Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No. 2) [2011] FCA 675 ("Dynamic Supplies (No. 2)")

The Federal Court has confirmed that cartridge reseller, Tonnex, infringed the copyright subsisting in a compatibility chart developed by its competitor, Dynamic, and had contravened sections 53, 53 (c) and 53 (eb) of the Trade Practices Act ("TPA"). The court also ordered the destruction of Tonnex's infringing charts, subject to the outcome of an appeal to the Full Federal Court by Tonnex in relation to the question of whether copyright subsisted in Dynamic's charts.

The Federal Court's findings in relation to copyright infringement and contraventions of the TPA

As previously reported, in April this year, Justice Yates of the Federal Court found that Tonnex had infringed the copyright owned by Dynamic in a printer consumable compatibility chart, and had made a number of false statements (including "Australian made" claims) that were likely to mislead or deceive, in contravention of the TPA (now the Australian Consumer Law).

Subsequently, in Dynamic Supplies (No. 2):

  • Dynamic sought relief in relation to these substantive findings; and
  • in response, Tonnex sought leave to appeal solely on the question of the subsistence of copyright in Dynamic's compatibility chart.

The nature of the relief sought by Dynamic

Dynamic sought:

  • Declarations that it was the owner of the copyright in its original compatibility chart, Tonnex had infringed the copyright subsisting in the chart; and that Tonnex had contravened sections 52, 53 (c) and 53 (eb) of the TPA;
  • Injunctive relief against further copyright infringement and contraventions of the TPA;
  • Orders for the removal and destruction of infringing material under the supervision of its solicitors;
  • An order for corrective advertising to remedy Tonnex's false representations; and
  • An order compelling the respondent to introduce and administer a compliance program in relation to its obligations under the Australian Consumer Law.1

Dynamic did not seek any monetary relief (aside from its costs) even though monetary relief in the form of damages or an account of profits can usually be sought following a finding of copyright infringement or misleading and deceptive conduct.

Yates J was prepared to make the declarations, and order removal and destruction of infringing materials as sought by Dynamic. Yates J also considered that injunctive relief was appropriate, as there was a likelihood of further infringement. However, instead of granting the injunctions, Yates J accepted a set of personal undertakings that were proffered by Tonnex's directors, which reflected the substance of the injunctions sought by Dynamic.

Interestingly, Yates J declined to order corrective advertising in relation to the "Australian made" claims, finding that such a measure would not accurately identify the contraventions and protect consumers. Yates J also noted that it was difficult to formulate a corrective advertising notice that would not confuse customers as to the nature and extent of the court's findings in relation to Tonnex's contraventions.

Yates J also declined to order Tonnex to participate in a consumer protection compliance program. He considered such a measure to be disproportionate to Tonnex's contraventions, and unfairly punitive and onerous, especially in circumstances where Tonnex would be supervised by Dynamic (a direct competitor), and unfairly placed "in a position of subservient accountability to Dynamic".2

Tonnex's appeal on the question of copyright subsistence

Yates J granted Tonnex leave to appeal to the Full Court of the Federal Court on the question of the subsistence of copyright in Dynamic's compatibility chart, and noted that the destruction of the infringing material would be dependent upon a finding of copyright subsistence on appeal.

We will monitor the progress of this matter, and provide updates accordingly.

The take home messages for copyright owners

  • A wide range of pecuniary, non-pecuniary and non-punitive remedies may be sought under the TPA (and now the Australian Consumer Law). The availability of these remedies is largely determined by the particular circumstances of the case (including the relationship between the parties, the flagrancy of the offending conduct and timing considerations).
  • Undertakings can sometimes be offered in substitution for court ordered injunctions. Undertakings may be given personally, and are enforceable in contempt proceedings (as is the case with court ordered injunctions).