Copyright authorisation infringement grounds
227 The appellant advanced four primary contentions of error:
(1) authorisation does not mean "authorisation to infringe" (grounds 1 to 7);
(2) authorisation does not require a mental element (grounds 1, 4 and 5);
(3) authorisation should have been found (grounds 1, 4 and 5); and
(4) if a mental element is required, it was met and authorisation should have been found (grounds 2 to 4, 6 to 7).
228 I deal with these grounds seriatim.
229 As to the first, the appellant contends that the primary judge applied the wrong test by interpreting authorisation at ss 36(1)-(1A) of the Copyright Act to require it to prove that the represented respondents authorised the primary actor (Mr Semmens and other Toolbox developers and users) to "infringe intellectual property rights". That error is said to be found in various sentences within PJ [297(7)], [305(2)], [305(3)], and [305(5)]. The error asserted is that ss 36(1)-36(1A) require proof that the defendant "authorised the doing…of, any act comprised in the copyright in a work". That is, the appellant is not required to establish that the defendant authorised infringement of intellectual property rights.
230 As correctly observed by the represented respondents, this contention is not a ground of appeal. In any event, it is of no merit. What is clear is that the primary judge, in various paragraphs of the reasons, adopted a convenient shorthand for the statutory requirement. This contention rests on a selective reading of isolated sentences and fails to have regard to the reasons as a whole. At PJ [169], his Honour set out s 36(1) of the Copyright Act. At PJ [170] his Honour also summarised the effect of s 13 of the Copyright Act that an act comprised in the copyright in a literary work includes: (a) any act that the owner of the copyright has the exclusive right to do; and (b) the exclusive right to authorise a person to do that act. At PJ [267], his Honour said further:
…by reason of s 36(1) of the Copyright Act, copyright in a work is infringed by a person who is not the owner of the copyright who does any act "comprised in the copyright" without the licence of the owner of the copyright. Section 13 provides that an act comprised in the copyright in a literary work includes any act that the owner of the copyright has the exclusive right to do in the exclusive right to authorise a person to do that act.
231 The shorthand phrase employed by the primary judge was also used by counsel for the appellant in his written closing submission at the trial: for example, paragraph [529] of the submission dated 21 August 2020.
232 For these reasons, the primary judge plainly did not misunderstand or misstate the statutory requirements.
233 Secondly, the appellant argues that the phrase employed by the primary judge, "authorisation to infringe", is contrary to binding authority. In its submission, all that is required is authorisation of the act which comprises the infringement, rather than the authorisation of the infringement itself. That is so: Moorhouse at 11 and 17 (Gibbs J), and at 21 and 23 (Jacobs J), McTiernan ACJ in agreement; iiNet HCA (French CJ, Crennan and Kiefel JJ at [5], [50]; Gummow and Hayne JJ at [142]. However, the primary judge did not commit the error that is asserted. Once again, the appellant focuses on individual phrases and fails to read the whole of the reasons in context. It is certainly the case that in some sub paragraphs at PJ [305] the primary judge employed the phrase "authorisation to infringe intellectual property rights". For the same reasons that I have set out above, it is clear that by using this shorthand phrase, the primary judge did not overlook that authorisation is concerned with the act done, rather than its legal consequence. He did not misunderstand or misapply s 36 when read with s 13 of the Copyright Act.
234 Thirdly, the appellant contends that the primary judge wrongly imported a mental element into the legal characterisation of the primary act, which is not essential to establish authorisation. This argument focuses upon the various phrases employed by the primary judge: "authorised him to infringe", "an authorisation to infringe intellectual property rights" and "requested or required him to infringe any person's intellectual property rights" each in the context of the conduct of Mr Semmens: PJ [297(7)], [305(2)] and [305(5)]. I reject this submission for the reason that, once again, it selectively focuses upon individual phrases used by the primary judge and fails to have regard to the entirety of the reasons when read in context.
235 The primary judge did not conclude that authorisation requires knowledge about the legal quality of the infringing act. So much is clear from: (a) his Honour's summary of the appellant's case at PJ [296] that the represented respondents "knew that there was a real risk that, in developing the system, Mr Semmens might infringe the intellectual property rights of DDPL"; and (b) his Honour's summary of the legal principles to be applied at PJ [268] where, referencing iiNet HCA at [93], he correctly distinguished between primary and secondary infringement, describing the latter as "…namely the authorisation of the doing of the act or acts comprised in the copyright constituting the primary infringement".
236 The appellant relied on a more substantial argument that the primary judge erroneously imported a mental element as necessary to establish authorisation of the doing of any act comprised in the copyright pursuant to s 36(1) of the Copyright Act. Although not a clearly articulated appeal ground, the appellant submitted that it is encompassed within grounds 1, 4, and 5. In rejecting the authorisation case against Biggin & Scott, RETB, Mr Stoner, and Ms Bartels, the primary judge said at PJ [300]:
As noted in the passage from Moorhouse, extracted at [270] above, authorisation connotes a "mental element" and it might be difficult to infer authorisation where the relevant person "neither knew nor had reason to suspect that the act might be done". It has not been established that RETB, Biggin & Scott, Mr Stoner or Ms Bartels knew (or that they should reasonably have known) that any of the works had been reproduced in the Toolbox system or that they knew that use by users or the loading, editing or modification of the Toolbox system by developers or others might involve reproduction of a substantial part of the DreamDesk system. This is not a case where the act of using the Toolbox system was known necessarily to involve an act of reproduction, such as might be the case in providing a photocopier for the purpose of copying library books. I am not satisfied that Biggin & Scott, RETB, Mr Stoner or Ms Bartels relevantly authorised any infringement, whether of Mr Semmens or of other developers or users.
237 At PJ [304]-[305], the primary judge reasoned similarly in rejecting the case against DDPL and Mr Meissner.
238 The starting point is s 36 of the Copyright Act which provides:
36 Infringement by doing acts comprised in the copyright
(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
(1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
(2) The next three succeeding sections do not affect the generality of this section.
239 The phrase in s 36(1) "any act comprised in the copyright" subsisting in the relevant work derives its content from the exclusive right to do all or any of the acts described in s 31(1)(a) to (d) of the Copyright Act. Section 35 determines, or provides for determining, who, for the purposes of the Copyright Act, is the owner of the copyright subsisting in the work and s 13(1) provides that a reference to "an act comprised in the copyright" in a work (or other subject-matter) is a reference to any act the owner of the copyright has the exclusive right to do under the Act. The "exclusive right" to do an act in relation to a work includes the exclusive right "to authorise a person to do that act in relation to that work": s 13(2). Thus, infringement of copyright is framed by s 36(1) as conduct of a person (not being the owner and without the owner's licence) who does any act comprised in the copyright or who authorises the doing (one of the exclusive rights of the copyright owner), of any act comprised in the copyright
240 As observed by Gummow J in WEA v Hanimex (1987) 17 FCR 274 at 284 "… the circumstance that the concept of 'authorisation' in the legislation had its own independent operation from what one might call primary infringement, did not exclude the general law principles dealing with joint tortfeasors from operation upon primary infringement". See also Australasian Performing Right Association Limited v Jain (1990) 26 FCR 53 (at 57 per Sheppard, Foster & Hill JJ).
241 The Copyright Amendment (Digital Agenda) Act 2000 (Cth) (Digital Agenda Act) introduced three mandatory considerations into the Copyright Act: ss 36(1A)(a) to (c) and 101(1A)(a) to (c). These represented a partial codification of common law developments in relation to authorisation: iiNet HCA (at [22], [24] per French CJ, Crennan & Kiefel JJ). After the Digital Agenda Act, mandatory and primary consideration must now be given to the statutory factors, although other matters may continue to be considered: iiNet HCA (at [63], [68] per French CJ, Crennan & Kiefel JJ; at [135] per Gummow and Hayne JJ); JR Consulting & Drafting Pty Ltd v Cummings (2016) 116 IPR 440; [2016] FCAFC 20 (at [322]-[332] per Bennett, Greenwood & Besanko JJ).
242 Accordingly, the statutory factors are "intended to inform the drawing of an inference of authorisation": iiNet HCA (at [68] per French CJ, Crennan & Kiefel JJ); Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380 (at [20] per Branson J, French J agreeing).
243 Although the exclusive right of the copyright owner to do an act in relation to a work includes the exclusive right to authorize a person to do that act (s 13(2)), the appellant did not assert a case against the represented respondents that they purported to grant to Mr Semmens the right to do the act complained of, and the primary judge rejected the case that Mr Semmens acted as the agent of the represented respondents. From that finding there is no appeal. The appellant's case rests on an inference of implied authorisation from all of the facts: iiNet HCA at [47], [61] and [125]. The appellant relies upon the reasoning of Jacobs J (with whom McTiernan ACJ agreed) in Moorhouse at 20-21 who, when dealing with the phrase "sanction, approve, countenance", said:
…But authorization is wider than authority. It has, in relation to a similar use in previous copyright legislation, been given the meaning, taken from the Oxford Dictionary, of "sanction, approve, countenance". See Falcon v. Famous Players Film Co. (1926) 2 KB 474 which was approved in Adelaide Corporation v. Australasian Performing Right Association Limited. (1928) 40 CLR 481. I have no doubt that the word is used in the same sense in s. 36 (1). It is a wide meaning which in cases of permission or invitation is apt to apply both where an express permission or invitation is extended to do the act comprised in the copyright and where such a permission or invitation may be implied. Where a general permission or invitation may be implied it is clearly unnecessary that the authorizing party have knowledge that a particular act comprised in the copyright will be done.
(citations added.)
244 That passage should not be read out of context. It will be recalled that in Moorhouse, the University authorities provided library books and photocopying machines, charged students for the making of copies, controlled the use of the machines, had reasonable grounds to suspect that infringements might occur and failed to take adequate steps to prevent unauthorised copying. Thus, the issue was whether a general permission or invitation to make such use of the copying facilities as the users thought fit should be inferred. Conduct of that character does not require actual knowledge of particular infringing acts, as the circumstances may support the inference of implied authorisation. That passage must also be read with his Honour's later observation at 22:
In the circumstances it was of little importance whether or not the University authorities knew in fact that users of the machines were doing acts comprised in the authors' copyrights. This knowledge or lack of it would not change the terms of the invitation extended by the supplier of the books and machines. Knowledge could become important if the invitation were qualified in such a way as to make it clear that the invitation did not extend to the doing of acts comprised in the copyright and if nevertheless it were known that the qualification to the invitation was being ignored and yet the University allowed that state of things to continue. Then it might be found as a fact that the University authorised the continued state of things, the continued use of its machines to do acts comprised in the authors' copyrights, and thus to infringe those copyrights.
245 I do not interpret the reasoning of Jacobs J as denying the necessity for there to be either "express knowledge" of the doing of the relevant act comprised in the copyright in the work, or "constructive knowledge" of the doing of that act as a matter of inference or implication drawn from conduct amounting to a "general permission or invitation" (in which event, actual knowledge "in fact" that a particular act will be done is of "little importance" or "unnecessary") or "wilful blindness" to the doing of an act comprised in the copyright (in which event, the conduct is of the character of a general permission or invitation by omission, by wilful indifference or wilful inactivity to the doing of the primary act comprised in the copyright). I deal later in these reasons with the elements of wilful blindness.. The implication of "a general permission or invitation" turns upon whether the authorising party has reasonable grounds to suspect that an act comprised in the copyright has or is likely to be done which is assessed upon all of the circumstances and is consistent with his Honour's reference in a later paragraph (Moorhouse at 21) where he cited with approval the judgment of Banks LJ in Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1 at 9 who reasoned that:
...The Court may infer an authorization or permission from acts which fall short of being direct and positive; …indifference, exhibited by acts of commission or omission, may reach a degree from which authorization or permission may be inferred. It is a question of fact in each case what is the true inference to be drawn from the conduct of the person who is said to have authorized…
246 In contrast, Gibbs J reasoned in Moorhouse at 12-13, after observing that the word authorize has its dictionary meaning of "sanction, approve, countenance", that:
…It can also mean "permit", and in Adelaide Corporation v. Australasian Performing Right Association Ltd. (1928) 40 CLR 481 "authorize" and "permit" appear to have been treated as synonymous. A person cannot be said to authorize an infringement of copyright unless he has some power to prevent it: Adelaide Corporation v. Australasian Performing Right Association Ltd. (1928) 40 CLR, [at 497-498, 503]. Express or formal permission or sanction, or active conduct indicating approval, is not essential to constitute an authorization; "Inactivity or 'indifference, exhibited by acts of commission or omission, may reach a degree from which an authorization or permission may be inferred'": Adelaide Corporation v. Australasian Performing Right Association Ltd. (1928) 40 CLR, [at 504]. However, the word "authorize" connotes a mental element and it could not be inferred that a person had, by mere inactivity, authorized something to be done if he neither knew nor had reason to suspect that the act might be done.
(citations added.)
247 Knowledge or reason to suspect without control is not sufficient: Australian Tape Manufacturers Association Ltd the Commonwealth (1993) 176 CLR 480; [1993] HCA 10 at 497 - 498per Mason CJ, Brennan, Deane and Gaudron JJ. In iiNet HCA at [50], French CJ, Crennan and Kiefel JJ understood Jacobs J in Moorehouse (at 21) to have found that "an implied invitation to infringe could constitute authorization despite the absence of knowledge of any act of infringement", recognising of course that in 1975 Jacobs J was writing before the introduction into the Copyright Act of the mandatory factors at ss 36(1A)(a) - (c) and ss 101(1A)(a) - (c). As further explained by Gummow and Hayne JJ in iiNet HCA at [128]:
In Moorhouse, Jacobs J adopted a passage in the judgment of Bankes LJ in Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1. This was to the effect that indifference, exhibited by acts of commission or omission, "may reach a degree" from which there may be inferred authorisation. It is upon this notion of indifference to the requisite degree on the part of iiNet that the appellants rely for the proposition that iiNet sanctioned, in the sense of countenanced, the Scheduled Infringements. The contrast between the notion of indifference, and the requirement by the United States Supreme Court in Metro-Goldwyn-Mayer Studios Inc v Grokster Ltd 545 US 913 (2005) of intentional inducement or encouragement of "contributory infringement", will be apparent.
(Citations added.)
248 What should not be overlooked is the further point made by French CJ, Crennan and Kiefel JJ in iiNet HCA at [52], when dealing with the relevantly indistinguishable text of s 101(1A) of the Copyright Act introduced into that Act by the Digital Agenda Act, that the statute at paragraphs (a) and (c) is derived from the reasons of Gibbs J in Moorhouse. It is that text which must be taken into account which primarily informs the drawing of an inference of authorisation from the facts of this case. Knowledge is relevant to consideration of the extent of the person's power to prevent the doing of the act comprised in the copyright.
249 In Roadshow Films Pty Ltd v iiNet Ltd (2011) 194 FCR 285; [2011] FCAFC 23 (iiNet FC), the Full Court dismissed the appeal from the decision of this Court with Emmett and Nicholas JJ in the majority (albeit with separate reasons) and Jagot J dissenting. Each judgment comprehensively reviewed what is required to establish authorisation in circumstances where copyright owners of cinematic and television works contended that iiNet, as an ISP, had received various notices from and on behalf of owners to the effect that some of its customers had used the service to infringe the rights of the copyright owners and where iiNet had power to terminate the customer accounts. By majority, this Court concluded that iiNet had not authorised the claimed acts of infringement by failing to exercise that power.
250 As the reasons of this Court demonstrate, knowledge of acts comprised in the copyright is a relevant matter although inactivity, indifference, or wilful blindness may be of such character and degree as to infer knowledge and conclude authorisation. Nicholas J from [757] analysed in detail when something less than actual knowledge of infringement may be sufficient to found the inference of authorisation in the context of the requirements of s 101(1A) of the Copyright Act. IiNet had received written notice from the Australian Federation Against Copyright Theft (the Federation) which provided that it was acting as an association whose members comprised various copyright owners and in that capacity was "currently investigating infringements of copyright in movies and television shows" by customers of iiNet through the use of the BitTorrent peer to peer protocol. The notice further provided that information gathered by the Federation indicated "numerous infringements of copyright in motion pictures and television shows" controlled by its members by customers of iiNet. The notice attached a spreadsheet that contained information relevant to the alleged infringing activities, which in some detail specified: the date of each infringement, the IP address used by an identified customer of iiNet and the motion pictures and television shows in which copyright was said to have been infringed.
251 Nicholas J reasoned that the notices were insufficient to fix iiNet "with knowledge that its network was being utilized by users of particular accounts to infringe the appelants' copyright in the identified films": [763]. His Honour continued:
I accept that they must have given the respondent reason to suspect that such infringements had occurred. However, knowing that specific acts of copyright infringement have occurred and merely suspecting they have occurred are quite different things. In the circumstances of the present case, the difference is of considerable importance.
252 The contrast with the facts of this case is self-evident. As explained below, commencing on 29 September 2016, the represented respondents were put on specific notice by the appellant that it suspected that copyright in DreamDesk had been infringed in the development of Toolbox. That factual difference is important to understand why Nicholas J drew the distinction that I have set out and explained in further detail at [764]:
It is important to recall, as the primary judge found, that the respondent has hundreds of thousands of customers and that each day it receives hundreds of notices issued by or on behalf of copyright owners. I do not think the respondent could reasonably be expected to issue warnings, or to terminate or suspend particular accounts, in reliance upon any such notice in circumstances where it has been told nothing at all about the methods used to obtain the information which lead to the issue of the notice. Nor should it be up to the respondent to seek out this information from a copyright owner who chooses not to provide it in the first place.
253 On the question of wilful blindness, Nicholas J said at [766]:
The appellants also submitted that the respondent was "wilfully blind" to the matters disclosed in the AFACT notices which I take to mean that the respondent deliberately abstained from inquiring into those matters for fear of what the inquiry might reveal: Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25 at 33 per Windeyer J. In determining whether a person should be taken to know of facts on the ground that he or she was "wilfully blind" to them, it is necessary to look to the motivation behind the failure to make inquiry. In R v Crabbe [1985] HCA 22; (1985) 156 CLR 464 at 470-471 the High Court approved the following statement by Professor Glanville Williams in Criminal Law: The General Part, 2nd ed. (1961) at 159:
A court can properly find wilful blindness only where it can almost be said that the defendant actually knew. He suspected the fact; he realised its probability; but he refrained from obtaining the final confirmation because he wanted in the event to be able to deny knowledge. This, and this alone, is wilful blindness. It requires in effect a finding that the defendant intended to cheat the administration of justice.
254 From [776], Nicholas J turned to that which he described as "the critical question", that is whether iiNet sanctioned, approved, or countenanced any primary act of infringement which had been found to have occurred. Neither sanction nor approval were made out on the unchallenged findings of fact of the primary judge: [777]. Turning to countenance, his Honour referenced the decision of this Court in Australasian Performing Right Association Ltd v Jain (1990) 26 FCR 53 at 61 where Sheppard, Foster, and Hill JJ observed:
The judgment of the members of the High Court in the Moorhouse case establishes that one of the meanings of the word "authorise" in the context in which it is here used is "countenance". It may be that not every act which amounts to the countenancing of something is an authorisation. Every case will depend upon its own facts. Matters of degree are involved. But the evidence in the present case reveals, in our opinion, a studied and deliberate course of action in which Mr Jain decided to ignore the appellant's rights and to allow a situation to develop and to continue in which he must have known that it was likely that the appellant's music would be played without any licence from it. It was within his power to control what was occurring be [sic] he did nothing at all. In those circumstances we have reached the conclusion that the appellant established that Mr Jain authorised the infringement of copyright in question …
and relevantly continued:
779 As the primary judge pointed out, "countenance" is sometimes defined to mean to sanction or favour, or to patronise or encourage. As I have said, I do not think the respondent's conduct fits those descriptions. It is likely, however, that the Full Court in Jain had in mind some of the broader definitions of that word which can include "to tolerate" or "to permit". These words are useful synonyms so long as it is recognised that the word "authorise" itself connotes a mental element involving the giving of a consent or permission of some kind or a carelessness from which such consent or permission may be inferred.
780 In Jain, it was the respondent's decision to ignore the copyright owner's rights that was central to the Full Court's finding of authorisation. I do not think it is correct to say that the respondent in the present case ignored the appellants' rights. The respondent was of the view that it was not required to act on the AFACT notices because they were based upon allegations that required further investigation which the respondent did not believe it was required to undertake. I do not infer from this that it was in the respondent's mind to consent to or to permit copyright infringement by iiNet users using the respondent's facilities.
781 I accept that a refusal by an ISP to act on infringement allegations made by or on behalf of a copyright owner may be evidence from which authorisation might be inferred. But that will only be so if the refusal is unreasonable. Whether or not a refusal is unreasonable must depend upon the circumstances in which it occurs including the nature and quality of the information upon which the ISP is requested to act by the copyright owner.
255 Emmett J approached the question of knowledge by focussing on the facts, primarily the numerous notices in writing from the Federation to iiNet which particularised the alleged infringements: [89]-110]. He recorded at [109] that iiNet "accepted that it had general knowledge of copyright infringement committed by its customers or that infringement was likely to occur on its facilities." In his Honour's view the question was "whether, given that knowledge, there were reasonable steps available to iiNet, once it received that knowledge, that would have prevented infringements occurring in the future": [110].
256 Jagot J, in dissent, differed from the majority only on the question of whether it was reasonable to expect iiNet, in response to the notices from the Federation, to take steps to warn its customers or to suspend or terminate accounts which turned upon her Honour's detailed analysis of the facts and application of s 101(1A): [389]-[449]. Her Honour concluded that "iiNet had evidence of widespread and repeat copyright infringements by its customers or persons its customers were allowing to use iiNet's internet service": [450].
257 What is clear is that each member of this Court in iiNet FC accepted that in order to establish that a person has authorised the doing of an act comprised in the copyright in the work and has thus infringed the copyright by exercising an exclusive right of the copyright owner in relation to that act, it is necessary to prove on the balance of probabilities that the person either had actual knowledge of the doing of the act or constructive knowledge of the act because the person had reasonable grounds to suspect the doing of the act or, the person exhibited wilful blindness to the doing of the act. I describe in these reasons these three possible states of knowledge as the "mental element". It is equally clear that it is not necessary to prove as an element of any one of the three states of knowledge constituting the mental element of the person, actual knowledge that the act constituted an "infringing act" or that the person had constructive knowledge of, or was wilfully blind to, the act being an "infringing act". The relevant fact comprehended by the mental element (as described) is the "doing of an act comprised in the copyright" taking into account the s 36(1A)(a) to (c) factors, not the legal character of the act.
258 Counsel for the appellant relied upon several decisions for the proposition that a mental element is not a precondition to inferring authorisation. The first is the reasoning of Jacobs J in Moorhouse at 21. As I have explained, that passage is concerned with drawing an inference of permission or invitation from all of the circumstances and must be read together with his Honour's later reasoning at 22 which speaks to the "unqualified" supply of library books and photocopiers as amounting to "an invitation to users of the library" to use the copiers "as they saw fit".
259 In Australasian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 210 ALR 244; [2004] FCA 1123 (Metro on George) at [16], Bennett J in her Honour's summary of the legal principles referenced the decision of Jacobs J in Moorhouse that knowledge is unnecessary. However, that statement cannot be read divorced from the facts (the music venue operator relied on a contract with promoters to the effect that it did not authorise individual performances) and her Honour's later finding at [44] that the respondent did not take steps to prevent or avoid infringing acts of performance.
260 Contrary to the appellant's submissions, Conti J in Microsoft Corporation v PC Club Australia Pty Ltd (2005) 148 FCR 310; [2005] FCA 1522 at [146]-[147] did not reason that knowledge is unnecessary. His Honour referenced the reasons of Gibbs and Jacobs JJ in Moorhouse and then in an orthodox way at [147] moved to a consideration of the particular facts by approaching the content of authorisation "…and its application to particular circumstances in a broad or comprehensive way".
261 Tamberlin J in Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1; [2005] FCA 972 at [78]-[79] referenced each judgment in Moorhouse and observed that the majority stated: "…knowledge was not relevant where a general permission or invitation existed to perform the acts of infringement…" This is consistent with my analysis.
262 In Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd (2014) 110 IPR 82; [2014] FCA 1366, Beach J analysed what is meant by authorisation from [389]. At [394] and after referencing Moorhouse and iiNet, his Honour stated that "For 'authorise', no intention to infringe or knowledge that the relevant acts would or would be likely to infringe is necessary." That sentence should not be understood divorced from the particular facts - whether officers of a corporation had, distinctly from the corporation, authorised the acts of infringement - and the immediately preceding paragraph where his Honour observed that an officer of a corporation "…merely by his position alone cannot be said to authorise", and "[e]ngaging or personally participating in relevant acts of infringement coupled with the power to prevent may be sufficient to demonstrate such sanctioning, approval or countenance."
263 The final authority relied upon by the appellant is Universal Music Australia Pty Ltd v Sharman Licence Holdings Ltd (2005) 222 FCR 465; [2005] FCA 1242 at [370] per Wilcox J. After referencing each of Gibbs and Jacobs JJ in Moorhouse from [367], his Honour said:
Knowledge, or lack of knowledge, is an important factor in determining whether a person has authorised an infringement. However, it is not a conclusive factor. Just as there may be authorisation without knowledge, mere knowledge is not enough. In Nationwide News Pty Ltd v Copyright Agency Limited (1996) 65 FCR 399 at 422, Sackville J (with whom Jenkinson and Burchett JJ agreed) said:
Nonetheless, a person does not authorise an infringement merely because he or she knows that another person might infringe the copyright and takes no step to prevent the infringement.
264 I do not interpret that paragraph as inconsistent with my reasons. His Honour at [369] cited the passage of Jacobs J in Moorhouse at 21: where a general permission or invitation to do an act comprised in the copyright may be implied.
265 As each of the cases to which I have referred demonstrate, close attention must be paid to the facts of this case and the way in which the appellant framed its case at trial. It was not the appellant's case that the represented respondents knew that the instruction contained in the letter of 3 August 2016 had not or would not be complied with. Nor was it the appellant's case that it should be inferred that the represented respondents granted a general permission or invitation to Mr Semmens to do acts comprised in the appellant's copyright. The case was that despite the instruction to Mr Semmens "…to build a web to print delivery system that does not breach any other companies IP or ownership, in particular DreamDesk or Campaign Track" and "[a]ll products used should be off the shelf products…", the represented respondents authorised the infringements for each of the reasons summarised by the primary judge at PJ [296]. The appellant's case focussed attention on knowledge "…that there was a real risk that, in developing the system, Mr Semmens might infringe intellectual property rights…" and that "…Mr Stoner had a heightened and constant awareness of the risk of infringement".
266 Moreover, in the written outline of opening submissions before the primary judge dated 7 July 2020, the appellant expressed its case against Biggin & Scott, RETB, Mr Stoner, and Ms Bartels in the alternative as follows:
They either deliberately procured, authorised or caused Mr Semmens to copy the DreamDesk system in developing the Toolbox system. Alternatively, in all the circumstances, they knew or had reason to suspect Mr Semmens would copy the DreamDesk system in doing so, and they took no or insufficient steps to prevent that from happening. They continued to exploit or enjoy the benefits of the Toolbox system after the allegations in this proceeding were made.
267 What is apparent from the reasons of the primary judge at [304]-[305] is that a case of the same type was asserted against DDPL and Mr Meissner.
268 Having framed each case in that way, it is hardly surprising that the primary judge reasoned that "…it might be difficult to infer authorisation where the relevant person 'neither knew nor had reason to suspect that the act might be done'": PJ [300].
269 When the issue of authorisation is examined through the lens of s 36(1A) of the Copyright Act, knowledge is plainly relevant in this case as to the extent of the power of each of the represented respondents that was open to be exercised, but was not, to prevent the infringing conduct of Mr Semmens pursuant to subparagraphs (a) and (c). Those persons cannot be expected to have taken reasonable steps "to prevent or avoid the doing of the act" by Mr Semmens unless each had knowledge of the particular acts, or a reasonable person with knowledge of the circumstances at the time would have had such knowledge.
270 For these reasons, I conclude that the primary judge did not err in the way in which his Honour framed the principle applicable to the circumstances of the case before him at PJ [300] or [304]-[305].
271 I next address the arguments on the third and fourth copyright authorisation contentions together as there is considerable overlap and the third, although it proceeds on the assumption that the primary judge erred in accordance with the first and second contentions, is not satisfactorily answered by my conclusion that the primary judge did not apply a wrong test. The core argument on these grounds is that the primary judge failed to draw the correct inference from all of the primary facts that he found. To understand that argument it is necessary to examine those facts in some detail, which I take from uncontested findings of the primary judge.
272 Mr Semmens reproduced the whole or a substantial part of the Source Code Works in developing Toolbox. Other developers of Toolbox (Mr Gallagher and Mr Zhang) reproduced a substantial part of the Source Code Works. Users of Toolbox (including Biggin & Scott) reproduced a substantial part of the Source Code Works in using Toolbox. Mr Semmens communicated a substantial part of the Source Code Works in developing Toolbox.
273 The Toolbox venture provided Biggin & Scott and its partners with a controlling interest, and Mr Semmens and his partners a minority interest. Biggin & Scott subsequently invested in the venture and instructed Mr Semmens in relation to the development of Toolbox. The directors of Biggin & Scott communicated with Mr Semmens and DDPL/JGM Advertising staff in the development of Toolbox, including in relation to features and testing. The Toolbox venture operated by way of a trust and RETB was the trustee. Mr Stoner participated in the venture as the CEO/director of Biggin & Scott and the sole director of RETB. Ms Bartels participated as a director of Biggin & Scott and the sole company secretary of RETB. Mr Stoner paid Mr Semmens' invoices in relation to development of Toolbox and Ms Bartels paid the Toolbox hosting invoice. DDPL and Mr Meissner participated in the development of Toolbox through DDPL and JGM Advertising, including by providing staff and resources used to develop the Toolbox system. DDPL and Mr Meissner had power to prevent the infringements, including by not engaging the DDPL and JGM Advertising staff to develop the Toolbox system, by not paying for that work and by not paying for the AWS invoices.
274 The represented respondents had relevant "relationships" with the primary actors. Biggin & Scott and Mr Semmens were in a contractual relationship and Biggin & Scott could instruct Mr Semmens. Mr Semmens was contracted to DDPL, and DDPL and Mr Meissner could issue instructions to Mr Semmens. The other Toolbox developers, Mr Gallagher and Mr Zhang, were contracted to or employed by DDPL or JGM Advertising, another company controlled by Mr Meissner and worked under Mr Semmens' supervision. Biggin & Scott and RETB had relationships with the users of Toolbox. Users included Biggin & Scott franchisees. Mr Stoner, Ms Bartels, and Biggin & Scott caused Biggin & Scott to move to Toolbox. Mr Stoner and Ms Bartels were available to persuade other customers to move to Toolbox.
275 On the question of whether the represented respondents took "steps to prevent or avoid" the primary acts, Biggin & Scott, RETB, Mr Stoner, and Ms Bartels did not conduct any independent audit or verification that Toolbox did not infringe another company's intellectual property rights, and DDPL and Mr Meissner took no steps to prevent or avoid the primary acts in the development of Toolbox or the moving of data away from DreamDesk.
276 Despite these findings, the primary judge was not satisfied that the appellant had made out its authorisation case for the reasons that he set out at PJ [297] (Biggin & Scott, Mr Stoner, RETB, and Ms Bartels) and PJ [305] (DDPL and Mr Meissner). Central to that reasoning is the finding that each trusted Mr Semmens not to infringe intellectual property rights; expressly relied upon him to not misuse intellectual property belonging to others; did not know or reasonably ought to have known that copyright works had been used in the Toolbox system; and Mr Meissner was "shocked" to discover that Mr Semmens had used Process 55 in the development of DreamDesk. The multiple findings of trust are significant upon this appeal as each quintessentially turns upon the assessment that the primary judge made of the evidence when given by the witnesses. The appellant does not challenge these findings. They are based on the following evidence.
277 After extracting a portion of the cross-examination of Mr Stoner at PJ [41], and in particular the following questions and answers,
You knew there was a problem with Process 55 and the use of Process 55 by DreamDesk, did you not? - At that stage, yes. On 3 August.
…
You appreciated that there was real risk that Mr Semmens might infringe another company'ss IP?---No. I would have to say, "No". I trust David
the primary judge found at PJ [43]:
In the context of the events which had occurred, including the fact that - to Mr Stoner's knowledge - Mr Semmens had admitted to using Process 55 in developing DreamDesk, it was hardly surprising that Mr Stoner would seek an assurance from Mr Semmens that he would not infringe the intellectual property rights of others in building a web to print delivery system. I am satisfied that Mr Stoner trusted Mr Semmens not to infringe the intellectual property rights of DDPL or Campaigntrack in developing the new system. I conclude that Mr Stoner did not want Mr Semmens to misuse intellectual property belonging to others in developing the new system.
278 Similarly, for Ms Bartels at PJ [45] the primary judge concluded that: "Ms Bartels did not want Mr Semmens to misuse intellectual property belonging to others in developing the new system."
279 At PJ [297(1)], his Honour reiterated his factual finding, in relation to the letter of 3 August 2016, that:
… it was hardly surprising that Mr Stoner would seek an assurance from Mr Semmens that he would not infringe the intellectual property rights of others in building a new web to print delivery system. I am satisfied that Mr Stoner trusted Mr Semmens not to infringe the intellectual property rights of DDPL or Campaigntrack in developing the new system. I conclude that Mr Stoner did not want Mr Semmens to misuse intellectual property belonging to others in developing the new system. I reach the same conclusion with respect to Ms Bartels.
280 Dealing next with Mr Meissner, at PJ [305(1)] he found, in accordance with the oral evidence, that he:
…was shocked to discover that Mr Semmens had used Process 55 in the development of DreamDesk. I do not accept that, having been surprised in that way, and having been effectively forced to sell the intellectual property rights in DreamDesk, he then participated in developing a new system, in competition with the purchaser of DreamDesk, in a way which infringed the intellectual property rights just transferred.
281 The appellant submits, despite these findings, that the primary judge wrongly ignored the preponderance of the contextual evidence and, if he had not, should have inferred that the represented respondents "had reason to suspect that Mr Semmens might copy DreamDesk or knew there was a real risk he might do so."
282 There are two difficulties with that submission. The first is that it fails to identify error by the primary judge. What is clear is that his Honour addressed all of the arguments put to him by the appellant seriatim at [296]-[297] and [304]-[305]. No relevant ground of appeal contends that he made a wrong finding of primary fact in any of those paragraphs. Rather, each turns upon a contention that the primary judge "should have concluded" or "ought to have concluded" differently. As is well understood, the appellate jurisdiction of this Court, conferred by s 24 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), is only exercisable where error is demonstrated: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [23] (Gaudron, McHugh, Gummow and Hayne JJ); and Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30 at [3] (Gyles, Stone and Buchannan JJ). Although this Court is in as good a position as the primary judge to draw inferences from the primary facts that were found (Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 (Lee) at [55] (Bell, Gageler, Nettle and Edelman JJ); and Jadwan Pty Ltd v Rae & Partners and Others (2020) 278 FCR 1; [2020] FCAFC 62 at [413]-[414] (Bromwich, O'Callaghan and Wheelahan JJ)), that does not relieve the appellant of the obligation to establish error. The trust findings cannot be reconciled with an inference of actual knowledge or reasonable grounds to suspect that the infringing acts of Mr Semmens might be done at least until the appellant made specific complaint. I deal with this below where I conclude that the primary judge with respect did err in overlooking evidence relevant from 29 September 2016.
283 The second is that difficulty is compound when one has regard to the way in which the case was pleaded and the way that the trial was conducted. The appellant pleaded its case in the form of the Further Amended Statement of Claim filed on 20 December 2018 (FASOC). That pleading adopted a consistent form on the question of authorisation. By way of example, when pleading infringement through the use of Toolbox at [53] it was said that Toolbox reproduced a substantial part of the DreamDesk database, including the source code. Paragraph [56] contended that the unlawful reproduction was authorised by Mr Semmens, Biggin & Scott and/or RETB by inferring that each "authorised one or more persons to use" Toolbox. For this contention, the pleading cross-referenced various introductory paragraphs to the effect that Mr Semmens was engaged as a contractor by or on behalf of Biggin & Scott, that he began development of Toolbox and that Biggin & Scott induced, procured, sanctioned, approved or countenanced the development of Toolbox. To that pleading, it was said that further particulars would be provided in the course of the proceeding.
284 Those particulars were in the form of the appellant's further and better particulars provided on 25 February 2019 and 17 July 2020. The first particularised, in some detail, the content of each database relied upon by the appellant as comprising its copyright works. The second provided particulars in letter form and was carefully cross-referenced to various paragraphs in the FASOC. But it did not further particularise the allegations at paragraph [53]. This allegation was simply denied by the represented respondents.
285 Mr Stoner was cross-examined on 28 July 2020. After giving the evidence that I have set out above, to the effect that he trusted Mr Semmens, which was not immediately challenged, he gave evidence as follows (from T532) and in relation to the letter of 3 August 2016:
And you didn't - at no time did you seek Mr Semmens' assurance after the letter of August 3, 2016 that he hadn't copied? - Well, my understanding is the Toolbox dashboard was a different product.
Mr Stoner, please answer my question. At no time did you ask Mr Semmens for any assurance that he had complied with your directive issued on 3 August 2016? - I probably asked him every two days.
Well, you - I put it to you, you did - you trusted him and you left it to him and you did not ask him for that assurance? - I asked him constantly.
Did you conduct an independent audit or verification that the two systems were different? - I've never seen the DreamDesk system. I've never seen their code.
286 Cross-examining counsel did not take up with Mr Stoner what questions were asked of Mr Semmens, when and what answers were provided. There was no re-examination of the witness. That is surprising when one turns to the way in which the appellant put its case in closing submissions to the primary judge. In the appellant's Note on Authorisation of Copyright Infringement of 20 May 2021, and in response to a question from the primary judge whether the letter of 3 August 2016 weighed against a finding of authorisation, the appellant submitted:
4.
…
(a) The "do not copy" instruction…[in the] 3 August 2016 letter…does not prevent a finding of authorisation because later circumstances established by the evidence after that date constitute a "studied and deliberate course of action in which [the respondents] decided to ignore the applicant's rights"
…
7. Here, each of the represented respondents: had the ability to control (in the relevant sense) Mr Semmens and the other developers Mr Gallagher and Mr Zhang in relation to developing the Toolbox system (and Mr Semmens controlled the other developers); the power to prevent infringement; relationships with Mr Semmens and the other developers; and took no steps to prevent infringement.
8. Rather than so doing, the represented respondents deliberately and clandestinely participated in that development and, as the timeline demonstrated, obfuscated their true intent in seeking to extend their ability to use the applicant's copyright works until their purpose was complete.
This contention was relied upon before us as founding the inference of authorisation for the entire period between 3 August 2016 and until the Toolbox system was shut down in June 2018.
287 That case was not pleaded. It was not fairly (or at all) put to any of the relevant witnesses for the represented respondents in cross-examination. In oral argument before us, counsel for the appellant further reframed the case as one of wilful blindness, which he accepted had not been pleaded but had been raised in closing submissions so that, as he expressed it, "our learned friend had an opportunity to respond to it, did not object to the way that was put, there was nothing then on the transcript to call his Honour's attention to the fact that this was a departure from the case as made."
288 What that case and those submissions overlook is that it is not open for this Court to draw the general inference, from unchallenged findings of primary fact, of serious and concealed misconduct where:
(1) it was not put to any witness that the letter of 3 August 2016 was a ruse to hide the true intent of the primary actors;
(2) the primary judge made the unchallenged findings that Mr Stoner trusted Mr Semmens not to breach intellectual property rights in developing the Toolbox system;
(3) Mr Meissner was shocked to learn that Mr Semmens had used Process 55 in developing DreamDesk; and
(4) the evidence of Mr Stoner that he sought constant assurances from Mr Semmens, was not challenged.
289 However, it does not follow that the appellant's authorisation case fails when a more discrete time period is examined. For the reasons set out above, on the facts of this case liability may attach to the represented respondents if it is open to infer that from an identifiable point in time they knew, or they should reasonably have known, that an infringing act was or was likely to be done by Mr Semmens, or the other developers, and then if they failed to take reasonable steps to avoid the doing of the act. Viewed in this way, the correspondence from 29 September 2016 becomes important.
290 The letter from Ms McLean to Mr Meissner of 29 September 2016 unambiguously expressed the appellant's concern that there had been "improper access and duplication of code which is intellectual property now owned by our clients" and that willingness to extend the DreamDesk licence was conditional upon the provision of undertakings by all parties that duplicated intellectual property would not be used and would be destroyed immediately. Curiously, the primary judge makes no reference to this correspondence. Biggin & Scott became aware of the letter and, on 3 October 2016, Mills Oakley Lawyers requested an extension to the DreamDesk licence period and confirmed that: "If your client is willing to grant the Extension, [Biggin & Scott] in good faith confirms that it will provide to your client the undertakings as set out in the attached document." Although the undertakings were not ultimately provided in that precise form, what is clear is that each of those parties were clearly on notice that the appellant was sufficiently concerned to protect its intellectual property that it was not prepared to grant a licence extension unless comprehensive undertakings were provided to it.
291 On 5 October 2016, Ms McLean provided the form of undertaking to Mr Meissner, which I have set out above, together with his response. Further, on that day she sent the same form of undertaking to Mills Oakley Lawyers and it was signed by the relevant parties but was not signed by Mr Semmens. That fact was notified by Ms McLean in an email of 7 October 2016 to Mills Oakley Lawyers and, later that day, she advised the firm that the licence would not be extended beyond 10 October 2016. The first reason given was that: "our client has not received an undertaking executed by David Semmins [sic]". The second was that the appellant had not received payment of the licence fee.
292 That correspondence was answered by Mills Oakley Lawyers on 9 October 2016 in an email purportedly marked "without prejudice" but about which no objection as to its admissibility was taken at the trial. That email was sent on the instruction of Mr Meissner. It stated that Mr Meissner was willing and able to advance payment for the licence fee upon confirmation as to the amount owing and was "comfortable for Dream Desk to continue to operate to 17 October 2016", and it sought urgent advice as to the position of the appellant and stated that in "all respects, Mr Meissner and Biggin & Scott Corporate Pty Ltd reserve their rights".
293 Approximately one hour later, Ms McLean responded to Mills Oakley Lawyers. She stated that she would convey the correspondence to her client and would take instructions about payment of the licence fee. She continued:
In any event, what your email does not address, and nor has Mr Meissner in any satisfactory fashion, is the request for an undertaking to be provided by Mr Semmens. Our client is already aware of activity that has given rise to the necessity to seek the undertakings that have been requested. If no questionable activity is anticipated, then we would have expected that there would have been absolutely no resistance to what was sought. That is not the case and accordingly, our client has made a decision based on the response received.
294 On 10 October 2016 at 5.45pm, Ms McLean sent an email to Mills Oakley Lawyers. She attached an email sent earlier on that day to Mr Meissner to the effect that the appellant required payment of the of the monthly licence fee "immediately", pressed for an executed copy of the undertaking signed by Mr Semmens and advised that her client will "suspend the Dream Desk licence until such time as they are both provided." She stated that her correspondence to Mr Meissner reflected her instructions and was self-explanatory.
295 Mr Meissner in an email to Ms McLean of 10 October 2016 sent at 3.55pm, advised that he was "more than happy to pay the fee [t]oday" and further stated:
As I have no control over David Semmins [sic] he has to get legal advice re his position. He is a contractor to DreamDesk and as such has not been a party to any Agreements at all.
296 What is apparent from this correspondence is that access to the DreamDesk system was denied by the appellant on the afternoon of 10 October 2016. Ms McLean unambiguously conveyed the appellant's position in her email sent at 5.45pm on 10 October 2016, to Mills Oakley Lawyers that access to the DreamDesk system would not be reinstated absent receipt of payment for the licence fee and delivery of the signed undertaking sought from Mr Semmens.
297 Following the termination of access to the DreamDesk system for Biggin & Scott, the firm immediately began to use the Toolbox system. Ms Bartels in an email sent at 6.59pm on 10 October 2016, advised all Biggin & Scott franchisees that access to the DreamDesk system "has been shut down without notice tonight" and that the Toolbox system would be used in place of it. Amongst other things, she stated: "things very quickly got legal with all kinds of threats and requests that we simply cannot agree to".
298 As I have noted, the independent expert Mr Geri authored his preliminary report on 19 January 2017 and it was provided to Mills Oakley Lawyers on that day. In quite direct terms he stated his opinion by reference to a "high probability" that the intellectual property of the appellant had been used in development of the Toolbox system. Despite that opinion, and despite the terms of the undertakings given by the represented parties, Biggin & Scott continued to use the Toolbox system and RETB continued to provide access to it. The only evidence as to the taking of any steps to ascertain if Mr Semmens had committed infringing acts was the general and unexplored evidence of Mr Stoner in cross-examination to the effect that he sought assurances from Mr Semmens.
299 Unsurprisingly, Ms McLean in her email to Mills Oakley Lawyers of 19 January 2017, requested "that your clients immediately shut down and cease use of the Real Estate Toolbox system. We ask that you provide us with confirmation that the Real Estate Toolbox system has been shut down and will not be used within 24 hours of the receipt of this email." Failing that, a threat was made that the client's instructions would be sought upon an application for injunctive relief. Confirmation was not provided. Instead, Mills Oakley Lawyers, by email of 20 January 2017, sought clarification of the intellectual property asserted to be owned by the appellant together with proof of ownership and evidence as to why damages might not be an adequate remedy in the event that breach was established.
300 On 2 February 2017, Mills Oakley Lawyers observed that the requested information had not been provided and that "due to your client's failure to provide the requested information, we infer that your client does not have any evidence to support the serious allegations made against our client." In the concluding paragraph it was said:
Accordingly, our client's position remains as set out in previous correspondence, that is, our client denies that your client has the intellectual property rights that it has asserted and also denies that it has breached your client's rights.
301 Why it was appropriate to make that assertion, in the light of the fact that the undertakings had previously been provided, was not explained by the represented respondents. On 3 February 2017, Ms McLean responded, and in some detail. She recited the history between the parties including the prior agreements entered into in the form of the DreamDesk sale agreement. She made the obviously correct observation that it was "curious" that the represented respondents required proof of the intellectual property owned by the appellant:
…in circumstances where your client has, at all times been aware of and acknowledged our client's rights as an owner of the intellectual property relating to the Dream Desk system and that has been confirmed to your client by the director of Dream Desk Pty Ltd, Mr Meissner, we do not consider it to be necessary to provide you with a copy of any of the agreements which relate to be intellectual property which it now owns.
Her correspondence continued:
We have now provided you a response to all of the queries that you have raised. Our client continues to assert that your client has flagrantly infringed our client's copyright. Our client refers to and relies upon the terms of the undertaking provided. Our client also considers your clients to be in breach of the undertakings provided.
302 A further demand was made to immediately cease the use of and shut down access to the Toolbox system with advice as to the taking of those steps by no later than 3.00pm on 6 February 2017. Use did not cease and that confirmation was not provided. Rather, in a short email sent at 2.07am on 3 February 2017, Mills Oakley Lawyers advised that instructions were being sought and that a response would be provided "as soon as possible". By 7 February 2017, no response had been provided and Ms McLean sent further email correspondence to Mills Oakley Lawyers and advised that she would take instructions in relation to the commencement of a proceeding.
303 On 9 February 2017, Mills Oakley Lawyers provided a detailed response. In short, Biggin & Scott denied the request that Mr Geri be provided with additional access to the Toolbox system for the purposes of his independent investigation, asserted that no proof of ownership had been provided for the intellectual property in the DreamDesk system, noted the absence of registered trademarks, patents or design rights in that system and positively asserted that Toolbox "does not use the source code that is used in the Dream Desk system." In general terms the claims of the appellant were denied with the usual threat that "our client will defend any proceedings or complaints made against it vigorously… And will rely on this and previous correspondence on the question of costs…"
304 The appellant commenced this proceeding on 18 May 2017. In June 2018, RETB ceased to trade and use the Toolbox system.
305 With respect to the otherwise comprehensive analysis of the primary judge, his Honour did not analyse all of this evidence on the authorisation case. That is largely because counsel did not focus sufficient attention on the importance of this evidence. That omission was the subject of questions from this Court upon the hearing of this appeal. An obvious concern is whether the appellant seeks to make out a case on appeal which it had not fairly put at the trial. It is of course elementary that a party is bound by the conduct of its case at trial and, save in exceptional circumstances, is not permitted to raise a new argument on appeal which could possibly have been met by evidence below: Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33.
306 I have comprehensively considered all of the material to which our attention has been drawn on these matters and for the following reasons I am satisfied that the appellant's authorisation case against the represented respondents case included the assertion that from 29 September 2016 those parties either knew, or had reason to suspect, that Mr Semmens either had or would likely copy aspects of the DreamDesk data or source code and they took no or insufficient steps to prevent that conduct.
307 I commence with the pleadings. The appellant in the FASOC referenced, though often obliquely, the undertakings of 6 October 2016 as evidence of authorisation by the represented respondents and in support of the contention that their conduct was flagrantly in breach of the appellant's copyright. At [69] the appellant pleaded that "unless restrained", RETB, Biggin & Scott, Mr Semmens, Mr Stoner, and Ms Bartels "will continue [to] infringe" the appellant's copyright and, by way of particulars, referenced the appellant's requests to cease infringement (which can only be a reference to the several emails from Ms McLean to Mills Oakley Lawyers) and the fact that "previous undertakings" had not been complied with.
308 On the separate misuse of confidential information claims, the appellant pleaded at paragraph [112] that since at least 13 October 2016, RETB, Biggin & Scott, Mr Stoner, and/or Ms Bartels "knew or ought to have known that the source code for the DreamDesk website was used in the development of and/or continues to be used" in Toolbox. The particulars to that pleading asserted that such knowledge arose "at least by reason of", the correspondence of Ms McLean dated 13 October 2016, 3 and 19 January 2017, and the preliminary report of Mr Geri. The same allegation was made against those parties in relation to the database tables. A less specific allegation was pleaded against Mr Meissner and DDPL to the effect that each "knew or ought to have known" that aspects of the DreamDesk database had been reproduced by Mr Semmens.
309 In their respective defences, the represented respondents simply denied these allegations.
310 Mr Stoner made an affidavit on 12 December 2019. At [50] he gave evidence about a meeting on 8 August 2016 with Mr Semmens. His evidence included this:
I said to David words to the effect that he 'must develop a system that did not use anything owned by CT or Dream Desk or anyone else'…David told me that the system he had been working on did not use anything that CT could possibly own. While I had my reservations, I decided to explore this option based on the assurance that David had given to me.
At [62] Mr Stoner mentioned the fact that he gave the undertaking of 6 October 2016, but did not give any evidence as to what (if any) inquiries he made of Mr Semmens (or anyone else) before he signed it. At [73] he stated his understanding that Toolbox "did not use or incorporate any information or data owned by CT or Dream Desk or anyone else." His affidavit did not mention any of the correspondence exchanged between the solicitors commencing on 29 September 2016, the preliminary report of Mr Geri or what (if any) steps he took in consequence of that exchange of correspondence or that report to determine for himself whether the claimed breach of copyright was true.
311 Ms Bartels also made an affidavit on 12 December 2019. She gave evidence that she did not provide any instruction to Mr Semmens but trusted him "not to make a mistake". She explained that when she signed the undertaking her state of mind was that "we were doing nothing wrong". She asserted that she did not authorise or give approval to Mr Semmens to copy any information or data. Like Mr Stoner, her affidavit did not deal with any of the solicitor's correspondence commencing on 29 September 2016, the preliminary report of Mr Geri and she did not give evidence as to the taking of any steps by her in consequence of the content of that correspondence or report.
312 Mr Meissner made an affidavit on 20 December 2019. Apart from the general statement that "I have never used, nor authorised the use of, nor been aware of the use of by anyone other than the purchasers of the DreamDesk platform from the moment that it was finalised and handed over in early October", he did not address at all the circumstances which caused him to give the undertakings, the subsequent correspondence between the solicitors or the preliminary report of Mr Geri. Like each of the other witnesses, he did not say that he took any steps to investigate the allegations that were made about breach of the appellant's copyright from 29 September 2016.
313 As I have observed, the appellant filed an outline of opening submissions on 7 July 2020 which at paragraph [22] (repeated at [95]), stated that its case against Biggin & Scott, RETB, Mr Stoner and Ms Bartels was put on two alternative bases: one deliberate, in the sense of intentional and express authorisation and the other that in all of the circumstances they knew or had reason to suspect that Mr Semmens would commit infringing acts and they took no or insufficient steps to prevent his conduct.
314 In an exchange with counsel during opening submissions, the primary judge expressed his Honour's understanding of the alternative submission to be that the respondents were "wilfully blind". That case was not pleaded.
315 The Court's attention was drawn to extracts of the cross-examination of the witnesses (T457-532) in response to our concern that the alternative case, whether expressed as indifference or wilful blindness, might not have been fairly put at the trial. Having reviewed that evidence the most that can be said is that counsel for the appellant drew to the attention of Mr Stoner the letter of 29 September 2016, asked questions about whether he had any discussions with Mr Semmens about giving the undertakings but did not directly put that he was on notice of the appellant's claims of copying, from defined points in time, and that in consequence he failed to make inquiries to determine the true position, save for the proposition that: "At no time did you ask Mr Semmens for any assurance that he had complied with your directive issued on 3 August 2016?" to which Mr Stoner responded, "I probably asked him every two days". In response to the next question that Mr Stoner trusted Mr Semmens and "left it to him", Mr Stoner answered "I asked him constantly". As I have observed, that answer was not pursued further by counsel.
316 The attention of Mr Stoner was also drawn to the preliminary report of Mr Geri but the questions focused on a separate issue, namely whether Mr Stoner had truthfully stated that the report "had found no issues" relating to the Toolbox system. Once again it was not put to Mr Stoner that he must have been alert at least to the risk that Mr Semmens had copied and had not been truthful in providing the unspecified assurances to Mr Stoner. Nor were questions put to expose what, if any, steps were open to be taken by Mr Stoner to investigate the applicant's claims and why, apparently, little or nothing was done between 19 January 2017 and June 2018.
317 Mr Stoner was not cross-examined to the effect that he was wilfully blind to the true facts. There was no relevant cross-examination on these issues of Ms Bartels or Mr Meissner.
318 Apart from the somewhat oblique reference by the primary judge to the un-pleaded case of wilful blindness, there is no reference to that case in any of the various extracts of written or oral opening and closing submissions of the appellant, in the supplementary material filed as an addition to Part C of the appeal book and in response to our request for provision of material to that effect.
319 Moreover, in closing oral submissions, counsel for the appellant clearly articulated that "if there was any doubt" the appellant's case was that "at least by no later than 29 September, in the case of DDPL and Mr Meissner, and no later than 3 October 2016" the authorisation case was made out despite the instruction contained in the letter of 3 August 2016. As counsel expressed it, that correspondence: "isn't sufficient to remove any liability from what then happened later and then became known." For that proposition counsel referenced Metro on George. In that case the respondent operated a live music venue. A Mr Doughty was a director of the respondent corporation. At a point in time the corporation had a licence from the applicant. Disputes arose and the licence was subsequently terminated. The applicant commenced proceedings for a declaration that the respondent had infringed copyright in certain musical works by permitting live performances at its venue. A defence relied upon was that the respondent had entered into contracts with promoters which contained a term that it did not authorise the performances and the promoters warranted that all performances would comply with the Copyright Act. Despite those terms, her Honour concluded that the respondents had authorised the infringements in that they failed to take reasonable steps to prevent or avoid the public performance of works without a licence from the copyright owner. Counsel for the appellant specifically relied upon the reasoning of her Honour at [75]-[76] where she concluded that:
Mr Doughty knew at the relevant times that the bands which performed at Metro were likely to perform songs in their own repertoire and that APRA asserted that it owned the performing rights in practically all such works…
I am satisfied that Mr Doughty was aware that infringements of APRA's copyright would take place if the promoters did not obtain an APRA licence. He was also aware that Metro had no system in place to ensure that promoters did obtain such a licence.
320 Her Honour also found that Mr Doughty "was indifferent to the risk of infringement" upon which counsel for the appellant at trial placed reliance in support of the submission that Biggin & Scott, RETB, Mr Stoner, and Ms Bartels were each indifferent to the likely risk of infringement by reason of the content of the correspondence sent by Ms McLean on 29 September 2016, but failed to take any reasonable steps to investigate the claims or to put an end to the conduct of Mr Semmens. Once again, this material does not reference any case of wilful blindness by any of the represented respondents. For these reasons I conclude that it is not open to the appellant to rely upon a case of wilful blindness in this appeal. However, the same cannot be said of the appellant's authorisation by indifference arguments despite the further submission of counsel for the represented respondents that we should not entertain these arguments for two reasons. One, the point is new and there are contested questions of fact that arise. I do not accept that submission. It is clear from my analysis that the argument is not a new one which has been raised for the first time upon appeal. All of the evidence was before the primary judge, the indifference argument was adequately formulated in submissions and whether the point was fairly or adequately put to the witnesses is in my view, in the context of this case, relevant only to the question whether it is open to to draw an inference in favour of the appellants authorisation case, and despite the findings of the primary judge that the represented parties trusted Mr Semmens and some of them were assured by him that he had not copied material the subject of copyright claims by the appellant.
321 The other is that the notice of appeal did not contend error by the primary judge in overlooking this evidence which then caused him to wrongly dismiss the authorisation claim. That is incorrect. The notice of appeal asserts error by the primary judge in failing to infer authorisation by indifference to infringement of the appellant's copyright rights by reference to the correspondence from 29 September 2016 and the failure of the represented respondents to take any meaningful steps to ascertain the true position; in particular grounds 1(b) (xi) and (xii), 2 (b)(i) and (ii), 3 (b)(i), 3 (c) (i) (4) and (ii) and 7 (b) and (c). Further, the authorisation by indifference case was fully explored in argument before us. The fact is that the primary judge not only did not mention the correspondence of 29 September 2016, but also did not mention the preliminary report of Mr Geri or all of the correspondence between Ms McLean, Mr Meissner and Mills Oakley Lawyers. In my respectful opinion, hat was an error.
322 I have carefully considered the draft reasons of Cheeseman J in which her Honour concludes that the appellant has not established reviewable error by the primary judge on the implied authorisation case. I respectfully disagree. For the detailed reasons that follow, I am satisfied that the evidence on this case was "important or critical to the proper determination of the matter and [was] not referred to by the trial judge": Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443, per Meagher JA. Consequently, the primary judge with respect did not draw the correct inference that was open, despite his Honour's credit findings: TechnologyOne Ltd v Roohizadegan [2021] 309 IR 262; [2021] FCAFC 137 at [107]-[113] Rangiah, White and O'Callaghan JJ.
323 In this case, the primary judge did not proceed by weighing his general findings of credit with the uncontested evidence which ought to have caused a reasonable person to suspect that Mr Semmens had infringed copyright in the DreamDesk system. He did not then address what a reasonable person would have done by way of steps to prevent the acts of infringement. The appellant's case was that the represented respondents either knew or had reason to suspect that Mr Semmens had or would copy from the DreamDesk system. What the represented respondents believed based on what they were told by Mr Semmens is relevant but not dispositive if, in all of the circumstances, a reasonable person would have had reason to suspect that infringements had occurred. That case judged by the entirety of the evidence should have been analysed by the primary judge together with his credit findings in order to draw the correct inference. Viewed in this way, the credit findings of the primary judge do not prevent this Court from performance of its review function: Lee at [55]-[56], Bell, Gageler, Nettle and Edelman JJ.
324 Having identified error by the primary judge, I deal next with what inference is open to be drawn from all of the evidence that was before the primary judge. The finding by the primary judge that Mr Stoner and Ms Bartels trusted Mr Semmens not to infringe the intellectual property rights of DDPL, or the appellant in developing the new system, is quintessentially a finding of fact that turns upon the advantage enjoyed by him in observing each witness and in considering the entirety of the material placed before him upon the trial. Likewise, the finding that Mr Meissner was shocked to discover that Mr Semmens had used Process 55 in the development of DreamDesk is in my view not one that is open to challenge upon this appeal. Those findings are not "glaringly improbable", " contrary to incontrovertible facts or uncontested testimony" or "contrary to compelling inferences": Lee at [55]; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [33], Gageler J; ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439; [2020] HCA 34 at [62], Nettle J.
325 In my view those findings by the primary judge stand firmly against the drawing of an inference that the represented respondents (or any one or more of them) either knew, or that they should reasonably have known, that any of the works that had been reproduced in the Toolbox system or that they knew, or should reasonably have known, that use by users of that system might involve a reproduction of a substantial part of the DreamDesk system, to use the language of the primary judge at PJ [300]. The correspondence of 3 August 2016 expressly directed Mr Semmens not to infringe intellectual property rights and to only use "off the shelf products" in developing the new system. Although Biggin & Scott, and necessarily Mr Stoner and Ms Bartels, had the power to prevent Mr Semmens from infringing the copyright of the appellant, such as by terminating the joint venture and his engagement as the developer, those persons had no reason to consider the exercise of that power between 3 August 2016 and 29 September 2016 because of that express direction and the trust they placed in Mr Semmens to abide by it. Additionally, one must accept the unchallenged evidence of Mr Stoner that he repeatedly sought assurances from Mr Semmens (even though the date of each assurance was not explored nor the content of what was said) and in combination with the instruction of 3 August 2016, it is clear that he did not have actual knowledge and I am not satisfied that he should reasonably have suspected that Mr Semmens had failed to comply with his express direction.
326 Nor am I satisfied that the nature of the relationship between Biggin & Scott, Printco, ABC, and Mr Semmens as joint venturers on and from 9 September 2016 required Biggin & Scott to take any further step to ensure that Mr Semmens had not and was not breaching the intellectual property rights of the appellant until 29 September 2016. Ordinarily, the parties to a joint venture are fiduciaries (See: United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49), with mutual trust and honesty at its core, which in this case strengthens the conclusion of the primary judge that Biggin & Scott and Mr Stoner were entitled to place trust in the assurances that had been given by Mr Semmens.
327 It follows from these conclusions that Biggin & Scott, RETB, Mr Stoner, and Ms Bartels did not know and were not obliged to take reasonable steps to avoid infringement of copyright by Mr Semmens prior to 29 September 2016 for the reason that objectively there was no reason to doubt that Mr Semmens had not (or would not) comply with the direction of 3 August 2016 and nor was there any reason to doubt the truthfulness of the assurances that he gave to Mr Stoner.
328 As for Mr Meissner and DDPL, I do not consider that the finding of the primary judge at PJ [305(1)] that Mr Meissner was "shocked to discover that Mr Semmens had used Process 55 in the development of DreamDesk" as either contrary to compelling inferences or glaringly improbable. On the evidence, Mr Meissner learnt that fact on or around 28 May 2016. For essentially the same reasons that I have set out in relation to the other respondents, I am not satisfied that Mr Meissner either knew, or ought reasonably to have known, that Mr Semmens had infringed the copyright of the appellant in developing the Toolbox system until 29 September 2016. The primary judge found that Mr Semmens was not an employee of DDPL or Mr Meissner and that finding is not challenged on this appeal. Mr Semmens was a contractor to DDPL. The primary judge did not accept that "…instructions were issued to Mr Semmens in terms, express or implied, which requested or required him to infringe any person's intellectual property rights." His Honour also found: "I conclude that it was understood by Mr Semmens that Mr Meissner wanted no such thing to occur given the events which had unfolded before the development of the Toolbox system": PJ [305(5)]. Those findings of fact were clearly open to the primary judge. Further, his Honour found that DDPL and Mr Meissner did not take steps to prevent or avoid infringements by Mr Semmens for the reason that Mr Meissner "…did not know of any events which called for his (or DDPL's) intervention": PJ [305(6)]. In my view that finding was also open to his Honour.
329 On those findings, although DDPL had power to terminate the consultancy of Mr Semmens, it was not reasonable in my view for that power to be exercised because Mr Meissner did not know (and reasonably ought not to have known) of the happening of any event which called for its exercise at least until the question of the undertakings was raised in September 2016.
330 However, I have reached a different conclusion to that of the primary judge on the authorisation case within the period 29 September 2016 to June 2018 and I am satisfied that the appellant has established error by the primary judge in failing to make findings of fact upon the evidence within this period.. The correspondence from Ms McLean to Mr Meissner and DDPL of 29 September 2016 put those parties on notice (and shortly thereafter the other parties) that the appellant asserted breach of its intellectual property in the DreamDesk system. That claim when read with the requirement to provide certain undertakings, in order to extend the licence period for one week from 3 October 2016, reasonably should have caused each to make specific inquiries of Mr Semmens in order to be satisfied that he had not copied, and was not intending to copy, any of the intellectual property of the appellant in development of the DreamDesk system. But Mr Meissner made no inquiry to that effect at that time. Further, a reasonable person in the position of Mr Meissner when asked to give an undertaking that intellectual property owned by the appellant "will not be used for any purpose" and that any intellectual property "already obtained or duplicated would be destroyed immediately" would not in my view have agreed to each of those requirements absent detailed inquiry as to whether it was appropriate to undertake to the appellant in the terms requested.
331 Mr Meissner, in his response of 30 September 2016, agreed "in principal" [sic] without making any disclosed inquiry of Mr Semmens and, quite disingenuously in my view, claimed: "I do not understand your reference to another company, and your involvement statement." A reasonable person in the position of Mr Meissner who lacked that knowledge ought to have at least sought further details from Ms McLean in order to be satisfied that the requested undertakings could appropriately be given.
332 As to Biggin & Scott, RETB, Mr Stoner and Ms Bartels, apart from the evidence of Mr Stoner that he sought unspecified assurances from Mr Semmens and trusted him not to copy the intellectual property of the appellant, no specific inquiries were made before Mills Oakley Lawyers advised that their clients would provide the undertakings. For the same reasons that I have given in relation to Mr Meissner, acting reasonably at the time Biggin & Scott, RETB, Mr Stoner, and Ms Bartels were clearly on notice of a claim of copyright infringement on or shortly after 29 September 2016 and correspondingly ought to have more carefully and fully investigated that claim at that time before agreeing to give undertakings on 6 October 2016.
333 Ms McLean, in her correspondence of 9 October 2016 to Mills Oakley Lawyers, noted the failure of Mr Semmens to give the requested undertakings, restated her client's assertion that it was aware "of activity that has given rise to the necessity to seek the undertakings" and that "if no questionable activity is anticipated then we would have expected there would have been absolutely no resistance to what was sought." The course of the correspondence between 29 September and 10 October 2016 plainly fixed the represented respondents with knowledge that the appellant had grounds to assert that its intellectual property rights had been infringed. Acting reasonably and having been put on notice to that effect, the represented respondents should have been proactive. A reasonable person in the position of each of the represented respondents (they all had the same solicitor from 6 October 2016) knowing that Mr Semmens had failed, for whatever reason to give the requested undertakings, in my view ought to have made genuine and specific inquiry from Mr Semmens as to why he had not given the undertakings and if it was because the copying allegations were true. It is no answer to these propositions to point to the fact that the represented respondents gave the requested undertakings on 6 October 2016. To the contrary, in my view a reasonable person in the position of the represented respondents would not have given the comprehensive undertakings in relation to the intellectual property of the appellant in the DreamDesk system, with the consequential exposure to potential liability, without making specific inquiries in order to be satisfied that it was safe to give the undertakings. For that reason, and to the extent to which counsel for the represented respondents submitted that giving the undertakings was a reasonable step, it was insufficient in the circumstances of this case.
334 It was also put to us by counsel for the represented respondents that each of those parties acted reasonably and appropriately in agreeing to the appointment of the independent forensic IT expert in November 2016. I accept that step was appropriate, but in my view it was taken at too late a point in time. It will be recalled that Ms McLean repeatedly stressed in her correspondence the importance of receiving the undertaking signed by Mr Semmens, asserted that his failure to give it was unsatisfactory and that it was evidence of "questionable activity". Mills Oakley Lawyers did not ever directly address those matters. It is also the case that the Toolbox system was used, clearly for commercial purposes, at all times on and from 10 October 2016 and where notice had clearly been given to the represented respondents that it likely contained source code (and other intellectual property) owned by the appellant. The inference that I draw is that the represented respondents were content to be, at best indifferent, to the rights of the appellant, which they subjugated to the economic interests of Biggin & Scott, RETB and DDPL. A reasonable person in the position of the represented respondents would reasonably have suspected that Mr Semmens had engaged in, and likely was intending to engage in, acts which infringed the appellant's copyright.
335 Moreover, and more compellingly, the represented respondents were on actual notice of the "high probability" that intellectual property of the appellant in Campaigntrack had been unlawfully copied and used in the development of Toolbox from the time of receipt of the preliminary report of Mr Geri on 19 January 2017. In serving that report, Ms McLean very politely requested that "your clients" (which at that point were each of the represented respondents of Mills Oakley Lawyers) should "immediately shut down and cease use of" the Toolbox system. That did not occur. Instead, Mills Oakley Lawyers engaged in a series of correspondence, commencing on 20 January 2017, which was obstructive and objectively must have been intended to delay the appellant in the prosecution of its claims.
336 With respect to the primary judge, his Honour failed to interrogate the authorisation claims of the appellant through the lens of the correspondence and the conduct of the represented respondents from 29 September 2016. With respect to the primary judge, in my view that was an error. Accepting, as I am bound to, each of the findings of the primary judge to the effect that Mr Stoner trusted Mr Semmens and Mr Meissner was, ultimately, shocked to learn that Process 55 had been used in the development of Toolbox, does not preclude the drawing of the necessary inferences by me upon the appellant's authorisation case and by reference to all of the evidence that was before the primary judge. The trust that Mr Stoner placed in Mr Semmens and the state of mind of Mr Meissner do not answer the implied authorisation case that was put to the primary judge and which his Honour correctly understood in the expression of his Honour's reasons at PJ [300] that the represented respondents had reason to suspect, within the time frame that I have identified, that Mr Semmens had, without the licence of the appellant, infringed its intellectual property rights in the DreamDesk system by copying components of it in the development of Toolbox.
337 Addressing specifically the factors that must be taken into account as required by s 36(1A) of the Copyright Act, the primary judge found, and I accept, that DDPL and Mr Meissner "had power to prevent the infringements, including by not engaging the DDPL and JGM Advertising staff to develop the Toolbox system, by not paying for that work and by not paying for the AWS invoices": PJ [305(4)]. As for Biggin & Scott, there was a contractual relationship with Mr Semmens as found by the primary judge at [297(3)], but in addition Biggin & Scott and Mr Semmens proposed to be and became joint venturers, and in that case there was clearly power that was open to be exercised by Biggin & Scott by putting an end to the joint venture. Although the exercise of either of those powers might not have prevented Mr Semmens from continuing on his own account to copy and use the intellectual property of the appellant, termination of the contractual and joint venture arrangement would at the very least have significantly disrupted the primary infringements of Mr Semmens in his continued development of the Toolbox system for ultimate commercial use. Indirect power of that character is relevant, although clearly not dispositive: iiNet HCA at [69]-[70], [139].
338 I have comprehensively set out the nature of the relationship between Mr Semmens and the represented respondents. As contracting parties and, in the case of Biggin & Scott, joint venturers, the represented respondents stood to gain financially from the development of the Toolbox system. As the letter of 3 August 2016 demonstrates it was open to Biggin & Scott to give directions to Mr Semmens. He was accountable to his contracting counterparties, Biggin & Scott and DDPL. The primary judge found, and I agree, that DDPL and Mr Meissner could also issue instructions to Mr Semmens: PJ [305(5)]. Overall, the relationship between Mr Semmens and the represented respondents was such that how Mr Semmens went about his task of constructing the Toolbox system was capable of being directly influenced by the represented respondents. After those parties were put on specific notice of potential infringement, and the fact that Mr Semmens had failed to give the undertaking, steps ought to have been taken within the context of that relationship to "get to the bottom of the allegations" and, if found to be substantiated, to end the contractual and commercial relationship with Mr Semmens.
339 The final statutory factor is whether the represented respondents took any (and if so what) reasonable steps to prevent or avoid the doing of the infringing acts by Mr Semmens. For the detailed reasons that I have set out, they did not after 29 September 2016.
340 Whether a person has authorised the doing of any act comprised in the copyright of a copyright owner is, necessarily, a fact sensitive and fact intensive inquiry. Authorisation takes many and varied forms and is insusceptible of clear definition in abstract which point was made by Herring CJ in Winstone v Wurlitzer Automatic Phonograph Company of Australia Pty ltd [1946] VLR 338 at 345:
It is, of course, a question of fact in each case what is the true inference to be drawn from the conduct of the person said to have authorised the act complained of. And as the acts that may be complained of as infringements of copyright are multifarious, so, too, the conduct that may justify an inference of authorisation may take on an infinite variety of differing forms. In these circumstances any attempt to prescribe beforehand ready-made tests for determining on which side of the line a particular case will fall, would seem doomed to failure. So, too, will it be impossible to determine any particular case by reference merely to the relationship that may exist between the person said to have authorised the act complained of and the actual infringer, though no doubt in the case of principal and agent an authorisation may be more readily inferred then in a case of vendor and purchaser. In the end the matter must in each case depend on a careful examination of all the relevant facts.
341 That reasoning was endorsed in iiNet HCA at [125], Gummow and Hayne JJ. It should also be understood that I have considered the statutory factors at s 36(1A) of the Copyright Act as interrelated questions. My conclusion, in consequence of all of the matters that I have considered, is that the primary judge erred in not concluding that the appellant's authorisation case was made out against each of the represented respondents and within the period 29 September 2016 to June 2018. Accordingly, I uphold these grounds to that extent.
342 A consequential matter that I must address is the appellant's claim for additional damages pursuant to s 115(4) of the Copyright Act and for that which it pleaded was flagrant misconduct by each of the represented respondents. By way of example, and as against Biggin & Scott, the appellant pleaded that it ought reasonably to have known that it was the owner of copyright in the DreamDesk system, that it knew that the acts of Mr Semmens would infringe those rights or acted with reckless disregard of those rights, established a competing product with substantial benefit to it and gave the undertakings and breached them. Apart from the contention that Biggin & Scott had actual knowledge that the acts of Mr Semmens were infringing acts, those contentions are made out. In my view, it is not however appropriate for this Court to determine the question of additional damages; that will be a matter for the primary judge upon remittal when considering the assessment of damages against each of the respondents and in accordance with the orders that he made on 31 August 2021.