CATCHHORDS Copyright - Computer programmes - Original literary works - Adaptations ~ Infringement by sale and importation of .~ reproductions of adaptations. Pn \, rade Practices - Misleading or deceptive conduct - Computers of similar appearance - Labels - Respondents' goods supplied with appellants' handbook - False representation of soconsorship, approval or affiliation. Teade Practices Act 1974 - ss. 52, S53(c). 53(d), 55. Copyright Act 1968 - ss. 10(1), 36, 37, 38 APPLE COMPUTER INC. and APPLE COMPUTER AUSTRALIA PTY. LIMITED v. COMPUTER EDGr PTY. LIMITED and MICHAEL SUSS _ No. G405 cof 1983 FOX, LOCKHART and SHEPPARD JJ. 129 May 1984 Sydney IN THE FEDERAL COURT OF AUSTRALIA eee eeOoDid oD 162) is) Fi be! wo c Ww NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN : APPLE COMPUTER INC. and APPLE COMPUTER AUSTRALIA PTY. LTD. | Appellants AND: COMPUTER EDGE PTY. LIMITED and MICHAEL SUSS _ . - "spre oo. , oo! . _ Respondents ; ; Ls repent : JULGES MAKING ORDER: FOX, LOCKHART and SHEPPARD Jd. ™~ ~? DATE OF ORDER: 29 MAY 1984 WHERE ORDER MADE: SYDNEY ORDER. THE COURT ORDERS THAT: l. The appeal he allowed and the judgment of Beaumont J. set aside. . ») 2. The first respondent by itself its servants and agents . amit the seconk respondent be restrained from infringing: the first appellant's copyright in Applesoft Source and Autostart Source programmes. - . 3A) The first respondent by itself its servants and agents and the second respondent be- restrained from, without (B} tw the licence of the f1rst appeliant, importing into Australia ROMs or EPROMsS or other Tfirmvare or sortware containing programmes which are reproductions of the first appellant's programmes, Applesott Object and Autostart Object, for the purpose of:- (a) selling, letting for hire, or by way of trade offering or exposing for sale or hire, the said. articles; or '(b) distributing the said articles for the purpose of trade or for any other purpose tO an extent that will atfect prejudicially the first appellant or by way of trade exhibiting the said articles in public. The first respondent by itself its servants and agents and the second respondent be restrained from, without the ifcence of the first appellant,:- (a) selling, . letting for hire, or by way of trade 'offering or exposing for sale or hire, the said articles; or (bh) bye. way of trad= exhibiting the saidarticles in public. If the appellants wish to pursue claims for damages in relation to infringements of s. 37 or s. 38 of the Copyright Act 1968 the subject of this proceeding the an \ y5. 6.7. appellants shall file and serve upon the respendents or ' their solicitors within 21 days of today written notice to that effect WHEREUPON without further order the matter shall be referred to BSeaument J. for findings on the evidence as it presently stands in respect of the knowledge, aif any, of the first respondent, which includes so far as relevant the knowledge, if any, of the second respondent, of the matters mentioned in s. 37 -o& s. 38 of 'the Copyright Act 1968 and in issue in this proceeding AND, if his Honour's findings are favourable | to the appellants, for the assessment of damages in relation to the infringements aforesaid. The appellants bring in short minutes of orders to give ertfect to the Court's findings on the issues relating to the Trade Practices Act 1974 and the matter is adjourned to a date to be fixed for this purpose. «- ' The respondents shall pay the costs of the appellants of this appeal and of the proceedings before Beaumont J. Thre costs of any further proceedings before Beaumont J. pursuant to any of the orders aforesaid shall be as ordered by his Honour. Liberty ta apply is reserved generally to any party on seven days' notice and, in particular, if any variation of or addition to orders 2, 3 or 4 above is sought. ys Is [a] mn iJ fayial ery Gee] vy Ty i)<4 CORAM © DATE: 29 May 1984 FOX J. computers This and G405 of 1982 ; BINGEE JUDGE AND: COMPUTER EDGE PTY. MICHAEL SUES FOX. LOCKHART and SHEPPARD JJ. Second Kesvendent REASONS FOR JUDGMENT appeal from a computer programmes in judge of the Co respect First Respondent urt of relates which w appeliants claim rights. Thev a@lieqge breaches of ss.52, Site, 53(d) and 55 of the Trade Practices Act 1974, and iniringement of coovriant. The first appeilant, a Californian corporation, maxes and sells muicro-computérs under the name ""Apvie", the relevant computer inthis case being known as Apple If. The second appellant is the Australian distributor of these computers. The. first respondent, a Victorian company, has imported inte and said. . in Australia under the name "Wombat", a micro-computer O manufactured, or assembled, in Taiwan. The second respondent is the managing director of the first respondent. For convenience, I will refer to both those respondents collectively, without distinction between them, as "the respondents". There were two other respondents to the proceedings as commenced, but the cases ~as against these have been disposed of, and they are no longer parties. It is claimed that computer programmes installed in the Wombat are unauthorized copies of those of the first appellant, and complaints are made respecting the equipment and the way it © is represented to the public. A cross-claim was filed by the respondents claiming relief in respect of claims in circular letters sent by the appellants, but the learned judge, in the belief that the matter was not a live issue, didnot make a finding in respect of it, and stood it over generally. Argument concerning the cross-claim has not been presented to us. In relation to what he called the primary case under s.52, the learned trial judae found that there was no likelihood —_——— that a purchaser would be misled or deceiyed into believing that a) the responcents or therr goods were in anv way associated with ! the appellants. He said: --» on the contrarv, the respective products are clearly distinguished from one another by the use of very different brand names and the i reference, in advertising, to the . 'compatibility' of Wombat software with programmes for the Apple II computer only serves to reinforce the distinction." He said that for similar reasons the cases under ss.53(c), 53\d) and 55 should fail. The secondary claim under s.52 related to three silicon chips sold by the first respondent in its Wombat computer which contain computer programmes-~ The appellants claimed these to be "infringing copies" of programmes of the first appellant within the meaning of the definition in s5.10(1) of the Copvricht Act 1968 ("the Act"). In that event it was submitted that the -O respondents misled or deceived purchasers of Wombat computers into thinking that they would take title and enjoy possession of the machines free of any claim such as that in conversion which the first appellant here asserts. The Claim in Copvricht The appellants further sought injunctions and damages \ for infringement of copyright. These aspects of the case depended upon copyright being proved in the relevant programes th His Honour heid that there was no copyright 1n the first appellant's programmes, because they were not literarv works. The essence of his reasons is contained in the following passage: "In my opinion, none of the programmes are literary works within the meaning of the statute. In my view, a literary work for this purpose 1S something which was intended to afford 'either information or instruction or pleasure un the form of literary enjoyment' (see Hollingrake v. Truswell (1894) 3 Ch. 420; Exxon Corporation v. Exzon Insurance Consultants International Ltd. (1982) R.P.C. 69 at p.88; cf. D.P. Anderson & Co. Ltd. v. Lieber Code Company (1917) 2 K.B. 469; Mirror Newspapers td. v. Queensland Newspapers Ltd. (1982) 59 F.L.R. 71: Northern Office Micro Computers (Ptv.} Ltd. v. Rosenstein (1981) (4) S.A. 123(c); Seqa_Entervorises Ltd. v. Richards (1983) F.S.R. 73 at pp.74-5). The function of a computer programme is to control the sequence of operations carried out by a computer. In this sense, as Dr. Emmerson submitted on behalf of the respondents, a contrast may properly be drawn between something which is merely intended to assist the functioning of a mechanical device and literary work so called. The position is even stronger in the case of the object programme, as Rosenstein, supra, recognises: this type of programme as Dr. Emmerson submitted. is at @ more advanced stage of the process of controlling the sequence of operations carried out by a computer." It is convenient to examine first the claim to copyright. The parties very helpfully presented to his Honour a statement of agreed facts, dealing with both the trade practices and copyright cases. I set them out as a schedule to these reasons. Paragraphs 17-32 and 40-41 are those more directiv concerned with the copyright clain. There was also a larce body of oral and other evidence. While this evidence could not be —_— - an io mee Pt ee oe ee ee ee ee ee we re me ne eee C | t [_. 6) used to contragict the aqreed facts, it was avarledisc both to help in an understanding of them, and to supplement them. The appellants claim that the computer programmes in question are original Jaiterary works in which copyright subsists by virtue of s.32(1) and s.32(2) of the Act. The works relied upon were written by United States citizens and were first made' ~- and published there. Regulation 4 of the Copyright (International Protection) Requiations which were made under 5.184 (and 5.248) of the Act is relied upon to secure the same protection here as if the works were made and first published here. No question has been raised concerning publication. The programmes are pleaded as being the original "source" codes and the original "object" codes, but, in the alternative, the latter are pleaded as adaptations of the source codes. It is. alleged that the respondents' conduct amounted to infrincement of the first appellant's copyright. Sections 37 and 38 of the Act were relied upon by the appellants at the trial, but on this appeal it was sought also ta place reliance on 5.36. I shall return to discuss this last-mentioned application. The sections referred to are as follows: "36.(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a persom who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright. (2) The next three succeeding sections do not affect \ oO the cenerality of the last preceding sub-section. 37. The copyright in a literary, dramatic. musical or artistic work is infringed Dv a person who, without the licence of the owner of the copyright, imports an article into Australia for the purpose of - (a) selling, letting for hire, or by way of trade offering or exposing for sale or hire. the article; - (b) distributing the article - {i) for the purpose of trade; or (ii) for any other purpose to an extent that will affect prejudicially the owner of the copyright; or (ce) by way of trade exhibiting the article in public, where, to his knowledge, the making of the article would, if the article had been made in Australia by the importer, have constituted an infringement of the copyright." °38.(1L) The copyright in a literary, dramatic, musical or artistic work is infringed by a person who, in Australia, and without the licence of the owner of the copyright - {a) sells, lets for hire, or by way of trade offers or exposes for sale or hire, an article, or {b) by way of trade exhibits an article in public, ' where, to his kmowledge, the making of the article constituted an infringement of the copyright or, in the case of an imported article, would, if the article had been made in Australia by the importer, have constituted such an infringement. (2) For the purposes of the last preceding sub-section, the distribution of any articles - (a) for the purpose of trade; or \ \ @) (b) for any other purpose to an extent "that affects prejudicially che owner or the copyright concerned, sShali be taken to be the sale of those articles." The first of the sections (s.36) is commonly referred to involving "direct" infringement, the other two as "indirect" infringement. as The terms "literary work" and "adaptation" are defined in s.10(1) as follows: "10.(1) ... 'jiterary work' includes a written table or compilation;"" "'adaptation' means - (a) in relation to a literary work in a non-dramatic form - a version of the work (whether in its original language or ina different language) in a dramatic form; (bh) im relation to a Literary work in a dramatic form -a version of the work (whether in its original language or 1n a different language) in a non-dramatic form; (c) im relation to a literary work (whether in a non-dramatic form or in a dramatic form) (L) a translation of the work: or (ii) a version of the work in which a story or action is conveyed solely or principally by means of pictures; and (ad) in relation to @ musical work - an arrangement or transcription of the work:". Tt 2g te be notea that the definition of "literary work" is not exhaustive. Tt may well take account of modern means of communication and of recording information, which have moved so much (and so rapidly) into the electronic field. A typical Apple IIT computer, when set up for use, is seen to comprise the following main parts: / + (a) the micro-processor, roughly the shape, dimensions and appearance of a portable typewriter; \ (b) a keyboard, similar to that of a typewriter, but with some adaptations, which is at the front of, and integral with, the micro-processor; . (c) adise drive unit, which is smaller and separate, has a slit to accommodate magnetic ("floppy") discs, and can be connected to the micro-processor 7 by cable; (d) @ visual display unit or "monitor"; and (e@) sometimes, a "printer". There are various models of the Apple II computer, and Xs progressive improvements have been made thereto, but the I references in this case have been to Apple II computers Ie =) | O 'Oo general, without attention to any variations. The monitor and the printer enable the computer's operations to be displayed and, with the disk drive, are referred to as "peripheral" equipment. The micro-processor contains: y Toe CS (i) a@ central processing unit or "CPU" for the : performance of calculations and other tasks; and (ii) various "memory" devices in which the information and the instructions for the carrying out of those tasks can be stored. A programme is commonly referred to as an ordered set of instructions, but this term can be misleading. For present purposes it is umnecessary to do more than say that what is primarily sought to be protected is the skill and care involved in the preparation of a code for a computer, using code in its ordinary sense of an abbreviated, but understood, form of expressiorr. Programmes exist im great variety, so far as concerns subject matter, and different sets of programmes have different functions in relation to the setting up and running of the computer. Some programmes can be stored permanently in a memory device called a "ROM" (Read Only Memory), the essence of which is . —_— wr a, a silicon chip. These are attached inside the computer at the time of manufacture, although they are readily removabie ance can be replaced. The2rr "memory" 1s not erased when the computer is \ switched off. They cannot be altered, and are therefore sometimes called "firmware". There are six ROM's in an Apple IL micre-processor. As I "think there 15 some lack of understanding of what a ROM comprises, I set out two passages from the Apple II. Reference Manual, which is in evidence. ' "The Apple, in its natural state, can hold from 2K (2,048 1 bytes) to 12K (12,288 bytes) of Read-Only memory on its main board. This ROM memory can include the Svstem Monitor, a couple of dialects of the RASIC language, various system and utility programs, or pre-packaged subroutines such as are included in Apple's Procrammer's Aid #1ROM. The Apple's ROM memory resides in the top 12K (48 pages) of the memory map, beginning at location $SD60¢. For proper operation of the Apple, there must be some kind of ROM in the uppermost locations of memory. When you turn on the Apple's power supply, the microprocessor must have some program to execute. It goes to the top locations im the memory map for the address of this program. In the Apple, this address is stored in ROM, and is the address of a program within the same ROM. This program initializes the Apple and lets you start to '@) use it." (p.72) The explanation of the term qiven in the qlossary to that publication is: "Read-Only Memory (ROM): This type of memory is usually used to hold important programs or data which must be available to the computer when the power is first turned on. Information in ROMs is placed there in the process of manufacturing the ROMs) and is unalterable. Information stored in ROMs does not disappear when the power is turned off." (p.183) The computer and all the physical devices attached to it are known as "hardware". Other programmes are fed into the micro-processor when a maqnetic disc comprising a programme is placed in the disc drive unit or when one is typed on to the keyboard. The keyboard and. dise drive unit are referred to as "input" devices. computer is being operated, the further programmes are stored temporarily in a memory device known as a "RAM" (Random Access Memory). The programmes will be erased from the RAM when the computer ceases operation, but usually remain stored on the magnetic disc for later use. Programmes of this kind are called "software" as they form no part of the micro-processor itseif. A distinction is sometimes drawn between "operating" programmes and "application" programmes. The Apple II ROMs fall more into the first category than the second, but the distinction, for copyright purposes, is rather too arbitrary and not very useful. The distinction was not a focus of argument in the present case. In this case we are concerned with two "firmware" programmes that have been instalIed in the six ROMs of the Apple II computer. "Applesoft" is stored in "five of them (identified as DQ, D8, EO, EB and FO) and "Autostart" is stored in the remaining one (identified as FB). es tN Both these programmes were originaliv written by persons in the employ of the first appellant. On one view of the iaw the fact that there was original writing may be recarded as a critical element in the case. Between August and December 1977, Kenneth Randall Wiacinton wrote ""Applesoft" by modifying a programme called "Microsoft Basic". He did sa using considerable - fo .é ae eg skill, time and effort. Wigginton expressed each step aor. operation of the programme ina shorthand form calied "6502 Assembly Code". 'That language consists of mnemonics each comprising three letters of the alphabet. and can be readily understood by people skilled in its use. A programme in this form is said to be expressed in "source code". In like fashion Stephen Gary Wozniak in 1977 wrote, and John Arklev in 1978 modified, "Autostart". These programmes included labels (identifying particular parts of the programme) and comments (explaining particular parts thereof) , written next to many of the mnemonic statements. A micro-processor cannot store or operate in acccordance with a programme expressed in source code. As an electrical device it can only register the presence or absence of electrical impulses and performs all its functions according to a process which can be described in terms of binary arithmetic. According to the evidence an "0" indicates the presence of an electric current, or impulse, at a particular place, anda "1" indicates the lack of a current, or an electric impulse, there. Cc) 13. It makes no d2iference 1:f this indication i wn n a q if] Lb] 101) {b rs) The fundamental aspect of computerization is not, however, the use of electricity or of micro-chips, but the conversion of figures, words and symbols into & code and, in the case of dicital computers, such as those here in question, a code expressed im terms of binary arithmetic, that- is to say, arithmetic to the base 2. Results could and can be achieved by Manual and mechanical means. usually with much labour, but the importance of the process in recent years is due to means being established for doing it electronically. The silicon chip has become the successor of more elementary electric devices. Programmes in source code must therefore be converted unto seauences of electrical impulses. This is achieved by the use of a computer (a PROM programmer) which is equipped with an "assembler" or "compilation programme". A source programme's mnemonics are typed into the computer. Each keystroke generates a series of- electrical impulses which the assembler will recognize and convert into impulses which detail each step of the programme. The sequences s0 produced are said to express the programme in "object" or "machine readable code". Assembler programmes .operate ina relatively standard manner, so that programmes ina particular source code (e.g. Applesoft Basic) comprising the same terms will produce object codes made up of the same sequences. Both ""Applesoft" and "Autostart" were converted into object code in this way. ee Fy initially, representations of these sequences oF electrical impulses were stored ona magnetic disc o cape. Later, they were regenerated, transferred to silicon chips contained in the ROMs, and stored or retained there. The silicon chips contain numerous fusible connectors | _ a and insulated capacitors. Using a device referred to as a "ROM © Burner", the impulses are passed through the chips, burning out the connectors and leaving the capacitors electrically charged. The pattern of connectors and capacitors thus affected corresponds ta the sequence of electrical impulses so that the Same sequence of electrical impulses can be regenerated. The impulses are regenerated in this way each time the programme is used or "rum" in the micro-processor. The ROMs in each Apple Il computer contain silicon chips bearing patterns which represent "Applesoft" and "Autostart" in object code. These can be seen, but only with an electronic microscope. An Appie IT computer has the capacity, when the appropriate keys are pressed, to display a description of the object code or sequence of impulses, this being reproduced from the patterns in its ROMs. The sequences can most accurately be described with binary notation, but a display made up this way would be extravagantly voluminous. The Apple II uses what is called hexadecimal notation when a description of the sequences is displayed on its monitor or printer. Either notation isa description of the object code programme, and is intellicible to persons trained in the use of that form of notation. There 5 evidence that Wozniak origine Ha g ly wrote part of what became "Autostart" in hexadecimal notation. The computer has the further capacity to "disassemble" the sequences of impulses and display the results in source code, in this case 6502 Assembly lanquagde. A print-out of the : se disassembled source code does not entirely reconstruct the programmes as originally written. The mnemonics reappear, Dut the labels and comments are not reconstructed. In the present case the paper on which was set out the source codes, and other details, was destroyed. This is a common practice. As indicated, the essential matter that is fed into the computer as source code can be recovered. The respondents import Wombat computers, the micro-processors of which contain two ROMs and one memory device called an "EP ROM" (Erasable Programmable Read Only Memory). A programme stored in arm EP ROM is embodied therein as a pattern of electronic charges stored on insulated "floating gates" (referred to as "MOS" technology). The absence of an electronic impulse is indicated by arr uncharged gate. If am EP ROM is illuminated through a "window" im its outer surface by ultraviolet light the pattern will be erased, otherwise it remains. An EP ROM, unlike a ROM, is a variable memory device. mbodied in the wombat a The computer programmes which are ROMs and EP ROM are said to be "reproductions" of those stored in an Apole LI's six ROMs. It was not submitted, nor was it pleaded, that the Wombat components comprised "adaptations" of the programmes comprised in the Apple ROMs (see dcefinition, s.10(1) above). a The Wombat computer, like the Apple II computer, has the capacity to display, either on a monitor or a print-out, a description of the sequence of impulses contained in its ROMs and EP ROM. It can disassemble the sequences and display the results in source code. Print-outs describing the sequences of impulses generated within the Apple II and Wombat computers were made available to the trial judge (Ex. "AB", "AC" and ""AF"). The print-outs are substantially the same and indicate that the sequences of impulses are the same. One minor difference between the print-outs indicates that one of the Wombat programmes enables the word "Wombat" to be displayed om the monitor or printed out when that programme is used, although notably in the Same place as "Apple" appeared, and appears, in the Apple programme. Whilst the Wombat EP ROM reproduces similar sequences toa part of the relevant Apple ROMs, its pattern of charged gates is probably not the same as the pattern of burnt-out fuses and Capacitors in the Apple ROMs. It may well be that the Wombat ROMs are also programmed using "floating gate" or MOS technoloav, oe but the submissions left this matter at iarace. There 25 apparently no evidence as to the technolocy used to store their respective programmes. It therefore cannot be decided positively that there are patterns in the Wombat ROMs which are closely similar in appearance to the burnt-out fuses and capacitors in the Apple ROMs. The evidence clearly establishes that the decree similarity between the Apple and Wombat programmes in the components mentioned could only be achieved by direct copying. Whatever the exact process used in bringing it about, the Wombat ROMs, and the EP ROM, contain representations of the same sequences of impulses as are represented in the Apple ROMs. The conclusion of copying is reinforced by the fact that the initials of the author of Applesoft are contained in both the Apple ROMs and the Wombat ROMs. Electrical devices are available to enable the patterns om a ROM to be copied readily on to another ROM or EP ROM, and it seems to be accepted that this is the easier or 'better way to do the copying. Another way would be to recover the object code of the ROMs, translate back to source code, or hexadecimal notation, and to programme forward again. The Wombat ROMs and EP ROM were, then, copied from the Apple ROMs. The fact that six Apple ROMs have been copied on to two Wombat ROMs and one Wombat EP ROM demonstrates an advance in micro-chip technology unrelated to the programmes or codes contained therein. 18. Being copies of the programmes containea in the Apple ROMs, che Wombat programmes do not include the labels and comments which were part of the original Apple programmes as written in source code. The Subsistence of Copyricht jte i rey a Beg The question whether copyright subsists was dealt with by the judge briefly on the basis that neither the programmes in source code, nor in object code, were literary works. I have understood this conclusion to flow from a general view concerning copyright in computer programmes. It has been suggested, on the © other hand. that he was deliberately confining his observations to the particular programmes, but he did not indicate what relevantly distinguished the present from other computer programmes, nor did he draw a distinction between the "source" and "object" codes. We have not been invited in this case by the respondents to find separately in relation to either Applesoft or Autostart om some basis such as function, and in what follows I will not always discuss them separately. Although we were addressed as to the function of the programmes, and particularly their use in the Apple II computer, the essential concern of copyright is expression and not function, or concepts. Similarly, while "purpose" is doubtless relevant in many cases, 1+ is not by itself critical. © I do not mvseif doubt that the programmes in source code were literary works. There is no necessity for a literary work to be of any literary quality. Tt is accepted that the term ancludes matnematical tables, codes, and, in general, alphanumerical works. One limit doubtless is that it needs to be a "work" and to have nad some skill, even if very small, applied te to its preparation. Meaningless rubbish would plainiy be ~ excluded. Conincer and Skone James _on Copyright, 1l2tn ed., para. 156 has a succinct passage which I believe to be supported by the authorities and to be applicable: "But so long as something in ''writing' exists, it is sufficient, and it is not necessary that what is written should express a meaning in ordinary language. Thus, there may be copyright in a list of words used as a telegraph code, or in a catalogue of type, orin a system of shorthand." - Haisbury's Laws of England, 4th ed., Vol. 9, para. 835 says, ina passage applicable to our Act: "The expression 'literary work' covers work which is expressed in print or writing, irrespective of whether the quality or style is high, and is used in the sense of written or printed matter." In the present case, there is no doubt that a great deal of skill went into the preparation of what was written, and that what was written could be read and understood by suztably trained people. Even applying the test his Honour thought appropriate, and which I have set out as part of his reasons, it is certainly 20. difficult to exciude the possibility that a reader may have got unstruction and information from reading it. Ite is clear that the first appeliant owned, and owns, the copyright in these literary works, and that they were "original" in the relevant sense. The statement of what is a literary work which his Honour gave, in reliance principally on Hollinagrake v. Truswell £18943 3 Ch. 420 and Exxon Corporation v. Exxon Insurance Consultants International Ltd. (1982) R.P.c. 69, is not, nor was it intended to be. exhaustive. There has I think long been a tendency (not invariably observed) to apply the lanquage of the statutory law governing copyright in a practical manner, consistently with the needs of the time, and the then current concepts. In my view the source cades before us express meaning as to the arrangement and ordering of instructions for the storage and reproduction of knowledce. It is incorrect to describe them simply as components of a machine. With respect, I do not agree with the statement apparently accepted by the learned judce which suggests an analogy with "something merely intended to assist the functioning of a mechanical device". There is a distinct and recognised difference between a computer programme and the electro-magnetic functioning of the machine. The codes are in ny view original literary works. 21. Adaptation of an Oricinel Literary Work Iam satisfied that the object codes in the Apple il ROMs are adaptations, within the meaning of s.31fli{a)(vi) and s.10(1), of the original literarv works constituted by the programmes in source codes. This is, I think, because they can Foe eS fairly be described as. translations. Transliteration may more precisely explain what happens, but this is plainly comprehended within "translation". This term doubtless normally suqgests translation from one language to another, but its ordinary meaning 1s wider and it is necessarv to apply it with due regard for modern technology. The object codes contained in the Apple ROMs are a straightforward electronic translation into a material form of the source codes, and it would be entirely within ordinary understanding to say that they are translations of the source code. An indication of the natural application of the word to the production of an object code is found in the 1979- report of the United States National Commission on New Technological Uses of Copyright Works (p.21, n.109): "A source code is a computer program written in any of several programming languages employed by computer programmers. An object code is the version of a program in which the source code language is converted or translated into the machine language of the computer with which it is to be used." (The emphasis is mine) It is apparent from the definition of "adaptation" in , ' §.10(1) thar neither it nor, I Suggest, its respective ingredients, are to be given a narrow or confined meaning. See also Laddie Prescott and Victorza. The Modern Law cf Copvright (1980) ».96 and Seca Enterprises Limited wv. Richards (1983) F.S.R. 73 (per Goulding J.}. It is plain from the langquace of the Act itself that an adaptation of a literary work does not itself have to be a literary work, and it does not seem to me that it must by itself be capable of being the subject of copyright. Whether the Apple II object codes could be regarded as literary works is nota matter which has to be considered. The making of an adaptation is one of the exclusive rights comprised in copyright. I should say that I do not find myself in agreement with the expressed view of his Honour to the effect that computer programmes were deliberately omitted from the provisions of the Act. It is certainly true that no special provision was made for Chem, but this is a different matter. Apart from the history of the matter, it can be borne in mind that at the time the 1968 Act was in the course of preparation (going back to the time of the Spicer Report (1959)), computers were not widely used, and micro-computers were almost unknown. Infringement I have already stated that the Apole object programmes crea me - _ oe - tee ee en een Nee ee were copied into the Wombat components. So far as concerns the Applesoft object programme, at least, 1t was early in the field and was of considerable value. The copies, when inserted in the Wombat computers, meant not only that Wombat software was "compatible" with Apple programmes (which they were advertised to be), but that the programming facility of the two machines was, mae oe . the same or virtually the same. This was undoubtedly done? 2 delibetately, for the financial benefit of the respondents. The question which arises is whether this offends against the copyright laws. It was submitted for the appellants that the Wombat ROMs contained reproductions of either the source or object code expression of the Apple proaqrammes. It was submitted on behalf of the respondents that the evidence does not establish that they copied the appellants' programmes from source code, or any writterr derivation thereof, into source code, nor that ther copied a representation of _the object code in hexadecimal notation. What they did, however, was to copy that which the source code - programmes had been converted into, that is to say, the programmes expressed in object code and embodied in the Apple ROMs. As I have said, this manner of copying seems to he the most likely. If the object codes in the Apple ROMs were "reproduced" in the Wombat ROMs and EP ROM there would in my view be reproductions of the adaptations and hence the commission in AY each' case of an an act comprised in the copyright (see I "po i tv > y G al a , m eyfi ma ' m Th! yoig not the chins } m subject n fu che re code 1s embeddec in the chips, in the sense thet un v pe) a) by ™ # al i ct components that the electric charges are to be found, arranged according to the code. Infringement in the present case involves the reproduction in "a material form" of an adaptation of a work (s.31(1)(i) and (vil1)). It is not necessary to reproduce the ~ material form of the work or adaptation. The resemblance to bet congidered is that between the code embodied in the adaptation and that in the alleged reproduction, and not one as between the materials in which they are embodied (see on the distinctions involved, Re Dickens (£19351 1 Ch. 267, per Romer L.J., at pp. 292-295, and Pacific Film Laboratories Pty. Ltd. v. Federal Commissioner of Taxation (1970) 121 C.L.R. 154. per Windeyer Jd., atpp.167-169). From the evidence of the print-outs it 1s plain that the arrangements of the object codes stored 1n the Wombat ROMs are the same, or virtually the same as the arrangements of the object codes stored in the Apple ROMs. Moreover, the Apple codes could be reproduced, with substantially their same 'content, from a print-out recovered from the Wombat ROMs. It is of no consequence that the Wombat ROMs and chips probably bear different patterns from those appearing on the Apple ROMs or chips. The fact is that the former embody the same arrangements of impulses and produce the same result, and are directly copied from the Apple ROMs. In my view it does not matter, if it be the fact, that the code cannot be seen. even with special apparatus. 25. The adaptation of the work is renderea perceptibie with a4 machine. It 1s sufficient that the code has its existence in. and is ascertainable from, the chips. It seems to me that 'he correct view is that the Wombat ROMs do contain reproductions of the Apple object codes, within the meaning of $-31(1) (a) (4) and (vii). I should ada that the: question has not been raised of direct adaptation of the source code hy production of the Wombat object code. The Wombat computers contained the ROM chips in question at the time of importation and of sale, and ss.37 and 38 are applicable if knowledge is proved. Print-outs were not, as such, imported, nor sold. by the respondents and need not be considered. There will not be infringement under ss.37 or 38 unless knowledge of infringement at the relevant time or times is established. This is not a matter upon which the learned judge made a finding. Counsel for the appellants relied upon the documents in evidence and some of the cross-examination of the second respondent, a decision on the matter may turn on matters of credibility. Section 36, which deals with primary infringements, does not require knowledge. A case might be made out thereunder, but counsel for the applicants (the present appellants) disclaimed reliance upon it at the trial. Counsel for the respondents objected to the section being relied upon before us, and said \ \ cee Se wey W ip Uf ci iy in AU he ad ay m t's 1b i 'vJ A i)ct mn that if it nad been a consideration &t <= IT do not think that the appellants should now be allowed to raise If knowledge acing back to some date oricr ta the AT commencement of the proceedings has to be proved, the matter will: have to be referred back to the trial judge. The primarv difficulty, as I see it, is that we do not know what weight, if : any, or, indeed, what effect generally, to give to Mr. Suss evidence. It may be difficult to deny that the relevant knowledee existed having in mind the action commenced on ll Marcn 1983 ain the Supreme Court of New South Wales against people, admittedly agents of the respondents, claiming, amongst other things. breach of copyriaht. The summons in that case refers to a Golden II computer but in his evidence Mr. Suss says that this computer is the same as a Wombat. He also states that he had kmowledge of these proceedings in March 1983. However. na finding of the learned judge as to Mr. Suss' explanations as to > the extent of his kncwledge is available. It is plain, nevertheless, that if there is copyright and the making of the Wombat computers containing the Applesoft and Autostart programmes otherwise constitute an infringement, the necessary knowledge has existed at least since the commencement of the proceedings. Reference is often made to the test of knowledge propounded by Harvey J. in Albert v. S. % - i Notinunc and Co. Limited (1921) 22 S.R.(N.S.W.) 75, at 0.81: "'Knowledee' in the section cannot mean in my opinion any more than notice of facts such as would suggest to a reasonable man that a breach of the copyright law was being committed." (See also Conincer and Skone James 12th ed. para. 530). The statement is to be understood as interpreted in R.C.RS 123 (see also Sillitoe v. McGraw-Hill Book Co, (U.E.) Led reported in "The Times" newspaper of 18 January 15982). ; The appellants on more than oné accasioan put cherr argument in support of injunctions on the basis of knowledge existing from at least the commencement of proceedings. The case the bs) Then becomes eubstantially a quia taimet one, I circumstances it seems to me that the appellants should be abie to put their case this way. The fact is that the respondents continue to claim the right tao import and sell as they have been doing. Acreed fact 12 is doubtless expressed ellipticallv, but it is as follows: "The first respondent has imported and sold in Australia and, unless restrained, will sell in Australia micro-computers under the name Wombat". It seems to be the fact that they have never been sold other than with the copies of che appellants' ROMs. The case thus put relies on ss.37 and 38. and not s.36. CY Tam thersfore of the view that there was copvricht. and that, after the time of commencement of proceedings, if not before, a threat of infringement existed. Some infringement may have occurred during the course of proceedings, but this is nota matter which has been explored, or arqued. I am therefore of the . view that injunctions should qo. If damages are sought, the. - ae ft matter should be referred to the trial judge for findings | - concerning knowledge, as well as other relevant matters. Claim under the Trade Practices Act In relation to the case under the Trade Practices Act, passages have already been cited from his Honour's reasons. He was of the view that the distinct label "WOMBAT", combined with small but observable differences in appearance of the computers, and some other factors, meant that there was no likelihood of deception. Hig conclusion in relation to s.52 (i.e. the "primary case" under that section) was based on absence of product Similarity. He immediately went on to deal with other provisions of the Trade Practices Act as follows: -"The case sought to be put by the applicants on the other provisions of the Trade Practices Act, namely, \ ss.53(c), 53(d@) and 55 must also fail, for similar reasons. Given the conclusion reached that the ! respondents' products have been . sufficiently distinguished from the Apple range of computers, it must Fe ee eee ete ee ee -- ee eee ae eee - ~~ —— ee follow that no fal is contemplated by s.53(c) or (d) has been made and that no misleading conduct of the kind proscribed by s.55 has been established. Acain, this 1s essentially a question of fact that must be resolved adversely to the applicants. In the circumstances, this part of the claim is also rejected." s2 representation oz the kind ) It does not seem to me to follow from his Honour's Tet we ee expressed reasons with recard to s.52 that the case sought ta be a made under the other provisions should fail, for similaf reasons, oer at all. His Honour did refer to the supply of Apple IT manuals, but, only, as it were, as a minor ingredient on the aspect of product similarity when considering the application of s.52. For the purposes of s.53(c) it is necessary to examine more clesely the effect of the supply of kpple II and Applesoft manuals, and copies thereof, in association with the Wombat computers. Section 53(c) is as follows: "53. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of gaods or services or in connexion with the promotion by any means of the supply or use of goods or services — (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have". Agreed facts 16 and 34 relate to this matter. The following facts also appear, and so far as I can see, are not \ ' disputed: \ t : | i (a) In a series of telexes (undated, except for one dated 4 March 1983) orders for one hundred Apple Ii User's Guides were placed with orders for one hundred Wombat computers, and their shipment was notified to the second respondent from the same Taiwanese supplier. The orders may have been renewed once or on a number of occasions, or there May only have been one order, before it was acted on. (b) By another telex, notification was given that fifty Apple II User's Guides were being shipped with fifty Wombat computers. (c) There was an urgent plea on 3 and 8 November 1982 to the Taiwanese supplier to provide manuals on the Apple computer. (d) On 1 July 1983 an order was placed for eighty Apple User's Guides with ten Wombat computers. The manuals in question were of two types. One bore the name in typescript of a Taiwan company, under that, in print, of Osborne/McGraw~Hill, with whose agreement the book was expressed to be published. The book also contained, on a fly leaf, and on the back cover page, some Chinese typescript, or print. It was prominently described as the Apple II User's Guide and the only ~ fF o-~n-|o 2 —- - - a ee eee ' i 31. direct evidence of the suspiy of such a book with & Wombat was oF its inclusion in a box with & Wombat purchased from the respondents by an employee of the second appellant, The other manual was issued under the name Guan Haur Industrial Co. Ltd.,. of Taiwan, and was supplied from Taiwan and admittedly distributed by the respondents in association with . their supply of Wombat computers. The manual purported to be for the Apple II and "Golden II Plus" versonal computers, but in fact was &@ complete copy, in the one volume, of two manuals of the appellants, described respectively as the Applesort Basic Programming Reference Manual, . and the Apple II Reference Manual. The Guan Haur manual bears an endorsement on its first vage, in large capitals: "A REFERENCE MANUAL FOR THE APPLE IL AND THE GOLDEN II PLUS PERSONAL. COMPUTERS". There are many references throughout to Apple II computers and, all the illustrations seem to be of them. In many places the words "Golden II" are inserted (rather crudely) where, in the original manuals, the words Applesoft or Apple II appeared. The manual appears to me to be a pirated copy of the Apple computer manuals to which I have referred. There is no evidence of the existence of separate Wombat manuais. So far as appears, the abovementionec ordérs were fulfilled. The presence of the Apple II books, and their supply with the Wombat computers, Was explained om the basis that the Wombat software was advertised as "Apple compatible". There is ambiguity about these words, and it is not always clear how they are used. I have generally taken them to mean that software designed for use im an Apple II could be used in the Wombat. This is the explanation given by Mr. Suss in his affidavit and at the commencement of his oral evidence. I quote a vassage from his affidavit: "I therefore obtained a machine, which I call the Wombat, which was, on my understanding designed to run Apple compatible programs. That is to say, a computer that is capable of running programs which were designed for Apple computers without substantial modification to those programs." On the other hand, some advertisements contain a prominent note: "The Wombat software is compatible with programs for the Apple II". It is understandably én important matter for the producer of a programme (on a floppy disk or cassette) to be able to say that it couid be used in a popular computer, such as Apple. It is also important, no doubt, to the producer of a computer to be able to say that sopular programmes could be used in its machine. What would be understood, in the note I have set out by "Wombat software" 1s also not clear. The term "software" may refer to the programmes in the EP ROMs and the Wombat, although that would not, I think, be a normal or od ° O ub WwW general use. It does not seem that the respondents were encacged in producing, or selling, something under the name or description "Wombat software". The Apple II manuals went far bevonce dealing with the use in other machines of programmes desiqned for use in the Apple II computer. Indeed, they do not seem to mé co deai With this aspect at all. ks I see it, the respondents were more or less compelled to provide the Apple manuals. They had none. of. their own, and they needed a manual which would adecauatelv deal with that which they were selling. As they were selling a unit programmed with the Apple II programmes, the Apple manuals would obviously go a considerable distance in providing information and guidance to their purchasers. They were manuals for the understanding and operation of Apple computers, and dealt with Apole II ROMs. The immediately relevant question 1s whether there was a representation that the Wombat had a sponsorship or approval (namely one by Apple Corporation Inc. or its associates) which it did not have. ' It seems to me that the conclusion is open that a purchaser would have believed that there was a closeness of association between the makers or suppliers of the Apple computer and the Wombat computer. The meanings of "sponsorship" and "approval" were discussed by Franki J. in McDonald's System of Australia Pty. Ltd. v. McWilliams Wines Pty. Ltd. (1979) 41 F.L.R. 429, at p.434, IL find it difficult to conclude that here i Bra there was a representation cf "sponsorship", Which suggests 4 degree of support or assistance by a sponsor. No oral evidence was given to this effect, nor, for that matter, to the effect that in someone's understanding there was an "approval". The trouble with this latter word, in the present case, is that it is not the most apt word to use, but in the context I do not think ne wot Ee that it should be regarded as connoting anything formal. The*-~- Te OUtR best way I can put "At with relative accuracy 1S to say that there \ © would appear to be a measure of agreement or concurrence between those producing or supplying the respective computers. The respondents sold computers other than the Wombat, and provided manuals other than the Apple II, and it is possible that they had the Apple Ir manuals for sale, or supply, to persons other than Wombat purchasers. There is, however, evidence that some were supplied with the Wombat computers, and, in the absence of evidence to the contrary, the inference seems O to me to be irresistable that this was a common course. It is necessary, however, to take account of his Honour's finding, as follows: "In the present case, in my view, no purchaser of the respondents' qoods is likely to be misled or deceived into believing that the respondents or their goods are in any way associated with the applicants: on the contrary, the respective products are clearly distinguished from one another by the use of very different brand names and the reference, in advertising, to the 'compatibility' of Wombat software with programmes or the Apple II computer only serves to reinforce the distinction. In my opinion, the primary i I have eariier made reference to the use of the term "compatible", and, in effect, suggested that, at the least. it amounts to a half-truth. In view of the fact that the learned judge was dealing with s.52, and focussing attention principally upon the appearance and possible deceptiveness of the Wombat: * computers, I do not think I should regard this statement asa finding of application to s.53(c). On the other hand, I have found particular difficulty in arriving at a conclusion on the matter, in the absence of discussion thereon by his Honour and his assessment of relevant aspects of the evidence. The - situation is one in which an appellate court finds benefit and assistance from the findings and- analysis of a trial judge. In my view the least undesirable course is to set aside his Honour's decision as far as it relates to the application of s.53(c), and to remit the matter .to..him for his further consideration and" decision. This brings me to what his Honour descrihed as the "secondary claim under s.52. The appellants submit that the Wombat ROMs and EP ROMs are "infringing copies" as described in s.10(1) of the Act and that the rights and remedies established by s.116 in respect of them are not only available against the respondents, but also ———— ee against persons purchasing Wombats from the respondents. ta) m They arque that by seliine the omDats the respondents have, in breach or s.52 of the Trade Practices Act, misled or deceived those purchasers inte believing that they will get good title to ard enjoy quiet possess20on of 'the ROMs and EP ROM, free of any claim such as one under s.116. ~~ Ne ale The respondents arcue that s.116 is only available: against actual infringers and not against persons in possession of infringing copies. As to whether it can be implied in the supply of goods by the respondents that they made the relevant misrepresentation, attention should be had to s.69(1) of the Trade Practices Act. This section implies a condition as to title and a warranty as to quiet possession in contracts between a cerporation anda consumer. See also s.53(q). I doubt therefore whether an absence of title upon the sale of goods is a case to be dealt with under s.52. I need say no more. In my view the eppeal should be allowed and the judgment of his Honour set aside as far as concerns the copyright claim and the application of s.53(c) of the Trade Practices Act. In lieu thereof there should be injunctions and declarations in accordance with the foregoing. The claim under s.53(c) should be remitted to be considered further. If the appellants wish to pursue claims for damages in relation to infringements under ss.37 and 38 of the Copyright Act notice should be given in twenty-one days and in that event the matter should be referred to the trial judge for findings on the evidence as it stands in -— ~ owe eee oe eee ee ee —-- ee oe Se he respect sof "hknowledce", and if favouranpie to the appellants in yelation to a particular time or times, there should thereafter be an inquiry as to damages under those sections. I certify that this and the thirtv-six (36) preceding pages are a true copy of the Reasons for - Judgment herein of his Honour Mr, Justice Fox. ind _ ta as 10. Le rete x Jus reasons vo issd, STATEMENT OF AGREED FACTS The first apolicant is incorporated in California. The second applicant is incorporated in New South Wales. st respondent is in tion under the Trad r a The first applicant makes and sells computers under. the "Apple" . The second applicant is the Australian distributor of th first applicant's computers The first apolicant has made and sold computers under th names "APPLE II", "APPLE IIT PLUS", "APPLE EUROPLUS" SND "APPLE. TIE". le II computer A large number of computers (including App throughout Austr have been solid throuchout the world and under the name "Apple". The applicants have advertised and promotea computers un the name Apple (including computers under the name APPLE widely throughout Australia and throughout the world. The applicants have a substantial reputation in Apple II m1icro-computers. rts at name a € s) alia der IT) 15. 16. 17. 19. 20. ai. 2. at deal of soft pheral equipmen uters A ore ware (computer prod 2 tv) 2 cramme Ss compatible with Ap 39 | (per compu The first respondent has imported and sold in Austraiia and, unless restrained, will sell in Australia micro-computers under the name WOMBAT. Programmes suitable for Apole II computers, can be used for Wombat computers. The similarities and differences between the shape of the es Apple Il.computer-and the shape of the Wombat computer are - apparent on a visual inspection of examples of the two ~ computers which will be identified by agreement. The first respondent has published and, unless restrained, will publish advertisements stating that "Wombat software is compatible with programmes for the Apple II". A book entitled "Apple II User's Guide" has been supplied by the first respondent to some of its customers. Kenneth Randall Wigginton is and has been at all material times a citizen of the United States of America. In 1977 the first applicant obtained a copy of a programme entitled MICROSOFT BASIC from Microsoft Inc., a corporation unrelated to the applicants. This consisted of about 10,000 lines of code together with comments thereon and explanation thereof. Betweer August 1977 and approximately December 1977 Widginton, (then employed by the first applicant) modified the MICROSOFI BASIC programme by altering or rewriting some of the lines thereof. The programme thus modified was called APPLESOFT=- Both the original MICROSOFT programme and the oricinal APPLESOFT programme have since been destroyed. The programme as originally written by Wigginton had four elements: (a) labels identifying particular parts of the programme; (b) mnemonics each consisting of 3 letter of the alphabet and each corresponding to a particular operation expressed in 6502 Assembly Code; {c) mnemonics identifying the register in the microprocessor and/or the number of the instruction in the programme to which the operation referred to in (b) relates; and (ad) comments intended to explain the function of the pu bh 22a. 23k. 25. 26. 27- 3. particular part of the proeramme Fcr the benezit oF a human reader of the programme. It 1s not possible to reconstruct from existing evidence the labels (a) or the comments (d). However, it is possible to reconstruct the mnemonics referred to under (hb) and (apart from the change in the labels used) the mnemonics referred to under (c). Such a reconstruction appears in a document to be identiIi1ed and agreed. Before it was destroved, the Applesoft source programme was used to make another programme called the APPLESOFT OBJECT PROGRAMME. A computer was used in this process and this computer was programmed with one or more programmes written by & person or persons other than Wioginton. The OBJECT PROGRAMME in the first instance consisted of a seauence of electrical impulses within a computer. After the electrical impulses referred to in paragraph 22 were generated, Wigginton then used the computer "to store a representation of" the impulses on a magnetic disc or tape. The maqnetic dise or tape is capable of being used in conjunction with a computer to generate the same sequence of electrical impulses. It is possible to describe this sequence of electrical impulses using certain conventions. In one such convention, HEXADECIMAL notation is used. A description of the APPLESOFT OBJECT PROGRAMME using HEXADECIMAL notation is set out in a document to be identified and agreed. Macnetic tapes capable of being used in conjunction with a computer to generate the sequence of electrical impulses referred ta in paragraph 22 were first sold to the public by the first applicant im the U.S.A. in 1978. Wigginton executed a document to be identified and agreed. At all material times Stephen Gary Wozniak was a citizen of the United States of America. In 1977 Wozniak wrote a computer programme called "SYSTEM MONITOR PROGRAM" in the United States of America. The programme as criginally written by Wozniak had the four elements described in paragraph 21. In addition, Wozniak also wrote a number of the operating codes in a conventional representation in HEXADECIMAL notation of a number of the mnemonics expressed in 6502 ASSEMBLY CODE. With the aid of a computer, Wozniak then generated a number of electrical impulses, and images om a visual display unit, and edited the System Monitor Programme. Wozniak then used the computer to "store a representation of" the impulses on to ~~ ae] O 29. 30. 31. 32. O 324. 35, 4, a Magnetic disc or tape. The magnetic G:isc or tape capable of being used in conjunction with a computer generate the same sequence of electrical impulses. TO Silicon chips are capable of being used in conjunction with a suitably vrogrammed computer to generate the sequence of electrical impulses referred to in parasrapn 27 were First sold to the public in the U.S.A. by the first apslicant in 1977. In 1978, Jonn Arkley, a citizen of the United States of America, modified the "SYSTEM MONITOR PROGRAM". The a programme so modified is known as the AUTOSTART PROGRAMME. : Arkley did this work during the course of and within the scope of his employment by the first applicant. ~- The texts of the SYSTEM MONITOR PROGRAMME and the AUTOSTART PROGRAMME are to be identified and agreed. Wozniak executed a document to be identified and agreed. The AUTOSTART PROGRAMME was used to make another programme called the AUTOSTART OBJECT PROGRAMME. A computer was used in this process and this computer was programmed with one or more programmes. The OBJECT PROGRAMME in the first instance consisted of a sequence of electrical impulses within a computer. It is possible to describe this sequence of electrical impulses using certain conventions. In one such convention HEXADECIMAL notation is used. A description of the AUTOSTART OBJECT PROGRAMME using HEXADECIMAL notation is set out in a document to be identified and agreed. The electrical impulses referred to in paragraph 32 were "stored" in the manner described in paragraph 22A. Silicor chips capable of being used in conjunction with e computer and another programme or programmes to generate the sequence of electrical impulses referred to in paragraph 22 were first sold ta the public by the first applicant in 1979. The Wombat computers sold by the first respondent contain 3 ROMS of 3 ROMS and EPROMS. On 15 April, 1983 the first respondent sold to Jeffrey Duffus McLeod, an employee of the second applicant, a Wombat computer to be identified and agreed. In the same box was an "APPLE II USERS GUIDE" to be identified and agreed. In June 1983 the cross-respondent sent to at least one University the document annexed to the Cross-Claim herein under tover of the letter referred to in the particulars to para 9 of the Cross-Claim. 38. 39. A listing of the Autostart ROM program in hexadecimal notation was filed by the first applicant in the U.S. Copyright Office. A copy of the certificate of reqistra is Ex "S"; a copy of the listing is Ex "T",. The effecti date of registration is 14 April, 1982. A listing of the Applesott program in hexadecimal notation from location E000 to location F8FF was filed bv the first applicant in the U.S. Copyright Office. A copy of the certificate of reqistration is Ex "U": and copy of the listing is Ex "V". The effective date of registration is 4° May, 1982. By oversight at the time of these proceedings, the listing which is Ex "V" does not contain a listing of Applesoft from location DOOO to DFIF. A complete listing of the Applesoft program in hexadecimal notation from location BO00 to Location F8FF was filed by the first applicant in the U.S. Copyright Office. A copy of the certificate of registration is Ex "W"; a copy of the listing is Ex "XK". The effective date of registration is 3 March, 1983. A reconstruction of the Applesoft program of the type described in paragraph 21 was filed by the first applicant in the U.S. Copyright Office. A copy of the certificate of registration 1s Ex "¥"; a copy of the document lodged is Ex "Z". The effective date of registration is 7 January, 1981. Ex "Z" also contains labels and comments of the kinds referred to in sub-paragraph 2l(a) and 21(c). iN THe FEDERAL COURT OF AUSTRALTA } NEW SOUTH WALES DISTRICT PECGTISTRY ; NO G 405 of 1983 GENERAL DIVISION BETWEEN : APPLE COMPUTER TNC. and . APPLE COMPUTER AUSTRALIS Pry. CTp. Appellants 7 Ee AND: COMPUTER EDGE PITY. LIMITED and Respondents CORAM: Fox, Lockhart and Sheppard JJ DATE: 29 May 1984 REASONS FOR JUDGMENT Lockhart J. Introduction This appeal raises amportant questions relating to the law of copyright. It also concerns issues under the consumer protection provisions of the Trade Practices Act 1974 (the "Trade Practices Act"). The first appellant, a Californian corporation, manufactures and sells computers under the name "Apple". Large numbers of Apple computers have been solid throuchout the world. The secona appelient, a New South Wales companr, i. the Australian cistributeor of the first appellant <= computers. Appie computers are made and sold under names which include "Apple iI", be {D "Apple II Plus", "App Euro Plus" and "Appie IIE". The Apple computer with wnich this cas@ 1s concerned is the APPLE II. The appellants have acauired a substantial reputation in Australia in respect of APPLE II computers, and more than 20,000 of them have been sold here. The first responaent, a Victorian company, imports and sells in Australia computers under the name "WOMBAT", a computer manutactured or assembled in Taiwan. The second respondent is the managing director of the first respondent. The first respondent was formeriy an APPLE dealer until shortly before 1t commenced to sell WOMBAT computers. The first respondent sells WOMBAT computers from the same premises as it previously used for the sale of APPLE II computers. The APPLE II computer and the WOMBAT computer are generally referred to as microcomputers or personal computers. With the development of the microprocessor (a Central Processing Unit on a silicon chip) there has been a substantial reduction in the size and cost of computers and at the same time a dramatic increase in their speed and capacity. These developments have led to the use of microcomputers in small businesses, homes and ty numbers of Apple computers have been sold throughout the world. The second appellant, a New South Wales company, is the Australian distributor of the first appeliant s computers. Apple computers are made and sold under names which include "Apple II", bt] "Apple II Plus", "Apple Euro Plus" and "Apple IIE". The Apple computer with which this case is concerned 1s the APPLE fi. The appellants have acquired a substantial reputation in Australia in respect of APPLE II computers, and more than 20,000 of them have been sold here. The first respondent, a Victorian company, imports and sells in Australia computers under the name "WOMBAT", a computer manufactured or assembled in Taiwan. The second respondent is the managing director of the first respondent. The first respondent was formerly an APPLE dealer until shortly before 1t commenced to sell WOMBAT computers. The first respondent sells WOMBAT computers from the same premises as it previously used for the sale of APPLE II computers. The APPLE II computer and the WOMBAT computer are Generally referred to as microcomputers or personal computers. With the development of the microprocessor (a Central Processing Unit on a silicon chip) there has been a substantial reduction in the size and cost of computers and at the same time a dramatic increase in thelr speed and capacity. These developments have led to the use of microcomputers 1n small businesses, homes and schools. & microcomputer is one of three classes cf computers, each defined by 1ts s1ze and capacity. It 1s the description given to that class of computer which is smallest in capacity and slowest in speed of computation. The other classes, in ascending | order, are minicomputers and mainframe computers. Within the microcomputer market there is a decree of standardisation of both equipment and programmes, despite a plethora of competing manufacturers and suppliers. Products manuractured by companies other than the first resrondent are compatible with the APPLE II computer. Similariy, some programmes produced by the first appellant and desicened for use in the Apple II computer are compatible with the WOMBAT computer. The appellants sued the respondents in this Court alleging breaches of s. 52, paras. 53{c) and 53(d) and s.55 of the Trade Practices Act and infringement of copyright under ss. 37, 38 and 115 of the Copvright Act 1968, (the "Copvracht Act"). The respondents cross claimed for an injunction to restrain the appellants from sending circular letters making various claims which the respondents contend are misleading and deceptive and therefore contravene s. 52. The learned primary Judge dismissed the appellants' claim under s.52 of the Trade Practices Act on the cround that no purchaser of the first respondent's goods was likely to be misled or deceived into believing that the first respondent or the WOMBAT computer was in any wav associated with the appellants. His Honour said that for similar reasons the claims under ss. 53 and S5 must. aiso fail. His Honour also dismissed a secondary claim of the appellants, a blend of s.52 of the Trade Practices Act and the Copyright Act, that the first respondent had sold WOMBAT computers containing three silicon chips and that the chips were "infringing copies" within the meaning of that expression in s. 10 of the Copyright Act. The appellants arqued that in those circumstances the first respondent misled or deceived purchasers of WOMBAT computers into believing that they would take title to, and enjoy quiet possession of, the computers free from any claim in conversion or detinue, so that the respondents were engaging in misleading or deceptive conduct contrary to s.52. His Honour dismissed this claim on the cround that no infringement of copyridht occurred. The learned primary Judge also dismissed the appellants' application far injunctions and damages for infringement of the first appellant's copyright in certain of 1ts computer programmes. His Honour found that the first appellant did not have copyright in those programmes because they were not "literary works" within the meaning of the Copyright Act. His Honour said that in his view a "literary work" for relevant Purposes is something which was intended to afford either information or instruction, or pleasure, in the form of literary enjoyment. He looked to the function of a computer programme and held that its function is to control the seduence of operations carried out by a computer, especially in the case of programmes written in object code (an expression to which fi shall refer later), being some of the programmes the supject of this case. His Honour therefore decided that none of the programmes in su1rt were "literary works" within the meaning of the Copyright Act. ' As to the respondents' cross claim, his Honour did not regard 1t as being any longer a iive issue between the parties and stood 1t over cenerally without making any findings about it. I propose to consider first the claim for infringement of copyricht and then the claim under the Trade Practices Act. However, before I consider the leqal issues involved in the claims, it is necessary to say something about computers in general and the products in this case in particular. Computers A computer is an interconnected and sophisticated system comprising four parts - input, processing, output and storaqde. The machines in a computer system are called its "hardware". "Software" 1s the term qiven to the computer's programmes and it is distinct from hardware, A programme is a concise series of instructions that directs the computer to do the tasks required or it step by step and to vroduce the desired result. Oy The copyright aspect of this case concerns software or computer programmes. The Trade Practices Act claims relate more to the hardware aspect of the computers in question. Blithouch in ome sense all programmes instruct the computer, they are freauently cateqorised by the function they perforn. In computer language, they may be ""operatince" programmes or "application" procrammes. Operating programmes are programmes that, as a system, instruct the computer to manage its own resources, execute application programmes and manage data. Application programmes are programmes written and used to solve specific problems, such as, in business, to calculate the payroll or the accounts receivable. Operating programmes are usually supplied by computer manuracturers, whereas application programmes. especially for microcomputers, can be bought "off-the-rack", or can be "tailor-made" to suit the users' needs. A microcomputer with an operating procramme but without an application programme is, 1n most cases, of little more use than a literate calculator. A microcomputer with only an application programme and without an operating programme will not function. An operating programme is fundamental to the working of the computer. It is the programme that tells the computer how to function and how to recognise and execute the application programme. The Gistinction between an operating and an application programme is not a rigid one because a single programme may answer both descriptions. This case concerns two programmes that answer the description of operating programmes. "Applesort", in whatever form it is written, is one of the main operating programmes for the Apple II microcomputer. It is an interpretér programme, with tne function of processing application programme statements entered into the computer inthe high level language of BASIC (about which I will say more later), one statement at a time, and then causing the computer to execute the instruction contained in it. The Apple II computer is desicqned to operate on application programmes "keyed in" with the BAsIc lanquage. Without "Applesoft" to interpret and process that lanquage, the computer would not be able to perform the tasks required of it. "Autostart", ain whatever form it is written, is the procramme that sets the Apple II computer in motion and prepares it for the demands made of it by the various application procrammes. A computer 15s thus controlled and operated by prodrammes. Before looking at how the computer interprets and obeys programmes fed to 1t, it 15 necessary to look at how the programmes progress through the computer system. A programme has to be placed ianto the computer by some means. This may be done by inserting a tape or disk with the (3 8. programme recorded on it, or by keying the programme in, line py line, through a keyboard terminal. It may also be done "automatically" by computer, when the programme has been permanently encoded on a silicon chip within the computer's main memory. This last method us usually adopted for operating Programmes, and applies to the "Applesoft" ana "Autostart" programmes in the APPLE II and WOMBAT computers. Unless it has been stored there vermanently, all programme instructions must be sent to the computer's "nain storage", a part or the microcprocessor in the computer. From there each item of instruction is "fetched", processed or executed, and returned in sequence by the Central Processing Unit, (the "CPU"), which 1s another part of the computer's microprocessor. All of this 1s done according to the overating programme's instructions. Generally, the main storage units hold the programme only temporarily while the CPU is executing the programme. Main storage is not to be confused with "secondary storace" which holds data ain a permanent or sem1 permanent state on, say, disk or tape. The CPU is the operating centre of every computer. All the manipulation of information entering a computer system takes Place in its CPU. For example, when the computer system is used for the retrieval of legal information - a form of data 'oO processing - the CPU is where ail the sorting and rearranging takes place. It is necessary to understand how inrormation gets into the primary storage or CPU so that the computer can process it. The CPU ius a complex and extensive set of electrical circuitrr. As such, it knows only the presence or absence of electrical impulses. The semiconductors in the microprocessor can be in one ef two possible states, similar to that of an electric iight globe, namely either "on" or "orf". For convenience, this two-state system (known as a binary system) is represented by the digits 0 orl. The zero ("0") indicates the presence of electric current at a particular place ain the CPU and the one ("1") indicates the absence of current there. The digits 0 and 1 are called binary digits or "bits", and represent the only units of information that can he recognised by a computer namely, the presence or absence of electric current. Since a single bit itself cannot store all the letters, numbers and special characters which must be processed by a computer, a coding scheme has been devised, by which each character is represented by a combination of binary digits. fFror example, in the Apple II computer the letter "A" may be represented by a bit compination of 11000001 (that is, eicht semiconductors each in the following electrical states; on on off q 10. eff off off off on). Thus, when the user of the Apple IL computer depresses the key "A" on its keyboard, (or reads the letter in Dy other means) the computer systems converts this character into a binary code of electrical ons and ofis and is then abie to understand it as the letter "A". Similarly, when it has finished processing that information, and is instructed to issue a print out, that process is repeated in reverse, so that. the internal binary code of ons and offs is converted back to the letter "BA". It is important to note that different internal binary coding systems are used im different computers. Many conventions have developed over the expression of this internal hinary code. The code is rarely writtem out by humans in Dinary notation, that is as aseries of groups (or bytes) of bits, or 0's and l''s. More usually, a base 16 number system called "hexadecimal notation" is used. This is a number system that has base 16 and is thus able to have a different character (by using the numbers 0-9 or the letters A-F) to represent each of the absolute values 0 to 15. Considerably fewer characters are needed to represent values using this code than binary notation. For example, whereas in binary notation the letter "A" may be represented as "11000001", in hexadecimal notation, it may be represented as "C4", which makes a programme considerably more manaceable. The hexadecimal notation convention is well defined and intelligible to persons trained in its use. The relevance of this is that the computer understands programmes only when they are stored in the CPU as electrical ons and otf, wherezs the human user or programmer understands programmes only when written out in some lanquage known to hin. Since the electrical states cannot be written down. they have to be represented in some other notation before a human is capable or reading it. The closest representation of those states is the binary notation in which each character is assigned a special configuration of 0's and l's directly corresponding to the on or off state of the electrical circuits. More convenientiy, hezadecimai notation may be used to make the same representation. When in either of those notations the programme is said to be in "machine language" or in "machine readable form". Machine language 1s the lowest of all computer lancuages. Programming lanquages are said to be "lower" or "higher" depending on whether they are closer to the language of the computer itself (0's and l's - low) or to the language of the user (akin to English ~ high). In the early stages of computer development, it was necessary for every programme to be written and read inte the computer in machine lanquage which proved tedious, cumbersome and liable to error. These inconveniences led to the early development of the next level of languages, the "assembly languages", which by today's standards are fairly "low~level", that is, they are orlented more to the computer than to the human user. By using them, however, the trained programmer is released tw tJ from the burden of 0's and 1's or from nexadecimal notation, and is able to write his instructions by way of abbreviations and mnemonic codes and other symbols more meaningful to him. Althouch assembly language is more readable to the programmer, and therefore more convenient for him to work with than machine language, the computer cannot understand it. Thus a programmer who uses an assembly lanquage requires a translator to convert the assembly lanquace programme into machine readable form. The translator is called an assembler programme, and is sually referred to as an "assembler". An assembler takes the programme written in assembly language and converts it into machine lanquade. "The assembler is usually automatically included in any overating system. it 1s important to note that, as with machine lanquages, assembly languages are not universal. In situations where one manufacturer's assembly language can be applied to another's computer, the 'first's language is said ta be "compatible" with the second's computer. ' Assembly languages presented difficulties to the burgeoning computer industry which led to the development of "high level lanaquages". These are hichly refined languages which are akin to English in both vocabulary and style, making them very convenient to use. There are many high level languages; some are very specific and limited in their design and use; whilst others, such as BASIC, are general ana universal in operation. FORTRAN, COBOL and PASCAL are three other well known examples of high level lanquages. Of course, whichever type of high level language 1s used by the procrammer, @& translator 1s needed to translate the symbolic statements in that lanquacge into machine lanquage. In performing this function the translator is called a "compiler". This case involves two programmes, each written ina form of assembly language imown as 6502 Assembly Lanquace and each also reduced toa form of machine language. As neither programme in this case is written in any form of high level language, no issue concerning proqrammes in that lanquege is involved. A further description is often applied to programming languages. When a programme is written in machine lancuage it 15 oiten said to be in "object code". When it is written in any language higher than that, i.e. in a lanquageé which needs to pass through either an assembler or a compiler, it is said to be in "source code". These descriptions have been emploved in the present case, so that when the "Applesoft" programme is written in 6502 Assembly Lanquacge it is known as "Applesoft Source", and when in machine language it is known as "Applesoft Object". Similarly when written in 6502 Assembly Lanquage the "Autestert" programme Fs is known as "Autostart Source", and when in machine language it 1s known 4s "Autostart Object". There are slight differences Between the programmes involved. in this case in their source code and in-their object code. These differences concern only the labels and comments Placed onthe source code programme to assist the programmer which were not translated or assembled into object code as they are not needed by the computer. Once a "programme in machine readable form has been entered into the CPU the "computer is able 'to process it. However, no programme is able to be executed until stored in the CPU's primary storage whence each instruction is processed sequentially. Most modern computers use semiconductors for storing data. The semiconductor typically used is silicon in the form of a silicon chip. A silicon chip is made up of thousands of integrated, complete electronic circuits etched onto a small chip of silicon. Each of these circuits can be in one of two states, e1ther carrying electrical current (on) or not (off). in computer language, these storage or memory chips, in Which data and programmes can be written in and read from any main storage location readily and speedily, are called RAMs, meaning "Random Access Memory". All RAMs share the feature of being volatile, Chat is, they require a continuous supply of electric current to maintain the stored data. If the current 15 stopped or even interrupted, all the data represented in the memory is lost. in O some cases, this volatility is desirable, for instance where the CPU 1s using the RAM as its "scratchpad", to do the task at hand. But in cases where the same programme is being used all the time, such as an operating programme, that volatility as a disadvantage. To overcome this potentially disadvantageous situation, a permanent form of main storage was developed. This is also a form of silicon chip storace, but is designed So that any programme or data encoded on it at the time of manufacture 1s permanently recorded. This type of storage is called a "ROM", meaning "Read Only Memory". ROMs typically store operating programmes for the microcomputer, as those programmes are always required whenever the computer is being used. The permanence of the programme encoded ona ROM has two effects. First, the programme cannot be changed by the user of the computer. tts contents can only be "read" each time, not erased, amended or rewritten. Second, the storage 1s not liable to power losses; if there is a break in the supply of electricity the data is not lost. These features are the result of the method of manufacture of the ROMs. The ROM silicon chip, with its thousands of electronic integrated circuits, 1s manufactured by a "ROM Burner" which passes electrical impulses through the chip. Those impulses burn out the connectors between the many capacitors, leaving certain of them electrically charced. The resulting pattern corresponds to the sequence of electrical impulses produced by the programme as represented by 1ts object code or machine readable form. Fach time the ROM is read, the same seguence of electrical impulses is generated, regenerating the programme precisely. Because the ROM may be seen as scitware in hard (permanent) form, it is often referred to as "firmware" oar "hardwired software". The programme contained on a ROM is still software, it is still a programme; but it now has the hardware Characteristic of permanence, making 1t much more convenient and inexpensive to use. An "EPROM", meaning "Erasable Programmable Read Only Memory", is a special type of firmware storage. It is like a ROM in that its contents can be read (and only read) during the execution of a programme. However, it 1S possible for the contents of an EPROM memory to be altered, rewritten or erased completely by the user or programmer before 15 assembled into the computer system. The Apple II computer, like most personal computers, has its operating system in ROM forn. The "Autostart" programme is encoded on one chip or one ROM, while the "Applesort" programme is encoded on five chips or five ROMs. In the case of both Programmes, the pattern of the electrically charged integrated circuits on the ROMs corresponds to "Autostart Object" and ""Applesoft Object" respectively. The inscribed patterns on the chips can be seen by a human being with the aid of an electronic microscope, but not otherwise. When recurred, the Apple II computer does have the facility to read each of the procrammes on the ROMs in question, convert the electrical impulses so produced into machine lanquace and reproduce that code either through a printer or on a VDU screen. In this wav 1t is possible to obtain a visible print-out of both programmes, as they are encoded, in object code form. The Apple Ii computer also has the capacity ta disassemble each of the programmes. That is, itis able to "read" each of the "Autostart" and "Applesoft" programmes from their respective ROMS, convert the electrical impulses so produced into assembly language tin the form of 6502 Assembly Lanquage) and reproduce that assembly lanquage in visible form. It 1s thus possible to obta:n from the Apple II a prant-out of both programmes, as they are encoded, in source code form. However, it should be noted that the resulting print-out in source code, being a "disassembled" programme, is not a complete reconstruction of procrammes as they were originally wratten in 6502 Assembly Language. All that appears upon disassembly are the mnemonics representing each line of instruction or identification. Any label or comment attached to those instructions originally (for the benefit of the programmer) is not reproduced for the reasons set out earlier. Since this case concerns two operating programmes 18. written in both 6502 Assembly Language and in machine language and also encoded in permanent form for use in six ROMs in the Apple II computer, it is necessary to give a brief outline of each of the programmes and their development. Applesoft and Autostart "Applesort" is the first appellant's version of the "Microsoft Basic", a programme first written by a corporation known as Microsoft Inc., which is unrelated to the appellants. It is an interpreter programme desianed to reduce instructions, written in certain dialects of the BASIC lanquacge, contained in application programmes and reduced into machine readable form comprehensible ta the Apple II computer. Kenneth Randall Wiagington. an employee of the first appellant and a citizen of the U.S.A., obtained a copy of the "Microsoft Basic" programme from Microsoft Inc. hetween August and December 1977. He modified "Microsoft Basic" and the programme thus modified was called "Applesoft". Wiggington's modification involved considerable skill, time and effort, consisting of writing out the whole programme and, after suitable amendments and alterations, re-expressing each step or operation of the programme inthe shorthand form called "6502 Assembly Code" consisting ot mnemonics, each comprising three letters of the alphabet. Each mnemonic corresponds to either a particular instruction to the computer, or identifies the part of the CFU to WD which such instruction relates. The lancuace 6502 Assembly code can be readily unaerstood by people skilled in its use. For reasons already explained, the "Applesoft" procramme in this form 1s known és "Appdlesoft Source". Both the original "Microsoft Basic" and the original "Applesoft Source" programmes have since been destroyed. Before it was destroyed, the "Applesoft Source" programme was reduced to make the ""Applesoft Object" programme, 1.e. the "Applesoft programme" in object code. For this reduction process a computer, programmed with one or more programmes written by some person other than Wiggington, was used. Wiggington then used the computer to store a representation of the series of electrical impulses that comprised "Applesoft Object" on a magnetic disk or tape. The second programme in issue in this case is the "Rutostart" programme. Originally a programme called "System Monitor" programme was written in 1977 by an employee of the first appellant, Stephen Gary Wozniak. In addition, Wozniak wrote a number of operating codes for that crocgramme in hexadecimal notation. Using a computer to generate images of the "System Monitor" programme, Wozniak then edited the programme. Aqain with the assistance of the computer he stored representation of the series of electrical impulses so edited on a magnetic disk or tape which is subseqeuntly capable of being used, in conjunction with a computer, to cenerate the same sequence of electrical impulses, and in effect reproduce the edited "System Monitor" programme. In 1978 John Arkley, an WD 20. employee of the first appellant, modified the programme. The programme as modified by Arkley 1s known as the "Autostart" programme and since it is in assembiy language is called "Autostart Source". He did this work during the course of, and within the scope of, his employment by the first appellant. The "Autostart" programme was subsequently reduced with the aid of a computer to machine language by a similar method to that applied to the "Applesoft" programme, sO as to produce the "Autostart Object" vorogramme. Both the "Applesoft" and the "Autostart" programmes, as they were expressed originally in 6502 Assembly Language contain four key elements. The first element is the use of labels applied throughout the programme to identify the various parts of the programme. The second is the application of comments to the programme for the benefit of the user or programmer and which are intended to explain the function of each of those various parts cof the programme. The third and fourth elements of each programme are the two types of mnemonic codes used in the assembly language being either instructions. or statements identifying registers within the CPU to which those instructions relate. Although it is not possible to reconstruct from the existing evidence either the labels or the comments in the eriginal "Applesoft" programme written by Wiggington there is in evidence a reconstruction of all the mnemonics of that programme. That reconstruction 1s the best evidence of the originai ""Applesoft" programme. 2l. The first respondent's WOMBAT computers contain two ROMs and one "EPROM" memory devices. Both types of memory device perform the same function; but in the case of the EPROM the programme stored on it can be erased and even reprogrammed, whereas ROMs are manufactured so that the programme cannot be erased or altered. Copyright Act The appellants contend that the computer programmes in question are original literary works in which copyright subsists by virue of sub-ss.32(1) and (2) of the Copyright Act. The works were said to be written by citizens of the U.S.A. and were first made and published in the United States of America. Regulation ¢ of the Copyright (International Protection) Reculations 15 invoked to secure the same protection for the appellants in Australia as if the works were made and first published here. The case for the appellants is that the relevant programmes entitled to protection are the "Applesoft" and "Autostart" programmes in either their original source code form or, in their original object code form. As an alternative, the appellants argued that the object codes in each case are said to he "adaptations" or translations of the source codes. The appellants asserted that the conduct of the respondents constitutes an infringement of the first appellant's copyright. At the trial ss.37 and 38 of the Copvricht Act were relied tu tN on in relation to infringement ana s.26 was expressly disavowed. Those three sections are in the following terms:- "36(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright. (2) The next three succeeding sections do not affect the generality of the last preceding sub-section. 37 The copyright in a literary, dramatic, musical or artistic work is infringed by a person who, without the licence of the owner of the copyright, imports an article into Australia for the purpose of - (a) selling, letting for hire, or by way of trade offering or exposing for sale or hire, the article; (b) distributing the article - (i) for the purpose of trade; or (ii) for any other purpose to an extent that will affect prejudically the owner of the copyright; or (ec) by way of trade exhibiting the article in puplic, where, to his knowledge, the making of the article would, if the article had been made in Australia by the importer, have constituted an infringement of the copyright. 38(1L) The copyright in a literary, dramatic, musical or artistic work is infringed by a person who, in Australia, and without the jicence of the cwner of the copyright - (a) sells, lets for hire, or by way of trade offers or exposes for sale or hire, an article; or (b) by way of trade exhibits an article in public, where, to his kmowledge, the making of the article constituted an infringement of the copyright or, in the case of an imported article, would, if the article had been made in Australia by the importer, have constituted such an infringement. (2) For the purposes of the last preceding sub-section, the distribution of any articles - 23. (a) for the purpose of trade; or (b) for any other purpose to an extent that affects Prejudiciaily the owner of the copyright concerned, shall be taken to be the saie of those articles. The expression "literary work" is defined in sub-~s. 10(1) as follows:- "10¢1) .»- Literary work "includes a written table or compilation". $.31 provides - "31(1) For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right - (a) in the case of a literary, dramatic or musical work, to do all or any of the following acts:- (i) to reproduce the work in a material form; (ii) to publish the work; (iii) to perform the work in public; (iv) to broadcast the work; (vw) to cause the work to he transmitted to subscribers to a diffusion service; (vi) to make an adaptation of the work; (v1i1) to do, in relation to a work that is an adaptation of the first-mentioned work, any of the acts specified in relation to the first-mentioned work in sub-paragraphs (i) to (v), inclusive; and (b) in the case of an artistic work, to do all or any of the following acts:- (i) to reproduce the work in a material form; . (iL) to publish the work; (iii) to include the work in a television broadcast; (iv) to) 6cause a television progranme that ancludes the work to be transmitted to subscribers to a diffusion service. e generality of sub-paragraph (1)(a)(1) 1s not by sub-paragraph (1)(a)(vi)." The submissions of the appellants may be summariséd 2s 24, (a) The "Applesoft Source" programme 18S &@ new and original literary work in which copyright subsists. It was made when it was first written by Wiggington; (b) The "Applesoft Object" programme is 4 reproduction zn a material form of "Applesoft Source"; (c) Alternatively to (Db), "Applesoft Object" is a new, original literary work, distanct from ""Applesoft Source", of which new work Wiggington is the author; (ad) Alternatively to (¢), "Applesoft Object" is an adaptation or translation of "Applesort Source"; oa "s (e) The "Autostart Source" programme is a new and original literary work in which copyright subsists. It was made when it was first written by Arklerv; (f) The "Autostart Object" programme is a reproduction in a material form of "Autostart Source" programme ; (g) Alternatively to (f), "Autostart Object" is a new, original literary work, distinct from "Autostart Source", of which new work Arkley is the author; (h) Alternatively to (g), "Autostart Obiect" 1s an adaptation or translation of "Autostart Source"; YQ) 25. 41) The WOMEAT ROMs and EPROMs are 2 reproauction of the programmes embodied in tne APPLE If ROMs namely, the "Applesoft Object" and "Autostart Object" programmes; (i) The programmes are stored in the WOMBAT ROMs and EPROMs br means either of fused and unfused wires or of the permanent presence or absencs of relatively large numbers of electrons; out, by whichever means, there is established a Material form; (It) Accordingly, the WOMBAT ROMs and EPROMs together constitute a reproduction in a material form of both "Applesoft" and "Autostart" programmes; (1) The appellants cave no licence to e2ther respondent to make the ROMs or EPROMs that are used in the WOMBAT computer; (m) To the knowledce of the first and second respondents the making of the ROMs or EPROMs would, if they had been made in Australia by the first or second respondents, have constituted an infringement of the copyright in the "Applesoft" and "Autostart" programmes; in) In these circumstances the incredients of ss. 37 and 38 of the Copvriaht Act are established so the appellants should have succeeded at the trial. 26. The submissions of the respondents may be summarised as (a) None of the alleged works are "literary works" within the meaning of the Copvriaht Act: (b) None of the alleged literary works are original. The originality of a literary work lies not in the originality of the ideas that 1t expresses; but in the originality of the manner in which they are expressed. So far as the programmes in source code are concerned no literary skill is involved. The mnemonics are incapable for relevant purposes of constituting original literary works because they are determined by the sequence af operations that the programme is required to perform and involve no literary skill. The remaining two elements in the source code programmes namely, labels and comments, have not been reproduced in the ROMs. So far as the object ccode programmes are concerned, they are wholly determined by the sequence of functions which the computer is to perform and cannot be original literary works. Further, the object programmes were prepared by the mechanical operation of a computer and so are merely the product of the operation of a computer on the source programme, a purely mechanical operation requiring no element of human originality. For these reasons, the respondents argue that the result cannot be an original literary work; (c) The farst appellant is not the owner of any alleced to wat copvriaht; (d) The respondents nave not infringed any copyright in the APPLE ROMs; (e) There was no reproduction of any copyright subsisting in the APPLE ROMs; (f) If there is reproduction it 2s not ina "material form"; {g¢) Even if the ROMs and EPROMs in the WOMBAT computer are reproductions of one or more of the alleged literary works it has not been established that this was known to the second respondent. The requisite knowledge is actual, not constructive, knowledae. Tt has not oeen established that the second respondent knew of ali the relevant facts necessary to establish actual kmowledce. In my opinion the following questions arise for consideration in this appeal:- (i) whether "Applesoft Source" and "Autostart Source" are Original literary works of which the first appellant is the owner ; (il) whether "Applesoft Obiect" and "Autostart Object" 28. are adaptations of "Applesoft Source" and "Autostart Source" respectively within the meaning of para. 31(1)(vi) of the Copyright Act; (i212) whether "Applesort Object" and "Autostart Object" are reproductions ina material form of "Applesoft Source" and "Autostart Source" respectively within the meaning of para. 31(1)(i) of the Copvricht Act; (iv) whether "Applesoft Object" and "Autostart Object" are original literary works of which the first appellant is the OUNeEr >; (v) whether the making of the ROMs and the EPROMs in the WOMBAT, if they had been made in Australia by the first respondent, would have constituted an infringement of this copyright under ss. 37 and 38 of the Convricht Act; (v1) if so, whether this was known to the first respondent. ' I shall deal with each of these questions seriatim. First, the question whether ""Applesoft Source" and "Autostart Source" are original literary works of which the first appellant 1s the owner. The essential purpose of copyright law is to encourage 2¢. disclosure of original ideas to tne public by creating certain proprietary rights in the expression of those ideas and by affording lamited protection to those rights. Copyright law confers upon a person the right to prevent the unauthorised copying of his work. It is not concerned with the originality of ideas, but with the expression of those ideas. It does not subsist 1n opinions or information as such; but in the form or | composition which is chosen to express then. Although a "literary work" is not defined in the Copyricht Act, sub-s. 10(1) states that the phrase includes "a written table or compilation". It is difficult to define the expression comprehensively but it does cover work which is expressed in printing or writing irrespective of whether it hes an excellence of quality or style, literary merit, taste, judement or ingenuity. It is sufficient 1f the work supplies information capable of conveying an intelligible meaning and if mental effort and industry is expended in its preparation: Maple & Co. v. Junior Army & Navv Stores £18823 21 Ch. D. 369; Boosev v. Whight (£19001 1 Ch.D. 122; Walter v. Lane £19003 A.C. 539; Hollinrake v. Truswell (18943 3 Ch 420; University of London Press Limited v. University Tutorial Press Limated £19162 2 Ch 601; D.P. Anderson & Co. Limited v. The Lieber Code Company C1917] 2 K.B. 469; Ladbroke (Football) Laimiated v. William Hi11 (Football) Limited (19643 1A.L.R. 273; Exxon Corporation v. Exxon Insurance Consultants International Limited £1981] 1 K.L.R. 30. 624 and £19813 3 W.L.R. 54i; Mirror Newspapers Limited v. Queensiand Newspapers Pty. Limited (1982) 59 F.L.R. 71. The contents of the work need not be words: mere collections or letters, numerals or symbols which are in themselves meaningless, and are made up in merely mechanical ways may be sufficient, e.g. telegraph codes, ciphers, mathematical tables, systems of shorthand, braille cataloques: D.P. Anderson & Co. v. The Lieber Code Company (supra); Acer v. P. & 0. Steam Navigation Co. (1884) 26 Ch.D. 637; Masson, Seeley & Co, Limited v. Embosotype Manufacturing Co. (1924) 41 R.P.C. 160; Pitman v. Hine £18847 1 T.L.R. 39. "Originality" means that the author's own skill and labour must be involved, though the degree of such skill and labour required is slight: MacMillan & Co. Limited v. Coover (K. & J.) (1923) 40 T.L.R. 186. Some original result must be produced. It is not necessary that new or inventive ideas be contributed by the author, but the work must be more than a copy of other material; Walter v. Lane £1900] A.C. 539. In deciding whether a work is original it is wrong to start by considering andividual parts of it apart from the whole because many works (e.g. compilations) have nothing original in their parts but the total may be original. When an author applies his own original skill and labour to existing material a new work results: Sands & McDougall Pty. Limited v. Robinson (1917) 23 C.L.R. 49; Ladbroke v. William Hill (supra); University of London Press 's 1) th i) tc Limitea v. Univeristy Tutorial P Limited (supra); Victorian Park Racing & Recreation Grounds Co. Limited v. Taylor (1937) 58 C.L.R. 479. In my opinion ""Applesort Source" programme 1s a new and oricginai work in which copyright subsists. It was made when first written by Wiggington in 1977 in the form of handwriting on paper. He expended considerable skill and labour in creating "Applesoft Source" by both writing new material and also substanially revising portions of "Microsoft Basic". The result of his skill and labour was a programme written in 6502 Assembly Code approximately 10,000 lines in length. It is irrelevant that 6502 Assembly Code is a computer language comprised of three letter mnemonics, each a shorthand representation or Enclish words, phrases or sentences. it 1s a highly developed lanquage Plainly intelligible to people familiar with it or skalled in its use. In my opinion the "Autostart Source" programme is also a new and original work in which copyright subsists. It was made when Arkley first wrote it down in the form of handwriting on paper after he had revised Wozniack's "System Monitor" programme and after he had written some new material substantially varying portions of that "System Monitor" programme. Arkley's work involved considerable skill and labour. As Wiggington wrote the "Applesoft Source" programme in 32. the course of, and within the scope of, his employment by the first appellant, the first appellant is the owner of the copyrignt in that programme. But if this were not so the first appellant became the owner of such copyricht pursuant to assignment by Wiggington of any copyright which (he owned in ""Applesoft". As Wozniack wrote the "System Monitor" programme in the course, of and within the scope of, his empioyment with the first appellant the first appellant is the owner of the copyright in that programme. Arkley wrote the "Autostart Source" programme also in the course of, and within the scope of, his employment by the first appellant so it is the owner of the copyright in "Autostart Source" programme. Wozniack also assianed to the first appellant any copyright which he owned in the "System Monitor" procramme. Emphasis was placed by counsel for the respondents upon the fact that the function or purpose of a copyright programme is to control the sequence of operations carried out by a computer. Whilst it as true that this is the tunction and purpose of a copyright programme, 1n my opinion it does not deprive it of protection by copyright law. Copyright is essentially concerned with the expression of ideas in composition or language rather than with the function or purpose of those ideas. Counsel for the respondents submitted that in order to Ww lu be a literary work for copyright pursoses the work must be antended to afford either information and instruction, or pleasure, in the form of literary enjoyment. Reliance was placed on various cases, in particular Hollinrake v. Truswell (supra) at p. 428 and Exxon Corporation v. Exxon Insurance £1981] 3 W.L.R. 541 at po. 551-552. The opinions expressed by the judges who decided those cases must be read in the context of the particular facts involved. None of the passaces relied on, as I read them, are intended to define comprehensively or exhaustively any of the elements of the law of copyright. Courts have qenerally construed copyright legislation mindful of changes in ideas and advances in technolocy. In my opinion both "Applesoft Source" and "Autostart Source" programmes are original literary worms of which the first appellant is the owner. The second of my questions is whether "Applesort Object" and "Autostart Object" are adaptations of "Applesoft Source" and "Autostart Source" respectively, within the provisions of para. 31(L) (vi) of the Copvricght Act. Copyright in relation to a literary work is, inter alia, the exclusive right to make an adaptation of the work: sub-para. 31(1)(a)(vil). The word "adaptation" is defined by s. 10 of the Act as meaning: ds a """Adaptation" means - (a) in relation toa literary work in a non dramatic form - a version of the work (whether in its original language or ina different language) ina dramatic form; (b) aun relation to a literary work in a dramatic form - a version of the work (whether in its original lanquace or in a different lanquace) in a non-dramatic form; (c) in relation to a literary work (whether in a non-dramatic from or in a dramatic form - (1) a translation of the work; or (in) a version oF the work ain which a story or action is conveyed solely or principally by means of pictures; and (d) in relation to a musical work - an arrangement or vranscription of the work." The question in the present case is whether "Applesoft Object" and "Autostart Object" programmes are translations of their respective source code programmes. A common understanding of the English verb "translate" 15 to change from one language into another language which retains the sense of the former. As Lord Esher M.R. said in Chatenay v. The Brazillian Submarine Telecrapk Company Limited £18913 190.B. 79 at p. 82: "Making a translation 1s not a mere question of trying to find out in a dictionary the words which are given as the equivalent of the words of the document; a true translation is the putting into English that which is the exact erfect ef the lanquage used under the circumstances". The word is susceptible however of a variety of quite Gs) wn different meanings: ¢.¢. to explain somethine in simple or less technical lanquage; to aunterpret gestures or symbols; in bio-chemistry to transform molecular structure; to transfer a person from one ofiice to another ¢€.¢. a cleric; in theology toa transfer a person from one plane of existence to another - e.g. from earth to heaven; 1n physics to cause a body to move laterally in space without rotation or angular displacement. Although the word generally would be used, in the context of copyright law, to suggest translation from one humanly intelligible language to another such language, I do not think that its meaning should be necessarily confined to that sense. Programmes in source code may he read and umderstood by people trained in the art of computer science. Programmes in that form can, to all intents and purposes, be stored on disks or tapes for later retrieval and use. This is done by the computer "assembling" the source code into electrical impulses and storing those impulses on the disk or tape. When required at some later time, the computer reads those stored impulses, dissassembles them and precisely reproduces the orogramme in source code. To be understood by the computer, the programme in source code must undergo the transfromation mentioned earlier via the "assembler". Having passed through the assembler the programme 1S stored in the CPU as a secuence of electrical impulses. This sequence is, however, capaple of being directly reduced to a written form namely, object code. fu) oOo . In these ways, the transposition of the source code into object code by the Apple II computer is not an irreversible process. It is possible to have the source code, or at least the essential mnemonic parts of the source code, reproduced at any time. Further, the object code into which the source code has- been translated can be reproduced in written form and examined by a human being to see whether or not it is a faithful version of the source code. The fact that a programme in object code is the result ef the computer's interpretation of that programme in source code, and in that sense is a mechanical result without the intervention of a human being, does not in my view prevent 'the object code answering the description of a translation of the source code. T reject the view that to be a translation of a literary work the translation must bear in its new Ilancuage form substantial similarity to the work in the original lanquacge from which it was derived. Object code is not a mysterious language which only computers can read. It as a language devised and developed by persons skilled in computer science which they can read, and indeed translate, into various computer languages, mainly assembly lanquages. 37. Obiect code 1s essentially a mechanical translation of the source programme into another language. The computer adds na Creative element to the source programme. Given the source programme the object code version is predetermined by 17t. The process of converting source code into object code is something computers must do by automatic "translation". It is a mechanical pwrocess which takes place within the computer. In my view the right to make an adaptation of the source code 1s not confined to giving the exclusive right ta translate the source code from one humanly intelligible computer language to another such lanquage e.g. from FORTRAN to COBOL, or from one assembly language to another. When in written form the two prodrammes in object code presently relevant are humanly intelligible. in my opinion they answer the description of translations of the source code from which they are derived. Many object codes are, however, found only in machine readable form: (1.e. they cannot be reproduced in visible form) but I would not regard this fact. as necessarily disqualifying those codes from being described as translations of the source codes from which they originated. The object codes in suit are interpretations or transformations or transliterations from one language to another. They are translations for presently relevant purposes. 38. The cuestion whether the programmes in object code are reproductions in a material form of programmes in source code, being the third of my questions, is not one which I need decide. The word "reproduction" is not defined by the Copyright Act. There is a sharp division of opinion among learned authors on this question and spirited articles have been written by them. The respondents derived some support for their argument that the object codes are not reproductions ina material form of the programmes in source code from Boosey v. Whight (supra) and perhaps Data Cash Systems, Inc. v. J.S.& A. Group, Inc. (1971) 203 U.S-P.Q. 735; and Seca Enterprises Limited v. Richards C1i9831 F.S.R. 73. My fourth cuestion is whether the programmes in opject code namely, "Applesoft Object" or "Autostart Object" answer the description of original literary works in which copyrignt subsists. This question has been considered in the United States by courts where opinion is divided. Although I recognise some force in the view that the programmes in object code are original literary works in which copyright subsists I have considerable reservations about the correctness of the view, but need not decide the auestion. I turn now to the fifth question namely, whether the making of the ROMs and EPROMs that are used in the WOMBAT computer, if they had been made in Australia by the first respondent, would have constituted an infringement of the first a Us. Oo c ' a o appellant's copyrignt in its programmes ""Applesot "Autostart Source" or in its programmes "Applesort Object" or "Autostart Object" as adaptations of the former. The appellants asserted that the computer cvrocrammes embodied 1n the WOMBAT ROMs and EPROM are "reproductions" of the programmes stored in the APPLE II's six ROMs. The inference is plain that the WOMBAT ROMs and EPROM were copied from the APPLE ROMs. Expert evidence was led at the trial on behalf of the appellants that the extent of similarity between the programmes and their respective relevant components used in the Apple II and WOMBAT computers could only have been achieved by direct copying. This evidence was uncontested. There is perhaps room for debate as to the precise processes used in the WOMBAT ROMs and EPROM to generate the relevant sequences of electrical impuises; but the inescapable conclusion is that the WOMBAT ROMs ana EPROMs contain representations of the very same sequence of impulses as are represented in the APPLE ROMs. The APPLE II and the WOMBAT computers can display a description of the sequence of impulses contained in their ROMs, or in the case of the, WOMBAT computer its ROMs and EPROM. Both can disassemble the sequences and display the results on a monitor or printout in source code, and in each case the source code is 6502 Assembly Lanquace. Printouts describing the object code, the sequence of impulses generated within each computer, are in evidence, and they are substantially the same and lead inevitably to the conclusion that those sequences of impulses are also the same. The conclusion 40. that the WOMBAT ROMs ana EPROMs were copied from the APPLE ROMs is confirmed by the evidence that the initiais of the author of the "Applesort" programme are inscribed, not only in the APPLE ROMs, put alse in the corresponding WOMBAT ROMs. The ract that there are six APPLE ROMs and only two WOMBAT ROMs and one WOMBAT EPROM does not affect any issue in this case. It simply demonstrates the swift advances of technology in the field of © computers which the manufacturers of the WOMBAT computer have deen able to adopt. It 1s an immaterial difference having no relation to the content or quality of the programmes in either computer. I should perhaps add that the WOMBAT programmes do not contain the labels and comments which were part of the original "Applesoft Source" programme; but the explanation for this is simply that the relevant WOMBAT programme is copied from the "Applesoft Object" programme as embodied in the APPLE ROMs, which themselves do not contain those labels and comments. In my opinion the programmes contained in the WOMBAT ROMs end EPROM are reproductions of the programmes contained in the APPLE II ROMS namely, "Applesoft Object' and "Autostart Object". The programmes are stored in the WOMBAT ROMs and EPROMs by means either of fused and unfused wires or of the permanent presence or absence of relatively large numbers of electrons. The WOMBAT ROMs and EPROM embody the same arrangements of electrical impulses as the "Applesoft's" programmes in object code. The code is constituted by the arrangement of impulses. The silicon chips represent the materiai form in which the codes of are empodied. The code may be ascertained from the chips by having their contents (1.e. the programmes) reproduced by the computer in a written form. Whichever means of storage is adopted, each is ina material form. Hence the WOMBAT ROMs and EPROM constitute a reproduction in a material form of both ""Applesoft Object" and "Autostart Object". As the object codes _ in the ""Applesort" ROMs have been reproduced in the WOMBAT ROMs and EPROM, there has been a reproduction of the adaptations of the two programmes in source code. Hence what has been done is an act comprised in the copyright: sub-para. 31(1){a)(vi1). It 1s not necessary therefore to consider whether the _ ie WOMBAT ROMs and EPROM are reproductions of "Autosoft Source" and ~ "Applesoft Source" procrammes themselves. ar oat - The question now arises whether the making of the WOMBAT ROMs and EPROMs, if they had been maie in Australia by the first respondent, would have constituted an infringement of the first appellant's copyright: ss. 37 and 38. Counsel sought leave to rely in the appeal upon s. 36 to sustain a case of infringement of copyright. We allowed counsel for all parties to arque the points raised by s. 36, but reserved the question whether we would qize leave to the appellants to rely on it. As mentioned earlier, counsel for the appellants expressly disavowed before the primary Judge any case basea on s. 36. Counsel for the respmdents informed us that the respondents' case would have been conducted ditferentlr at the trial if s. 36 had been in issue. In my opinion these considerations lead to the refusal of the application. The question of infringement falls to be determined with reference only to ss. 37 and 38. The two sections have been set out earlier. Sections 37 and 38 deal specifically with | infringement arising from the unauthorised umportation of material in which copyright subsists for the purpose of trade and unauthorised trading generally. It is necessary for the appellants to prove knowledge by the first respondent that the making of the ROMs and EPROMs usec in the WOMBAT computer, if they had been made in Australia by the importer, that is, the first respondent, would have constituted an infringement on the first appellant's copyright. Knowledce of the law is not required: Sillitoe 7. McGraw-Hill, The Times January 18 1982. The knowledge is actual, not constructive, knowledce: Van Dusen v. Kritz [1936] 2 K.B. 176; R.C.A. Corporation v. Custom Cleared Sales Pty. Limited (1878) 19 A.D.R. 123. The requisite knowledde may be inferred from the relevant circumstances. In Bibert v. §S. Hofnunc & Co. Limited (1921-22) 22 S.R. i(N.S.W.) 75 Harvey J. said at o. 61 - "'Knowledge' ain the section Ci.e. sup-s. 2/2) of the Copvricht Act (I.N.P.) L& 2 GeoV, C. 46, Which 1s substantially similar to s. 103 of the Copvright Act _ 1968] cannot mean in my opinion any more than notice of facts such as would suggest to a reasonable man that a breach of the copyright law was being committed." For presently relevant purposes there is no material difference between s. 103 and ss. 37 and 38. See also Infabrics Limited v. Jaytex Shirt Co. Limited (1978) F.S.R. 451, R.C.A. Corporation v. Custom Cleared Sales Ptv. Limited (supra) and Copineer on Copyright i2th Ed, para. §3¢. The requisite knowledge may be interred if the evidence leads reasonably to that conclusion. Such an inference can only be drawn after consideration is given by the Court to the whole of the evadence in the case. It will be more readily drawn if there is evidence from which the Court can conclude chat the defendant has the knowledge and he does not deny the knowledce unless a satisfactory explanation is given for his not giving evidence denying that knowledce. Turning to the evidence in this case, the second respondent, who at all material times was the managing director of the first respondent which itself had been previously a dealer in APPLE computers, gave evidence before the primary Judge which established the following:- (a) By 18 January 1983 the APPLE II computer contained "Applesoft Object" and "Autostart Object" emnodied (b) (c) (d) (e) (f) in in its ROMs; By 17 November 1982 "Applesoft" was a programme which the first appellant purported to own; By 17 November 1982 the WOMBAT computer had "copied Applesoft without too-much modification"; By 22 October 1982 the WOMBAT computer had an "Autestart" ROM and the WOMBAT computer operated in the same way as the APPLE computer; By 2 December 1982 the second respondent wanted the WOMBAT ROMs to be provided separately from the WOMBAT computers themselves; Before 1 April 1983 the second respondent arranged for 300 WOMBAT ROMS to be sent toa fictitous addressee - @ Mr. Bill Smith at Balaclava, Victoria. By that date the second respondent knew that 1f there were any litigation instituted by the appellants it would relete to the ROMs in the WOMBAT computer. The primary Judge did not make any findings of fact on the question given careful of the second respondent's knowledce and I have consideration to the question whether this Court, on appeal, should itself consider whether the second respondent had the requisite knowledge or whether it should refer the cuestion or determination. knowledge hack to the primary Judge for Counsel for the appellants argued that the evidence leads clearly to the conclusion that the second —s ib Ls] a responcent ana therefore the first respondent knew, prior to the commencement of this proceeding, that the WOMBAT ROMs and EPROMs reproduce a substantial part, ina material form, of the ROMs used by the APPLE It computer. The argument 1s strong, but in the absence of any findinas on the question of knowledge by the trial Judge and because the second respondent gave evidence that, if accepted, perhaps is tantamount to a denial of certain elements of the recuisite knowledge in my view this Court should not determine the question of knowledce prior to the commencement of the proceeding. We have not enjoyed the benefit of seeing the second respondent give evidence. The appellants arqued, in the alternative, that injunctive relief should be granted on a quia _timet basis. The respondents continue to assert the first respondent's right tc import and sell WOMBAT computers ana WOMBAT ROMs and EPROM. The threat to the rights of the first appellant continues. The requisite JImowledge of the first respondent from at least the commencement of this proceeding is plain. In my opinion injunctions should be granted on a guia _timet basis. If the appellants wish to pursue claims for damages in relation to any of the infringements of ss. 37 and 38 of the Copvright Act the subject of this appeal the matter should be referred to the trial Juage to make findings on the question of knowledge and, if those findings are favourable to the appellants, the tr2zal Judge should hear and determine all relevant questions on the issue of damaces. I turn now to the appeal in relation to the Ifrade Practices Act. The appellants claim that the respondents have acted in contravention of s. 52, paras. 53(c) and (d) ands. 55 of the Trade Practices Act. In support of their claims the appellants relied in particulars on the following matters: (a) that the WOMBAT computer 18 similar to the APPLE iT computer in physical appearance and shape, and has a similar keyboard; (b) that programmes desiened to be suitable for use on the APPLE II computer can be used on the WOMBAT computer and this fact is emphasised in advertisements published by the first respondent; and (c) that two booklets, one entitled "APPLE II USER'S GUIDE" and another entitled "2 REFERENCE MANUAL FOR THE APPLE IT AND THE GOLDEN II PLUS PERSONAL COMPUTERS" both containing detailed instructions about the use of the Apple II computer, have been supplied by the first respondent to some of its customers in conjunction with the sale of the WOMBAT computer. The appellants submitted that the doing of each of these Ae os) acts constitutes misleacing or ceceptive conduct or conduct likely to mislead or deceive; and siqnifies, or is likely to siqnify, to consumers in Australia that the WOMBAT computer is Manuractured or sold or advertised by or with the Licence oar authority of the appellants or has the same provenance as the APPLE Ii computer. This is said to be in breach of s. 52 and paras. 53(c) and (d) of the Trade Practices Act. The learned primary Judge held that no purchaser of the WOMBAT computer is likely to be misled or deceived into believing that the WOMBAT computer, or the first respondent, 15 in any way associated with the APPLE ITI computer or the appellants. He therefore dismissed the part of the appellants' claim based on the Trad? Practices Act. i oshall consider the three submissions in turn. (a) The first submission was that the WOMBAT computer is similar to the APPLE If computer in physical appearance and shape, and has a similar keyboard. This submission, may be dealt with briefly. & is true that the APPLE II computer and the WOMBAT computer are very similar 1n certain respects, but there are differences between them. The orincipal difference 1s in their respective labelling. The APPLE Ii computer 1s labelled with the word "APPLr" and the APPLE loco. This ioco 1s reminiscent of the Delicious variety of 48. epple but in varieqgatec colours; blue, red, orange, qreen and yellow. The WOMBAT computer is prominently labelled with the word "WOMBAT". Further, the colour of the keyboard and the size and shape of the kevs are not the same in the two computers. The overall shape of the two differs in-certain respects, including the lines across the top of each computer, the shape of the bevelled edge and the appearance of the power light. Also the WOMBAT computer has a numeric keyboard. All the similarities and. differences, including those relating to the computer's shape, are apparent on visual inspection, but the principal distinguishing feature of each computer lies in its label. The APPLE II computer is clearly and prominently labelled with the word "APPLE" and the APPLE logo. The WOMBAT is clearly and prominently labelled with the word "WOMBAT". I agree with the primary Judge's conclusion that the two computers are clearly distinguished from one another by the use of very different brand names. My conclusion might be different 1f -the brand names appeared in small letters or in inconspicuous places on the two computers because the other differences between them are not great. But the names "APPLE" and "WOMBAT" appear in hold letters across the front of each machine. The prominent labelling or the two machines is decisive on this aspect of the case: see Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited (19B2) 42 A.L.R. Ll. (b) The second submission of the appellants was that programmes designed to be suitable for use on the APPLE II lo computer can bé used on the WOMBAT computer ana this fact is emphasisea in advertisements published by the first respondent. APPLE If computers have heen widely advertised and promoted throughout Australia. 'The first "respondent has published advertisements for the WOMBAT computer which state: "The WOMBAT software 1s compatible with programmes fer the APPLE II". This submission of the appellants that s. 52 and paras. 53(c) and (d) are contravened by these advertisements published by the first respondent may also be briefly dealt with. The statement contained in those advertisements, especially when read in the context of the advertisements as a whole, do not convey the meaning that WOMBAT computers are manufactured or supplied by or with the licence or approval of the appellants ° y that ther have the same provenance as the APPLE IIT computer. I acree with the primary Judge that: "The reference in advertising to the "compatibility" of WOMBAT software with programmes for the APPLE IIL computer only serves to reinforce the distinction between the two products." The word "compatible" suggests a difference in trade source rather than a common trade source. (c) The third submission was that the two booklets mentioned above have been supplied by the first respondent to some of its 50. customers in conjunction with its sale of the WOMBAT computer. The strenath of the appeliant's case under the Trade D> Practices Act rests on the use made by the first respondent of these two manuals. It was agreed between the parties that the "APPLE II . USER'S GUIDE" has been supplied by the first respondent to some of its customers and that a copy of it was supplied to an employee of the second applicant in the same packaging as a WOMBAT computer, which was sold on 15 April 1983 by the first respondent to that employee. The APPLE II USER'S GUIDE purports to be written by "Lon Poole with Martin McNiff & Steven Cook" and to be published by ""Osborne/McGraw-Hill, 630 Bancrort Way, Berkeley, California". Underneath this reference to the publisher there appears in a different typescript "Reprinted in Taiwan by Scholars Book Co. Limited by special agreement with Osborne/McGraw-Hill" followed by Chinese typescript or print. The Guide contains 385 numbered pages and provides a lot of detailed information and qcuidance for users of APPLE II computers. The other manual, distributed by the first respondent in association with 1ts supply of WOMBAT computers, is "A REFERENCE MANUAL FOR THE APPLE II AND THE GOLDEN II PLUS PERSONAL COMPUTERS" which was imported from Taiwan. It bears the name al PP ""GUAN HAUR INDUSTRIES CO., LTD." of Taawan. Tt states oni1cts first page, in bold print and capitals, that it purports to be "a reference manual for the APPLE II and the GOLDEN II PLUS personal computers". The GOLDEN IIT PLUS is a microcomputer manufactured un Taiwan where the WOMBAT computer is also manufactured. The evidence suggests that the two microcomputers are identical, save in name. So far as i can discern, this manual is a copy, in one volume, of two manuals, published on behalf of the appellants, described as the "APPLE II Reference Manual" and the "APPLESOFT Basic Programming Reference Manual" respectively. This manual contains many references to the APPLE II computer, or to the "Apple" or "Apple II". The terms "Golden II" or "Golden" have been rather obviously and crudely inserted wherever "Applesoft" or "Apple II" apoeared in the original manual. The manual complained of also contains illustrations which seem to me to be of the APPLE II computer. <tc is plain that this manual is a pirated copy of the two APPL= II manuals. In addition to the agreed facts mentioned earlier in relation to the "APPLE II User's Guide", the evidence establishes that the first respondent placed orders in early 1983 with the Taiwanese supplier for at least 150 WOMBAT computers and 150 "APPLE II User's Guides" and that the second respondent was notified of the shipment thereof. The first respondent also placed an order in July 1983 for 10 WOMBAT computers ana 80 "APPLE II User''s Guides". It 158 not clear from the evidence whether the APPLE II cuides ordered and delivered were the un particular manual which are entitied "APPLE IZ User's Guide"; but they were either that quide or the "Reference Manual for the APPLE II and the GOLDEN II PLUS Personal Computers", or both. In my opinion the conduct of the first respondent, in supplying the two manuals to purchasers in association with the supply of WOMBAT computers, is misleading or deceptive conduct or conduct likely.to mislead or deceive within the meaning of s. 52. It aiso constitutes an untrue representation that the WOMBAT computer is approved by the manufacturer or supplier of the APPLE II computer (para. 53(c)) and an untrue representation that the first respondent is approved by, or has an affiliation with, the manufacturer or supplier of the APPLE II computer (para 53 (d)). A person who is supplied by the first respondent with either manual in association with a WOMBAT computer would, in my opinion, believe that there was some association or affiliation, in trade or commerce, between the manufacturer or supplier of the WOMBAT computer and the manufacturer of APPLE II computer whether by licence, franchise or otherwise; or that the WOMBAT computer 1s sold by, or with the licence or approval of, the manufacturer or supplier of the APPLE II computer; or that the manufacturer or supplier of the APPLE II computer had put its stamp of approval upon the sale or supply of the WOMBAT computer or WOMBAT sottware. it is unnecessary to consider the appellants' arguments ny ff] ad gu ct pe fey rei cra an tw oO td, ct 1s) {p J ¥ 'U Y b ru ts se ie) ct 1, a 1D toy ie Q ct The appellants asserted a separate claim for breach by the res uy ondents of s. 52 namely, that by selling the WOMBAT computer the first respondent is misleading or decezving its purchasers into believing that they will obtain good title to, and enjoy quiet possession of, tne ROMs and EPROMs contained therein. They further asserted that no such title exists because those ROMs and EPROMs are infringing copies under sub-s. 10(1) of the Copyright Act and that the rights and remedies afforded by s. 116 of that Act are available against persons purchasing those ROMs and EFROMs, as well as against the first respondent as their seller. In view of my conclusions thus far, in relation to the Copyricht Act and the Trade Practices Act, 1t is not necessary for me to consider this separate claim of the appellants. In my opinion the appellants should succeed in their claim for injunctions against the first respondent to restrain it from further contravening s. 52 and paras. 53(c¢c) ana (d) of the Trade Practices Act. If the appellants wish to pursue claims for damages in relation to any of the contraventions of s. 52 or paras. 53(c) or (d) of the Trade Practices Act which thas Court has found established, the matter should be referred to the trial Judge to hear and determine all relevant questions on the issue of damages in relation to the contraventions. I would grant an 54, unjunction against the second respondent as a person invoived in the contraventions. He ais aiding and abetting the first respondent to contravene those provisions of the Trade Practices Act and is directly knowingly concerned in. or party to, them. Conclusion Notwithstanding my respect for the views of the primary Judge on the questions of law involved in this case, I have come to different conclusions. Those questions have also given rise to differences of opinion between judges of the courts of other countries and of authors. They are questions of high controversy. In- my opinion copyricht legislation should be construed liberally and with a view to the furtherance of justice. In particular, such legislation should be interpreted to keep pace with technological innovation. But this does not mean that the lanquage of copyright legislation should be strained to bring within its scope subject matter which, although perhaps deserving of protection, is not conformable with the principles developed by courts over many years of experience. An approach of this kind defeats the ends of justice. Ultimately Parliament may have to decide whether the Copyright Act requires amendment in the light of the judgments of this Court and, 1f tne matter should proceed further, of the High CO S5. Court. This involves essentially ovolitical considerations, business interests and Parliameant's verception of Australia's medium and long term interests in relation to computer technology. I would allow the appeal and grant injunctions to give e-fect to my reasons for judgment. The matter should be referred to the trial Judge for the purposes previously mentioned. The respondents should pay the costs of the proceedings before the trial Judge and of this appeal. preceding pares ee a true ccry of tha : Seasons for dedome7: Wren of Ss Honour at ue-. Mr. Justice Loc nat y Vi Zia Ans a. ActSoS RS Dated: 29 /NAY 1987 IN THE FEDERAL COURT OF AUSTRALIA } ) NEW SOUTH WALES DISTRICT REGISTRY) No. G405 of 1985 . } . GENERAL DIVISTON ON APPEAL FROM A STNCLE JUDGE OF THE FEDERAL COURT BETWEEN : APPLE COMPUTER INC. AND ANOR, Apoellants AND: COMPUTER EDGE PTY. LIMITED . ~ AND ANOR. Resvondents CORAM: FOX, LOCKHART and SHEPPARD JJ. DATE: 29 MAY 1984 REASONS FOR JUDGMENT SHEPPARD J.: In this matter I have had the advantage of reading the judaments to te delivered by the other members of the Court. I am thus saved the necessity of referring to the general background of the matter, the terms of che relevant legislation ard some of the detail of the technical evidence. I propose to address myself first of all to the claim made by the appellants that their copyright has been iniringed by the respondents. I shall deal with the various claims made under the Trade Practices Act 1974 after I have reached conclusions on the cepveright claims. fe)uy ie) th oD rh at S Dp 'y fe) ry vw Q er p fe) ry a a ww) ~" a He] A. Ww fea) is) rh be rsi my in] fe) <i Copvridnt Act 1968. During the hearing of the appeal an attempt was made by senior counsel for the appellants to rely also on s. 36 of the Copyright Act. Coumsel conceded that s. iD 36 had not been relied upon before the learned primary Judg but contended that the s. 36 claim raised only a matter of law and that the cases of the parties wouid not have been conducted differently if reliance had been olaced upon it at first instance. Counsel for the respondents ooposed the application. He drew attention to the fact that counsel for the apvellants at first instance had expressiy disavowed celiance on the section. Counsel for the respondents also said - and I think what he says must be accepted at its face had s. 35 been relied upon he may have conducted his case differently. In those circumstances I do not think it would be just to ecermit the appellants to rely ons. 36. In my opinion they should be restricted to the case which they made at first instance pased on ss. 37 and/or 38. o For the moment I do.not find it necessary te go to the varticular orovisions of those sections upon which the a appellants need to rely in order to establish their case. The provisions Ihave in mind are those which apply to articles which have been imported into Austr oft all asif the articles which are said to constitute 3. - infringement of the apoellants' coovright had been manufactured in Australia rather than in. Taiwan as was in fact the case. s In order to understand the various submissions which were made and to come to grips with the difficult problem of construction of the Copyright Act which the case poses, it is necessary to have an understanding of the technical evidence. ~-- I propose, therefore, to set. out as simply as I can my own understanding of what essentially is involved. Both the appellants and the first respondent market small computers, the appellants' computers being known as "Apple" and the . respondents' computers as "Wombat". The computers consist of an outer casing upon Which there is a keyboard not unlike the keyboard of a typewriter. Within the casing are a number of compenents. Broadly speaking these comprise a central processing unit, (otherwise known as a microprocessor), a number of memory devices known either as ROMs or RAMs and a good deal of wiring and printed circuitry. The microprocessor and the ROMs and RAMs each have as their principal component a silicon chip. The ROMs and RAMs provide the permanent and temporary memory of the computer. I use the word "memory" advisedly, not overlooking the warning of counsel for the respondents against attributing to comouters and their various components human characteristics, such as a memory and an ability or a ct ie) ts o willingness ¢ cognis2 certain things or to understand and carry out instructions. No one thinks that a computer is eerer other than ean inanimate object but the industry itseif and others concerned with having to deseribe corputer fFuncticns use a fargon in which human characteristics of the kind I have mentioned are attributed to comouters and their componénts. I see no harm in th>s; for me at least it.is easier to understand what occurs if that is done. This case is concerned essentially with the ROMs (in one .. . instance an EP ROM) which form ovart of each brand of computer. 'They are known as ROMs because the letters making up the name are an abbreviation for "Read Only Memory". The ROMs constitute the computer's non-erasable memory. Its read only memory is to be distincuished from another tyve of memory which it has. namely, its random access memory known as RAM. Usually the read only memory of a computer is built into it inorder to enable it to perform a variety of ternal operations. some of which could otherwise be done by n its microprocessor, although less efficiently, and some of iz) ould not be done at all. | ead n a q Jsualiy chere will be attached to a comouter three H ww ' Cc}4 ct additionai pieces of equipment. namely, a video disp (VDU}, a disk drive anda orinter. The VDU. as its name implies. is a display screen upon which will apsear from time to time questions, instructions, information and other material depending upon the keys which are manipulated on the kevboard. The disk drive enables a user to load into the temporary memory of the comoyter 'the RAM) vartricular re] nm connect ) o programmes for use with the particular pursoses 5. which the user has. An #zample is an accounting programme. This is contained ina disk. When the disk is loaded on to the disk drive and appropriate keys are manipulated, the 'programme will be transferred to one or more of the RAMs. When the user has finished what he wishes to da he may retrieve the programme on to the disk again by depressing appropriate keys. If, whilst a _programme is placed in the temporary memory of a computer, the power is turned off, the" ~~ programme will be erased from the RAM. Finally, the printer _ enables tabulations, analyses and other information obtained as the result of the use of the computer, to be vrinted out so that-they may be retained in a permanent form. I have said that this case is about ROMs not RAMs, but I have described my undérstanding of what is involved in relation to RAMs in order to draw the distinction which there is between ROMs and RAMs and thus explain more easily what is essentially involved in ROMs. What is placed permanently in a ROM" is alsoa programme but, as mentioned. itis a orogramme designed to facilitate the working of the computer. Unlike the accounting programme, it is not special to the needs of a particular user; it is a programme which all users reauire available tor the proper functioning of the computer. For this reason it is often described as an operating systems programme (as distinct from an application programme). : In order that such a crogramme mav ultimately be place on the ccrouter's permanent memory. 1t has, first cf all, to be written down. It is not written in ordinary lanquege but in a computer language which psople comeetent in vcrocramming understand. The language in which the programmes here in ayuestion were originally written was known as- 6502 Assembly Code. The language consists of a series of three letter mnemonics which each has a meaning. For example, the letters JSR mean "jump to sub-routine" and the letters LDA "load accumulator". As is referred to in paragraph 21 of the agreed statement of facts, a copy of which is aovended to the judement of Fox d., the programmes as originally written had four elements:- "(a) labels identifying particular parts of the programme; (B) mnemonics each consisting of 3 letters of the alpnhabet and each corresponding fo a particular operation expressed in 6502 Assembly Code; {c) mnemonics identifying the redister in the microprocessor and/or the number of ' the instruction in the programme to which the operation referred to in (b) relates; and {d) comments intended to explain the function of the particular part of the programme for the benefit cf a human reader of the procramme." Partly because of the presence of the labels referred to in paragraph (a) and the comments referred to in varagraph {d) the programme 1n the form in which it was written was readily understandable by persons exper in programming. jn Thus if another programmer had vicked it up, it would have had meaning to nim and he would have been able to make use of (eu 7. The orogrammes did not com2 into existence without a reat deal of time, effort and skill on the part of those who Ts) wrote them. The programme referred to in vara. 21 of the agreed statement of facts is known as APPLESOFT. The other programme with which the case is concerned is referred to in para. 28. It is known as AUTOSTART. Both the APPLESOFT and AUTOSTART programmes as originally written have heen destroyed. But they were used, before their destruction, to programme the appellants' Apple conputer. The physical process by which this was done involved the use of a device known as an assembler which converted the mnemonics of the Assembly Code (otherwise source code) into object code. Object code is machine language, that is, language which can be understood by the microprocessor in the computer. Object code cam be written. Tf it is. it will appear in binary notation (that is, mathematical notation to a base of 2) as a series of noughts and ones. But the noughts and ones are only symbolic. They are symbcls designating the presence or absence of an electrical charge. Each such indication is a bit and a group of 8 (which is equivalent to a character, that is, a letter or digit) is a Byte. A kilobyte is 1,024 (not 1.000) Bytes. A kilobyte is designated by the letter K and 4 computer or a conponent thereof is said to have a capacity in terms of the number of kilobytes which ict is able to store, for exanpls, 5K or 12K and so on. It should be nentioned that, although the process by which the assembier converted the source coae inte abiecc code was ramarkably qwaick, ut involved two steos. The first was the conversion of the source code into hexadecimal notation. Hexadecimal notation is mathematical notation to a base of 16. The notation used comorised the digits 0 to 9 inclusive and the letters A to F inclusive, the latter representing respectively the mumbers 10 toa 15, The conversion to hevadecimal notation enabled the mnemonics of the source code to be shortened or abbreviated and the storage capacity of the ROM chips conseauently increased. By the time the conversion to cbiect code nad taken piace the vrogramme in that code was stored in ROM chips. By a vrocess which is described in the evidence the programme R was fixed or "burnt" into the chip. A programme so fixed is not erasable. It will not disaopear when the oower is turned off It should be emphasised that the orocess whereby the source code is converted into obiect code is not a manual or written process such as was involved in the compilation of the vrograrne when it was originally written in the assembly ar source code. The person carrving out the process does not see the transition into object code. Nome of the vrocess is visible to the human eye. Nevertheless it is ovoossible once the crogramme has been fayed in the ROM in the wav that I have described for it to be cartially retrieved The operation whien will enable rchais m1 ) uy fa) rary °On) ew u a ie} ca1 \4 iT =) oO = co i vr ui nm [3] a 'DBP n » cT v Oo{fi oF pas a nV Dv a it "S w Ke as fa) v fen igs the calling up, by the use of the xevboard, of the number -151, This will result in the orogramme apcearing both in hexadecimal notation and in the mnemonics of the source code on the VDU er, if desired in permanent form, on a print-out. The orogramme will not be retrieved with the labels referred to in sub-vara. (a) of cara. 21 of the agreed statement of facts above quoted nor wirh the comments referred to in sub-para. (ad) thereof. But it will show, instead of the labels referred to in sub-pare. (a), certain address lines or memory locations. With difficulty an experienced vrocrammer, after many hours work, is able to make some reconstruction of the programme with the aid of the mnemonics, but there is not possible any recovery or reconstruction of the comments referred to in sub-para. 21({d). The Aople computers each contain six ROMs, five containing fhe APPLESOFT programme and one the AUTOSTART programme. Implanting the programmes on to further ROM chips is apparently a comvaratively simple orocess. The procedure earlier described is not reveated. There is available a copying device by which the programmes are fixed into as many ROM chips as are required. Presumably this is how the manufacturing process takes place. The evidence plainly establishes that the Wombat ROMs are almost exact replicas of the Apple ROMs. Tf say that nor unmindful of the fact that the Wombat computers contain three, rather than siz, ROMs and that one of the Wombat ROMs EP R is rot a ROM but an OM. Thes2 letters stand for. y "Erasable Procrammapli2 Pead Only. Memorv". As whe name zmplies 1% 18 possible Lo erase the memocy fixed into an EP ROM. But this involves the application of ultraviolet Light to its outer surface. The programme wrll not be erased merely because the power is turned off. For practical "s purposes the fixing of the programme into the EP ROM makes it as much part of the permanent memory of the computer as would Reve been the case if a ROM had been used. A further, matter of difference relied upon by counsel for the respondents was that the programmes were acparently fized in the Wombat ROMs by the use of a technology different from that used to fix the programmes in the Apple ROMs. Again, I do not regard this as significant. The plain fact of the matter is that the programmes in both sets of ROMs (that is, the hexadecimal notation and the to in sub-varas. (b) and (c) of para. 21 mnemonics rererred of the agreed statement of facts) are, when ovrinted out - 7 , rtually identical. Even the initials. of one of the persons pH have been c d across. fu ns t ow who wrote one of the programmes One difference provides positive evidence of piracy. It is the substitution of the name Wombat for the name aA n a] ple. 'U I have stated the facts sufficiently to come to the which ace involved. One may have views about the mocality of whet those who tanufactured the Wombat computer have done. but morality is not the cuestion. The only question is whether there has been @ breach or the iaw. Fer the reasons given in the sudarents of Fox and . Lockhart JJ. I am of opinion «hat the oreogrammes as originally writcen in source code were literary works and that they were owned. at all relevant times, by the first appellant. The learned primary Jucge, relying principally upon Hollinrake v. Trusswell £18941 3 Ch. 420 and Exzon Corporation v.. Exxon Insurance Consultants International Limited [19827 R.P.C. 69, expressed the view that for relevant. purposes a literary work was something which was intended to afford either information or instruction or pleasure in the forn of literary enjoyment. I acres with the other members of the Court in thinking that this cannot be an exhaustive statement or definition of what a literary work- is. The purvorted definition seems to contemolate that there must be an intention to make available the work for the information, instruction or literary pleasure of others. The words. come Zrom the judgment of Davey L.-J. in che Hollinrake case (see p. 428). The case was decided before the United Kingdom Act of 1911 came into force. That Act applied in Rustralia -— see Copyright Act 1912. Until the United Kinadom Act of 1911 there was no. statutory copyright in unpublished works; see Covinger and Skone James on Copvricht, 12th Ed. ("Copinger") oara. 51. Under the ovresent Australian Act, copyright subsists in unpublished works by reason of the operation of sub-sec. 32(1); see also s. 29. It seems tome that many instances could be given of literary works in which copyric 'At subsists but which are not oO embraced within Davey L.J.' ul a ry [4 inition. TI instance a diar 12. ct for one's personal use or pleasure recording, perhaps. Pal 0) © ene pertod of one's life or a series of related events. As a Q ee ct ut le] it is written, there may be no intention of oublishin that it is not, at that time, for the inforration, instruction or pleasure of anyone but the writer. Years later the author may decide to publish it or to repreduce it. He has the copyright in ic from the outset. If before his decision to publish, anyone took it and reproduced or published it without his consent, there would be an infringetent. So here the programmes in question were not, as I understand the evidence, ever published nor was it intended that they should bs. They were not, so far as the evidence discloses, reproduced, but they were nevertheless literary works. Copyright subsisted in them as unpublished works. If they had been taken from one of the programmer's desks by a cleaner and reproduced or published by a competitor without the first appvellant's consent, there would have heen an infringement. During the argument, much was made of the fact that the programmes as originally written could not be fully retrieved or reconstructed. That was because neither the labels nor the comments could be "recalled" by the computer and thus resurrected or retrieved. But I am satisfied on the evidence that the two series of mnemonics referred to iin siib~oaras. (b) and (c) of para. 210 Tacts vere, im the case of each orcgranre, sufficrent eo) © and comments they were not as i them. Nevercheless, experienced peovle could urderstand and nake use of them, albeit with a great deal of time and effort and with the need to assign comments probably different from those forming part cf the original programmes to them. In any event, it seems beyond question, that if one were to have copied only the mnemonics, there would have been a reproduction of a substantial vart of each programme for the "purposes of s. 14 of the Act; see Copinger para. 465. The vrogrammes in source code being literary works, the next question is whether they are also literary works when converted in the manner earlier described into object code. If not. there arises. the alternative. question, as to whether the programmes when so converted are adaptations of the programmes in source code within the meaning of sub-para. 31(1)(al{(vi) and sub-sec. 19(1) of the Act. It is to be - observed that it will not assist the appellants to show that the srogranmmes when converted into object cede became reproductions of the programmes in source code. That is because there is no intringement it what is done by the alleged infringer is to nake a reproduction of a reproduction. That is no doubt because the draftsman of the Act considered that any reproduction would be a reproduction of the work itself, notwithstanding that it was derived from another reproduction. Tt follows that infringement will Occur, for relevant ours ce) wn wu a a , oniv if there is a reoroductic of the literary work itself (sub-cara. 31¢(1)(al(i)) or a reproduction of an adaptation cf the literary work (sub-paras. 31/1)Ca}fi) and (v7ii)). Tn my ovinion the orogramres in ohject cod= are not a fu yp (ty ct bow ® q gw iat a to fo] ct yvu) Oo x4 n ct by a ' yp ts fa) literary works. Pixe unable to be seen in that code. True it is, someone could write them out so as to show them symbolically in binary notation or hexadecimal notation. The computer itself can _.- O show them symbolically in hexadecimal notation. But all of 1 : that is irrelevant. The important point is that it is only ont che machin itself,-that is, the microprocessor, which can _ "urderstand" or "see", and thus deal with, the object. code. It is to be emphasised that the appellants need to persuade the Court that the ROMs with the orogrammes fixed in them are literary works because it was the ROMs which the manufactur wo "'S of the Wombat computer copied. Unless that wu fet copying constitut a reproduction of a literary work (or of an a@artation therecf to which IT heave later to come), there © will he no infringement. T recognise that it is trite law that copyright subsists in the order of words and not in ideas. It is the form, not the idea, which is of paramount importance. But 2f what is alleged to constitute a literary g is) rs orLa) ry nt ct r Oe) "e) rogrammes in object code) cannot be seen even with the aid of the screening or printing devices attached to the computer, they cannot in my opinion, amount to 4 literary work. A consideration of a number of the orincical sections ) f the Act be this connection ct p> Pp a[e)fo} I = it)a 2] t~l vs & should be mentioned 15. at q nab the music recorded on the perforated rolls which were the subject of the contcoversial decisions in Boosey _v. Whicght £19003 1 Ch. 122 and White- mith Music Publishing Company v. Apollo Comoany (1908) 209 U.S. 21, could be heard -when played on a pianola,. That leaves the difficult question of whether the orogrammes, as fixed into the ROMs in object code or machine Tan guage, are adaptations of the literary works constituted "by the Programmes in source code. "adaptation" in the a Q Tr ra n ry) Pe) D set out in the other judgments, I fesi again. [It is as follows:- The definition "of raustive one. Although it is the need to set it out "In this Act, urmless the contrary intentton - appears - "adaptation" means - ' (a) ain relation to a literary work ina non-dramatic form - aversion of the work (whether in its original lanquage or in a different language) in a @Qramatic form; {b) in- relation to a4 literary dramatic form - a version (whether in its ori a different lan Torm; work ina of the vork ginal language or in nguage) in a non-dramatic {c) in relation to a literary work (whether in a non-dramatic form or in a dramatic form) - (i} a translation of the work: or $ (ii) a version of the work in which a story or action 1s conveyed solely or orincivally by ion to a musical pt or transcriotion of the means of work - an The immediately reievant pact of the detirition is found in sub-para. (c)(i} which constitutes a translation of a fal) literary work an adapration thereof. Is - " fa = the word translation" any narrow Nevertheless, the context in which it definition of "adaptation" and the wider context used in the Act m word "adapcation" itself ts into account Generally speaking a translation denotes a chan form to will be in languace, speech or But a meaning "translate" in Oxford Dicti interoret, explain; also, to express (one thing another..." The corresponding meaning ° in coming to a conclusion as to w ust hat e ry Q ip My ° na "dq eno reason to give or restricted meaning. in which the it means. from one tatz on to the verb is, "To } in terms of f the noun "translacion" is. "The action or process of turning from one aiiferent language ... The exprassion or another medium or form." another; also, the product of this; @ version "transformation, alteration, (or) change." Literally then, it ais by no. means an abuse of language to describe the conversion of the source ccde into language as a translation. But as I[ have said, one needs to take into account the context in which the word 1s used both un the Act itself. Te is to (Db), ed(iid and (4d) are all plainly concerned with - C © adaptations of literary works which will themselves be capable of being seen or heard. Thev encompass versions of literary works in non-dramatic form in dramatic farm, versions of literary works in dramatic form in non-dramatic . form, versions of literary works in which the story or action is conveyed solely or brincivally by means of pictures. and, in relation to a musical wock, an arrangement or transcription of a work. Tt would seem. odd to me if the draftsman had intended thact the translation of the work to which he referred in subrvara. (cli) was ta encompass something which could neither be seen nor hearc. I do not say that it is impossible that that was his intention, but it would seem to me to be unlikely that it was. ts My view in this regard is confirmed bv a consideration of a number of the rvincipal sections of the Act, arlier caferred to. particulariy ss. 31, 32, 33 and 36 1D There seems to be running through these various provisions the idea or notion that what is the subject of copvright (whether 2 work or an adaptation thereot) will, althoudch not immediately published and perhaps nevar published. be capable of being published and thus being sean oc heard. The very idea of publishing is that something shoula be seen or heard. The same may be said in relation cO pérrorming a wock, broadcasting a work, causing a work toa be transmitted to subscriders to a2 diffusion service and, TF think 16 follows, Cc thenseives. must, in my 18. ovinicy, be capable of being seen or In those circumstances I have- reached the conclusion. not without code are programmes im source sympathies are some hesitation, not adaprations, code. with the appellants, that the programmes in object that is, translations of the Notwithstanding I regret to say that I think the fact must be faced that the leatsTation in question does) not extend to protect the appellants in circumstances. Drocrammes in source code, that is fey [4 u ecinction without point of view. did not contemslate the fact Honour in the present c mnemonics orf the source That I regard: as irrelevant. act done by Aombat computers. Ir it retrisved the o If what not what occurred. a difference, and I But in my opinion, the Chis kind that it is possible, as was those responsible for xpress no concluded view. But th the present had been copied had been. the I would have had ancther view; but To some, this may seem to be a can understand that. draftsman of the Act drew the of piracy when he indéed done before his ase, to yretrisve or resurrect the code by manipulating... the keyboard. Tt has nothing: to do with any the manufacture oz the had been established that they had in that way and then used the to do what they did she result may sin a therefore that my 1d. appropriate to be taken into account. ue) T have aiso taken into account the reliance placed hy senior counsel for the anpvellants unon certain varagraprs in one of the Apple manuals which inform an Apole user how to obtain access to the mnemonics of the progremmes im questiom. The purpose of this was explained by the first aprellant's Australian General Manager, Mr. Strong, in the following evidence:- "Is there any usefulness in being able to examine the contents of ROM? ---- Yes, most definitely. The various sub-routines being small programmes that are stored in the ROM memory are worthwhile to examine, firstivy, to determine exactly what they do and how they doit which is an invaluable way of determining good programming technique. Further, shoulda programmer wish tu prorhuce a very similar routine but not identical then the best way to do that is to examine the coutine you wish to copy and display it on the screen and then subsequently make the small changes necessary to it." Counsel said that the user was thus intended to be able to resurrect or retrieve at least varts of the two programmes in question. I agree that that is so. but have difficulty in understanding how this can he relevant to the case which the apoellants make. That case ts: that the copying of the. Apple ROMs by the Wombat manufacturer was an infrincement of the Tirst appellant's copyright. No question of the retrieval of all or part of either ovorogramme was involved. The vice of what the manufacturer was alleged to have done was to have cooled the Apole ROMs for the ourpose of facilitating the operation of the Nombat computers 20. For the reasons IT have oiven the FOMs are nor, ir mr opinion, adaptations of the programmes in source coce. It follows that there can be no infringement of the first appellant's copyright. The consequence is chat the appellants' claim in copyright should fail. It is thus unnecessary for me Fa express 2 view ar the suit sstorrs ghEch. were made concerning knowledge for the vurposes of the operation of ss. 37 and 38 of the Act. Before leaving the question of copyricht, I wish to make this clear. The views [I have expressed relate only to the programmes in question in this case. Those procranmes are cperating systems programmes and form the soermanent nemory of the computer. The vosition nay be entirely different in relation to avplication programmes such as the accounting programme earlier mentioned. I do not express any view on this. Before one could do so, one would need detailed technical avidence about what was involved. Moreover, the position may not be the same in relation to all application programnes. And it may vary depending upon the circumstances of each case. It seems. to me that the learned primary Judce did not intend his decision either to apoly to programmes other than those about which he had heard evidence. Although the matter is not spelt out in terms in the passage from his judoment cited by Fox J. (po. 4), I thank it follows from the way he d aM has cited the various authorities to which he has referr KH s D rh iD ba) anc from sone of his discussion about them. 22, particularly to his mention of Northern Office Micro Computers (Pty.) Ltd. v. Rosenstein (£19823 F.S.R. 124 and Seca Enterprises Limited. v. Richards £19835 FP_-S.R. 73- bock of which concerned application progranmes. In each case, although-in Sega. only ar am inrerlocutouy basis, Lt wes Ei that an infringement of copyright had occurred. Nothing that the learned primary Judge has. said leads me to think that he ~ thought that those cases would necessarily hare been decided: differently under the Australian Act. That is certainly my own view. Whether they have application here ar not is nate. matter which now arises for dectsion,. As to the claims made pursuant to the various provisions of the Trade- Practices Act, I have reached the conmclustor that the appellants are entitied to relief pursuant to the provisions of s. 52 and paras. 53(c) and (d). TF agree in substance with the reasons of Lockhart J. IT would anly add that in my consideration of the problem, I have had regard to the fact that the claims nade pursuant to paras. 53(c) and. (d) involve the appellants establishing, albeit in civil roceedings, the cammission of a sari of misdemeanaurs. 'so The oft referred to caution in Bricginshew v. Briginshaw (1938) 560 C.L.R. 336, must be observed. I am nevertheless satisfied that the appellants have made out their case. The injunction to which in my view they are entitled may require some consideration. That is particularly because che restraint to be ximposed will b om one which. prevents the respondents from selling Nombat computers and, at the same son e) ef argument before us. My judement in relation to the copyright claim will not prevail. The other members of the Court consider that an injunction to restrain continued infringements of copyright should go. Of necessity, that injunction will be in terms wider than any injunction under the Trade Practices Act. Ido not therefore consider it N necessary to attempt to formulate an appropriate injunction in these reasons. I would prefer to allow counsel to consider the reasons of che Court and to soeak ar a later time as to the form of orders to be made in relation to the claims under the Trade Practices: Act upon which the appellants have succesded. In the result I woulda allow the apoeal in so far as the Trade Practices claims are concerned but only ct u ct a ™ i) tal ch b § a indicated by what I have said. The avpeal in relation to the oO ie] 'D 'q ty He r ct Q G laims should be dismissed. estas TP fanart pedthe 2/ preceding Mir vustice Sheppard. SP HUTCHISON Associate Dated 29 WAY (784