Tonnex International Pty Ltd v Dynamic Supplies Pty Ltd FCAFC 162
In a continuation of a battle between two printer cartridge resellers, the Full Federal Court has affirmed the legal principles pronounced by the High Court in Ice TV v Nine Network Australia which govern the nature and level of skill, judgement and human effort required for copyright to subsist in a compilation as an original literary work. It is clear from the Full Court's decision that:
- For a work to be original it must originate from the author as opposed to having been copied;
- An original work must be the product of human intellectual effort, but need not have literary merit;
- Copyright protects the form of expression of information, not the information itself; and
- When determining whether copyright subsists in a work, the work should be examined as a whole rather than as individual elements.
The Federal Court's decision at first instance
Printer consumable company Dynamic Supplies Pty Ltd had, since 2007, maintained a database, called the ‘Navision database’, which stored data on each of the cartridge products it manufactured and sold.
In 2008, Mr Campbell, a Dynamic employee, extracted part of this data and arranged it into a printer cartridge compatibility chart. This involved selecting which information was relevant to customers and setting out the information in columns for ease of use, which was then published on Dynamic’s website.
Tonnex, a trade rival of Dynamic, later produced its own compatibility chart containing parts of the Dynamic chart.
Initial decision of the Federal Court
As previously reported1, in April 2011, Justice Yates of the Federal Court relevantly found that in producing its chart, Tonnex had infringed the copyright subsisting in Dynamic's printer cartridge compatibility chart.
Tonnex appealed Justice Yates' decision to the Full Court of the Federal Court of Australia.
The Full Court's decision
In November 2012, the Full Court unanimously affirmed Justice Yates' decision and dismissed Tonnex's appeal, finding that copyright subsisted in Dynamic's compatibility chart and that therefore Tonnex had infringed Dynamic’s copyright.
Tonnex’s arguments on appeal regarding "intellectual effort"
Broadly speaking, Tonnex’s appeal challenged that there was sufficient intellectual effort exerted in the production of the compatibility chart by Dynamic to render it an original literary work.
In support of this contention, Tonnex relied upon two main grounds:
- That the formatting and selection of data to be included in the compatibility chart had principally occurred at the time the data was entered into the Navision database, and that Mr Campbell had exerted negligible human intellectual effort in transferring this information into the compatibility chart; and
- That Mr Campbell’s written evidence in support of his intellectual effort was contradicted by his oral evidence given during the trial, and that the trial judge was therefore wrong to accept that earlier written evidence.
Subsequent to the hearing of the appeal, Tonnex made a further application seeking to have the issue remitted to trial in light of further evidence. Tonnex did not dispute the finding that, should copyright exist, it had infringed that right.
Mr Campbell’s "intellectual effort" evidence
Regarding Mr Campbell’s evidence, Tonnex argued that it was contradictory and that part of it was incorrect. In essence, Tonnex sought to show that the real work had been done in creating the Navision database, rather than the compatibility chart and that Mr Campbell’s evidence in support of the latter was flawed.
The Court disagreed and held that there was no inconsistency, and that since it had not been put to Mr Campbell at trial that his evidence was incorrect, it was impermissible to pursue the issue on appeal.
Was Dynamic's printer cartridge compatibility chart "original"?
In dismissing the appeal, the Full Court found that Mr Campbell’s evidence had established that the compatibility chart was original and thus protected by copyright.
Importantly, the court focused on the fact that Mr Campbell had made an assessment of what information from the Navision database would be included in the compatibility chart and how that information would be arranged.
In fact, the Full Court stated that these factors were “critical” to the outcome of the case.
There was significantly more information stored in the Navision database than that which was included in the compatibility chart, which reflected the selection process undertaken. Additionally, reference was made to the trial judge’s findings that some material had been deliberately duplicated in the ‘product description’ fields to aid customer searching. Simplicity in the layout, it was also said, can be a virtue and does not deprive a work of originality unless it reflects the fact that there is only a limited number of ways the work could be expressed, such as the TV Schedules in Ice TV.
The court emphasized that the fact the information had been extracted from the database did not prevent copyright subsisting in the compatibility chart.
Tonnex’s late application to have the copyright subsistence issue remitted in light of further evidence:
A final submission was made by Tonnex subsequent to the hearing of the appeal, based on a list produced by Mr Campbell called the ‘tab delimited price list’. This was an earlier list, produced from material on the Navision database and Tonnex sought to argue that the compatibility chart in issue was copied from this list.
The application was fraught with procedural issues and was said to be inconsistent with fundamental case management principles. The application raised another point that should have been pursued at trial, or during the appeal hearing at the very latest.
The court noted that copyright would have subsisted in the tab delimited price list, the compatibility chart or both, and that Tonnex would therefore be guilty of infringement regardless. To add insult to injury, costs of this application were awarded on an indemnity basis due to the lateness of its filling and the fact it did not reveal any error in the trial judge’s reasoning.
Lessons for copyright litigators in Australia
This case provides guidance as to the considerations that an Australian court will have regard to when determining whether copyright subsists in a work that is sourced or derived from an earlier work:
- The fact the compiled information is taken from an earlier source does not prevent copyright subsisting in the compilation;
- Whether copyright subsists in a literary work will depend on whether sufficient human intellectual effort has been exerted in its reduction to a material form;
- In determining whether sufficient human intellectual effort has been exerted, the extent to which the information has been selected and filtered, as opposed to merely copied in its entirety, will be highly relevant; and
- The way in which that information is then arranged and the thought that has gone into the arrangement is also relevant to the issue of copyright subsistence.
Finally, the case illustrates the importance of raising all relevant arguments at trial and of ensuring that important points are not left until the appeal (or later). Failure to follow this approach may result in claims being compromised by procedural issues and harsh adverse costs orders being made by the court.