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This article appeared in the Australian Intellectual Property Law Tracker
 
Copyright infringement: Judge actually used evidence to establish tendency, but tendency rule was not followed
 

When running copyright infringement litigation, lawyers should consider carefully whether they are actually asking the judge to use the evidence to infer a tendency to act in a particular way, such as knowingly dealing with articles made in the infringement of copyright. If so, they must comply with the tendency rule in s 97(1) of the Evidence Act 1995 (Cth), which requires reasonable notice and significant probative value. This was highlighted in the recent High Court case of Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd[2013] HCA 21.

This is particularly important in cases, like Aristocrat, where:

  • • circumstantial evidence is heavily relied on
  • • there was no direct evidence of the alleged infringing transactions or counterfeit products
  • • there is evidence of a joint venture contemplating infringing acts, and
  • • the evidence is tendered to discredit witnesses and/or prove the existence of the joint venture but it also has the potential to demonstrate a tendency to infringe copyright.

The only way to connect the infringing transactions to the joint venture, in this case, was to infer that the respondents had a tendency to engage in copyright infringing conduct: [28].

In this case, the primary judge held that the respondents had infringed the applicant’s copyright. The primary judge had not used the word “tendency”, nor referred to s 97 of the Evidence Act, in his judgment: [35]. However, the Full Federal Court held that the primary judge had actually used the evidence to infer a tendency to engage in infringing conduct. Since the tendency rule had not been complied with, the Full Court allowed an appeal against the primary judge’s decision. The High Court held that it was open to the Full Court to characterise the primary judge’s reasoning as treating the evidence as tendency evidence, and refused special leave to appeal. Therefore, the respondents were successful.

Facts

The applicants, Aristocrat Technologies Australia Pty Ltd and others, manufactured electronic gaming machines and owned the copyright in the computer programs, compliance plates and artwork.

The respondents were involved in a joint venture to supply refurbished gaming machines to overseas markets. The applicants claimed that the respondents had counterfeited and sold gaming machines, which had been constructed by using pirated copies of the applicant’s copyright material. It was not possible to identify precisely which components in the machines (involved in the relevant transactions) were counterfeit components, which infringed copyright: [8].

Primary judge’s findings

The primary judge made the following key findings:

  • 1. Some respondents had copied the applicants’ game software onto blank memory chips
  • 2. Some respondents had manufactured counterfeit compliance plates
  • 3. Other respondents were aware of (1)
  • 4. The other respondents were aware of (2)
  • 5. The other respondents sent or were aware that the joint venture had sent artwork to South America to be copied: [9].

There were significant emails tendered to discredit witnesses and/or prove the existence of a joint venture. However, the Full Court found that the primary judge treated the emails as going beyond these issues: [28]. The primary judge had erroneously treated the emails as probative of the infringing transactions and demonstrating a connection between the joint venture and the alleged transactions. Without the emails, the primary judge could not have found such a connection, and the third, fourth and fifth findings could not be supported: [32]. These findings established the “knowledge” requirement of s 38 of the Copyright Act 1968: [23].

Quotes showing the judge had used the evidence to establish tendency

The High Court pointed to various quotes from the primary judge’s reasons to show that the judge had used the evidence to establish a tendency to infringe copyright, including:

“[the offers] do indicate Mr Andrews’ willingness to assist the ‘serial counterfeiters’ in South America in carrying out their actions.”

and

“the acceptance by Mr Cragen that the Global/Impact Joint Venture was prepared to supply gaming machines with false Aristocrat compliance plates.”

and

“Moreover, the email correspondence to which I have referred at some length makes it plain that the Global and Impact respondents sanctioned, approved or countenanced the infringements of copyright carried out by the Tonita respondents”: [16], [18], [21].

This third quote was significant, because it was an inference that did not appear to be based on conduct related directly to the alleged infringing transactions. Therefore, it was open to the Full Court to characterise the primary judge’s reasoning as based on perception of a tendency: [35].

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