Jane Glover Barrister – Mediator – Adjudicator

PRE-ACTION AUDIT: COPYRIGHT INFRINGEMENT

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Letters before action have an unfortunate tendency to be overblown, overstated, and over-egged. The demands made can be entertainingly over the top. A while ago I was instructed in relation to a matter where my client had received some particular doozies that had been dashed off without any real analysis. The alleged causes of action were many and various, but oddly the one that really stood out as being unparticularised and unsubstantiated was the allegation in relation to copyright infringement.

Before leaping into print or, worse, legal action, it is prudent to conduct a brief audit of the rights on which your client intends to rely, together with an assessment of the evidential/factual position. As a general public service announcement, here is a checklist of the matters that should be considered before alleging copyright infringement.

IDENTIFY THE PARTICULAR WORKS RELIED UPON

The first step is to identify the particular copyright works that are alleged to have been infringed. In the case of a 3D product, for example, these may be design drawings or prototypes or CAD files.

IS IT A COPYRIGHT WORK?

The scope of copyright in New Zealand is extraordinarily (some might say anachronistically) broad – but there are limits. For example, some works, such as titles and slogans, may be denied copyright protection on the basis that they are not sufficiently substantial and/or lacking in originality.

Also, copyright only protects the particular expression of an idea rather than the underlying idea itself. Say I had an idea for a magazine article, told a colleague about it, and he stole my idea. This is unlikely to be copyright infringement. (Depending on the circumstances it might amount to breach of confidence.) If, however, I jotted down some notes about my idea and emailed them to my colleague, who incorporated some of my actual wording into his own article, then this might well amount to copyright infringement.

DOES COPYRIGHT STILL SUBSIST?

Copyright protection is lengthy for most types of work, but it does not last forever. Once copyright in a work has expired, the work forms part of the public domain.

WHO OWNS COPYRIGHT?

The first owner of copyright in a work is usually the author, although the Act provides for different starting presumptions where the author of the work is an employee who has created the work in the course of his or her employment, or where certain types of work are commissioned. Joint ownership of copyright is also possible.

The rights holder will need to prove that it owns copyright. This can sometimes be difficult because copyright arises automatically and there is no central register of works. As soon as a person writes a letter, or takes a photograph, or writes a song, or makes a video, or creates a database, copyright will subsist in those works. The rights holder may need to search for copies of contracts, earlier drafts of the work, dated CAD drawings, or other documents that can help to establish ownership.

There are also various restrictions around the circumstances in which the work must be created, and by whom, in order to qualify for copyright protection in New Zealand. Remember, too, that an exclusive licensee of the copyright has standing to bring infringement proceedings, but a non-exclusive licensee does not.

HAS THE DEFENDANT ENGAGED IN AN INFRINGING ACT?

Unlike trade marks and patents, copyright doesn’t prevent someone else from independently producing the same work. If someone else just happens to come up with the same thing coincidentally, then there is no infringement. Also, the defendant must have copied a substantial part of the work.

Check the Act carefully to make sure that all the elements of the particular act of infringement you allege can be made out. There are many different types of infringing acts (copying, issuing copies to the public, communicating the work to the public, importing an infringing copy, possessing or dealing with an infringing copy, providing the means for making infringing copies and so on). Copyright law is fiddly because the elements of infringement differ depending on the particular type of infringement alleged. In the case of secondary infringement, for example, the defendant’s knowledge will be critical, whereas this is irrelevant in the case of primary infringement.

WHAT EVIDENCE IS THERE OF INFRINGEMENT?

Ask your client to keep copies of anything that might be relevant as evidence in Court proceedings. So, for example, if an allegedly infringing product is being sold, take photographs, keep copies of advertising materials, purchase a sample and keep the receipt. If there is relevant material on the internet, take periodic screenshots in case the website changes.

If the person who collates evidence of this type is a lawyer, ensure that the lawyer gathering the evidence is not the person who will be arguing the case.

DO ANY DEFENCES/EXEMPTIONS APPLY?

The defences/exemptions to copyright infringement are reasonably narrow and cover specific situations. For example, the Act exempts fair dealing for the purpose of criticism, review, news reporting, and research or private study. There is also protection for incidental copying and for transient reproduction of a work.

Neither freedom of expression nor fair use is a general defence to copyright infringement in New Zealand.

ARE THERE ANY OTHER RIGHTS AT ISSUE?

It is not uncommon for copyright issues to arise alongside other causes of action. In particular, copyright issues may give rise to related breach of confidence, passing off, Fair Trading Act, trade mark, patent or contractual causes of action.

WHICH FORUM?

A copyright owner can take legal action against an infringer in the District Court or the High Court. The Disputes Tribunal has no jurisdiction over IP disputes. Alternative dispute resolution may be an option, but is often only effective if court proceedings are on foot so that the other party understands the seriousness of the situation it is facing.

WHAT DOES THE CLIENT WANT TO ACHIEVE?

The most important issue to clarify when acting for a rights holder is what it wants to achieve. Does it want the other party to stop what it is doing? Does it want the infringing items out of the marketplace? To send a message to the market? To recover damages/lost profits? To stop infringing goods being imported into New Zealand? Does it want the infringer to provide information about other traders in the supply chain? Does it need urgent orders to preserve the position pending a full trial? Or a search order?

Any legal action taken should be tailored to achieve the particular real-world result that the client seeks, not a potentially meaningless and expensive vindication of its rights. In addition, any undertakings sought should be drafted with a view both to the particular remedies that the client wants to achieve and the relief that a Court is likely to grant if the matter went to trial.

LOSS/DAMAGE

If the putative plaintiff intends to claim damages, it is crucial to identify which entity has suffered loss (especially where there are a number of related companies involved), and to assess the scale of the loss suffered before providing advice about the best strategy to follow.

UNJUSTIFIED PROCEEDINGS

Be careful out there! As well as causing reputational damage, issuing ill-considered proceedings for copyright infringement can backfire, particularly if the other party counterclaims on the basis that the proceedings were unjustified.

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Jane Glover

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By Jane Glover
Jane Glover Barrister – Mediator – Adjudicator

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