Acohs Pty Ltd v R A Bashford Consulting Pty Ltd & Ors [1997] FCA 352

• in a form which renders them suitable for adoption by Commonwealth, State or Territory governments as mandatory standards. Pending adoption the standards operate as instruments of an advisory character. Nevertheless, they are likely to have a significant role in determining the common law duties and standards of care for suppliers of hazardous substances and employers using those substances. The standards ensure that employers and employees at workplaces with potential exposure to hazardous substances used in a work activity are provided with, or have ready access to, information on the nature of the hazard, how to assess and control exposure to the hazard and how to deal with any emergency situation that might arise from the use of hazardous substances. MSDSs are the primary vehicle for the provision of that information. They have been used extensively in Australia since 1986. Under the standards, provision is made for MSDSs to be provided by manufacturers, importers or suppliers of hazardous substances. The MSDSs are in a recommended format and contain the following information: • Company Details;

• Statement of the hazardous nature of the substance including product identification, physical description/properties and ingredients; • Health hazard information including health effects and first aid; • Advice to doctors; • Precautions for use including exposure standards, engineering controls, personal protection and flammability; • Safe handling information including storage and transport, spills and disposal and fire/explosion hazard; • Other relevant information; and • Details of persons to contact for further information. It is common ground that MSDSs enable an employer to manage health and safety policy in the workplace, engineer its facilities to reflect the characteristics and hazards of the products it uses and respond to emergencies and injuries ("safety related purposes"). The evidence establishes that in Australia there are about 1500 hazardous substances which are used in about 100,000 products. 3.0 The issues The main s.52 issues arising for determination in the proceeding are:

• whether RMS and RMC contravened s.52 by publishing the Chemwatch news item; • whether Bialkower was a person involved in the contravention of s.52 by RMS and RMC; • whether Acohs suffered any loss or damage by reason of the contravention of s.52; and • whether declaratory or injunctive relief should be granted to Acohs in relation to any contravention of s.52. Bialkower has claimed a declaration in respect of his copyright in the 43 MSDSs and Acohs' infringement of that copyright, orders for the delivery up of all infringing copies and injunctive relief restraining any further infringement. Bialkower also claimed damages and interest but, ultimately, did not pursue those claims. The main copyright issues arising for determination in the proceeding are: • whether Bialkower is the owner of copyright in the 43 Chemwatch MSDSs transcribed by Acohs into the Infosafe database; • whether Acohs infringed Bialkower's copyright in the 43 MSDSs and, in particular, whether Acohs' use of the 43 MSDSs was in accordance with an implied licence of Bialkower; • whether the relief sought by Bialkower is discretionary and, if so, whether the Court should refuse the relief sought on discretionary grounds, including the public interest. 4.0 Section 52 4.1 The facts Prior to November 1993 Bialkower had claimed that use of Chemwatch MSDSs by Acohs infringed his copyright. Bialkower, directly or through his solicitor, had corresponded with J. Blackwood & Sons Pty Ltd ("Blackwood"), a substantial wholesaler of chemicals, and the Australian Navy, a substantial user of chemicals. He claimed that any transcription of Chemwatch MSDSs into the Infosafe database infringed Bialkower's copyright. It appears that by about October 1993 Bialkower had become confident that his copyright claims were being taken seriously, at least by the Navy. Philip McCann ("McCann"), an employee of RMC, was responsible for the Infax newsletter. He and Bialkower gave conflicting versions as to the origin of the Chemwatch news item. On the balance of probabilities I have concluded that the following events are likely to have led to the publication of the Chemwatch news item. In late October or early November 1993 Bialkower telephoned McCann and told him that he had been successful in upholding his copyright claims for Chemwatch MSDSs in relation to companies using the Infosafe system. Bialkower suggested that McCann might use that information as a selling point. At the time McCann was seeking to persuade The Australian Gas and Light Co. (AGL) to select the Chemwatch, rather than the Infosafe, chemical management system. McCann assumed that the success, to which Bialkower referred, was in relation to litigation by Chemwatch against the proprietors of Infosafe. He regarded the information as appropriate to pass on to AGL. Accordingly, on 19 November 1993 he sent a facsimile to Ken McCall of AGL which stated: I thought that you and Elizabeth might be interested in hearing that the CHEMWATCH company has recently won court cases in Victoria against INFOSAFE. INFOSAFE were found to be breaching copyright laws by using CHEMWATCH MSDS'S in their databases. CHEMWATCH MSDS's have such a wide usage now that it will be difficult for companies such as INFOSAFE to avoid breaching copyright conditions on a regular basis.

McCann also prepared a draft of the Chemwatch news item for inclusion in the November Infax newsletter. During the morning of 2 December 1993 McCann sent a copy of the proposed newsletter by facsimile to Bialkower with a handwritten note stating: "Bernie, you get mentioned a bit in this issue is it o.k. to send?"

The note was consistent with past conduct of McCann. Prior to the November 1993 newsletter, when McCann proposed to insert items in relation to Chemwatch in the newsletter he sought to verify the accuracy of the item with Bialkower prior to its publication.

Bialkower responded to the note by telephoning McCann and informing him that it was dangerous to refer to Infosafe and there was no need to state in the article that Infosafe was the system in question. Bialkower did not suggest that the article was in any way incorrect or inaccurate. McCann discussed the conversation he had had with Bialkower with Hank Schapveld, a Director of RMC. They agreed that, as they believed that the information was accurate, there was no need to delete all reference to Infosafe. Accordingly, the November edition of the Infax newsletter was distributed on 2 December 1993 without the deletion suggested by Bialkower. The text of the Chemwatch news item, as distributed, was as follows: CHEMWATCH WINS COPYRIGHT CASE The CHEMWATCH company of Victoria successfully challenged in court two companies which use MSDS's on a database for breach of copyright. The court found that the companies had been using Data Sheets written and compiled by CHEMWATCH and that this unlawful act was in total disregard of copyright legislation. We will not mention the software concerned because the INFOmation is SAFE with us! Companies attempting to compile databases of hazardous substances will find it increasingly difficult not to breach copyright conditions. This is because CHEMWATCH has now written over 40,000 data sheets and are writing documents for most of the major organisations in Australia, including many of the emergency service organisations. CHEMWATCH also have the cooperation of many of the major manufacturers.

Bialkower disputed McCann's evidence that Bialkower made the claims set out in the article and said that he did not know of the article until after its publication. He said that on receiving the copy McCann sent to him, he immediately telephoned McCann and informed him that the Chemwatch news item was not correct. I do not accept Bialkower's evidence on this issue. It is unlikely that McCann would have invented the content of the letter to AGL and the article in its entirety and then proceed to publish it to customers, which obviously included persons dealing with Acohs, without any communication or authorisation from Bialkower. Secondly, McCann's evidence was consistent with his previous conduct of checking an item in relation to Chemwatch with Bialkower prior to publishing it. Thirdly, McCann's evidence is supported by the contemporaneous documentation, being the letter of 19 November 1993 and the newsletter facsimiled by him to Bialkower which states, in McCann's handwriting, that it is being sent for Bialkower's approval. Fourthly, McCann, who is no longer in the employ of RMC, presented as a credible and honest witness doing his best to recall the relevant events. I found Bialkower's evidence as to the events to be self-serving, unreliable, not supported by the contemporaneous documentation and to have an air of unreality about it. If Bialkower's version is accepted, RMS acted in serious dereliction of its duty. Yet, on Bialkower's own version, he made little or no immediate complaint about McCann's conduct and otherwise continued with RMS's agency without serious complaint. Finally, there is no rational explanation for McCann's conduct if Bialkower's version is accepted. In contrast McCann's version is inherently likely. Bialkower believed he had made an important breakthrough with the Australian Navy for his copyright claims and that led him to make the general, albeit exaggerated, claims he made to McCann. Although originally the claims were not intended by Bialkower to be published in a newsletter, Bialkower intended that they be used as a selling point and, more importantly, did not prevent publication of the newsletter. It is likely that McCann may have misunderstood Bialkower's initial statement by assuming that the success to which Bialkower referred was in litigation. However, I am satisfied that Bialkower was prepared to take the benefit of the misunderstanding when he did not prevent the publication of the Chemwatch news item. In my view Bialkower's precaution in suggesting that Infosafe not be mentioned in the newsletter related to not being caught making misleading statements rather than not being misleading. After McCann decided to publish the Infax newsletter, he sent 39 copies to customers. McCann then received a call notifying him that Acohs had complained about the Chemwatch news item, contending that it was false. McCann checked the complaint with Bialkower who said that there had not been any litigation but that demands had been made on two companies which had removed Chemwatch MSDSs from their databases. McCann then refrained from further distributing the newsletter. There were unsuccessful negotiations between Acohs and RMS concerning a retraction. Finally, on 14 December 1993, RMC sent a retraction to the 39 recipients of the newsletter in the following terms: RETRACTION In our INFAX Newsletter of November 1993 we had an article which related to CHEMWATCH successfully suing another company relating to the use of INFOSAFE MSDS sheets. This article was incorrect. We apologise to INFOSAFE unreservedly with respect to this matter.

4.2 Was there a breach of s.52? In publishing the November 1993 Infax newsletter RMS and RMC published, or caused to be published, information in trade and commerce which was misleading and deceptive. The facts that: • RMS and RMC did not intend to publish information that was misleading or deceptive; and • RMS and RMC were not the original source of the information they caused to be published do not afford RMS or RMC a defence to a claim for breach of s.52. It is sufficient that RMC and RMS adopted the information as accurate and caused it to be published: See Miba Pty Ltd v. Nescor Industries Group Pty Ltd (1996) 141 ALR 525 at 538-41. Although RMS and RMC retracted the misleading information within 2 weeks of its publication the retraction does not alter the misleading and deceptive conduct involved in the publication of the November 1993 Infax newsletter. However, the retraction is relevant to the question of relief. 4.3 Was Bialkower a person involved in the breach of s.52 by RMS and RMC?

On the facts I have found, Bialkower was the source of the misleading information published by RMC to 39 customers. Bialkower also authorised the publication of the information although he suggested, but did not require, deletion of the reference to Infosafe. In these circumstances I am satisfied that Bialkower was a person involved in the contravention of s.52 by RMS and RMC: see s.75B of the TPA and Yorke v. Lucas (1985) 158 CLR 661. As Bialkower's conversations with McCann took place over the telephone he is probably directly liable, as a principal, under ss.52 and 6(3) of the TPA, notwithstanding that he is an individual and not a corporation. However, as I am satisfied as to his liability under s.75B it is not necessary to pursue that aspect. 4.4 Did Acohs suffer any loss by reason of the contravention? Acohs adduced extensive evidence in order to establish that as a result of the publication of the AGL letter and the November 1993 newsletter it lost, or lost the opportunity of entering into, profitable contracts in relation to Infosafe with Blackwood and AGL. It is necessary for Acohs to establish actual loss, which can include loss of opportunity: see Sellars v. Adelaide Petroleum NL (1992) 179 CLR 332, 348, 355. Evidence on this issue was given by representatives of Acohs and of Blackwood and AGL. I am not satisfied, on the balance of probabilities, that any loss of business with Blackwood or AGL by Acohs was caused by the publication of the AGL letter or the Chemwatch news item. In my view if any such business was lost, or more accurately not gained, by Acohs it was as a result of Bialkower's claims of copyright infringement in relation to the use of Chemwatch MSDSs in the Infosafe system. Bialkower had made such claims independently of the publication of the newsletter, both before and after its publication. Once the issue of copyright infringement in relation to Chemwatch MSDSs had been raised, resolution of that issue became a matter of concern to both AGL and Blackwood. Mr. Cowie, a director of Acohs, suggested that copyright was not an issue prior to December 1993. In my view the issue had been raised on a number of occasions by Chemwatch and also by Blackwood prior to December 1993. However, more importantly, once raised it remained an issue until its resolution in these proceedings. Accordingly, I am satisfied that the reluctance of Blackwood and AGL, as Infosafe customers, to extend their Infosafe systems, or any deferral of a decision on that issue was as a result of the failure to resolve Bialkower's claims of copyright infringement rather than the publication of the November 1993 Infax newsletter or the letter of 16 November 1993. The retraction which was sent to Blackwood and AGL on 14 December is also of relevance to this issue. Whilst I am satisfied that the representatives of Blackwood and AGL who received the retraction accepted its accuracy, those persons were likely to have been aware that any underlying copyright dispute in relation to Chemwatch MSDSs remained unresolved. That strengthens my view that it was the failure to resolve that dispute, rather than the publication of the newsletter, that may have resulted in a failure by Acohs to enter into further contracts with Blackwood and AGL. Put another way, applying a common-sense and practical common law approach to causation, the contravention I have found to have occurred did not cause the loss of further contracts with Blackwood and AGL: see Wardley Australia Ltd v. The State of Western Australia (1992) 175 CLR 514 at 525 per Mason CJ, Dawson, Gaudron and McHugh JJ. Accordingly, I am not satisfied that damages should be awarded for loss of custom with AGL and Blackwood. However, that is not the end of the matter. The Chemwatch news item was seriously misleading and was inherently likely to damage Acohs' reputation and goodwill in relation to the Infosafe system. One witness said that the retraction confused him on the issues it addressed, rather than clarified them. It is likely that other recipients were also confused over the copyright issue as a result of the newsletter and the retraction. The newsletter was sent to 39 businesses, many of which were actual or potential customers of Acohs. It was likely to have been read or discussed by a significant number of persons. I am not satisfied that the retraction, sent 12 days later, was seen by all of those persons or was accepted by them to be a complete negation of the impact of the Chemwatch news item. In my view the publication seriously damaged Acohs' repute and goodwill in relation to its Infosafe system. In Typing Centre of NSW Pty Ltd v. Northern Business College Ltd (1989) ATPR 40-943 and FAI General Insurance Co Limited v. RAIA Insurance Brokers Limited (1992) 108 ALR 479 it was accepted that seriously misleading conduct may well cause actual loss by reason of the damage such conduct caused to the repute and goodwill of a business. In Typing Centre of NSW Wilcox J at 50,290-1 accepted that although there was no evidence of any loss of income, the consequence of the misleading publication: ... must have been to affect the goodwill of the applicant's business and that, in determining the extent of the loss, the court ought to have regard to the nature of the statements made by the respondents and to the manner and extent of their publication.

and at 50,292: The selection of any particular sum, by way of damages, must simply be an exercise of judgment having regard to the whole of the circumstances. Bearing in mind those circumstances, and especially the nature, terms and distribution of the advertisements and Mr Tooley's evidence, I think that it would be appropriate to award the sum of $30,000 by way of damages.

In FAI General Insurance, French J discussed the same issue at 508-9 in the following terms: Has any relevant injury, loss or damage been shown to have been occasioned to the applicant as a result of the respondent's breach? There is no direct evidence that any of the architects who received the appraisal were induced by it to remain with the respondent's policy rather than taking out insurance cover with the applicant through Willis Faber. The simple fact is that they were sent the appraisal and thereafter did not yield to the blandishments of the Willis Faber promotional material. The situation is not an easy one. However, having regard to the serious nature of the misleading representations that I have found to have arisen from the appraisal document, I am satisfied that there is a likelihood that some at least of the recipients were influenced against taking out insurance with the applicant by those representations. .... Doing the best I can on what is extremely exiguous material I think it appropriate that I award damages in the sum of $15,000. In arriving at this award I have accepted that it is open to award damages for vindication of commercial reputation under s.82 (see Brabazon v. Western Mail Limited (1985) ATPR 40-459 at 46,453; Flamingo Park Pty Limited v. Dolly Dolly Creation Pty Limited & Ors (1986) ATPR 40-675 at 47,461; (1986) 65 ALR 500 at 525; Typing Centre of NSW Pty Limited v. Northern Business College Limited (1989) ATPR 40-943 at 50,290).

A similar situation has arisen in the present case. I am satisfied that many of the 39 businesses to which the Chemwatch news item was sent were potential customers of Acohs. Two of the businesses were actual customers. I am satisfied that the seriously misleading statements caused harm to Acohs' repute and goodwill and that harm is likely to have led to some loss of business or custom. Doing the best I can on the evidence before me I think it is appropriate to award damages in the sum of $20,000 for vindication of commercial reputation, loss of goodwill and consequential loss of custom.

4.5 Other relief Acohs also sought declaratory and injunctive relief. The respondents have denied the breaches of ss.52 and 75B which were alleged against them. I have determined that dispute in favour of Acohs. In these circumstances, and notwithstanding the retraction by RMC, in my view it is appropriate to grant the declaratory relief sought by Acohs in respect of the breaches I have found to have occurred: cf FAI General Insurance Co Limited at 508 per French J. The issue of injunctive relief is more complex. Section 80(5) of the TPA provides that the Court may grant an injunction to restrain conduct which contravened the TPA notwithstanding that there is no further threat or intention to contravene the Act. However, the Court has a discretion to refuse injunctive relief in an appropriate case, particularly if there is no reason for the grant of such relief. RMS and RMC retracted the misleading news item within a reasonable time of becoming aware of its falsity. I am satisfied there is no real prospect or possibility of them republishing the misleading information. As far as Bialkower is concerned, the issue of copyright infringement in respect of Chemwatch's MSDSs is now before the Court for determination. The present action will determine Bialkower's claims against Acohs for past infringement. I have no reason to expect that Bialkower will misrepresent the outcome of the proceedings or his rights under the Copyright Act 1968 (Cth). If, contrary to my expectation, Bialkower does so, it will be appropriate for that matter to be dealt with in the circumstances then arising. In all the circumstances it is my view that it is inappropriate to grant the injunctive relief sought. 4.6 Claim for contribution by RMS and RMC against Bialkower The Court has a wide discretion to make appropriate orders for contribution between wrongdoers to ensure that each party liable in respect of the same damage makes a just contribution by paying a proper share towards discharging the common obligation: see Albion Insurance Company Limited v. Government Insurance Office of New South Wales (1969) 121 CLR 342 at 350-1 per Kitto J and Jones v. Mortgage Acceptance Nominees Ltd (1996) 142 ALR 561 at 563-5 per Davies J. On the facts I have found, I am satisfied that Bialkower was the primary, but not the sole, cause of the breach of s.52 by RMS and RMC. McCann misunderstood the information initially communicated by Bialkower and failed to adopt Bialkower's suggestion that Infosafe not be mentioned in the item. Bialkower had the opportunity, but failed, to correct McCann's misunderstanding when the proposed article was facsimiled to him. In these circumstances I am satisfied that RMS and RMC are entitled to a substantial contribution from Bialkower in respect of the damages and any costs awarded against them in relation to Acohs' Application. In my view that contribution should be 75%. 5.0 Copyright Section 32 of the Act provides that, subject to the Act, copyright subsists in an original literary work that is unpublished, where the author of the work was a qualified person at the time the work was made. Section 32(4) provides that a qualified person means, inter alia, an Australian citizen or person resident in Australia. Section 10 defines a literary work as including a table or compilation in words, figures or symbols. Under s.22(1) a literary work is made when the work is first reduced to writing. Section 32(2) provides that subject to the Act, where an original literary work has been published, if copyright in the work subsisted immediately before the first publication, copyright continues to subsist in the work if the first publication of the work took place in Australia. Section 29(1)(a) provides that subject to the section, a literary work shall be deemed to have been published if reproductions of the work have been supplied (whether by sale or otherwise) to the public. Section 35(2) provides that, subject to the section, the author of a literary work is the owner of any copyright subsisting in the work. Under s.35(6), if a literary work is made by an author in pursuance of his or her employment by another person under a contract of service, that other person is the owner of any copyright subsisting in the work. Accordingly, if an author is commissioned to prepare a literary work under a contract of services as an independent contractor, rather than as an employee, the author will be the owner of any copyright subsisting in the work. Section 31(1)(a) provides that copyright in relation to a work is the exclusive right, inter alia, to reproduce the work in a material form or to publish or make an adaptation of the work. Section 36(1) provides: Infringement by doing acts comprised in the copyright 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 authorises the doing in Australia of, any act comprised in the copyright.

Accordingly reproduction in a material form, or the publication or adaptation, of the literary work in which copyright subsists will constitute an infringement of copyright under s.36(1). 5.1 Copyright in Chemwatch's MSDSs Bialkower's claim for copyright infringement relates to the 43 Chemwatch MSDSs which had been transcribed into the Infosafe system. Bialkower claimed that the MSDSs were original literary works which were authored by himself and his staff. Accordingly, he claims to be the owner of the copyright in the 43 MSDSs. A MSDS is a compilation following a standard format which employs recommended phraseology in relation to certain matters. The information contained in MSDSs is usually derived from manufacturers' documentation or prior MSDSs in respect of the chemical, and from published texts. These factors raise the question of whether sufficient skill, judgment and labour is required for the compilation of a MSDS for it to constitute an original literary work in which copyright subsists. As was said recently by Drummond J in A-One Accessory Imports Pty Ltd v. Off Road Imports Pty Ltd (1996) 34 IPR 306 at 316, the cases in relation to compilations ...repeatedly say that whether a compilation has sufficient originality to attract copyright protection depends on the degree of skill, judgment or labour which has been involved in producing it: see Ladbroke (Football) Ltd v. William Hill (Football) Ltd [1964] 1 WLR 273; Football League Ltd v. Littlewoods Pools Ltd [1959] Ch 637 at 650-1; Blackie & Sons Ltd v. Lothian Book Publishing Co Pty Ltd (1921) 29 CLR 396 at 398-9; Real Estate Institute of New South Wales v. Wood (1923) 23 SR (NSW) 349 at 352.

See also Skybase Nominees Pty Ltd v. Fortuity Pty Ltd (1997) AIPC 91-302 at 39,128 per R.D. Nicholson J. The nature and extent of the "skill, judgment or labour" which is required in producing a compilation in order to attract copyright protection depends on the facts of the particular case and involves a question of degree: G.A. Cramp & Sons Limited v. Frank Smythson Limited [1944] AC 329, 335; Football League Ltd v. Littlewoods Pools Ltd [1959] 1 Ch 637, 651; Computer Edge Pty Ltd v. Apple Computer, Inc (1986) 161 CLR 171,182-3. Certain authorities have endeavoured to quantify the level of skill, labour or judgment which will be required. Thomas J, in Kalamazoo (Australia) Pty Ltd v. Compact Business Systems Pty Ltd (1985) 84 FLR 101, 120 notes that some authorities: ...suggest that this requirement will be satisfied if a plaintiff employs 'more than negligible' skill and labour in his selection of words or other content: Ladbroke (Football) Ltd v. William Hill (Football) Ltd [1964] 1 WLR 273 at 287...; Apple Computer Inc v. Computer Edge Pty Ltd (1984) 53 ALR 225 at 234 (per Fox J), and at 257 (per Lockhart J). The 'more than negligible' text seems to have derived directly from the 'diary tables case': G.A. Cramp & Sons Limited v. Frank Smythson Limited [1944] AC 329....On the other hand, one finds statements suggesting the need for a 'substantial' degree of skill; 'The requirement of originality means that the product must originate from the author in the sense that it is the result of a substantial degree of skill, industry or experience employed by him' (per Lord Devlin in Ladbroke (Football) Ltd v. William Hill (Football) Ltd, supra, at p.289: compare Portway Press Ltd v. Hayne (1975) 74 RPC 426 (ChD).

In Kalamazoo (which related to a compilation of basic accounting forms), Thomas J declined to adopt either formulation, and concluded at 124 that, although the authors had not exercised "great skill", the preparation of the forms required a degree of concentration, care, analysis, comparison, and a certain facility in using and adapting the altered forms to a composite 'one-write' system....there is sufficient originality of expression, shape and content to compose an original literary work. It is clear that the process of selection alone may involve sufficient skill, labour or judgment to give rise to the requisite originality. In Ladbroke (Football) Ltd v. William Hill (Football) Ltd [1964] 1 WLR 273, Lord Reid noted at 277 that ...it has often been recognised that if sufficient skill and judgment have been exercised in devising the arrangements of the whole work, that can be an important or even decisive element in deciding whether the work as a whole is protected by copyright. However, if the selection process does not involve any element of originality or skill, but is rather a selection which is of an "obvious and commonplace character", the compilation will fail to display the qualities required to attract copyright: G.A. Cramp at 338. In that case, tables of various information (including, for example, weights and measures) which were included in a diary, were held not to be capable of attracting copyright, as that sort of information was commonplace information which was commonly found prefixed to diaries. The tables did not involve any feature "which could be pointed out as novel or specially meritorious or ingenious from the point of view of the judgment or skill of the compiler": per Viscount Simon LC at 336. In Victoria Park Racing and Recreation Grounds Company Limited v. Taylor (1937) 58 CLR 479 at 511, Dixon J concluded that a list, displayed at a racecourse, of scratchings and places at the barrier was not the subject of copyright as although it was not necessary, for a work to attract copyright, for it to have a new or inventive idea, some "original result" must be produced. In Interlego A.G. v. Tyco Industries Inc [1989] AC 217 at 263 the Privy Council stated: There must in addition be some element of material alteration or embellishment which suffices to make the totality of the work an original work. Of course, even a relatively small alteration or addition quantitatively may, if material, suffice to convert that which is substantially copied from an earlier work into an original work. Whether it does so or not is a question of degree having regard to the quality rather than the quantity of the addition.

Accordingly, the exercise of skill, labour or judgment merely in the process of copying may not involve sufficient originality to confer copyright. An assessment is to be made of the "merit" or "ingenuity" of a selection or compilation (see G.A. Cramp at 336) or of the quality of an alteration or embellishment of work (see Interlego at 263) in relation to a work which has been compiled or copied from existing works. In order to do so it is necessary to be able to ascertain what elements of the original works have been used as the basis for the compiled work, so that a comparison may be made which reveals the extent and nature of the efforts of the compiler. I am satisfied that, in general, the compilation of a MSDS involves sufficient skill, judgment and labour for it to constitute an original literary work in which copyright subsists. However, whether the 43 Chemwatch MSDSs are such works requires careful consideration of the criteria to which I have referred, in the context of the very general evidence given by Bialkower as to their origin. A number of problems have arisen as to the authorship and originality of the 43 MSDSs. Over the last 5 years Chemwatch has prepared a large number of MSDSs; Bialkower had little or no recollection of his role in the preparation of the 43 MSDSs the subject of his cross-claim. That is not surprising as the 43 MSDSs were of no particular significance. Their sole special feature is that they were Chemwatch MSDSs which were able to be identified as forming part of the 50,000 or so items in the Infosafe database. Bialkower's evidence is that since about 1991 Chemwatch has been engaged as an independent contractor on a regular and ongoing basis by chemical manufacturers and importers to prepare data sheets, including MSDSs, which conform to the Australian national standards. In that period Chemwatch has prepared in excess of 20,000 product data sheets pursuant to such engagements. Bialkower's evidence was that the MSDSs were requested in the usual course by the manufacturers or importers which provided Bialkower with any relevant data, including any existing or previous MSDSs, in respect of the chemical. There does not appear to have been any discussion as to copyright ownership of the MSDSs commissioned although from time to time some manufacturers or importers queried Chemwatch's copyright note on the last page of its MSDSs. When that occurred Bialkower responded that his copyright would not interfere with the manufacturer's or importer's use of the MSDSs commissioned from Chemwatch in respect of their products. Any copyright subsisting in a MSDS produced by Chemwatch, i.e. Bialkower, pursuant to such an engagement would be owned by Bialkower pursuant to s.35(2), if he was the author, and s.35(6) if an employee of Bialkower was the author. However, these findings do not resolve the issue of copyright ownership for the 43 Chemwatch MSDSs in issue in the present case. Bialkower was unable to give any specific evidence as to the authorship of the 43 MSDSs. The evidence does establish that the MSDSs were prepared by Chemwatch mainly for manufacturers or importers who became customers since 1991. However, the evidence also establishes that the information contained in the MSDSs may have been derived from: • American MSDSs which were provided for imported chemicals; • the extensive MSDS library of the Adchem system which was acquired in 1989 by Oakridge Pty Ltd (a company owned, in part, by Bialkower) which permitted Bialkower to use the library; • existing MSDSs for the particular chemical; and • texts or other documentation which describe properties of the chemical in question. The difficulty is that Chemwatch MSDSs are updated from time to time and the records make it difficult to identify whether a MSDS was derived from an earlier MSDS and, if so, the format of that earlier MSDS. I accept Bialkower's evidence that all or most of the 43 Chemwatch MSDSs tendered in evidence were produced during the period of his proprietorship of Chemwatch since 1991 but that does not lead to the conclusion that each MSDS was an original literary work authored by Bialkower or his employees for the purposes of s.35. A further problem is that, in addition to his staff, from time to time, Bialkower also employed at least 4 appropriately qualified "outside persons" to assist in the preparation of Chemwatch MSDSs. The evidence does not enable me to form a view as to the role, if any, these experts played in the preparation of the 43 MSDSs. If they were the authors of the MSDSs, copyright ownership might vest in them as they did not appear to be employed as employees under a contract of service: see s.35(2) and (6). When this problem became apparent Bialkower gave evidence that the 43 MSDSs were in fact prepared by him and his employees. However, I have difficulty in accepting that evidence. It was inconsistent with his earlier evidence that Chemwatch MSDSs were prepared by a mix of Bialkower, his employers and "outside persons". Further, it does not sit comfortably with Bialkower's lack of recollection of the circumstances in which the 43 MSDSs were prepared. Further, my rejection of Bialkower's evidence in relation to the Chemwatch news item has led me to approach the generality of his evidence on authorship with some caution.

In all the circumstances I have had great difficulty in being satisfied that Bialkower has discharged the onus upon him to establish the authorship of and copyright in any particular MSDSs. However, the high probability is that a number of the 43 MSDSs do fall into the category of MSDSs: • which constitute original literary works of Bialkower and his employees and in which copyright subsists; and • which were transcribed by Acohs into the Infosafe system. Notwithstanding the difficulty to which I have referred, obviously it is desirable for the dispute in relation to past copyright infringement to be resolved. In view of the conclusions at which I have arrived in relation to Acohs' defences to Bialkower's infringement claims, that dispute is able to be resolved without it being necessary to reach a final conclusion to the question of copyright ownership in respect of particular MSDSs. Accordingly, for the purpose of resolving these issues I am prepared to assume copyright subsists in a number of the 43 MSDSs and is owned by Bialkower. 5.2 Implied licence Infringement is only established under s.36(1) of the Act if the conduct alleged to constitute the infringement is engaged in "without the licence of the owner of the copyright". The onus of establishing the absence of an express or implied licence lies on the copyright owner suing for infringement: see Avel Pty Ltd v. Multicoin Amusements Pty Ltd (1990) 171 CLR 88 and Devefi Pty Ltd v. Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 234, cf De Garis v. Neville Jeffress Pidler Pty Ltd (1992) 37 FCR 99 at 110 per Beaumont J. In Avel Mason CJ and Deane and Gaudron JJ stated the underlying principle for ss.37 and 38, but which applies equally to s.36, at 94-95: The onus of proving the absence of the licence of the owner of the copyright in relation to an issue of infringement under s.37 or s.38 of the Act lies on the party who asserts infringement. The reason why that is so is that the absence of such licence constitutes an element of the wrong of infringement under those sections as distinct from a justification or excuse for doing something which prima facie constitutes infringement.

A "licence" in the statutory context of ss.36, 37 and 38 means no more than "permission" or "consent", which for the purpose of those sections need not result from a formal grant, but may be an express or implied term of a contract or be implied by conduct: see Interstate Parcel Express Co Pty Ltd v. Time Life International (Nederlands) B.V. (1977) 138 CLR 534 at 540 per Gibbs J and at 547-8 per Stephen J and Beck v. Montana Constructions Pty Ltd (1963) 80 WN (NSW) 1578 at 1580-1 per Jacobs J. In Beck at 1580-1 Jacobs J described the issue as being whether the alleged infringer "was entitled to the benefit of an implied licence, permission or consent" to make use of the copyright material in the manner said to constitute the infringement. In that case, architects were engaged to prepare, and did prepare, sketch plans of a building proposed to be constructed on the land of their clients who later sold the land with the plans to a purchaser. The purchaser's architect prepared further plans which were found to be a substantial reproduction of the plans of the vendors' architects. The vendors' architects sued the purchaser and its architect to restrain the infringement of copyright in their plans. At 1581 Jacobs J said that two questions arise: Firstly, did the person or persons who engaged the architects for reward to prepare these plans thereby obtain the right to use them in the manner in which they were ultimately used and secondly, if that be so, did the transferee of the land in the circumstances where it was held out to him that plans were available and approved obtain the like right?

Jacobs J was satisfied that, as no term of the architect's contract of engagement dealt with copyright, any licence, consent or permission must be one which is implied. On the first question Jacobs J said at 1581-2: The question raised is quite a broad one because it applies not only to architects but would apply for instance to artists who are engaged to prepare a particular work which would of its nature be reproduced, for instance a cartoon for a tapestry or a mosaic, or which would apply to persons who prepared written material with the intention that it should be used in a particular manner. It seems to me that the principle involved is - that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission or consent or licence in the person making the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement. It seems to me that this must be regarded as a principle of general application. It seems to me that it was the principle applied in the cases to which I was referred by Mr. Hutley, Cooper v. Stephens and W. Marshall & Co Ltd v. A.H. Bull Ltd. I think it is a principle which can be found to be applied in a number of cases. It relates to permission or consent to what must have been taken to have been within the contemplation of the parties at the time of the engagement. After all, it must be borne in mind that it is the engagement which brings the copyright material into existence. When that principle is applied in the present case it seems to me to be inevitable that one should conclude that the payment for sketch plans includes a permission or consent to use those sketch plans for the purpose for which they were brought into existence, namely, for the purpose of building a building in substantial accordance with them and for the purpose of preparing any necessary drawings as part of the task of building the building.

On the second question Jacobs J said at 1581: Assuming the right of the owner of land to make use of sketch plans for the purpose of erecting a building substantially in accordance with that sketch I think that when he sells the land and holds out to the purchaser that plans are available and approved from all authorities and shows those plans to the purchaser then on the sale of the land there should be implied an agreement collateral to the sale of the land whereby the vendor grants to the purchaser such right as he has to the use of the plans. This assumes that the right, that is to say, the licence, permission or consent, however it is described, is assignable and that depends on the implied terms of grant of the original licence, permission or consent. and at 1582: There then remains the question whether there should be any implied right to transfer it and here I think that it must inevitably be implied that the owner, having commissioned the sketch plan and having obtained the right to use it for the purpose of erecting on that site a building in substantial accordance with it, should have the right to transfer that right to a new owner of the land.

The principles enunciated by Jacobs J in Beck have been followed and applied in Australia: see Ng v. Clyde Securities Ltd (1976) 1 NSWLR 443, Bourke v. Filmways Australasian Distributors Pty Ltd Supreme Court of NSW, 9 October 1979, unreported, R & A Bailey & Co Ltd v. Boccaccio Pty Ltd (1986) 4 NSWLR 701 at 711, Gruzman Pty Ltd v. Percy Marks Pty Ltd (1989) 16 IPR 87 at 89, De Garis at 110-112 and most recently in Tucker v. Bentley & Ors O'Loughlin J, unreported, 20 December 1996. Beck has also been applied in the United Kingdom: see Blair v. Osborne and Tomkins (1971) 2 QB 78. Further, as was pointed out by the Full Court in Devefi at 241, Beck has been referred to with apparent approval in leading copyright texts. Beck has been accepted as authority for the principle that if copyright material is produced for a particular purpose, then there is an implied permission, consent or licence to use that material to carry out that purpose: see De Garis at 110 and R & A Bailey at 711. In my view the Beck principle involves the following questions: • is there an implied licence to use the copyright material to carry out a particular purpose? • what is the purpose? • is the use by the alleged infringer in accordance with the licence conferred? If the "purpose" is restricted to use by the person upon whom the licence was conferred, an additional question might arise. That question, which arose in Beck, is whether the person upon whom the licence was conferred was entitled to transfer the right to the alleged infringer? From time to time the question has arisen as to whether the contractual licence relied upon is an implication of a term by law which is necessary to give the contract business efficacy: see Interstate Parcel Express Co at 548, R & A Bailey & Co Pty Ltd at 711-712, Devefi at 239-241, Tucker at 50; see also Stovin-Bradford v. Volpoint Properties Ltd [1971] 1 Ch 1007, 1017-8 per Salmon LJ. The significance of this question was explained by Hope JA in Castlemaine Tooheys Ltd v. Carlton & United Breweries Ltd (1987) 10 NSWLR 468 at 486-7: (c) Implication of terms by law and otherwise: Terms may be implied in a contract in a number of ways. Of these ways one is commonly called implication by law, when terms may be implied regardless of the actual intention of the parties; another is the implication of a term which is necessary, in the circumstances of a particular case, to give business efficacy to the contract. The distinction between these two kinds of implication was referred to by Mason J in Codelfa Construction Pty Ltd v. State Rail Authority of New South Wales (1982) 149 CLR 337 at 345-346 in these terms: "Of course, I am speaking of an implied term necessary to give business efficacy to a particular contract, not of the implied term which is a legal incident of a particular class of contract, of which Liverpool City Council v. Irwin [1977] AC 239 is an example. The difference between the two categories of implied term was mentioned by Viscount Simonds in Lister v. Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 576, where he referred to the search for the second category of implied term as being based 'upon more general considerations', a comment endorsed by Lord Wilberforce in Irwin [1977] AC 239 at 255." One basic distinction between these two classes of implied terms is this. Terms implied by the application of the business efficacy test are terms unique to the particular contract under consideration; they depend upon the express terms of that contract and the relevant surrounding circumstances. Terms implied by law, on the other hand, are, or at least are relevantly for these proceedings, terms which, prima facie, are to be implied in all contracts of a particular class. As I will seek to show, whether the implication is excluded requires regard to be had to the express terms of the contract and to the relevant surrounding circumstances of the case, but the prima facie implication depends upon the contract falling within the class in respect of which the law has decided that particular terms should be implied. Although the distinction between the two classes of implication has not been and perhaps is still not universally appreciated, classes of contract in respect of which terms will be implied by law, and the terms which will be implied, have in many cases been long established. Typical classes are contracts between master and servant, for the sale of goods, for the provision of work and materials and between landlord and tenant. However the classes of contracts in which the law will imply terms are not closed; the difficult question is to determine what test should be applied before the courts imply such a term for the first time.

Hope JA concluded that the test to be generally, but not exclusively, applied for the implication by law of a term to a particular class of contract was that of "necessity". His Honour said at 489: No doubt it might be thought that the necessity test, assuming it to be the or a test to be applied when courts decide for the first time that the term should be imported by law, is not particularly different from the business efficacy test. There are however at least two differences. The first is that the search conducted by the court is based on wider considerations than those relevant to the business efficacy test, and concerns what term should be implied as a legal incident of a particular class of contract rather than what term should be implied in a particular contract, and the second, flowing almost necessarily from the first consideration, is that intention, so far as relevant, is imputed intention as opposed to an actual intention.

In Devefi the Full Court referred to Hope JA's discussion of implied terms in Castlemaine Tooheys and said at 240: However, his Honour added that the classes of contracts in which the law will imply such terms are not closed. For example, his Honour pointed to cases where the particular implied term had become so much a part of common practice that the courts imported it into all transactions of that type as a matter of course. He also (at 487-90) considered authorities which suggested that such a term might also be implied where the nature of the contract itself implicitly required it as a matter of necessity. The sense of "necessity" is conveyed by Holmes' phrase, "The felt necessities of the time", and indicates something required in accordance with current standards of what ought to be the case, rather than anything more absolute: Renard Constructions (ME) Pty Ltd v. Minister for Public Works (1992) 26 NSWLR 234 at 261 per Priestley JA. Counsel for the respondent disputed whether the term was implied in Beck and the cases following it answered these criteria. There was no evidence that any particular implied term had become part of common practice, nor was it "necessary" that such a provision be read into the Mateffy agreement. There is, in our view, much to be said for these submissions. However, it is unnecessary to decide the point.

It was unnecessary to decide the point in Devefi because the Full Court said at 240: ... as is also explained by Hope JA in Castlemaine Tooheys (at 490-3), a term otherwise implied by law may be excluded both by an express provision and also if it is inconsistent with the terms of the contract. The parties may have expressly dealt with the area covered by the implied term, but in a manner at variance with it.

In determining whether the term implied by law has been excluded it is appropriate to have regard, not just to the terms of the contract, but to the matrix of facts in which the transaction took place: see Castlemaine Tooheys at 492 and Devefi at 241. In Devefi the Full Court regarded the fact that the decision in Beck has stood for 25 years in Australia to be part of the relevant factual matrix in that case.

In the present case it is necessary to decide the point as, unlike Devefi, there are no relevant circumstances which would exclude any implied licence. Chemwatch's commissions to prepare MSDSs were under "open contracts" i.e. contracts which do not deal with the issue of copyright: see Devefi at 240. I am satisfied that such discussions as may have occurred in relation to Bialkower's copyright note on MSDSs did not have contractual effect and went no further than recognition that any copyright in the MSDS vested in Bialkower. Indeed, in his evidence Bialkower referred to the MSDSs as MSDSs of the manufacturer or importer and gave assurances that his copyright would not interfere with their use of the MSDSs. Put another way, Bialkower has not discharged the onus upon him of negating any implied licence, for example by establishing that the contract was not an "open contract". In my view, the licence considered in Beck is one which is implied by law to a particular class of contract. Jacobs J clearly regarded the licence he implied as falling within that category. In Beck at 1581 His Honour said that the question raised was quite a broad one which applied not only to architects but to artists and to persons who prepared written material with the intention that it should be used in a particular manner. Jacobs J concluded that the principle enunciated by him must be regarded as a principle of general application. In doing so His Honour decided that the licence was to be implied by law for the particular class of contract with which he was concerned, i.e. where copyright material is commissioned for a particular purpose. It is important to define with precision the particular purpose, which is to be determined by reference to the circumstances of the particular case. If the purpose includes use of the material by persons other than the person commissioning the copyright material, then use by those other persons to carry out that purpose will fall within the licence implied by law. If the particular purpose does not involve use of the material by others, as seems to have been the case in Beck, then the issue of an implied right to transfer the implied licence will arise by reference to the circumstances and terms of the particular contract. The initial issue is whether the engagement of Bialkower to prepare MSDSs, by manufacturers or importers falls within the class of contract described in Beck. The contract of engagement of Bialkower, by manufacturers and importers, is an "open contract" to prepare written material, being MSDSs, with the intention that they be used for a particular purpose, being the provision of ready access to the information contained in the MSDSs for safety related purposes. Such a contract falls within the class of contract described in Beck. Accordingly, a licence is implied by law which permits or consents to the use of the MSDSs to carry out those purposes. The purpose is to be determined objectively by reference to the contract entered into by the parties and the regulatory and factual matrix in which the transaction took place. There is little difficulty in ascertaining the relevant matrix in the present case. The MSDSs were commissioned by manufacturers and importers to be in the Worksafe Australia standards format for use, inter alia, as set out in the standards. Bialkower accepted that he was commissioned to prepare MSDSs which would be distributed by manufacturers and importers on the sale of their products in accordance with the standards. They were commissioned in relation to substances, including hazardous substances, for the purpose of ensuring the ready availability and accessibility of the MSDSs for safety related purposes for or at any workplace in Australia at which the substances are or will be stored, used or transported. The manner in which the MSDSs were to be made available or accessible was set out in Worksafe Australia Standard for Control of Workplace Hazardous Substances (1994) (on which the parties agreed I was to act for purposes of the present case). The Regulations, which form part of the standard, provide that: • manufacturers and importers shall produce MSDSs for all hazardous substances which they supply, and shall review and revise MSDSs to keep them up to date (clause 6(1)); • suppliers shall ensure, in relation to any hazardous substance supplied for use at work, that a current MSDS is provided with the first supply to a purchaser and also on request (clause 6(2)); • an employer shall obtain a MSDS on the first supply of a hazardous substance to a workplace and ensure that a MSDS provided by the supplier is available for all hazardous substances used in the workplace and is readily accessible to employees with potential for exposure to those substances (clause 8). The National Code of Practice which forms part of the standard provides: • the purpose of MSDSs is to provide the information needed to allow the safe handling of hazardous substances used at work (clause 7.1); • a current MSDS shall be provided by the supplier on the first supply and on request to each person who purchases the hazardous substance from the supplier (clauses 7.4 and 7.5); • retailers are not required to provide MSDSs but may choose to do so by arrangement with suppliers. Where a person purchases a hazardous substance for use at work from a retailer and the MSDS is not available, the purchaser can obtain, on request, a copy of the MSDS from an upstream supplier (clauses 7.7 and 7.8);

• employers shall ensure that all employees have ready access to MSDSs (clause 8.1). Access to MSDSs is provided for in clause 8.5: 8.5 At each workplace, employees and employee representatives shall have ready access to MSDS for the hazardous substances used. Copies shall be readily accessible to employees who are required to use or handle the hazardous substance, as well as to employees who are supervising others working with the hazardous substance. 8.6 Access to MSDS may be provided in a number of ways including: (a) paper copy collection of MSDS; (b) microfiche copy collections of MSDS with microfiche readers open to use by all employees; and (c) computerised MSDS databases. 8.7 Depending on the needs of the workplace, any of the methods in section 8.6 of this national code of practice may be used. In each case, the employer should ensure that: (a) the current MSDS are available; (b) any storage or retrieval equipment is kept in good working order; (c) employees are trained in how to access the information; and (d) where information is displayed on a screen, there are means of obtaining a paper copy of that information.

In my view it can be taken to have been within the contemplation of the parties at the time of commissioning a Chemwatch MSDS that access to MSDSs for safety related purposes may be provided by paper copy, microfiche copy or computerised MSDS databases (see clause 8.6 above). Clause 17 provides for access to information, which would include MSDSs, to certain public authorities or emergency services: 17.1 Relevant public authorities shall have access to all records maintained by the employer for the purposes of the national model regulations, subject to confidentiality being maintained where required by the national model regulations.

17.2 It is essential that emergency services have information on the hazards present at any location involving the manufacture, use, storage or disposal of hazardous substances, as well as other relevant information such as the location of water hydrants, the workplace register, assessment reports and emergency response plan. However, it is not appropriate or necessary for emergency services to have access to monitoring or health surveillance results. The employer should cooperate with requests for information and make such information available as soon as practicable. 17.3 Employers should prepare a suitable emergency response plan in consultation with emergency services, where appropriate.

Although the standards relate to hazardous substances they also apply, on a voluntary basis, to chemicals which may have the potential to cause harm but do not fall within the definition of a hazardous substance for the purposes of the standard. A number of the 43 Chemwatch MSDSs in issue between the parties relate to non-hazardous chemicals. National standards in respect of MSDSs have been adopted in legislation or under regulations in New South Wales, Queensland, South Australia, Australian Capital Territory and Northern Territory. They also apply to Commonwealth work sites. Although the standards have not yet been implemented in Victoria, Tasmania or Western Australia, the evidence is that implementation in those States was imminent. The specific obligations in the standards for the provision of MSDSs may not go a great deal further than the general legal obligations imposed on manufacturers, importers, suppliers and employers in any event. These obligations arise both at common law and under statute. At common law a duty to warn is imposed on a manufacturer of a product where the danger is unknown to the user and is not likely to be discovered in the course of the normal use of the product: see Donoghue v. Stevenson [1932] AC 562 and Norton Australia Pty Limited v. Streets Ice Cream Pty Limited (1969) 120 CLR 635 at 642-3 and 651. In Norton at 651 Kitto, Menzies and Owen JJ accepted that in the case of potentially dangerous material, a high degree of care in warning users of the dangers would reasonably be required. Essentially, MSDSs are designed to satisfy that duty. A similar situation arises under State and Territory occupational health and safety legislation. Under such legislation there is a general statutory duty imposed on employers to provide a safe work environment. Obviously, MSDSs for hazardous chemicals used in the workplace are an important factor in achieving such an environment. In the regulatory and factual matrix to which I have referred, there is little difficulty in identifying the manner in which the parties contemplated that the Chemwatch MSDSs commissioned by manufacturers and importers were to be provided. The availability and accessibility of the MSDSs for or at workplaces was to be in a photocopy or microfiche format or from a computer data base. The reproduction or copying of the MSDSs in any of these formats may be commissioned by a manufacturer, importer, supplier, retailer, a public emergency service or by or for any employer from contractors engaged for the purpose if for any reason that is not achieved "in house".

It was submitted on behalf of Bialkower that any implied licence was limited to hard copy reproduction by suppliers, employers or their employees. Whilst such a limitation might suit Bialkower's underlying object of preventing a competitor, such as Acohs, from providing a computerised chemical management system using Chemwatch MSDSs, there is no basis in the evidence for any such limitation. Whether reproduction is by staff or independent contractors or in hard copy or on computer depends on practical exigencies which may differ from user to user. I am satisfied that, in accordance with Beck, an accurate copying, reproduction or adaptation of any of the 43 Chemwatch MSDSs in the manner and for the safety related purposes to which I have referred falls within the implied licence of Bialkower. If I am in error in my conclusion that the particular purpose results in the implied licence extending to manufacturers, importers, suppliers, retailers, employers and to any other person requiring a MSDS for the safety related purposes for which it was prepared, I would arrive at the same conclusion as was reached in Beck in respect of the right to transfer the licence. In my view, using the words of Jacobs J in Beck at 1582, "it must inevitably be implied" that the manufacturer or importer which commissioned the MSDSs obtained the right to use them for the safety related purposes for which they were brought into existence and "should have the right to transfer that right" to suppliers, retailers, employers and others requiring MSDSs for the same safety related purposes. Finally, I would add that in the event that I am also in error in treating the implied licence as being implied by law to the particular class of contract described in Beck, I would have arrived at the same result on the basis of implying the same licence in relation to each particular contract for the commissioning of each of the 43 MSDSs, as a term which is necessary to give business efficacy to the contract: see Codelfa Construction Pty Ltd v. State Rail Authority New South Wales (1982) 149 CLR 337 at 345-347 per Mason J and 403-4 per Brennan J. The terms and purposes of the commissioning and the relevant factual matrix to which I have referred compel such an implication. 5.3 Is Acohs' use of Chemwatch MSDSs in accordance with the implied licence?

Acohs made use of some or all of the 43 Chemwatch MSDSs in its possession in two ways: • it transcribed them to form part of an Infosafe computer software system specifically commissioned by a manufacturer, importer, supplier or employer using the hazardous or other chemicals the subject of the MSDSs. The system is a user controlled database for the electronic management of chemical safety data ("the industrial use"); and • it maintains a central Infosafe computer database comprising, inter alia, all MSDSs transcribed by it and provides that "library" for a fee to public emergency or safety organisations being WorkCover (NSW), the Queensland Government Emergency Response Centre and the ICI Chemical Emergency Response unit ("the library use"). The central Infosafe database is also made available to the Commonwealth Surgeon General for use by those sections of the defence forces which use chemicals. That use accords with the industrial use described above. The industrial use clearly falls within the implied licence. The use is by the entities for whose benefit MSDSs are prepared. These entities commission Acohs, as an independent contractor, to prepare and provide for their individual use the Infosafe software program which gives them and their employees electronic access to the MSDSs for the chemicals supplied or used by them. It is less clear whether the library use falls within the implied licence. However, on careful analysis, that use falls within the safety related purposes for which the 43 MSDSs were brought into existence. The sole function of the library use is to ensure that public emergency services or organisations can provide instant access to MSDSs for safety related purposes to those in need of that information. The only reason for any of these entities to obtain or provide access to a MSDS is that such access is necessary for that entity to provide safety information to those in need of it, as a result of using the chemical the subject of the MSDS. Before departing from the issue of implied licence it is necessary to deal briefly with the submission made on behalf of Bialkower that the copying of Chemwatch MSDSs wrongly deleted the Chemwatch copyright note which formed part of the MSDS. In my view nothing turns on this issue. The note may have formed part of Chemwatch's MSDSs but is not a matter provided for under the national standards nor does it touch upon any safety related matter. Accordingly, the failure to incorporate the copyright note does not take the reproduction or copying outside of the ambit of the implied licence. If the information contained in a MSDS was altered in a material respect, that may take its reproduction or copying outside of the implied licence. The copyright note is not material as it is irrelevant to the matters required to be dealt with in a MSDS. There are additional problems with the copyright note. In its current form it requires the written permission of Chemwatch prior to any reproduction of the MSDS. As the implied licence itself constitutes permission no further licence or permission is required. In those circumstances the note in its current form is misleading. Further, the copyright note appears to have been inserted on all Chemwatch MSDSs. As pointed out earlier, there is considerable doubt as to whether copyright subsists in and is owned by Bialkower in all of those MSDSs. Accordingly, I am satisfied that there has been no infringement of copyright in respect of the 43 Chemwatch MSDSs as the transcribing, copying, reproduction or adaptation of the MSDSs by Acohs is within the implied licence of Bialkower. 6.0 The public interest defence Acohs also submitted that the Court ought to refuse relief for infringement of copyright in any event as its disclosure of MSDSs, including the 43 Chemwatch MSDSs, is in the public interest. In the United Kingdom, where public disclosure of certain copyright material has been regarded as being "in the public interest", the courts have regarded themselves as entitled to refuse to enforce the statutory rights of the copyright owner notwithstanding that no public interest defence was provided under the United Kingdom legislation: see Beloff v. Pressdram Ltd (1973) 1 All ER 241 at 259-260 per Ungoed-Thomas J and Lion Laboratories Ltd v. Evans (1985) 1 QB 526 at 550 per Griffiths LJ. The defence is now recognised by statute in the United Kingdom in s.171(3) of the Copyright, Designs and Patents Act 1988 which provides that nothing in the Act "affects any rule of law preventing or restricting the enforcement of copyright, on the grounds of public interest or otherwise". Until recently a public interest defence was also assumed to be applicable in Australia: see The Commonwealth of Australia v. John Fairfax & Sons Ltd (1980) 147 CLR 39 at 56-7 per Mason J who, inter alia, cited Beloff as authority for the proposition that: Although copyright is regulated by statute, public interest may also be a defence to infringement of copyright.

However, Mason J regarded the public interest defence to a copyright claim as narrower in scope than the same defence to a confidential information claim. Mason J said at 57: Assuming the defence to be available in copyright cases, it is limited in scope. It makes legitimate the publication of confidential information or material in which copyright subsists so as to protect the community from destruction, damage or harm. It has been acknowledged that the defence applies to disclosures of things done in breach of national security, in breach of the law (including fraud) and to disclose matters which involve danger to the public.

The cases to which I have referred in relation to the public interest defence accept that copyright exists in the material, but that the Court should refuse to enforce the copyright on grounds of public interest. These cases can be contrasted with earlier authorities which suggest that the public interest might deny that copyright could subsist in immoral or mischievous works: see Southey v. Sherwood (1817) 2 Mer 435; 35 ER 1006 and Lawrence v. Smith (1822) Jacob 471, 37 ER 928. The significance of the distinction between these two categories of cases is discussed in The Legal Implications of Disclosure in the Public Interest, Yvonne Cripps 2nd Edition 1994 at 182-193.

In several recent cases Gummow J has suggested that there is no such defence: see Smith Kline & French Laboratories (Australia) Ltd v. Secretary, Department of Community Services and Health (1990) 17 IPR 545 and Collier Constructions Pty Ltd v. Foskett (1990) 97 ALR 460. In Collier at 471 Gummow J explained his view that there is no public interest defence to a copyright claim in Australia: Divisions 3, 4, 5, 5A, 5B, 6 and 7 of Pt III of the 1968 Australian Copyright Act contain very detailed provisions specifying a range of activities which do not constitute infringement of copyright in various works. The provisions dealing with fair dealing are, of course, well known and have a legislative history beginning with s.2 of the 1911 Act: Copinger and Skone James [on Copyright 12th ed], 510-513. Further, in Australia, the Copyright Act, since it came into force in 1969, has been amended substantially from time to time to provide for particular regimes where copying will be permitted. ... It would be an odd result if this complex of provisions, reflecting an accommodation by the legislature of a range of competing interests, were overlaid with some defence springing from the general law and defined with none of the precision apparent in the legislation. And at 743: Notwithstanding the recent developments in the United Kingdom, the objections in principle, taken by Messrs Laddie and Prescott and Miss Vitoria in their work [The Modern Law of Copyright, 1980] to the introduction of a 'public interest' defence to infringement of copyright are compelling; in my view, there is no legislative or other warrant for the introduction of such a concept into the law of this country. This is so whether the plaintiff's work is published or unpublished. I should add that it is by no means settled that even as regards equitable obligations of confidence, there is a 'public interest' defence of the scope as is suggested in the English decisions: Corrs Pavey Whiting & Byrne v. Collector of Customs (Vic) (1987) 14 FCR 434 at 451-6; 74 ALR 428; David Syme & Co Ltd v. General Motors-Holden's Ltd [1984] 2 NSWLR 294 at 298, 305-306, 309-310.

However, Gummow J appeared to accept at 474 that equitable discretions (e.g. clean hands) had been imported into the Act in relation to claims for discretionary relief such as an injunction: see s.115(2).

The true underlying principle acted upon by the Courts for refusing relief on grounds of public interest might lie in the discretion conferred as to the appropriate form of relief, rather than whether a defence disentitles the copyright owner to any relief. As Cripps states in her work at 183: If no copyright can exist in such a work, then the plaintiff will be left without a remedy. If, however, the public interest does not prevent the claimant from acquiring copyright, the courts will have greater discretion to grant relief of some kind - for example, an account of profits in cases where the court will not restrain the alleged infringement of copyright but where at the same time it is not appropriate to allow a defendant to benefit from his disclosures and there is no third party or public interest in preventing the plaintiff from obtaining an account.

As long ago as 1813, injunctive relief was withheld in respect of a copyright claim on the grounds of public interest: see Lord and Lady Perceval v. Phipps (1813) 2 V & B 19; 35 ER 225. It was recently said by Drummond J in A-One Accessory Imports Pty Ltd v. Off Road Imports Pty Ltd (No 2) (1996) 34 IPR 332 at 334 that: Where it is against public policy to enforce copyright because, eg the copyright work is libellous, obscene or otherwise involves a publication contrary to the public interest, the courts will not give any remedy.

The main authority relied upon by Drummond J in that regard is Glyn v. Weston Feature Film Company (1916) 1 Ch 261, in which the court refused relief on the ground of the immorality of the copyright work. However, in doing so Younger J said at 270:

It is enough for me to say that to a book of such a cruelly destructive tendency no protection will be extended by a Court of Equity. It rests with others to determine whether such a work ought not to be altogether suppressed.

See also Attorney General v. Guardian Newspapers Ltd (No. 2) [1988] 3 All ER 545 at 654 per Lord Griffiths. Younger J's reference to a Court of Equity suggests that the public interest or policy considerations which influence the exercise of discretionary remedies granted by the Courts of Equity apply to analogous remedies under the Act. As the remedy of damages is a traditional common law remedy granted as of right, it may stand in a different position. The Court's power to grant relief for infringement is set out in ss.115 and 116 of the Act. In so far as is relevant, the sections provide: Actions for infringement 115. (1) Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright. (2) Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits. (3) .... (4) Where, in an action under this section: (a) an infringement or copyright is established; and (b) the court is satisfied that it is proper to do so, having regard to: (i) the flagrancy of the infringement; (ii) any benefit shown to have accrued to the defendant by reason of the infringement; and (iii)all other relevant matters; the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances. Rights of owner of copyright in respect of infringing copies

116. (1) Subject to this Act, the owner of the copyright in a work or other subject-matter is entitled in respect of any infringing copy, or of any plate used or intended to be used for making infringing copies, to the rights and remedies, by way of an action for conversion or detention, to which he or she would be entitled if he or she were the owner of the copy or plate and had been the owner or the copy or plate since the time when it was made.

Decisions of the Court have treated the remedies under s.115(2) of injunction and account of profits, but not damages, as discretionary; see LED Builders Pty Ltd v. Masterton Homes (NSW) Pty Ltd (1995) 54 FCR 196 at 198 per Sheppard J and A-One at 335 per Drummond J. The underlying principle was stated by Sheppard J in LED Builders at 198: I would not suggest that the presence of the word "may", especially in s.115(2), means that the Court in an ordinary case ought not give the remedies there provided for if a case for them has been made out. But I do not think it right to take the view that the remedies of injunction and an account of profits being equitable remedies and thus discretionary were intended to be applied in cases for infringement of copyright in the way that they have been applied over the years both under the general law and under statute law such as the intellectual property statutes to which I have referred.

Accordingly, the discretionary considerations which operate in relation to the grant of equitable relief, such as an injunction and an account of profits, have been treated as relevant to the analogous statutory relief under s.115(2). Similar considerations would govern the grant of declaratory relief by the Court. Although damages were described by their Honours as being non-discretionary there may be some situations where, acting upon public policy considerations such as illegality, dishonesty or unconscionability a court may refuse to enforce a legal right including a right to damages: see Kalamazoo (Aust) Pty Ltd v. Compact Business Systems Pty Ltd (1985) 84 FLR 101 at 127-8 per Thomas J. The process of reasoning employed in LED Builders leads to the conclusion that relief under s.116(1) in detinue and conversion for the delivery up of infringing copies, as opposed to damages, is also discretionary: see Blackie & Sons Ltd v. The Lothian Book Publishing Company Pty Ltd (1921) 29 CLR 396 at 404 per Starke J, Howard E. Perry & Co v. British Railways Board (1980) 1 WLR 1375 at 1381-2 per Megarry VC. In the present case the substantive relief which Bialkower, as cross applicant, ultimately sought was: • a declaration as to his ownership of copyright in the Chemwatch MSDSs or alternatively the 43 MSDSs copied by Acohs; • injunctions restraining Acohs from infringing Bialkower's copyright in the Chemwatch MSDSs or alternatively the 43 MSDSs copied by Acohs; and • delivery up on oath to the cross applicant of all infringing copies of the MSDSs. Ultimately damages and an account of profit were not sought. In view of the uncertainty as to the copyright subsisting in and ownership of the copyright in the specific MSDSs, and the conclusions I have reached on implied licence and the public interest, declaratory relief is clearly inappropriate. In any event the Court is reluctant to grant such relief if it is of little or no consequence to the dispute between the parties: see Ozmanian v. Minister for Immigration (1996) 141 ALR 322 at 348, 351. In the absence of other relief this would be such a case. Accordingly the main relief sought and in issue, being an injunction and delivery up of infringing copies, is discretionary. In accordance with the principles set out above such relief may be refused on public policy grounds or in the public interest. In the present case if, contrary to the conclusions I have reached, Acohs infringed Bialkower's copyright in any of the 43 MSDSs, I would refuse the relief sought on two discretionary grounds. The first is that it would be contrary to the public interest for the Court to make orders preventing or impeding the disclosure of MSDSs for safety related purposes. Such disclosures are obviously in the public interest and should not be prevented or impeded by court order whenever the need arises for such disclosure. It is difficult to conceive of a situation where a court would grant an injunction the effect of which will deprive members of the public of the benefit of information necessary for their safety. That category of disclosure clearly falls within the public interest: see John Fairfax at 57 and Beloff at 260. Such a situation is analogous to that considered in Roussel-Uclaf v. G.D. Searle and Co Ltd [1977] FSR 125 in which Graham J refused to grant interlocutory injunctive relief in a patent infringement claim where the effect of the injunction would be to deprive members of the public of the benefit of a life-saving drug which may be prescribed for otherwise fatal heart disorders. At 131 Graham J stated that the onus in such a situation requires the applicant to show that there is little, if any, likelihood of the public being injured by their inability to obtain the drug in question. I am not satisfied that there is little, if any, likelihood of the public being injured by their inability to obtain the safety information set out in Chemwatch MSDSs provided by the Infosafe system. In my view it is no answer to say Chemwatch might provide a similar system. The fact remains that if the information contained in a Chemwatch MSDS is required for safety related purposes then a court ought not prevent its supply by the grant of injunctive or other similar relief for copyright infringement. It is difficult to accept that a court would by injunctive or any other coercive order prevent a user or any emergency organisation from obtaining access to MSDSs for emergency or other safety related purposes. Whether or not damages, if any, would be awarded raises entirely different questions which need not be considered in the present case as no damages are claimed. The second discretionary reason is that the grant of the relief sought is likely to affect the interests of the manufacturers or importers which commissioned the MSDSs. The national standards have been adopted as law in several states. In any event the manufacturers and importers of hazardous substances for industrial use are probably under a duty to users of those substances to take reasonable steps to ensure ready availability or access to the safety related information contained in the MSDSs. It would require exceptional circumstances, which are not present in this case, for the Court to exercise its discretion to make injunctive orders at the instance of the copyright owner, without notice to and in the absence of the manufacturer or importer commissioning the MSDS, if those orders had the effect of preventing or hindering users from obtaining ready access to the MSDSs. The orders sought would have the practical effect of limiting or impeding access to information which importers and manufacturers are under a duty to take proper steps to provide or make available at or to workplaces where their hazardous substances are used. The importers or manufacturers which commissioned the 43 MSDSs are not parties to the present proceeding and may not be aware of the proceeding or the consequences it may have for the fulfilment of their legal duties. I do not go so far as to hold that they are necessary parties on the ground that their rights or liabilities will be directly affected by any order which may be made in the action: see Pegang Mining Co Ltd v. Choong Sam [1969] 2 MLJ 52 at 55-6 and News Ltd v. Australian Rugby Football League Ltd (1996) 139 ALR 193 at 297-301. However, the importers and manufacturers, in a real and practical sense, have an interest in the injunctive relief sought including the delivery up of infringing copies of their MSDSs. In these circumstances, even if infringement was established, it would be inappropriate to make the injunctive or delivery up orders sought: cf Gregg v. Tasmanian Trustees Ltd, unreported, Merkel J 28 February 1997, at 69-71. 7.0 Fair dealing Acohs also relied upon the defence of fair dealing for the purpose of research or study (s.40). The defence was considered by Beaumont J in De Garis at 104-105. The defence requires that the relevant purpose is that of Acohs. Acohs' purpose was to copy, reproduce or adapt Chemwatch MSDSs to enable their use for safety related purposes. Primarily those purposes were to enable users of chemicals, the subject of the MSDS, to ensure the safe use, handling and transportation of the chemicals. The purposes did not involve research or study within the meaning of s.40 of the Act. Section 43A of the Act was also relied upon by Acohs. The section relates to copyright in relation to computer programs. No such copyright is claimed by Bialkower. Accordingly, the section has no application in the present case. 8.0 Relief I have concluded that:

• Acohs is entitled to declaratory relief and damages in the sum of $20,000 against the respondents in respect of its claims based on s.52 of the TPA. Acohs' proceeding is to be otherwise dismissed; • the cross-claim of Bialkower against Acohs in relation to copyright infringement is to be dismissed; • RMS and RMC are entitled to contribution and therefore an indemnity by Bialkower in respect of 75% damages and costs awarded against them. I turn to the appropriate orders as to costs. Acohs has had substantial success in establishing the liability of all respondents in relation to its s.52 claim and in defeating Bialkower's claims for infringement of copyright. Although Acohs failed to obtain injunctive relief and all of the damages claimed by it, those matters ought not result in it not obtaining an order for all of its costs. Bialkower has failed in his defence of Acohs' s.52 claim and also in his cross-claim for infringement of copyright. Accordingly Bialkower should be ordered to pay Acohs' costs of the claim and cross-claim. The s.52 and the copyright claims were, in one sense, discrete but they were intertwined at a number of levels. Bialkower's copyright infringement claim was relied upon by him as a ground of defence to the grant of all but nominal relief in respect of Acohs' s.52 claims. Rather than attempt to disentangle the costs of the application and cross-claim it is appropriate to apportion one-third of the costs of the proceeding to the application and two-thirds of the costs of the proceeding to the cross-claim. RMS and RMC failed in their defence of Acohs' s.52 claim but substantially succeeded in their claim for contribution against Bialkower. The defence and cross-claim were closely related. In all the circumstances it is appropriate that Bialkower pay one-third of RMS's and RMC's costs of the proceeding. It is appropriate to make the following orders as to costs: (a) RMS, RMC and Bialkower pay one-third of Acohs' taxed costs of and incidental to the proceeding. (b) Bialkower pay two-thirds of Acohs' taxed costs of and incidental to the proceeding. (c) Bialkower pay to RMS and RMC one-third of their costs of and incidental to the proceeding.

I certify that this and the preceding 61 pages are a true copy of the Reasons for Judgment of the Honourable Justice Merkel

Heard: 22, 23, 24, 26, 29 and 30 April, 1, 2 and 3 May 1996

Place: Melbourne Judgment: 9 May 1997 Appearances: Mr. W. Gillies instructed by Mulcahy Mendelson & Round appeared for the applicant Mr. M. Goldblatt instructed by N.A. Young & Co. appeared for the first and second respondents Mr. J.D. Mattin with Mr. A. Phillips instructed by Rockman & Rockman appeared for the third respondent