Burge v Swarbrick

Burge v Swarbrick - [2007] HCA 17 - HCA 2007 case summary — Zoe

[25]

It should be noted immediately that whilst title to a design derives from statutory registration, and a publicly accessible register, there is no registration system for copyright. Further, copyright subsists for a much longer period than the maximum period of protection under the Designs Act of 16 years from the priority date[6], now reduced to a maximum of 10 years protection from the filing date under the New Designs Act. In cases of possible dual protection, the legislative policy manifested since 1911 in the United Kingdom and then in Australia has been to encourage design registration[7] and to limit or remove copyright protection for artistic works which are applied to industrial products. But, as these reasons will seek to explain, the means adopted to that end have varied and successive legislative schemes have sought to overcome the shortcomings of their predecessors.
The evidence includes numerous examples of registrations by other parties under the Designs Act in respect of the shape or configuration of vessel hulls. The international design classification, used by Design Offices in many countries, including Australia, identifies "Ships and Boats" as Class 12‑06.
Mr Swarbrick does not rely upon any design registration; it is the absence of any utilisation of the protection offered by registration under the Designs Act that is critical for this appeal. Rather, as noted above, Mr Swarbrick founds his claim for intellectual property protection upon the Copyright Act and its provisions respecting that species of original "artistic work" which comprises "a work of artistic craftsmanship". In the absence of a design registration, s 77 of the Copyright Act permits reliance by Mr Swarbrick only on those copyrights he may have in works of "artistic craftsmanship". The ultimate issue is whether the JS 9000 embodies "a work of artistic craftsmanship" in the statutory sense. If so, Mr Swarbrick may pursue his claim of copyright infringement and the absence of a design registration is no answer to his action for copyright infringement. The appellants in this Court challenge Mr Swarbrick's success to date on this issue. For the reasons which follow, the appeal should be allowed.

[26]

In June 2003, the first appellant, Mr B J Burge, was engaged by the fourth appellant, Boldgold Investments Pty Ltd ("Boldgold") as operations manager of its factory premises. He had the task of overseeing work on the hull and deck of a JS 9000 yacht using a hull and deck moulding which Boldgold had acquired from the second appellant, Mr T Rogers, for the sum of $7,500. Mr Rogers and the third appellant, Mr B Warren, were also engaged by Boldgold to work at its factory; they had been employed by Swarbrick Yachts previously in the moulding of hulls and decks. Late in 2002, Mr Swarbrick had given to Mr Rogers the hull and deck moulding which he later sold to Boldgold. The circumstances in which Mr Swarbrick had given the moulding to Mr Rogers were disputed and that dispute has not been resolved. The fifth and sixth appellants, Mr G P Bosman and Mr S E Zaza, are directors of Boldgold.
Work at the Boldgold factory ceased on 13 September 2003, upon the service of an ex parte interlocutory injunction granted by the Federal Court (Carr J) on the previous day upon the application of Mr Swarbrick. The injunction, modified after an interlocutory hearing inter partes before Carr J[8], still remains in force until further order. Relevantly, the appellants are enjoined from reproducing or authorising the reproduction in a material form of the object identified as "the Plug" and from manufacturing or procuring the manufacture of any mould using the JS 9000 hull and deck mouldings. The Plug was identified by Carr J as a hand-crafted full scale model of the hull and deck sections of what became the finished yacht and is visually identical to the hull and deck of a finished JS 9000. The hull and deck mouldings were produced from moulds taken by Mr Swarbrick separately of the hull and deck sections, the moulds themselves being exact, although inverted, copies of the Plug.
The Plug was destroyed. But Mr Swarbrick asserts an incorporeal right, namely that given by the copyright law, whose continued subsistence does not depend upon the fate of its first material embodiment[9].
It is important to note several fundamental provisions of Pt III of the Copyright Act which deals with copyright in original works. Copyright in the case of an original artistic work includes the exclusive right to reproduce it in a material form (s 31(1)(b)(i)). An artistic work is deemed by s 21(3) to have been reproduced, in the case of a work in a two-dimensional form, if a version is produced in a three-dimensional form, and vice versa. It is an infringement to do or authorise the doing in Australia of any act comprised in the copyright (s 36(1)) and thus indirect copying may infringe.
The re‑amended defences dated 28 January 2004 filed on behalf of each of the present appellants included the assertion that the Plug, and hull and deck mouldings of the JS 9000, embody designs which when applied to an article result in a reproduction of an artistic work, and so are "corresponding designs" within the meaning of that phrase in s 74 of the Copyright Act. The term "design" in s 74 picks up the definition in the Designs Act[10]. The result is said to be that, in the absence of registrations under the Designs Act, s 77 of the Copyright Act applies and there is no copyright infringement by the appellants.
On 6 November 2003, by consent, Carr J ordered that questions of liability for infringement be heard and determined separately and that this hearing be expedited. Other matters remained outstanding, particularly certain cross-claims including those brought by Mr Burge and Mr Warren against Mr Swarbrick for defamation. In his detailed reasons delivered following a seven day hearing, Carr J rejected the defence based upon s 77 of the Copyright Act[11]. He granted declaratory relief to the effect that Boldgold had infringed the copyright of Mr Swarbrick in the Plug, the hull mould and the hull moulding, being artistic works, and had engaged in conduct which, but for the grant of interlocutory relief, would have resulted in infringement of Mr Swarbrick's copyright in artistic works being the deck mould and deck moulding. An appeal to the Full Court (Moore, North and Emmett JJ) by the present appellants in this Court was unsuccessful[12].
At first instance and in the Full Court, some attention was given to the significance of drawings by Mr Swarbrick, free drawn and computer digitised, which were made and utilised at various stages in the design of the Plug and the finished item, the Bateau Rouge. However, the effect of Mr Swarbrick's evidence, as his counsel saw it, was that the creative design effort had been in the fashioning of the Plug. In the course of submissions for Mr Swarbrick in this Court, counsel accepted that the only relevant artistic works which could be works of "artistic craftsmanship" were the Plug and the final hull and deck mouldings for the Bateau Rouge and that no wider injunctive relief under the Copyright Act could be maintained. With that in mind, it is convenient now to consider the central importance of this species of artistic work for the operation of the copyright legislation in this case.
The statutory expression "artistic craftsmanship" has a double significance for this case. The first is as a species of "artistic work" whose appearance in copyright legislation almost a century ago marked a significant step in the development of the nature and scope of the subject-matter for copyright protection under the rubric of "artistic work". The second involves the use in the Australian statute law of "artistic craftsmanship" for a more recent and quite different purpose. This is to supply the discrimen to mark off the "overlap" between copyright and registered designs law. Both matters call for an understanding of the course taken over more than a century by the statute law in the United Kingdom and then in Australia. We turn first to the matter of "overlap".

[27]

The Second Schedule to the Copyright Act 1911 (Imp) ("the 1911 Act") repealed no fewer than 21 statutes, beginning with The Engraving Copyright Act 1734 (UK) ("the 1734 Act")[13], including the Sculpture Copyright Act 1814 (UK) ("the 1814 Act")[14], and ending with The Musical Copyright Act 1906 (UK). The 1911 Act provided comprehensively for copyright in published and unpublished works[15]. It was brought into force in Australia by s 8 of the Copyright Act 1912 (Cth) ("the 1912 Act"). Until the commencement of the Australian legislation passed in 1968, the 1911 Act remained in force as Imperial law[16], with adjustments made by the 1912 Act, and notwithstanding the enactment of the Copyright Act 1956 (UK) ("the 1956 UK Act")[17].
Something more should be said respecting the earlier Australian legislation. Section 4 of the 1912 Act repealed the Copyright Act 1905 (Cth) ("the 1905 Act"). This had largely superseded the future application of State laws on the subject (s 8)[18]. The 1905 Act was an anticipation in Australia of the Imperial statute, the 1911 Act. The 1905 Act drew[19] upon the recommendations of a British Royal Commission[20] which had reported in 1878[21]; it had recommended the consolidation of the copyright law in the one statute[22]. That proposal did not bear fruit in the United Kingdom until the 1911 Act.
The law with respect to designs also had a lengthy legislative history in the United Kingdom[23], and in the Australian colonies[24]. The Designs Act came into force on 1 January 1907, the same day as the first federal copyright statute, the 1905 Act. Neither statute had any provision dealing with any "overlap" between them. Why was this so?
One explanation lies in what was then understood to be the position which had then been reached in the United Kingdom legislation. Designs for sculptures within the protection of the 1814 Act were excluded from the definition of "design" in s 60 of the Patents, Designs, and Trade Marks Act 1883 (UK)[25] and thereafter in s 93 of the Patents and Designs Act 1907 (UK) ("the 1907 UK Act")[26]. Copyright in drawings and other such two‑dimensional works was generally treated as restricted to two‑dimensional reproduction for a purpose and in a medium sui generis with the form of the work[27]; further, whilst registration was not required by the 1814 Act for copyright protection for sculpture, in other respects before the 1911 Act registration was a precondition to the bringing of an action for copyright infringement[28].
Another explanation may have been the view that any overlapping should be tolerated, to the resultant advantage of copyright and design owners. That was the attitude taken in the United Kingdom in the Report of the Committee on the Law of Copyright ("the Gorell Committee")[29] which reported in 1909 to the President of the Board of Trade[30]. But that was not the policy adopted in the 1911 Act.
The question of "overlapping" became critical for the new legislative scheme. The 1911 Act required no formalities such as registration of copyrights and adopted a lengthy period of protection, generally, for published works, the life of the author plus 50 years. The 1911 Act also (s 1(2)) so defined the copyright monopoly in terms to include the reproduction of the work or of a substantial part thereof "in any material form whatsoever", thereby encompassing three-dimensional reproductions of two-dimensional works. The fear of industrialists, which impressed the Board of Trade, was that "the grant of full copyright to designs intended to be multiplied by an industrial process would destroy the efficacy of the Patents and Designs Acts, which are regarded as valuable by the manufacturers which use designs (eg calico printers)"; as a result, the Board "decided to exclude such design[s] if registrable under the Patents and Designs Acts from the Bill [for the 1911 Act]"[31].
The upshot was the provision made by s 22 of the 1911 Act. In particular, the awkwardly drafted s 22(1) stated:

[65]

In its form after the changes made by the 1989 Act, the Copyright Act employed the expression "a work of artistic craftsmanship", both as a criterion to mark out the nature, duration and ownership of copyright in artistic works (Pt III, Div 1, ss 31‑35) and to differentiate the protection given where artistic works were applied as industrial designs without a design registration (Pt III, Div 8, ss 74‑77A). The statute in this amended form is to be considered with respect to subsequent events as a coherent whole. The phrase "a work of artistic craftsmanship" should be read consistently. There has been debate as to the extent to which a statute in its unamended form may be construed with respect to past events by reference to amendments[60]. But however that may be, the phrase "a work of artistic craftsmanship" was introduced by the 1989 Act into the "overlap" provisions of Pt III, Div 8 of the Copyright Act upon a particular legislative view of the purpose it would serve. That view, as Drummond J indicated in Coogi[61], was the encouragement of "real artistic effort" in industrial design.
Several consequences for this appeal follow from this state of affairs. First, as the facts of this case demonstrate, encouragement of "real artistic effort" to industrial design may be constrained by the nature of the functional purposes to be served by the object to which industrial design is applied and by the marketing imperatives for mass production. The evidence of the marketing of the JS 9000 class of racing yacht, described in the first part of these reasons, is illustrative of these constraints. It is these constraints which make it difficult to support the Plug as "a work of artistic craftsmanship".
Secondly, the need after the 1989 Act to read consistently throughout the Copyright Act the phrase "a work of artistic craftsmanship"[62] entails caution, lest too little weight be given to the need for a real or substantial artistic element in what is posited for any purpose of the Copyright Act as "a work of artistic craftsmanship".
Thirdly, the 1989 Act places some check upon entire acceptance of what had been said earlier with respect to the 1956 UK Act in the most significant judicial treatment of the scope and purpose of the special treatment given the phrase "a work of artistic craftsmanship". This was the speech of Lord Simon of Glaisdale in George Hensher Ltd v Restawile Upholstery (Lancs) Ltd[63]. We now turn to what was said by Lord Simon.

[66]

The plaintiff in Hensher, successfully before Graham J[64] but unsuccessfully in the Court of Appeal[65] and in the House of Lords, asserted infringement of copyright in artistic works, being the chairs which were components of a suite of furniture marketed as the Bronx[66]. The artistic copyright relied upon was that in respect of works of "artistic craftsmanship" as provided in the 1956 UK Act. There were no design registrations relied upon and the issue was a threshold one of whether, in any event, copyright subsisted in respect of any original artistic work.
Several points should be made respecting the Hensher litigation. First, the consideration in various of the speeches in the House of Lords of the purpose and scope of the term "artistic craftsmanship" was skewed by a concession. The concession was that there was no dispute that the prototype from which the Bronx suite was constructed in 1966 and mass produced was "a work of craftsmanship"; the only issue being whether the "craftsmanship" involved was "artistic"[67].
Secondly, the concession notwithstanding, Lord Simon went on to construe as a whole the phrase "a work of artistic craftsmanship" as it appeared in s 3(1)(c) of the 1956 UK Act. He noted that the concession that the Bronx prototype was a work of craftsmanship had tended to distort the argument and that "works of artistic craftsmanship" was a composite phrase to be construed as a whole[68]. That approach by Lord Simon should, subject to what has been said above respecting the significance of the 1989 Act, be adopted in dealing with the present appeal. In Australia, thus, there will be no occasion to attempt from all five speeches in Hensher a distillation of what can be regarded as the ratio decidendi[69].
Thirdly, Lord Simon noted that there was no relevant distinction between the phrase used in the 1956 UK Act and that found in the 1911 Act[70]. His Lordship went on, in a manner now regarded in this Court as involving orthodox principles of interpretation[71], to consider what he called the social and legal backgrounds to the 1911 Act, saying[72]:

[79]

The answer to the question whether the Plug is a "work of artistic craftsmanship" cannot be controlled by evidence from Mr Swarbrick of his aspirations or intentions when designing and constructing the Plug. His evidence was admissible. But the operation of the statute does not turn upon the presence or absence of evidence of that nature from the author of the work in question. The matter, like many other issues calling for care and discrimination, is one for objective determination by the court, assisted by admissible evidence and not unduly weighed down by the supposed terrors for judicial assessment of matters involving aesthetics[81].
The statute does not give to the opinion of the person who claims to be the author of "a work of artistic craftsmanship" the determination of whether that result was obtained; still less, whether it was obtained because he or she intended that result. Given the long period of copyright protection, the author, at the stage when there is litigation, may be unavailable. Indeed, as Pape J noted in Cuisenaire[82], the author may be dead. Again, intentions may fail to be realised. Further, just as few alleged inventors are heard to deny the presence of an inventive step on their part, so, it may be expected, will few alleged authors of works of artistic craftsmanship be heard readily to admit the absence of any necessary aesthetic element in their endeavours[83].
This is not to deny the admissibility of such evidence, nor to disparage the good character of such witnesses, and certainly not that of Mr Swarbrick; it is to reaffirm the well‑recognised dangers of hindsight which are present in various fields of intellectual property law, as in many other disputes that come to litigation.
The various aspects of the definition of "a work of artistic craftsmanship" which are discussed above with reference to Hensher have particular significance here. The primary judge considered "craftsmanship" and "aesthetic appeal" as distinct and consecutive questions, before going on and "considering both aspects together"[84]. This was an error in the construction and application of the Copyright Act and requires re‑examination of what transpired at the trial.
Upon that footing, the primary judge started his analysis of the evidence from the proposition that the evidence of intention of the author of the alleged work was important, albeit not essential[85]. Whilst allowing that Mr Swarbrick was "scarcely a disinterested person", the primary judge gave very great weight to his evidence as to that intention. His Honour accepted that Mr Swarbrick had intended to design and build a yacht of "great aesthetic appeal", that the JS 9000 had "a high level of aesthetic appeal" and that this was the outcome intended by Mr Swarbrick[86].
The primary judge added that Mr Swarbrick had not been cross‑examined on these views. The appellants properly dispute this. They point, among other things, to the passage in his lengthy cross‑examination:

[82]

The promotional material and business plan described earlier in these reasons are relatively contemporaneous evidence. They are confirmatory of that design brief but, it should be noted, do not give prominence to matters of visual and aesthetic appeal. However, the primary judge gave this material little apparent weight, beyond saying that the documentary evidence did not lead him to doubt Mr Swarbrick's evidence at the trial.
His Honour did give much attention to the steps by which the Plug came into existence in its final form. There were disputes between witnesses on these matters. But, as a whole, that evidence is equivocal; it suggests that yacht design requires engineering skills and that the problems overcome as Mr Swarbrick progressed had been predominantly to do with matters of function.
The primary judge gave limited attention in his reasons to the whole of the evidence of Mr Warwick Hood, a very experienced yacht designer who has practised naval architecture since 1954. Carr J did accept Mr Hood as an appropriately impartial expert witness, but said he preferred the evidence of Mr Swarbrick to that of Mr Hood to the extent there was a conflict[87]. His Honour did not disclose why that was his preference.
Mr Hood described the JS 9000 as an example of a popular class of yacht, known as a "sports boat", designed to sail as fast as possible within the constraints of an overall length of about 9 metres. Speed was said to be the overriding consideration in the design of "sports boats" and all other factors were of secondary importance. Mr Hood said the design of "sports boats" was not substantially or mainly governed by considerations of appearance or pleasing aesthetics.
Taken as a whole and considered objectively, the evidence, at best, shows that matters of visual and aesthetic appeal were but one of a range of considerations in the design of the Plug. Matters of visual and aesthetic appeal necessarily were subordinated to achievement of the purely functional aspects required for a successfully marketed "sports boat" and thus for the commercial objective in view.

[90]

The hull and deck mouldings assumed particular importance in the Full Court. In its reasons[98], the Full Court said that the primary judge "may have erred" in concluding that the Plug was a work of artistic craftsmanship because it was "no more than the means to the end of creating the mouldings that were to constitute the hull and deck of the Bateau Rouge". As explained earlier in these reasons, the primary judge had erred in his conclusion, but not because the Plug had been created as the preliminary step in a process of manufacture or, as the Full Court put it, "the means to the end". The conclusion expressed earlier in these reasons that the Plug was not a work of artistic craftsmanship has as a necessary corollary that the hull and deck moulds made from it were not works of that character. In any event, at trial Mr Swarbrick had not contended that the hull and deck moulds were independent works of artistic craftsmanship and Carr J therefore did not enter upon any such question[99].
Recognising this, in this Court counsel for Mr Swarbrick relied upon the hull and deck mouldings for the Bateau Rouge as independent works of artistic craftsmanship irrespective of their derivation from the Plug. Whilst the primary judge found that the hull and deck mouldings were works of artistic craftsmanship[100] later in his reasons[101], his Honour described both the moulds and the mouldings as "manifestations" of the same object, the Plug.
In this Court, counsel for Mr Swarbrick referred to the findings by the primary judge as to the steps by which the hull and deck mouldings were produced from the moulds. A spray gel coat was applied to the moulds, a skin layer was hand-laid using derecane resin and the remainder of the laminate, skin and core was applied using a vacuum infusion process[102]. This was not the work of an artist-craftsman in the sense discussed earlier in these reasons.
The upshot is that the primary judge correctly described, for present purposes, the hull and deck mouldings as manifestations of the Plug. Put another way, they might well be regarded as reproductions in a material form of the Plug within the meaning of s 31 of the Copyright Act. Thus, the statement of Lord Reid in the following passage in Hensher[103] applies here:

[93]

At first instance and in the Full Court, the appellants put an independent argument which they renewed in this Court. That argument should be rejected. In short, the appellants submit that (i) the Plug and the hull and deck mouldings of the Bateau Rouge were original artistic works, being sculptures within the meaning of par (a) in the definition of "artistic work" in s 10 of the Copyright Act; (ii) the primary judge so held[104]; (iii) therefore, these works do not fall within par (c) of the definition - "a work of artistic craftsmanship to which neither of the last two preceding paragraphs applies" - because one of the proceeding paragraphs, par (a), applies; (iv) as a consequence of (iii), neither the Plug nor the hull and deck mouldings is "a work of artistic craftsmanship" within the sense of par (a) of s 77(1); (v) the exception in par (a) of s 77(1) of the defence to the action of copyright infringement therefore cannot apply in the present case.
Step (iv) in this chain of argument does not follow from step (iii). It has been remarked earlier in these reasons that some works within par (a) and par (b) of the definition of "artistic work" in s 10 may, and others may not, be of "artistic quality". Further, the text of the definition of "artistic work" accommodates, in par (c), the readily apparent proposition that, for example, at least some sculptures will be works of a rtistic craftsmanship[105]. Paragraph (c) of the definition sweeps up works of artistic craftsmanship which fall outside pars (a) and (b). Paragraph (c) does not exclude as works of artistic craftsmanship those works which also happen to answer the specific criteria of par (a) or par (b). Thus, par (a) of s 77(1) removes any work of artistic craftsmanship from the scope of the defence for infringement provided by s 77(2).
During the course of this litigation, the Copyright Act was further amended, with effect from 17 June 2004, by the 2003 Act. This accommodated changes made by the New Designs Act and also made amendments with respect to the design-copyright "overlap".
From par (c) of the definition of "artistic work", the words "to which neither of the last two preceding paragraphs applies" are now omitted and in their place the paragraph reads, "whether or not mentioned in paragraph (a) or (b)"[106].
In the Explanatory Memorandum to the Bill for what became the 2003 Act, the following was said of this amendment[107]:

[99]

The appeal should be allowed with costs. The orders of the Full Court made on 8 December 2005 should be set aside. In place thereof, the appeal to that Court should be allowed with costs.
The question then arises as to what, in the light of the reasons of this Court, should follow for orders 1-8 made by Carr J on 24 June 2004 upon the issues which, on 6 November 2003, he had directed there be a separate hearing and determination.
Order 1 was a declaration as to the subsistence of copyright in respect of artistic works, being the Plug, the moulds, the hull and deck mouldings, the Bateau Rouge and certain drawings. However, the critical issue was whether they were works of artistic craftsmanship, a matter upon which turned the defence to infringement. The declaration in order 1 did not reflect that situation and should also be set aside.
Orders 2, 3 and 4 were declarations respecting infringement of copyright. In the light of the decision now made in this Court, those declaratory orders cannot stand. They must be set aside.
Order 8 continued in force until further order the interlocutory injunction granted on 12 September 2003. In the light of the concession by counsel in this Court to which reference has been made, this injunction was cast in terms which were too wide. In any event, given the outcome of this appeal, order 8 should be set aside with the consequence that the interlocutory relief is dissolved. This will also operate to release any of the appellants from the undertakings so given.
Order 6 held over for further determination questions of any additional relief to which Mr Swarbrick might be entitled against the present appellants. That portion of order 6 cannot stand. The remainder of order 6 and the whole of order 5 was directed to questions arising in respect of the cross-claims. Orders 5 and 6 should be set aside and it should be ordered that all questions remaining with respect to the cross-claims be stood over for determination by a judge of the Federal Court in conformity with the reasons of this Court.
In his reasons for judgment, Carr J gave detailed consideration to issues of costs[109]. Order 7 provided that the present appellants pay Mr Swarbrick's costs of the proceedings to date including any reserved costs and the costs of the motions, notice of which was filed on 12 September 2003 and 3 October 2003 respectively. These were the motion whereby Mr Swarbrick obtained an interlocutory injunction and the unsuccessful motion by the appellants to discharge the injunction. In place of order 7, it should be ordered that the respondent pay the costs of the appellants of the proceedings before Carr J up to 7 July 2004, the date of entry of his orders made on 24 June 2004, including any reserved costs and also the costs of the two motions.
The outcome is that all of the orders made by Carr J should have been set aside by the Full Court. This Court should now so provide. In place of the orders of Carr J, an order should now be made dismissing the present respondent's application to the Federal Court with consequential orders as set out above.

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