Case: Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472
Outcome: cited
an award of damages pursuant to s 115(2) of the Copyright Act might in an appropriate case be the measure of the depreciation in the value of the exclusive bundle of rights comprising the copyright, as a chose in action ( Sutherland Publishing Co. Ltd v Caxton Publishing Co. Ltd [1936] 1 Ch. 323 per Lord Wright MR; Microsoft Corporation v Atifo Pty Ltd (1997) 38 IPR 643) , it is not the right measure in a case such as this ( Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472 at 475 per Wilcox J; Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales (1975) 6 ALR 445 , Bowen CJ at Eq 446). There is, understandably, no evidence of a discounted cash flow valuation of the copyright as a capital asset nor, equally understandably, any evidence of any diminution, by reason of the infringement, in the capacity of Jennings to derive revenue by exploiting the copyright work, that is, by using the plan and constructing houses representing a three-dimensional reproduction of the plan, for clients. In this case, the respondents built a single house as their residential dwelling. They are not project home builders and they are not in the business of repetitious infringing conduct. Since there is no demonstrated impact on the exploitation revenues Jennings derives from the use of the Cortona 290 plan, there is very likely to be no corresponding impact on the value of the copyright as an incorporeal right. However, the formulation of Lord Wright in Sutherland has been described as "no more than a convenient label for the various ways of assessing damages which are available in any particular case" ( Australasian Performing Rights Association v Grebo Trading Co. Pty Ltd (1978) 23 ACTR 30 per Blackburn CJ at 31) and the question to be answered is, what loss has Jennings suffered as a result of the infringement of its copyright? ( Interfirm at 446) As to the general principles concerning the assessment of damages for breach of copyright, see Autodesk v Cheung (1990) 94 ALR 472 at 474 477; Amalgamated Mining Services Pty Ltd v Warman International Ltd [1992] FCA 542 ; (1992) 111 ALR 269 at 285; Microsoft Corporation v TYN Electronics Pty Ltd (in liq) (2005) 63 IPR 137 and Eagle Rock Entertainment Ltd &amp; Anor v Caisley (2006) 66 IPR 554. Jennings contends that it does not licence its copyright to enable third party construction to occur. It keeps its copyright in a Jennings safe harbour and uses it solely in its own construction activity. Therefore, it is said, Jennings ought not to be treated in an analogous position to an architect who might, by reason of the nature of the professional work an architect undertakes, be subject to an implied licence of the copyright in a work produced in connection with particular projects. Nor, it is said, should the hypothetical "construct" of a notional willing licensor and licensee be adopted as the framework for determining a surrogate measure of damages by reference to a licence fee. The pleading claims damages on the alternative bases of either a fee for use of the plan or lost profits in the construction of the Bogdan home. Presumably, the pleading does so in order to preserve alternative possible formulations of a remedy in damages in respect of proven infringing conduct. However, it is clear that the letter of demand from Jennings dated 19 November 2003 made a claim for a fee for use of the plan for an amount which remains the amount claimed as a fee for use in the amended pleading. In Autodesk v Cheung , Wilcox J did not apply the licence fee approach to the assessment of damages because his Honour could not draw the inference, on the facts of that case, that the respondent, presented with a choice between paying a licence fee or not using the work, would have paid the licence fee. It was simply not a likely event. Similarly, Tamberlin J took the view on the facts before his Honour in Columbia Pictures Industries Inc. &amp; Anor v Luckins (1996) 34 IPR 504 at 509 that a licence was unrealistic. His Honour observed at 509: In my view, the licence fee approach is not appropriate in a situation where it is clear that there never would have been a licence granted by the applicants because of the disruption such a licence would inflict on the applicants' basic strategic marketing timetable in Australia. The evidence in this case does not suggest any element of a competitive threat by the respondent, Mr Bogdan, to the activities of Jennings nor is there any suggestion of any disruption to the applicant's activities manifest in the class of case reflected in the decisions in Autodesk v Cheung , Columbia Pictures v Luckins and Eagle Rock v Caisley . Equally clearly, the element of disruption was the factual foundation upon which their Honours came to the conclusion that the applicants in each case would not have granted a licence. It is clear in this case that had a licence been sought by the respondents from Jennings it would either not have been granted or alternatively a licence fee of $20,000.00 might have been nominated by Jennings. That possibility is at least consistent with the letter of demand and the pleading. Nevertheless, had Jennings sought a licence fee from the respondents of $20,000.00, plainly enough, the respondents would not have taken up that licence.