JUDGMENT No. bla 21. CATCHWORDS Interlocutory injunctions - questions of prima facie case, discretion and balance of convenience - whether granting of interlocutory relief would be likely to put respondent out of business. Copyright - computer operating systems programme fixed in ROM - applicant's ROM used by respondents in prototype microcomputer used for testing by respondents and potential purchaser - whether ROM being distributed for the purpose of "trade". Copyright Act 1968, 3s. 38 Copyright - disassembly of machine or object code fixed in ROM chip - copyright in code and chip owned by applicant - preparation by respondents of programme designed for similar purpose ~- inclusion in draft programme written in assembler code of so much of programme as provided for procedure known as floating point routine - whether this part of programme reproduction of substantial part of applicants programme - whether sufficient evidence that respondents intended to use that part of the programme in the programme ultimately to be compiled by them. Copyright Act 1968, ss. 14, 36 Trade practices (consumer protection) - applicant and respondents nominated as suppliers of microcomputers for use in Western Australian schools - evidence that respondents product unlikely to be read in time to be delivered in accordance with contract - whether evidence that respondent engaging in misleading and deceptive conduct. Trade Practices Act 1974, s. 52 BARSON COMPUTERS AUSTRALASIA LIMITED v. SOUTHERN TECHNOLOGY PTY LIMITED and EDMUND ROMAN JURKIEWICZ No. W.A. G1l06 of 1987 Coram: Sheppard J. Date : 22 October 1987 Place: Sydney on + IN_THE FED OURT OF AUSTRALTA ) ) AUSTRALIAN DIS REGISTRY ) No. W.A.G106 of 1987 ) ) GENERAL DIVISION BETWEEN : BARSON COMPUTERS AUSTRALASTA LIMITED Applicant AND: SOUTHERN TECHNOLOGY PTY LIMITED and EDMUND ROMAN JURKIEWICZ Respondents MINUTES OF ORDER JUDGE MAKING ORDER: SHEPPARD J. DATE OF ORDER: 22 OCTOBER 1987 WHERE MADE: SYDNEY 1. The Court notes the undertaking as to damages filed on l October 1987 and renewed in Court by counsel for the applicant on 21 October 1987. The Court orders that, until the hearing of these proceedings or until further order, the First Respondent whether by itself, its Directors, servants or agents, or any of them or otherwise howsoever, be restrained from, without the licence or consent of the Applicant, selling, letting for hire or by way of trade offering or exposing g for sale or hire, exhibiting to members of public or distributing for the purpose of trade, any Squirrel computer, whether a production model or prototype, which 2. contains any of the following materials: (1) Watford Disc Filing System ("DFS") 0.9, 1.50 and/or 1.2 ROM or any computer program embodied therein; (ii) ACORN B.B.C. BASIC ROM or any computer program embodied therein. The Court orders that, until the hearing of these proceedings or further order, the First Respondent, whether by itself, its Directors, servants or agents, or any of them or otherwise howsoever, be restrained from selling, letting for hire, or by way of trade offering or exposing for sale or hire, exhibiting to members of the public, distributing for the purpose of trade, publishing, reproducing in material form, or converting or making an adaptation, by compiling a Squirrel BASIC ROM or EPROM which is in whole or in part a reproduction or adaptation of: (1) So much of the ACORN 8B.B.C. BASIC program as consists of steps necessary to provide a floating point routine, and (ii) S30 much of the ACORN B.B.C. BASIC program as is referred to in para. 36 of Exhibit "ARW1" to the affidavit of Alun Roger Wilson sworn 16 October 1987. The Court grants liberty to either party to apply generally on 2 days' notice provided that the Applicant is not to make any application for further interlocatory injunctive relief based on an alleged breach or alleged breaches of the Trade Practices Act 1974 without the leave of the Court qranted on an application made ex 3. parte to a Judge of the Court. The Court orders that the costs of the application for interlocutory relief be costs in the principal application. The Court directs that in lieu of the existing directions: (i) The Applicant be granted leave to file an amended Statement of Claim on or before 5 November 1987 (ii) The Respondents file their defence on or before 19 November 1987. The Court directs that the matter be stood over for further directions to 15 December 1987 at 9.30 a.m. in Perth. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FED COURT OF AUS A ) ) WESTERN AUSTRALIAN DISTRICT REGISTRY) No. W.A.G106 of 1987 ) GENERAL DIVISION ) BETWEEN: BARSON COMPUTERS AUSTRALASIA LIMITED Applicant AND: SOUTHERN TECHNOLOGY PTY LIMITED and EDMUND ROMAN JURKIEWICZ Respondents CORAM: SHEPPARD J. DATE : 22 OCTOBER 1987 REASONS FOR JUDGMENT HIS HONOUR: This is an application for interlocutory relief in proceedings in which the applicant ("Barson") sues the respondents for actual and threatened infringement of copyright and breaches of s. 52 of the Trade Practices Act 1974. Barson is an Australian company having its principal offices in Victoria. It is the exclusive Australian and New Zealand distributor of computers and computer related products manufactured and sold by a United Kingdom company, Acorn Computers Limited, under the name Acorn. ' Acorn has granted to Barson exclusive licences in respect to the copyright it claims to have ina number of its products including microcomputers, computer systems operating programmes, software and semi-conductor chips. I refer to ss. 196, 119 and 115 of the Copyright Act 1968. For a number of years Acorn has manufactured computers and computer software designed especially for use in schools. One series of such computers consists of microcomputers designed to the specifications of the British Broadcasting Corporation for use in schools. These computers are produced and sold by reference to the name, British Broadcasting Corporation or B.B.C., and are known as the B.B.C. model B microcomputer, the B.B.C. master microcomputer and the B.B.C. master compact microcomputer. Barson commenced selling such computers on the Australian market in 1981. Sales are budgeted to exceed $6 million in the 1987/1988 year. The evidence establishes that the Acorn range of 8B.B.C. microcomputers is accepted in the Australian schools market as being amongst the leading educational computers available here. Late in 1986 the State Tender Board of the State of Western Australia invited tenders for the supply to the Ministry of Education of microcomputer systems for schools. The closing date for tenders was 18 June 1987. The tender documents included one entitled "Technical Specifications". These provided in paragraph 2.2.5 that the "Ministry presently has approximately 120 programmes in 15 packages developed in B.B.C. BASIC and/or "6502 Assembler for the Acorn B.B.C. microcomputer". The paragraph also said:- "No system will be recommended until all facets have been satisfactorily addressed by the supplier and where appropriate demonstrated to officers of the Ministry. Therefore, suppliers should not make submissions unless' they are able, within two weeks of the close of the tender or within one week of request, to provide a system for the purposes of inspection, demonstration and testing". There are further provisions in the technical specifications to which I should make reference. Paragraph 2.6.2 provides:- "On the basis of the written submission the Ministry of Education will create a short list for further investigation and will notify applicants if, and when their system is required for further testing and evaluation. Assessment for the purpose of establishing a short list will include such factors as: - the cost; the degree to which mandatory requirements are met the capacity and capability of the system; and . the apparent ability of the supplier to provide and maintain the complete system. It is expected that short listing will be completed by Monday, 29th June, 1987". Paragraph 2.6.3 provided for an initial evaluation and 2.6.4 for a final evaluation. This referred to evaluation of such factors as durability of connectors, continuous cycling of disc drives and memory, reaction to power fluctuations, electrical safety, heat safety, robustness of system software, acceptance by representatives of school communities, who might be invitéd to inspect the system, and support for the development of software which might be required to support the local curriculum. This was said to include the ease with which software could be developed, and the degree to which the software supported the hardware. Paragraph 2.9 provided that it was expected that approved suppliers would be required to commence deliveries to schools by the end of the third week of July and be completed by December 1987. Those dates have gone back somewhat. It would seem on the face of the evidence that the earliest date upon which delivery of any computer will be required is 15 January 1988, 12 weeks after tomorrow, 23 October 1987. Paragraph 8.2.1 is entitled, "Programming Languages) - Programming Option". There follows a heading, "Mandatory". Paragraph 8.2.1 provides that a powerful and well-structured version of BASIC capable of supporting the graphics, colour and sound capabilities of the hardware must be included. BASIC is a computer language. Paragraph 9.1 said that the robustness and maintainability of the system were seen as being important because: - "(a) hardware faults must not cause the computer system to be idle for more than a minimum amount of time, otherwise educational timetables are likely to be disrupted with consequent harmful effects on students; and (b) it is unacceptable that on-going maintenance costs should impose major recurrent expenditure burdens upon the Ministry of Education and/or its schools. Experience has shown that shifting of computer equipment places particular stress on cabling, anchoring of cables and circuit boards, disk drives and power supplies. Suppliers are therefore requested to give particular attention to these aspects of maintainability". There is then a heading "Mandatory" under which appears:- "9.1.1 The system be robust and reliable enough to stand up to constant use by large numbers of students in unprotected classroom environments. 9.1.2 The equipment must be easily shifted to different locations. Information regarding the portability of the equipment, and any problems that may arise in its movement, should be provided". As is apparent from the provisions of paragraph 2.2.5 of the specification, the computers to be supplied would need to be capable of using a large number of B.B.C. programmes, that is B.B.C. computer software, prepared for use in schools. To use an expression, the computers would need to be "compatible" for the use of these programmes. Plainly enough the Acorn computers were compatible in this respect because they were specially designed to take these very programmes. The particular component of the computers which gives them this quality is a ROM (Read Only Memory) chip, which has been programmed to enable the computer to make use of the programmes. The chip is known as the BASIC ROM chip or B.B.C. BASIC ROM chip. The word BASIC is used because the source code and, as I understand the evidence, assembler code, was either written in or derived from the computer programme language to which I have referred, namely BASIC. The encoded programme is divided into two parts, B.B.C. faSIC 1 and B.B.C. BASIC 2. A central part of B.B.C. BASIC 2 provides for what is called the floating point routine. It is unnecessary to endeavour to describe what is involved in this routine, but an oversimplified explanation would commence with reference to the calculation by a simple electronic calculator or an arithmetical division or the ascertainment of a square root of a number which does not yield a precise resuit. The division of a number by 3, 6 or 9 or the calculation of the square root of 2 provide examples. Depending on the size of the number to be divided, or of what number the square root is required, and the capacity of the calculator, so the decimal point will move across the display panel. As I understand the evidence that is the nature of a floating point but as [ say that is an oversimplified analogy for something which is far more complex and will eventually be part of the working of the computer without the operator necessarily being aware of its presence or of what it does. Early in 1987 the first respondent ("Southern Technology"), along with another company, Professional Technology Pty Limited, decided to manufacture a computer which would meet the Western Australian Government's requirements. It would be compatible with B.B.C. software. In the events which happened Professional Technology dropped out of the venture. Before this occurred, Southern Technology, with the help of Professional Technology, produced a prototype computer and offered it to the Western Australian Ministry for testing. It would appear on the face of the evidence that the computer passed the test with flying colours. The prototype contained three ROMs which in various ways are at the centre of the issues in this case. , Both Southern Technology and Barson tendered for appointment as approved suppliers of computers to Western Australian schools. Southern Technology's tender was lodged on 18 June 1987. Eventually the Ministry nominated seven suppliers from whom computers would be ordered in the coming year. These included both Barson and Southern Technology. Because of evidence that the Western Australian school system is by comparison with other centres somewhat undersupplied with computers, it is anticipated by both parties that the market for the supply of computers to the Western Australian school system will be a large one. The Ministry announced that orders would be placed with one or other of the nominated suppliers on 23 October 1987, that is tomorrow, and 27 November 1987. Delivery would be required 12 weeks from the placement of the orders. It is anticipated that the orders placed on 23 October 1987 will be substantially more numerous than those to he placed on 27 November 1987, which, as I understand the evidence, are likely to be more in the nature of make-up orders. In the light of the dispute which exists, it is necessary that I now say something of the nature of each of the ROM chips to which I have referred and the function they were intended to perforn. The first may be described as aD.F.S. (Disk Filing System) ROM. This was manufactured by another English company, Watford Electronics. The only trouble is that the ROM is the subject of a long-running dispute between Acorn and Watford in which it is alleged by Acorn that the ROM is an infringing copy of another of its ROMs (not the B.B.C. BASIC ROM eaflier mentioned). If Acorn be right, Barson is entitled to sue for any infringement in Australia because of its exclusive licence. Counsel for Southern Technology submitted that there was no sufficient evidence, even on a prima facie basis, to enable me to conclude that the Watford ROM was an infringement of the Acorn ROM. However, Dr. Thackray, an employee of Acorn, who isa well-qualified computer scientist and analyst, has sworn that he personally compared the Watford product with the Acorn product and found a number of similarities between the programmes fixed on to each. The matter has not been fully investigated by me, but I think that I should prima facie be satisfied that the Watford ROM does infringe Acorn's copyright and that for that infringement Barson may maintain an action. That is not the end of that matter. There are other considerations to which I shall come in due course. The second of the three ROMs in the computer to be manufactured by Southern Technology, which is to be known as a Squirrel computer, was an Acorn BASIC ROM. Southern Technology, so it said, through one of its directors, the respondent, Mr. Jurkiewicz, made it clear to the Ministry of Education that, if Southern Technology obtained orders for Squirrel computers, the models which would be produced and supplied pursuant to the orders would contain a BASIC B.B.C. ROM, the programme for which would be written and produced by Southern Technology. The Acorn ROM would not be used and there would thus be no question of any infringement of copyright. There is no copyright issue concerning the third of the ROMs, known as an MOS (Machine Operating System) ROM, but it has a relevance in relation to the issues arising under the Trade Practices Act claim. What Barson firstly seeks is an interlocutory injunction restraining the use by Southern Technology in the Squirrel computer, whether the prototype or the production models to be sold to the Ministry, of both the Watford ROM and the Acorn B.B.C. BASIC ROM. In relation to production models the issue is probably academic. Southern Technology through Mr. Jurkiewicz has indicated that it does not propose to use the Watford ROM. An alternative is being sought in the United Kingdom. According to Mr. Jurkiewicz, Southern Technology has never intended to use the Acorn BASIC ROM in its production models. The claim for interlocutory relief was resisted chiefly because there was no continuing threat to use the two ROMS in production models of the Squirrel, that is to say, the Watford ROM and the Acorn BASIC ROM. IT have given that matter some thought. Having done so, I have decided that I should grant the relief sought because the use of the two in the prototype does give rise to a reasonable apprehension that there might bea temptation to use the Acorn ROM or the Watford infringement in production models. I have found support for that conclusion in the evidence which there is in relation to the floating point routine and the difficulties which confront Southern Technology in supplying production models of the computer. I shall deal with those matters in due course. * That leaves the question whether the injunction should also restrain the use of the two ROMs in the prototype. That may also 10. be an academic issue because the prototype has probably served its purpose; but that may not be so, and if there were no other matter, I would have little hesitation in granting relief in respect of the prototype as well as in respect of production models. The outstanding matter concerns the proper construction of s. 38 of the Copyright Act. It is only for a breach or threatened breach of that provision that Barson may sue. Section 36 does not apply in the circumstances of this case. Section 38 provides:- "38. (1) 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 knowledge, 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 the owner of the copyright concerned, shall be taken to be the sale of those articles".The articles in question are the two chips. There is a question in my mind whether, notwithstanding the amendments to the Copyright Act which were made in 1984 to cater for computer ll. programmes, what is involved is a literary work. However, although there was no discussion in the argument about this matter, I think, in accordance with the perceived way in which this problem is being attacked in a number of countries, that at least on a prima facie basis, I may conclude that the chip itself is an artistic work. The question then is whether the section applies in relation to the two ROMs used in the prototype. The section does not apply unless it be shown, at least on a prima facie basis, that the respondents have sold, let for hire or, by way of trade, offered or exposed for sale or hire the relevant article or by way of trade exhibited the article in public. The words to which I have referred need to be interpreted inthe light of the provisions of subsec. (2) which relevantly provide that, for the purposes of subsec. (1), the distribution of an article for the purpose of trade is to be taken to be the sale of the article. In the submission of counsel for Barson, the showing and making available for testing of the prototype was a matter necessarily incidental to the distribution of the product. Uniess the article was made available in this way, the chain of distribution could not commence. I was referred to a New Zealand case, the decision of Prichard J. in Barson Computers (N.Z.) Limited v. John Gilbert & Co. Limited (1984) 4 I.P.R. 533. However, the case does not deal with the particular point in question here. I was not referred to any authority which does. Having reflected on the matter, however, I think the better 12. view is that the use made of the prototype was incidental to the distribution of the products to be manufactured. As I have said, it was a necessary step in the chain of events which had to occur in the distribution process. For that reason I think I should accept the submission made by counsel for Barson and I propose to do so. It will be appreciated, however, that the matter has had to be decided on an interlocutory basis and time has not permitted me to make the investigation of possibly relevant authorities or texts, which may have shed light on the matter, which I would have preferred to do. Another matter that one should notice about s. 38 is the requirement of proof of knowledge. That was not a matter that was the subject of any submission, but I have formed a view about it. It would seem to me that in relation to the Acorn B.B.C. BASIC chip, there can be no argument about the matter. According to Mr. Jurkiewicz' own evidence, he at all times appreciated that he could not use that chip in the production models of Southern Technology's computers. One should therefore impute to him and thus to Southern Technology itself the appropriate degree of knowledge. I have had more difficulty in relation to the Watford ROM because there appear in the evidence some letters which indicate that there is an ongoing dispute about the matter, anda third party such as Southern Technology could be excused for* not knowing that there was a problem. To put it round the other way, such evidence could lead one to conclude that it was not shown that Southern Technology had the requisite knowledge. However, 13. it seems to me that this is a case where. whatever Southern Technology's knowledge may have been in the past, it is now on the face of the evidence aware of the problem. Accordingly, and particularly in the absence of any submissions on the matter, I have reached the conclusion that at least on a prima facie basis Barson has satisfied me about the question of knowledge. I am, therefore, satisfied that an injunction should be granted onan interlocutory basis restraining the use of the Watford ROM and the Acorn B.B.C. BASIC ROM in production models of the Squirrel computer and also in prototype models thereof. The next matter to be dealt with is that which concerns the floating point routine. The evidence establishes on a prima facie basis that critical parts of the Squirrel BASIC B programme constitute a reproduction, or an adaptation, of so much of the Acorn BASIC 2 programme as deals with the floating point routine. The programme is not yet complete. Indeed, according to Dr. Morris who has the task of writing it, it is only about 50 per cent complete. Moreover, he has not, s0 he said, yet decided whether to use that part of the programme which provides for the floating point routine. He may devise a programme of his own to deal with it. I should mention at this point that Dr. Morris acknowledged that he had obtained access to the assembler code used to cofipile the programme for the Acorn B.B.C. BASIC ROM from documents which were described as disassembied listings. These were obtained when someone, not Dr. Morris, disassembled the object or machine 14. code in the ROM into assembler language by the use of a device known as a disassembler. Dr. Morris acknowledged that he had a copy of the disassembled listings with him during the time he was writing the programme. However, he disclaimed making any substantial use of them, saying that he had had far more assistance froma text book, described in the evidence as a "hacker's text book", which he was unable to identify except that it dealt with the Acorn BASIC programme. The book was no longer available to him and was not produced. An explanation was given by Mr. durkiewicz for its absence, that explanation being based ona falling out that he said Southern Technology has had with Professional Technology. The point emphasized in Dr. Morris' evidence, and in the submission of counsel for Southern Technology, was that there was no certainty and thus no real threat that so much of the BASIC 2 programme as concerned the floating point routine would remain as it was. It was also submitted that the evidence did not establish that so much of the programme as concerned the floating point routine was a reproduction, or adaptation, of a substantial part (s. 14 of the Copyriqht Act) of the Acorn BASIC programme. Having considered the evidence, I reject this submission. I also think, notwithstanding the incompleteness of the programme, that, bearing in mind the whole of the evidence in the case, I ought not take the view that there is no existing threat of use of the programme as it is presently written by Dr. Morris and thus Southern Technology. He does not close the door to the use of it. 15. Accordingly, I have reached the conclusion that an injunction should go to restrain the respondents from including in any programme compiled for the purpose of the manufacture of a Squirrel BASIC B ROM, or EPROM, mnemonics, algorithms, or other language, which is in whole or in part a reproduction or an adaptation of s0 much of the Acorn B.B.C. BASIC 2 programme as consists of the steps necessary to provide for the floating point routine. I shall explain a little later the difference between a ROM and an EPROM. A similar problem exists in relation toa part, true it is a substantially smaller part, of the Squirrel BASIC A programme. Relief will also be granted in relation to that aspect of the matter. In summary then, the interlocutory relief to be granted for infringement of copyright will restrain the use by the respondents in any models of the Squirrel computer, whether the prototype or production models, of the Watford ROM and the Acorn B.B.C. BASIC ROM, and also so much of the Squirrel BASIC A and B programmes as I have indicated in what I have earlier said. That leaves the case based ons. 52 of the Trade Practices Act. It has two aspects. The most important aspect raises, I think, an uncommon application of s. 52. It can be simply put. It is that the respondents have engaged in, and are continuing to engage in, misleading and deceptive conduct because they have been making and continue to make statements, and have been engaged in, and continue to engage in, other conduct which 16. represents to the Ministry of Education and others that Southern Technology will be in a position to deliver completed models of the Squirrel computer on or before 15 January 1988. There is no issue that the respondents are engaging in such conduct, but their case is that it is not misleading and that they believe on reasonable grounds that the deadline will be met. Evidence about the respondents' prospect of achieving this goal has been given by both Dr. Thackray and Mr. A.R. Wilson, another employee of Acorn, who is well experienced in the development of computer programmes. It was he who wrote the Acorn B.B.C. BASIC programme, a task which took him some three years. The evidence of the two witnesses is compelling. It is their view that at the very least Dr. Morris will be engaged for another six months in completing the writing of the Squirrel BASIC B programme. It will then need to be fixed on to EPROMs, not ROMs, because EPROMs - EPROM being an abbreviation for Erasable Programmable Read Only Memory - can be manufactured very much more quickly. It is not suggested that it would he inappropriate to use EPROMs rather than ROMs. The two witnesses have also referred to other delays which are likely to occur because of the need to find a replacement for the Watford ROM and to complete work in relation to the MOS ROM. I do not go to the detail of this latter matter, but it does seem that not inconsiderable work may need to be done on the MOS ROM. Such work may not lead to an extraordinary delay because it® may proceed at the same time as Dr. Morris' work is being carried out. He is not engaged on that project. But other matters mentioned by the witnesses include the need to manufacture the 17. units as a whole. This may be the simple task which Mr. Jurkiewicz says it is, but experience teaches one that things do not always run smoothly. Cabinets, central processing units, circuitry, the three ROMs, and perhaps others for all I know, may all be able to be put together in afew days in sufficient numbers to enable Southern Technology to meet its obligations. But one cannot help having some reservation about the prospects of that occurring. Then one would expect there to be a period needed for testing, not only by the respondents in the interests of the good name of Southern Technology, but also by the Ministry of Education. Notwithstanding the stringent conditions contained in the technical specifications, it has not in fact tested the respondents product in its entirety. The product it tested contained two ROMS, one quite critical to the computer's required performance, which are either not presently available or not yet in existence. It is the critical one, the Squirrel BASIC B ROM, which is not yet in existence. On the respondents' own case it will not be in existence for about six weeks at the best, that is to say, by about the second week in December, a little over a month before delivery is required. What I am asked to do by Barson is to restrain the misleading and deceptive conduct upon which it relies by an injunction which will prevent Southern Technology from selling any Squirrel computers to the Western Australian Government at this stage. Unless I do so, counsef for Barson has submitted, Barson may lose orders as the result of unfair competition by the respondents. Damage to its reputation and goodwill will be difficult to quantify and in any event 18. damages will be an inadequate remedy because the evidence discloses that Southern technology may not be financially sound. Indeed, its future seems to depend on its obtaining substantial numbers of orders for its Squirrel computer. Both Dr. Morris and Mr. Jurkiewicz gave evidence, upon which they were cross-examined, of their confident expectations that the Squirrel would be ready for delivery, if not by 15 January 1988, then by the end of January. Mr. Jurkiewicz said he was confident of obtaining an extension of time until then, and for present purposes I am prepared to accept that that will probably be so. My observation of the two witnesses was not particularly unfavourable, but I do have the impression that they see the position as extremely serious, if not desperate, and for that reason tend to become unrealistic when pressed with the realities of what really is involved in completing the project within the time available. All these circumstances establish that Barson has a strong case, at least ona prima facie basis, for the relief which it seeks and also that there are matters in its favour in relation to the balance of convenience. But one needs to consider the implications of the granting of the relief which is sought. The grant of such relief would, from a practical point of view, decide not only this case but the fate of Southern Technology. It would thus be quite drastic in its effect. I have said that I consider that Barson has a strong case. So it has. But I am not persuaded that it is impossible for Southern Technology to meet the deadline which it must if it is to survive. The history of 19. commercial activity is dotted with valiant tales of heroic efforts to meet deadlines many of which have proved successful. The penalty exacted upon Southern technology for failure will be heavy if indeed it obtains orders from the Western Australian Government which it does not fulfil. It is not unlikely that it will be liable in an' action for damages at the suit of that Government if it does not deliver on time. It is also not unlikely that it will be liable for damages at the suit of Barson for breaches of s. 52 of the Trade Practices Act. Successful actions by either one, let alone both, would seem to me to be likely to put anend to Southern Technology unless it has a substantial increase in the amount of its working capital. There are some further factors:- 1) The evidence satisfies me that Mr. Jurkiewicz, no matter that the grounds upon which he relies may be seen to be shaky, believes in the project. He is aware of all the problems I have mentioned. He does not accept that his conduct is misleadng or deceptive and certainly he does not intend it to be. (2) One cannot ignore the place in the scheme of things of the Western Australian Ministry of Education. This ought not be under-emphasized. It has the interests of its schools, particularly their staff, and pupils, and perhaps parents and citizens associations who have contributed money to purchase some of the computers, to consider. In the fight of its demanding specification it seems unlikely to be satisfied with an inferior product or indeed with a product which has not been sufficiently tested. In the 20. light of the untried nature of the product, as will be the case if it is produced by about the end of December, it seems likely that the Western Australian Ministry may not wish to acquire production models unless it has the opportunity to test them fully. (3) The grant of relief may not only have a drastic effect on Southern Technology's future; it may in the end be seen to have stifled what turns out to be, however unexpectedly, quite fair competition. Although I have not found the resolution of the overall problem particularly easy, I have reached the conclusion that at this stage I should refuse the relief which is sought. I think the best way of dealing with this quite difficult problem is to make no order on the application at this stage but reserve to Barson the right to renew its application if it be so advised. Things from now on will not stand still. Events to take place in the next month or so will determine whether the respondents' expectations are vain hopes or are based on reality. The other aspect of the claim made for breach of s. 52 of the Trade Practices Act centres upon an advertisement which has been used from time to time by the respondents. Amongst other things, the advertisement says under the heading, "Useable", "Runs software designed for use with Acorn Model B and Master series computers". It is submitted that I should restrain the uge of the advertisement unless it is amended 30 as to delete that statement. The statement of course is made about a computer not yet in existence. It cannot at the moment be acquired. It would 21. be unlawful for the respondents to sell a prototype model because of the infringements of copyright which I have found prima facie to exist and the production models await the manufacture of ROMS which will contain the Squirrel BASIC programme. It is unlikely that such models will be available in any form until well into December. Anybody seeing the advertisement who made enquiries would understand very quickly that the matter was in the future. There is little, if any, evidence of deception being caused as a result of the use of the advertisement. Certaintly the West Australian Ministry has not been deceived nor has Barson. In those circumstances I think I should treat this aspect of the case similarly to the way in which I have treated the other aspect of the Trade Practices Act claim for relief, and reserve liberty to Barson to apply for interlocutory relief in relation to the advertisement if it be so advised. At the moment, however, such relief will not be granted. It remains then to formulate the orders which I should make to give effect to what I have decided to do. (There followed discussion with counsel and a short adjournment after which his Honour made orders in terms of those contained in the Minutes of Order earlier set out. Further discussion then ensued for which see the transcript). | certify that this and the 2O preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Juetioe Shepp A Tikxm / plow Associate Dated 22 OCTOBER 1787 22. Counsel for the Applicant Mr. T. Simos, Q.C. with R. McCormack Corser & Corser of Perth Solicitors for the Applicant Counsel for the Respondents 8 Mr. A.J. Templeman Solicitors for the Warren McDonald French & Respondents Harrison 20, 21 and 22 October 1987 Dates of hearing