Hardingham v RP Data Pty Limited

Federal Court of Australia|2019-12-09|Before: Robert J, Mr J, Thawley J

Registry: New South Wales

Division: General Division

National Practice Area: Intellectual Property

Category: Catchwords

Counsel for the Applicant: Mr R Cobden SC and Mr J Sleight

Solicitor for the Applicant: Neville Hourn and Borg Legal

Counsel for the Respondent/Cross Claimant: Mr M D Martin QC and Mr A Messina

Solicitor for the Respondent/Cross Claimant: Mills Oakley Lawyers

Counsel for the Cross-Respondent: Mr H P T Bevan

Solicitor for the Cross-Respondent: Corrs Chambers Westgarth

18 December 2019 Real Estate Marketing Australia Pty Ltd is added as the Second Applicant to the orders. 18 December 2019 Realestate.com.au Pty Ltd is added as the Cross-Respondent to the orders.

BETWEEN: JAMES KELLAND HARDINGHAM First Applicant

REAL ESTATE MARKETING AUSTRALIA PTY LTD Second Applicant

AND: RP DATA PTY LIMITED Respondent

AND BETWEEN: RP DATA PTY LIMITED Cross-Claimant

AND: REALESTATE.COM.AU PTY LTD Cross-Respondent

JUDGE: THAWLEY J DATE OF ORDER: 9 DECEMBER 2019

By 4.00pm on 13 December 2019, the parties file agreed minutes of order reflecting these reasons for judgment or, in the absence of agreement, competing minutes of order.
In the event orders cannot be agreed, the matter be listed at 9.00am on 17 December 2019 for argument including as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THAWLEY J: OVERVIEW 1 The first applicant, Mr Hardingham, is the sole director of the second applicant, Real Estate Marketing Australia Pty Ltd (REMA). REMA was incorporated on 17 November 2009. Mr Hardingham is a professional photographer. Since incorporation, REMA has been commissioned by various real estate agencies to produce photographs and floor plans for use in marketing campaigns for the sale or lease of properties. Those agencies had been retained by owners of properties to market them for sale or lease. 2 The respondent, RP Data Pty Ltd, operates the website www.corelogic.com.au. Through that website subscribers can access a product described as "RP Data Professional". RP Data Professional includes reproductions of a number of Mr Hardingham's photographs and floor plans. The applicants claimed that they had not licensed RP Data to publish the photographs and floor plans and that RP Data had infringed, and was continuing to infringe, copyright in the works. 3 RP Data obtained the photographs and floor plans from the cross-respondent realestate.com.au Pty Ltd (REA). REA is a wholly owned subsidiary of REA Group Ltd. REA Group supplies residential property listing services to real estate agencies. Many agencies in Australia list and thereby advertise residential properties on behalf of vendors and landlords on online channels operated by REA. The online channels include the realestate.com.au website and mobile applications. The combination of the website and mobile applications is referred to as the "realestate.com.au platform". 4 The applicants' claims against RP Data concern a large number of works. It became apparent during the course of the proceedings that considerable time and expense would be involved in determining the extent of the claimed infringements and issues of damage. The Court made a consent order on 11 October 2018 that questions of liability for infringement of copyright in respect of works relating to certain identified properties be heard and determined separately and before the hearing and determination of questions of infringement of other works and questions of pecuniary relief. The properties identified for the purposes of the separate question were chosen by the applicants. 5 The works the subject of the separate question related to photographs and floor plans in respect of twenty properties. 6 After the order for a separate question was made, RP Data was granted leave to file a cross-claim against REA. By the cross-claim, RP Data asserted that, if it had infringed copyright, then REA was liable to indemnify RP Data in respect of any loss or damage. That indemnity was said to arise under data licence agreements between RP Data and REA pursuant to which RP Data obtained access to electronic versions of the relevant works. Liability under the cross-claim is not the subject of the separate question. 7 For the reasons which follow, the applicants have not established that RP Data infringed copyright in respect of any of the works the subject of the separate question.

The applicants and the real estate agents 8 The evidence adduced in respect of the arrangements between the applicants and the agencies was minimal, consisting primarily of Mr Hardingham's affidavit evidence and invoices issued by REMA. REMA was usually engaged to supply photographs and floor plans to agencies by a telephone call from a real estate agent. An agent, on behalf of the agency, would typically request that Mr Hardingham attend a particular property and take photographs to be used in a marketing campaign. Mr Hardingham said that, generally, he would be told that a property had been listed and when the campaign was due to start. He would be asked if he could visit the property and take photos for the campaign and, if relevant, prepare a floor plan. 9 The parties proceeded on the basis that Mr Hardingham took the photographs and prepared the floor plans. The agencies received photographs and floor plans from REMA in an editable digital form. The agencies paid invoices issued by REMA. The agencies uploaded the photographs and floor plans to the realestate.com.au platform. The applicants knew that one of the purposes for which the photographs and floor plans had been commissioned from REMA was to upload them to that platform. 10 The photographs were also published on the relevant websites of at least some of the agencies the subject of the relevant twenty properties and, I infer, probably on each of the relevant websites. Although there was no direct evidence to this effect, it is likely that the works were also published in brochures, magazines and general advertising material.

The realestate.com.au platform 11 REA sells listing subscriptions to real estate agencies (typically a company), rather than franchise groups or individual agents. To list a residential property on the realestate.com.au platform, a real estate agency must hold a registered real estate licence and enter into a subscription agreement of which there are different levels. Each subscription agreement included an express acknowledgement by the real estate agency that the: … terms stipulated in this form and in the Terms and Conditions contained on our website (www.realestate.com.au/terms) form part of this Agreement… 12 The terms and conditions on the realestate.com.au website included an express licence from the real estate agents to REA in the following terms: 5. Your acknowledgements You acknowledge and agree that at all times during the Term of this Agreement: (a) in consideration for us granting a right to upload listings to the Platform and the other services we provide, you grant us an irrevocable, perpetual, world-wide, royalty free licence to publish, copy, licence to other persons, use and adapt for any purpose related to our business any content you provide to us during the Term, and this licence survives termination of this Agreement by you or us; … (c) you are solely responsible for the content of your listings and any errors or omissions in your listings - our role is one of publisher; … 13 The terms and conditions also included: 6. Your obligations 6.1 Your obligations to us are as follows: (a) you will only upload listings to the Platform yourself or via an authorised third party who has been provided with and agreed to each of the documents comprising this Agreement (subject always to clause 6.1(l) below); … (e) you will ensure that any statement you make to us or any content or material supplied by you (including content uploaded to the Platform): (i) is not unlawful; (ii) is not provided for an improper purpose; (iii) is not misleading or deceptive or likely to mislead or deceive (including for the reason that the branding on a listing would, or would be likely to, mislead or deceive consumers about the Agency Group, Agency Office or individual agent that was responsible for selling the relevant property); (iv) does not include information that is defamatory, fraudulent, infringes the intellectual property rights of third parties or would otherwise expose us to any liability, legal proceedings or other sanction; and (v) does not otherwise breach the Acceptable Use Policy; (f) you will comply with all applicable laws, including without limitation, the Competition and Consumer Act 2010 (including the Australian Consumer Law); Trade Marks Act 1995; fair trading legislation; real estate agent legislation and regulations (including rules governing the disclosure, retention and payment of any rebates or benefits) and any other applicable advertising standards and regulations including the Privacy Act 1988 and regulations thereunder; … 12. Limitation of liability and indemnity … 12.4 You indemnify us and our officers, employees and agents ("those indemnified") against any direct or consequential liabilities, losses, damages, expenses and costs (including legal expenses on a solicitor and own client basis) incurred or suffered by any of those indemnified as a result of any claim or proceedings brought by a third party against those indemnified in connection with any content or material uploaded or submitted by you in connection with this Agreement or any other act or omission by you in connection with your use of the Platform or our other services. 12.5 Each indemnity in this Agreement is a continuing obligation, separate and independent from the other obligations of the parties and survives termination of this Agreement for whatever reason. 14 Mr Rechtman was the Executive General Manager, Residential of REA Group. He gave evidence that the realestate.com.au platform contained, among others, the following sections: (a) The "Buy" section, located at the URL https://www.realestate.com.au/buy, where real estate agencies list properties for sale (on behalf of vendors), and consumers can search for properties listed for sale based on various criterion (eg, suburb, price range, bedrooms, property type, bathrooms, carspaces [sic] etc). (b) The "Rent" section, located at the URL https://www.realestate.com.au/rent/, where real estate agencies list properties for rent. (c) The "Sold" section, located at the URL https://www.realestate.com.au/sold/. The Sold section includes a search function that allows consumers to retrieve historical information on each property that has been listed for sale on the realestate.com.au platform, and realestate.com.au has been informed by the real estate agency that listed the property for sale that the property has been sold. The Sold section of the realestate.com.au platform has been active since at least 2003. The information available for each "Sold" listing includes the most recent date of sale, sale price, the property's specifications (eg, number of bedrooms, bathrooms, car spaces etc), and photographs and floor plans provided by the real estate agency for the listing used to advertise the property for sale. In addition to information provided by the real estate agency, the "Sold" page for a property includes data that realestate.com.au obtains from third party sources, including the sold price. (d) The "Property Value" section, located at the URL https://www.realestate.com.au/property/. Since at least 2015, realestate.com.au has provided a service known as "page for every property" (P4EP) which is currently accessible via the Property Value search function on the realestate.com.au platform. When a consumer enters a property address into the "Property Value" search function, a page for the corresponding address is retrieved which includes at least the following information on the property: (i) Whether the property is for sale, for rent or off market. (ii) Any photographs or plans previously uploaded by real estate agencies on the realestate.com.au platform in relation to the property, including photographs used in past sale or rental campaigns. (iii) The property's specifications (ie, number of bedrooms, bathrooms, car spaces, land size, floor area, year built, etc). (iv) The property's sale history and past prices at which it sold, if available. (v) An estimate of the property's current value, if available. This is only displayed for properties that are off market. (vi) A summary of market activity for properties of similar size in the property's suburb, including median sale and rent prices for the past 1 year, and 10 years. (vii) Links to the P4EP for properties neighbouring the property.

RP Data Professional 15 Mr O'Donnell, the senior leader of RD Data's data operations team, gave evidence that, since 1999, RP Data had conducted an internet subscriber based website service that provided property data to various real estate professionals and investors for the purposes of marketing for sale and lease real property in Australia. The service - RP Data Professional - also allowed paying subscribers to conduct research of property in Australia to establish fair market value for the purpose of marketing property for sale or for lease. 16 Mr O'Donnell confirmed in cross-examination that the service included properties which were currently for sale or lease. This was one of the major purposes of the service. Subscribers to the service included members of the general public, although this was a smaller category of subscriber. The more significant category was real estate professionals for whom the product was primarily designed. The affidavit evidence of Mr O'Donnell stated: The RP Data Professional subscription product is an online interactive user interface designed for real estate professionals undertaking property market research across the real estate market within Australia. Subscribers to this product have access to properties that are or have been activity advertised for sale and for lease and presents relevant activity and details relating to the individual marketing campaigns of these properties. … Although RP Data Professional is primarily designed for real estate professionals, it is promoted and licensed to a board range of industries and user types including banks, property valuers, mortgage brokers, investors, consumers, government departments, insurers, debt collection agencies and property developers. 17 Mr O'Donnell gave evidence that the photographs and floor plans the subject of the proceedings were provided to RP Data by REA. He stated: Photographs are a key aspect of the data attributed to a property when marketed. Photographs enable a subscriber to be better informed and establish the marketability and market value through visual assessment of the elements of the property including the conditions, fittings, attributes, size, style and construction materials of a property. In particular the photos show obvious improvements, degradation or materially significant changes to the property over time. The photographs also provide a basis to compare properties in a market for advertising and listing purposes. RP Data Professional enables its subscribers to: (a) search for properties advertised For Sale, For Rent, have Sold or have been rented to gain an understanding of the relevant local property market down to a single property address as well as what other properties are currently listed For Sale or For Rent; (b) search for properties within a geographic area to understand the total market size and breakdown of the types of properties that exist within a market; (c) identify the most effective marketing methods by providing a subscriber with access to the property campaign history which includes data points relating to 'days on market', listing price changes, photographs, floor plans and aerial and satellite images, listing description, and advertising mediums (online v print); (d) determine the physical elements of a property being marketed which is also used to create the listing description of a property listed For Sale or For Rent through analysis of a property's floor plan, property photographs and aerial/satellite imagery to identify the attributes and feature information such as: (i) type, size and condition of the dwelling; (ii) type, size and condition of the rooms within a dwelling; (iii) type of fittings and the quality of the fittings within a dwelling; (iv) the external environment and any potential hazards for consideration; (e) produce reports for the purposes of promoting their brand, showcasing their local expertise, marketing the property listed For Sale or For Rent, establishing market value and to meet compliance obligations when marketing properties for sale and for rent including: … [Mr O'Donnell described the various reports which could be generated] … (f) undertake comparable market estimates of the value of properties in any particular area or market, through reports that provide lists of properties advertised for sale, for rent, have sold or been rented. This information supports a real estate professional to determine and recommend to a vendor or owner the appropriate price at which to market a property For Sale or For Rent; (g) produce material used to inform the market including property vendors and purchasers of the for sale and for rent activity of properties past and present in any particular area, including photography to support the estimate of market value through an assessment of the physical condition, attributes and features of the individual properties; (h) be adequately informed about a particular property or property market by validating the real property identifiers such as the lot and plan details, title details including ownership and existence of any interests and encumbrances to be able to disclose with clients; (i) produce marketing plans and marketing material to make informed assessments of the market position, market value and marketable features of a property when acting on behalf of a property vendor or purchaser.

The applicants' letter of demand and RP Data's response 18 On 28 January 2014, the applicants' solicitors (Neville & Hourn Legal) wrote to RP Data asserting that RP Data had infringed copyright by reproducing photographs on RP Data's website and manipulating certain images to superimpose a logo. 19 On 9 April 2014, RP Data's solicitors (Mills Oakley Lawyers) denied that there had been any infringement of copyright or any other unlawful conduct. The letter included: The facts as we know them are from the point at which your client provides the images to its agent clients the images are then used by the agent client at it/his/her discretion either as owner of the copyright or licence. During the course of any marketing campaign the agents, who are clients of your client provided those images to the listing portal realestate.com.au ("REA"). RP Data acquires the rights to use and display data and photographs from a range of third parties including REA. RP Data has a specific contract with REA which governs its relationship with REA. For the purposes of your contentions however that agreement is entirely irrelevant. What is however relevant is the terms of the express licence granted by your clients agent client base to REA. Those terms are to be found on its webpage in the page headed "Legal Information". We specifically direct your attention to the provisions under the heading "Contributions". The relevant terms of the REA webpage to which you should have reference is as follows: http://www.rs.realestate.com.au/cgi-bin/rsearch?a=v&t=res&id=13. So as to avoid any confusion we set out below the relevant portion of those terms and conditions which affect your client's position: "To the extent that any Contributions are proprietary in nature, you grant REA a worldwide, nonexclusive, royalty-free, perpetual, transferable and irrevocable licence to use, reproduce, modify, adapt, translate, distribute, publish, create derivative works from and display and publicly perform your Contributions throughout the world in any medium, whether currently in existence or not. You also grant each user of our websites a nonexclusive licence to use, reproduce, adapt, translate, distribute, prepare derivative works of, display and perform your Contributions as permitted by REA and these terms. You grant: (i) REA, in respect of Contributions to its website the right to use your name or the name you submit with the Contribution, and, the right to represent and warrant that: (a) you own and control all of the rights to the Contributions; or (b) you have the lawful right including all necessary licences, rights, consents, and permissions to use and authorise REA to display the Contributions" These are the pertinent terms that your client's customers agree to when making contributions to REA. As you will see they are very clear in that your client's customers grant REA a licence to use the images over which your client claims copyright. That licence permits REA to transfer the licence and to use or distribute those images to third parties including RP Data. The reason that REA has such terms is so that it can carry on business in the real estate space knowing that these types of disputes regarding copyright will not arise.

The commencement of these proceedings 20 Mr Hardingham and REMA did not respond to the Mills Oakley letter dated 9 April 2014 for nearly four years. On 1 March 2018, Neville & Hourn wrote to Mills Oakley, referring to the two letters exchanged in 2014, and requesting, amongst other things: a written acknowledgement that "copyright in the works vests in Mr Hardingham"; an admission that reproduction of the works constituted an infringement of copyright; a statutory declaration setting out how RP Data came to obtain the works; and an agreement to pay damages. The letter indicated that proceedings would be commenced under s 115 of the Copyright Act 1968 (Cth) if what was sought was not granted. 21 Mills Oakley responded by letter dated 26 March 2018 denying any infringement of copyright. 22 Mr Hardingham granted an exclusive licence to REMA by a deed of licence dated 24 April 2018. The recitals stated that this confirmed the arrangements that had existed since REMA commenced business in November 2009. 23 These proceedings were commenced on 16 July 2018.

SUMMARY OF THE PARTIES' CASES 24 The applicants: (1) accepted that REMA licensed the photographs and floor plans to agencies for the purpose of those works being used for the marketing of the properties depicted in the photographs in discharge of each agency's retainer by an owner of the property to market the property for sale or lease; (2) contended that this was a "limited licence to use the photographs and floor plans for the limited purpose of marketing for sale or lease"; (3) accepted that the implied licence authorised the agencies to grant a sub-licence for marketing the properties for sale or lease; (4) contended that the implied licence granted by REMA "did not extend to use" once the sale or lease of the relevant premises completed. 25 RP Data contended that the applicants' case had to fail for two alternative reasons: (1) First, RP Data contended that the agreement between the applicant and the agencies gave rise to what RP Data referred to as an equitable assignment, meaning that there should be implied into the agreement a term that the author of copyright would assign legal title to it when called upon to do so, because equitable ownership of copyright in the work did not belong to the author. As equitable owners of the copyright, the agencies were entitled to and did grant a licence to REA to publish the works on the realestate.com.au platform and to grant a sub-licence. (2) Secondly, RP Data contended that the licence which the applicants admitted they had granted to the agencies arose either expressly or implicitly and allowed the agencies to grant to REA a sub-licence associated with the marketing of the properties, which those agencies did grant, and that the applicants were bound by the sub-licence granted by the agencies to REA and that there was no infringement. 26 REA adduced evidence on the separate question in defence of the claim against RP Data and made submissions in relation to the liability of RP Data to the applicants - cf: rule 15.13(b) of the Federal Court Rules 2011 (Cth). 27 REA submitted that the applicants granted an express or implied licence to the agencies which was, in turn, embodied in the express licence given by the agencies to REA under REA's terms and conditions. The express or implied licence granted to the agencies was of equivalent scope to that granted by the agencies to REA. One matter relied upon by REA as a basis for inferring or implying such a term was "the way in which real estate properties were and are marketed to the public, including the internet by way of real estate agents' websites, residential property portals (such as realestate.com.au) and social media platforms, where that marketing comprises current and historical listings in respect of the properties".

Ownership and assignment of copyright 28 Copyright subsists in an "original … artistic work" of which the author was a "qualified person" at the time the work was made: s 32(1), (2). There was no dispute that Mr Hardingham was at all material times a "qualified person" within the meaning of s 32(1): s 32(4). 29 The photographs and floor plans were each "original … artistic work" within the meaning of the Copyright Act - see: s 10(1), definitions of "artistic work", "photograph" and "drawing". 30 The "author" of a photograph is the person who took the photograph: s 10(1). The parties proceeded on the basis that Mr Hardingham was the author of the photographs and the floor plans. 31 Ownership of copyright is dealt with by s 35. Subject to s 35 and Parts VII and X of the Copyright Act, "the author of a literary, dramatic, musical or artistic work is the owner of any copyright subsisting in the work": s 35(2). 32 Although RP Data had, at various times, relied upon defences based on s 35(3), (5) and (6), it abandoned reliance on those defences. 33 Section 35 deals with legal ownership of copyright and does not exclude the possibility that copyright might be owned, in equity, by some other person. In Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd [2005] 225 ALR 57 at [81], Crennan J observed: …[T]here are numerous examples where Courts have been prepared to imply a condition into an agreement between the parties that the author of a copyright work will assign legal title to it when called upon to do so because equitable ownership of the copyright in the work does not belong to the author. See, for example, Massine v De Basil [1936-1945] MacG Cop Cas 223 (where a choreographic work was prepared for a ballet company); Merchant Adventurers Ltd v M Grew & Co Ltd [1972] Ch 242; [1971] 2 All ER 657; [1973] 90 RPC 1 (where design drawings for light fittings were prepared by an outside contractor); Ironside v HM Attorney-General [1988] RPC 197 (where a design for new coin was prepared by third party); John Richardson Computers Ltd v Flanders (1993) 26 IPR 367; [1993] 20 FSR 497 at 516-517 (which involved a commissioned computer program). 34 Her Honour observed, at [82], that such an implication frequently arises where there has been a commissioning arrangement for the preparation of copyright material. 35 Her Honour applied with respect to s 35 of the Copyright Act, the following passage from R Griggs Group Ltd v Evans [2004] 31 FSR 673 at [33] (insertions and emphasis repeated from her Honour's decision): [I]t is well established that [s 11 of the Copyright, Design and Patents Act 1988 (UK), which is similar, though not identical to s 35] refers to the legal title to the copyright. But it is possible for a person to own the legal title to property, not for his own benefit, but for the benefit of another person. That other person is said to be the owner in equity. It is well established that s 11 of the Copyright Act does not purport to legislate for equitable ownership, which is left to a well established body of rules that have been built up by the courts over many generations. For example, suppose a freelance designer orally agrees with a company that he shall create a website for use in its business, for payment, and on terms that the copyright shall belong to the company. Because the designer is not an employee of the company the legal title to the copyright belongs to him, because the Copyright Act says so; but the equitable title belongs to the company. This means that the designer can be called upon to assign the legal title to the copyright to the company; and, if he refuses, the law will compel him to do so. 36 The question is what the client expressly or impliedly agreed to pay for; the client may have agreed to pay for copyright in the commissioned work or for some form of licence or for no interest relating to the copyright: Gold Peg at [83]. 37 As mentioned, where equitable ownership of copyright is found to exist, the legal owner may be called upon to assign legal title to the equitable owner: Gold Peg at [81]; Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 4 IPR 214; Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 32 IPR 339.

License of copyright 38 The term "licence" is interchangeable with "consent" or "permission": Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 20 FCR 46 at 49 (Sheppard, Spender and Gummow JJ). 39 A licence of copyright might be granted expressly. It might be granted wholly in writing, wholly orally, or partly in writing and partly orally. The evidence did not establish an express written or oral licence. A licence might also be implied into a contract which is otherwise in writing or oral. The implication might arise in a number of ways. It might arise by implication from what was expressly agreed or from the nature of the contract as expressed in the words of the contract or from usage or from considerations of business efficacy - see: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [28] (Heydon JA), referring to Carlton & United Breweries Ltd v Tooth & Co Ltd (Hodgson J, 11 June 1985, unreported, but summarised at (1985) 6 IPR 319 at 320). 40 Further, a licence might be inferred from the conduct of the parties either alone or together with written or oral communications. As McHugh JA (with whom Hope and Mahoney JJA agreed) said in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97,326 at 8: ... a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523. The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract: cf Baltimore & Ohio Railway Co v US 261 US 592 (1923); Fincke v US 675 F 2d 289 (1982) … 41 In Avel Proprietary Limited v Multicoin Amusements Proprietary Limited (1990) 171 CLR 88 at 123, McHugh J expressly acknowledged that a licence might be inferred from conduct, although it was not on the facts of that case. 42 The question whether, as a matter of inference from conduct, a licence was in fact granted is different to the question whether a licence should be implied in fact to give business efficacy to an agreement. It would generally be desirable first to determine the express terms of the contract and only then to determine what terms are implied: Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742 at [28]. In Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410 at 442, McHugh and Gummow JJ said: … [W]here the contract is not in writing and is oral or partly oral it appears that the parties themselves did not reduce their agreement to a complete written form, caution is required against an automatic or rigid application of the cumulative criteria identified in BP. We should proceed on the footing that the present case is to be approached in this way. In such situations, the first task is to consider the evidence and find the relevant express terms. Some terms may be inferred from the evidence of a course of dealing between the parties. It may be apparent that the parties have not spelled out all the terms of their contract, but have left some or most of them to be inferred or implied. 43 The following principles are relevant in determining whether, after identification of the express terms, it is to be implied that a licence was granted and the scope of any such licence. 44 First, the ordinary contractual principles as to the implication of terms apply. A licence might, for example, be implied by law as a legal incident of a particular class of contract or it might be implied because it is necessary in the particular circumstances of the case to give business efficacy to the contract: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 per Mason J at 345-346. To the extent that RP Data and REA relied on an implied licence, they contended the licence was to be implied in fact to give business efficacy to the contracts between the applicants and the agents. They eschewed reliance on the term being implied by law as a legal incident of the class of contracts. 45 The test for implication in fact of a term to give business efficacy to an agreement in the case of a "formal" written contract was described in BP Refinery (Westernport) Pty Limited v Hastings Shire Council (1977) 180 CLR 266 at 283 in the following way: (1) it must be reasonable and equitable; (2) it must be necessary to business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract. See also: Codelfa at 347; Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [21]-[22] (French CJ, Bell and Keane JJ). 46 It has been said that a more flexible approach is warranted where the question arises in the context of an "informal contract" - see: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 per Deane J at 121; Hawkins v Clayton (1988) 164 CLR 539 per Deane J at 573; Gold Peg at [79]. In the case of "informal contracts", the five BP Refinery tests are relevant, but the decisive question is whether the implication of the term is necessary for the reasonable or effective operation of the contract in the particular circumstances: Byrne at 442 (McHugh and Gummow JJ); Gold Peg at [79]. 47 Secondly, a licence of copyright will be implied only to the extent that it is necessary - see: Copyright Agency Ltd v NSW (2008) 233 CLR 279 at [92]; Acohs Pty Ltd v Ucorp Pty Ltd (2012) 201 FCR 173 .at [145]. It follows that: (1) "…if it is necessary to imply some grant of rights in respect of a copyright work, and the need could be satisfied by the grant of a licence or an assignment of the copyright, the implication will be of the grant of a licence only"; (2) in the case of a client who has commissioned a person to create a copyright work "the ambit of the licence must be the minimum which is required to secure to client the entitlement which the parties to the contract must have intended to confer upon him" - see: Ray v Classic FM Plc (1998) 41 IPR 235 at 248-249; Gold Peg at [83]. 48 Thirdly, the implication is to be drawn from all of the relevant circumstances existing at the time of the agreement, including what the parties then contemplated, objectively assessed. In Beck v Montana Constructions Pty [1964-5] NSWR 229 at 235, Jacobs J concluded that there existed a licence implied by law in the case of an architect who had been commissioned to prepare plans for a block of units for a client. The architect's client later sold the land and gave the architect's plans to the purchaser, who decided to build in accordance with the plans, but not retain the architect in that endeavour. His Honour expressed the rationale for concluding that there was an implied licence in the following way: (footnotes omitted): [T]he engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement. See also: Blair v Osborne & Tompkins [1971] 2 QB 78 at 87; Concrete at [71] (Kirby and Crennan JJ). 49 The "purpose" for which the "material" was to be used is determined objectively by reference to the parties' words and conduct and the circumstances in which the agreement was reached: Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 37 IPR 542 at 560-562; Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd (2002) 55 IPR 542 at 547. 50 Fourthly, the onus of establishing infringement lies on the copyright owner with the result that the copyright owner bears the onus of establishing the absence of an express or implied licence - see: Multicoin at 94-95; Bashford at 558 (Merkel J). That onus is to be discharged on the whole of the evidence: Ucorp at [169]. Where a respondent in its defence to a claim of infringement raises a positive assertion that an implied licence of a certain scope exists, it is for the respondent to make good the evidentiary foundation for their defence, including the factual matrix necessary to establish the existence and scope of the licence on which they rely: Ucorp at [173]. See also: Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) (2011) 196 FCR 1 at [370]-[379] (Jagot J).

Infringement of copyright 51 Infringement of copyright is addressed by s 36. Infringement occurs where a person not being the owner of the copyright, does an act comprised in the copyright without the licence of the owner, being an act that the copyright owner has the exclusive right to do: s 36; s 13(1). In the case of an artistic work, copyright is the exclusive right to do the acts set out in s 31(1)(b). Copyright in an artistic work includes the right to: (1) reproduce the work in a material form - see: s 31(1)(b)(i); or (2) communicate the work to the public - see: s 31(1)(b)(iii). This includes either to make the work available online, or electronically transmit the work to the public - see: s 10(1), definition of "communicate". 52 Section 15 of the Act provides: For the purposes of this Act, an act shall be deemed to have been done with the licence of the owner of a copyright if the doing of the act was authorized by a licence binding the owner of the copyright. 53 It follows from these provisions that, in order for there to have been an infringement of copyright, the conduct engaged in by RP Data must have been without the licence of the owner: s 36(1). In answering that question, s 15 might operate to deem the conduct of RP Data to have occurred with the licence of the owner if the relevant act was authorised by a licence binding on the owner, for example, by a licence held by the agencies or REA.

CONSIDERATION 54 As mentioned, the applicants did not dispute that they granted a licence to the agencies. Indeed, their case was that they did grant a licence to the agencies and that the licence so granted permitted the agencies to grant a sub-licence. Nor did the applicants submit that a sub-licence granted by the agencies to REA could not have authorised REA, in turn, to grant a sub-licence. 55 The applicants were correct not to submit that the admitted sub-licence granted to the agencies did not extend to authorising the grant of further sub-licences. For example, the agencies could have granted a sub-licence to a newspaper company for the marketing of the properties and that newspaper company could in turn have sub-licensed the copyright to a series of affiliated or associated entities to expand the marketing campaign. The question of what such a sub-licence could authorise, and in particular whether it could have expanded upon the sub-licence admittedly given by the applicants to the agencies, is a different matter. 56 As mentioned, the parties were in dispute as to the scope of the licence granted by the applicants to the agencies. The applicants submitted that the licence was implied, that it was a "limited licence to use the photographs and floor plans for the limited purpose of marketing for sale or lease" and that it ended on completion of the relevant sale or lease transaction the subject of the marketing campaign. 57 RP Data and REA contended the licence was express or implied and that it was, in substance, equivalent to the express licence the agencies purported to grant to REA when uploading the photographs to the realestate.com.au platform: RP Data contended that the licence was "a licence to use, reproduce, modify, adapt, translate, distribute, publish, create derivative works from and display the photographs and/or floor plans in marketing for sale or lease of the properties depicted therein". This licence was said to be "perpetual, irrevocable, world-wide, royalty-free and include[d] the right to sub-licence". REA contended that the applicants "granted the real estate agents who commissioned and paid for the production of the artistic works a licence to use the artistic works for marketing in relation to the sale or lease of the properties depicted in the artistic works". REA adopted a broad meaning of the word "marketing" in this context, which included publication of the works for historical information and research purposes. REA contended that the licence was "perpetual, irrevocable, world-wide, royalty-free and include[d] the right to sub-license". 58 Especially in the case of informal contracts, such as those which governed the twenty transactions the subject of the separate question, it is important to understand the context in which the parties dealt with each other in order to form a view as to both: (a) what the terms of the contract were, including any terms inferred from conduct (Byrne at 442; Multicoin at 123); and (b) what terms might be implied into that contract. It was not suggested by the applicants that there was any difference in the contractual relationship between the applicants and the agencies in respect of any of the twenty transactions the subject of the separate question or those which came before or after. 59 The evidence established, and the applicants conducted their case on the basis, that: the overwhelming majority of Australian real estate agencies use the realestate.com.au platform and, as a matter of practical commercial reality, would use the platform in marketing properties for sale or lease; the prospect of selling or leasing a property is enhanced by using the realestate.com.au platform and the consequent exposure that provides; one of the principal purposes for which the agencies commissioned photographs and floor plans from the applicants was to obtain works to upload to the realestate.com.au platform; and whilst theoretically possible, at a practical level agencies are not able to negotiate out of the usual terms and conditions required by REA in order for the agencies to upload content to the realestate.com.au platform. 60 The applicants and the real estate agents knew, as a result of their course of dealing and experience in the industry, that works uploaded to the realestate.com.au platform were not removed on completion of the sale or lease transaction for which the photographs were taken and that they were made available in relation to historical sale and lease transactions. It would be unrealistic to suggest otherwise. 61 By way of example, after a property sale completed, the photographs and floorplans continued to be available on the "sold" section of the realestate.com.au platform, which existed from 2003. That had been the position over the entire course of dealing between the applicants and the agencies. 62 The applicants did not suggest that there was a single example of any photograph or floor plan, of which the applicants were the copyright owner or exclusive licensee, ever being removed from either platform. There were said to be many thousands of such works. 63 Agents commissioning works on behalf of their agency are likely to have used one or both of realestate.com.au and RP Data Professional in order to provide advice to their clients in relation to the likely sale price or market rental which might be achieved. Those agents would have done such research on any number of occasions in relation to numerous properties whether or not the subject of these proceedings. It is unrealistic to suggest that agencies did not regularly access photographs and floor plans relating to completed sale and lease transactions. It is equally unrealistic to suggest that they were not aware that the works uploaded by them remained available, including as historical information, on the realestate.com.au platform and on RP Data Professional. 64 Mr Hardingham gave evidence that "once my photographs have been posted on the realestate.com.au, they [sic] also appear on the RP Data Professional within a few days". It is not clear when Mr Hardingham became aware that photographs taken by him became available on RP Data. However, it must have been before 28 January 2014 when he instructed his solicitors to send the letter of demand to RP Data. In light of his experience and involvement in supplying services to the real estate industry, I infer he would have been aware substantially before that time. The applicants must have known that the works remained available on RP Data Professional after the completion of sale and lease transactions. They did not adduce evidence to the contrary. I infer that they knew or assumed that the works were obtained by RP Data from REA. 65 No evidence was adduced by any party from any agent or agency. There was no evidence of any discussion between the applicants and the agencies about intellectual property rights. The applicants gave no evidence that they sought to impose any restriction on the way in which the agencies dealt with REA. The applicants gave no evidence that they informed the agencies that they were not authorised to give a licence to REA or to give the licence set out in the REA terms and conditions. The applicants adduced no evidence that they sought to draw to the attention of any of the agencies that the applicants took the position that the agencies could only give a limited licence to REA which terminated on completion of the relevant transaction or that the agencies could not give the licence set out in the REA terms and conditions. The applicants did not adduce any evidence to suggest that, in any of their dealings with the various agencies over many years, they sought to limit the use of the works by the agents or REA or limit the time during which the works could be made available to the public by the agencies or REA. 66 There was no direct evidence as to whether the agents in fact read REA's terms and conditions. They knew that there were terms and conditions, because they had to agree to them in order to upload content to the realestate.com.au platform. Irrespective of whether agents in fact read REA's terms and conditions, they knew that the content uploaded by them continued to be available after completion of the relevant sale or lease transactions. In agreeing to the terms and conditions, the agencies represented to REA that they could grant the licence set out in those terms and conditions and that the content uploaded would not infringe the intellectual property rights of any third party. 67 The applicants must have known that the works they had been commissioned to prepare had been and were being uploaded in accordance with terms and conditions imposed by REA. These were freely available on the realestate.com.au website. 68 Whether or not the applicants in fact read the REA terms and conditions before early 2014, they knew before that time that: (1) the photographs and floor plans were being commissioned by the agencies in part in order for those agencies to upload the works to the realestate.com.au platform; (2) the works remained on that platform as historical information in relation to completed transactions and were not removed; (3) within a few days of upload the works appeared on RP Data Professional and continued to be made available to the public, including as historical information in relation to completed transactions. 69 In setting their fees the applicants were aware of the matters set out immediately above. The applicants did not adduce evidence in relation to what they took into account in setting their fees. However, they received valuable consideration to produce the catalogue works so that the agencies could, amongst other things, upload the works onto the realestate.com.au platform. 70 Objectively viewed, even before early 2014, the applicants and agencies conducted themselves on the basis that the agencies had the right, so far as concerned the applicants, to upload the works to the realestate.com.au platform in accordance with terms and conditions between REA and the agencies which the applicants and agencies either knew or must have assumed contemplated that REA was permitted to make the works available after marketing campaigns had ended and after completion of relevant sale and lease transactions and which permitted the works to be provided by REA to RP Data. 71 From at least early 2014, there is direct evidence that the applicants in fact knew that, in order for the agencies to upload content to the realestate.com.au platform under REA's terms and conditions, the agencies had to: (1) grant to REA "an irrevocable, perpetual, world-wide, royalty free licence to publish, copy, licence to other persons, use and adapt for any purpose related to [REA's] business any content you provide to [REA]". (2) agree not to upload content which infringed third party intellectual property rights; (3) indemnify REA for loss and damage "as a result of any claim … brought by a third party … in connection with any content or material uploaded … in connection with" the agencies' agreement with REA. 72 Further, there is direct evidence that the applicants knew, from at least early 2014, that there was an agreement between RP Data and REA under which RP Data was provided the content uploaded to the realestate.com.au platform and that RP Data made the works so obtained available to paying subscribers to RP Data Professional, albeit the applicants did not know the precise terms of that agreement. 73 The matters in the preceding two paragraphs necessarily follow from the content of the letter of demand and the 9 April 2014 response to it. 74 It was in that context that the applicants continued to deal with the agencies by accepting their requests to supply photographs and floor plans for valuable consideration. That context applied to each of the twenty transactions the subject of the separate question. 75 The applicants and the agencies knew that the commissioned works were being sought for a purpose which included uploading the works to the realestate.com.au platform. Those parties knew that this was to occur in accordance with REA's usual terms and conditions. The applicants knew the precise content and effect of the terms and conditions. The applicants, in deciding whether to perform the work, dealt with the agencies with that knowledge. 76 It may be that, if the applicants had said to the agencies that the agencies were not authorised by the applicants to give the aforementioned licence to REA, those agencies would have retained a different photographer. If the agencies had not agreed to REA's terms and conditions because they were not authorised by the applicants to give the licence which REA required, they would not have been able to use the platform in relation to the relevant property and would have sought a photographer who was prepared to allow them to grant the relevant licence. 77 Just as the agencies could not, in a practical sense, negotiate out of REA's terms and conditions, neither was it commercially realistic for the agreement between the applicants and the agencies to be such that the agencies could not give to REA the licence which the applicants knew the agencies had to give to REA in order to upload the works which had been commissioned from the applicants for that very purpose. 78 The objective circumstances in relation to the twenty transactions the subject of the separate question, each of which occurred after 9 April 2014, are such that: (1) it is to be inferred from the conduct of the applicants and the agencies, including their course of dealings; (2) alternatively, it should be implied into the agreements between the applicants and the agencies, in order to give business efficacy to those agreements, that the applicants agreed that the agencies were authorised, by way of licence from the applicants, to upload the photographs and floor plans to the realestate.com.au platform and grant to REA a licence in the form required by REA and contained in REA's usual terms and conditions. 79 The agreement between the applicants and agencies would have failed to deliver what was objectively intended to be acquired by the agencies in commissioning the works if such a term were not inferred or implied. The purpose of uploading the works to the realestate.com.au platform was central to the objective sought to be achieved by the parties. That objective could not have been achieved unless the agencies granted the licence contained in REA's terms and conditions. The agencies could not lawfully grant the licence in REA's usual terms and conditions unless the applicants authorised them to grant a licence of that scope. 80 It follows that Mr Hardingham and REMA authorised, consented to or permitted (that is licensed) the agencies to sub-licence the copyright works to REA on terms which permitted the agencies to grant the licence contained in REA's usual terms and conditions, which included authorising REA to grant a sub-licence. REA granted a sub-licence to RP Data which was not contended to go relevantly beyond what was permitted by the sub-licence granted to REA by the agencies. Nor was it submitted that RP Data acted beyond the scope of the sub-licence granted by REA. 81 It also follows that s 15 of the Copyright Act is engaged. The actions of RP Data are "deemed to have been done with the licence of the owner of … copyright" because RP Data's acts were authorized by the licence granted by the agencies to REA, being a licence which bound the owner of the copyright - see generally: Concrete at [11]-[16] (Gummow ACJ); [121]-[124] (Hayne J). It was not established that RP Data's acts went beyond what was permitted by the licence granted by the agencies to REA. The publication or communication of the works by RP Data was not shown to be materially different from the publication or communication of the works by REA. 82 It was also not established that RP Data's acts went beyond what was permitted by the licence granted by the applicants to the agencies. 83 The applicant has not established that RP Data has infringed copyright in the works the subject of the separate question.

Equitable ownership and assignment 84 As mentioned RP Data pleaded that the agencies were "equitable assignees" of copyright, meaning that they were the equitable owners of copyright in the photographs and floor plans and that the applicants, as legal owners of copyright, could be called upon to assign copyright to the agencies. 85 It was not established that the agencies were equitable owners of copyright in the works or that an assignment of copyright, as opposed to the granting of a licence, was necessary to give business efficacy in the circumstances. It was not established, for example, that the agencies needed, in addition to the right to use the copyright works by uploading them onto the realestate.com.au platform, the right to exclude the applicants from using the work or that the agencies required the ability to enforce the copyright against third parties. RP Data was not able to identify any interest or right on the part of the agencies which would be insufficiently recognised by a licence as opposed to an assignment of copyright.

CONCLUSION 86 The applicants have not discharged the onus of establishing that RP Data has infringed copyright in relation to the works the subject of the separate question. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley.

At a glance

Court

Decision date

Before

Source

Judgment (32 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (20)