Consideration
97 As will be apparent from the above summary, the parties' submissions contained a number of recurring themes. I do not propose to analyse, in detail, every argument advanced by the parties. Rather, I will focus on what I consider to be the main elements of their submissions that have informed the conclusions and decision I have reached.
98 I am satisfied that this is a case in which additional damages should be awarded. Notwithstanding Tonnex's arguments to the contrary, I am persuaded that the case is one of flagrant infringement. I am also persuaded that there are other factors which support the awarding of such damages.
99 Based on the evidence presented to the Court, I can only conclude that the reproduction of a substantial part of Dynamic's Compatibility Chart was the result of copying that had been consciously and deliberately undertaken. Although, at the liability hearing, Mr Rendell gave evidence as to how Tonnex 2008 was compiled, I could not accept that evidence in the face of the overwhelming objective evidence that copying of Dynamic's Compatibility Chart had taken place on a substantial scale.
100 There are, however, other dimensions to that copying. Based on the evidence I have summarised at [22]-[36] above, it would seem that, for the purposes of considering the imposition of additional damages, Tonnex asks the Court to accept that Tonnex 2008 was compiled in a way that was contrary to Mr Solomon's direct instructions as to how it should have been compiled and that, when challenged on or about 3 April 2009 or thereafter with the claim that a substantial part of Tonnex 2008 had been copied from Dynamic's Compatibility Chart, Mr Rendell, in his position as National Marketing Manager, represented to Mr Solomon that no such copying had taken place. In short, Tonnex places the blame for copying on Mr Rendell but apparently asks the Court to accept that these significant acts are not properly attributable to Tonnex and are, in any event, to be viewed as something of a mistake.
101 I do not accept that submission. I am satisfied that Mr Rendell's knowledge and acts and, to the extent that it is also necessary to decide, Mr Furtado's knowledge and acts, were Tonnex's knowledge and acts. Mr Rendell held a senior position within Tonnex as its National Marketing Manager and was the person responsible for compiling Tonnex 2008. Not only was he responsible for compiling Tonnex 2008, he had a "hands on" role in compiling it and in sourcing the data used in it. He also supervised Mr Furtado's work. Mr Rendell and Mr Furtado appear to have worked alongside each other in undertaking this task. Their acts - certainly Mr Rendell's acts - cannot be explained away as a mistake or mere inadvertence. As I have said, they can only be seen as acts of conscious and deliberate copying.
102 I have doubts about the reliability of Mr Solomon's evidence. The matters to which he deposed confidently in his first affidavit about the creation of Tonnex 2008 bear a completely different complexion when viewed against the evidence he gave at the damages hearing as to his true state of knowledge. His evidence suggests a cavalier approach to placing matters of fact before the Court. I gained the impression that he was more concerned to put before the Court a version of the facts that he wished the Court to accept, rather than to give evidence of facts about which he had actual knowledge. I therefore treat his evidence with considerable caution. However, notwithstanding these doubts, I am not persuaded that I should find, on balance, that Mr Solomon knew that, at the time it was compiled, Tonnex 2008 reproduced a substantial part of Dynamic's Compatibility Chart. I am prepared to accept that Mr Solomon acted on Mr Rendell's assurance that, in compiling Tonnex 2008, no copying of Dynamic's Compatibility Chart had taken place. I am prepared to accept that he acted on that basis up to 13 August 2010, when Dynamic provided its detailed particulars of the 471 instances of copying from Dynamic's Compatibility Chart.
103 I also have concerns about the way in which Mr Kozman gave his evidence at the liability hearing. I identified some of those concerns in the liability reasons. I refer in particular to Mr Kozman's evidence summarised at [124] of the liability reasons. Once again, I gained the impression that, on occasion, Mr Kozman was more concerned to put before the Court a version of the facts that he wished the Court to accept, even though, in relation to the matters summarised at [124] of the liability reasons, that evidence defied a commonsense reading of the relevant entries in Tonnex 2008. However, notwithstanding Dynamic's submissions to the contrary, I am not persuaded that I should find, on balance, that Mr Kozman knew that, at the time that it was compiled, Tonnex 2008 reproduced a substantial part of Dynamic's Compatibility Chart or that Mr Kozman condoned the copying of that chart. I am prepared to accept that, up to 13 August 2010, when Dynamic provided its detailed particulars, Mr Kozman likewise acted on the basis of the assurances that had been given that the compilation of Tonnex 2008 did not involve any copying of Dynamic's Compatibility Chart. I do not accept Dynamic's submission that I should infer that Mr Kozman had knowledge of the copying I have found, simply because he was working in a relatively small office with Mr Rendell and Mr Furtado, and was in regular contact with them.
104 With respect to Mr Solomon and Mr Kozman, I am not prepared to infer, as Dynamic contended, that they had actual knowledge of the copying I have found, and condoned that copying, because, as directors of Tonnex, and in light of the findings of copying I have made, they have since permitted Mr Rendell to remain in his position of National Marketing Manager.
105 I should nevertheless record that, in my view, the receipt by Tonnex of Dynamic's detailed particulars marked a change in circumstances. A conscientious consideration of the particulars should have alerted Mr Solomon and Mr Kozman to the fact that, despite what they might have been told by Mr Rendell, or indeed other employees, the prospect that a substantial part of Dynamic's Compatibility Chart had been copied was real and that former assurances to the contrary might well be unreliable. There is nothing in the evidence to suggest that, armed with the information provided by the detailed particulars, Mr Solomon and Mr Kozman sought to review Tonnex's position, or were even motivated to do so. They seem to have simply adhered to the their previous view, without further reflection, that Dynamic's claims were no more than a manifestation of an "obsession" with Tonnex and that Dynamic was seeking to "distract" it. That said, by the time the particulars were provided, Tonnex, for its own reasons, had stopped providing a link to Tonnex 2008 when sending price lists to its customers by email.
106 My findings concerning Mr Solomon's and Mr Kozman's state of knowledge in the period up to 13 August 2010 do not mean that the conscious and deliberate copying I have found to be attributable to Tonnex was not also flagrant. As I have found, Mr Rendell's knowledge and acts are to be taken as Tonnex's knowledge and acts. On the basis of Mr Solomon's evidence, I am left to conclude that Mr Rendell's involvement in the compilation of Tonnex 2008 involved the copying of Dynamic's Compatibility Chart in a way that was not only conscious and deliberate, but also disobedient. If Mr Solomon gave instructions as to how Tonnex 2008 was to be compiled (which included an instruction not to copy competitors' compatibility charts), then Mr Rendell must have understood that those instructions were given for good reason and that such copying should not take place. He and Mr Furtado nevertheless did so. In addition, I can only conclude that, by giving such an instruction, Mr Solomon himself had an understanding that competitors' compatibility charts should not be copied.
107 Further, on the basis of Mr Solomon's evidence, I am left to conclude that these conscious, deliberate and disobedient acts were intentionally concealed when the matter was raised with Mr Rendell following the claims made in Dynamic's solicitors' letter of 3 April 2009. On the case advanced by Tonnex, no explanation, otherwise consistent with Mr Solomon's and Mr Kozman's "innocent" state of mind, is likely. Tonnex has not sought to provide an alternative explanation. As I have noted, the most that Mr Solomon could say was that Mr Rendell's conduct was a mistake. In my view, it is impossible to characterise, in any sensible way, the conduct involved, as presented by Tonnex's own evidence, as a mistake. This deliberate concealment reveals a case of conscious wrongdoing.
108 Therefore, based on the findings of copying made in the liability reasons, and based on Mr Rendell's knowledge and acts as revealed through Mr Solomon's evidence, I am satisfied that Tonnex's infringement of copyright was flagrant.
109 I turn to consider Tonnex's conduct after receipt of the letter of 3 April 2009, when it was put on notice of Dynamic's copyright claims. This conduct also exhibits elements of flagrancy.
110 In the responding letter, Tonnex rejected Dynamic's claims in a somewhat high-handed fashion. Regardless of whatever legal advice it had obtained concerning the subsistence of copyright in literary works that are compilations, Tonnex maintained, vehemently, that no copying of Dynamic's Compatibility Chart had taken place. It continued to refer its customers to Tonnex 2008 when sending price lists by email. The evidence shows that over 38,000 emails were sent. This resulted in a large number of "click throughs" to Tonnex 2008 by Tonnex's customers. Tonnex stopped using Tonnex 2008 on 2 August 2010, about 10 days before receipt of the detailed particulars, and relatively shortly before the commencement of the liability hearing. The cessation of Tonnex's conduct was taken at a time of its own choosing, without regard to Dynamic's rights. Regardless of Mr Solomon's and Mr Kozman's state of knowledge in that period, by reason of Mr Rendell's knowledge, Tonnex must be taken to have known the true position regarding its copying of Dynamic's Compatibility Chart. With that knowledge, it undoubtedly took commercial advantage of its wrongful conduct.
111 With respect to Dynamic's submission that Tonnex's denial of the alleged copying put it to considerable expense in proving that copying, I think that, in the present case, this is properly a matter for costs, not a matter going to the award of additional damages. Further, with respect to Dynamic's allegation that Tonnex has failed to comply with the Court's orders for supervised destruction, I am not prepared to deal with such an important matter as a side-wind to a damages hearing. If Dynamic wishes to pursue that allegation, then it should do so formally.
112 Finally, I am not persuaded that, by claiming confidentiality in the responding letter, Tonnex was seeking to conceal its infringement of Dynamic's copyright: see [10] above. I do accept, however, that Tonnex's false denial that it had "reproduced or replicated any document compiled or prepared by Dynamic", was an attempted concealment of Tonnex's copying, even if the true position was not then known by Mr Solomon and Mr Kozman. As I have noted above, based on Mr Rendell's knowledge alone, Tonnex must be taken to have known the true position at the time the responding letter was sent.
113 Turning to the question of benefit, I do not accept Tonnex's submission that it did not derive any appreciable benefit from its conduct or that Tonnex 2008 was supplied merely for the guidance of customers. Undoubtedly, Tonnex considered Tonnex 2008 to be of benefit to its customers, otherwise there would be no point in providing links to Tonnex 2008 in its price lists. But in seeking to provide that benefit, Tonnex was surely seeking to advance its own commercial interests with a view to enhancing its sales.
114 The extent to which its position was enhanced in that regard will never be known. For example, it will never be known what Tonnex's actual level of sales would have been absent Tonnex 2008. It is clear, however, that the compilation of Tonnex 2008 was undertaken as part of what Mr Rendell described as Tonnex's "determined approach to improve all marketing communications". Mr Rendell said that, following the introduction of Tonnex's price list in October 2007, he received feedback from Tonnex's sales staff that customers wanted a user-friendly compatibility chart. It is clear from Mr Rendell's evidence that, at that time, Tonnex did not have a user-friendly compatibility chart. In furtherance of their sales function, Tonnex's sales staff obviously saw value in such a chart. Tonnex 2008 was the answer to that need. In these circumstances, any benefit to Tonnex's customers by the provision of Tonnex 2008 can be seen to have resulted in a related benefit to Tonnex itself. I am satisfied that this related benefit was real and of substance. The perceptions of Tonnex's sales staff provide a sure indication of that fact, even though that benefit is not readily quantifiable in money terms.
115 Turning to the "other matters" raised by Dynamic, I am not persuaded that Tonnex concealed or sought to conceal its conduct by publishing Tonnex 2008 through emails rather than, more publicly, on its website. Further, I am not persuaded, on the evidence before me, that I should infer that the publication of Dynamic's Compatibility Chart, on Dynamic's website, was the impetus for Tonnex creating Tonnex 2008.
116 As to Tonnex's size, measured by its sales or its profits, I am not persuaded that mere size alone is a factor that warrants an award of additional damages or any relative level of additional damages. I accept, however, that, where specific deterrence is an issue, an infringer's financial standing and resources may well be a relevant matter to be considered. I turn, therefore, to consider that question.
117 As I have noted, Tonnex submitted that there is no need for additional damages to produce a deterrent effect, given the relief already granted and the fact that it has lost what has been long and, no doubt, expensive litigation.
118 The last-mentioned matter seems to assume a liability on the part of Tonnex for costs, even though, by agreement between the parties, I have made an order reserving the question of costs, and even though at the damages hearing the parties requested an opportunity to address me on the question of costs following my decision on the present question.
119 I have no doubt that the experience of this litigation has had some deterrent effect on Tonnex. Similarly, when considering the question of additional damages, I accept that it is appropriate to have regard to the relief that has already been granted. I include, in that connection, the fact that Mr Solomon and Mr Kozman have given personal undertakings to the Court in respect of Tonnex's future conduct.
120 Tonnex has also pointed to the fact that it has implemented an approvals process for material that is to be published as part of Tonnex's business. I take that matter into account but, in so doing, I think that recognition of this apparent change in Tonnex's business management should be tempered by an acknowledgment that the steps that it has put in place appear to be no more than good business practice and are not specifically directed to addressing the risk of copyright infringement. I also observe that, so far as the new approvals process might extend in practice to copyright matters, its efficacy will depend, in any event, on the candour of Tonnex's employees participating in that process. Tonnex's evidence at the damages hearing indicates that, even at a relatively high level of management, a culture of candour does not apparently exist.
121 In his affidavit of 15 February 2013, Mr Solomon said that Tonnex acknowledges and accepts the Court's decision reflected in the liability reasons. Mr Solomon, in substance, repeated that statement in the course of his cross-examination. I am not confident, however, that this acknowledgement represents a complete acceptance of Tonnex's wrongdoing. I think it stands as no more than an acknowledgement by Tonnex of what is, by now, the inevitable. I cannot help but feel that the hubris reflected in the responding letter remains to a considerable extent; that Tonnex sees this litigation in terms of commercial posturing by Dynamic rather than as a proper vindication of Dynamic's legitimate legal rights, which Tonnex has clearly infringed by its acts of copying. Tonnex's conduct exhibits a degree of intransigence, even after delivery of Dynamic's detailed particulars which, as I have said, should have indicated to Mr Solomon and Mr Kozman, albeit at an advanced stage of the litigation, that something was amiss in their camp. Further, at the damages hearing, Mr Solomon appeared to downplay Tonnex's conduct, undertaken through Mr Rendell, as a mistake. In my view, specific deterrence remains an element of my consideration of the question of additional damages in the present case.
122 General deterrence is also an element of my consideration. If, as Tonnex's own response to Dynamic's claims suggests, there is a perception in the community that copyright cannot subsist in compilations of publicly-available data as a form of literary expression, and if, correspondingly, there is a perception that works of that kind can, with impunity, be pilfered by reproducing, without authority, a substantial part of such forms of expression, then those perceptions should be corrected. That task will be assisted by the award of additional damages I propose to make in the present case.
123 Moreover, the additional damages to be awarded in the present case should mark the Court's disapproval of the specific conduct that has taken place.
124 As I have noted, Dynamic submitted that additional damages should be awarded in the sum of $400,000.00. I think that this sum is excessive, in all the circumstances. By the same token, I am unable to accept that it would be sufficient to award additional damages in the "modest" range to which Tonnex has alluded.
125 An evaluative judgment is required. Considering the various matters I have discussed above, I am of the view that additional damages in the sum of $150,000.00 should be awarded.