean that Tonnex 2008 is not a reproduction of a substantial part of the March 2008 CSV file.

139    Finally, the fact that Tonnex has reproduced a substantial part of the March 2008 CSV file is also evidenced by the fact that five of the nine columns of information in the March 2008 CSV file have been repeated, in the same sequence, in Tonnex 2008.

140    In light of Mr Rendell’s evidence that the compatibility charts comprised in Tonnex 2008 are included in the Tonnex International February 2009 Price List and the Tonnex 2010 Price List, the same conclusion must follow with respect to those publications. Tonnex did not seek to contend otherwise.

141    I am therefore satisfied, on the balance of probabilities, that Tonnex has infringed Dynamic’s copyright in the March 2008 CSV file.

the trade practices act claims

The genuineness and reliability representations

142    In submissions the parties dealt with the genuineness representation, the first reliability representation and the second reliability representation together.

143    Dynamic contended that these alleged representations were false and constituted conduct that was misleading or deceptive or likely to mislead or deceive, such that Tonnex has contravened ss 52, 53(a) and 53(c) of the Trade Practices Act.

144    As to the genuineness representation, Dynamic relied on the following discrete statement published by Tonnex on its website:

All our products are original OEM products only.

145    Dynamic contended that this statement conveyed a representation by Tonnex that it (Tonnex) can be certain that all printer and computer consumables (consumables) offered for sale or sold by it are genuine and not counterfeit. Significantly, Tonnex admitted that this representation was made by the published statement. It denied, however, that the representation was misleading or deceptive or likely to mislead or deceive, or was false.

146    As to the first reliability representation, Dynamic relied on the following discrete statement also published by Tonnex on its website:

Tonnex International stock all the top brands and offer actual 100% genuine OEM products. We understand that some suppliers state that they offer genuine products but don’t offer the real thing.

147    Dynamic contended that this statement was a representation by Tonnex that customers cannot rely upon other suppliers of consumables to offer for sale or sell genuine and not counterfeit products.

148    As to the second reliability representation, Dynamic relied on the following discrete statement published by Tonnex in a number of its brochures:

You can rely upon Tonnex to only ever sell 100% genuine OEM products. Don’t risk counterfeits – choose genuine – choose Tonnex.

149    Dynamic contended that this statement was a representation by Tonnex that customers can rely upon it and not its competitors to offer for sale or sell genuine and not counterfeit products.

150    In the case of each reliability representation, Tonnex denied that the alleged representation was made by the impugned statement. Consequently, in each case, Tonnex denied that, by making the statement, it engaged in conduct that was misleading or deceptive or likely to mislead or deceive, or that it had made a false representation.

151    The issues raised with respect to the genuineness representation and the two alleged reliability representations fall to be determined against the background of how Tonnex sources the products it supplies. It also falls to be determined in light of the evidence that was adduced in relation to the genuineness of products acquired in the so-called “grey market”. It is to this lastmentioned evidence that I turn first.

The “grey market” for computer consumables

152    It was common ground between the parties that OEMs appoint authorised distributors to sell their products. These products often pass through the hands of a number of suppliers in the chain of distribution before they reach the retail consumer. The sale of consumables at the wholesale level by persons who are not authorised distributors is referred to as “the grey market”.

153    It was Dynamic’s case that consumables sold by authorised distributors do not usually contain counterfeit products. However, there is an incidence of counterfeit products acquired on the “grey market”. Dynamic contended that those who acquire products from persons who are not authorised distributors cannot be certain that those products do not include counterfeits.

154    In support of its case, Dynamic adduced evidence from a licensed private investigator, Mr Arnold, who was experienced in the investigation of counterfeit consumables supplied in Australia, China and South-East Asia. These investigations were carried out on behalf of international OEMs.

155    Mr Arnold gave evidence that international OEMs go to significant lengths to prevent the counterfeiting of their products. Such manufacturers use sophisticated packaging, labelling and coding for their products in an attempt to distinguish them from counterfeits supplied in substitution for them. These techniques vary in their sophistication.

156    With respect to security labels, Mr Arnold said that the most sophisticated label technology was difficult to copy, to the point that it was sometimes uneconomic for counterfeiters to attempt to do so. On the other hand, security labels produced by less sophisticated technologies were, correspondingly, easier to copy. Mr Arnold said that one of the world’s largest manufacturers of consumables (measured by total sales value) in fact uses relatively less sophisticated colour shift technology in the production of its security labels and that, for that reason, it appeared to be the most attractive brand for counterfeiters to target. Mr Arnold said that he was aware that several brands of holographic and colour shifting security labels had been stolen from factories in China and that these had been sold over the Internet.

157    Mr Arnold also said that counterfeiters of consumables go to great lengths to copy packaging and product coding in an attempt to make their products look genuine. In his experience, most counterfeits are of reasonably good quality, so much so that, in the field, it has sometimes been necessary for him to send samples of what he believes to be counterfeit products to the laboratory of a manufacturer to determine their genuineness. He said that wholesalers and retailers of consumables do not normally have access to the confidential information of manufacturers that enables counterfeit products to be readily distinguished from genuine products. He said that price can be, but is not always, an indicator of counterfeit product.

158    Mr Arnold referred to the fact that consumables are delivered to distributors on pallets containing dozens or hundreds of individual products. These products are typically delivered into large warehouses where they are processed for further delivery. In some cases whole pallets are delivered by distributors to resellers; in other cases pallets are broken down for delivery. Mr Arnold said that it was his experience that warehouse staff who handle pallets of these products do not usually have the knowledge or concern to distinguish between genuine and counterfeit products. It was also his experience that it was a common practice of counterfeiters to mix counterfeit products with genuine products in an attempt to minimise the risk of detection.

159    In cross-examination Mr Arnold accepted that his current experience was really in relation to certain overseas markets and that he was not really familiar, at present, with the question of the presence of counterfeit products in Australia. This acceptance was made in the context of questions directed to Mr Arnold on the use of counterfeit labels, and stolen genuine labels, on counterfeit products. He also made it clear that his work was not really looking at the actual supply chain in relation to counterfeit products. He said that his clients were in America and that his investigative work was in relation to manufacturing in China and the initial supply of counterfeit products from China. His evidence thus stands qualified to the extent of these concessions. He nevertheless gave evidence in cross-examination about investigative work carried out by him in Australia in relation to suspected counterfeit consumables, including at Dynamic’s own premises (where, on his investigation, no counterfeit products were detected).

160    Mr Arnold’s evidence on the difficulty of detecting counterfeit consumables was supported by other evidence, given specifically in relation to the presence of such products on the Australian market. Morteza (Mory) Khadem is the managing director of a company called Phoenix Toner. Phoenix Toner was a wholesale supplier of spare parts and consumables. Phoenix Toner was an authorised distributor of a number of OEM products. It also supplied other OEM products for which it was not an authorised distributor. Those other products included Panasonic brand products. Phoenix Toner was one of Tonnex’s suppliers. Evidence was adduced of email correspondence in January 2009 between Phoenix Toner and another Australian supplier called Toner Warehouse, in which Mr Khadem alerted Ms Fryer, the managing director of Toner Warehouse, about dealing with a particular United States business which had an office in China. Relevantly, Mr Khadem said:

If…you intend to buy from him, I just wanted to warn you that their products are looking very genuine but they are counterfeit! We were dealing with them and we were ripped off.

161    When questioned on how hard it is to distinguish genuine from counterfeit products, Mr Khadem gave this evidence:

It is very, very difficult, even the experts cannot do that, unless you [pull] the cartridge apart and then take the toner, which is a powder, take it to the laboratory and they can analyse that and they can find out it is not genuine. But appearance, from the appearance, they look exactly the same.

The source of Tonnex’s products

162    Tonnex relied on George Kozman to give evidence about the source of Tonnex’s products. As I have stated, Mr Kozman is one of Tonnex’s directors. He is responsible, predominantly, for the financial aspects of Tonnex’s business. He also oversees its product distribution activities. He made two affidavits which were read in the proceeding. He was cross-examined on those affidavits. No other witness was put forward by Tonnex to give evidence about the source of its products.

163    In his first affidavit Mr Kozman said that Tonnex sources its consumables exclusively from authorised distributors in Australia and overseas. He developed this statement in the following paragraph of his affidavit:

In every case, the respondent sources products from authorised distributors. It does not deal with other traders. Because it deals only with authorised distributors, it can be completely confident that all the products thus acquired are genuine products and are not counterfeit products. Were the respondents to deal, as some other wholesalers in Australia may have done, with traders who are not authorised distributors, there is a risk, and possibly even a likelihood where products are priced significantly lower than genuine products, that products so obtained are counterfeit.

164    Mr Kozman retreated from this position in his second affidavit sworn on 16 August 2010. He said that, when making his first affidavit, he had overlooked the fact that Tonnex deals with two Australian suppliers (Aussie IT and United First) that are not authorised distributors of consumables. He said that he nevertheless remained confident that all of the products sourced from these suppliers were genuine products, based on: (a) differences in packaging and labelling between genuine and counterfeit products; (b) the substantial price difference between genuine and counterfeit products; (c) a belief that “punitive and invasive steps” would be taken against Tonnex should a major manufacturer become aware or suspect that Tonnex was selling counterfeit products, and (d) the fact that many of the Canon products purchased by Tonnex from United First were not available in Asia and could only be purchased through Canon Australia.

165    When challenged in cross-examination with the statement I have quoted from his first affidavit, Mr Kozman sought to qualify his reference to “traders” in that affidavit to mean persons who do not have a legitimate business but who operate as a “one man band” and buy, sell and move stock “all over the world”. I found this evidence to be unconvincing. On seeing and hearing Mr Kozman give this evidence in cross-examination, I gained the clear impression that he was seeking to protect Tonnex from what had become, at the time of the hearing, an inconvenient truth: Tonnex does not deal only with authorised distributors.

166    It is perfectly clear from his first affidavit that Mr Kozman was drawing a distinction between acquiring products from authorised distributors (where one could have confidence that the products were genuine products) and acquiring products from persons who were not authorised distributors (where there was a risk that the products were counterfeit). Significantly, in his second affidavit, Mr Kozman did not seek to qualify his use of the word “traders”, as he did in cross-examination.

167    Moreover, Mr Kozman did not seek to say in his second affidavit that Aussie IT or United First source all their products exclusively from authorised distributors. In respect of those suppliers, Mr Kozman relied only on the four indicia I have noted above to satisfy him that all of the products sourced from these suppliers were genuine products. The closest his affidavit came to connecting those suppliers with authorised distributors was the statement that “many” of the Canon products purchased by Tonnex from United First were not available in Asia and could only be purchased through Canon Australia. In the course of his cross-examination it became clear that this statement was based on what appears to have been remote hearsay. Mr Kozman had no personal knowledge of the fact he had asserted.

168    In cross-examination Mr Kozman accepted that Tonnex purchases products from a number of other suppliers that are not authorised distributors. Some of these were overseas suppliers. It is plain from his evidence that Tonnex purchases consumables on the so-called “grey market”.

169    Some of these suppliers were identified in Tonnex’s records as wholesalers; some were identified as sub-distributors. Mr Kozman said he regarded these suppliers as being reputable. The reasons he gave for that view were as follows:

When I say that I regard them as reputable organisations, I haven’t visited them, however, I’m aware of the type of business that they have, [the] sort of volume that they do because of the amounts of money that we send them. There’s a lot of trust involved because it’s all payable up-front, so we transfer the money before we even see the stock. So I make that assessment on my own judgment.

170    Mr Kozman was cross-examined on his knowledge of the source of Tonnex’s suppliers’ products. The following exchange took place:

I see, in fact you don’t know where any of your suppliers got their product from, you just assume that they got it from authorised sources, don’t you?---I couldn’t even tell you where the authorised distributors get their product from, Mr Burley. I just assume that they get it from authorised sources also.

171    In other parts of his cross-examination Mr Kozman made it perfectly clear that he (which, in context, plainly meant Tonnex) would not know that a sub-distributor was not supplying counterfeit products to Tonnex.

Now you’ve just told his Honour that you can’t even guarantee that the authorised distributors sell genuine product?---No, I told his Honour that, in the context of your question, that how would I know that a sub-distributor, if they’re buying stock from other places, couldn’t be selling me counterfeit. I actually said to you, well, I couldn’t even tell you that from an authorised distributor.

172    Mr Kozman was also questioned on the steps that Tonnex takes to assess whether the products from these suppliers are genuine. He gave evidence to the effect that, apart from relying on an assessment of the supplier’s reputation, Tonnex relied on OEMs to police its (Tonnex’s) activities, noting that it had never been suggested by anyone “other than a very fierce competitor” (a reference which I understood to be to Dynamic) that “we may be subject to counterfeit”.

173    In relation to certain of Tonnex’s suppliers he gave this evidence:

Well, again, these are companies that have been in business for many, many years; are well known in the region. It’s not like we’ve stumbled across them through a – you know, by accident; they’re well known. It’s a small industry. You do know – you tend to know who you’re dealing with. We’ve been in this business for quite a while – for 12 years. I think we’ve got enough experience to determine what a reputable supplier is and what a risky one is. I think that’s an assessment that you make based on industry experience and knowledge.

I see. But certainly not by you or anyone in your company inspecting product as it comes in to see whether it’s counterfeit?---We sell probably – like, I said, in the earlier question, the amount of units would be in the hundreds of thousands, if not in the millions. I think it’s unrealistic for me to stand at the warehouse, being the owner of a business, with the sole responsibility to check every single item that comes in and every single item that goes out. But I think that I’m well within my right to make the assertion that I’m free from counterfeit because there’s never been any other suggestion, not by any manufacturer or any customer to suggest otherwise. So our reputation is something that we’re very proud of.

174    I infer from this evidence that Tonnex does not systematically check the products that come into its warehouses to ensure that those products are genuine and not counterfeit. Certainly it adduced no evidence of such a practice. When required, by notice, to produce documents directed to procedures in place for the detection of counterfeit products or to the training of staff in relation to that matter, no documents were produced, leading to the inevitable inference that Tonnex has no documented procedures for detecting counterfeit products or staff training on that matter.

175    I should add that, apart from the use of holograms on packaging, Mr Kozman was not aware of the means that OEMs use to distinguish genuine from counterfeit products. Similarly he was not aware of the alerts that OEMs publish on their websites to inform how their products can be distinguished from counterfeit products. Examples of these alerts from a number of OEMs of products supplied by Tonnex were in evidence.

The genuineness representation: consideration

176    The starting point for the consideration of this part of the case is Tonnex’s admission that, by making the statement “(a)ll our products are original OEM products only”, it has represented that “it can be certain that all of the printer and computer consumables offered for sale or sold by it are genuine and not counterfeit”.

177    Tonnex’s own evidence shows that it cannot be certain of that fact. Its evidence was that, save for those goods which are acquired from authorised distributors, there is a risk that products supplied by other traders are counterfeit. Mr Kozman’s evidence in cross-examination only served to confirm the existence of that risk.

178    The evidence does not enable me to assess the magnitude of that risk with any degree of precision. However, in light of the evidence that counterfeit consumables are sometimes very difficult to detect, and given that: (a) a number of Tonnex’s suppliers are not authorised distributors of the OEM products they purport to supply; (b) Tonnex has no apparent system in place for systematically checking for the presence of counterfeit products; (c) Mr Kozman (as the representative of Tonnex’s knowledge on this subject) displayed no real knowledge, save of a most rudimentary kind, of how counterfeit products can be detected; (d) Tonnex merely relies on it own commercial judgment and assessment of the reputation of its own (non-authorised) suppliers as the means for assuring itself that all products sourced from those suppliers are genuine products; and (e) Tonnex does not know and cannot tell where those suppliers have, in turn, acquired all their products, I am satisfied that the risk is a real one, and not merely a remote or fanciful one that can simply be ignored.

179    In my view this conclusion is not gainsaid by the fact that no evidence was adduced that Tonnex has supplied counterfeit products. The fact that no such evidence was adduced does not establish the positive fact that, on any reasonable basis, Tonnex can be certain that all consumables offered for sale or sold by it are genuine and not counterfeit. What the evidence really reveals is not that Tonnex can have the certainty it has represented, but that, based on its own commercial judgment (which may not conform to that of Tonnex’s customers apprised of the same facts), it is prepared to make an assumption about that matter. This falls far short of what Tonnex admits it has represented by making the impugned statement.

180    Tonnex emphasised that the class of persons to whom this representation is directed comprises resellers or retailers of the products, not ultimate consumers. Tonnex submitted that these persons can be taken to have a working and business knowledge of the products and the market in which they are traded. Tonnex submitted that, in the context of advertising and promotional material “where, traditionally, some leeway is given to traders who wish to spruik and sing the praises of their products”, the genuineness representation (and, indeed, the two reliability representations) would only induce persons into the belief that they are dealing with a reputable company and that, for that reason, they can be reasonably confident that the products they are acquiring are genuine rather than counterfeit products.

181    The difficulty with this submission is that it is really an attempt to dilute the force of Tonnex’s admission that the impugned statement conveys to its customers the fact that Tonnex can be certain that all consumables offered for sale or sold by it are genuine and not counterfeit products. Tonnex did not seek to withdraw the admission. Indeed, during the course of the hearing it sought to sustain, by evidence, the fact that it could have the certainty it had professed. That attempt failed. In any event, I do not accept that the impugned statement is one about Tonnex’s reputability. It is a direct and unqualified statement about the genuineness of the products that Tonnex supplies.

182    Given that Tonnex cannot be certain, on any reasonable basis, that all of the consumables offered for sale or sold by it are genuine and not counterfeit, it is misleading or deceptive for it to make a statement in its promotional material that represents that it can be certain of that fact. I am therefore satisfied that, in making the genuineness representation, Tonnex has engaged and is continuing to engage in conduct, in trade or commerce, that is misleading or deceptive or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act.

183    In support of its case based on s 52 of the Trade Practices Act, Dynamic sought to invoke the application of s 51A of the Act, dealing with representations about future matters. In my view, the genuineness representation is properly characterised as a present and continuing representation. On that basis it is unnecessary to consider the application of s 51A. However, to the extent that it is necessary to consider the application of that provision, I am not satisfied that Tonnex has established that it has reasonable grounds for making the genuineness representation.

184    Despite this conclusion I am not satisfied that Dynamic has made good its case that Tonnex has made a false representation that goods are of a particular standard, quality, value, grade or composition, contrary to s 53(a) of the Trade Practices Act, or that it has made a false representation that its goods have performance characteristics, uses or benefits they do not have, contrary to s 53(c) of the Trade Practices Act.

185    Leaving aside the question whether each of the allegedly represented product attributes pleaded by Dynamic is applicable, the fact remains that Dynamic has not established that any consumables offered for sale or sold by Tonnex are, in fact, counterfeit and not genuine. It is one thing to establish that a representation about a state of affairs (albeit concerning goods) is misleading or deceptive or likely to mislead or deceive because it lacks a proper basis. It is another thing to establish that the statement is false as a matter of fact with respect to all or any of those goods to which the statement relates.

186    Here Tonnex has contravened s 52 of the Trade Practices Act because, contrary to its representation, it cannot be certain that all of its printer and computer consumables are genuine and not counterfeit; it is realistically possible that, unbeknown to it, some of its stock of products contains or has contained counterfeit products. It simply cannot be certain, one way or the other. It does not follow from this lack of certainty that its stock of products in fact contains counterfeit products or that any product it has supplied is counterfeit. Those facts (if they be facts) are matters for proof. They do not rest in assumption. Dynamic has not discharged its onus of proof in respect of this part of its case.

The first reliability representation: consideration

187    The first issue that arises is whether the specific statement relied upon by Dynamic conveys the first reliability representation, namely that consumers cannot rely upon other suppliers of printer and computer consumables to offer for sale or sell genuine and not counterfeit consumables.

188    In my view the impugned statement does not convey that representation. The impugned statement conveys no more than it actually says. In this connection the impugned statement can be seen to assert the following matters. First, that Tonnex stocks all the top brands. It is not suggested by Dynamic that this statement is not correct. Secondly, that Tonnex offers “actual 100% genuine OEM products”. It is not suggested by Dynamic that this statement is not correct. Tonnex does, in fact, offer such products. As I have found in relation to the genuineness representation, Dynamic has not established that the products actually offered by Tonnex are not “100% genuine OEM products”. Thirdly, the impugned statement records Tonnex’s understanding that some suppliers say that they offer genuine products but do not offer “the real thing”. Dynamic has not sought to show that this statement is not correct. Indeed, it has been an integral part of Dynamic’s evidentiary case on the Trade Practices Act claims that some suppliers who state that they offer genuine products do not offer “the real thing”. Tonnex has not represented that consumers cannot rely upon any other suppliers of printer and computer consumables (that is, any suppliers other than Tonnex) to supply genuine and not counterfeit consumables.

189    It follows that Dynamic has not made good its case in respect of the first reliability representation.

The second reliability representation: consideration

190    Once again, the first issue that arises is whether the specific statement relied upon by Dynamic conveys the second reliability representation, namely that customers can rely upon Tonnex and not its competitors to offer for sale or sell genuine and not counterfeit printer and computer consumables.

191    In my view the impugned statement does not convey that representation to its full extent. It simply does not represent that customers cannot rely upon any of Tonnex’s competitors to supply genuine and not counterfeit products.

192    However, the statement, as a matter of substance, is indistinguishable from the statement conveying the genuineness representation. In that connection the statement represents precisely what it says: customers can rely upon Tonnex to only ever sell 100% genuine OEM parts. However, because Tonnex cannot be certain that all printer and computer consumables offered for sale or sold by it are genuine and not counterfeit, its customers cannot rely upon it “to only ever sell 100% genuine OEM products”. The misleading nature of the statement is reinforced by the exhortation: “Don’t risk counterfeits – choose genuine – choose Tonnex”. As I have found, Tonnex’s own evidence speaks of the existence of such a risk when products are purchased from a trader who is not an authorised distributor.

193    Thus the conclusions to which I have come in relation to the genuineness representation apply equally to this statement, save that, in my view, s 51A of the Trade Practices Act does apply to the statement as a representation about a future matter. However, with or without the application of that provision, I am satisfied that, by making the statement, Tonnex has engaged in conduct that is misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Trade Practices Act.

The tax free representation: introduction

194    Between 4 August 2008 and 1 May 2009, Hewlett Packard administered a loyalty program known as HP Supplies Rewards (the rewards program). Customers of Tonnex (i.e. resellers) were eligible to participate in the program provided they registered online with Hewlett Packard. These participants earned points by purchasing certain Hewlett Packard products from certain suppliers, including Tonnex. Accumulated points could be redeemed from Hewlett Packard for products selected from its Rewards Catalogue. These products included gift cards from major retailers, movie tickets, and the like.

195    Between August 2008 and August 2009 Tonnex made a number of statements in promotional literature and on its website, including the following:

    Get up to 10% back in tax free rewards from HP Supplier Rewards.

    Earn up to a massive 10% back in tax-free rewards through HP Supplies Rewards.

    10% TAX FREE in selected vouchers from HP Supplies Rewards.

196    Tonnex did not seek or act on any professional advice to inform itself whether rewards under the rewards program were tax free or, indeed, would be tax free to any extent. Mr Kozman said that, nevertheless, he believed the statements to be correct at the time that they were made, based on his personal (but not expert) understanding of the tax treatment of rewards provided under other rewards programs. The reference to 10% appears to have been Tonnex’s own assessment of the value of the rewards under the rewards program. The percentage figure is not prescribed in the relevant tax legislation.

197    Mr Kozman said that the accuracy of these statements was first raised by the first statement of claim filed in this proceeding and that a decision was taken to withdraw the statements because “we received advice … that it was an area that we shouldn’t promote, that it was tricky”.

198     Dynamic contended that, by making these statements, Tonnex represented that participants in the rewards program could obtain a tax-free benefit worth up to 10% of the value of their purchases of eligible Hewlett Packard products. Dynamic contended that the rewards provided under the rewards program were taxable as income if those rewards were provided wholly or partly in respect of a business relationship or wholly or partly for or in relation directly or indirectly to a business relationship, unless the rewards were used to acquire a deductible item or the value of the rewards was not more than $300 in an income year. It contended that the unqualified representation made by Tonnex (the tax free representation) was false or misleading or deceptive or likely to mislead or deceive and that, by making the representation, Tonnex contravened ss 52, 53(a) and 53(c) of the Trade Practices Act. It also contended that the tax free representation was one with respect to a future matter within the meaning of s 51A of the Trade Practices Act.

199    Despite having made and subsequently withdrawn the statements in the circumstances I have described, Tonnex has sought to defend them.

The tax free representation: background

200    It is common ground between the parties that a taxpayer’s assessable income includes income according to ordinary concepts and that a profit or gain made in the course of a business is income according to ordinary concepts.

201    It is also common ground between the parties that a benefit which is not convertible to cash cannot be income according to ordinary concepts: Federal Commissioner of Taxation v Cooke and Sherden (1980) 80 ATC 4140 at 4150. Rewards under the rewards program could not be converted to cash. However, s 21A of the Income Tax Assessment Act 1936 (Cth) (the ITAA) provides that, in determining a taxpayer’s income, a “non-cash business benefit” is to be treated as if it were convertible to cash. For this purpose, a “non-cash business benefit” is defined as property or services provided after 31 August 1988 wholly or partly in respect of a business relationship or wholly or partly for or in relation directly or indirectly to a business relationship: s 21A(5) of the ITAA. The parties agreed that rewards under the rewards program were property or services for the purposes of this definition.

202    Tonnex accepted that there is a business relationship between it and its resellers. It contended, however, that this relationship is not the relevant relationship for the purposes of the definition of “non-cash business benefit”. It contended that there must be a business relationship between the donor and donee of the rewards (Hewlett Packard and the resellers). That being so, it said that there is no relevant business relationship between Hewlett Packard and the resellers, with the result that s 21A of the ITAA is not engaged. Tonnex also contended that rewards received under the rewards program should properly be seen as a discount from the purchase price of goods, not as income as such.

203    Two further provisions should be noted. First, s 21A(3) of the ITAA determines the amount of income to be brought to account in relation to a “non-cash business benefit”. It provides that a taxpayer’s income does not include the value of a “non-cash business benefit” to the extent that the taxpayer would be entitled to a deduction if it paid for the benefit. Secondly, s 23L(2) of the ITAA provides that where the total amount of “non-cash business benefits” is not more than $300 in any income year, it is exempt income.

204    The issues that divided the parties are:

(a)    whether the rewards provided under the rewards program are income according to ordinary concepts, that is whether they constitute a profit or gain, and;

(b)    if so, whether they are a “non-cash business benefit”, within the meaning of s 21A of the ITAA.

The tax free representation: consideration

205    In my view rewards received by a reseller under the rewards program are properly to be regarded as a profit or gain made in the course of that reseller’s business. The rewards are received as part of an income earning activity. Those rewards are not properly characterised as a discount on the purchase price for the Hewlett Packard products. The reseller pays the full purchase price demanded by Tonnex for the relevant products. Tonnex does not reduce its purchase price for them. However, in acquiring the products from Tonnex, and provided it meets Hewlett Packard’s other requirements under the rewards program rules, a reseller is entitled to certain rewards. Those rewards are provided by Hewlett Packard, not Tonnex. It follows, in my view, that the rewards are income according to ordinary concepts.

206    The issue then becomes whether those rewards are provided wholly or partly in respect of a business relationship or for or in relation directly or indirectly to a business relationship. In my view they are.

207    The definition of “non-cash business benefit” does not identify the parties to the relationship; nor does it require the provider of the benefit to be a party to the relationship. What is required, however, is a connection between the benefit and a business relationship. The parties agreed that there is a business relationship between Tonnex and the resellers who purchase products from it. The rewards under the rewards program can be seen to be, at the very least partly, to encourage the establishment or maintenance of a business relationship between Tonnex and its resellers in relation to the supply by Tonnex of eligible Hewlett Packard products to those resellers. Thus it can be seen that the rewards are provided in respect of a business relationship or, alternatively, for or in relation directly or indirectly to a business relationship. In my view it does not matter that Hewlett Packard, as the provider of the rewards, stands outside the immediate business relationship between Tonnex and a particular reseller who is eligible to participate in the rewards program. No other provision in s 21A compels a different conclusion.

208    It follows, in my view, that the rewards under the rewards program are income derived by the resellers in the form of a “non-cash business benefit”, as understood by s 21A of the ITAA.

209    In light of this conclusion, the blanket representation made by the impugned statements was substantively false. It could only be made true by making necessary qualifications to fundamentally change its meaning. The representation was no doubt made by Tonnex to induce resellers to purchase eligible Hewlett Packard products from it in preference to other suppliers. There can have been no other purpose in making the representation. The representation was thus made in trade or commerce and in connection with the supply or promotion of goods.

210    I am satisfied, therefore, that, by making the representation, Tonnex engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act. Once again, Dynamic relied on the application of s 51A of the Trade Practices Act. In my view it is unnecessary for Dynamic to invoke the application of that provision, although I would accept that the representation was about a future matter, namely the tax-free status of rewards that might be obtained under the rewards program.

211    So far as s 53 of the Trade Practices Act is concerned, Dynamic only sought to sustain a submission based on s 53(c) in its closing submissions. That submission was that the tax free representation was a false representation “that the eligible HP supplies had a particular benefit, that is the receipt of tax free rewards”. I do not think that that characterisation is correct. The Hewlett Packard products purchased from Tonnex, if eligible products under the rewards program, earned points for the reseller that could be redeemed for rewards in the form that I have noted. The tax free representation was about the tax treatment of those rewards. It was not a representation about the products supplied by Tonnex or the eligibility of those products for the purposes of participation in the rewards program.

212    However, in conformity with my conclusion that the blanket representation made by the impugned statements was substantively false, I am satisfied that the tax free representation was a false representation about the benefits offered by the rewards program and was thus a false representation in connexion with the supply or promotion of goods (that is, the eligible Hewlett Packard products), that services (the rewards offered under the rewards program) have benefits they do not have, contrary to s 53(c) of the Trade Practices Act.

The Australian-made representation and the Australian jobs representation

213    In submissions the parties dealt with the Australian-made representation and the Australian jobs representation together.

214    Dynamic alleged that Tonnex has represented that the products sold by it are genuine Australian-made products (the Australian-made representation) and that by buying products from it, its customers were protecting more Australian jobs (the Australian jobs representation). It contended that these representations were made by the following discrete statements published by Tonnex:

    … because you are buying genuine Australian products, you are protecting more Australian jobs.

    … because you are buying genuine Australian products, free from counterfeit, you are protecting more Australian jobs.

    … you can rest assured that you are purchasing 100% genuine Australian HP products.

    So make sure you are purchasing the 100% Genuine Australian product from Tonnex.

    Get the 100% genuine Australian product from Tonnex.

215    It can be seen that the first two statements are explicit as to the protection of Australian jobs. The first and third statements were made about Hewlett Packard products supplied by Tonnex. The second, fourth and fifth statements were made about Brother products supplied by Tonnex.

216    The second statement was the subject of specific evidence from Tonnex. In his first affidavit Mr Kozman said that, on receiving a complaint from Dynamic in respect of that statement, he and his partner, Mr Solomon, took the view that the complaint had some foundation and that the statement was unsatisfactory. Mr Kozman was explicit in cross-examination:

I didn’t like that statement. I felt that it gave the representation that it was Australian made although it didn’t say it. So it really – the Australian flag and the reference to Australian jobs smelt like Australian made to me and when I saw it I told the sales manager that I didn’t like it and it had to be changed. He argued the point and I said, “No, I don’t like it, change it”. He then said, “Too late, it’s already gone out”. I went and had a discussion with Mr Rendell, who was our national marketing manager to ask him how this could happen. He told me he also wasn’t happy with it. However, [he] had taken the advice of the sales manager, being more – he felt that he was more senior and there was some urgency to get this promotion out and I just thought, well, I don’t like it, it’s wrong. We certainly took it immediately off the website but the emails had gone out and then within a matter of a week, I believe, Dynamics [sic] solicitors sent us a letter, which was no surprise, and we made the apology and the correction.

217    The “correction” referred to in this evidence was in the following terms:

Dear Valued Customer,

Recently you received a promotional email from us titled: ‘Brother Big Bonus’ which included reference to protecting more Australian jobs through purchasing genuine Australian product. It has been brought to our attention that some people may interpret this as the products being manufactured in Australia which is in fact not the case. As such we would like to clarify that statement.

That statement was in direct reference to that [sic] fact that as Tonnex purchases all of its Brother products through the Australian channel, your purchases of Brother product through Tonnex is [sic] supporting the jobs of Brother employees here in Australia. Tonnex acknowledges that the products are not made in Australia and this was an unintended error in the promotional flyer.

We apologise unreservedly for any misinterpretation this may have caused and in no way have any intention of inferring [sic] that the 100% Genuine OEM products we supply are manufactured here in Australia.

218    In light of Mr Kozman’s evidence in cross-examination, Tonnex must have been dissimulating when it referred in the “correction” to the fact that it had been brought to its attention that the second statement may be interpreted as meaning that the products to which it had referred were made in Australia. According to Mr Kozman’s evidence given in cross-examination, he and others at Tonnex were well-seized of the likelihood that Tonnex’s customers would read the second statement as conveying that meaning. It did not need to be brought to Tonnex’s attention.

219    Tonnex continues to make the third statement, even though the products in question are manufactured overseas and imported in Australia. I should add that Tonnex accepts that all its stock of printer consumables is manufactured overseas and imported into Australia. On no view could it be said that any of these products are made in Australia.

220    Tonnex contended that it is justified in making the third statement because the statement relates specifically to Hewlett Packard products in special packaging. This packaging states that those products are for sale in Australia and New Zealand only. An example of the packaging is in evidence. The significance of products being in this packaging is that it enables end-users of the products to participate in particular promotions conducted by Hewlett Packard. The special packaging is in fact a label placed upon the packaging which relevantly states (in so far as the label relates to Australia only):

Australia only

Think Pink with HP and discover the exciting world of HP Supplies promotions

Enjoy greater rewards when you purchase genuine HP products. Selected original HP Toner cartridges come in specially marked packaging with a pink label. Make sure you purchase specially marked products so you can enter HP Supplies promotions.

For more information, please visit www.hp.com.au/supplies.

221    Despite the evidence given by Mr Kozman about his and Mr Solomon’s concerns in relation to the second statement, Tonnex nevertheless submitted that neither the second statement nor any of the other impugned statements would lead persons who read them into error.

222    In this connection Tonnex once again stressed that the persons to whom these statements were directed were resellers, rather than ultimate consumers, with business expertise in the products they were sourcing. Tonnex submitted that it is most unlikely that any reseller would be misled into thinking that these products were in fact manufactured in Australia. Rather, it submitted that it is likely that the statements would be interpreted as meaning (as pointed out in the “correction”) that products were acquired through Australian trade channels. It submitted, therefore, that these products were aptly described as “Australian products”, the purchase of which from an Australian company would protect Australian jobs.

223    Similarly, Tonnex submitted that products that are packaged in a form which states that the products are for sale in Australia only and in respect of which consumers can benefit from particular promotional incentives in relation to those products, are aptly described as “Australian products”, the purchase of which from an Australian company would protect Australian jobs.

The Australian-made representation: consideration

224    In my view the words “genuine Australian products” or “100% genuine Australian products” in the impugned statements are likely to be understood by a substantial number of the persons to whom they were (and are) directed, as meaning that the products originate in Australia, in the sense that they are made in Australia. That is the ordinary meaning of the words used in each statement.

225     I have no evidence before me about the level of sophistication of the class of purchasers represented by Tonnex’s customers. Whilst I accept that it could be expected that, in a general way, those persons might, as a class, exhibit a higher level of purchasing sophistication and knowledge on the subject of printer and computer consumables compared to the general population, I am not persuaded that this leads to any different conclusion.

226    In this connection I am prepared to assume that some of these purchasers would know or hold a belief that products of this kind are manufactured overseas. I am prepared to assume that some may even have knowledge or at least hold a belief, rightly or wrongly, that products of this kind are only manufactured overseas. Even so, I have no reason to assume, and would not assume, that such knowledge or beliefs, if held, are universally held within the relevant class. It is equally likely that a substantial number of these purchasers have no knowledge or belief at all on the subject. I would not assume that purchasers in this class necessarily have the same knowledge as Tonnex itself has on the subject. Importantly, purchasers within this class should not be taken to be striving for a meaning that is different to the meaning that the words in the statements convey as a matter of ordinary signification.

227    The competing meaning for which Tonnex contends is, in my view, contrived. It finds its source only in the “correction” published by Tonnex. It is hardly likely that Tonnex’s purchasers would understand that, in making the second statement, Tonnex was really making a statement about supporting the jobs of Brother’s Australian employees who were merely involved in the Australian “trade channel”. The same applies to the other statements. These statements are all directed to the origination of the products themselves, in the sense I have explained. The intended meaning explained in the “correction” should be seen for what it really is: an argument of convenience that was made in an attempt to justify a very strong promotional statement made by Tonnex, which Mr Kozman, and apparently others at Tonnex, feared would readily be understood by Tonnex’s customers as meaning that the products were made in Australia. Mr Kozman’s own instincts, emphatically described in his oral evidence, provide the strongest trade evidence of the meaning that these statements would be likely to convey to Tonnex’s customers. The effect of this evidence is that, had he known sufficiently in advance that the second statement was going to be made, he would have prevented it from being made. The first, fourth and fifth statements can stand in no different position.

228    Similarly, no different conclusion can be made with respect to the third statement. The context in which that statement appears is revealed by the following extract from Tonnex’s website in which the third statement is made:

Tonnex International and HP have just secured another partnership for success, with the announcement of Tonnex International as a HP authorised reseller.

This partnership means that you get to enjoy not only great prices on the entire HP range; you can rest assured that you are purchasing 100% genuine Australian HP products. This means that your customers can qualify for whatever promotions HP are offering end-users.

So why wait any longer, if you already aren’t purchasing your HP through Tonnex International, you could be missing out! – Freecall 1800 866 639

229    It can be seen that the third statement says nothing about products in particular packaging. It simply refers to “100% genuine Australian HP products”. They are powerful descriptors of the products to which they refer and are likely to be understood by a substantial number of Tonnex’s customers as referring to products made by Hewlett Packard in Australia. The surrounding context of end-user customers qualifying for “whatever promotions HP are offering” is consistent with a promotion to support Australian-made products. There is no reason for one of Tonnex’s customers to think that the words “100% genuine Australian HP products”, as used in the third statement, are really referring to Hewlett Packard products that are, in fact, not made in Australia but are simply products in packaging that bears a sticker that says that they are for sale only in Australia.

230    It follows that, in making each of these statements, Tonnex made the Australian-made representation. The making of this representation constitutes, in the circumstances, conduct by Tonnex in trade or commerce that is misleading or deceptive or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act.

231    Dynamic also alleged that the making of the Australian-made representation constitutes the making of a false representation that the goods in respect of which the representation was made are of a particular standard or quality (contrary to s 53(a) of the Trade Practices Act) or the making of a false or misleading representation concerning the place of origin of goods (contrary to s 53(eb) of the Trade Practices Act).

232    In my view the Australian-made representation is one concerning the place of origin of goods within the meaning of s 53(eb): Netcomm (Australia) Pty Ltd v Dataplex Pty Ltd (1988) 81 ALR 101 at 107. It follows from the conclusions I have expressed that the making of the Australian-made representation contravenes s 53(eb) of the Trade Practices Act. I am not satisfied, however, that the Australian-made representation is properly characterised as a representation about the standard or quality of goods within the meaning of s 53(a) of the Trade Practices Act. Although the word “quality” in s 53(a) is given a wide meaning (see Ducret v Chaudhary’s Oriental Carpet Palace Pty Ltd (1987) 16 FCR 562 at 577), the presence of s 53(eb) strongly suggests that the word “quality” in the particular context of s 53(a) is not intended to occupy the field of s 53(eb).

The Australian jobs representation: consideration

233    I am satisfied that, in referring to Australian jobs, the first and second statements were representing that, by purchasing the relevant products from Tonnex, purchasers would be protecting jobs in Australia involved with the manufacture of the products in Australia. It follows from the conclusions I have expressed in relation to the Australian-made representation, that the making of this representation constitutes conduct by Tonnex in trade or commerce that is misleading or deceptive or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act.

234    Dynamic also alleged that the making of the Australian jobs representation constitutes the making of a false representation that the goods in respect of which the representation was made are of a particular standard or quality (contrary to s 53(a) of the Trade Practices Act) or the making of a false or misleading representation concerning the place of origin of goods (contrary to s 53(eb) of the Trade Practices Act). That could only be so to the extent that the Australian jobs representation is properly characterised as an element of the Australian-made representation. I am satisfied that the Australian jobs representation can be so characterised. However, to so characterise it adds nothing of substantive significance to the contraventions I have already found.

DISPOSITION

235    I have found that Tonnex has infringed Dynamic’s copyright in the March 2008 CSV file and that Tonnex has contravened the Trade Practices Act in a number of respects.

236    I will stand over the proceeding for a directions hearing at a time and date to be arranged with my Associate to make directions for the further conduct of the proceeding, including in relation to any debate about what, if any, relief should be granted at the present time.

Associate:

Dated:    13 April 2011