Case: Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621
Outcome: referred to
The applicant made a number of claims against the respondents. Those claims are outlined in my liability reasons: Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621. The applicant was unsuccessful as to the majority of its claims. It was unsuccessful as to what it presented as the main claim, namely, that there was an implied term in a contract between it and Graphix Labels Pty Ltd which prevented Graphix Labels from manufacturing and selling skins. The applicant submitted that one order as to costs should be made and it should be an order in its favour. The problem for the applicant is that if it is appropriate to make only one order as to costs, and that order should be in favour of the successful party, or the party who has been largely successful, then neither party has been wholly successful, and it is the respondents who have been largely successful. The respondents have been largely successful in that they have resisted the majority of the applicant's claims including what was the main claim advanced by the applicant. The applicant's counsel attempted to argue that in terms of witnesses and their evidence, the case and the costs associated with it would have been the same, or more or less the same, even if it had not pursued the claims upon which it was unsuccessful. He also submitted that the applicant had been successful as to some claims and unsuccessful as to others. The applicant's attempts to characterise the proceedings in that way must fail because the fact is that the applicant failed on its main claim and the bulk of its other claims. My reasons for reaching that conclusion are apparent from my liability reasons and require no further elaboration. 7 For their part, the respondents submitted that the success or benefit ultimately achieved by the applicant in pursuing the proceedings, as reflected in my orders, was slight, whereas the costs were substantial. The success or benefit was submitted to be so slight that when regard is had to the undertakings as to the artworks offered by the respondent at the outset, the success or benefit achieved by the applicant should be ignored. As I understood the submission, it was that in practical terms the respondents have been successful. It follows, so it was submitted, that an order for costs should be made in their favour albeit the costs should be assessed on different bases for different periods. 8 In my opinion, the respondents' submission should be rejected for two reasons. First, the applicant has succeeded in its claim for infringement of copyright in relation to the artworks and for breach of an implied term in relation to samples containing the artworks. In relation to the first-mentioned claim, the applicant has received an award of damages including additional damages which, although modest, were based partly on a finding that the infringement was flagrant. Secondly, the undertakings proffered by the respondents to the applicant not to use the artworks were made with a denial of liability and did not include any indication that the respondents would pay damages or consent to an order for the assessment of damages. The applicant pointed out to the respondents in correspondence that they had not explained the basis upon which they denied liability for infringement of copyright. The denial of liability was maintained in the defence and indeed it was maintained until the fifth day of trial. I was told that the reason for the denial was that the respondents were not satisfied that the artworks were original works, but even if the reason for the denial is relevant, the particular reason was not conveyed to the applicant in their correspondence or in the defence in a way that may have reduced costs. It may be that the important fact is not that the respondents did not offer to pay damages or consent to an assessment of damages but, rather, the fact that ultimately the applicant received an award of damages.