Case: Polygram Pty Ltd v Golden Editions Pty Ltd (1997) 76 FCR 565
Outcome: cited
However, that sum reflects the lost profit upon sales of the bucket rather than the loss suffered by the applicant by reason of infringement of the copyright in the drawing for the pivot mechanism itself. It seems to me that a further discount should apply to take account of that proportion of the profit which is attributable to a component forming part of an assembled article. In this case, it seems to me that the copyright owner is only entitled to damages that represent the loss attributable to the copyright material taken. Although speaking in terms of conversion damages, the principle in relation to severance was expressed this way by Lockhart J in Polygram Pty Ltd v Golden Editions Pty Ltd (1997) 76 FCR 565 at 571: 'If the court is presented with goods that comprise infringing and non-infringing matter, it will be necessary to decide whether the goods can be severed into infringing and non-infringing components. If the goods can be severed then the court can find that it was the making of the infringing component that constituted an infringement of the work, and therefore that the infringing copy is only comprised by that component. In such a case, the copyright owner is only entitled to damages that represent the value of the copyright material taken.' 298 I have accepted that the pivot mechanism is a major component and is, on the expert evidence, central to the functioning and operation of the bucket. It is the mechanism within the bucket that under hydraulic load causes it to function and articulate. Many of the other parts (although plainly not all), play a dependent role in the configuration of the bucket. It seems to me that the supplementary discount is not simply a question of whether the part or component is one of five or seven or 12 or 30 components within the bucket resulting in a proportionate allocation of the lost profit but whether the component is a material component of real importance. It seems to me that the pivot mechanism is clearly such a component. Its relative importance is a matter of judgment and in determining a reasonable view of compensatory loss it seems to me that the amount at [296] ought to be further discounted by 60% resulting in an amount of $61,223.00. 299 Accordingly, the measure of damage is $61,223.00. 302 The principles influencing an assessment of damages under the section are these ( Aristocrat Technologies Australia Pty Limited v DAP Services (supra) [40]-[45]). Flagrancy is not an essential pre-requisite for an award of additional damages; it is sufficient if the court is satisfied that any one or more of the circumstances set out in s 115(4)(b) is established ( Raben Footwear v Polygram Records Inc. (1997) 75 FCR 88 at 93 per Burchett J; per Tamberlin J at 103 and per Lehane J at 104; Polygram Pty Ltd v Golden Editions Pty Ltd (1997) 76 FCR 565 per Lockhart J at 575; Sony Entertainment (Australia) Limited v Smith (2005) 215 ALR 788 per Jacobson J [158]); additional damages under s 115(4) may be assessed having regard to principles derived from awards of aggravated and exemplary damages at common law ( Autodesk Inc. v Yee (1996) 68 FCR 391 per Burchett J at 394; Lamb v Cotongo [1987] HCA 47 ; (1987) 164 CLR 1 per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ at pp 9, 10); one objective of an award is deterrence; an element of penalty is an accepted factor ( Autodesk v Yee (supra) at p 384); the accrual of benefit by reason of the infringement to the respondent is a further factor and the notion of 'benefit' suggests a pecuniary benefit to the respondent in excess of the damages otherwise payable ( Ravenscroft v Herbert and New English Library Limited [1980] RPC 193 per Brightman J at 208); the benefit need not be pecuniary ( Polygram v Golden Editions Pty Ltd (supra) per Lockhart J, p 576); and there need not be any proportionality between the amount of compensatory damages awarded pursuant to s 115(2) and the amount of additional damages awarded pursuant to s 115(4) ( Raben Footwear v Polygram Records (supra), pp 93, 103 and 104; Microsoft Corporation v PC Club of Aust Pty Limited [2005] FCA 1522 ; (2005) 148 FCR 310 at pp 409, 410 per Conti J); and the assessment of the amount to be awarded is necessarily an imprecise exercise ( Bailey v Namol Pty Limited (supra) per Burchett, Gummow and O'Loughlin JJ at p 114).