Copyright:  authorising copyright infringement - Heinz Wattie’s Limited v Spantech Pty Limited

In this latest instalment in the saga of the Spantech potato storage buildings in Hastings, the Court of Appeal dealt with Heinz Wattie’s argument that it did not authorise the alleged infringement of copyright involved in the construction of its fourth storage facility.

In 1997 and 1998 Spantech built three potato storage buildings for Heinz Wattie in Feilding.  In 1999 Heinz Wattie decided that it needed a fourth, and sought competitive quotes from Spantech and from BPM.  BPM’s quote was cheaper, and BPM got the job.  Heinz Wattie told BPM that the specification for the fourth potato storage building was to be “as per the existing adjacent potato stores”.

The building was constructed, and Spantech sued for copyright infringement, asserting that it owned copyright in the plans for the first three potato storage buildings, and that its copyright had been infringed by BPM and others in the construction of the fourth.  Spantech’s claim against Heinz Wattie alleged that Heinz Wattie was liable for authorising the alleged copyright infringement, by virtue of the instruction that the specifications were to be “as per the existing adjacent potato stores”, in breach of s.16(1)(i) of the Copyright Act 1994.

In its defence Heinz Wattie denied authorising any breach of copyright.  Heinz Wattie brought an application for a summary judgment upholding that defence on the basis that, on the facts, there was no express or implied grant of authority to BPM to copy Spantech’s works, and accordingly no authorisation of infringement.

In the High Court, Judge Gendall concluded that there was a reasonably strong argument that Heinz Wattie did authorise the alleged copyright infringement.  In doing so, he held that the proper time for ascertaining authorisation was at the time the contract with BPM was entered into and the initial instructions given, and that subsequent events were not relevant.

Heinz Wattie appealed.  It persuaded the Court of Appeal that an infringement of copyright by authorisation is not complete until there is in fact an act of infringement of copyright of the kind alleged; and that this meant that all of the relevant communications ought to have been considered (including a meeting between the parties, and a subsequent exchange of correspondence in which Spantech asserted copyright in its design, but BPM denied infringement and asserted its own copyright and that of its consulting engineers in its design).

Heinz Wattie then argued that in these circumstances BPM could not have thought that Heinz Wattie possessed or purported to possess the authority to grant any permission to perform any restricted acts in relation to Spantech’s copyright; and that all Heinz Wattie had authorised BPM to do was to use BPM’s own alleged copyright.  In this regard Heinz Wattie relied on the House of Lords decision in Amstrad, in which it had been held that in advertising and selling tape recorders with a high-speed dubbing function Amstrad had not authorised purchasers to infringe copyright (it merely sold a machine, and the purchaser decided the use to which it would be put). 

The Court of Appeal did not consider the Amstrad decision to be on point, as no directions were given by Amstrad to purchasers of its machine, whereas Heinz Wattie had directed what was to be built through the contractual specifications and accompanying instructions.  The Court of Appeal noted that it did not matter whether Heinz Wattie thought that there would be no infringement of copyright, if it were the case that BPM in carrying out Heinz Wattie’s instructions, did in fact infringe Spantech’s copyright.  An authorisation to copy is sufficient – it need not be a knowing authorisation to infringe copyright.

Heinz Watties appeal accordingly failed.  The issue whether the BPM design in fact infringed Spantech’s alleged copyright still remains to be decided

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For more information on piracy, breach of copyright and intellectual property issues please email Alan Ringwood or call Alan on 64 9 916 8925.