Dais Studio Pty Ltd v Bullet Creative Pty Ltd

• Jurisdiction: Australia Federal only
• Judgment Date: 20 December 2007
• Neutral Citation: [2007] FCA 2054
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054

Copyright – Computer program – Content management system for Internet web site – Individual files within such a system – Whether “set of statements or instructions” – Whether “used … to bring about a certain result” – Whether source code on files a computer program as defined.

Copyright – Infringement – Whether necessary to establish actual copying of work or copy of work – Whether infringement constituted by copying progenitor or sibling of work.

Copyright – Infringement – Computer program – Part only copied – Whether part a substantial part – Qualitative or quantitative approach to this issue – Originality of part – Relevant of failure to explain qualitative aspects of whole work.

Equity – Obligation of confidence – Information obtained during employment – Information used after termination of employment – Whether information had necessary quality of confidentiality – Circumstances in which information was conveyed to employee.

Contract – Contract of employment containing confidentiality terms – Whether information acquired by employee was “confidential information” or “proprietary information”.

Corporations – Obligation of former employee as to use of information acquired during employment – Whether such use “improper”.

Copyright Act 1968 (Cth) ss 10, 14

Corporations Act 2001 (Cth) ss 182, 183

AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464

Ansell Rubber Co Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37

Australian Video Retailers Association v Warner Home Video Pty Ltd(2001) 114 FCR 324

Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300

Coco v AN Clark (Engineers) Ltd[1969] RPC 41

Corrs Pavey Whiting & Byrne v Collector of Customs(1987) 14 FCR 434

Data Access Corporation v Powerflex Services Pty Ltd (1999) 202 CLR 1

Del Casale v Artedomus(Aust) Pty Ltd (2007) 165 IR 148

Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd[1979] VR 167

Faccenda Chicken Ltd v Fowler[1984] ICR 589

Faccenda Chicken Ltd v Fowler[1987] Ch 117

Farah Constructions Pty Ltd v Say-Dee Pty Ltd(2007) 236 ALR 209

Forkserve Pty Ltd v Jack (2000) 19 ACLC 299

Forkserve Pty Ltd v Pacchiarotta (2000) 50 IPR 74

Francis Day & Hunter Ltd v Bron [1963] Ch 589

Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd(2005) 225 ALR 57

Grove v Flavel (1986) 43 SASR 410

Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic [1973] VR 784

Powerflex Services Pty Ltd v Data Access Corporation (No 2)(1997) 75 FCR 108

R v Byrnes (1995) 183 CLR 501

R v Cook; ex parte Commonwealth Director of Public Prosecutions (1996) 20 ACSR 618

Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779

Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136

Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health(1990) 22 FCR 73

SW Hart & Co Pty Ltd v Edwards Hot Water Systems(1985) 159 CLR 466

Tamawood Ltd v Henley Arch Pty Ltd (2004) 61 IPR 378

TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (2005) 145 CLR 35

TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (2003) 57 IPR 530

Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317

DAIS STUDIO PTY LTD AND JACEK PERLINSKI AS TRUSTEE OF THE PERLINKSI FAMILY TRUST v BULLET CREATIVE PTY LTD AND BENJAMIN PETRO

QUD121 OF 2007

JESSUP J

20 DECEMBER 2007

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD121 OF 2007

BETWEEN:	DAIS STUDIO PTY LTD First Applicant JACEK PERLINSKI AS TRUSTEE OF THE PERLINKSI FAMILY TRUST Second Applicant
AND:	BULLET CREATIVE PTY LTD First Respondent BENJAMIN PETRO Second Respondent

JUDGE:	JESSUP J
DATE OF ORDER:	20 DECEMBER 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The application be dismissed.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD121 OF 2007

BETWEEN:	DAIS STUDIO PTY LTD First Applicant JACEK PERLINSKI AS TRUSTEE OF THE PERLINKSI FAMILY TRUST Second Applicant
AND:	BULLET CREATIVE PTY LTD First Respondent BENJAMIN PETRO Second Respondent

JUDGE:	JESSUP J
DATE:	20 DECEMBER 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1In this proceeding, the applicants sue for infringement of copyright, to restrain the unauthorised use of confidential information, for breach of contract and for breach of certain provisions of the Corporations Act 2001 (Cth). Each cause of action is said to be based upon the conduct of the second respondent, Mr Ben Petro, who was formerly an employee of the first applicant, Dais Studio Pty Ltd (“Dais”), in which capacity he had access to certain computer files. It is alleged that, after Mr Petro left that employment, he downloaded those files from an Internet web site of Dais or one of its clients and used them for his own commercial purposes. The applicants seek declarations, injunctions, orders for delivery up and damages.

2Dais carries on business in the supply of what was described as “a range of services in relation to design strategy, brand strategy, marketing and Internet strategy and solutions”. One of Dais’s lines of business is the design and creation of Internet web sites for commercial clients. Mr Petro worked for Dais as a web developer between February 2002 and December 2003. The second applicant, Mr Jacek Perlinski, is the sole shareholder and director of Dais. However, it is not in that capacity that he is a party to the proceeding; rather, he is a party as trustee of the Perlinski Family Trust, which is the assignee from Dais of certain intellectual property which includes the rights to copyright upon which the applicants sue. By reason of the way I have determined the substantive issues involved in the applicants’ copyright claims, I do not need to refer to that circumstance further. The first respondent, Bullet Creative Pty Ltd (“Bullet Creative”) is a design company which engaged Mr Petro in about August 2005 to build a web site for one of its clients, a business called “Red PR”. The applicants allege that, in the course of building that site, Mr Petro engaged in unlawful or actionable conduct of the kind referred to above. After the institution of this proceeding, the applicants settled their differences with Bullet Creative and, on 28 May 2007, Dowsett J granted a permanent injunction against Bullet Creative but otherwise ordered that the action against it be dismissed.

The Facts In Outline

3To appreciate the nature of the allegations made by the applicants in this proceeding, it may be useful to commence by considering any commercial web site such as will be familiar to users of the Internet. The computer data for the images, words, numbers etc that, to the viewer, constitute the site are contained in files located on the server for the site. So are the functional files which cause the site to operate as intended. The construction of a commercial site of any complexity is necessarily a specialised task, and one which would normally (at least according to the assumptions by reference to which this proceeding has been conducted by the parties) be carried out by professional web developers (such as Mr Petro) and the organisations which employ them (such as Dais). Having made a substantial investment in the construction of a new web site, what would the business concerned do if the occasion arose for some details of the site to be changed, as must often be the case? Absent a product of the kind with which this proceeding has been concerned, the business would again have to engage a web development professional to make the necessary alterations to the files constituting the site.

4The product in question is what is known as a “content management system” (“CMS”). It is a system of files (resident on the server) which enables the owner of the web site to undertake online editing of the content, and therefore of the appearance, of the site. The owner may not know that he or she is using a CMS as such, of course, but will know that, as part of the package of services provided by the web developer who built the site, there is the capacity to make all manner of changes to the content thereof. It seems that the inclusion of a CMS is a common practice in the construction of commercial web sites. There are many CMSs publicly, freely and legally available on the Internet. As I understand the evidence, if a web developer such as Mr Petro desired to incorporate a CMS into a web site being built, he or she could readily obtain it from one of these sources. The developer might then apply some discretionary modifications to suit the particular purposes at hand, but, as I understand it, even a very generic CMS would be expected to have the attributes which would enable incorporation into many web sites.

5Dais, however, has developed its own CMS, which it incorporates into web sites built for its commercial clients. The CMS is called “WebStable”. According to Mr Perlinski, WebStable is the result of continuous development since 1999. It was in that year that he commenced the development of WebStable, then known as WEBS. Since that time, about 10-15 staff members at Dais – in roles including senior developer, interface designer and other development roles – have worked, both full-time and part-time, on WebStable. Mr Craig Suthers, to whose contribution I shall refer further presently, was employed by Dais as senior software developer from September 2002 to November 2004. He replaced Mr Shannon Glover, and before him Mr Patrick Cooney held that position. In recent times (ie, as I understand it, since the departure of Mr Suthers), Mr Mattias Lindgren (who has been employed by Dais since 2001) held, and continues to hold, the position. The senior software developer was the leader of a team of...