Spatialinfo Pty Ltd v Telstra Corporation Ltd - [2006] FCA 950 - FCA 2006 case summary — Zoe

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Spatialinfo Pty Ltd v Telstra Corporation Ltd

[2006] FCA 950

Federal Court of Australia|2006-07-28|Before: Sundberg J

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Source facts

Court

Federal Court of Australia

Decision date

2006-07-28

Before

Sundberg J

Source

Original judgment source is linked above.

Judgment (19 paragraphs)

[1]

introduction 1 This proceeding was commenced in February 2004. Since then, I have been called on to adjudicate: (a) a dispute as to notices to produce and subpoenas served by the first respondent (Telstra) on the applicant (Spatialinfo) and the entities funding Spatialinfo's prosecution of the proceeding: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455; (b) a motion by Telstra for the striking out of part of Spatialinfo's claim or for summary judgment thereon: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 1629 (Spatialinfo No 2); and (c) a dispute as to the regime that should govern the treatment of confidential documents exchanged in the course of the proceeding: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 1902. At the hearing of the motion referred to at sub-para (b), I granted Spatialinfo leave to join the second respondent (Autodesk). That, and the reasons for judgment referred to at sub-para (b), necessitated the drawing of a second further amended statement of claim (the statement of claim). The statement of claim was filed on 13 December 2005. 2 By motion, notice of which was filed on 7 March 2006, Autodesk seeks, pursuant to O 11 r 16, the striking out of paras 33 to 61 of the statement of claim or, pursuant to O 20 r 2(1), summary judgment thereon (the primary relief). Those paragraphs constitute the whole of Spatialinfo's suit against Autodesk, in respect of which it seeks damages in excess of $70,000,000.00. That case consists of three claims. Paragraphs 33 to 47 plead infringement of copyright. Paragraphs 48 to 55 plead breach of confidence. Paragraphs 56 to 61 plead contravention of s 52 of the Trade Practices Act 1974 (Cth) (the TPA). To the extent that Autodesk fails to secure the relief described above, it seeks, pursuant to O 12 r 5, an order that Spatialinfo provide "a full and complete response to [its] request for further and better particulars dated 10 February 2006" (the secondary relief).

[2]

THE INFRINGEMENT OF COPYRIGHT CLAIM 3 The relevant part of the statement of claim pleads as follows. (a) At all relevant times, Spatialinfo owned the copyright in three computer programs and five other literary works (the DCE tools): para 33 of the statement of claim. (b) By various agreements made on or about 30 March 2000, including a "Varied Subcontract Agreement" (the subcontract), Autodesk undertook to deliver to Telstra a cable plant records system (the new system) to replace that which Spatialinfo's predecessor had developed for Telstra (the old system - see Spatialinfo No 2 at [5] to [7]): para 34. (c) It was a term of the subcontract "that Autodesk would by 17 April 2000 deliver 'data cleansing and migration tools' to Telstra, including the computer programs and documents necessary to audit, cleanse and export the data from the [old system] for migration to the [new system]": para 35. (d) On or about 17 April 2000, purportedly pursuant to the obligation referred to at sub-para (c), "Autodesk delivered or made available to Telstra copies of" the DCE tools: para 36. (The emphasis is mine.) (e) By engaging in the conduct described at sub-paras (b) to (d), Autodesk reproduced the DCE tools or substantial parts thereof in a material form and authorised the reproduction of the DCE tools or substantial parts thereof in a material form by Telstra and its agents or contractors as alleged in the particulars to para 44: para 37. (The allegations in para 37 of the publication of the DCE tools and the authorisation thereof have been abandoned.) (f) On or about 9 May 2001, Autodesk, Autodesk's parent company and Telstra entered into a settlement agreement and release (the settlement): para 38. (g) Pursuant to the settlement, "Autodesk purported to grant to Telstra a perpetual, royalty-free, non-exclusive licence to reproduce, modify and use the [DCE tools] in Telstra's business operations in Australia together with a right to permit access and use by third parties, subject to the terms of the [settlement]" (the licence): para 39. (h) By granting the licence, Autodesk authorised specified reproductions of the DCE tools or substantial parts thereof in a material form by Telstra and its agents or contractors as alleged in the particulars to para 44: para 40. (i) By reason of the matters alleged in sub-paras (b) and (h), Autodesk infringed Spatialinfo's copyright in some or all of the DCE tools: para 41. (j) By reason of that infringement, Spatialinfo is entitled to damages or an account of profits: para 42. (k) Spatialinfo is entitled to additional damages pursuant to s 115(4) of the Copyright Act 1968 (Cth) (the CA): para 43. (l) At some time that Spatialinfo cannot before discovery and inspection more particularly specify, Telstra, without its licence or authority, reproduced or authorised the reproduction of the DCE tools or substantial parts thereof in a material form: para 44. (m) By reason of the matters alleged in sub-paras (a) and (l), Telstra infringed Spatialinfo's copyright in some or all of the DCE tools: para 45. (n) By reason of that infringement, Spatialinfo is entitled to damages or an account of profits: para 46. (o) Spatialinfo is entitled to additional damages pursuant to s 115(4) of the CA: para 47. The infringement of copyright claim is twofold. First, Autodesk directly infringed Spatialinfo's copyright (the direct infringement claim). Secondly, Autodesk authorised Telstra's infringement of Spatialinfo's copyright (the authorisation infringement claim). Both fasten on the reproduction of the DCE tools or a substantial part thereof. 4 Spatialinfo concedes that the statement of claim fails to plead that the acts alleged to amount to infringement of its copyright by Autodesk were done without its licence. However, Autodesk concedes that that defect can be cured by an amendment.

[3]

The direct infringement claim 5 The direct infringement claim rests on the allegation that "Autodesk delivered or made available to Telstra copies of" the DCE tools. (The emphasis is mine.) See 3. Autodesk contends that the statement of claim fails to identify an act by it that amounts to "reproduction" within the meaning of s 31(1)(a)(i) of the CA because, in their ordinary meaning, the emphasised words do not describe the creation of copies in a manner that necessarily involves such reproduction. By way of example, it points to the delivery and making available of a book - which does not necessarily involve its reproduction. 6 Autodesk requested further and better particulars of the statement of claim. Spatialinfo responded to the request (the response). As to para 36 of the statement of claim, Spatialinfo said in the response that it relied on para 27 of Telstra's defence to an earlier version of the statement of claim (the defence). Paragraph 27 of the defence pleads that on or about 17 April 2000, pursuant to certain obligations under the subcontract that are described in para 26, "Autodesk delivered or made available to Telstra copies of versions of some of the DCE tools". As to para 37 of the statement of claim, Spatialinfo said in the response that the creation of the copies referred to in para 27 of the defence necessarily involved reproduction. In each case, Spatialinfo said that it could not provide further particulars until after discovery and inspection. Further, Anthony Cotter, Spatialinfo's chief executive officer, deposed that, in his opinion, the delivery referred to in para 26 of the defence would have involved reproduction and would "highly likely" have been preceded by reproduction. I need not set out the reasons for that opinion. 7 Autodesk contends that notwithstanding the terms of para 36 of the statement of claim, the direct infringement claim in fact rests upon an unpleaded and unparticularised allegation that copying amounting to reproduction took place before the delivery referred to therein (the prior copying allegation) and that its contention recorded at [5] applies a fortiori to the prior copying allegation. Autodesk contended that even if it did not succeed in obtaining the primary relief, Spatialinfo would still need to amend the statement of claim so that it pleads and particularises the prior copying allegation. 8 The contention recorded at [5] fastens on the words "delivered and made available". It ignores the word "copies". The example of the book set out at [5] is inapposite. According to the Macquarie Dictionary, one of the meanings of "copy" is "one of the various examples or specimens of the same book, engraving, or the like". That is the sense to which the example speaks. Another meaning is "a transcript, reproduction, or imitation of an original". At least to the extent that the DCE tools consist of computer programs, the statement of claim's use of the word "copy" is to be understood in the latter rather than the former sense. 9 What I have said at [8] means that, at this stage, I do not think that the statement of claim must be amended so that it pleads the prior copying allegation. Properly understood, it is not an allegation but a potential allegation. See also what is recorded in the second last sentence at [6]. 10 That leaves the question whether the direct infringement claim has been adequately particularised. There are no particulars to paras 36 and 37 of the statement of claim. That is unexceptionable when one considers what Spatialinfo said in the response. See [6].

[4]

The authorisation infringement claim 11 The statement of claim alleges that Autodesk authorised Telstra's infringement of Spatialinfo's copyright. See 3 and (h). Telstra's alleged infringement is the reproduction of the DCE tools or a substantial part thereof or its authorisation of the same. See 3. That infringement is particularised as follows. "(a) On a date or dates presently unknown to Spatialinfo, Telstra … copied one or more of [a suite of computer programs (the Migration tools) which form part of the DCE tools] from one server or group of servers to another server or group of servers. (b) From in or about April 2000 until in or about December 2000, Telstra used the Migration tools and [a document entitled 'Logical Data Model for Telstra CPR Export' (the Export Data Model) which also forms part of the DCE tools] to migrate 100% of Telstra's [cable plant records] data." (c) Between 8 April 2003 and 12 August 2003, the user known as 'peterc' on Telstra's 'melb602' server used the Migration tools to migrate data. (d) On or about 17 June 2003, Alessandro Caruso of Telstra sent an email to Alan Walter of Spatialinfo reproducing and attaching a copy of the Export Data Model. … (e) On a date presently unknown to Spatialinfo, Telstra without the licence of Spatialinfo, authorised IBM to use the [DCE tools] in order for IBM to tender for and undertake Telstra's CPR2 project. (f) In or about July 2002, and again in or about February 2003 until on or about 9 September 2003, IBM used the Migration tools to migrate some of Telstra's [cable plant records] data for the benefit of Telstra in order for IBM to tender for and undertake Telstra's CPR2 project. (g) On a date presently unknown to Spatialinfo, Telstra authorised … GE Smallworld (Australia) Pty Ltd ('GE') to use the Export Data Model in order for GE to tender for and undertake Telstra's CPR2 project. (h) During a period presently unknown to Spatialinfo, GE used the Export Data Model in order to tender for and undertake Telstra's CPR2 project. (i) Spatialinfo cannot give full particulars of all of Telstra's unlawful acts until after discovery, but at the trial of this acton Spatialinfo will rely on and claim relief in respect of all such acts." 12 Autodesk contends that particular (a) lacks specificity as to what was copied, when it was copied, what it was copied from and what it was copied to. However, Mr Cotter deposed as to the basis on which he believed that that copying took place. Autodesk did not take issue with that part of Mr Cotter's affidavit. 13 As to particular (b), in its response to Autodesk's request for further and better particulars, Spatialinfo said that the use amounting to reproduction involved backing-up the Migration tools to tapes and storing the Migration tools on hardware that contained a disk mirroring facility. Autodesk contends that s 47C of the CA provides a complete answer to that allegation. That section provides that, in certain circumstances, the reproduction of a computer program does not constitute an infringement of the copyright therein. (The expression "computer program" in s 47C is given an extended meaning by s 47AB.) One of the requisite circumstances is that the reproduction is made for the purposes for which backing-up and disk mirroring are commonly employed: sub-s (1)(c). But the section does not apply where the reproduction is made from an infringing copy of the program: sub-s (4)(a). Nor does it apply where the entity by or for whom the reproduction is made is not the owner or licensee of that from which the reproduction is made: sub-s (1). Clearly, Spatialinfo's case is that any reproduction of the Migration tools was made from an infringing copy thereof and that Telstra, by or for whom such a reproduction would have been made, was not the owner or licensee of the Migration tools. 14 Autodesk complains that particulars (c) and (e) to (h) allege use without saying how such use amounts to reproduction. That complaint is answered by what is recorded in the first sentence at [13]. What is said in Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 at [62] to [79] per Gleeson CJ, Gummow, Hayne and Heydon JJ does not assist Autodesk. Nothing in what is recorded in the first sentence at [13] seeks to rely on the loading of a computer program into a computer's random access memory as a reproduction of that program. 15 As to particular (d), Autodesk contends that "[i]t is simply fanciful to assert, as Spatialinfo apparently does, that a copy of its own work made on its own computer was made without its licence". That contention seems to assume that the reproduction complained of is the copy of the Export Data Model that made its way to Spatialinfo by way of the email in question. However, Mr Cotter deposed that the sending of the email in question "involved a reproduction of the Export Data Model from a Telstra repository to Telstra's email server". 16 Autodesk also contends that there is no causal relationship between its alleged authorisation and Telstra's alleged infringement. As to particulars (b), (c) and (e) to (h), Autodesk says that the DCE tools' presence on Telstra's back-up or disk mirroring systems "is overwhelmingly likely to result from the fact that copies of the DCE tools were supplied during 2000 directly by Spatialinfo to Telstra. Acts of reproduction alleged to occur in 2002 [and] 2003 do not causally result from any possible supply by Autodesk on or about April 2000, even assuming that it occurred, when there is intervening supply of copies by Spatialinfo." Similarly, as to particular (d), Mr Cobden SC for Autodesk said that "the far stronger inference … is that … the [Export Data Model] appears on Telstra's [email] server [because] Spatialinfo sent it there themselves in 2000". In support of those statements, Autodesk points to six emails that passed between Spatialinfo and Telstra. However, assuming there was an "intervening supply" by way of those emails avails Autodesk nothing. (Needless to say, Spatialinfo contests that assumption.) The significance of that supply remains in issue and is to be determined by reference to the circumstances thereof. That is a question for trial.

[6]

THE BREACH OF CONFIDENCE CLAIM 18 The relevant part of the statement of claim pleads as follows. (a) The DCE tools were and are confidential to Spatialinfo and its predecessor: para 48 of the statement of claim. (b) Autodesk received the DCE tools in circumstances in which it knew or ought to have known that they were confidential to Spatialinfo and that their use or disclosure was not authorised by Spatialinfo: para 49. (c) At some time after 12 December 1999 that Spatialinfo cannot before discovery and inspection more particularly specify, Autodesk disclosed to Telstra the DCE tools and, without Spatialinfo's licence or authority, purported to grant to Telstra a licence to use the DCE tools and to disclose them to Telstra's agents and contractors: para 50. (d) By reason of the matter alleged in sub-para (c), Autodesk breached its obligation to Spatialinfo to keep the DCE tools confidential and, consequently, Spatialinfo is entitled to damages or an account of profits: para 51. (e) Telstra received the DCE tools in circumstances in which it knew or ought to have known that they were confidential to Spatialinfo and that their use or disclosure was not authorised by Spatialinfo: para 52. (f) At some time that Spatialinfo cannot before discovery and inspection more particularly specify, Telstra used some or all of the DCE tools without Spatialinfo's licence or authority: para 53. (g) Further, at some time that Spatialinfo cannot before discovery and inspection more particularly specify, Telstra disclosed to a number of third parties some or all of the DCE tools without Spatialinfo's licence or authority: para 54. (h) By reason of the matters alleged in sub-paras (a) and (e) to (g), Telstra breached its obligation to Spatialinfo to keep the DCE tools confidential and, consequently, Spatialinfo is entitled to damages or an account of profits: para 55. 19 Autodesk contends that the relevant part of the statement of claim: (a) does not describe with the requisite degree of specificity the information that is said to be confidential - that is, the DCE tools; (b) does not describe the basis on which the DCE tools are said to be confidential; (c) puts against it a case that is "circular"; (d) ignores what arises from the fact that part of the DCE tools are embodied in literary works other than computer programs; (e) should temporally limit the breach of confidence claim; and (f) relies on an erroneous theory of accessorial liability for breach of confidence.

[7]

The description of the information that is said to be confidential 20 In Dart Industries Inc v David Bryar & Associates Pty Ltd (1997) 38 IPR 389 at 406, Goldberg J said: "The information in respect of which confidentiality is claimed must be capable of being identified with a degree of specificity; it is insufficient to claim confidentiality in general or global terms: O'Brien v Komesaroff (1982) 150 CLR 310 at 326-328; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443." (And see Telephonic Communicators International Pty Ltd v Motor Solutions Australia Pty Ltd [2004] FCA 942 at [47] per Selway J.) 21 A detailed description of the DCE tools is provided by para 33 of the statement of claim, the particulars thereto and paras 1 to 8 of the response (the description). I will not repeat or summarise it. Autodesk's complaint that it lacks the requisite degree of specificity does not rise above the level of assertion. 22 Further, to the extent that Autodesk seeks to support that complaint by way of an analogy between the description and the descriptions rejected in Re Sea Culture International Pty Ltd (1991) 32 FCR 275 and Elliot v Seymour [2000] FCA 694, the analogy is false. In the former case, French J said at 281 that the words "relating to, or resulting from research and investigations into oyster and scallop farming on a commercial scale in Western Australia … [did] not identify any confidential information" and that the words "in relation to submissions prepared and made by the fourth respondent to the Fisheries Department … require[d] further narrowing to indicate precisely that research, advice and analyses [were] relied upon". In the latter case, Ryan J said at [50] and [53] that the words: "Between December 1989 and July 1991, Leckie, Livermore and the [National Crime Authority] exercised [defined] coercive powers to obtain documents, transcripts of evidence and other information of and concerning the business affairs of the applicant … comprehend matters which by no stretch of the imagination could be regarded as confidential."

[12]

Autodesk's expert evidence 31 In support of the motion, Autodesk procured two reports from Rodney McKemmish, an independent expert. Those reports relate to only one of the DCE tools: the "functional specification" for one of the computer programs (the specification). 32 For the first report, Mr McKemmish was given a copy of Mr Cotter's affidavit. He was not given a copy of the specification. He was "asked to identify … the … commonplace contents of a specification for a data auditing program that would be part of a data migration process". He did so. Autodesk contends that what Mr McKemmish so identified "covers large parts" of the specification. 33 For the second report, Mr McKemmish was given a copy of the specification. He was asked to examine the specification and identify the commonplace contents thereof. Autodesk contends that what Mr McKemmish so identified "conformed" to his earlier identification referred to at [32]. Then, he was "asked to assume certain information that in effect identified Telstra (as opposed to Spatialinfo) as the source of some [of the] information in the [specification]". Autodesk contends that the assumed information "was, by and large, information that he had not identified as commonplace - unsurprisingly, because it was Telstra-specific". (Presumably, "Telstra-specific" in the same sense in which that phrase is used in what is recorded at [27].) As a result, Autodesk contends that "subtracting from the [specification] first the commonplace and secondly that which was not the information of Spatialinfo, even a cursory examination shows that Spatialinfo's claim that all the information in the [specification] is confidential to Spatialinfo cannot be maintained. As to what could properly be claimed to be confidential, Autodesk cannot know." (The emphasis is in the original.) 34 Spatialinfo responds that the reports do not show that all of the information contained in the DCE tools cannot be confidential. It takes issue with the contention that the specification contains much that is commonplace and, in any case, the assumptions that: (a) because the specification contains information that has been identified as commonplace, the specific contents of the specification: (i) appear elsewhere; (ii) are in the public domain; or (iii) cannot be confidential in their entirety; (b) anything that is not commonplace is "Telstra-specific"; and (c) anything that is "Telstra-specific" cannot be confidential to Spatialinfo. It also points out that Mr McKemmish was only asked to examine one of the DCE tools and that his reports do not show that none of the information contained in the DCE tools can be confidential. 35 Spatialinfo's complaints about the assumptions recorded at [34] are well-founded. There is no evidence that the specific contents of the specification appear elsewhere or are in the public domain. In any case, the fact that information may be identified, in the abstract, as commonplace does not answer the question whether it has the requisite quality of confidence - let alone the question whether in combination with other information that is not commonplace it has the requisite quality of confidence. In the circumstances, the concept of the commonplace is a straw man. Further, even if the assumption recorded at 34 is correct, what I have said at [27] applies mutatis mutandis to the consequential assumption recorded at 34.

Spatialinfo Pty Ltd v Telstra Corporation Ltd

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