FEDERAL COURT OF AUSTRALIA Aussie Glass (Operations & Marketing) Pty Ltd v Greencare Resources Pty Ltd [1999] FCA 1597 AUSSIE GLASS (OPERATIONS & MARKETING) PTY LTD (ACN 057 002 043) v GREENCARE RESOURCES PTY LTD S 14 OF 1999 MANSFIELD J 17 NOVEMBER 1999 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 14 OF 1999 BETWEEN: AUSSIE GLASS (OPERATIONS & MARKETING) PTY LTD (ACN 057 002 043) Applicant AND: GREENCARE RESOURCES PTY LTD (ACN 081 224 197) Respondent JUDGE: MANSFIELD J DATE: 17 NOVEMBER 1999 PLACE: ADELAIDE REASONS FOR DECISION 1 This is a motion for summary judgment under O 20 r 1 of the Federal Court Rules ("the Rules"). I should accede to the application only if there is no real question of law or fact to be tried in the proceedings: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91-92. 2 The applicant's claim is that, in the period 1996-1998, it authored a booklet describing and promoting investment in a eucalyptus forest franchise scheme, which was promoted under licence by Enviro Systems Renewable Resources Pty Ltd ("the applicant's booklet"). It claims copyright in the applicant's booklet. The respondent, subsequently in 1998, published a booklet concerning investment in a firewood franchise scheme ("the respondent's booklet"). The applicant asserts that the respondent's booklet is a substantial reproduction of the applicant's booklet, and so infringes the applicant's copyright in the applicant's booklet. The defence does not admit any material element of the applicant's claim. It specifically denies that it copied and reproduced a substantial part of the applicant's booklet. 3 Both the applicant's booklet and the respondent's booklet are in evidence. The only other substantive evidence relied upon by the applicant was from a director of the applicant who deposed to having been "the author" of the applicant's booklet. It is a one line assertion. How that document was "authored" is not explained. It is clearly what the applicant's counsel called "a compilation" taken from other like documents, with some original text. The respondent relied upon an affidavit from one of its directors which is equally laconic; he denied that the respondent copied or reproduced "a substantial part of" the applicant's booklet. If it is intended to convey that the respondent did not copy or reproduce any part of the applicant's booklet, that affidavit does not say so. It does not explain the genesis of the respondent's booklet. In particular, it does not seek to explain what was the source of any part of the respondent's booklet, or to what extent it was original writing or was taken other than from the applicant's booklet. The only other evidence on the motion was from the respondent's solicitors. They assert that the applicant's booklet contains many standard clauses for documents of that type, so that the respondent cannot be assumed to have copied the applicant's booklet in reproducing standard clauses. 4 The respondent's evidence also complains about the adequacy of the applicant's discovery. It is asserted that the respondent has been unable properly to consider factors "such as the originality" of the applicant's booklet. Correspondence between solicitors is produced, covering the period 1-19 October 1999. I do not consider that that material assists in determining the present motion. There has been no application for further and better discovery, nor any application to adjourn the motion whilst such an application is pursued. Although the letter from the respondent's solicitors expresses the view that documentation dealing with the production of the applicant's booklet is inadequate, it really requests only fee notes for drafting and engrossing the applicant's booklet. The applicant's solicitors responded, asserting inter alia that copies of the draft documentation had been discovered. There is no focus upon the documents available to the applicant or used by the applicant in preparing or "authoring" the applicant's booklet. I do not know whether such documents exist, or existed, or whether they have been discovered. I am not prepared to infer that any such documents have not been discovered. I was told by counsel for the applicant that it regards its discovery as complete. Those considerations, in my judgment, lead to the view that any issue as to adequacy or inadequacy of the applicant's discovery is not a matter which should influence the outcome of the present motion. 5 The applicant acknowledged that it must establish that there is "no real question to be tried" (see Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99) on the following two issues, namely: · copyright exists in the applicant's booklet, and · the publication of the respondent's booklet infringes that copyright. 6 For the purposes of the motion, I am prepared to assume in the applicant's favour that copyright exists in the compilation which constitutes the applicant's booklet: eg. Real Estate Institute of NSW v Wood (1923) 23 SR (NSW) 349. Such a compilation must be more than a mere binding together of existing forms or documents. I am prepared to assume that the authorship of the applicant's director involved a sufficient effort of labour and time and money to attract such copyright. Whether that is proved at the trial will need to be determined upon all the evidence. On this motion, having regard to the terms of the defence and of the respondent's affidavits, I am prepared to accept the applicant's argument that s 126 of the Copyright Act 1968 (Cth) ("the Act") advances the applicant's claim to copyright. At the very least, it is arguable that the defence does put in issue the question whether copyright subsists in the applicant's booklet. The non admission constitutes a traversal of the allegation in the statement of claim: O 11 r 13(3) of the Rules. 7 However, I am not able to be satisfied to any firm degree about the extent to which there is originality in the applicant's booklet. There is clearly some text which is specific to the applicant's booklet. But, I do not know whether the fruits of the applicant's labour lie in the way or sequence in which the compilation is presented, or in sections of original text, or in the identification and description of particular topics for comment, or in a combination of those matters, or in some other respects. Of course, on the assumption I have made, copyright exists in the applicant's booklet as an entirety, rather than in those parts of it which constitute original writing: Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436. The compilation represented by the applicant's brochure is what I have assumed to be the result of skill and labour of the applicant: Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1985) 5 IPR 213. What I do not know is the extent to which prior materials contained similar selections, and coordination, and arrangement of such materials. In other words, I do not know the extent to which the respondent's booklet might involve the taking advantage of the applicant's labour and skill and its investment in the applicant's booklet. 8 I have carefully compared the two booklets. The respondent's booklet contains a contents page and a corporate directory (although the applicant describes its "Key People" in its text), but the applicant's booklet does not. Each has an introductory section and a section headed "Why Invest In …". In those sections, there is some significant replication of words which may well have been taken by the respondent from the applicant's booklet, but there are also parts of the text which are quite different and the subtopics dealt with do not all coincide. The sections of the respondent's pamphlet headed 'How the project works' and 'Silver Perch Plantation Management' contain large slabs of text which duplicate the applicant's booklet almost verbatim, but they do not appear in the same sequence and there are also sections of the text which are not common. Thereafter, the respondent's booklet contains a heading 'Franchise Options' and text, financial projections, and financial and other data, which is different from the applicant's booklet dealing with those matters, and some of which contains information of a kind which is not set out in the applicant's booklet. The applicant's booklet also has sections entitled 'Franchisee Questions & Answers', 'Check list' and 'Summary' which are not replicated in the respondent's booklet. 9 The applicant's booklet then has terms and conditions for its Management Agreement, Loan Agreement, and Franchise Agreement. The respondent's booklet also contains terms and conditions for such agreements. Those terms and conditions are not identical. They are very similar in a large number of respects, but one would expect for instance terms to be similarly defined given the nature of the respective proposals of the applicant and the respondent. There are also many respects, including definitions, on which the documents diverge. Many of the clauses are typical of what is commonly found in franchise agreements. The respondent's booklet draws attention to the Franchise Code of Conduct Exposure Draft (4 April 1998) as at least identifying topics which must be dealt with. 10 Finally, the two booklets contain the forms for completion for the agreements, and a unit certificate. They are in substantially the same form, and in particular the unit certificate has a border which is distinctive and almost identical on each document. 11 Proof of copying of a compilation is sometimes difficult to establish. I am asked to conclude that there is no real issue that such copying occurred, despite the respondent's denial of having done so. That conclusion, which in a practical sense, must be almost beyond argument on an application such as the present, is urged upon me on the basis of the comparison of the two booklets. I have undertaken that comparison, as described above. I have considered the substantial similarities between the two booklets, as well as their differences. I have considered what counsel for the applicant called "the look and feel" of the two booklets. I have addressed what might be called the similarities in the meaty or specific parts of the booklets, as distinct from their more formal contents. No mistakes in the applicant's booklet were identified as having been transposed into the respondent's booklet (cp. Kelly v Morris (1866) LR 1 Eq 697). There is at least one misspelling in the respondent's booklet which did not come from the applicant's booklet, although that is not of great moment. The nature of some of the replicated text is such that it may have come from other sources. There are differences in the form and contents of the two booklets. In Skybase Nominees Pty Ltd v Fortuity Pty Ltd (1996) 36 IPR 529, Nicholson J at 541 pointed out that the real question in determining infringement is whether the respondent has made unfair use of the work of the applicant. The existence of independent labour on the part of the respondent in producing its booklet or compilation, which on my analysis of the two booklets, may have taken place, may also indicate that the applicant's (assumed) copyright has not been infringed. 12 Having regard to those considerations, I am not satisfied that there is no real issue to be tried as to whether the respondent's booklet infringes the (assumed) copyright of the applicant in the applicant's booklet. Accordingly, I decline to make the order sought for summary judgment. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. Associate: Dated: 17 November 1999 Counsel for the Applicant: Mr S Doyle Solicitors for the Applicant: Fisher Jeffries Counsel for the Respondent: Mr T Bourne Solicitors for the Respondent: Stanley & Partners as agents for Camm & Associates Date of Hearing: 12 November 1999 Date of Decision: 17 November 1999