Digga Australia Pty Ltd v Norm Engineering Pty Ltd

• Jurisdiction: Australia Federal only
• Judgment Date: 12 March 2008
• Neutral Citation: [2008] FCAFC 33
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Digga Australia Pty Ltd v Norm Engineering Pty Ltd
[2008] FCAFC 33

COPYRIGHT – infringement – respondent manufactured and sold buckets for use with Bobcat in accordance with engineering drawings it prepared for the bucket components – the drawings were in computerised form – appellant “reverse engineered” from respondent’s bucket to enable it to manufacture and sell its buckets and, to that end, to prepare engineering drawings – whether appellant effected two-dimensional and three-dimensional reproductions of respondent’s drawings of the bucket components – respondent’s drawings reduced three-dimensional prototype of bucket to two-dimensional form - respondent’s drawings recorded electronically on computer by use of computer aided design (CAD) system –– primary Judge found respondent had copyright in drawings created in September 2003 – whether primary Judge was entitled to so find – unclear state of evidence as to when drawings came into existence – primary Judge’s finding that drawings came into existence as culmination of “process of “origination” over lengthy period culminating in September 2003 –whether that finding sustainable on the evidence – testimony of respondent’s managing director to effect that drawings made in early 2002 – whether respondent had proved that its bucket that was inspected and copied by appellant was manufactured in accordance with the drawings sued upon – if not, whether respondent had failed to prove unbroken chain of causation between its drawings in which copyright subsisted and appellant’s drawings and buckets – operation of s 77 within Div 8 of Pt III of the Copyright Act 1968 (Cth) prior to the Designs (Consequential Amendments) Act 2003 (Cth) – whether s 77(2) excepted from infringement appellant’s two-dimensional reproductions (drawings) that came into being as steps on the way to appellant’s three-dimensional reproductions of the buckets – whether appellant’s drawings were articles of manufacture – whether in the case of one component (Pivot Arms) there was a “design” and therefore a “corresponding design” following the Designs Amendment Act (1981) (Cth) - effect of changes to Div 8 made by the Designs (Consequential Amendments) Act 2003 (Cth) as from 17 June 2004.

Held: (1) on the evidence, the primary Judge was entitled to find that the requisite degree of originality was established for copyright to subsist; (2) on the evidence, the primary Judge was entitled to find the necessary causal chain was established; (3) prior to 17 June 2004 s 77(2) of the Copyright Act did not except from infringement drawings prepared in the course of the manufacture of articles, even though the manufacture of the articles was itself excepted from infringement; (4) after 17 June 2004, the new s 77A did effect such an exception; (5) both before and after 17 June 2004, the design of the pivot arm component fell within the definition of “corresponding design” and the manufacture of that component did not constitute a three-dimensional infringement of the respondent’s copyright in its drawings.

Copyright Act 1968 (Cth) ss 10(1) (“artistic work”), 31, 32, 36, 74, 77, 77A

Designs Act 1906 (Cth) ss 4 (“design”), 18

Designs Act 2003 (Cth) ss 5 (“design”), 7 (“visual feature”)

Amalgamated Mining Services Pty Ltd v Warman International (1992) 111 ALR 269 discussed

Biotrading & Financing OY v Biohit Ltd [1996] FSR 393 cited

Biotrading & Financing OY v Biohit Ltd [1998] FSR 109 cited

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

Burge v Swarbrick (2007) 234 ALR 204 referred to

C&H Engineering v F Klucznik & Son Ltd (1992) 26 IPR 133 cited

Compagnie Industrielle de Precontrainte et D’Equipment des Constructions SA v First Melbourne Securities Pty Ltd (1999) 44 IPR 512 discussed

Edwards Hot Water v SW Hart & Co Pty Ltd (1983) 49 ALR 605 cited

Global Brand Marketing Inc v Cube Footwear Pty Ltd (2005) 65 IPR 44 cited

Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd (1990) 95 ALR 275 cited

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

Hosokawa Micron International Inc v Fortune (1990) 26 FCR 393 discussed

Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 cited

Interlego AG v Tyco Industries Inc [1989] AC 217 cited

L A Gear Inc v Hi-Tec Sports Plc [1992] FSR 121 cited

L B (Plastics) Ltd v Swish Products Ltd [1979] RPC 551 cited

Macmillan Publishers Ltd v Thomas Reed Publications Ltd [1993] FSR 455 cited

Muscat v Le (2003) 204 ALR 335 discussed

The Reject Shop Plc v Robert Manners [1995] FSR 870 discussed

Shacklady v Atkins (1994) 126 ALR 707 discussed

Swarbrick v Burge (2004) 208 ALR 19 cited

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

Garnett K, Gillian D and Garbottle G, Copinger and Skone James on Copyright (15^th ed, Sweet & Maxwell, London, 2005)

DIGGA AUSTRALIA PTY LTD (ACN 010 443 875) v

NORM ENGINEERING PTY LTD (ACN 010 799 943)

QUD 175 OF 2007

LINDGREN, BENNETT AND LOGAN JJ

12 MARCH 2008

sydney (heard in BRISBANE)

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 175 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	DIGGA AUSTRALIA PTY LTD (ACN 010 443 875) Appellant
AND:	NORM ENGINEERING PTY LTD (ACN 010 799 943) Respondent

JUDGES:	LINDGREN, BENNETT AND LOGAN JJ
DATE OF ORDER:	12 MARCH 2008
WHERE MADE:	sydney (heard in BRISBANE)

THE COURT ORDERS THAT:

1. The parties attempt to agree on the form of the orders to be made (including orders as to costs) to give effect to the Reasons for Judgment published today.

2. By 25 March 2008, the parties provide to the Associate to Lindgren J an agreed form of orders, or, if agreement has not by then been reached, the forms of orders for which they will respectively contend accompanied by written submissions in support.

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	QUD 175 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	DIGGA AUSTRALIA PTY LTD (ACN 010 443 875) Appellant
AND:	NORM ENGINEERING PTY LTD (ACN 010 799 943) Respondent

JUDGES:	LINDGREN, BENNETT AND LOGAN JJ
DATE:	12 march 2008
PLACE:	sydney (heard in BRISBANE)

REASONS FOR JUDGMENT

LINDGREN J

INTRODUCTION

1 The appellant (Digga) appeals from declarations of infringement of copyright and associated orders made in favour of the respondent (Norm) in Norm Engineering Pty Ltd v Digga Australia Pty Ltd (No 2) (2007) 73 IPR 75 (Norm v Digga (No 2)). The primary Judge had previously delivered the reasons for his decision: Norm Engineering Pty Ltd v Digga Australia Pty Ltd (2007) 162 FCR 1. Unless otherwise specified, my references to the primary Judge’s reasoning are references to the latter of the cases mentioned.

2 Digga was found to have infringed the copyright in engineering drawings (I will use the terms “drawings” and “plans” indiscriminately) for a bucket designed by Norm to be attached to a “Bobcat”, which is a species of “skid steer equipment”.

3 Whereas a standard bucket is “fixed”, and allows the operator of the Bobcat only to push, load or scoop material using the leading edge of the bucket manipulated by the hydraulic arms of the skid steer apparatus, Norm manufactures a “4 in 1 bucket”, the advantages of which were explained by his Honour (at [5]) as follows:

When attached to the primary skid steer apparatus, additional hydraulic rams attached to the bucket, operated in conjunction with the skid steer’s hydraulic system, enables the lower part of the bucket to open and close thus enabling the operator to undertake four additional versatile functions of cutting, pulling or scraping material, a loading function and a clasping, holding or “grab” action.

4 Norm claimed that the drawings for its 4 in 1 bucket were original artistic works in which it held the copyright and that Digga had reproduced them in a material form: see ss 31(1)(b)(i), 32, 36(1) and 10(1) (“artistic work”) of the Copyright Act 1968 (Cth) (Copyright Act) discussed at [35] below. Norm alleged that Digga had reproduced the drawings in both two-dimensional and three-dimensional forms: see s 21(3) of the Copyright Act.

5 Norm’s case at trial, which his Honour accepted, was that Digga had “reverse engineered” a Norm 4 in 1 bucket with the consequence that Digga’s resulting drawings and bucket reproduced a substantial part of Norm’s drawings for its 4 in 1 bucket.

6 The first two grounds of appeal raise questions as to precisely in which, if any, of Norm’s drawings copyright subsisted, and whether there was the necessary causal connection between the particular drawings in which copyright was found to subsist and the acts said to constitute a “reproduction” of them.

7 The third and fourth grounds of appeal raise questions as to the relationship between the Copyright Act and the Designs Act 1906 (Cth) (Designs Act 1906) and its successor, the Designs Act 2003 (Cth) (Designs Act 2003). Associated with the repeal and replacement of the Designs Act 1906, amendments were made to Div 8 of Pt III of the Copyright Act (Division 8 or Div 8) by the Designs (Consequential Amendments) Act 2003 (Cth). Division 8 deals with the relationship between copyright and designs by providing, generally speaking, that copyright protection is not available where design protection is available. Again, generally speaking, the legislative intention is that where design protection is available, it is only the short term protection afforded upon registration of a design that is to be available. Digga argued that Div 8 applied in the present case with the result that Digga had not infringed copyright.

8 The Designs Act 2003 and the associated amendments to Div 8 commenced on 17 June 2004. It has been necessary to consider the...