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ARA OY v PASCALL AND OTHERS

WITWATERSRAND LOCAL DIVISION

MYNHARDT J

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JUDGMENT

Mynhardt J: In terms of the Notice of Motion applicant seeks an order:
`(a) interdicting the respondents from their continued, direct and indirect, infringement of the applicant's copyright in the drawings listed in schedule "HE 7'';
(b) that the respondents deliver-up under oath to the applicant all:

(i) two-dimensional reproductions of the applicant's drawings listed in schedule "HE 7" in the possession or under the control of any respondent or any contractor of a respondent.

(ii)three-dimensional reproductions of the applicant's drawings listed in schedule "HE 7" in the possession or under the control of any respondents or any contractor of a respondent, and

(iii) tools, dies, jigs and other tooling and machinery used for the manufacture of the three-dimensional reproductions of the applicant's drawings listed in schedule "HE 7".

c) thattherespondentsprovidetheapplicantwithalistofdrawings,other than the drawings listed in schedule "HE 7", which are legally the property of the applicant and which are in the possession or under the control of the respondent or any contractor of the respondent and that the respondents deliver-up to the applicant the drawings listed;

d)  that the respondents provide the applicant with an account of profits and payment thereof by the respondents jointly and severally;

e)  an award of additional damages in the sum of R2 000 000 to the applicant and payment thereof by the respondents jointly and severally; and

f)  in the alternative to (d) and/or (e) above an order postponing the matttter to be arranged for the hearing of oral evidence in order that the question of an account of profits and/or the question of additional damages may be investigated and determined by the court;

g)  thattherespondentspaytheapplicant'scosts,ontheattorneyandown client scale, such costs to include the costs of the employment of two counsel and the costs, and travelling to Finland and accommodation expenses whilst there, of Dr Burrell of the applicant's attorneys in collecting and collating the evidence necessary to support the application.'

The salient features of the applicant's case may be summarised as follows: the applicant is a Finnish company; over many years applicant and its predecessors have developed the TORO LHD (load, haul, dump) product line, ie machinery, more specifically, front end loaders, of which various models are manufactured and marketed; as part of this development process a number of technical drawings of the parts of these machines and specifications relating thereto have come into being; by virtue of a licensing agreement Bateman Mining Equipment (Pty) Ltd (`Bateman') has become the exclusive licensee of the applicant in the Republic of South Africa; in terms of this licensing agreement applicant has supplied many of its aforesaid technical drawings and specifications relating to parts of the TORO machines to Bateman and there has also been a continual interchange of specialist technical personnel and knowledge; in terms of the licensing agreement the applicant retained its copyright in the drawings and Bateman is obliged to ensure that `all ARA know-how and technical information' provided is to be kept confidential; the respondents are in competition with Bateman in supplying some of the goods and spares for underground loader equipment and other earthmoving equipment; the first respondent was, until 1 April 1988, the general manager of Bateman Mining Equipment Ltd, the predecessor of Bateman; the second respondent was also in the employ of Bateman Mining Equipment Ltd, he was also the company's marketing manager and he resigned on 30 September 1988; the third respondent was also in the employ of Bateman Mining Equipment Ltd as a parts sales clerk and he resigned on 29 February 1988; the first respondent is also a director of the fourth and fifth respondents and he is the sole member of the sixth respondent. During August 1989 Bateman received information that the respondents were involved in stealing confidential drawings of the TORO product line from Bateman and one of Bateman's employees, Mr T L Nkhetoa revealed to Bateman that he had, on various occasions, been requested by the third respondent to make copies of drawings relating to TORO machinery and to supply these copies to him and that he had complied with these requests. Bateman applied to court for a so-called Anton Piller order which was granted. This order was executed at different addresses of the respondents and a number of drawings were attached. An examination of the drawings which were attached revealed that copies have been made of drawings relating to parts which were designed by the applicant and which are used exclusively in TORO vehicles. The respondents have also obtained the services of a sub-contractor to manufacture TORO parts which the respondents have sold and supplied to various clients of them. Applicant initially applied for leave to intervene as a co-applicant in the abovementioned application which was brought by Bateman against the respondents but has since decided not to proceed with the application for leave to intervene but to launch the present application in its stead. Applicant contends that copyright subsists in the drawings which form the subject matter of this application and that the copyright vests in applicant; that the respondents have infringed the copyright and that applicant is therefore entitled to the relief claimed in the Notice of Motion.

The respondents have not produced evidence to refute the applicant's allegations. The respondents have contented themselves with merely denying applicant's allegations. The respondents do, however, allege that applicant and Bateman are acting in concert with each other and that they are improperly utilising the process of the court to mulct the respondents in enormous legal costs and thus forcing them out of the market place. The respondents further alleged that in view of the fact that they have tendered an undertaking the applicant as early as September 1989 not to infringe the copyright claimed by applicant, the present application should not have been instituted but that they in any event consent to an order in terms of paragraph (a) of the Notice of Motion, and that the applicant ought to be ordered to pay their costs of suit.

At the commencement of the hearing Mr Serrurier, who, together with Mr Goodman, appeared for the respondents, conceded that applicant has proved that copyright in the drawings vests in the applicant and that respondents have infringed applicant's copyright and that applicant is entitled to an interdict as prayed for in paragraph (a) of the notice of motion. Mr Serrurier's whole argument was therefore directed to the further relief claimed by applicant and he submitted that applicant is not entitled to the relief claimed in paragraphs (b) to (g) of the Notice of Motion. In view of this concession it follows that at least an order in terms of paragraph (a) of the Notice of Motion will have to be made.

The question therefore is whether or not the applicant is entitled to an order in terms of any one or more of the remaining paragraphs of the notice of motion. These paragraphs will now be considered.

PARAGRAPH (b)

It will be seen from the formulation of this prayer in the notice of motion that applicant seeks an order which is directed to the delivery-up of reproductions of the drawings which belong to applicant and in respect of which applicant is the holder of the copyright, and, also, to the delivery-up of tools, dies, etc. which was used for the manufacture of three-dimensional reproductions of the aforesaid drawings.

Mr Puckrin, who together with Mr Franklin, appeared for the applicant, submitted that the applicant is entitled to an order for delivery-up of the reproductions of the drawings as well as the tools, dies, etc. in terms of section 24(1) of the Copyright Act (no 98 of 1978) (`the Act'). Mr Puckrin conceded that the order was too widely framed in the Notice of Motion in so far as it directed the respondents to deliver-up the documents and items `under oath'. These words will therefore have to be ignored.

Mr Serrurier submitted, in the main, that section 24(1) of the Act does not entitled applicant to an order in the terms as sought by applicant; that the relief sought in any event involves an assumption that the respondents will not heed the interdict, an anticipation that the respondents will not comply with the interdict for which assumption there is insufficient evidence, and, that applicant has not proved that the respondents are in possession of any infringing reproductions of the drawings.

Section 24(1) of the Act reads as follows:
`Subject to the provisions of this Act, infringements of copyright shall be actionable at the suit of the owner of the copyright, and in any action for such an infringement all such relief by way of damages, interdict, accounts, delivery of infringing copies or plates used or intended to be used for infringing copies or otherwise shall be available to the plaintiff as is available in any corresponding proceedings in respect of infringements of other proprietary rights.'
The first question to be considered is whether or not the relief which applicant seeks is `available in any corresponding proceedings in respect of infringements of other proprietary rights'. Mr Serrurier has submitted that the owner of copyright has no proprietary right to recover `offending' reproductions or copies and for this submission he relied upon the judgment of Slomowitz AJ, who delivered the judgment of the Full Bench, in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation; Video Parktown North (Pty) Ltd v Shelburne Associates and others; Video Parktown North (Pty) Ltd v Century Associates and others 1986 (2) SA 623 (T) at 641 F-G. In the passage relied upon by Mr Serrurier Slomowitz AJ said the following:

`As I have been at pains to point out, copyright is a species of ownership. Because it is the ownership of an incorporeal, it does not admit of the notion of natural fruits. The rental received for the letting out of pirated copies of copyright material is a civil fruit of those pirated copies. The offending copies are not, however, part of the patrimony of the copyright owner, and the rental in question is not his either. It follows that in the absence of the remedy of conversion and detention accorded by s 19 of the 1965 Act, no right to an account falls to the copyright owner any more than would the owner of, say a holiday home be entitled to sue a trespasser who has let it for reward to an account of the rental which the trespasser obtained. His remedy is in damages alone.'

Mr Serrurier has also relied upon a passage in the judgment of Van Dijkhorst J who delivered the judgment of the Full Bench in Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and another 1984 (4) SA 149 (T). The relevant passage is to be found at p 173 F-I of that judgment and it reads as follows:

`The South African Courts have therefore no jurisdiction to grant an order for the attachment of the property of another where no right of the applicant therein exists, merely for the purpose of its production as evidence.
The last component of the Anton Piller order to be considered is whether, ancillary to an interdict, an order should be made for the handing over of the property of another 'to make the interdict effective' where no right to that property exists. This type of order may arise in trade mark cases where the infringing trade mark is sought to be erased and the applicant wants to do that himself.

This type of order presupposes that the interdict, which prohibits the respondent from utilising that product as long as it contains the infringing trade mark, will be disregarded. This presupposes, even before the order is granted, that the respondent will be in contempt of court and that, should an order be granted that the respondent himself erase the offending work, that order will equally be disregarded. I find this a strange approach. The courts of this country have always acted upon the basis that their orders are complied with and, if not, the procedure for committal for contempt of court is effective. There is no reason to make this order and in law the court has no power to order the handing over of the property, for the reasons set out above.'

In my view it does not follow that because the copyright owner is not the owner of the `offending' copies that he would therefore not be entitled to an order for delivery-up thereof. What section 24(1) of the Act does, in my view, is to grant to the copyright owner relief similar to that granted to the holder of other proprietary rights who complains that his rights have been infringed. The rights of the copyright owner need not be equated to those of the holder, or owner, of other proprietary rights; the section does not, in my view, require or imply that: the section accords the copyright owner relief or remedies similar to that which is available to the owner of other proprietary rights. Mr Serrurier did not contend that the owners of other proprietary rights is not entitled to an order for delivery-up of `offending' copies. It therefore follows, in my view, that if the owners of such rights are entitled to orders for delivery-up then the applicant in this matter would also be entitled to such an order in terms of section 24(1) of the Act.

Furthermore, I do not think, in any event, that the above quoted passage in the judgment of Van Dijkhorst J in Cerebos, supra can be regarded as authority for the submission made by Mr Serrurier. In the Cerebos-matter the court was not concerned with the remedies of, or the relief available to, the holders of rights of a proprietary nature.

The second reason, why, in my judgment, the submission made by Mr Serrurier cannot be accepted, is that orders of this nature have, in the past, been granted by our courts in favour of the copyright holder. In Paramount Pictures Corporation v Video Parktown North (Pty) Ltd 1983 (2) SA 251 (T) McCreath J made an order in favour of the holder of the copyright in the films with which the court was concerned, for the delivery-up of the `offending copies'. This order was the subject of attack on appeal before the Full Bench in Video Parktown North, supra. The appeal against this order was dismissed by the Full Bench. See Video Parktown North, supra, at 636 I.

In Galago Publishers (Pty) Ltd and another v Erasmus 1989 (1) SA 276 (A) the court a quo made an order in favour of the copyright owner for the delivery-up of all copies of the infringing work. On appeal the Appellate Division did not specifically deal with this order of the court a quo as no objection was taken to it. See Galago Publishers, supra, at 194 F-G.

I cannot accept that the court in Video Parktown North, supra, and the Appellate Division in Galago Publishers, supra, would have allowed the orders to stand, even if no objection was taken to them, if a copyright owner was not, in law, entitled to such an order as was contended by Mr Serrurier. In Fax Directories (Pty) Ltd v SA Fax Listings CC 1990 (2) SA 164 (D) a similar order was granted. Admittedly, the order was granted without the court considering the question of whether or not the holder of the copyright was entitled to the order. The case is, however, at least authority for the proposition that our courts have invariably granted orders of this nature of the holder of copyright.

In regard to the other arguments advanced by Mr Serrurier I have come to the conclusion that they, too, cannot be upheld. I agree with Mr Puckrin's submission, namely that it has been shown on the papers that the respondents have made themselves guilty of a flagrant breach of their duty not to infringe applicant's copyright in the relevant drawings listed in schedule `HE 7' to the founding affidavit of Mr Heikki Euro. The respondents have not taken the court into their confidence by stating that they have no other copies of those drawings in their possession. This they could easily have done. Applicant was also not a party to the obtaining of the Anton Piller order and was not involved in its execution. Applicant cannot, therefore, vow for the fact that the respondents still have copies of the relevant drawings in their possession. This is something exclusively within the knowledge of the respondents and they have chosen not to take the court into their confidence. It does not lie in their mouths, therefore, to say that applicant has not shown that they are still in possession of any copies of the drawings. In view of the fact that copies of these drawings were in fact found in the possession of the respondents when the Anton Piller order was executed and the fact that applicant has proved that at least the third respondent had been instrumental in stealing copies of the drawings under the control of Bateman, I would have thought that the respondents would have regarded it their duty to be frank with the court and to have disclosed to the court whether or not they still have copies of the drawings in their possession. This, as I have said, they have failed to do. Under these circumstances it seems to me that the inference is almost an irresistible one that they still have copies of the drawings in their possession. In my view applicant is therefore entitled to an order in terms of prayer (b)(i).

As far as prayer (b)(ii) is concerned the applicant has also proved incontestably that respondents have caused parts to be manufactured by their sub-contractor, Rocoal Mining Equipment Supplies (Pty) Ltd (`Rocoal'). These parts could only have been manufactured by making use of applicant's drawings or copies thereof.

For the same reasons why an order in terms of paragraph (b)(i) will be granted the applicant is, in my view, entitled to an order in terms of paragraph (b)(ii) of the notice of motion.

In regard to paragraph (b)(iii) Mr Puckrin conceded that the relief has been too widely framed. The applicant is not entitled to delivery-up of the respondents' factory, so to speak. What applicant is entitled to is an order for the delivery-up of the appliances used for the manufacture of the parts referred to in paragraph (b)(ii) of the Notice of Motion. In terms of section 24(1) of the Act an owner of copyright is entitled to delivery-up of `plates used or intended to be used for infringing copies ....'. The word `plate' is defined in section 1 of the Act so as to include `any stereotype, stone, block, mould, matrix, transfer, negative or other similar appliance'. Mr Puckrin submitted that the appliances referred to in paragraph (b)(iii) of the Notice of Motion are in fact the `plates' referred to in section 24(1) of the Act. I did not understand Mr Serrurier to contest this. No other argument was advanced by Mr Serrurier why an order in terms of paragraph (b)(iii) should not be granted. It follows therefore that an order in terms of that paragraph of the Notice of Motion, suitably amended, will also have to be granted.

PARAGRAPH (c)

This paragraph is also concerned with drawings which are the property of the applicant. The relief claimed is accordingly of a vindicatory nature.

During argument Mr Puckrin conceded that it would not be necessary, in the event of the order being granted, to demand of the respondents that they compile a list of the drawings. In the event of the order being granted he suggested that it be granted in an amended form so as to direct the respondents to deliver-up to the applicant drawings belonging to the applicant.

Mr Serrurier submitted that, on the probabilities, respondents do not have any other drawings in their possession after the execution of the Anton Piller order. He also submitted that applicant has not proved that respondents have any drawings in their possession which belong to the applicant.
Once again I regard it as an important factor that the respondents have not stated under oath in their answering affidavits that they do not have any such drawings in their possession. Once again I must also make mention of the fact that applicant has showed, by means of the affidavit of Mr Pretorius, Annexure `HE 6' to the founding affidavit, that respondents have been in possession of a number of drawings. It also appears from paragraphs 22 and 23 of Mr Pretorius' affidavit that the respondents must have had drawings in their possession which would have enabled them to give a quotation for a complete refurbishment of a TORO 200D-machine. These drawings could only have been obtained from Bateman which, in turn had the drawings of the applicant under its control. As I understand the matter, there is nothing to show that those drawings which the respondents must have had in their possession, were also attached by the deputy sheriff when he executed the Anton Piller order. If that were so, the respondents could easily have said so. What is more, there is also no proof that the Anton Piller order was executed at all the places or addresses of the respondents where they could possibly have kept documents or drawings. Once again, bearing in mind that this is also a matter within the exclusive knowledge of the respondents, it is rather significant that the respondents have not told the court that they do not have any drawings, other than those listed in schedule `HE 7' of the founding affidavit, in their possession.
In paragraphs 29 and 30 of the founding affidavit and in paragraphs 16 and 20 of Mr Pretorius' affidavit it is alleged that the respondents must have been in possession of the so-called `fabrication drawings' in order to have been able to have manufactured certain components or parts of TORO machines. In paragraph 54 of the founding affidavit it is stated that there are indications that the respondents have filched a substantial number of, if not all, the drawings relating to at least one entire machine in the TORO product line. This allegation is confirmed in paragraph 22 of Mr Zille's affidavit, Annexure `HE 23' to the founding affidavit. In paragraph 56 of the founding affidavit it is also stated that the respondents have other drawings in their possession which they have filched from Bateman. This allegation should be read in the light of what Mr Pretorius has stated in paragraphs 22 and 23 of his affidavit to which I have referred above. The respondents have chosen, for reasons better known to themselves, not to deal in any detail with these allegations and they have not put forward any factual averments to contradict the allegations made by the applicant. Under these circumstances I agree with Mr Puckrin's submission namely that as the papers stand at present the respondents do have drawings in their possession, other than those listed in schedule `HE 7', which belong to the applicant.

I am therefore satisfied that the applicant has made out a case for the relief sought in paragraph (c) of the Notice of Motion.

PARAGRAPH (d)

Mr Puckrin submitted that the judgment of the Full Bench of this Division in Video Parktown North, supra, which held that the remedy of an account of profits was a substantive remedy that it had been removed from the South African Law of Copyright in the Act was wrong. I am, however, bound by the aforesaid judgment and I accordingly refrain from expressing any opinion on the interesting questions whether or not the remedy is merely a procedural one or a substantive one and whether or not it forms part of our law. See also J L & J E Walter Enterprises (Pvt) Ltd v Kearns 1990 (1) SA 612 ZHC at 616 B-F.

It follows, therefore, that applicant is not entitled to an order in terms of paragraph (d) of the Notice of Motion and that that prayer will have to be dismissed.

PARAGRAPHS (e) and (f)

Paragraph (e) is a prayer for an award of additional damages in the sum of R2 000 000 and an order that the respondents should pay that amount jointly and severally. Paragraph (f) is a prayer, in the alternative to prayer (e), for an order referring the matter for the hearing of oral evidence so that the question of additional damages may be investigated and determined by the court.

In paragraph 53 of the founding affidavit it is stated that the applicant and its predecessors have spent between R10 000 000 and R14,4 million in developing the TORO product range. On the basis then of the respondents having stolen all the drawings relating to at least one entire machine in the TORO product line, it is suggested in paragraph 54 of the founding affidavit that they have avoided at least R2 000 000 in costs of development. In paragraph 16 of the applicant's replying affidavit it is stated that the respondents have gained an advantage of at least R2 000 000 through their theft and dishonest copying of applicant's drawings which enabled them to manufacture, or procure the manufacture of TORO parts without having to invest any money.

These allegations of the applicant must also be read in the light of its allegations in paragraphs 55, 56 and 57 of the founding affidavit namely that effective relief would not otherwise be available to the applicant.

In terms of section 24(3) of the Act an owner of copyright is entitled under the circumstances therein set out, to recover additional damages. For present purposes it is not necessary for me to express any opinion on the true nature of the damages recoverable under this section of the Act; a matter about which there exists differences of opinion. See Priority Records (Pty)

Ltd v Ban-Nab Radio & TV; Gramophone Record Co (Pty) Ltd v Ban-Nab Radio & TV 1988 (2) SA 281 (D); CCP Record Co (Pty) Ltd v Avalon Record Centre 1988 (1) SA 445 (C) at 449I-450A.

The question in the present matter is whether or not I ought to make an order in terms of paragraph (f) of the Notice of Motion and either refer the matter for the hearing of oral evidence or for trial in terms of Rule 6(5)(g) of the Uniform Rules of Court.

Mr Serrurier submitted, firstly, that such an order ought not to be granted because the applicant had no basis for not anticipating a dispute of fact in regard to the question of damages and, accordingly, should not have proceeded by way of an application but should have instituted an action. For this submission he relied upon R Bakers (Pty) Ltd v Ruto Bakeries (Pty) Ltd 1948 (2) SA 626 (T) at 630-631 and Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1159-1162.

I do not think that it would be correct to say that the applicant had no basis for not anticipating a dispute of fact in regard to the question of damages. If regard is had to the overwhelming proof of unlawful infringement of copyright by the respondents it is not difficult to understand that the applicant might have thought that no real dispute of fact in regard to the question of damages would arise. It should also be borne in mind in this regard that it is only a certain kind of dispute of fact which has to be foreseen in order to disqualify motion proceedings as the appropriate form of procedure. See Cullen v Haupt 1988 (4) SA 38 (C) at 40F-41B. In any event, the applicant would still be entitled to ask the court to refer the matter for the hearing of oral evidence, or for trial, in the event of the court being of the opinion that the disputes of fact cannot be resolved on the papers. See Marques v Trust Bank of Africa Ltd and another 1988 (2) SA 526 (W); Fax Directories (Pty) Ltd v S A Fax Listings CC, supra , at 167 C-J. I therefore remain unpersuaded that the order should be refused merely on this basis.

Mr Serrurier contended, in the second place, that Rule 6(5)(g) only permits the hearing of oral evidence on `specified issues with a view to resolving any dispute of fact ...' or a referral of `the matter' to trial. Relying upon cases such as Room Hire, supra at 1161 and Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1978 (4) SA 696 (T), Mr Serrurier further submitted that it would be inappropriate to make an order in terms of paragraph (f) of the Notice of Motion in the present case. More specifically, submitted Mr Serrurier, Rule 6(5)(g) excludes the possibility of referring the present matter to trial only in so far as the question of damages is concerned because `the matter' will not then be referred to trial but only a portion thereof and that would result in a piecemeal hearing of the case; something which should not be permitted.

It is true that the courts have consistently declined to regard motion proceedings as appropriate for the determination and recovery of damages. For that reason they have refused to refer questions of damages for the hearing of oral evidence or for trial. A factor which must, in the present case, also be taken into account is the question of how the matter is going to be conducted if the question relating to damages is referred to trial. Mr Puckrin has suggested that the court could give the necessary directions if the parties are unable to agree in regard to the future pleadings. The problem I have with this suggestion is that, in terms of Rules 17(1), 17(2) and 18(10) of the Uniform Rules of Court, a combined summons will have to be issued by the applicant if the matter is referred to trial and it is ordered that the founding affidavit should stand as the summons or letter of demand. In view of the lack of particularity in the founding affidavit and the replying affidavit about the damages suffered by the applicant, the court would be doing the respondents an injustice if it is ordered that the matter be referred for the hearing of oral evidence or that the founding affidavit should stand as the applicant's combined summons. This aspect distinguishes the present case from other cases, eg Pressma Services (Pty) Ltd v Schuttler and another, 1990 (2) SA 411 (C), where the affidavits were ordered to stand as pleadings. Therefore, if the applicant will, in any event, have to file a combined summons I can see no real advantage to be gained by the applicant by requesting the court to refer the matter for trial for adjudication of the question of damages.

In regard to Mr Serrurier's argument that the court is in any event precluded from referring the question of damages to trial because that would result in a piecemeal hearing of the matter as opposed to `the matter' being referred to trial for hearing, I should state that I disagree with that argument. I do not think that the court is precluded, in principle, in terms of Rule 6(5)(g) to refer a particular aspect to trial. See Tamarillo (Pty) Ltd v B N Aitken (Pty) Ltd 1982 (1) SA 398 (A) at 430F-431C.

I am therefore of the opinion, in the light of the aforegoing, that it would not be proper to make an order in terms of paragraph (f) of the Notice of Motion but that it would be more correct not to make any order on this prayer as well as on prayer (e).

PARAGRAPH (g)

This paragraph relates to costs. During argument Mr Puckrin has conceded that, in the event of the applicant being successful, it would not be entitled to an order for costs on the scale as between attorney and own client. I think that this concession was correctly made. Mr Puckrin submitted that an order granting the applicant costs on the ordinary attorney and client scale would be appropriate in the present matter.

The respondents have most certainly behaved in a scandalous manner.

They have filched the applicant's drawings which were under the control of Bateman. They have used these drawings to manufacture components for machines which they have sold to clients of theirs in direct competition with Bateman. They have persistently denied that they have infringed the applicant's copyright. They have persistently denied that applicant is the owner of the copyright subsisting in the drawings. It was only at the commencement of the hearing that the respondents have made the concessions to which I have referred above.

Mr Serrurier submitted that the applicant should be ordered to pay the costs of this application. He argued that as early as September 1989 the respondents offered an undertaking to applicant's attorneys not to infringe applicant's copyright in future. This undertaking was contained in a letter written by respondents' attorneys and a copy of which is Annexure AMP 4 to the first respondent's answering affidavit. Mr Serrurier further submitted that applicant should have accepted that undertaking and should therefore not have instituted the present application as there was, since September 1989, no reason to suspect that respondents would not honour the undertaking. This undertaking was again repeated in a written tender which was filed of record on 4 May 1990. The applicant has therefore made itself guilty of an abuse of the process of the court by instituting the present application, submitted Mr Serrurier.

I do not agree with these submissions by Mr Serrurier. The so-called undertaking of September 1989 was given on the basis of respondents denying having infringed applicant's copyright and on the further basis that applicant had no cause of action against them. The tender of the relief claimed in paragraph (a) of the Notice of Motion which is contained in the aforesaid written tender was tendered on the basis that respondents do not admit any of the allegations made by the applicant in the papers.

In my opinion both the undertaking and the tender were given in terms and under circumstances which justified the applicant in rejecting them. The applicant all along, since August 1989, had reason to believe that its rights have been flagrantly infringed in a scandalous manner. As the owner of the copyright subsisting in the drawings it had every right to take effective steps to protect its copyright. Any undertaking by the respondents could have been justifiably viewed with suspicion by the applicant because of the facts which were disclosed to it by Mr Pretorius and Mr Nkhethoa and by what was attached by the deputy sheriff when he executed the Anton Piller order. The applicant had every reason in the world to be suspicious of the respondents and to be wary to place any reliance upon what the respondents say. Furthermore, in so far as the applicant was not in a position to exercise control over the litigation between Bateman and the respondents, unless it also became a party to that litigation, it was justified in taking the necessary steps to protect its rights.

I have therefore come to the conclusion that applicant is entitled to an order for costs on the scale as between attorney and client.

It was not contested by Mr Serrurier that the present matter justified the employment of two counsel by the applicant.

In regard to the costs incurred by applicant's attorney in travelling to Finland to collect and collate the necessary evidence, I think that I would be usurping the taxing master's functions if I make an order awarding these costs to the applicant. In my view it is a matter for the decision of the taxing master and I am not prepared to award those costs to applicant without the taxing master having considered the matter. See also Cambridge Plan AG v Cambridge Diet (Pty) Ltd & others 1990 (2) SA 574 (T) at 604G-605D.

Although the applicant has not succeeded in obtaining an order in its favour on paragraphs (e) and (f) of the Notice of Motion, I am of opinion, as was also contended by Mr Puckrin, that the applicant still has achieved substantial success. It is obvious from the papers that the most important part of the application was the question concerning the applicant's copyright and the infringement thereof. The applicant has been successful in vindicating its rights. The question whether or not the applicant is entitled to the relief sought in paragraphs (e) and (f) of the Notice of Motion was a subsidiary one and I do not think that it played such an important role so as to warrant a special order of costs.

In the result the following order is made:
1. An order is granted:

1.1 interdicting the respondents from their continued, direct and indirect, infringement of the applicant's copyright in the drawings listed in schedule HE7 to the founding affidavit deposed to by Heikki Euro; 1.2that the respondents deliver-up to the applicant all—

(i) two-dimensionalreproductionsoftheapplicant'sdrawingslistedinthe aforesaid schedule HE 7 in the possession or under the control of any respondent or any contractor of a respondent;

(ii)three-dimensional reproductions of the applicant's drawings listed in the aforesaid schedule HE 7 in the possession or under the control of any respondent or any contractor of a respondent; and

(iii) tools, dies, jigs and other tooling appliances used for the manufacture of the three-dimensional reproductions of the applicant's drawings listed in the aforesaid schedule HE 7;

1.2 that the respondents deliver-up to the applicant all drawings, other than the drawings listed in the aforesaid schedule HE 7, which are legally the property of the applicant and which are in the possession or under the control of the respondents or any contractor of a respondent;
1.3 that the respondents pay the applicant's costs on the attorney and client scale, such costs to include the costs of the employment of two counsel;

2. No order is made on paragraphs (e) and (f) of the Notice of Motion.

3. The claim for an account of profits and payments thereof by the respondents jointly and severally, is dismissed.

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BEECHAM GROUP PLC v BIOTECH LABORATORIES (PTY) LTD

TRANSVAAL PROVINCIAL DIVISION

SWART J

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JUDGMENT

The first applicant is Beecham Group plc Liability Company incorporated in accordance with the Companies Law of the United Kingdom, having its principal place of business at 4 Dew Horizons Court, Harlequin Avenue, Brentwood, Middlesex, England. The second applicant is Smith-Kline Beecham Pharmaceuticals (Pty) Ltd, a company duly incorporated in terms of the Company Laws of the Republic of South Africa, having its principal place of business at Inyanga Close Sunninghill Extension 81, Sandton, Gauteng. The respondent is Biotech Laboratories (Pty) Ltd, a company duly incorporated in terms of the Company Laws of the Republic of South Africa, having its principal place of business at 10 Melrose Street, Melrose, Johannesburg Gauteng.

I found for the applicants on 7 June 2000 on the question of urgency and ordered that the matter be heard by me during the vacation recess. I heard argument on 29 June 2000. Counsel have referred me to a host of detail and authorities which, no doubt, warrant a sophisticated and comprehensive judgment which I do not intend delivering. The judgment will have to be confined to essentials. If a comprehensive reference to the facts and authorities is found necessary, such will be obtained from the various heads of argument put before me by counsel.

I was told by Mr Puckrin that at this stage only relief based on copyright infringement is being pursued and that is what a full day’s argument was devoted to. Somewhat surprisingly I received further written submissions on behalf of the applicants on the following day, claiming that the respondent has conceded that its use of the applicant’s information in the package insert, Absorption and Excretion is wrongful and has acceded to the claim to have it deleted from the package insert and that the respondent has therefore acceded to prayer 8 of the notice of motion. This drew a vehement written reaction from respondent later on the same day, denying any concession as to unlawful competition and emphasising that the matter was argued on one and only one issue, that of copyright. The tactics of the applicants are redolent of the tang of gunpowder in an attempted ambush, but that is all it is. The submission is rejected.

I revert to the question of copyright. It is not in dispute that respondent has blatantly and widely copied the package insert of the applicants even to the extent of exactly duplicating applicant’s clinical absorption and excretion tests, a feat which applicants themselves would not have been able to accomplish in subsequent tests.

Respondent, however, denies liabi1ity on the following bases:

Mr Joubert submits that irrespective of the fatalities of the case of the applicants inherent in respondent’s other defences, applicants on their own showing have not proved their copyright in the 1994 package insert. Mr Joubert’s heads of argument read in part:

'The respondent submits that the applicants’ claim that copyright subsists in the package insert, has not been proved by them. It has in particular not been established that the entire work is a compilation created by Kritzinger or people working under him, employed by the second applicant. The applicants have not shown which portions of the work relied upon by them, are original, nor have they established the reasons why the work is original.'

In order to show that copyright subsists in a particular work it is necessary to prove the following: The work relied upon is eligible for copyright (section 2 of the Act). In order to be eligible for copyright the work relied upon by applicants must be shown to be a literary work as defined in the Act—original and reduced to material form. The work must qualify for conferral of copyright (sections 3 and 5 of the Act). Copyright is conferred by the Act on a work which is eligible for copyright and in respect of which the author (as defined in the Act) or the joint authors was/were at the time when the work or a substantial part thereof was made, a qualified person, namely a natural person who is a South African citizen or domiciled or resident in the Republic or a juristic person, being a body incorporated under the laws of the Republic. In terms of section 37 of the Act the Minister has extended the Act to persons who are citizens of or who are domiciled or resident in a scheduled country in the same way as it applies to persons who are citizens of or domiciled or resident in South Africa. The United Kingdom is such a scheduled country. Regarding originality where there are pre-existing works Mr Joubert’s heads of argument read:

'Only that which is original in a work can be the subject of copyright protection. An applicant should identify those parts of a work for which originality is claimed. In Pyromet (Pty) Ltd v Bateman Project Holdings Ltd 699 JOC (W) at 702-703, Goldstein J found that the claim as to originality of the drawings was not established as it was impossible to establish which portions of the drains were original and which were not.
In Jacana Education (Pty) Ltd v Frandsen Publishers (Pty) Ltd 1998 (2) SA 965 (A) Schutz JA stated the following at 969D-F: "... the existence of prior material tends also to limit the scope for originality and to require more exacting proof of its existence than is the case with truly original works."

At 9741-J he said as regards Jacana’s claim to originality "Jacana failed to demonstrate what exactly it did, something peculiarly within its own knowledge".

In Klep Valves (Pty) Ltd v Saunders Valve Co Ltd 1987 (2) SA 1 (A) , the appeal court held that "originality" refers to "original skill and labour in execution", and that the work in respect of which copyright is claimed, should emanate from the author itself and not be copied. The original skill and labour employed by the draughtsman in Klep Valves to “modify an existing design” and to achieve the “substantial differences’ between the drawing there in issue and the earlier versions, bestowed upon that work a quality of individuality sufficient to distinguish the new work from the previous. The time and effort of the draughtsman in Klep Valves produced something original and not of doubtful substance. The changes effected were not insignificant; but were “meritoriously distinctive” and "principled".

In International Credit Control Ltd v Axelton 1974 1 NZLR 695 (Supreme Court) at 701, citing Copinger and Skone James on Copyright 11th edition, para 1/6 page 55, with approval, where the author says the following:

"Use of existing subject matter. As has been seen here where the author has produced the result without reference to any pre- existing subject matter, it is immaterial that the result is not novel, or that anyone else could have produced the same result, or that the idea or scheme from which the result has been produced is open to the public. But where the author has made use of existing subject matter more difficulty arises and it has to be determined whether he has done sufficient independent labour to justify copyright protection for his result."

In Universal Press (Pty) Ltd v Provest Ltd 87 ALR 497 (Federal Court of Australia) at 500, line 36: "It is beyond dispute that as each initial base map was prepared, copyright existed in that base map as an original artistic or perhaps (1 literary work. Where an original work is subsequently altered there will be a question of fact involved in determining whether the map as altered, has become a new original work or whether it remained the old work. As the Privy Council pointed out in Inteleco AG v Tyco Industries Inc [1989] 1 AC 217 at 262/3 mere copying of a work will not produce an original artistic or literary work. 'Skill, labour or judgment mere in the process of copying, cannot confer originality... there must in addition be some element of material alteration or embellishment which suffices to make the totality of the work an original work.'"

As far as compilations are concerned, these have been said to be based essentially upon a plaintiff being able to establish the required degree of skill and labour in making the compilation as distinct from that of ascertaining that information, and that “it is the product of the labour, skill and capital of one man which must not be appropriated by another.” (Copinger and Skone James on Copyright supra at para 7-52, page 421.’

Mr Joubert’s argument on the facts against this background is summarised by me as follows:

(a) Mr Joubert submitted for a number of reasons that no copyright has been proved to exist in the hands of the first applicant. ( I shall accept without deciding the point that this submission is correct. It is, however, irrelevant because the facts do not indicate that the application for registration of Augmenten in South Africa and the compilation as submission of the original inserts which culminated in the approval of the 1994 insert, was done by first applicant. It was done by second applicant.)

(b) Mr Joubert also submitted that it has not been proved that copyright exists in the hands of the second applicant for the following reasons:

(i)  There is no proof that the entire work is a compilation, that Kritzinger is the author of the entire work or that the work is original.

(ii)  It was incumbent on the second applicant to show that the package insert was an original work with reference to the original work from which it allegedly originated. ‘This it had not done. The pre-existing material is not before court and it is impossible to judge whether Kritzinger has added ‘some element of material alteration or embellishment which suffices to make the totality of the work an original work.’ The question mark surrounding the issue of originality is underscored by the inherently contradictory

(iii)

(iv) nature of his evidence, as well as the fact that it is contradicted by other evidence.’

Kritzinger’s evidence about the manner in which he would have created the package insert is contradictory as far as the sequence of summaries and synopses are concerned.

The above evidence is problematic in two respects. In paragraph 12 of his affidavit Kritzinger states that the summaries ‘from which the synopses were derived’ were summaries ‘compiled by persons in the employ of Beecham Group’. In other words, employees of the first applicant. If this is so, it is not clear why he also found it necessary to, or did indeed make summaries of the data. Furthermore, Kritzinger claims in paragraph 6.3 that the package insert is ‘a synopsis of various summaries’. If this be so it is not clear why he submitted the first drafts of the package insert before he made the synopsis.

(v) Kritzinger’s claim that in most cases the language in the insert ‘would have been his own’ is a bald speculative statement which is insufficient for the purpose of proving copyright. He ought to have attached those portions from the registration application from which he allegedly made the synopsis to enable the court to ascertain whether he did create an original work. The fact that the language might have been his own is not sufficient to establish originality in the work.

(vi) The impression sought to be created that the package insert is in totality a compilation made by Kritzinger, is not supported by facts. He states in paragraph 6.3 that he would have to use his judgment in selecting in synoptic form that which he considers relevant for the purposes of the package insert.

(vii) Portions of the package insert were taken from the insert leaf submitted to the Ministry of Health in the united Kingdom by the first applicant. Kritzinger will not have created anything original in copying or including in ‘similar wording’ such portions in the package insert. There are remarkable similarities between the UK data sheet and insert leaflet number 2. These are not explained by Kritzinger who does not refer to this input in his evidence. The second applicant aimed to remain in line with its ‘worldwide package insert’. In these circumstances it is not clear why it would go to all the trouble of rewriting a package insert when it already had one available to it and

(viii)

(ix)

would presumably insofar as the MCC would allow it, to 'remain in line with it'.
It is clear from the documentation discovered by the respondent that Beecham Research International in England was closely involved with the drafting of the package insert. Third parties made comments and it was expected that these be incorporated in following drafts. This fact Kritzinger did not disclose in his founding affidavit. Significantly, the filed label ‘Augmentan 375 (package insert S3)’ was emptied, except for the documents referred to below. These documents are the affidavit of Mr Jacobsberg at pages 665 to 671.

It is submitted that Wimpy’s comments do not take the matter further. The letter attached to his affidavit supports the close connection between input from the English parent company and the second applicant. Kritzinger made no mention of this as well as the facts that changes were made to the insert, following such input. If, as Kritzinger claims, he based the insert on information in the registration package, it is difficult to explain the anomalies between the information contained therein and that in the proposed insert leaflet submitted to the parent company. To the extent that Wimpy seeks to interpret the documents attached in the respondent’s supplementary affidavit by Jacobsberg his evidence should, with respect, be ignored as irrelevant.

(x) To the extent that any copyright exists in wording written down by the MCC, such copyright vests in the MCC.

(xi) In a letter dated 8 March 1982 Kritzinger mentions that ‘we are asking Deo Botha’s paragraph to be included’. This paragraph is not identified; nor is any evidence provided about the capacity of Deo Botha, but what is apparent is that paragraphs written by third parties were included in the insert. In addition, the copy of the letter from the MCC with changes to be made to the insert referred to in that letter, is not attached. It is accordingly not possible changes were made by the MCC in this instance.

(xii)  Kritzinger’s claim that changes made by the MCC were in all instances ‘miniscule’ is not supported by the correspondence emanating from the MCC. The documentation provided in respect of the MCC is in any event incomplete and a complete record about its changes

(xiii)

is absent. Mr Joubert then in his heads refers to various letters from the Department of Health and Welfare and from the MCC.
Kritzinger’s statement that Annexure NAK11 is not ‘in any way a verbatim reproduction of’ the master sheet furnished to him, is not supported by the facts. Paragraphs in the master sheet appeared to have been copied verbatim in Annexure NAK11. The significance of this is underscored when regard be had to the insert package attached as NAK16. The paragraphs which appear to have been copied in Annexure NAK11 appear for the first time in Annexure NAK16, which was issued a few months after the master sheet was made available to the second applicant during January 1994. It is submitted that no irregularity attaches to the mere copying of paragraphs of Annexure NAK13.

With all due respect to Mr Joubert’s thorough and cleverly constructed argument I am in disagreement with this line of reasoning. It is somewhat ironic that a party guilty of blatant copying should so assiduously deny (when caught with fingers in the till) the originality and validity of what was previously considered worthwhile copying. The argument is reminiscent of selective sharp-shooting. It loses sight of the fact that respondent has supplied no evidence in contradiction of Dr Kritzinger’ s (to which I shall revert as tar as may be necessary), loses sight of the context and perspective of Dr Kritzinger’s evidence and loses sight of the fact that he is testifying concerning matters which were commenced some 20 years ago. I would be surprised if he would remember everything and if all documents were still available. I think the argument also negates the probabilities established by Dr Kritzinger’s evidence. The papers in this matter are voluminous. I shudder to think what they would have looked like had Dr Kritzinger attached all his pre-existing material. This would have been completely impractical. Instead, when sought, such documentation as the applicants still have, was made available promptly and on reasonable terms to respondent on 15 June 2000. Not only did respondent request sight of these documents only on 23 June 2000, but very little has been put forward by respondent as a result of such inspection. I bear in mind, of course, that the respondent was subject to a measure of time constraint. What has been put forward (or remarked upon) does not in my view detract from the veracity of Dr Kritzinger or demonstrate that the applicant’s case is materially incomplete or lacks sufficient input from Dr Kritzinger to constitute originality. The alleged contradictions referred to above require no comment. The emphasising thereof smacks of desperate measures. A number of the criticisms raised in argument were, moreover, not raised in the papers. The reason why Dr Kritzinger made his own summaries when UK summaries were available, is apparent. The first applicant made the material available to the second applicant for purposes of a South African registration by it. Dr Kritzinger was responsible for the registration and everything involved in it. There is no indication that it was feasible or in line with relevant local legislation and regulations to simply dump the UK material on the Medicines Control Council (‘MCC’). The respondent, as a matter of fact, is at pains to demonstrate that the South African medicines control is amongst the strictest in the world and the fact that a medicine is registered in the UK or the USA is no passport to South Africa as such. I do not think Kritzinger’s claim that in most cases the language in the insert ‘would have been his own’ is unnecessarily bald or speculative The man cannot be expected to remember every word. He did recount what he does distinctly remember and makes inferences as to what he cannot remember. He is the best person to draw those inferences. In any event, whether he penned every word or whether some of it was done by other employees of second applicant under his supervision and control is immaterial. Dr Kritzinger was in overall charge and was responsible for the negotiations with the MCC which led to final approval. I think the evidence does support (conclusively) the impression that the insert is a compilation made in its totality by Kritzinger. Whether he wrote every word in the compilation is for that very reason immaterial.

Heavy emphasis has been placed on similarities between the insert (or one of its earlier versions at page 206) and the UK data sheet at page 210 and NAK13 at page 263 and NAK11 at page 236. I do not find all the similarities Mr Joubert relied on, certainly not in the literal sense of the word. Similar topics are in a number of cases differently worded. In any event, similarities are only relevant as a gauge of copying and the extent thereof: copying as such is not always a sin. A comparison of these documents even without reference to the evidence of Dr Kritzinger, does not detract from the inserts as original compilations.

The reference to the phrase ‘that Beecham Research International in England was closely involved with the drafting of the package insert’ is not clear. Whatever the innuendo, it has been satisfactorily explained. See paragraphs 11 to 13 and Annexure BAW1 at pages 682 to 686 and 689 of Mr Wimpy’s affidavit. I fail to see how consultation and submission to a parent company for approval detract from the originality of a compilation. Even a technical subject such as copyright must have some regard to reality.

The argument related to ‘Deo Botha’s paragraph to be included’ as proof that third parties were co-authors and that in addition no evidence was provided concerning Deo Botha’s capacity is not correct. Dr Kritzinger states in paragraph 11 at page 188 that the late Prof Deo Botha was then vice-chairman of the MCC. This was part of the approval process.

The argument seemed to proceed on the lines that the MCC provided a major input to the insert and that this would constitute a bar to copyright. As a matter of law I think this is wrong, except insofar as the input is relevant to the defence which will subsequently be discussed. The parties are, of course (such is human nature when embroiled in litigation) more or less at two extremes in evaluating the extent and the quality of the input of the MCC. For this part of the dispute it is sufficient to state that the MCC played a significant role in the approval of the final insert but that both quantitatively and qualitatively the making of the insert.

Mr Joubert finally presented the following conclusion in his heads of argument:

'It is submitted that, in the light of the above, Kritzinger clearly did not furnish a complete picture in his founding affidavit about the creation of the package insert. In the circumstances it is impossible to ascertain whether the work is a compilation made by him and, if it is, which portions were compiled by him and which were written by overseas companies, the MCC and third parties. It is for the applicants to identify those portions of the work in which they claim copyright. Where they have not done so, they cannot succeed.'

For the reasons stated I disagree. With more to come, this judgment will eventually be totally unwieldy should I attempt to quote from the evidence of Dr Kritzinger or discuss it in greater detail. I am satisfied, however, that the general tenor as well as the detail of his affidavit, support my conclusion.
2. The second defence is that, to the extent that any copyright exists in the applicants’ package insert, it vests in the state and not in the second applicant by virtue of sections 5(2) and 21(2) of the Copyright Act 1978. Section 5(2) reads as follows:

'Copyright shall be conferred by this section on every work which is eligible for copyright and which is made by or under the direction or control of the state or such international organisation as may be prescribed.'

Section 21(2) reads as follows:
'Ownership of any copyright conferred by section 5 initially vests in the state or the international organisation concerned and not in the author.'

The Afrikaans text of the Act was, acccording to Mr Joubert, signed by the State President. Section 5(2) of that text reads as follows:

'Outeursreg word deur hierdie artikel verleen aan elke werk wat vir outeursreg in aanmerking kom en wat vervaardig word deur of onderhewig aan die voorskrif of beheer van die staat of die internasionale organisasies wat voorgeskryf word.'

Section 21(2) of that text reads:
'Eiendomsreg op outeursreg by artikel 5 verleen, vestig aanvanklik in die staat ... en nie in die outeur nie.'
The package insert in this case can in my view best be described as a compilation and as such, literary work which would be eligible for copyright in terms of section 2 along the usual lines of material form, sufficient substance and originality. In terms of section 3 of the Act copyright is conferred on every work eligible for copyright of which the author at the time the work or a substantial part thereof is made, is in the case of an individual, a South African citizen or is domiciled or is resident in the Republic or, in the case of a juristic person, a body incorporated under the laws of the Republic. The term ‘author’ in relation to a literary work, is the person who first makes or creates the work. Subject to the other provisions of section 21, the ownership conferred by section 3 of any work shall vest in the author or, where the work is made in the course of the author’s employment by another person, in such other person. Dean Handbook of South African Copyright Law states at 1-1 para 1.2 concerning the philosophy of copyright law the following:

'Article 1, clause 8 of the Constitution of the United States of America, empowers Congress “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”. This simple clause sums up in a few words the philosophy and underlying principles of copyright law. Copyright law, like other branches of intellectual property law (ie the laws of patents, trade marks and designs) seeks to create a system whereby the creator of an original work is afforded a qualified monopoly in the use or exploitation of the work in order, firstly to compensate and reward him for the effort, creativity and talent expended and utilized in the creation of his work and, secondly, to act as an incentive for him to use his talents and efforts to create more and better works or intellectual products in the future.'

The learned writer at 1-22 para 4.1 states this concerning the author:

'The author or maker of a work is the corner stone of copyright law. The Copyright Act uses the terminology of “author” to designate the maker of any type of work which can be the subject of copyright. Thus the Act refers to the “author” of an artistic work, the “author” of a musical work etc. As explained above, the underlying philosophy or principle of copyright law is to reward or compensate the author of a work for the utilization or expenditure of his talents, time and effort in creating works of intellectual property. Copyright is intended to provide and establish the incentive for the author to create more and better works. Copyright law serves to look after the interests of the author and to define and regulate the scope and operation of his qualified monopoly in relation to his work.'

The learned writer in paragraph 5.1 at 1-28 distinguishes the author from the owner of the copyright. In paragraph 5.2 he states that as a general proposition the author is the initial owner of the copyright in the case of all the various types of works covered by the Act, but goes on to state that this rule is subject to several exceptions. One of those exceptions is the case where the work is made by the author during the course of his employment by another. At 1-25, paragraph 4.6 the same writer opines (without the issue having been judicially decided) that a juristic person cannot be the author of a literary work. If that is correct, the author or possibly authors in this case would have been Kritzinger and/or the other South African employees of second applicant. The second applicant, however, would have been the owner of the copyright. Another possible exception would be the case envisaged in section 5(2) read with section 21(2). (See Dean supra para 5-3 at 1-29). The question is whether the exception applies on the facts of this case.

Mr Joubert contends for an unqualified approach to interpretation on the basis of the ordinary grammatical meaning of the words used in the relevant provisions, to wit, ‘direction or control’. (It is not contended on behalf of respondent that the package insert was made by the state (my emphasis) and it has not been contended for the applicants that the MCC is not an organ of state.) Mr Joubert has referred me to a host of dictionary definitions of the words ‘direction’, ‘voorskrif’, ‘control’ and ‘beheer’ and decided cases in which those terms have been discussed, to indicate, inter alia, that ‘control’ is a word ‘of wide and ambiguous import’, and is a word to which ‘it is difficult to give a clear and exact meaning’. I am not going to repeat all Mr Joubert’s material but will refer to certain examples.

The Oxford English Dictionary 2nd edition, defines 'direction' as '(a) the action or function of directing; or (b) putting of keeping in the right way or course, guidance, conduct; (c) of instructing how to proceed or act, a right, authoritative guidance, instruction; (d) of keeping in right order, management, administration.' See page 7 of Mr Joubert’s heads of argument.

The Oxford Dictionary 2nd edition, defines 'control' as '(1) the fact of controlling or of checking and directing action, the function or power of directing and regulating domination, command, sway; (2) restraint, check; (3) a method or means of restraint, a check, to exercise restraint or direction upon the free action of, to hold say over, exercise power or authority over, to dominate, command'. See page 8 of the said heads of argument.

The word 'voorskrif' in the Afrikaans text of the Act is defined in the Verklarende Afrikaanse Woordeboek 6th edition, as 'wat voorgeskryf is, reels wat mens moet volg, moet nakom, resep, formule, gebruiksaanwysing'.

The word ‘beheer’ has been defined, with reference to the Groot Woordeboek as follows:

‘(I) S (1) bestuur en toesig, administratiewe kontrole; (2) (jur) bevoegdheid om in sy besit te hou en meer of minder vry te beskik oor die boedel van ’n ander, bevoegdheid om die bestuur te voer oor die een of ander onderneming of instelling; (3) vermoë om in bedwang of onder kontrole te hou; (II) W, bestuur, administreer.’

I also quote paragraph 16 of Mr Joubert’s heads of argument at page 13 to 14:

‘It was pointed out in Van Rooy v Law Society (OFS) supra, at 586E-F that “control” implies “restraint exercised upon an independent activity” In contrast, the word “conduct” stresses the idea of immediate supervision or personal leadership. At 586F-G of the judgment, Horwitz J quoted with approval from R v Croydon and Norwood Tramways & Co 18 Q.B.D. 39 where Lord Esher, M.R. at p 42 said: “I cannot help thinking that to give or refuse assent to a certain proposed act is, and must be, exercising control at all events.” Lindley L.J. expressed himself as follows in the same case: “If I prohibit a man from doing a thing, I control him to that extent”. So, too, one of the meanings assigned to “control” in the Oxford Dictionary is “to exercise restraint upon the free action of”. I venture to think that our case law clearly indicates that a power to control confers authority to impose neither restrictions and prohibitions although it may not authorise a general prohibition. The authorities moreover indicate that a power to control authorises the licensing of the activity to be controlled.’

Mr Joubert argues that the facts clearly indicate that from the outset the writing of a package insert is restrained by statute, regulations and the requirements of the MCC. Applications for registration shall be submitted on a prescribed form, with prescribed particulars. Regulation 10 contains particulars relating to a medicine which must appear in the package insert. See, for instance, Annexure 1 which calls for the following information: Schedule status, proprietary name and dosage for, composition, pharmacological classification, pharmacological action, indications, contra-indications, warnings, dosage and directions for use, side effects and special precautions, known symptoms of overdosage and particulars of its treatment conditions of registration, identification, presentation, storage instructions, registration number or reference number, applicant and date of application. All this is, according to Mr Joubert, carefully checked by the MCC which has the right to call for changes (the extent of such intervention is in dispute). Mr Joubert submits that the MCC is the final authority on the nature of the content of the insert and its directions as to the content are peremptory. Failure to comply with its directions will result in applicant not being able to distribute the drug legally. (The insert is certainly subject to the approval of the MCC, but this argument goes too far. The requirements for a package insert are set out in the regulations by way of reference to certain parameters within which the applicant must set forth the details of his own medicine. The regulations do not confront the applicant with a full blown verbatim version of an insert. Naturally, in fulfilling its functions in terms of the Act, the MCC will strive to make certain that the insert conforms to the regulations and serves the aims of safety, efficacy and so forth. However, I can visualise cases where in so doing bureaucratic over-exuberance will be curbed in a free and democratic society on review.)

Mr Joubert submits that the facts demonstrate that in relation to second applicant’s package insert the MCC did exercise direction and control in numerous respects from the time the original insert was submitted up to the stage when the final revised version was approved, including certain words or phrases in exact form to be taken up in the insert. Mr Joubert’s conclusion is stated thus in paragraph 49 of his heads of argument:

‘The state directs the initial making of the package insert through the requirements set out in the Medicines Control Act, its regulations and the requirements set by the MCC itself. Through these measures, the state instructs and guides an applicant in the making of its package insert. Once the insert is submitted to the MCC for approval, the MCC checks and verifies the content thereof and exercises restraint and direction upon the final version of the insert prior and subsequent to its publication.’

The spokesmen for the MCC policy have come out in support of this conclusion. The official line seems to be that allegedly cheaper generic medicines are to be promoted The standards for registration are much less stringent. Allegations have been made of Lek’s own extensive tests for registration purposes. Nothing of this is in evidence before court save for one reference to an input by the MCC regarding the package insert of respondent. There is, surprisingly, a lot of talk concerning policy and practice, but no evidence of how the package insert of respondent came to be approved. Spokesmen for the MCC will moreover have nothing to do with claims of copyright in package inserts. Reference is made to an approved insert being ‘in the public domain’ and being a ‘final contract’ and being a ‘legal document’. These terms may be criticised as inappropriate and imprecise, but Dr Rees makes no bones about it. She states in paragraph 7 at page 480:

‘The MCC has no interest in producing package inserts for the same chemical compound which have differently worded package inserts purely to satisfy the whims of copyright. On the contrary, the MCC would prefer to use consistency in the content and layout of package inserts for drugs which have the same active ingredients.’

This seems to underlie an alleged policy that the package insert for a generic medicine must be in accordance with the most recently approved insert for the identical or a similar product. It has also apparently led to the MCC countenancing copying, for instance, in respondent’s claims, for absorption and excretion tables exactly similar to those of second applicant. This could simply never have been established by way of subsequent clinical tests and should never have been in the respondent’s insert. Even if originally allowed for sake of conformity, it is not clear why the MCC has now allowed respondent to remove that information from its insert. Moreover, the claim for conformity and the necessity of copying which has been stated as a policy, is inexplicably not supported by the objective evidence. See the Trimed case and paragraph 6 at page 693-694 with annexures of Zwemstra’s affidavit.

The authority on the interpretation of provisions referring to state copyright are extremely sparse. Mr Puckrin referred to the 14th edition of Copinger and Skone-James on The Law of Copyright where the learned authors say the following insofar as the question of works made under the direction or control of the Crown are concerned at paragraph 10.2, page 581:

‘It was probably intended to confer protection beyond work made under a contract of service to works commissioned by the Crown from independent contractors.’
Mr Puckrin referred to British Broadcasting Co v Wylis Lee Gazette

Publishing C 1936 CHD 433 where it was held that programme published by the broadcaster carried copyright, although the broadcaster operated under general licence. It takes the matter no further because apart from a veto, the Postmaster-General had no authority or control over the formulation of the programmes. He also referred to Monoty in his article, The Nature and Basis of Crown Copyright in official publications 1992, 9 EIPR. According to Mr Puckrin’s heads of argument the article (which has not been put at my disposal) dealt with copyright in bills and judgments. Mr Puckrin quotes from the article as follows at page 40 of his heads of argument:

‘The meaning attached to “direction” is of particular relevance to the issue of Crown Copyright in judgments. The idea of judges being under either direction or control of the Crown is an anathema to the concept of the independence of the judiciary, if those terms are interpreted in the sense in which they apply to employment contracts Clearly, judges are not under control of the Crown. But as direction alone will result in Commonwealth or state ownership of copyright, the meaning of this term needs to be examined more closely. In the shorter Oxford English Dictionary “direction” is defined as follows: “the action or function of directing, aiming, guiding, instructing or administering; conduct, instruction, management, administration. And instruction how to proceed.” Judges of the High Court of Australia are appointed by the Governor-General by commission. Before taking office, the person must take an oath or make affirmation to serve the Queen. As servants of the Crown, all judges are directed to dispense justice in the cases which come before them. Arguably, the definition of “direction” should be read widely to encompass the relationship between the Crown and its judges, both Commonwealth and State, to bring within the scope of Crown Copyright. Otherwise, unless judgments come within the scope of prerogative works, copyright in judgments would be owned by the judge as author. On the other hand, a broad interpretation of “direction” has undesirable consequences. Not only would the Crown have ownership of copyright in judgments, but it will probably also own copyright in all the works requested by the Commonwealth or a State, whether or not they are produced in the course of employment.’

The Modern Law of Copyright by Hew Laddy, Peter Priscott and Mary Vittoria, second edition, states the following in paragraph 22.10 concerning ‘by or under the direction and control of the Crown’. ‘There is no definition in the 1956 Act of what is meant by under the direction or control of Her Majesty or a government department. Clearly, works made by Crown servants in the course of their duties, are made under the control of the Crown, but the ambit of “made under the direction of” is clearly wider and probably extends to works prepared by independent contractors. It is not clear, however, whether this provision is wide enough to give the Crown the copyright in works which have merely been commissioned by it. For example, the Whitford Committee pointed out in its consideration of s39 that while its own Report was prepared at the request of and for a government department, that department did not seek to direct or control the procedures of the Committee or its conclusions, or the form in which the report was written. The committee asked rhetorically: Can it be said to have been written under the direction or control of the department (of Trade) merely because they asked for it? It can be argued that the answer would be negative. If s39 had been intended to give the Crown copyright in commissioned works it could have done so by using similar phraseology to s4(3) which gave the copyright in certain types of commissioned works to the commissioner. Probably, however, most works commissioned by the Crown would have been first published by the Crown and so the Crown will acquire Crown copyright anyway by virtue of first publication.’
It is remarkable that not only is there no authority in support of the

case advanced by respondent, but none of the authors, although dealing tentatively with the subject, have come near to recognising state copyright on facts such as in this case. I accept that the actions of the MCC in this case represent direction and control in the broad meaning of those words. Once again, however, with due regard to the ostensibly persuasive argument of Mr Joubert, I do not accept that it was direction or control of the making of the work as intended in the relevant provisions. My reasons are the following:

Section 5(2) read with section 21(2) constitutes an exception, moreover broadly and imprecisely worded to the time-honoured, general approach governing ownership of copyright. As such it warrants a narrow interpretation. See as well by way of analogy Steyn, Die Uitleg van Wette 3rd edition, page 24.

‘Donellis verduidelik dat die bedoeling op tweërlei wyse kan verskil van die woorde, óf omdat dit enger is óf omdat dit wyer is. Dit is enger wanneer die wet meer voorgeskryf het en minder gewil het.

(cum lex olus scriosit minus voluit) en dit gebeur wanneer die woorde algemeen is en dinge van een óf ander genus omvat, terwyl die wil en bedoeling nie op bepaalde species van daardie genus slaan nie. In so ’n geval moet die woorde, hoewel algemeen van strekking, só beperk word dat die besondere gevalle wat nie beoog word nie, daarbuite val, want woorde vermag nie meer as die wil van diegene wat hul uitspreek nie. Die wil behoort nie die woorde te dien nie, maar die woorde die wil. By die sake, gevalle, tye en persone wat nie deur die bedoeling van die wet gedek word nie, hou die wet ook op, en daar en tot die mate maak die woorde geen reg uit nie, hoe seer ook die algemene woorde hul almal omvat.’

The relevance of paragraph 1 is underscored by the fact that paragraph 5(2) of the Act relates in the first instance to a work which is made by (my emphasis) the State. The further words, ‘by or under the direction or control' cannot be seen independently or substantively and require in, my view an eiusdem generis approach. It clearly entails a case where the work is not made by employees of the state acting as such, but where undertaking of the making of the work is as a whole, subject to the direction and control of the state.

Dr Kritzinger testified that a lot of time, money and endeavour went into the compiling of the insert tendered to the MCC. Despite the input of the MCC by way of direction and control the major part of that ultimately remained intact. The latter was moreover not the work of the MCC only, but due to a process of negotiation and further input by Kritzinger as well. As such it cannot realistically be said that the insert was made under the direction or control of the MCC. The MCC played a role in scrutinising and approving the insert. The legislature could never have had this set of facts in mind as warranting state copyright in negation of the general rule regarding copyright as belonging to the author. One wonders, in addition, which circumstances would have to prevail for an ‘international organisation’ to prevail over the author. If what the respondent contends for was envisaged by the legislature it would have been stated much more emphatically.

The aforegoing becomes even more apparent if it is recalled that section 21(2) provides that ownership of copyright shall initially vest in the State and not in the author. Section 21(1)(d) however, already provides that in the circumstances envisaged therein, the employer shall be the owner of the copyright. The author does not even come into the picture as owner. How do section 5, 2 and 21(2) operate in the light of the ownership of the employer?

Clause 18 of the British Copyright Act 1911 which, as far as I can gather, had some application locally by virture of our 1916 Act, reads as follows:
‘Without prejudice to any rights or privileges of the Crown, where any work has, whether before or after the commencement of this Act, been prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty, and in such case shall continue for a period of 50 years from the date of the first publication of the work.’
I pause to interpose that it is noticeable that since 1911 no British court, as far as I am aware, has come to the conclusion that on the basis of section 18 Crown copyright subsists in circumstances similar to those now before me.

Section 39 of the Copyright Act 63 of 1965 provides in part as follows:

‘1. Copyright shall subsist in any original literary, dramatic, musical or artistic work made by or under the direction or control of the Government, in which, but for the provisions of this section, such copyright would not subsist and shall be vested in the State.

2. The state shall, subject to the provisions of this chapter, be entitled:

(a)  to the copyright in every original literary, dramatic or musical work first published in the Republic, if so published by or under the direction or control of the state;

(b)  to the copyright in every original artistic work first published in the Republic, if so published, by or under such direction or control.’

See in addition subclause (5) which reads as follows:

‘Copyright shall subsist in any sound recording or cinematograph film made by or under the direction or control of he State in which but for the provisions of this section such copyright would not subsist and shall be vested in the state, and the period of subsistence of such copyright shall be the same period as if it were copyright subsisting by virtue of and owned in accordance with the provisions of sections 13 or 14, whichever is applicable.’
Section 5(2), read with section 21(2) of the present Act is more streamlined and less elaborate than the 1965 provisions and more in line with section 18 of the British Act. No reasons of policy or otherwise are apparent to me, to indicate that the change in format in the presently attributable Act was due to an intention to extend state copyright to something like a package insert. It is clear from the 1965 Act that nothing of the kind was then contemplated but rather something undertaken by the state, even though not made by itself. Whatever the extent of control or the effect of the requirement of approval may be, the insert or even the application for registration is not something undertaken by the State; it is undertaken by the applicant and the statutory intervention of the MCC does not make it the maker of the insert. To decide otherwise would lead to startling results, inter alia (whatever the merits of the new relaxed approach to generics may be) negating as far as second applicant’s insert is concerned, the very philosophy behind copyright law and leading to a situation where the copyright of the State, as far as future applications or inserts are concerned, is made dependent on policy considerations which may not be consistently applied and which may change for better or worse. Surely the law of copyright cannot be thus approached.

3. The third defence is a jump from State copyright in contrast to that claimed by the applicants to no copyright at all and is based on the provisions of section 12(8)(a) of the Act which reads as follows:

‘No copyright shall subsist in official texts of a legislative, administrative or legal nature, or in official translations of such texts, or in speeches of a political nature or in speeches delivered in the course of legal proceedings, or in news of the day that are mere items. of press information.’

The Afrikaans text reads, as far as it is relevant:
‘Outeursreg bestaan nie in amptelike stukke van ’n wetgewende, administratiewe of wetlike aard ... nie.’
Mr Joubert’s conclusion stated in paragraph 59 of his heads of argument at page 32, reads as follows:

‘It is submitted that the package insert is a text, sanctioned by the government and more particularly the Department of Health and the MCC. It is furthermore, a text which pertains to and deals with the conduct and management of state affairs, namely the regulation of the supply and sale of medicines to the public. It is also a text of which the particulars and format are prescribed by law. It is accordingly, an “official” text of a “legal”, or at least, an “administrative” nature.’
There is no merit in this contention.
It is common cause that if the second applicant is to succeed it is to be by way of a final interdict and not an interim interdict. In my view the applicants have established copyright, the defences gainsaying that are rejected and a breach of copyright has not been disputed. The requirements for a final interdict are well-known, but, if necessary, reference may be had to Joubert Law of South Africa Volume 11, paragraph 316. I find that those requirements have been established, and

I make the following orders:

1. An order in terms of prayer 6 of the notice ,dated 7 June 2000, with the deletion of the words ‘first and/or second applicants’ and substituting in its place the words ‘second applicants’ .

2. The balance of the application is postponed sine die

3. The respondent pays the costs attendant on obtaining the relief set out in paragraph 1 hereof, including the costs of employment of two counsel, but excluding the costs of the last submission regarding unlawful practice and the response thereto.

FAX DIRECTORIES (PTY) LTD v SA FAX LISTINGS CC 1990 (2) SA 164 (D)

Citation

1990 (2) SA 164 (D)

Court

Durban and Coast Local Division

Judge

Hugo J

Heard

April 17, 1989

Judgment

May 17, 1989

Annotations

Link to Case Annotations

Judgment

Hugo J:

The applicant company seeks the following relief on motion:

   'A.1   Interdicting and restraining the respondent from:

   1.1   infringing the applicant's copyright in and to the compilation of names, addresses and telefax numbers styled "The Pink Pages Fax Directory", "The Pink Pages Fax Book" (hereinafter in para 1 referred to as "the directory") by doing or causing any person to do in the Republic of South Africa any act which the applicant, being the author of the directory has the exclusive right in terms of s 6 of the Copyright Act 98 of 1978, to do or to authorise the doing of;

   1.2   distributing, advertising, selling or offering for sale copies of the 1987/88 and 1989/90 editions of the "SA Fax Listings Directory";

   1.3   distributing, advertising, selling or offering for sale any copies of the 1989/90 "SA Classified Fax Listings Directory", or "SA Fax Listings Directory" reprint which the respondent has announced its intention of publishing during early 1989;

   A.2   requiring the respondent to deliver up to the applicant for destruction all copies of the 1987/88, 1988/89 editions of the "SA Fax Listings Directory" as also the proposed 1989/90 "SA  Classified Fax Listings Directory" or "SA Fax Listings Directory" which are in the possession or under the control of the respondent;

   A.3   requiring the respondent to pay the costs of this application.

   B      Alternatively to A above:

   B.1   a temporary interdict in terms of A.1 above pending the determination of an action to be instituted by the applicant against the respondent in this honourable Court within 15 days of the date of this order for the relief set forth in A.1 to 3 above and in addition thereto for damages;

   B.2   granting that the costs of this application be costs in the cause of the said action.'

At the outset Mr Magid SC, for the applicant, said that he persisted in seeking final relief but that, if I could not find in his favour on the basis set out in Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd1957 (4) SA 234 (C) and Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd1984 (3) SA 623 (A) at 634H - 635C, he would move for a temporary interdict.

Mr Levinsohn SC for the respondent objected to this approach and maintained that an irresoluble conflict of fact had arisen on the papers and that the applicant should have applied in initio for the matter to be referred to evidence. For this submission he relied on a line of cases of which the most famous is probably Di Meo v Capri Restaurant1961 (4) SA 614 (N), the effect of which is that an application for the referral to evidence

   'should be made in unequivocal terms and should not be made conditional upon the Court coming to the conclusion after hearing and considering argument in the whole case, that a conflict cannot be resolved without hearing evidence'.

This was a judgment by Fannin J in an application for leave to appeal. When considered on appeal this aspect of the judgment was touched upon  E only in passing and not with apparent approval (see Goldberg and Another v Di Meo1960 (3) SA 136 (N)).

   The correctness of the decision in Di Meo's case has been questioned by some (see for example Uniform Rules of Court by Nathan, Barnett and Brink 3rd ed at 50) and has recently been dissented from in Marques v Trust Bank of Africa Ltd and Another1988 (2) SA 526 (W) in which case Morris AJ exhaustively examined the authorities in this regard and came to the conclusion that:

   'If counsel believes that the papers entitle him to an order or disclose a valid defence, he is entitled to persist in his application without being precluded, when a dispute becomes apparent and incapable of resolution on the papers, from asking for evidence viva voce. Counsel should not be saddled with the burden, at the expense of his client, of deciding the very question which the Court must decide.'

   To the extent that the Di Meo case purports to lay down an inflexible rule of law, I must respectfully disagree with it. I entirely and respectfully agree with the views of Morris AJ in the Marques case.

Brave indeed is the advocate who will be prepared to gamble that the Court shares his view of the law and of the facts. This means counsel will almost invariably opt for the safer but more expensive course of asking that the matter be referred to evidence. In so doing he would still be able to argue the legal point but at what cost to his client, both in respect of time and money.

 There are, it seems to me, cases where the legal issues are so crisp and so far removed from the conflict of fact that it would be fair to both parties to allow argument thereon in initio. If the applicant loses the legal battle he should not then be penalised for having tried to save the costs involved in hearing viva voce evidence. (Provided of course that his efforts were bona fide and well considered and not merely frivolous.) In my view this is a case in which counsel was justified in arguing the legal point in initio and making his application for reference to evidence dependent upon my not finding in his favour.

   Mr Levinsohn also applied from the Bar to hand up, as part of the respondent's answering papers, an additional or supplementary affidavit by one Lesley Ann Devine, who had also deposed to an affidavit in the papers already filed.

   Mr Magid objected to this procedure and pointed out that no reasons for the lateness had been advanced nor indeed had any reasons been advanced at all for its admission.

   I deferred a decision on its admission until argument had been heard when I could see whether justice demanded its inclusion in the evidential matter before me. If its admission seemed essential to the respondent's case I would possibly have admitted it. It turned out not to be and indeed received but scant attention during argument. It was, it seems, a further exercise in showing the extent of the novel matter in the respondent's publications. I do not think that the affidavit really advances the respondent's case and in the absence of reasons for its late filing I decided to reject the affidavit.

   So much for the preliminaries.

   The applicant's case is based upon the following facts.

   In about 1986 the applicant's deponent, one Dixon, conceived the idea of compiling a directory of users of telefax equipment. He set about obtaining the necessary information. This he did by obtaining lists of purchasers from distributors of such equipment and also by canvassing any such purchaser telephonically. Applicant company was incorporated in 1986 to publish this work.

   By October 1986 sufficient information had been obtained to publish the first edition of the directory called 'The Pink Pages', ostensibly for the years 1986/1987. These directories will be referred to as 'The Pink Pages'.

   In September of the following year the next edition was published for 1987/1988. This was a considerably thicker publication and contained, in addition to the names in the first edition, also new ones obtained in the interim.

   In July 1988 the third edition of 'The Pink Pages' appeared, this time for 1988 only. This again was a thicker volume than the previous one and contained not only the alphabetical list published in the previous editions but also additional names obtained in the interim. A so-called 'classified section' containing information of telefax users by trade or profession was included, starting for example with the heading 'Abrasives' and going on to 'Accountants and Auditors' and so forth.

   The work that goes into these publications, in particular the gathering of the necessary information, is all done by employees or staff of the applicant.

   The directories were fairly widely disseminated throughout southern Africa.

   Thus far these facts are not really in dispute. The respondent's deponent claims to have no knowledge of many of them and therefore does not admit them. It is plain from the Plascon-Evans case supra that such ostensible disputes are not true disputes of fact and, in these instances at least, the applicant's version may be accepted.

   Based on the facts above the applicant avers that it is the author (within the meaning of Act 98 of 1978) of the three Pink Pages editions and owns the copyright therein. This allegation is in dispute and I shall return to it later. 

   In order to prevent or at least to detect infringement of its copyright the applicant hit on the idea of inserting in the directories a number of fictitious entries. These consisted of a false name and either a false address or the applicant's address or the address of friends of the applicant's deponent.

Each edition of 'The Pink Pages' contains a notice to the following effect:

   'Copyright

   No reproduction of this directory in whole or in part is allowed without the express permission of Fax Directories (Pty) Ltd. Legal proceedings will be instituted against anyone reproducing material without the permission of the publisher.'

In addition each edition contains the following publishing information:

   'Publication of the Pink Pages

   This directory is published by Fax Directories (Pty) Ltd PO Box 53170 Troyeville 2139 Johannesburg....'

   In the first edition it is said that the directory has been 'compiled and published' by the applicant while the further editions (in the English version only) claim that it was so 'published'. In the Afrikaans version of the notice the claim throughout is that the directory was 'opgestel en gepubliseer' by the applicant.

   There is no reference to these notes or notices in the affidavits but at the beginning of the hearing copies of all the relevant directories, both the applicant's and respondent's, were placed before me. I asked counsel if I was entitled to look at these notes and other entries in the directories and both agreed that I was.

  In 1987 the respondent published its directory called 'SA Classified Telex Register and SA Fax Listings'. This is a directory published on paper which on the face of it is inferior to that of any of 'The Pink Pages' publications and in general appears to be a much cheaper work. It contains in addition to telex and telex information (with which I am not concerned in this case) telefax information in a separate section. This  H work will henceforth be referred to as 'SAFL'.

   The applicant compared the telefax information in the first edition of SAFL with its own directory and found that all but one of the fictitious entries were also recorded in SAFL.

   This allegation is admitted by the respondent. It is met, however, by stating that the same entries also appear in the 'International Directory ' published by Jaeger and Waldman, one of the sources allegedly used by the respondent for gaining information. I pause here to state that it appears that this latter directory contains telefax information for South Africa which has also been copied from the applicant's works, but by leave of the applicant. The respondent's deponent, Devine, goes on to say:'While it is true that the respondent may well have used "The Pink Pages" as a source of reference, it is also highly likely that the Jaeger and Waldman directory was also consulted.'

(At 77 - 8.) Devine also deposed that he had been involved in the publishing of inter alia telex directories since about 1977. The information in these directories was contained in a computer.

The method used by the respondent to compile its directory is explained in the following terms by Devine:

   '14.6 Although I realised that the telex directory would eventually be phased out, I nevertheless realised that the persons who appeared in our telex directory data base and other directories would be an important source of information for the purpose of  C the compilation of a fax directory.

   14.7 In the compilation of the first edition of the respondent's directories, we used a number of sources from which information was compiled. I annex hereto, marked "B", a list of all publications which were used as reference sources. I point out that all the South African publications including "The Pink Pages" are placed in public libraries and are freely available.

   14.7.1   Everyone who appeared in our telex directory was sent a circular as will more fully appear from the circular dated March 1986, which is annexed hereto marked "C".

   14.7.2   We sent out circulars and calendars to people on our telex data base and to thousands of persons whose names we had obtained from newspaper advertisements and catalogues, and  E also from the responses to advertisements placed in Chamber of Commerce newsletters throughout the country, and a limited number of publications reflected in annexure "B".

   14.7.3   The said circulars were also sent to persons whose names we obtained from the Government telephone book, from a small directory compiled by Nashua, and we also obtained names from sales people who had actually sold fax machines. I stress, however, that this information was given to us in confidence. As will more fully appear from the circular, annexure "C", the established procedure used by the respondent was to circulate all persons whose names and fax numbers were received. These persons were requested to check the details appearing and advise if any changes were required. The circular letter made it clear that if no response was received the free entry in the directory would appear. Persons were also invited to furnish information in regard to clients and business associates to ensure that the names of those persons are published.

   14.8   I verily believe that the respondent must have sent out from March 1986 to the end of 1988 approximately 1 300 000 circulars as well as solicitations for advertisements.

   14.9   There was a very good response to advertisements placed in at least 10 of the major of the Chamber of Commerce publications as well as from the circular letters sent out as aforesaid.

   14.10 The main objective was to establish a comprehensive data base properly verified to compile the fax directory. To this end a computer was used to store and sort data. In the result the compilation of the directory is the product of the respondent's  I idea to compile a fax directory which germinated in late 1985 and 1986.'

   The circular referred to here is a document which, in the form attached to the papers, is somewhat equivocal inasmuch as the blanks have not been filled in. It seems, however, that the name of a company or person and its particulars, obtained in one of the ways described by the respondent, was inserted by the respondent in an empty space provided for that purpose and sent to the company or person concerned. They were told in the circular that they should check the details given and advise of changes. The document then goes on to say 'your free light type entry will appear as below in the forthcoming edition of the directory if we do not hear from you within 14 days'.

 In addition the addressee is invited to furnish information of other telefax users.

   These circulars were also sent to the fictitious names contained in 'The Pink Pages' and when no response was made the entries were placed in that form. The source of this information could, on the respondent's own showing, only have been 'The Pink Pages' or the Jaeger and Waldman  C directory.

   It is conceded by the applicant that there is some novel content in the respondent's directory. It is also conceded that not all the entries in 'The Pink Pages' found their way into the SAFL.

   Because of what Dixon considered to be a very poor publication that would not really constitute a threat, he decided not to take Court action when the first edition of SAFL came out, but to publish a 'warning' to telefax users in the next edition of 'The Pink Pages'. Inter alia this warning contained a direct reference to the respondent in the following terms:

   'The SA Fax Listings is a direct and very poor copy of the first edition of "The Pink Pages" for R108.'

  This warning gave rise to an application in this Court in which the present respondent sought to restrain the publication of 'The Pink Pages' while they contained it. This application was eventually settled and the present applicant undertook not to print the warning in any future directory and to remove it from the current one.

 This undertaking was made subject to the following condition:

   'The aforementioned undertakings are conditional upon and shall only become effective once the respondent's senior counsel has certified that none of the entries set out in the schedule annexure "SR4" to the respondent's supplementary affidavit dated 23 November 1988 appear in the applicant's fax directory which it is about to publish.'

The annexure referred to contained a list of the fictitious entries referred to above.

   The purpose of this condition is not clear, nor was it explained during the course of the present application. Mr Levinsohn, however, argued that the condition was an implied consent to publish once the certificate was given. Because the settlement agreement also contains an express clause reserving the rights of both parties in respect of any claims which either party may have against the other, this argument cannot be correct.

   It is common cause that the condition was fulfilled.

   In December 1988 the applicant got sight of the 1988/1989 edition of SAFL and resolved to launch this application.

   Although the fictitious entries had been deleted it was found that at least four typographical errors appearing in 'The Pink Pages' also appeared in the second edition of SAFL. (A fifth alleged case fell away.) This is not in dispute.

   The respondent deals with these entries as follows. In respect of the first it says: 'it is equally possible that the source from which this entry was taken was the Jaeger and Waldman directory'. As to the second case it says that 'it is likely that in this instance the source of the information was obtained (sic ) from the applicant's third edition'. The third and fourth cases are again dealt with by reference to the Jaeger and Waldman directory.

  It is conceded by the applicant that the second edition of the SAFL contains more novel content than did the first. Both parties performed various exercises to determine the extent of this novel material. In all cases they consisted of spot checks, and it turned out that there were four categories of entries. Firstly, where the entries in both directories were identical, secondly where the entries appeared in both directories but not in identical terms, thirdly those that appeared in 'The Pink Pages' but not in the SAFL and finally, those that appeared in the SAFL but not in 'The Pink Pages'.

   Neither party has done a complete survey of the entire publications and both have contented themselves with those spot checks from which they attempted to extrapolate the results to the complete works. On both versions there are not inconsiderable numbers in each of these categories. For present purposes it suffices to leave it there.

   It is to be noted, however, that nowhere does the respondent state categorically that it did not copy the applicant's work at all. The furthest its deponent is prepared to go is to deny copying the work 'en bloc '. Indeed there are a number of thinly veiled admissions that some copying did take place. For example in para 22.1 he says 'my own survey... is far more telling... that the respondent has not under any circumstances simply copied the applicant's directory'. In para 22.2 he says '... detracts from the suggestion that there has been copying en  F bloc ', and in para 22.3, 'there has not been a blatant copying'. In addition there are the references to the Jaeger and Waldman directories quoted above. (Underlining in this paragraph inserted by me.)

   Indeed the presence of the fictitious entries and typographical errors leaves a firm denial of any copying out of the reach of respondent. Its partial reliance on the entries in the Jaeger and Waldman directories avails it but little. The applicant has shown in reply that Jaeger and Waldman had the applicant's consent to 'use your directory to complete and update our data base for SA fax subscribers'. On the probabilities therefore Jaeger and Waldman is itself pro tanto a copy of the applicant's work. In s 1 of Act 88 of 1978 the concept of 'reproduction'  H is defined in relation to, inter alia, a 'literary work' as including 'a reproduction made from a reproduction of that work'.

   To the extent that the respondent reproduced the data contained in the Jaeger and Waldman directories, this constituted also a reproduction from the applicant's work.

So much for the facts for the present.

Was applicant the author of 'The Pink Pages'?

   Mr Levinsohn for respondent argued that the applicant was not and could not be the author of 'The Pink Pages'. This, he says, is because, implicit in the Act, an author must be a natural person and not a company.He conceded that there is nothing in the definition of author nor is there anything explicit in the Act to this effect.'Author' in relation to a literary work is defined in s 1 of the Act as 'the person who first makes or creates the work'.

   The implication, he said, must be drawn from the provisions of s 3(2)(a) of the Act. This section reads:

   'The term of copyright conferred by this section shall be, in the case of -

   (a)  literary or musical works or artistic works, other than photographs, the life of the author and fifty years from the end of the year in which the author dies....'

This is a clear indication, he says, that the author must be a natural person because, if not, there would be no way in which to determine the duration of copyright in literary works. The definition of 'author' in the Act is neutral. It could be of course that there is a casus omissus in the Act and that it simply fails to dealing with the situation where a corporate body is the author. I do not think so. Such a casus omissus is not easily presumed and, if an interpretation is possible which would  D avoid it, then that interpretation is to be preferred. (See Steyn Uitleg van Wette 5th ed at 124.)

   Mr Magid referred me to s 3(1) of the Act. This section makes provision for a juristic person in its definition of a 'qualified person'.

   Section 3(1) does not refer only to literary works. It is not really helpful because it is plain that in respect of works like cinematographic films or photographs the term of the copyright is determined without reference to the death of a person. Section 3(2)(a) provides no reason why a company could not be the author in respect of that kind of work. The implication in respect of literary works does not apply. 

   No other indications in the Act were pointed out to me nor was I referred to any authority in this respect.

   In dealing with similar provisions in the English Act, Copinger and Skone James on Copyright 12th ed para 65 come to the conclusion that 'it would not appear that a body corporate can be an author except in the case of photographs...'. No authority is quoted for this view and the sections referred to in the footnote are not very helpful. Nonetheless, even having regard to the differences between the two Acts, this does provide some support for Mr Levinsohn's contention.,

   See Pan African Engineers (Pty) Ltd v Hydrotube (Pty) Ltd and Another  1972 (1) SA 470 (W)at 472G.

   Copeling Copyright Law at 59 seems to be of the same mind where he says that the reference in the definition of 'qualified person' in s 3(1) to a body corporate is designed for the case of sound recordings and cinematographic films.

 No cogent reason has been pointed out to me nor have I been able to find one for holding that the Act would be unworkable if I were to hold that only a natural person can be an author of a literary work. There are ample provisions in the Act which make it possible for a corporate body to become the holder of a copyright without necessarily being the  author thereof.

Subsection (g) of the definition of 'author' in the Act was not referred to in argument. This subsection provides that, in relation to a published edition, the 'author' means 'the publisher of the edition'.'Published edition' in turn means 'the first print by whatever process of a particular typographical arrangement of a literary or musical work'.

   On the face of it these definitions indicate that at least in the case of a published literary work the publisher (which presumably can be a body corporate) is the author.

   In the absence of argument on these definitions, however, I would prefer not to make any definite finding in this regard. I do not need to do so in the light of the other conclusions I have come to.

  I am prepared to accept in the respondent's favour that Mr Levinsohn is correct in his argument that only a natural person and not a company such as the applicant's can be the author of a literary work.

   Mr Levinsohn has further argued that since the applicant has relied on authorship to found its application it must lie on the bed it has made. He argued that the applicant cannot now rely on another form of ownership of the copyright in order to establish its case.

   In prayer 1.1 the applicant requests an interdict against the respondent, restraining it from performing any act which the applicant 'being the author of the directory has the exclusive right in terms of s 6 to do or to authorise the doing of'. In para 13 of the founding affidavit Dixon says

   'it is respectfully submitted in the premises described above that the applicant is the author... of "The Pink Pages" and has the copyright'.

   It is manifest from the above quotation that the applicant did base its case on the premise that it was the author.

   The question therefore arises as to whether the applicant is bound by  F the premise upon which it approached the Court or whether the Court may come to its assistance if that premise turns out to be incorrect but where the papers disclose another basis upon which it would be entitled to relief.

   The allegations in the papers that the applicant is the author of the works is not an allegation of fact in the context of this case but a conclusion of law based on the facts stated.

  In my view, if the facts in the papers disclose that the applicant is the owner of the copyright, then provided that it satisfies the other requirements it would be entitled to relief. See Sewmungal and Another NNO v Regent Cinema1977 (1) SA 814 (N) at 817G; Simmons NO v Gilbert Hamer & Co Ltd1963 (1) SA 897 (N) at 903 and Allen v Van der Merwe 1942 WLD 39 at 47.

   Normally it is the owner of copyright that has the right to protect the copyright. If the author is not also the owner, he has but limited rights. The right upon which the applicant relies is therefore not so much its authorship but its ownership of the copyright. In para 13, the passage that I have referred to above, the deponent Dixon indeed makes the final legal conclusion from the facts, namely that the applicant is the holder of the copyright.

Is the applicant the holder of the copyright?

   Mr Magid argued that it is plain from the applicant's affidavits, and not disputed, that the authors (there must have been more than one) acted in the scope of their employment in obtaining and processing the data. If that is so then, in terms of s 21(1)(d) of the Act, the applicant as their employer is the owner of the copyright.

   This section reads:

   'Where in a case not falling within either para (b) or (c) a work is made in the course of the author's employment by another person under a contract of service or apprenticeship, that other person shall be the owner of any copyright subsisting in the work by virtue of s 3 or 4.'

   Mr Levinsohn argued that there is no proof of a contract of service or apprenticeship and that therefore the applicant had not brought itself within the terms of the section. I do not agree. Dixon in para 7 - 9 speaks of the 'staff' of the applicant and of the applicant's  C 'employees'. There must have been some form of contract even if it were an implied or tacit one between the applicant and its staff or employees. On the probabilities, therefore, the applicant was the employer of the authors who acted within the scope of their employment in producing the works concerned. By virtue of this section the applicant is therefore the owner of the copyright.

   But, even if I am wrong in this conclusion, there is another hurdle in the way of Mr Levinsohn's argument. Section 26(3) of the Act provides as follows:

   'Where in an action brought by virtue of this chapter with respect to a literary or artistic work which is anonymous or pseudonymous it is established -

   (a)  that the work was first published in the Republic and was so  published within the period of 50 years ending with the beginning of the calendar year in which the action was brought; and

   (b)  that a name purporting to be that of the publisher appeared on copies of the work as first published,

   then, unless the contrary is shown, copyright shall be presumed to exist in the work and the person whose name so appeared shall be presumed to have been the owner of that copyright at the time of the publication: Provided that this subsection shall not apply if the actual name of the author of a pseudonymous work is commonly known.'

   In Copyright, Modern Law and Practice by Carter-Ruck and Skone James (1985 ed) the authors say

   'no further definition of anonymous or pseudonymous publication is given in the Act but the dictionary definitions of such words show that such publications are anonymous and pseudonymous if they conceal the identity of the author'.

   In each of the editions of 'The Pink Pages' the note to which I have referred above dealing with the publication of 'The Pink Pages' appears. The note does not expressly purport to name an author but does at least in the Afrikaans version thereof state that the directory has been compiled by the applicant.

   If I was wrong in the assumption that I made in favour of the respondent earlier, then the applicant is the named author of 'The Pink Pages' (at least in the Afrikaans version of the notice in 'The Pink Pages') and by virtue of s 21(1) of the Act is the owner of the copyright. If, however, the assumption was correct and the applicant was not the real author, then the naming of the applicant in the notice was as the pseudonym for the real author, and the applicant as publisher would own the copyright.

   Mr Levinsohn attempted to persuade me that s 26(3) is not designed for this type of publication and that the section does not apply. With due deference to him, I fail to understand on what basis he tried to draw a distinction. He did not quote any authority nor did he refer to any other indications within the Act itself upon which to base a distinction.

   That the directories concerned are literary works within the meaning of the Act has not been disputed. See, for example, Copeling Copyright and The Act of 1978 para 16 at 15.

  I think that it has been shown that 'The Pink Pages' are (1) literary works; (2) anonymous or pseudonymous; (3) first published in the Republic of South Africa within the past 50 years; (4) that the name of the applicant purporting to be the publisher appears in the works as first published and (5) the actual names of the authors are patently not commonly known.

   If that is so then the presumption applies and the applicant as publisher is presumed to have been the owner of the copyright at the time of publication thereof.

   On any or all of these grounds I think that the applicant has shown that it owns the copyright in respect of all three editions of 'The Pink Pages'.

Waiver

   Mr Levinsohn argued that the applicant had waived its right in respect of the first edition of SAFL inasmuch as having ascertained that there had been copying it did nothing to protect its rights through the Courts.

  This argument is clearly untenable. Applicant has explained why it did not come to Court and indeed sought to protect its rights along different, if perhaps ill-judged, lines. Mere delay or even acquiescence does not reflect a waiver. It is perfectly permissible to ignore what is conceived to be a pin prick until the pricks become so frequent and so damaging that action becomes essential. (Questions of prescription do not arise here.)

Infringement

   Section 23(1) of the Act reads:

   '(1) Copyright shall be infringed by any person, not being the owner of the copyright, who, without licence of such owner, does or causes any other person to do, in the Republic, any act which the owner of the copyright may authorise.'

 Only the owner of the copyright may authorise the reproduction of literary work. See s 6 of the Act and Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A) at 279.

   In these proceedings the applicant has to show an infringement on the limited basis permitted by the Plascon-Evans case.

  The evidence of infringement adduced by the applicant is entirely based on the presence in the respondent's works of the fictitious entries and the common typographical errors I have referred to above.

   It is of course quite true that if two compilers of similar directories both work independently, accurately and from scratch the results will to a very large degree be identical. To this extent it is  I difficult and sometimes probably impossible to prove copying in the case of directories which will also produce two almost identical works. Copinger and Skone James (op cit at para 473) say:

   'Whereas with strictly original work any identity of phrase is sufficient evidence of copying, with many compilations, it is only from external evidence or from a minute examination of textual errors that an  J infringement can be established.'

 In the present case such a minute examination was to a degree rendered unnecessary because of the applicant's stratagem of inserting fictitious entries. These made the copying stand out like the proverbial sore thumb.

   In the present case such a minute examination was to a degree rendered unnecessary because of the applicant's stratagem of inserting fictitious entries. These made the copying stand out like the proverbial sore thumb.

   It is conceded by the respondent that these entries appear in its publications. It is also conceded at least by implication that they were copied either from 'The Pink Pages' or from the Jaeger and Waldman directory.

   Mr Levinsohn has, however, argued that for the applicant to succeed it must also show that the infringement was not trivial or, conversely, that the copying was of a substantial portion of the work.

   At most, he says, the applicant has shown 28 or 29 instances of copying; in a work containing some 11 000 entries this is not substantial and is indeed trivial.

   He has pointed out that there are a number of entries in 'The Pink Pages' which do not appear in the respondent's works and vice versa. This, he maintained, refutes any suggestion of a wholesale copying of 'The Pink Pages' by the respondent and destroys any inference sought to  D be drawn from the fictitious entries and typographical errors.

   In Galago Publishers (Pty) Ltd and Another v Erasmus (supra ) Corbett JA (as he then was) quoted with approval the following statement by Lord Reid in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465 (HL):

   'If he does copy, the question whether he has copied a substantial part depends more on the quality rather than the quantity of what he has taken. One test may be whether the part which he has taken is novel or striking, or is merely a common-place arrangement or ordinary words or well-known data. So it may sometimes be a convenient short cut to ask whether the part taken could by itself be the subject of copyright. But, in my view, that is only a short cut, and the more correct approach is first to determine whether the plaintiff's work as a whole is "original" and protected by copyright, and then to enquire whether the part taken by the defendant is substantial. A wrong result can easily be reached if one begins by dissecting the plaintiff's work and asking, could section A be the subject of copyright if it stood by itself, could section B be protected if it stood by itself, and so on. To my mind, it does not follow that because the fragments taken separately would not be copyright, therefore the whole cannot be. Indeed it has often been recognised that if sufficient skill and judgment have been exercised in devising the arrangements of the whole work, that can be an important or even decisive element in deciding whether the work as a whole is protected by copyright.'

  This is the only authority I have been able to find on the question of substantiality in South Africa. Fortunately the English Courts have dealt with the concept more frequently and fully.

   See, for example, Copinger and Skone James (op cit at para 469). Of importance is the passage by Petersen J in University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 610, viz 'what is worth copying is prima facie worth protecting'.

   In Kelly v Morris (1866) LR 1 Eq 697 the defendant, in addition to lists he had obtained elsewhere, took particulars from the plaintiff's directory and sent canvassers to check on the correctness thereof. Where the person concerned could not be found the particulars were simply reproduced. It is obvious that the defendant's directory must have contained some novel material. The relative quantum thereof was not enquired into. The Court (per Page-Wood VC) stated:

   '(G)enerally it is not entitled to take one word of the information previously published without independently working out the matter for himself so as to arrive at the same result from the same common sources of information and the only use that he can legitimately make of the previous publication is to verify his own calculations and results when obtained. So in the present case the defendant could not take a single line of the plaintiff's directory for the purpose of saving himself labour and trouble in getting his information.'

The references in this passage to 'single word' and 'single line' are probably too strong in the light of subsequent legislation. They do, however, indicate that the reproduction need not be gross to be substantial.

   In Hawkes and Son (London) Ltd v Paramount Film Service Ltd [1934] ChD 593 the reproduction of 28 bars of a much longer tune was held to be substantial inter alia because

   'the amount of the music or march that is taken is (not) so slender that it would be impossible to recognise it'

(at 604) and,

   'this reproduction is clearly a substantial part of "Colonel Bogey" looked at from any point of view, whether it be quality, quantity or occasion. Anyone hearing it would know that it was the march called "Colonel Bogey" and though it may be that it was not very prolonged in its reproduction it is clearly in my view a substantial and vital and essential part which is here reproduced.'

It is plain from the authorities that the guide is quality rather than quantity.

   On the facts of the present case the inference is inescapable that the 28 or so instances mentioned above were copied directly or indirectly from the applicant's works, most of them probably from the first edition but at least one from a subsequent edition. It is inconceivable that the respondent could only have selected these 28 or 29 cases to copy. The probabilities are overwhelming that there must have been many more entries that were simply copied.

   Mr Levinsohn was quite right when he argued that it is impossible to determine what the extent of the copying was. I do not think, however, that it is necessary for the applicant to show the exact extent of the copying, provided that he does show that the copying was not insubstantial.

   Having regard to the nature of the work in question, a directory, which must by its nature aim to be as complete as possible, a deletion of 28 entries therefrom would in itself render the work substantially less valuable. (The fact that in casu the 28 entries are in any event fictitious or erroneous is not the point. I am attempting to demonstrate that 28 entries alone can be a substantial part of the whole.) And if one considers that this is only the tip of the iceberg, as it were, then the inference is well-nigh inescapable that what was copied was substantial even if the precise extent thereof is not known.

   Mr Levinsohn has argued that such copying as there was was only shown  J to have occurred in the first edition of SAFL. This argument really does not bear scrutiny. Not only is it likely on the facts that the defendant simply reproduced, with additions, the data in its first edition but the typographical errors in fact appear in the second edition as well. Both works are therefore tainted by the same or similar degrees of copying.

 Interdict

   The applicants seek an interdict. The requirements for an interdict in cases of this nature are the same as for any other interdict. See Conde Nast Publications (Pty) Ltd v Jaffee1951 (1) SA 81 (C) at 86.

   I find that the applicant has shown that it has a clear right to copyright in all three editions of 'The Pink Pages'.

   I also find that an infringement on the part of the respondents has been shown.

   It is common cause that the respondent intends to publish its directory again.

   Clearly it is not possible to separate the pirated portions from the novel content in the respondent's directories. That being so the order must relate to the whole works insofar as they contain telefax information. See Braby v Donaldson 1926 AD 337 at 343.

   Some argument was also addressed to me along the lines of so-called unfair competition but I need not pursue that aspect in the light of the other findings I have made. It also follows that I find no necessity for referring the matter to evidence.

   The applicant is entitled to the orders it seeks, save that it should be made plain that the orders concerned relate only to those portions of the respondent's directory that contain information of telefax numbers and addresses. In the first edition of the SAFL there is for example also a section on telex numbers. If the respondent is so minded it could physically separate the two sections and only deliver up the offending section. This does not apply to the 1988/1989 edition, save that the first section (in yellow pages) in that work, ie that dealing with calendars and dialling codes etc, is excluded from the order.

   I therefore make the following order:

1. The respondent is interdicted and restrained from:

      1.1   infringing the applicant's copyright in and to the compilation of names and addresses and telefax numbers styled  (i) 'The Pink Pages Directory for Southern Africa (1986/1987)', (ii) 'The Pink Pages Fax Directory (1987/1988)', (iii) 'The Pink Pages Fax Book/Southern Africa (1988)' (hereinafter referred to as 'the directories') by doing, or causing any person to do, in the Republic of South Africa, any act which the applicant, being the holder of the  copyright in the directories, has the exclusive right in terms of s 6 of the Copyright Act 1978 to do or to authorise the doing of;

      1.2   distributing, advertising, selling or offering for sale any copies of the 1987/88 and 1988/89 editions of the 'SA Fax  Listings Directory';

      1.3   distributing, advertising, selling or offering for sale any copies of the 1989/90 'SA Classified Fax Listings Directory', or 'SA Fax Listings Directory' reprint which the respondent has announced its intention of publishing during early 1989.

2. The respondent is ordered to deliver up to the applicant for destruction all copies of the 1987/88, 1988/89 editions of the 'SA Fax Listings Directory' as also the proposed 1989/90 'SA Classified Fax Listings Directory' or 'SA Fax Listings Directory' which are in the possession or under the control of the respondent, to the extent that they are or purport to be directories of telefax information.
3. The respondent is to pay the costs of this application, including  the costs of two counsel.

   Applicant's Attorneys: Savage, Jooste & Adams Inc, Pretoria; Shepstone & Wylie, Durban. Respondent's Attorneys: Louis J Hitchcock & Co, Durban. 

FRANK & HIRSCH (PTY) LTD v A ROOPANAND BROTHERS (PTY) LTD 1993 (4) SA 279 (A) 

Citation

1993 (4) SA 279 (A)

Court

Appellate Division

Judge

Corbett CJ, BOTHA JA, GOLDSTONE JA, NICHOLAS AJA and HARMS AJA

Heard

May 3, 1993

Judgment

June 2, 1993  B

Annotations

Link to Case Annotations 

Judgment

Corbett CJ:

This case is concerned with what has become known as 'parallel importation' and it represents an attempt to prevent this by means of the law of copyright. In the Court a quo, the Durban and Coast Local Division, the attempt failed. The appeal to this Court seeks the reversal of the decision of that Court, which has been reported (see Frank & Hirsch (Pty) Ltd v A Roopanand Brothers (Pty) Ltd1991 (3) SA 240 (D)).

The appellant, a South African company with its principal place of business in Johannesburg, trades as an importer and distributor of, inter alia, blank audio and video cassette tapes. Since 1974 appellant has acted as the sole and exclusive importer and distributor of blank TDK audio recording tapes ('TDK tapes') in terms of a distributorship agreement entered into between appellant and the manufacturer of TDK tapes, TDK Electronics Co Ltd of Japan ('TDK Electronics'), and the exporter of these tapes, Furukama Trading Co Ltd of Japan. Included in this agreement (which I shall call 'the distributorship agreement') are clauses in terms of which (i) TDK Electronics grants appellant the right to be the exclusive distributor of TDK tapes in the Republic of South Africa and in certain other Southern African states (referred to as the 'territory') and (ii) appellant undertakes not to sell sound recording tapes or similar products of 'other parties' in the territory.

   At the time of the proceedings in the Court below the distributorship agreement was still in operation. It is common cause that TDK tapes are amongst the most famous and popular makes of blank audio cassette tapes in the world. Since 1974 appellant has established throughout South Africa a network of dealers to whom it supplies TDK tapes; and these tapes are stocked by many retail outlets in South Africa. They are one of the best selling brands of blank audio cassette tapes in South Africa. Appellant spends considerable sums of money each year on advertising and otherwise promoting the sale of TDK tapes and thereby establishing and maintaining the pre-eminence of these goods in the South African market. The importation and distribution of TDK tapes has become one of the major areas of appellant's business.

The respondent is also a South African company and it has its principal place of business in Durban. Its trading activities comprehend the importation into and sale in South Africa of blank audio cassette tapes, including TDK tapes. It appears from the answering affidavit filed on behalf of respondent in the Court a quo that respondent obtains its supplies of TDK tapes from Dialdas and Co of Singapore, which in turn acquires them from Hock Cheong and Co, also of Singapore and the authorized dealer appointed by TDK Electronics in Singapore. TDK Electronics supplies these goods to Hock Cheong and Co without any restrictions on resale; and Hock Cheong and Co's supply of the goods to Dialdas and Co and the latter's supply of the goods to respondent are similarly free of restriction. It appears that it would be unlawful in terms of Japanese law for TDK Electronics to impose contractual restrictions on the resale of TDK tapes supplied by it to its distributors.

The appellant has for some years been very concerned about the trading activities in South Africa of respondent in regard to the importation and sale of TDK tapes, which it terms 'parallel importation'. It avers that a parallel importer is in the nature of a 'parasite' in that he imports goods for which a ready demand has already been established by the regular and authorized distributor. The 'parasite' slur is, needless to say, strenuously denied by respondent.

   In 1986 and after a running dispute for some years appellant instituted an action against respondent in the Durban and Coast Local Division, claiming that respondent's activities constituted the infringement of the mark 'TDK' and a certain device mark (which appears to represent a diamond with its different facets - 'the diamond device') on the cassette tapes, which were both registered trade marks; or alternatively that such activities amounted to the contravention of certain provisions of the Merchandise Marks Act 17 of 1941. The action was heard by Page J, who dismissed it with costs (see Frank & Hirsch (Pty) Ltd v Roopanand Brothers1987 (3) SA 165 (D)).

   Thereafter appellant and TDK Electronics considered other ways and means of preventing the parallel importation of TDK tapes by the respondent. It was eventually decided that, in order to give effect to the exclusivity of the distributorship agreement, TDK Electronics would assign to appellant all its copyright in the literary and/or artistic works comprised in the get-up and trade dress of TDK tapes. This was done by means of a written deed of assignment of copyright entered into between the parties in Japan on 4 June 1987. The preamble to the deed recorded that TDK Electronics was the owner in South Africa of copyright in '. . . certain original artistic and literary works within the meaning of the Copyright Act of the Republic of South Africa 98 of 1978 in the nature of packaging, inserts, covers and the like for audio cassette and video cassette tapes, true copies of which works are annexed hereto marked "A1-A27"' and that it might become the owner of the South African copyright in 'further artistic and literary works of this nature to be made in the future'.

(Annexures A1-A27 consist of a series of colour photographs depicting the different aspects of a number of different TDK audio and video tapes and showing not only the outward get-up, but also what are termed the 'inserts'.) In the preamble all this was named 'the copyrighted works'. The deed further provided that TDK Electronics assigned and transferred to appellant

   '. . . the full and complete South African copyright and all its right, title and interest in and to the copyrighted works for the full duration of the term thereof'.

   Shortly thereafter, on 16 July 1987, appellant's attorneys wrote a letter to respondent setting out the full facts of the matter, including those relating to their exclusive distributorship, the nature of the packaging of the TDK tapes, their claim that the written and pictorial material included on such packaging constituted literary and/or artistic works in terms of the Copyright Act 98 of 1978 ('the Act') and the assignment to appellant of the South African copyright in such material by the owner thereof, TDK Electronics, for the full duration of the term thereof, and explaining in detail why the activities of respondent in importing and trading in TDK tapes constituted an infringement of appellant's copyright. The letter further demanded that respondent refrain from continuing to do so, on pain of legal action.

Respondent's reply was non-committal and, it appears, it continued to trade as before. On 15 December 1987 appellant's attorneys again wrote to respondent saying that they had received confirmation that respondent had sold in South Africa a TDK tape manufactured after the copyright had been assigned to appellant and threatening legal action unless there was compliance with the requirements of the letter of 16 July 1987.

In January 1988 TDK Electronics adopted a new get-up for its TDK D60 audio cassette tapes, one of the best selling products of the range of TDK tapes. I shall later describe this new get-up which replaced the then-existing get-up for these tapes. In September 1988 a supplementary deed of assignment was entered into between TDK Electronics and appellant. The preamble to this deed refers to the deed of assignment of 4 June 1987 and recites that TDK Electronics has adopted a new trade dress for its audio and video cassette tapes. In the body of the deed it is provided that the artistic and literary works embodied in this new trade dress is comprised in the 'further artistic and literary works of this nature to be made in the future', referred to in the preamble to the original deed; and that the original deed applies in all respects to the copyright in this new dress.

On 6 October 1988 appellant's attorneys addressed a further letter to respondent explaining that the new get-up adopted by TDK Electronics for its blank cassettes was covered by the assignment of copyright in appellant's favour and that accordingly the importation, selling and/or distribution by respondent of TDK tapes in the new get-up would constitute infringement of appellant's copyright. The letter ends with a warning that if respondent should be found to be doing this, infringement proceedings would be instituted forthwith.

Thereafter appellant was provided with evidence that respondent was continuing to sell TDK D60 audio tapes. And in May 1990 appellant instituted motion proceedings in the Court a quo claiming an interdict and orders for delivery up, an account of profits or, alternatively, for postponing the question of damages to a date to be arranged, and costs. The matter came before Booysen J who, for reasons which I shall later elaborate, dismissed the application with costs, but granted leave to appeal to this Court.

I turn to examine the legal basis of appellant's case. The Act was extensively amended by the Copyright Amendment Act 125 of 1992, but it is common cause that this case must be decided on the basis of the law as laid down by the Act prior to the 1992 amendments. Section 23(1) and (2) provided as follows:

  '23(1) Copyright shall be infringed by any person, not being the owner of the copyright, who, without the licence of such owner, does or causes any other person to do, in the Republic, any act which the owner of the copyright may authorise.

(2) Without derogating from the generality of ss (1), copyright shall be infringed by any person who, without the licence of the owner of the copyright and at a time when copyright subsists in a work -

   (a) imports an article into the Republic for a purpose other than for his private and domestic use;

   (b) sells, lets, or by way of trade offers or exposes for sale or hire in the Republic any article; or

   (c) distributes in the Republic any article for the purposes of trade, or for any other purpose, to such an extent that the owner of the copyright in question is prejudicially affected,

   if to his knowledge the making of that article constituted an infringement of that copyright or would have constituted such an infringement if the article had been made in the Republic.' ('Republic', of course, means the Republic of South Africa - s 2 of the Interpretation Act 33 of 1957.) The appellant relies upon infringement in terms of s 23(2) - sometimes termed 'secondary' or 'indirect' infringement - and its claim relates specifically to the new get-up of the TDK D60 audio cassette tapes. (I shall call these 'the tape (or tapes) in issue'.) This get-up is illustrated by photographs of the two sides of  the tape in issue which constitute annexures EG3 and EG4 to the founding affidavit. In addition, we have been provided (as was the Court a quo) with a sample of such a tape. Appellant avers that this get-up embodies artistic and/or literary works within the meaning of those concepts in the Act.

In terms of s 24(1) of the Act infringements of copyright are actionable at the suit of the 'owner of the copyright'. Section 21 defines in whom ownership of copyright vests. And s 22 deals, inter alia, with assignment of copyright. It provides that copyright is transmissible as movable property by assignment; that an assignment of copyright may be limited so as to apply to some only of the acts which the owner of the copyright has the exclusive right to control, or to a part only of the term of the copyright, or to a specified country or other geographical area; and that no assignment of copyright shall have effect unless it is in writing signed by or on behalf of the assignor. The effect of a valid assignment is to vest in the assignee ownership of the copyright in the work or works covered by the assignment and entitles the assignee to sue for infringement of such copyright (see Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A) at 279F-G; Dean Handbook of South African Copyright Law at 1-35).

   In the present case it is not in dispute that in terms of s 21 ownership of whatever copyright there is in the get-up of the tapes in issue originally vested in TDK Electronics; that this copyright, in so far as it obtained in South Africa, was validly assigned to appellant; and that such copyright still subsists. In order to complete its cause of action in terms of s 23(2) appellant had to establish also

(a)   that respondent either imported into South Africa the tapes in issue for a purpose other than for his private or domestic use, or sold, let or by way of trade offered or exposed for sale or hire in South Africa the tapes in issue, or distributed in South Africa the tapes in issue for the purposes of trade or for any other purpose to such an extent that the owner of the copyright in question is prejudicially affected;

   (b)   that to respondent's knowledge the making of the tapes in issue either

      (i)   constituted an infringement of appellant's copyright, or

      (ii)   would have constituted such an infringement if the article had been made in South Africa; and

   (c)   that respondent had no licence from the owner of the copyright to do what he did.

   It is not disputed that the evidence of the activities of the respondent in importing and marketing the tapes in issue established one or more of the requirements of (a) above. As to (b), appellant relied on alternative (ii).

This aspect of s 23(2) was considered by Goldstone J in the case of Twentieth Century Fox Film Corporation and Another v Anthony Black Films (Pty) Ltd1982 (3) SA 582 (W). In this case the Court held:

   (1)   that the words in s 23(2),

         '. . . would have constituted such an infringement if the article had been made in the Republic',

         applied, and could only apply, to an imported article, ie one not made in South Africa;

   (2)   that the hypothesis that the Court is required to make in terms of these words is that the imported article was made in South Africa by the person who made it in fact; and

   (3)   that if that person could lawfully have made it in South Africa, there is no infringement of copyright.

(See the judgment at 589H-594H.) It seems to me, with respect, that these propositions are a correct interpretation of the relevant words of s 23(2). It follows, as a logical corollary, that, if the person who made the article could not lawfully (ie without infringing copyright) have made it in South Africa, a person who, with the requisite knowledge and without licence, either imports the article into South Africa or sells or distributes it here commits an infringement of copyright in terms of s 23(2): see Paramount Pictures Corporation v Video Parktown North (Pty) Ltd1983 (2) SA 251 (T) at 261B-F; also Dean (op cit at 1 - 23 - 4); Dean in an article entitled 'Parallel Importation - Infringement of Copyright' (1983) 100 SALJ 258 at 261-71.

 In applying these statutory provisions, thus interpreted, to the facts of the present case, the cardinal questions which must be asked are: whether, if TDK Electronics had made the tapes in issue in South Africa, this would have constituted an infringement of appellant's copyright in the get-up of the tapes; if so, whether respondent knew this; and whether respondent acted without the licence of the owner. The answer to the first of these questions depends in turn on whether there was in the get-up of the tapes in issue subject-matter enjoying copyright protection. It is to this question that I now turn.

Annexures EG3 and EG4 and the sample handed in show that the tape in issue is permanently encased in a transparent plastic cassette into which is built portions of the mechanism. When packed and ready for sale the cassette is enclosed in a transparent plastic container, the two halves of which are hinged together and which opens and shuts to a slight pressure of the fingers. This container is virtually devoid of embellishment. Inside the container there are placed pieces of paper called 'inserts'. The container itself is enclosed in a cellophane wrapper. In its fully-packed state the cassette (in its container) measures about 11cm x 7cm and is about 1,5cm thick. In determining whether there is subject-matter in the get-up of the tape in issue I shall concentrate on the wrapper and the inserts. For reasons which will emerge later it is not necessary to deal with what appears to be printed on the sides of the cassette itself.

   One side of the cassette, when packed and enclosed in its wrapper, is obviously the one which would normally be uppermost on display ('the obverse side'). The upper portion of the obverse side of the wrapper consists of a transparent panel through which portions of the tape and the cassette mechanism are visible. The rest of this side is opaque and is divided into a number of rectilinear strips or panels of different colours - white, black, red and gold. On the transparent panel appear (in white) the aforementioned diamond device, the mark TDK and the words 'Reliable cassette mechanism'. 'D60' (the 'D' in white and the '60' in green) is printed against the background of a black panel and other technical information appears on a white panel. The reverse side of the wrapper has a red background on which appear, inter alia, the diamond device, the TDK mark, D60 (in white) on a small black panel, a narrow gold panel on which are printed the words 'Dynamic Cassette Low Noise High Output', material descriptive and laudatory of the cassette, printed in black, in English, German and French, and various other inscriptions. The designs and colouring on the obverse and reverse sides of the wrapper are carried over onto the edges of the cassette, upon which there are also various inscriptions, including the diamond device and the TDK mark.

   The two inserts are somewhat different from one another. The one, made of thick, stiff paper is folded to fit into one portion of the hinged container ('the first insert'). When the container is closed (whether empty or containing the cassette) part of this insert forms a series of strips or panels, coloured white, grey, black, red and gold, which are visible on portion of the obverse side and also on the bottom edge, after the wrapper has been removed. The rest of the insert is only visible on the obverse side when the container is empty. At the top of it is a strip coloured pink on which appear in red lettering certain inscriptions and below that a blank space with horizontal dotted lines. The purpose of this part of the insert was not explained to us, but I would infer that it is to provide the user of the tape with a convenient table upon which to list what he has recorded on the tape. On the reverse side is visible, when the wrapper is removed and irrespective of whether the container is empty or not, a similar table. The other insert ('the second insert') consists of an oblong piece of paper. On the one side (colours white and red) are a number of strip (pull-off) labels; and on the other a warranty relating to the cassette in English, German and French (black print against a white background). The original author of the get-up of the tapes in issue, an employee of TDK Electronics named Nobora Yemura, did not claim to have made or devised the second insert and it can consequently be ignored.

   In terms of the Act copyright may exist in respect of, inter alia, original 'literary works' and 'artistic works'. These are defined in the Act as follows:

   '"artistic work" means, irrespective of the artistic quality thereof -

   (a) paintings, sculptures, drawings, engravings and photographs;

   (b) works of architecture, being either buildings or models of buildings; or

   (c) works of artistic craftmanship, or works of craftmanship of a technical nature, not falling within either para (a) or (b);

  . . .

   "literary work" includes, irrespective of literary quality and in whatever mode or form expressed -

   (a) novels, stories and poetical works;

   (b) dramatic works, stage directions, cinematograph film scenarios and broadcasting scripts;

   (c) textbooks, treatises, histories, biographies, essays and articles;

   (d) encyclopaedias and dictionaries;

   (e) letters, reports and memoranda;

   (f) lectures, addresses and sermons; and

   (g) written tables and compilations.'

Applying these definitions I am satisfied that the whole of the wrapper constitutes 'artistic work' within the meaning of the statutory definition. As this definition indicates, artistic quality is not a necessary requirement. Nevertheless, I am satisfied that considerable design and draughting skill has gone into the production of this wrapper. The obverse side has a lay-out which is attractive, eye-catching and colourful; and, though less skill would appear to have been required to produce the reverse side, it, too, shows evidence of artistic quality. Moreover, it is interesting to note that the English Courts have recognised items such as labels as having the necessary qualities to constitute artistic work: see Charles Walker & Co Ltd v The British Picker Co Ltd [1961] RPC 57; Tavener Rutledge Ltd v Specters Ltd [1959] RPC 83 (CA). In the Charles Walker case the label, as illustrated at 58 of the report, appears to have substantially less artistic merit or quality than either side of the wrapper here in issue.

At this point I should make it clear that appellant disavows any copyright in the diamond device and the TDK mark individually and dehors the wrapper or the insert as a whole. These two features had originally been made by someone other than the author of the wrapper and insert and were incorporated in the wrapper and the insert by the author thereof.

The claim that the wrapper includes literary work is perhaps more debatable, but in view of the finding in respect of artistic work it is not necessary to pursue this aspect. And, I might add, I did not understand respondent's counsel to seriously dispute the proposition that the wrapper constitutes or contains artistic work. Nor did he suggest that this artistic work was not original; 'original' in this context meaning that the work should emanate from the author himself and not be copied (see Klep Valves (Pty) Ltd v Saunders Valve Co Ltd1987 (2) SA 1 (A) at 22H-23B).

Turning to the first insert, I am of the view that, mainly on the strength of the portion displaying the coloured strips and panels, this item of get-up has artistic subject-matter. Again it is not necessary to consider literary subject-matter. Nor is it necessary to deal with the inscriptions printed on the cassette itself. As far as can be ascertained this is not separable from the cassette.

Assuming at this stage that appellant has shown infringement of copyright, it will be entitled to an interdict against respondent on the strength of, and in respect of, the wrapper and the first insert and will be entitled also to the delivery up of these items. But it will not be entitled, and this is conceded by appellant, to any such orders in respect of the cassette tape itself. In view of the impossibility of separating the inscriptions on the cassette from the cassette it is not feasible to grant any such orders in regard to the inscriptions.

I hold, accordingly, that the get-up of the tapes in issue did contain subject-matter for copyright protection. The assignment of the South African copyright in respect of the get-up of the tapes in issue vested in appellant exclusively all the rights comprehended by the South African copyright and divested TDK Electronics thereof. It follows that, hypothetically, the making in South Africa of the get-up of the tapes in issue by TDK Electronics would have constituted an infringement of appellant's copyright.

The next element required to establish appellant's cause of action is knowledge of this on the part of respondent. In the case of Gramophone Co Ltd v Music Machine (Pty) Ltd and Others1973 (3) SA 188 (W) 'knowledge' in the similar sections (ss 17(2) and 17(3)) of the previous Copyright Act 63 of 1965 was held to mean notice of facts such as would suggest to a reasonable man that a breach of copyright law was being committed (see at 207F-G); and also Paramount Pictures Corporation v Video Parktown North (supra at 261G); and the discussion in Copinger and Skone James on Copyright 13th ed at 140). It is not necessary to decide whether this formulation is precisely correct or adequate for, in my view, appellant, by means of its letters of 16 July 1987 and 6 October 1988, placed before respondent sufficient facts from which it could and should have appreciated that its commercial activities relating to the tapes in issue constituted infringement of appellant's copyright. And it would have been no answer for the respondent to say that although it knew all the relevant facts it nevertheless believed, as a matter of law, that it was committing no infringement (Copinger and Skone James on Copyright (op cit at 241); Sillitoe and Others v McGraw-Hill Book Company (UK) Ltd [1983] FSR 545 at 557). None of this appeared to be contested by the respondent in this Court.

Subject to the question of licence (with which I shall deal later) the appellant would thus appear to have established all the requirements of a cause of action in terms of s 23(2) of the Act. It was nevertheless non-suited in the Court a quo. The Court's reasons for doing so appear from the reported judgment at 244I-246D. Here the learned Judge a quo commences his line of reasoning by focussing on the words in the section which relate to an article the making of which would have constituted an infringement of copyright if the article had been made in South Africa (at 244I). Having referred to the purposes of the law of copyright and certain provisions of the Act, he concludes that copyright in a literary or artistic work is infringed by making an article which is a reproduction, publication or adaptation of the work without licence of the owner of the copyright; or by importing such an article for the purposes of trade. The learned Judge then poses the question (at 245H-I):

 'What is the position, though, if a physical reproduction of the work by accessio becomes part of a principal thing so that the thing thus made is not a reproduction, publication or adaptation of the work but a different thing altogether and what if such a physical reproduction of the work together with other physical things by specificatio becomes a new thing or article?'

He answers this question by stating the following (at 245I-246C):

   'It seems to me that the answer to this question must be that it is not an article the making of which constitutes an infringement if only the making of an accessory part of the article which has been made constituted an infringement. If the Legislature had meant to refer to such articles, it should have said so, eg by referring to an article or any part thereof. To hold otherwise would mean that the importer of a car which has components such as shock absorbers of another manufacturer fitted, upon which literary or artistic work is printed or painted, could be infringing copyright and be prohibited from importing the car.

 The remedies of the Copyright Act could not possibly have been meant to apply to such a situation. The short answer would be that the car is not an article the making of which infringed copyright. The car would not be a copy, reproduction or adaptation of the work. The reproduction work would merely be an accessory component thereof.

It seems to me that these cassette tapes are also not articles the making of which would have constituted infringement of copyright. The physical reproductions of the artistic or literary works comprising the get-up were indeed accessory to the principal things, ie the cassette tapes, and by accessio or specificatio became part of the cassette tapes, the articles in question.'

Respondent's counsel supported this line of reasoning. Indeed, despite the fact that respondent raised a number of other defences on the papers and in argument before the Court below, this was virtually the only ground upon which respondent's counsel resisted the appeal in this Court. He did also argue the question of licence, but without much conviction.

I am, with respect, unable to agree with the reasons and decision of the Court a quo. The reliance on the concepts of accessio and specificatio is, in my view, misplaced. In Wille's Principles of South African Law 8th ed, the section edited by Prof C G van der Merwe contains the following definitions of accession and specification:

   'Accessio is a method of acquiring ownership by a person in a thing by virtue of it being added to, or incorporated with, a thing belonging to himself'

'Specification occurs when a person creates a nova species (a new product) out of materials which belong wholly or partly to another without there being any legal relationship between the parties. The maker only becomes the owner of the new product if it cannot be reduced to its original form'

(at 287). (See also Aldine Timber Co v Hlatswayo 1932 TPD 337 at 341.) I fail to see how these principles which deal with the passing of ownership in corporeal property have any relevance to the present situation. The owner of copyright in a certain subject-matter holds a bundle of incorporeal rights created and regulated by statute. The statute determines when and how these rights come into existence, how they may be transferred and when and how they terminate. Respondent's counsel conceded that he knew of no authority which suggested that the principles of accessio and specificatio apply to incorporeal rights; and I would be surprised if there were any. In any event, I do not see how common-law rules regarding the passing of ownership (even if applicable on the facts) could displace the specific provisions of the statute governing the law of copyright. And, finally, the reasoning of the Court a quo, as I understand it, relies upon the principles of accessio and/or specificatio in order to establish not that the copyright in the wrappers was transferred to someone else when the cassettes were encased in them, but that it, somehow, ceased to exist. This, in my view, is wholly contrary to the provisions of the Act, which, as I have stressed, regulates how and when copyright terminates. It seems to be an inescapable consequence of the decision of the Court a quo that wherever the physical reproduction of a work in which A has the copyright becomes part of a 'principal thing' (which itself is either not the subject-matter of copyright or over which A has no copyright) A loses his copyright and can have no claim for its infringement; and that this principle would apply to both direct and indirect infringement. If this were so, the protection afforded to an author by the copyright law would be nullified in a number of important instances. Thus, for example, an artist who painted an original artistic work would, presumably, not be entitled to sue under either part of s 23 if a reproduction of that painting were used without permission as a dust-cover for, or an illustration in, a book of which someone else was the author. Similarly, a writer or poet would have no claim against a publisher who unauthorisedly included his short story in a collection of short stories or his poem in an anthology of poetry. Many other examples spring to mind.

That this is not the law is well illustrated by two English cases and an Australian one. The first is Tavener Rutledge Ltd v Specters Ltd (supra). In that case plaintiff and defendant both sold sweets (particularly fruitdrops) in tins. In each case the top of the tin was decorated by a coloured drawing depicting fruitdrops and a central panel which featured the producer's name, the name of the product, viz 'fruit flavoured drops', and certain other information. In an action in which the plaintiff claimed, inter alia, infringement of copyright, the Court held that defendant's label so closely resembled plaintiff's that it constituted a copy thereof and the copyright claim succeeded. The essential facts of that case are very similar to those in the present case.

In the second case, Moffatt and Paige Ltd v Gill & Sons Ltd [1902] 86 LT 465 (CA), the plaintiff was the publisher of an annotated edition of Shakespeare's As You Like It. The defendant published an annotated edition of the same work. Plaintiff sued successfully for infringement of copyright, the Court finding that defendant's publication was substantially a copy of plaintiff's. It was also held that the plaintiff's work was subject-matter of copyright. Clearly this copyright applied only to the author's annotations since, as Collins MR pointed out (at 470), it was open to anybody to compile an edition of As You Like It. The annotations were obviously accessory to the main work, but that did not prevent there having been an infringement of copyright.

In the Australian case, R A & A Bailey & Co Ltd v Boccaccio Pty Ltd and Others; R A & A Bailey & Co Ltd v Pacific Wine Co Pty Ltd (1986) 6 IPR 279, an instance of parallel importation, the product in question was a liqueur manufactured in the Republic of Ireland called 'Bailey's Original Irish Cream'. It was marketed in a distinctive bottle and part of the get-up was a label which contained various inscriptions and a picture of a country scene. In an action in the Supreme Court of New South Wales it was not disputed that there was copyright in the label as being an artistic work and it was so found. The defendant raised other defences (which failed), but nowhere was it suggested that because the label was accessory to the bottle of liqueur no copyright in the label existed.

   The example of the motor car and its shock absorbers used by the Judge a quo to reinforce his reasoning is, in my view, unhelpful. From a practical point of view I find it very unlikely (i) that printing on a shock absorber would constitute a literary or an artistic work; and (ii) that, if it did, the owner of the copyright would not have licensed its use; and (iii) even assuming he had not, that the importer would have knowledge of all this. If, contrary to the probabilities, these circumstances all co-existed, then, subject to the de minimis principle, the importer might have a problem. In other words, the example does not demonstrate the correctness of the approach adopted by the Judge a quo.

   It remains to deal briefly with the questions of licence and estoppel raised by respondent and, as I have indicated, argued but faintly before us. Reduced to its essentials, respondent's argument is that TDK Electronics labelled and packaged the tapes without any restriction on resale, and the subsequent lack of restriction on resale to, inter alia, a South African importer by the person first purchasing them, occurred to the knowledge of and without action by appellant against TDK Electronics; that this constituted an unconditional consent by conduct on the part of the appellant to (and thereby an implied licence for) the sale of the goods in that form, so packaged and labelled; and that this consent extended to resales. There is no substance in this argument. When asked what action appellant could have taken against TDK Electronics, respondent's counsel was unable to give an adequate reply. Moreover, after the assignment of the copyright and by means of its letters of 16 July 1987 and 6 October 1988 appellant made it abundantly clear to respondent that the continued importation and sale of the tapes in issue would infringe its copyright. This would have dispelled any notion of an implied licence. And, of course, after the assignment only appellant could grant a licence in regard to South Africa.

Respondent's counsel conceded that if the implied licence argument failed, the one based on estoppel could not succeed.

For these reasons, I hold that appellant did establish infringement of its copyright in the get-up (comprising the wrapper and the first insert) of the tapes in issue and that its appeal must be allowed. Appellant is entitled to an interdict and delivery up of the wrappers and inserts which came into respondent's possession after it received the letter of 6 October 1988. Appellant also claimed relief by way of an account of profits but during the hearing of the appeal this was wisely abandoned.

In appellant's notice of motion the prayers for an interdict and for an order for delivery up are directed against 'respondent, its servants and agents'. Orders of this nature are sometimes, but not always, sought and granted by the Court in copyright and other intellectual property cases (see, for example, Tie Rack plc v Tie Rack Stores (Pty) Ltd and Another 1989 (4) SA 427 (T) at 451F; but compare Paramount Pictures Corporation v Video Parktown North (Pty) Ltd (supra at 263D and G)). Insofar as an order in this form refers to 'servants' it seems to me to be redundant, particularly in the case of a limited liability company which perforce acts to a great extent through its servants. The unqualified reference to 'agents' is anomalous in that such agents are not before the Court and consequently the order would not be binding on them. These points were discussed in the speech of Lord Uthwatt in Marengo v Daily Sketch and Sunday Graphic Ltd [1948] 1 All ER 406 (HL) at 407 (a passing off case) with reference to the English practice of granting an injunction against 'the defendants, their staff, servants and agents'. He pointed out that the reference in an order to staff, servants and agents could not bind such persons, but was merely a warning to them against possibly committing contempt of court by knowingly assisting the defendant in a breach of the injunction. The learned Law Lord considered that this form of order was open to objection and concluded (at 407H):

   'I suggest (my suggestion is, perhaps, a one-sided compromise with tradition) that the Judges might well consider whether injunctions should not assume the form of restraining "the defendants by themselves their servants workmen and agents or otherwise" from committing the prohibited acts. In the present case the defendants are a limited company and can act only through others. I invite your Lordships, therefore, to consider whether the injunction here should not take the form of restraining the "defendants by their servants workmen agents or otherwise" from commission of the acts to be enjoined.'

(See also Copinger (op cit para 11-63 at 341).)

My researches indicate that in this country there is no established tradition regarding the form of such orders and, in my view, it is appropriate to discard what is in truth a misleading and ineffectual formula and simply to grant the order, whether it be for an interdict or delivery up, as against the defendant or respondent, as the case may be.

Respondent's counsel contended that the failure of the argument on an account of profits merited a special order in regard to costs should the appeal succeed. I cannot agree. The appellant has achieved substantial, indeed almost overwhelming, success and it is entitled to its costs of appeal in full.

   The following order is made:

   (1)   The appeal is allowed with costs, including those occasioned by the employment of two counsel.

   (2)   The order of the Court a quo is set aside and the following order is substituted:'It is ordered:

            (a)   that respondent is interdicted from infringing the applicant's copyright in the get-up (consisting of the cellophane wrapper and the first insert) of TDK D60 audio cassette tapes (hereafter referred to as the "subject works") by: 

               (i)   importing into the Republic of South Africa audio tapes in the get-up of which copies of the subject works appear; and/or

               (ii)   selling, exposing for sale or distributing for trade audio-tapes in the get-up of which copies of the subject works appear;

            (b)   that respondent deliver up to the applicant for destruction all copies of the subject works which are in their possession or under their control; and

            (c)   that respondent pay the costs of suit, including the costs of two counsel.'

   Botha JA, Goldstone JA, Nicholas AJA and Harms AJA concurred.

   Appellant's Attorneys: Spoor & Fisher, Pretoria; Strauss Daly, Durban; Israel & Sackstein, Bloemfontein. Respondent's Attorneys: J Kissoon Singh & Co, Durban; Lovius-Block, Bloemfontein.

Neutral Citation Number: [2005] EWHC 472 (Ch)

Case No: HC04C02812

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 23/03/2005

Before

JUSTICE MANN

- - - - - - - - - - - - - - - - - - - - -

Between :

Fraser-Woodward Limited Claimant

- and -

(1) British Broadcasting Corporation

(2) Brighter Pictures Limited Defendants

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

Miss C. Michalos (instructed by Messrs. Charles Russell) for the Claimant.

Miss C. May (instructed by BBC Litigation Department and Messrs. Bristows)

for the Defendants.

Hearing dates: 22nd, 23rd, 24th and 25th February 2005

- - - - - - - - - - - - - - - - - - - - -

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be

taken of this Judgment and that copies of this version as handed down may be treated

as authentic.

............................

Mr Justice Mann :

Introduction

This is an action for infringement of copyright in photographs, the copyright in which is vested in the claimant (“Fraser Woodward”). They are all photographs of various members of the well-known Beckham family. Mr David Beckham is a very well-known footballer, and his wife Victoria is a well-known pop singer who was formally a member of a group called the Spice Girls, in which context she was known as Posh Spice. Together and individually they have acquired celebrity status, and their private and public lives are apparently of great interest to many people. At the time of the TV programme which is at the heart of this case they had two small children, Brooklyn and Romeo (they have since had a third). The photographs in question were originally published in various tabloid newspapers. That publication was by licence. The second defendant (“Brighter”) is a television production company. It used images of the newspaper pages on which the photographs were published in a programme which it made for, and which was broadcast by, the first defendant (“the BBC”). It is that use which is complained of as being an infringement of copyright. Additional damages for flagrancy are sought, partly on the grounds of the flagrancy of the alleged breaches. The principal defences of the defendants are fair dealing within section 30(1) of the Copyright, Designs and Patents Act 1988 (“the Act”), and incidental inclusion within the meaning of section 31(1) of that Act.

The Facts

The fact of the use of the photographs, the existence of copyright and its being vested in the claimant are not in dispute. I will therefore be able to deal with them relatively shortly. There is, however, a dispute as to the level of editorial control exerted by Victoria Beckham, and the state of mind of Brighter when it made the programme (going to flagrancy of breach and additional damages, and going to the fairness of dealing).

There are 14 photographs in issue in this case. At the trial they were given the names Beckham 1 to 14, and I shall continue to identify them in that way. Beckhams 1-13 were taken by Mr Jason Fraser, a well-known photographer who has a reputation for taking photographs of celebrities for the purposes of being sold, and ultimately reproduced, in various publications. The claimant company is a company of which he is a shareholder, and it owns the rights in various photographs, which it exploits from time to time. Beckham 14 was taken by Michele Crosera, an Italian photographer with a commercial relationship with both the claimant and Mr Fraser. He originally had the copyright in this last photograph (“Beckham 14”); he has assigned it to the claimant. All the photographs except Beckham 14 are photographs of two or more members of the Beckham family taken in apparently off-guard moments when their subjects were conducting their day-to-day activities in public. They are not formal photographs in the sense that their subjects formally sat for them; on their face they might be thought to be photographs taken on occasions not intended for photography and in circumstances in which their subjects were not intended to be photographed (though whether that is right or not is one of the points made in the television programme which reproduced them). Beckham 14 is of Mrs Beckham by herself.

At the end of 2002 Brighter embarked on the production of the television programme in question, which was ultimately broadcast under the title “Tabloid Tales”. The pleaded purpose of the programme (which was one of six in a series) was that it “intended to and did criticise and/or review tabloid journalism and the methods employed by the tabloid press and/or the celebrities featured to build and exploit a story to their advantage” (to quote the Defence in this case). The Beckham programme was broadcast on 29 April 2003 at 10.40 p.m. It was narrated by Mr Piers Morgan, a well-known former Fleet Street tabloid editor. He opens the programme by saying:

“Tonight Tabloid Tales exposes Victoria Beckham’s relationship with the press, revealing the truth, the rumours and the lies behind the headlines.”

A little later on he says:

“The big question is whether she is really just a canny little minx cleverly manipulating the media for her own gain, or whether the press are a bunch of tabloid vultures, preying on Victoria to sell newspapers.”

The programme (which runs for a little under 40 minutes) then contains a sort of survey of press coverage of the Beckhams, and in particular Victoria Beckham, starting with her career as a member of the Spice Girls pop group and showing, or claiming to show, a developing relationship with the press. This is achieved by linking narration of Mr Morgan, clips of interviews with various journalists and media personnel, some short contributions from Mr Fraser himself, rather longer extracts from an interview of Victoria Beckham and her mother by Mr Morgan, and a mixture of film clips, clips from pop videos and (most importantly for the purposes of this case) images of newspaper headlines, articles and photographs. The 14 photographs which are the subject of this action featured in this last context. Apart from one which was on screen for about 4 seconds, they were shown for no more than 2 or 3 seconds each, and some of them less than that. On occasions they were shown as part of a brief still image; on others the camera panned quickly across them or zoomed in relation to them.

I now need to go back and set out one or two brief details of how the programme came to be made and how the makers of the programme went about dealing with intellectual property rights. The history is relevant to two issues – the fairness of the dealing for the purposes of the fair dealing provision, and whether any breach was flagrant or would otherwise attract additional damages under section 97(2) of the Act. The series of which the programme formed part had an original working title of “Set the Record Straight”. At some point the title was changed to “Tabloid Tales”. The claimant sought to suggest that the original title betokened the real purpose of the programme, which was to give the main subject (Victoria Beckham in the subject programme) the opportunity to use the programme as a public relations opportunity, and “put the record straight” in that sense. At the end of the day there was no evidence to support an explicit intention on the part of Brighter that this should be the thrust of the programme, and I find that there was no real significance (for the purposes of the points I have to decide) in the original choice of name (or in its change). Brighter pitched for the series to the BBC, and was commissioned to make it. The budget was about £845,000. 6 programmes were broadcast; the Beckham programme was the first. Miss Jacquelene Williamson was the production manager for the series and she gave evidence before me. One of her concerns was the proper rights clearance for the various images used in the course of the programme (and the other programmes). In addition to the images which are the subject of this action, other still images were used. She consulted a BBC in-house lawyer about this (Mr Alistair Bonnington), and I shall come to that in due course. However, it is clear from her evidence that she considered that the fair dealing provisions were capable of applying, and as a result of her consultation with Mr Bonnington she claims that her view was reinforced. In the circumstances there was no need to seek the permission of any of the owners of the copyright of the photographs with one exception – there was one photograph for which a licence fee of £125 was paid. She produced a document called a Residuals Schedule, which is said to demonstrate that all the photographs except that one were used on the “fair dealing” basis. This is a document that was prepared at the end of the series for the benefit of the BBC so that the BBC could see the basis on which material was used. It is intended to cover all the material used, and shows such things as the basis on which copyright material was used, a summary of any licences obtained and the amounts paid. At the end of the schedule is a page referring to “Headlines” from various newspapers. All have the word “Fair” in the relevant columns relating to licences, indicating (as I was told, and which I accept) that the fair dealing provision was considered to apply to them. These entries do not expressly refer to photographs appearing in newspapers (such as those which are the subject of this action), but I am told that there is no other entry in the Residuals Schedule which is capable of referring to them, and it was intended that this part of the schedule should deal with them thus. I accept that evidence.

In those circumstances it is the defendants’ case that it was not necessary to seek Mr Fraser’s consent to the use made of the Beckham photographs, and no such consent was sought. Mr. Fraser’s evidence as to consent was different.He says that some time before 27th February 2003 (he cannot put a date on it) he was told by his personal assistant Cathy Carroll that a researcher from Brighter had telephoned her to request a licence to use photographs of the Beckhams in the programme. He says that he instructed her to tell Brighter that he would not grant such a licence. In saying No he was acting in accordance with what he said his general (though not invariable) practice was in relation to the use of his photographs on television. These particular photographs had of course already been published, and the newspapers had paid a price of well over £30,000 in aggregate for the right to publish immediately after they were taken, and over the course of time these figures have apparently yielded an unspecified sum which exceeds six figures, but he generally regarded the use of his photographs on television as being very damaging to the residual value of his photographs; hence his general practice, and hence what he says his reaction was on this occasion. Miss Carroll gave evidence. She could not recall receiving and relaying such a request (and refusal), but what Mr Fraser described as happening would have been in accordance with her practice had she received such a request.

The making of such a request, if it occurred, formed a material part of the claimant’s case on fair dealing. As will be apparent later on in this judgment, I do not think that it affects the point one way or another, but in case that conclusion is wrong and in case this case should be taken further I need to make a finding about it. Having heard the evidence I am not satisfied that this particular request was made (and refused). Miss Carroll’s inability to recollect any such request does not point one way or the other – in my view it certainly does not mean that the request was not made, because it is quite conceivable that the request was of a routine nature that would not necessarily be remembered in a busy office. It is unsatisfactory that the researcher on the programme (a Ruth Johnson) has not given evidence – Miss May, who appeared for the defendants, told me she could not be contacted, though Miss Michalos, who appeared for the claimant, told me her solicitors believed they had found her. However, I am satisfied that neither Miss Williamson nor anyone else in a supervisory capacity would have required that it be made. There is no evidence that Miss Williamson was intending to rely on anything other than fair dealing in relation to these (and other) photographs, and no reason emerged why she (or anyone else) would have instructed the researcher to make the call alleged by Mr Fraser. She had an early meeting with Mr Bonnington, before the programmes were shot, at which such things were discussed, and I think it is likely that fair dealing was in her mind from then on. That makes it very unlikely that she would have instructed anyone to seek a licence from Mr Fraser. Of course, it is possible that the researcher might have taken it upon herself to make the request anyway, but if she had then I think it inevitable that any refusal would have been reported back to Miss Williamson, and Miss Williamson told me, and again I accept, that she could not remember receiving any such report and would be likely to have remembered if she had. It is fair to say that a lot of the detail of the making of this programme had obviously passed out of her recollection, but I think that it is likely that that would have stood out in her mind, especially in the context of later discussions about fair dealing to which I will come shortly. So far as Mr Fraser’s recollection is concerned, I am quite satisfied that at all times he was a truthful witness who was not deliberately making anything up, but I think it likely that he has confused another occasion with this particular occasion (his evidence was that he had received many requests for the use of his photographs in TV programmes – 3 or 4 per week was his estimate). He clearly felt strongly about the use of his photographs, and there were other requests for the use of photographs later on, when he was giving an interview for the programme, and it may be that this has all come together in his mind to give him a false recollection, but whatever the explanation is I think that he was mistaken.

However, there came a time when he was, as I find, asked whether his photographs could be used in a different way, and in respect of which he did refuse consent. In early 2003 he was contacted on a number of occasions by representatives of Brighter and asked if he would give an interview. He declined, until eventually he was persuaded to do so personally by Mr Piers Morgan. He told me that he agreed once it had been made clear that the programme would not be a “hatchet job” on Victoria Beckham. Four proposed appointments were cancelled before the interview was finally filmed on 27th February 2003. In the context of that filmed interview Mr Fraser was asked if he would allow his photographs to appear during the interview, spread out on the table. Mr Fraser told me that he refused that, and I accept his evidence. I also accept his evidence that he declined a request made by the producer conducting the interview for sending copies of photographs of the Beckhams for inclusion in the programme. I think that this was probably a casual request, but I accept that what he described about this occasion actually happened. As a result no photographs were shown as part of Mr Fraser’s interview.

Production of the programme had started at about the end of November 2002 – Miss Williamson could not quite remember more precisely when, but it was about then. In the first month of production Miss Williamson had a meeting with Mr Bonnington to discuss the use of material, and it is likely that fair dealing was discussed. The idea assumed more importance in her mind as production progressed, and on 11th February 2003 she emailed Gloria Wood, who was the series producer, to pass on a request to Mrs May Mitchinson (the executive producer at the BBC) asking, amongst other things, the following:

“ I am slightly nervous of the fair dealing photo rule with Posh because the photographs of her are worth money – the vultures could be knocking at her door after the programme goes out. I would really like to talk to Alistair about this and get something in writing… and with regard to fair dealing photos in general. Any chance of asking May if I can talk to Alistair as I need to get my head fully round this or I could be calling her every day.”

She was obviously given permission because later that day she emailed him asking if he could spare some time to see her because:

“I need to be very clear so I can be very clear with the Producers exactly how they show photos of Ms Beckham in newspapers and magazines”

They had a meeting the next day, but no note of what was said survives. However, Mr Bonnington wrote an email on 13th February in which he confirmed his advice:

“I confirm that our approach to the use of newspaper ‘tear-outs’, which contain both newspaper copy and newspaper photographs is that the fair dealing provisions of the Copyright Designs and Patents Act will give us legal protection. That is because there is an exemption for criticism and review. It is our view that the programmes we are making here are both criticism and review of the way in which tabloid newspapers report matters which they regard as being of significance.

“As you know, I was concerned when we met yesterday about the possible use of a photograph of Victoria Beckham from Hello! Magazine without the permission of the owners of the copyright in that photograph. I am not saying it is impossible that we could successfully plead the same defence in court proceedings, should they be raised against us by Hello! Magazine. However, Hello! are a litigious organisation and in their case photographs are very much their stock-in-trade. In the case of Victoria Beckham I think substantial sums have been paid over to her before the “photo shoot” took place.

“What concerns me is the possibility of an interim injunction/interdict being granted…

“Of course, if it was the case that the Hello! pictures are regarded as absolutely vital to the programme, it might be we took the view that we should revisit the question of risk here. My impression from our discussions yesterday was that, although it would be desirable to use the Hello! pictures, they were by no means essential for the telling of the story in this case”.

This email featured quite largely in Miss Williamson’s cross-examination by Miss Michalos. It was put to her that it said, and she should have understood, that the advice was that the fair dealing exception could apply only if the photographs and some text appeared in the same shot – photographs without text would not bring the use within the exception. This point is said to go to flagrancy – it was said that when, in due course, the programme showed

pictures without showing text at the same time Brighter was acting contrary to its own legal advice. I can deal with that point now. The point is, I find, a bad one. The email is not a formally written opinion, but looking at it realistically and placing it in context it is clear that the writer was not being that sophisticated. The attempt to read it in the manner suggested by Miss Michalos was one that obviously puzzled Miss Williamson in the witness box, and I am not surprised. The reasonably obvious sense would be conveyed if the letter had contained the words “either or both of” instead of “both”, but that would be a level of formality of expression which (as a matter of every day experience) one seldom finds in emails. That this was intended is borne out by other things. First, the subject line of the email reads: “Subject: Tabloid Tales: Use of Newspaper Photographs and Copy from Newspapers”. That suggests that photographs and text were being treated separately. Second is the puzzlement of Miss Williamson. She had talked to Mr Bonnington, and her puzzlement indicated that the refinement suggested by Miss Michalos had not been referred to in their conversations. Third is the fact that the final form of the programme was subsequently seen by lawyers, and Miss Williamson thought that Mr Bonnington had seen it. The programme shows some photographs which are sometimes, albeit briefly, unaccompanied by text, yet there was no indication that Mr Bonnington (or any other lawyer) sounded any warning about that. Last, but by no means least, the advice as construed by Miss Michalos does not make much sense – fair dealing is, as a matter of principle, applicable to photographs whether they are with or without text (and to be fair to her, Miss Michalos did not contend otherwise – all her submissions on this point were on what the email said, not whether it was right or not) and it is hard to justify the effects of Miss Michalos’s construction as a matter of common sense, let alone law. In circumstances such as these I see no merit in construing a document such as this in a manner which does not coincide with common or legal sense if there is a perfectly good alternative construction which makes better sense. This email, and any subsequent display of photos without text, is therefore neither departing from any legal advice, nor is it any basis for any claim that any infringement of copyright was flagrant.

The programme was broadcast in the late evening of 29^th April 2003. Earlier that day Mr Fraser had found out that the programme was to include some of his photographs and he telephoned to object and to demand their withdrawal. This was refused, and a similar request later that same day, made by his solicitors, met with the same fate. The programme went out with Mr Fraser’s photographs in it, and in due course he commenced this action.

Fair dealing and incidental use – the nature of the parties’ respective cases

Before turning to the details of the use of the photographs in question it will be useful to indicate what the respective cases of the parties are on the point.

Section 30(1) is in the following terms:

“30 (1). Fair dealing with a work for the purpose of criticism or review, of that or another work or of a performance of a work, does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement”

The criticism or review on which the defendants rely for these purposes is twofold. First, there is said to be criticism and review of the photographs themselves (or at least some of them). Second, their use was said to have taken place in the context of criticism or review of another work (or more appropriately, works), namely the tabloid press’s coverage of celebrities. It is said that the use of the photographs was fair for the purposes of the concept of “fair dealing” – their use on screen was not over-long, and the use in the context of criticism and review was not a contrivance to justify a use whose purpose was in substance not that of criticism and review. For the claimant it was said that criticism or review, at least in the present context, had to be criticism or review of the photographs themselves, and that criticism or review had to be with some degree of particularity – a passing and unargued observation (for example, and by way of illustration, “this photograph is a bad photograph”) was not sufficient to bring the act within the section. In the context of fairness of dealing, the use should not conflict with the normal exploitation of the work, or unreasonably prejudice the legitimate interests of the author. The true purpose must be genuine criticism or review, and the use must not be something else dressed up in criticism’s clothing. The extent to which the work is reproduced is also said to be relevant to fair dealing – in the case of photographs, the longer the display, and the more completely the photograph is displayed, the less likely it is that the use is fair, particularly if the criticism is slight. In addition, there was insufficient acknowledgment.

I shall elaborate on those arguments later, but that indication is sufficient for the purposes of enabling me to set out a description of the programme, its contents and the use of the photographs in it. I have, of course, had the opportunity of seeing it, and counsel have been able to take me through relevant parts of it.

The alleged infringements of copyright in their context – the appearance of the photographs in the programme.

The programme starts with a shot of Mrs Beckham reflecting on fame. Then it has the first of the two extracts from Mr Morgan referred to above. Various contributors then make observations (by way of clips from previously filmed interviews), including one from a Mr Neil Wallace who says:

“There are few people better in this country at workingthe press [than Victoria Beckham]”

After 25 seconds there is an observation from Mr Morgan:

“…today [Posh Spice] is Britain’s most written about, talked about and photographed A List celebrity and the readers still can’t get enough”

After a short break he then makes the second of the two observations referred to above, which I will repeat here in its context:

“I have worked in Fleet Street for more than 15 years and I have rarely encountered anybody more adept in handling the tabloids than Victoria Beckham. Big question is whether she is really just a cunning little minx cleverly manipulating the media for her own gain or whether the press are a bunch of tabloid vultures preying on Victoria to sell newspapers. Fleet Street has always had a two-way relationship with celebrities. One day you are cock of the walk and the next you are a feather duster. In Posh Spice’s case you learn the hard way after a rather brutal apprenticeship with the Spice Girls.”

There is then a cut to the previously filmed interview with Mrs Beckham in which the following exchange takes place:

“Piers Morgan: ‘So you are using the media and all you want is that front cover, I mean that is true, isn’t it?’

Victoria Beckham: ‘Yeh, I can’t say anything but yeh, I mean its very true, we had a message to put out there, you know, we loved our music and of course to get that message to people you have to use the media because that’s the easiest way’.”

The next section of the programme refers briefly to the wedding of the Beckhams and a short reference to their first son (Brooklyn). A Mr Mark Jagasia is then seen saying:

“There was a sense in the press that we are going to milk this one [i.e. the birth of Brooklyn] as long as we can because in a sense it is good for everyone, it sells newspapers, people enjoy reading about them, they clearly enjoy the spotlight to an extent so it was a kind of a win win situation.”

The programme then returns to the Beckham wedding and various contributors refer to the desire of the media to have pictures of the wedding, in circumstances in which that desire was frustrated by control by the Beckhams. Mr Morgan observes (at 5 mins 33 secs into the broadcast):

“To maintain absolute control over how the wedding was reported, Victoria gagged everyone working on it with strict confidentiality agreements.”

And a little later on, having described how a magazine (OK Magazine) had bought the sole right to take and show photographs, Mr Morgan observes:

“When OK hit the stands on Friday it sold more than 1.7 million copies, three times its normal circulation, and Victoria by almost controlling the story had successfully re-launched herself as the new people’s princess.”

Two contributors then observed how strange, or even “ludicrous” according to one contributor, it was to think of two people on their wedding day going through the proofs of photographs to decide which should be published, which is clearly an implicit reference to the degree of control exerted by the Beckhams over their own publicity as well as being a reflection on it. The control is recognised in the next contribution from Mrs Beckham, when she says:

“The fans wanted to see our wedding and there were going to be pictures anyway, so I wanted there to be pictures that we had a certain amount of control over.”

Another contributor, a Mr Geoffrey Wansell, observes:

“It’s not just about the million pounds, that’s incidental in a way, it is controlling the pictures that emerge, so what Posh is really doing is saying I am only going to present myself in a way in which I want to be seen, my image is more significant than anything else.”

Thus far, therefore, the programme has been referring to the content of the newspapers by reference to control over the input, and therefore the output, of material. This is said by the defendants to be criticism of other works.

The programme then turns to the theme of new haircuts acquired by the Beckhams in the context of which the first of the subject photographs were shown. Having averted to the fact that the “Posh and Becks Plc… brand” was now a big one, Mr Morgan observed:

“… Victoria was learning that you must keep reinventing your product if you are going to keep the press and the public interested. Nine months after the wedding in a prime example of Fleet Street’s rather warped news agenda, the new Beckham hairstyle smashed war and famine off the front pages.”

Another contributor (a Ms Blackburn) observed that that:

“was just another example of their unerring sense of what would get them on the front pages.”

Mr Sean O’Brien was heard to say:

“and Posh also had gone completely blonde, absolutely white blonde, she looked like Billy Idol walking down the street.”

As he spoke the words “she looked like Billy Idol” the scene cuts to a picture of most of the page in the newspaper which contained the first photograph. At the top of the page, slightly cut off, one can see two or three other photographs which are not material. Below that occupying the right hand half of the page and the bottom two thirds of the page was a picture of the Beckhams with their new haircuts, both being shown full length with Mr Beckham pushing a pushchair with young Brooklyn in it. On the left hand side of the page next to the photograph, there is visible a headline and the story, described as a “picture exclusive”. The camera then pans slightly down the photograph and at the same time zooms into the bottom of it to show, prominently and obviously, at the bottom of the article and just to the left of the bottom of the image, the words “Pictures: JASON FRASER”. This is accompanied by Mr Morgan (off screen) saying:

“The exclusive pictures of the change of image were taken by Jason Fraser.”

The claimant accepts that this is a sufficient acknowledgment of authorship in relation to this appearance of this photograph because, I think, of the written attribution, not because of the oral attribution.

Immediately after that Mr Fraser appeared on screen referring to an occasion which he managed to get a shot of the Beckhams with new haircuts. He describes how, on the occasion that he is referring to:

“I had a tip and I went out and I took photographs and I got them together.”

The Defendants sought to say that that was an express reference to Beckham 1, and that may well be so, but the context of the remark in the interview has to be taken into account in reaching that conclusion, and the defendants had successfully resisted disclosure of the unedited interview at an earlier stage in these proceedings. In those circumstances, and in the absence of an admission by Mr Fraser that that is indeed what he was referring to (or at least a sufficiently clear admission) it would be unfair to him to make that finding. However, nothing in this action is going to turn on that.

Immediately following that Mr Morgan is heard saying the following over fuzzy images of what are obviously Beckham stand-ins apparently carrying out the mundane activity of assembling a pushchair in a car park. As they do that Mr Morgan says:

“Throughout Victoria’s career Jason Fraser always mysteriously seems to be the photographer in the right place at the right time, which has raised a few questions about exactly where he gets his information from.”

In order to make sense of this remark, and what follows, it is necessary to understand the nature of the Beckham photographs which are the subject of this action. With one possible exception (Beckham 14) they are not photographs for which the subject has apparently deliberately sat or posed. They are all photographs in which the subject was apparently going about his or her everyday activities, ostensibly irrespective of the presence of a photographer, and they are apparently just “snapped” as they walked along or sat. The next voice to be heard was that of Mr Geoffrey Wansell, who observed that:

“Gradually she began to realise that certain photographers and certain places could be manipulated to her advantage.”

This followed by a contribution from Mr Andrew Morton, who was seen and heard to say:

“So for example on the day in question when David’s about to get his hair cut and she is about to go blonde, they evade the photographers waiting outside their home…”

and at this point four more photographs of the Beckhams (Beckhams 2-5) are shown by showing the newspaper pages on which they appeared, accompanied by Mr Morton continuing:

“And they have a pre-arranged assignment with another photographer, effectively their court photographer, a chap called Jason Fraser. It looks as though they’re snatched pictures, that they’re taken off guard, off duty, when all along those pictures were rehearsed and prearranged.”

The pictures are shown until the words “snatched pictures” at which point the camera returns to show Mr Morton speaking. Beckham 2 is shown for just over 2 seconds. It is apparently on the front page of The Sun, and one can see what is probably the top half of it. From what one can see it looks as though it was probably taken on the same occasion as Beckham 1 (and Mr Fraser confirmed that in the witness box), but one cannot see the pushchair; the remaining three photographs (Beckham 3, 4 and 5) are similar photographs, showing half-shots of the Beckhams with their new haircuts, and apparently displayed in a row across a newspaper page. Each is displayed for about 1.5 seconds. Then before the next interview contribution (Mr Fraser again) Beckhams 3-5 are shown again briefly, this time for less than 1 second each, flashed on the screen and accompanied by the sound of a camera shutter.

Mr Fraser was then seen and heard making observations on how one might get tips in order to get the photographs, and Victoria Beckham then says, as part of her interview, that on occasions she might make an arrangement with a photographer to repeat an exit from a building for photography purposes after she had exited for the first time, having (for example) put her children in the car first so that they were safe and out of shot. Mr Morgan then observes, partly to camera and partly by other images:

“Victoria may favour certain photographers, but she also knows she is likely to be snatched at any time and any place, whether she has helped arrange the picture or not. When you are riding high in the press, there is a huge industry out there making vast amounts of money from your photograph. ”

Another contributor (Mr Joe Sene) makes observations about getting tip-offs of what Victoria Beckham is doing, and then that is contrasted by Mr Morgan with photographers who stalk their victims more patiently.

12 minutes in, the programme returns to the interview with Victoria Beckham, and she observes that every time she comes out of her house she is aware that there could be a photographer ready to capture the moment or whatever she looks like. While she is saying this Beckhams 6-10 are displayed. They are shown as they appeared in a sort of montage in one of the tabloids. They (or parts of them) were all taken when Mr and Mrs Beckham and Brooklyn visited a wildlife park. Beckham 6 is a photograph of Mrs Beckham carrying Brooklyn; as published in the newspaper it is heavily cropped to exclude a number of other people who would otherwise appear in it. In the left hand one-third of the page, appearing one above the other, are Beckhams 7, 9 and 10 (in that order) which show pictures of Brooklyn, sometimes with one or other of his parents. Two of them are again heavily cropped in order to focus on Brooklyn. On the right hand side of the page is a large blown up extract of Brooklyn taken from Beckham 8; he is apparently in the course of doing messy battle with an ice cream. In order to show these photographs the camera pans down the page over the course of about 4 seconds, ending up by zooming in on Mr Fraser’s name predominantly displayed in a red box at the foot of the photographs. Mr Fraser is then heard and seen to observe that it is hard to take a bad picture of Victoria Beckham.

The theme of the programme then moves on to less favourable newspaper coverage of Mrs Beckham, and Mr Morgan observes:

“The debate [about an eating disorder] refused to go away, raging out of Victoria’s control, especially after her appearance in London Fashion Week.”

This is said in relation to press coverage of her eating disorder in one or more newspapers, and Mr Morgan contrasts the coverage of two rival publications. Mrs Beckham and her mother are seen and heard to comment on that sort of coverage, and then there is an extensive part of the interview with Mrs Beckham at which comments on other parts of her appearance are referred to. Then Mr Morgan turns to the occasion when:

“In the summer of 2000 the press were still having huge fun knocking great lumps out of Posh’s pedestal, which did not bode very well for the start of her new solo singing career. In an attempt to gain some street cred … and in spite of a cynical press, Victoria used every trick in the book to grab headlines with the tabloids rubbing their hands in glee.”

There are then several minutes relating to less than flattering coverage of Victoria Beckham and a reference to a point of time at which Victoria Beckham was thought to have acquired a lip ring but it turned out that the ring was false, although not before the Daily Mail was said by Mr Morgan to have “vent[ed] its high moral spleen” about it. This incident was presented as her deliberately seeking media attention.

From time to time in the remainder of the programme contributors returned to the question of Mrs Beckham’s attempts to control the publicity she received in the media, and to turn it to her advantage, and the need of the media to show her activities from time to time:

“With normal artists the manager PR or manager press relationship is reasonably simple to control, it’s entirely different with the Beckhams, she is one of those faces that sells magazines, so if you haven’t got a real story for them, they will make it up.” (per Mr John Glover).

Half an hour into the programme it sought to draw attention to the fact that on the day that Mrs Beckham was dropped by her record label she announced that she was having her second child:

“Fantastic news but obviously buries the fact that her solo career had completely died and she was now on skid row as far as her career was concerned.” (per Clare Morrisoe).

Mr John Glover attributed the timing of the announcement to the fact that the Beckhams did not want to announce it publicly until Mrs Beckham had had her three month test. This was all presented as part of the debate as to who was controlling whom in terms of publicity. Mr Morgan observed:

“Once it was known that Victoria was pregnant again the tabloids turned off the knocking copy and turned on the charm, Posh was back in favour. The press know that its readers adore little famous babies and with the Beckhams speculative stories about what sex, what name, what date could be strung out for months.”

In other words, he was observing that the media would exploit pregnancies involving famous babies.

The birth of the second child (Romeo) was then the context for showing most of the remaining photographs which are the subject of this action. After 32 minutes of the programme Mr Geoffrey Wansell observes:

“After the birth of Romeo, the second child, she didn’t go out, she quite deliberately kept herself back until she was prepared to make a formal appearance, because she knows that that is what keeps her brand going.”

Piers Morgan:

“When Victoria was eventually seen in public for the first time with little Romeo, she looked amazingly glamorous and slim, and surprise surprise there is her old friend Jason Fraser to capture the happy moment, splattered across the tabloids, blasted across the magazines of the world, Jason Fraser calmly, and rather easily, helped himself to another six figure sum.”

As he speaks the words “and surprise surprise” to the words “happy moment”, Beckham 11 is shown. It is a photograph of Mrs Beckham apparently leaving a house with Brooklyn by her side, and holding the new baby in her arms. Like the other photographs, it is apparently an unstaged, casually snapped photograph; she appears full-length in it. What is reproduced is, again, the relevant page from the relevant newspaper, with the headline and the story printed in the top right hand quadrant of the page. During the course of 4 seconds, the camera pans down from the top of the photograph and, at the end of the shot, it zooms in on the words “Pictures: JASON FRASER” in fairly large type just below the bottom of the photograph. As Mr Morgan utters the words “splattered across the tabloids, blasted across the magazines of the world”, Beckham 12 is shown. This is similar to Beckham 11, though it is either taken rather closer to its subject or the photographer has zoomed in or enlarged it. Again, what is produced is a picture of the newspaper page on which the photograph appeared; it seems to have occupied roughly the top half of the newspaper page. The original photograph shows Mrs Beckham almost full length, carrying Romeo and with Brooklyn at her side. As it appears in the newspaper it is approximately half length shot, still showing Romeo but Brooklyn has been cropped out. To the left of the image of Mrs Beckham is the headline “Romeo takes a bow” and below that, in smaller type, the words “a five week old superstar sleeps through his debut”. This time the shot zooms out from just showing Romeo to showing the rest of the photograph; it takes about four seconds to do that. Unlike previous occasions, there is no identification on screen of Jason Fraser as the author of the photograph.

In this context I should add something about the matter in which Mr Morgan delivers the last 13 words of his piece. The commas after the words “calmly” and “easily” were stressed by significant pauses, and the words “and rather easily” were themselves given some stress. The overall effect is to make it clear that the words were used ironically.

The next contributor is Mr Fraser again. He is shown uttering the words:

“A style fashion icon, a cute baby with a pretty quaint name as well, you know, how can you go wrong? It’s a great shot.”

As he utters the words “you know, how can you go wrong?” Beckham 13 appears. This again shows Mrs Beckham holding Romeo, taken from a slightly different angle from Beckhams 11 and 12, but otherwise very similar and, judging from Mrs Beckham’s appearance and the way she is holding the baby, from the same series. It is on screen for almost 5 seconds; it remains on screen until just after the end of his short piece. This time one can see the text below the photograph, and if one looks very carefully at the text (with an opportunity to stop the tape) one can see his name appearing as the author of the photograph, but that cannot be taken as any real attempt to identify him, in text, as the author since that would not realistically be seen by anybody viewing the television programme as a programme.

Immediately after that contribution from Mr Fraser, Mr Morgan’s voice is heard again. He says:

“With the help of these photographs, Victoria was the subject of glowing headlines once again.”

As he says that the picture shows Beckhams 11 and 12 again, this time appearing on the same page of a different newspaper. Beckham 11 is shown at roughly twice the size of Beckham 12 – they are shown side by side on the same page, and on the left hand page there is the headline “Lets See Daddio, Romeo”, and some copy below that. As that finishes, Clare Morrisoe says:

“I think now she’s Mum Spice isn’t she? She is embracing the role as perfect wife and perfect mother.”

The suggestion behind the content and the delivery is that she was deliberately projecting herself in that way; in other words, that the photographs were deliberately contrived by her notwithstanding their appearance of noncontrivance. As she says this a video is shown of Mrs Beckham in a kitchen with Mrs Beckham apparently tidying up. Then Mr Roy Greenslade (media commentator for the Guardian) says:

“Let’s do this scenario. She has two children, she appears in public with two children, the press take a picture and then days later, columnists as they like to call themselves, suddenly start saying, oh, you see she’s re-branding herself, she is now wanting to appear as mother.”

As he utters the words “the press take a picture” the camera shot switches to a picture of most of the front page of the Daily Mirror, the right hand one third of which is occupied by a slightly cropped version of Beckham 13 (its second appearance). Mrs Beckham is shown from just below the waist upwards, and over the course of 3 seconds the shot zooms in and away from the photograph and up to the headline at the top of the page (“Romeo’s debut – the new Beckham takes centre stage”), so that after those 3 seconds all one can see is a small part of the top of Mrs Beckham’s head.

The theme of the programme then moves onto an occasion featured in the newspapers when it was reported that there was a plot to kidnap Mrs Beckham and her family. To the accompaniment of words taken from a TV news item, the programme then showed Beckham 14. This is quite hard to spot. What is actually shown on screen, for just over 4 seconds, is a headline appearing at the bottom right hand part of what I assume is the front page of a newspaper. In very bold type is the headline:

“£5m PLOT TO

KIDNAP

POSH AND KIDS”

laid out in that manner. To the right of the headline is a small square of text – the beginning of the account of the story. Tucked in the gap bounded by the words “PLOT TO”, “KIDNAP” and “KIDS” on three sides, and the text on the fourth, is a small photograph of Mrs Beckham. I would judge that the photograph in the newspaper is a little bigger than a passport photograph. The full picture (which was not shown on the programme, because the programme merely reproduced newspaper photographs) was a three-quarter length shot of Mrs Beckham taken out of doors somewhere, which looks as though it might have been a little more posed than the other photographs, but nothing turns on that. Although the shot is just a shot of her head, and the rest of the photograph has been cropped, no point was taken by the defendants that they had not reproduced a substantial part of the original. After that appearance Mr Morgan comments on the story and says:

“The gang was arrested in London for the theft of antiques but it was their alleged kidnap plot that set the media into meltdown. The words Beckham and kidnap were tabloid gold dust, which left some to question whether the story may have been hyped up to create a bigger scoop.”

As he speaks the words “May have been hyped up to create a bigger scoop” the picture shows two thirds of a newspaper page with Beckham 12 to the top right. To the left of the photograph is a headline “£5m kidnap plot…or just a tabloid sting?” Below that is a picture of a house and some unreadable text. Over the course of 3 seconds the camera zoomed into the headline so that all that can be seen of Beckham 12 is Romeo in the arms of his mother. As this happens Mr Roy Greenslade comments on the apparent farfetched nature of the kidnap story.

There are then some contributions in which comment is made on legal steps that the Beckhams were prepared to take in order to stop false rumours and in his last piece to camera, Mr Morgan observes:

“So has Victoria used and abused the press, or has the press used and abused Victoria? There is no doubt that between us we have created a sort of unofficial royal family, but the big question for Victoria is whether she can now reinvent herself again to be something more than just the wife of David Beckham, and the big question for the tabloids is whether they will ever let her.”

The programme then closes with remarks which are not germane to this action.

I have sought to describe the programme in some detail, and have set out extensive extracts from the soundtrack, because the context of the photographs is essential to the defences of the defendants. What I have not done hitherto is to indicate the nature of some of the other accompanying material. That can be described generally, but it is, in its own way, equally important. As the programme progresses, in addition to the short extracts from a number of interviews with contributors, the programme shows a considerable number of other press stories about the Beckhams. It does so by showing dramatic headlines, invariably accompanied by other pictures of the Beckhams. There are a considerable number of these. It also contains film footage of the Beckhams appearing in public (on catwalks, signing autographs, going on holiday and in other contexts) all of which have obviously been taken from film archives of some sort. How the Beckhams have been treated in the press is obviously a key part of the programme.

The Defences

Having set out that material, I can now turn to the Defences, and I shall take fair dealing first.

Criticism and review

The first question which arises under this head is whether the use made of the photographs was for the purposes of criticism and review of the work (ie the photographs) or of another work. This raises two separate points – was there criticism or review, and if so what was the work being criticised or reviewed? In what follows, for ease of exposition I shall use the expression “other work” as if it were the expression appearing in the statute (which refers to “another work”) – they do not differ materially.

The defendants’ case was that the concept of criticism or review had to be interpreted liberally. Here there was criticism or review of both the photographs and of another work or works, namely the coverage of the Beckhams (and in particular Mrs Beckham) in the tabloid press. The criticism and/or review was thus of two things – there was criticism and review of the photographs themselves (or some of them at least) and the philosophy or ideas behind them, and there was criticism and review of another work (or works) namely the tabloid press. One had to look at the programme as a whole, and not dissect it too readily into unrealistic parts, and one had to look at the programme as it would strike the reasonable viewer.

The claimant had a number of answers to this. First, so far as it was alleged that there was criticism or review of the photographs themselves, it had to be more than mere passing comment or passing reference, and in the present case there was no such thing. One pointer as to whether there is genuine criticism or review is whether the same point can be made without displaying the copyright material. Second, so far as criticism or review of another work was concerned, then that other work had to be a copyright work within the meaning of the Act, that is to say a work falling within section 1 of the Act, and that other work must be identified (which it was not in the present case). Miss Michalos disputed that the other work could be general media attitude, or that references to underlying philosophy and ideas appearing in the authorities should be taken as being a reference to any such concepts other than those appearing in the actual specific work itself.

The meaning of “criticism” and “review” were considered in the Australian case of De Garis v Nevill Jeffress Pidler Pty Ltd (1990) 18 IPR 292, relied on by Miss Michalos. Beaumont J proceeded from dictionary definitions in the MacQuarie Dictionary as follows:

“Criticism - 1. “The act or art of analysing and judging the quality of a literary or artistic work, etc: literary criticism; 2 the act of passing judgment as to the merits of something … 4. a critical comment, article or essay; a critique.”

Review – “1. a critical article or report, as in a periodical, on some literary work, commonly some work of recent appearance; a critique …”

In that case the subject of the action was press clippings, so it is not surprising that the extracted definitions tend to focus on literary criticism or review. Miss May, for the defendants, chose to counter that with the Shorter Oxford English Dictionary definitions:

“Criticism: …2a the work of a critic. B – an article, essay etc expressing or containing an analytical evaluation of something.”

“Review: 1. a general survey or assessment of a subject or thing …”

These definitions are of some assistance, so far as they go, but it is important to have in mind what Robert Walker LJ said in Pro Sieben Media AG v Carlton UK TV Ltd [1999] FSR 160 at p 620:

“’Criticism or review’ and ‘reporting current events’ are expressions of wide and indefinite scope. Any attempt to plot their precise boundaries is doomed to failure. They should be interpreted liberally …”

Miss May drew my attention to the fact that in Ashdown v Telegraph Group Ltd [[2002] Ch 149 the fair dealing provision was an instance of the right of freedom of expression displacing copyright protection (see para 33), but I do not think that that idea assists in determining the nature of “criticism or review” which falls within the section. It may be that that can be said to be the basis for adopting a liberal interpretation, as required to by Walker LJ in Pro Seiben, but beyond that it does not assist. I therefore approach the question with the assistance of the concepts behind the definitions but not rigidly bound by them, and bearing in mind what Robert Walker LJ said.

This impossibility of plotting boundaries makes it impossible to accept Miss Michalos’s submission that there must be something beyond a bare comment. It is not helpful to try to introduce such limitations into the debate; at worst it is misleading, and at best is unhelpful because it will merely shift the debate to the question of whether, in its own context, the relevant remark is merely a “bare comment” or goes further and is criticism. The context is likely to be all-important.

The next point is to what I apply those concepts – what is capable of being the subject of criticism or review for the purposes of the section? The photographs, as subjects, are easy enough as a concept. However, there is more difficulty (in the present case) about criticisms of what Miss May called the philosophy and ideas underlying a work, and what (if any) other works were the subject of any criticism of review in this case.

Miss May said that, in addition to relying on criticism of the photographs themselves, she was entitled to rely on criticism or review of the philosophy or ideas underlying them. By the end of the case I do not think that there was any difference in principle between her and Miss Michalos on this. That it is correct appears from Hubbard v Vosper [1972] 2 QB 84, in which the copyright works were various works about Scientology, extracts of which appeared in the defendant’s book which was critical of the cult. It was submitted that the fair dealing section applied only to criticism of the work, not of the doctrine or philosophy underlying it. Lord Denning disagreed with this submission:

“I do not think that this proviso is confined as narrowly as Mr Pain submits. A literary work consists, not only of the literary style, but also of the thoughts underlying it, as expressed in the words. Under the defence of “fair dealing” both can be criticised. Mr Vosper is entitled to criticise not only the literary style, but also the doctrine or philosophy of Mr Hubbard as expounded in the books.” (at page 94).

The same view was expressed in Time Warner Entertainments LP v Channel Four Television Corporation plc [1994] EMLR 1 at pp 13 and 15, and confirmed in Pro Sieben (at p 621). I agree with Miss Michalos that on analysis this is because criticising the philosophy is criticising the work. It must follow that if the review or criticism is of another work (ie a work other than the one in respect of which fair dealing is claimed) then that review or criticism can extend to, or even be confined to, the ideas and philosophy underlying that other work. Furthermore, it is not appropriate to confine the notion to “ideas and philosophy” – that is merely one formulation of the extent to which criticism may extent. Walker LJ expressed himself thus in Pro Sieben at p 621:

“Criticism of a work need not be limited to criticism of style. It may also extend to the ideas to be found in a work and its social or moral implications.”

I was not shown any authority dealing with the nature of the “other work” for the purposes of section 30(1). Miss Michalos submitted in her written submissions in reply that it had to be a copyright work. That seems to me to be wrong so far as it requires the other work to be in copyright – why should the fair dealing defence in relation to a current copyright work depend on whether the other work, which is the subject of criticism, is itself in copyright. However, there is more in her submission if one removes the requirement of subsisting copyright from another work. Since the same word (“work”) is used to describe both the copyright item whose infringement is in issue, and the other item or items which can be the subject of the criticism or review, it is likely that it has the same meaning in both instances. Since copyright can only exist in a work of the kind described in section 1 of the Act (as elaborated in the following sections), it seems to me to follow that what must be the subject of criticism is something which is a “work” in the same sense.

This point was not dealt with as such in Pro Sieben, though my conclusion is consistent with it. In that case the defendant was accused of infringing copyright in a TV programme (called the TAFF report) relating to the pregnancy of a woman with eight foetuses. The defendant relied on fair dealing, but that defence was rejected by the trial judge. That rejection was reversed by the Court of Appeal. At p 621 Robert Walker LJ refers to the defendant’s pleaded case which was that the works being criticised were:

“The Plaintiff’s Film and/or the Plaintiff’s Broadcast and/or other media exploitation” (my emphasis)

He then observes that the judge did not comment on the words that I have emphasised and says (all emphases being mine):

“It may be said that those words are very vague … Nevertheless the judge should in my view have taken as his starting point that the appellants’ pleaded case was that the Carlton Programme was criticising various works representing the fruits of chequebook journalism, of which the TAFF report was one. The other (which might have been more particularised if Pro Sieben had pressed) were daily or weekly newspapers mentioned as having run stories on Ms Allwood or her partner or one or more of the other “ordinary people” to whom “something extraordinary happens in their lives”. Four newspapers – the News of the World, the Sun, the Daily Mirror and the Daily Mail – were mentioned frequently in the Carlton programme, with shots of mastheads, headlines and parts of articles in those papers. Other newspapers (and one British television programme) received passing references.”

Then he goes on to criticise the trial judge because

“He did not consider the possibility that [the programme’s use] might have been for the purpose of criticism or review of the TAFF report and the newspaper material mentioned above, taken collectively as a genre of the fruits of chequebook journalism”

thereby clearly indicating that such use, thus described, was capable of falling within the section. At p 623 he then concludes:

“The Carlton programme as a whole was in my judgment made for the purpose of criticism of works of chequebook journalism in general, and in particular the (then very recent) treatment by the media of the story of Ms Allwood’s multiple pregnancy.”

In my view it is quite clear from those extracts that the other works which Robert Walker LJ had in mind for these purposes (that is to say, the works other than the TAFF report itself in respect of which criticism was being made) were newspapers and broadcasts of a particular type. Certain newspapers are actually identified in those extracts. All those works are, collectively and individually, the “fruits of chequebook journalism”, and “works of chequebook journalism”. Newspapers and broadcasts are “works” within the meaning of section 1. The decision is therefore consistent with my view of the proper interpretation of section 30.

The decision also assists on two other points. First, it demonstrates that the ideas or philosophy underlying a certain style of journalism, as manifested in the works themselves, can be the subject of criticism which falls within section 30. That, as will become apparent, is important in the present case. Second, it demonstrates the fallacy of a submission that at one point Miss Michalos seemed to be making (though at the end it was not clear that she was putting the matter in this way) namely that the other work or works must be specifically identified. I can see no reason in principle why that should be so and the reasoning and decision in Pro Sieben clearly indicates that it is not. It was no part of Robert Walker LJ’s reasoning that specific editions of specific newspapers, or specific broadcasts, were identified. Four newspapers were specifically identified, but others (and broadcasts) were identified only in general terms, by type, as falling within the genre. That was sufficient in that case, and is therefore sufficient (so far as relevant) in the present one.

With those points established and in mind, I can now turn to the assertion of the defendants that the programme contained relevant criticism. They say that it contained criticism both of the photographs themselves (except Beckham 14) and of a certain style of tabloid journalism which amounted to criticism of the newspapers themselves and the ideas behind their reporting of celebrities. If that is a proper description of the nature of criticism then there is criticism (or review) within the meaning of section 30 in precisely the same way as there was such criticism in the Pro Sieben case.

Having viewed a recording of the programme, I have come to the clear conclusion that the deployment of the first 13 photographs is for the purpose of criticism or review within the meaning of section 30. I have sought to set out the shape of, and the most significant points in, the programme in the extracts referred to above. Like the programme in Pro Sieben (as that programme is described in the law report), Tabloid Tales contains frequent shots of newspapers, their mastheads and their stories, and in addition their pictures. It also contains various film clips demonstrating the public presentation of, or public appearances of, the Beckhams. They are all there to demonstrate a certain style of journalism – the coverage of celebrity – and to comment on (in the form of criticism) that style as manifested in the relevant publications (tabloid newspapers and, to a certain extent, magazines). Various points are made in the course of the programme, including important reflections on the fact that certain items are covered at all (for example, the haircuts), the extent of the coverage, the extent to which rival newspapers cover or disdain to cover matters such as Victoria Beckham’s alleged eating disorder (which she denies in her interview), and the extent to which the newsworthiness of the everyday lives of these particular celebrities is capable of pushing other matters which might be thought to be more important (“war and famine”) off the front page. So far as the dictionary definitions are concerned, it falls fairly and squarely within the definitions of “criticism” when applied to the ideas underlying the reporting, and to some extent to the reports themselves, though those reports are not actually cited save insofar as headlines are sometimes briefly in shot.

All the photographs apart from Beckham 14 are used in that context. Beckham 1-5 are used 9 minutes into the programme after the scene of the programme has been set by remarks reflecting on the interest of the public in the lives of celebrities and the fact that the Beckhams sought (with some success) to manipulate that to their own advantage. That is clearly criticism within the meaning of the section. These particular photographs then appear having been foreshadowed by Mr Morgan’s reflection as to how the change in the Beckhams’ hairstyles achieved media prominence in “a prime example of

Fleet Street’s rather warped news agenda” (again, something clearly in the nature of criticism in the context of this programme). Ms Blackburn is seen and heard to describe this as something that would get them on to the front pages, and almost immediately afterwards these pictures appear as an example of that. That is clearly use in the context of criticism of the newspapers and their reporting ethos. They are also shown as an arguable example of manipulation of that ethos by being arguably staged, and that also seems to me to be criticism of the “other works”. I shall return to that when considering the case made by the defendants that there is also criticism of the photographs themselves. When Beckhams 3-5 are shown for a second time accompanied by shutter sounds the context and purpose is still essentially the same.

Beckhams 6-10 are shown in a similar critical context. These are the shots of the family in the wildlife park. They are shown when Mrs Beckham is musing on the fact that photographers are apparently ready to capture any moment – a criticism of journalistic style and content – and the photographs are apparently shown as examples of that. There is little fundamentally interesting about someone else’s family having a day out with some animals; but nevertheless here is a photographer who has snapped the event, and here is a newspaper which has published it because it believes its readers are interested. That is what the programme is apparently saying. This is all part of the overall critical or reviewing theme. They are genuine illustrations of what the programme is saying – “Section 30 is designed to protect a critic or reviewer who may bona fide wish to use copyright material to illustrate his review or criticism.” (Banier v News Group Newspapers Ltd [1997] FSR 812 at 815) (emphasis supplied).

The first showing of Beckhams 11, 12 and 13 occurred in the context of that part of the programme which dealt with the question of who was controlling whom – was Mrs Beckham controlling the media in order to divert attention to good news when she wanted. These photographs are shown in order to demonstrate the effects of that – the timing of her first appearance after childbirth is held back until she is ready (in terms of personal appearance and, on one suggestion in the programme, in terms of diverting attention from less welcome news about her record label), and the photographs are the coverage that she got. The content of the media has been contrived by the subject of the story – that is the suggestion. The same applies to the second showing of each of those photographs. They accompany, illustrate, elaborate and to a certain extent make good what the programme is saying about the content of the tabloids, which it portrays as putting forward Victoria Beckham in a new role

or new light. There is then one more occurrence of Beckham 12, which appears in the context of a recital of the kidnap story. This part of the programme critiques the coverage of that story and the extent to which it was, or may have been, hyped, and how it fitted into the media coverage of the affairs of the Beckhams. The newspaper used a certain headline, and with that headline a picture of Mrs Beckham appeared, holding a baby. That is part of the dramatic treatment of the story, and it is the coverage that is being criticised, or reviewed. Accordingly, it is a further use of the photograph in the context of a criticism of the “other works”.

I do not think that this applies to Beckham 14, however. That is the small photograph appearing tucked into the sensational headline about the Beckham kidnap plot. The point of the shot in question is to show the headline. The small photograph happens to be there. While the photograph appears in the context of criticism or review of the other works, it does not appear “for the purpose” of criticism or review. Its proper place appears below when I consider it again in the context of incidental use.

Accordingly all of Beckhams 1 to 13 are deployed in the context of, and for the purpose of, criticism or review of the other works, that is to say the tabloid press and magazines, and I so find. In addition, it is clear to me that in relation to most of the photographs there is also criticism of the photographs themselves. Beckham 1 first appears when the programme turns to the Beckham haircut. As it is shown there is an oral attribution of the photograph to Mr Fraser by Mr Morgan. After Mr Fraser’s contribution Mr Morgan makes his remark about how mysterious it is that Mr Fraser manages to be in the right place at the right time, and questions where he gets his information from. The question is answered almost immediately by Mr Wansell’s saying that Mrs Beckham can manipulate “certain photographers” and by Mr Morton’s explicit allegation that the photographs are pre-arranged and

“It looks as though they’re snatched pictures, that they’re taken off guard, off duty, when all along those pictures were rehearsed and pre-arranged.”

This is accompanied by Beckhams 2 to 5 being shown simultaneously, and Beckhams 3-5 appearing again almost immediately afterwards. It is clear that Mr Morton is speaking about the Jason Fraser photographs. That is a clear criticism of the photographs – it is said that the photographs are not in fact as they appear, or as the subject and photographer would wish them to appear. That is a clear act of criticism of the photographs themselves, and the context in which all 5 are shown indicates that it applies to all 5. Similar remarks do not accompany the showing of Beckham 6 to 10, but in my view the criticism can and should be taken as extending to them. The photographs are shown in a section of the programme which deals with unstaged or non-pre-arranged photographs, but there is a clear shot of the Jason Fraser name, and I think that the programme is implicitly inviting the reader to consider whether these apparently unarranged photographs are nevertheless as pre-arranged as the others because they are by the same person (Mr Morton’s “court photographer)”. With Beckhams 11 and 12 the link becomes stronger again, because of the ironic tone and content of the accompanying words from Mr Morgan (“surprise surprise, there’s her old friend Jason Fraser” and “Jason Fraser calmly, and rather easily, helped himself to another six figure sum”), which is a return to the theme that these apparently casual and opportunistic snaps are not so casual and opportunistic as would appear. This clearly carries over to Beckham 13, and the repetition of Beckhams 11 and 12. They are shown within 30 seconds of the first showing of Beckham 11, while the theme is still being advanced or is fresh in the mind, and the second showings of Beckhams 11 and 12 are accompanied by Mr Morgan’s remarks about the “help of these photographs”, which is again tinged with a little irony – the suggestion is that the help is not wholly accidental because the photographs are not wholly accidental. The criticism is still operating when Beckham 13 is shown for a second time. It is, however, not implicitly operating when Beckham 12 is shown for the third time (in the context of the kidnap story). The theme of the programme has moved on here, and the photograph itself is not being criticised or reviewed at this point. There is no suggestion of criticism of Beckham 14, either.

For those reasons, therefore, each of the publications of the photographs, save for the third showing of Beckham 12 and the only showing of Beckham 14 are in the context of criticism of the photographs themselves within the meaning of section 30(1).

For the sake of completeness I should deal with a couple of submissions of Miss Michalos on this point, each of which I reject.

First, she said that something could not be criticism or review unless there is specific reference to the content of that which is being criticised. Since there is no sufficiently specific reference to the photographs then there is no criticism (or review). All there is, she says, is criticism of Victoria Beckham. She claims to derive support for her submission as to what is required from Ashdown v Telegraph Group Ltd. In that case the Court of Appeal rejected a fair dealing defence in relation to a copy of a minute of a meeting, in the course of which they quoted with approval from the judgment of Sir Andrew Morritt V-C at first instance:

“But what is required is that the copying shall take place as part of and for the purpose of criticising and reviewing the work. The work is the minute. But the articles are not criticising or reviewing the minute: they are criticising or reviewing the actions of the Prime Minister and the claimant in October 1997”

I do not think that that citation supports a submission that there must be some form of specific reference to the work in question. That citation demonstrates clearly that it is not sufficient to criticise something (anything) in order to invoke the section; there has to be a criticism Uof the workU; and one has to add the rider “or another work”, a point which was not germane to that particular case. When judging whether what has happened is a sufficient criticism or review there is no requirement of any particular degree of specificity. There has to be sufficient content to amount to criticism of whatever is being criticised (the copyright work or another work). In the present case there is sufficient content in the programme to amount to a criticism of other works (the tabloid newspapers and magazines), and in most cases the photographs themselves.

She also submitted that a helpful indication as to whether what was taking place was criticism or review was whether the “criticism” could be done without using the copyright work. If it could then that was a strong pointer against its being criticism (though it was not determinative). I reject this submission too. It has no foundation in the statute. What the statute permits is “fair dealing” for the purposes of criticism or review. There is no requirement of necessity of use in section 30(1); there is merely a requirement of fair dealing.

Fair dealing

If use of copyright material is to fall within section 30(1) then that use must amount to “fair dealing”. In considering whether the use in the present case amounted to fair dealing (and the claimant says it was not) the following guidelines are relevant:

i) It is relevant to have regard to the motives of the user (contrast the question of criticism and review where the focus is more on the actual use without, or without so much, reference to the motive – see Pro Sieben at page 620).

ii) Whether there is fair dealing is a matter of impression.

“What amounts to fair dealing must depend on the facts of the particular case and must to a degree be a matter of impression. What is of prime importance is to consider the real objective of the party using the copyright work. Section 30 is designed to protect a critic or reviewer who may bona fide wish to use the copyright material to illustrate his review or criticism.” (Banier v News Group Newspapers Ltd [1997] FSR 812 at 815.

iii) If some degree of use would be fair dealing, excessive use can render the use unfair – Hyde Park Residence Ltd v Yelland [2001] Ch 143 at para 40.

iv) In assessing whether the dealing is fair the court can have regard to the actual purpose of the work, and will be live to any pretence in the purported purpose of the work:

“… it is necessary to have regard to the true purpose of the work. Is it a genuine piece of criticism or review, or is it something else, such as an attempt to dress up the infringement of another’s copyright in the guise of criticism, and so profit unfairly from another’s work?” (Time Warner, supra, at p 14).

v) In the same vein, the amount of the work used can be relevant:

“I may add, however, that the substantiality of the part reproduced is, in my view, an element which the Court will take into consideration in arriving at a conclusion whether what has been done is a fair dealing or not. To take an example, if a defendant published long and important extracts from a plaintiff’s work and added to those extracts some brief criticisms upon them, I think that the Court would be very ready to arrive at the conclusion that that was not fair dealing within the section (Morton J in Johnstone v Bernard Jones Publications Ltd [1938 2 Ch 599 at 603-4).

vi) However, this must be carefully applied in relation to photographs. It makes more sense in relation to extended literary or musical works. If one is critiquing a photograph, or using it for the purpose of criticising another work, then the nature of the medium means that any reference is likely to be by means of an inclusion of most of the work because otherwise the reference will not make much sense. This degree of care is particularly appropriate in the context of a television programme where the exposure is not as (for example) continuous or permanent as publication in printed form would be.

vii) Reproduction should not unreasonably prejudice the legitimate interests of the author or conflict with the author’s normal exploitation of the work – see the Berne Copyright Convention Article 9(2).

These factors were not seriously in dispute between the parties. Miss May said that none of them pointed towards unfairness of use or dealing, and Miss Michalos said that they did, when one looked at the actual use and at the evidence of the parties. Despite the many points that Miss Michalos made in relation to fairness, my clear view is that there was nothing unfair about the use of the photographs in this case in relation to which I have found criticism or review to have occurred (Beckhams 1 to 13). It was the defendants’ case that the use of the photographs was genuinely for the purpose of criticism and review; that there was no hidden or ulterior motive; that manner of use was not unfair; and that the interests of the claimant were not unfairly prejudiced (if indeed they were prejudiced at all). The claimant alleged, for the reasons appearing below, that the use of the photographs was not fair in the circumstances, and put forward a number of reasons for saying this.

First, it was said that the use was not fair because the programme relied on comments by Mr Fraser when he had refused consent to use his photographs. It was unfair to obtain those comments from someone who gave them voluntarily believing that the defendants were not going to use his works. I have already held that I am not satisfied that one of the requests was made (and refused), so much of the point of Miss Michalos in this respect does not arise on the facts. So far as the actual refusal of consent which I have found is concerned, there is no link between that refusal and the use which would make the use unfair. That refusal would not reasonably give rise to any belief on the part of Mr Fraser that the photographs would not be used, since it says nothing about whether they would be used from another source. On the evidence and on the basis of my findings, therefore, there was no unfairness in this respect. However, even if I had found in favour of Mr Fraser’s case on the evidence (that is to say, even if I had found that he had been explicitly asked for consent by a researcher and had refused) I would still not have found that this made the use of his photographs in the programme unfair (within the section). The unfairness has to arise in relation to the dealing with photographs – it has to go beyond some aspect of unfairness as between the parties which is not related to the use of the photographs. It principally relates to the manner and purpose of use, though it can extend to the circumstances in which the copyright material was obtained (see eg Hyde Park Residence v Yelland, where the photographs in question had been dishonestly obtained). It might just be that if Mr Fraser’s evidence were that he participated on the basis of express assurance that none of his photographs would be used then the subsequent use of film of the newspaper photographs could become unfair dealing, but the evidence in this case stopped short of that even if Mr Fraser’s evidence about the request for use were accepted in full. On that hypothesis what would have happened would have been that a researcher asked for a consent that would not have been necessary (if there were no other bar to fair dealing), and the other programme makers, apparently unaware of that request and refusal, made a legitimate use and innocently asked Mr Fraser for some participation. That might entitle Mr Fraser to feel personally let down in relation to the circumstances of his interview, but it does not entitle him to say that it renders what would otherwise be fair dealing unfair in relation to the use of his photographs.

Next, it was said that there was excessive use of the photographs in the sense that they were substantially reproduced when that was not justified by the brief criticism of the photographs themselves. I do not consider that this criticism is justified. It is true that in every case what the programme showed was what the newspaper printed. It is also true that in many, though not all, cases what the newspaper reproduced was substantially the whole of the photograph (it was not true of Beckham 8 and Beckham 10, which were heavily cropped to reveal what the newspaper wished to use as the central subject). However, any legitimate use of a photograph for the purposes of criticism and review is likely to require display of a large part of the photograph in order to make the point that is being made. That is certainly true of the photographs in this case. Unless the photographs had been shown as printed the point made by the programme could not have been made, either in relation to the criticism of the tabloid press coverage or in relation to the particular photographs themselves. The length of display of the whole photograph has to be taken into account here too. It could not conceivably be treated as too lingering on the facts of this case. In no case was the display of any photograph longer than about 3 seconds, and many were shorter. And in the case of some of the longer periods the whole photograph was not shown for the entire period because the camera panned across it or zoomed into some limited part of it, thus preventing any potentially unjustifiable lingering. In some cases the exposure was so brief as to make it difficult to spot exactly which photograph was being shown – see the second uses of Beckhams 3 to 5, which are little more than flashes on the screen as a directorial nuance demonstrating “snapping” (perhaps with some irony). Overall I regard this criticism as unjustified. If there is such a thing as a limit defined by a criticism:exposure ratio, then this case fell easily on the “fair” side of the line.

The claimant then relied on the fact that this was a commercial use of the photographs which makes the use unfair. Miss Michalos did not go so far as to say that UanyU commercial use was unfair, and obviously she could not sensibly do so – there is no reason why a review done for commercial purposes (which most reviews will be, since they will appear in some commercial publication) should be deprived of the use of the reviewed material when a non-commercial review would not be. However, she said that a use which had a commercial purpose would or could be unfair, and should be put in the scales when weighing up matters in order to arrive at an overall impression. As an example she relied on Associated Newspapers Group plc v News Group Newspapers [1986] RPC 515 where one newspaper (the Sun) printed copyright letters passing between the late Duke and Duchess of Windsor, the exclusive rights to which had been obtained by another. At page 518 Walton J referred to a passage in Hubbard v Vosper in which it was said to be not fair for a rival “to take copyright material and use it to his own benefit”. Walton J said:

“That seems to be exactly what has happened in the present case. There is no blinking the fact that the Sun is trying to attract readers by means of printing these letters or extracts from letters.” (at page 518)

It is not clear to what extent there was any attempt at criticism or review in that case, but what I think Walton J was seeking to say is that it is not fair if what the user of the material is actually doing is seeking to deploy the copyright material so as to derive benefit Ufrom that deploymentU. That is basically a user which is coloured by the motive. The motive was not to use the letters so as to criticise them (see the examples of genuine criticism given earlier on the same page of Associated Newspapers), but “to attract readers”. There is absolutely no evidential basis on which that can be said in the present case. There was, for example, no suggestion that the programme was trailed by alerting viewers to the fact that it would contain these photographs, or even photographs of a similar nature which would have the viewers switching on to see them. Nor is it plausible that that was the motive when one looks at the programme itself. The photographs were deployed briefly at various points in the programme, amidst a lot of other visual material. There is no way in which it can sensibly be said that these photographs were somehow intended as a ratings booster, and no evidence which would begin to justify such an assertion (let alone a finding) to that effect.

The same point can be made in relation to the allied point that this was copyright infringement dressed up as criticism and review. The criticism and review were, on their face, genuine enough – I have so found above. It is not readily apparent that there was a disguise to be penetrated when one looked at the programme. Having heard about the making of the programme from Miss Williamson, there is no evidence that behind the scenes there was any attempt at dressing up either.

Next is the point that the use in the programme competes with the claimant’s own commercial use of the material in such a way, and to such an extent, as to tend to render the use unfair. Mr Fraser gave very firm evidence that he was generally reluctant to allow use of his photographs in television programmes because the more lucrative press market was “hugely diminished” by over exposure to large TV audiences, and for that reason he would never have considered allowing the use of his exclusive photographs of the Beckhams to be included in this programme. There were occasions when he would allow his photographs to be used, and he had even allowed a use of one of the subject photographs in a prior programme called Diet Another Day. In that programme there was a brief shot of the front page of a magazine, and one of the Beckham photographs (Beckham 11) appeared as part of that front page. He made a charge of £500 for the licence to use that photograph and countered a suggestion that that showed that the photograph had declined in value, and that it demonstrated that he was not as reluctant to allow TV exposure as he sought to make out, by saying that this was a brief appearance on a programme on a TV station which he clearly thought would not give it the same exposure as a BBC (or indeed an ITV) programme would give it, particularly a programme of the nature of the Tabloid Tales Beckham programme. I was urged to accept Mr Fraser’s evidence as to the devaluing effect of TV exposure since Mr Fraser knew the business generally, and knew his own business in particular, and that therefore the exposure of these photographs on this programme would indeed compete seriously with his own exploitation of the photographs in the future.

I do not doubt that Mr Fraser knows his own business, and is a master at exploiting his own photographs. It is also true that the defendants did not adduce much evidence of their own as to the effect of broadcasting on the residual value of photographs such as the Beckham photographs. All they adduced was a statement of Miss Williamson that she had never heard such an argument being advanced. Bearing in mind the nature of her experience in the industry I think that that is of more limited value when compared with Mr Fraser’s greater experience of dealing with his own photographs. However, despite the lack of countervailing evidence I think that some of Mr Fraser’s evidence has to be viewed with care. These are photographs whose principal benefit as photographs lies in the ability to view and consider their content at the viewer’s pace. Anyone really interested in their content would want to be able to study them for a period of many seconds, if not longer. The viewer of the programme would not have that opportunity. I have indicated the length of time for which they were on the screen. Anyone interested, for example, in the Beckham haircuts and hoping to see a good shot of them would have to be pretty quick and would ultimately be very disappointed at the length of time they were given to reflect on the subject matter. They would be better off getting hold of a back copy of the newspaper. It seems to me to be unrealistic to suppose that, so far as the interested tabloid reader is concerned, this exposure will lead to increased boredom with these pictures. I accept that that is not determinative of a devaluing effect, because it may be that despite that the photos would be devalued in the amounts that future users would pay no matter how blasé the average tabloid viewer had become, and I accept that that is possible. Mr Fraser sought to address that point. At one point he asserted that the value of these photographs was “crippled” by their use in the Tabloid Tales programme, but it immediately appeared that he did not mean that in the sense that no-one else wanted to use them afterwards. He was still asked for licences to use them afterwards, and gave no details about those requests which would have enabled me to judge the extent to which he was no longer able to ask the sums that he had asked hitherto. Over the course of his evidence he indicated the sort of things that he would take into account in deciding whether to license photographs for TV use. They included the nature of the programme, the broadcaster, the time of broadcast, the number of times the photograph was to be shown and the extent to which the programme might be repeated. At one point he said:

“My fear is always repeats. This is one of the reasons why I do not come to agreements very often because people will want to repeat a programme again and again and again.

Taken overall I think that his evidence does not show that the value of these photographs was inevitably and seriously damaged by their use in this programme. It was not inevitable that UanyU TV use would “cripple” a photograph, because otherwise he would never license them at all, and he admitted that he did. Alternatively, if there were always likely to be a serious damaging effect then he would charge a large fee, and the evidence was that when he licensed TV use he would charge a smaller fee. He said that this was

because TV companies were not able to pay the sort of sums that newspapers would pay, but that does not really meet the point. That explains why the would not pay large sums. It does not explain why he would agree to license at smaller sums. He also explained that such exposure would sometimes have the merit of maintaining his profile, but again to my mind that does not explain why he would tolerate an inevitably “crippling” effect. The fact that he would license at all at the smaller sums he referred to (usually a few hundred pounds, though he did refer to a more substantial TV deal) demonstrates that the damaging effect was not inevitable, or always significant. He even licensed what he obviously regarded as some of his most precious (and therefore controlled) photographs of Mr Dodi Fayed and Princess Diana kissing on a boat to a TV programme which was discussing iconic photographs (there was a debate as to which were the most famous pictures of all time) – apparently therefore a programme containing criticism or review – and to 2 or 3 other TV programmes, without apparently “crippling” their value. So the most I can get out of the evidence is that putting a photograph on TV is capable of adversely affecting the future value of the photograph, but it depends on the circumstances. Mr Fraser’s attitude to the use of a photograph in the “Diet Another Day” programme demonstrates this – he clearly thought that the use of the photograph in that television context did not risk the same damage as use in other television contexts would. It was indeed a very brief appearance, and I can quite see why he might take the view he did about it. If repeats are damaging, then that point would go to any repeats of the Tabloid Tales programme, which have not (so far as I know) taken place. I find that on the evidence presented to me it was not proved that the exposure of the photos in the Tabloid Tales programme had a diminishing effect on the value of the photos of any, or any significant, amount. I accept that Mr Fraser thought that it might, and that his fear was genuinely felt, but overall he has not made out more than his fear of the risk of damage. He has not made out any actual damage to his commercial interests, and he has not established any particular level of significant risk.

How, then, does that affect the assessment as to the fairness of the dealing? Risk to the commercial value of the copyright may go towards demonstrating or creating unfairness, but it does not follow that any damage or any risk makes any use of the material unfair. If it did then there could be no use of copyright material in criticism or review if it could be said that that use might damage the value of the material to the copyright owner. That would be inconsistent with the purpose of the section which is to balance the interests of the copyright owner and the critic. It is all a question of balance. In the present case I consider it to be clear that the level of risk of damage (whatever it may be) is not sufficiently great to mean that the use of the photographs was unfair. The exploitation of the photographs in the programme was not gratuitous or lingering, so if there was any risk of over-exposure it was kept to an acceptable minimum. So far as this factor is concerned the use of the photographs was well on the “fair” side of the fair/unfair borderline (wherever that may lie).

For the sake of completeness I would add that as part of her written reply Miss Michalos put before me a short summary report of a decision of Hart J delivered on 24th February 2005 in IPC Media Ltd v News Group Newspapers Ltd. The report was a very brief Lawtel report and a transcript is not yet available. Hart J seems to have found that on the facts the reproduction of the front page of a competitor’s magazine on the front page of the defendant’s magazine was not fair dealing because such criticism as there was could have been done without it, and in copying the work to advance its own competing purposes at the claimant’s expense the defendant was advancing its own work, and that did not amount to fair dealing. So far as one can tell, that is a decision on the facts where the balance on fair dealing went the other way. I can detect nothing in that case which would affect the decision which I have reached without it.

Last, as an aspect of “dressing up”, it was alleged that the programme was not genuine criticism or review because what the programme makers in fact set out to do was to produce a lightweight piece of entertainment which was in fact a public relations exercise for Mrs Beckham. It was even asserted that Mrs Beckham had editorial control over the programme. Having seen the programme, and considered the evidence, I am satisfied that there is nothing in this point. Objectively speaking the programme contains criticism; I have already dealt with that above. It may or may not amount to entertainment as well, but I do not think that entertainment is necessarily inconsistent with criticism or review. If “lightweight entertainment” is intended as some sort of antithesis to criticism and review, then this programme does not fall into that category, but in truth it does not seem to me that the question of whether use is fair dealing or not can be determined by deciding what other labels can be applied to it. The real question here is whether this is a trivial programme dressed up as criticism or review so as to provide an ostensible justification for showing copyright material under some pretence, or whether it is genuinely critical and reviewing. Objectively speaking it is the latter, as I have already found, and nothing in the evidence suggests that anyone behind the scenes had any other, more sinister, intention.

If it were established that Mrs Beckham had editorial control over the programme, then that might tend to indicate that it was not genuine criticism or review, though what would be more significant would be how she exercised it. However, it is quite clear on the evidence that she had no such thing. What was established was that she had managed to extract some concessions from Brighter in relation to the use of her recorded interview. Like other contributors, she signed a release form which governed the terms on which she permitted her taped interview to be broadcast, but hers contained additional terms. It provided:

“The Contributor shall be provided with an opportunity to view the transcript of her edited interview prior to the final edit of any Programme in which she features and she shall have twenty four (24) hours to notify the Company of any element of the edited interview which is legally sensitive and therefore unsuitable for transmission in which case the Company shall re-edit the Programme to remove the offending element to make the Programme suitable for transmission …”

This was negotiated in her case because she was thought to have some ongoing legal disputes as to which she was sensitive. Mrs Mitchinson, a BBC executive producer who was responsible for this programme, gave evidence that the BBC approved this wording in this particular case because of that sensitivity. She was aware of what she thought was a couple of disputes, (though it appears she was wrong about one of them because it had been previously settled, but nothing much turns on that). What is important is that the control was limited as to the basis of intervention by Mrs Beckham, and that in its terms it did not contravene BBC guidelines which prevented the ceding of editorial control to a contributor. The actual wording of the clause gives no foundation for saying that Mrs Beckham had editorial control. She had a limited right of objection in relation to her interview, and not in relation to the rest of the programme, and that remains the case even if (as may have been the case) there would have been question marks over whether the programme would have been broadcast without it.

However, the matter does not quite stop there. The actual operation of the clause went beyond its strict terms. First, Mrs Beckham was given the opportunity to see a tape of the interview, not just a transcript. There was some uncertainty as to whether she was sent a tape of the rushes (that is to say a rough version) of the whole programme or just of her interview. I think it likely, and find, that it was the latter. That gave Mrs Beckham an additional advantage over just seeing transcripts, but it does not betoken any greater degree of editorial control. However, she also put forward objections which for the most part clearly went beyond anything that would impact on apparent existing legal disputes. The first objection was as to the appearance of her skin tone. Then she raised a point about not wishing to have broadcast small parts dealing with the following: a question concerning whether she had taken money for setting up photographs with paparazzi; a bit about her husband’s personal life; a reflection on her own honesty and willingness to disclose; and a passage reflecting a certain haziness as to whether Essex has a coastline or not. All her requests were conceded, apart from the last where something that she wanted added in was not added (perhaps because the requested additional material did not in fact exist). Mr Morgan himself approved the relevant alterations. Only one (the reference to payment) was referred to by Brighter as apparently having reference to an ongoing legal dispute, and Brighter may have been under a misapprehension about that. The others were not ostensibly justified in that way, and they seem to have resulted from the personal preferences of Mrs Beckham. However, this does not mean that she had editorial control over the programme. She had some limited control over part of it for legal reasons; and she took the opportunity of making some requests, in relation to her interview, which were granted. To say that this amounted to, or betokened, some significant degree of editorial control so as to make the whole programme a piece of PR for her seems to me to be unarguable. Mrs Beckham’s participation in the programme might have been important, but there is absolutely no evidence that anyone thought it was so important that they would, in substance, be forced to cede editorial control over the programme. Since it appears the whole programme (even in rushes form) was not sent to her I do not see how she can have exercised it. Had she had that power, then (judging by the sensitivity demonstrated by her actual requests) I think it likely that other aspects of the programme would have been challenged as well. At the end of the day to say that this programme, with the slants that it adopts, is a PR piece for Mrs Beckham is seriously to mischaracterize it. The suggestion that she arranges her own publicity under the guise of chance photographs, and the less than flattering treatment of her solo singing career, are demonstrations of that. Last, no support is to be gleaned in this respect from the apparent change of name of the series from “Set The Record Straight” to “Tabloid Tales”. That does not disguise some hidden agenda in this respect.

In the circumstances I find that the use of the photographs amounted to fair dealing for the purposes of section 30(1) of the Act.

Sufficient acknowledgment

Under section 30(1), fair dealing is only a defence:

“…provided that it is accompanied by a sufficient acknowledgement”

It is accepted by the claimant that there was sufficient acknowledgment in relation to Beckhams 1, 6-10 and the first use of 11, but not in respect of the other use of photographs said to be covered by the fair dealing defence. I must therefore consider it in relation to those.

“Sufficient acknowledgment” is defined in section 178:

“ ‘sufficient acknowledgment’ means an acknowledgment identifying the work in question by its title or other description, and identifying the author unless-

(a) in the case of a published work it is published anonymously;

(b) [immaterial on the facts of this case]”

No question arises as to anonymous publication in this case, nor does any question arise in relation to an identification of the work in question. The questions that are said to arise do so in relation to the requirement to identify the author. Miss Michalos’s point was that the identification of the author had to be express, and it was not sufficient for it to be implied.

There is no authority in support of Miss Michalos’s submission, and it does not seem to me to accord with principle. The borderline between what is express and what is implied can get blurred anyway, and it is not a satisfactory distinction to introduce in this area of the law. What is important in principle is that there is something which can properly be seen as an identification of the author. Miss Michalos drew my attention to Sillitoe v McGraw-Hill Book Co [1983] FSR 545, where the absence of an express recognition of authorship meant that there was no sufficient acknowledgment, but on this point the case was simply a decision on the facts. Such identification as there was of the author of the material in that case was too far divorced from the appearance of the material to be associated with it, apparently, because the copyright works were treated as though they were non-copyright (see page 565). It is not an authority for the proposition that any identification must be express. All that is required is that it is an identification, though I think that I can accept that it probably has to be one that can be readily seen and not require some form of hunting around or detective work in order to ascertain it. It is probably not enough to say that the author can be identified if you look hard enough; the authorship must be more apparent than that. However, at the end of the day it is a question of fact whether there has been an identification.

I turn therefore to consider the dispute in relation to the photographs. The identification of the author of Beckham 1 is presumably conceded because the camera pans down to and zooms in on Mr Fraser’s name at the foot of the newspaper photograph. That does not occur in relation to Beckhams 2 to 5, but the voice over of Mr Morton (the text of which appears above) identifies him, and in that context I consider that he is sufficiently identified as the author. That is reinforced by the fact that not long before, Beckham 1 had been shown with Mr Fraser’s name, and anyone paying a moderate amount of attention would be able to identify the photographs as being from the same series (and therefore by the same photographer), particularly bearing in mind that Mr Morgan had identified “the exclusive pictures of the change of image” as being Mr Fraser’s. The whole context of the appearance of these photographs clearly links them with Mr Fraser, and there is sufficient identification of him to amount to a “sufficient acknowledgment”.

Next there is the second appearance of Beckham 11. The first appearance is accompanied by a shot of his name, so he is identified there, as well as by the oral statements of Mr Morgan which accompany it. The second appearance of the photograph is not so accompanied, but I consider that it is sufficiently clearly a repetition of the earlier photograph that the identification of the author can be said to be carried over – bearing in mind the emphasis given to the authorship in its first appearance (“surprise surprise”) this repetition will be even clearer than it otherwise would be. Accordingly this appearance sufficiently identifies the author.

Next there are all three appearances of Beckham 12. The first appearance is not accompanied by any clear separate visual identification of Mr Fraser as an author, but the accompanying words are the clearest attribution of authorship short of that. Mr Morgan all but says in terms “the author of this photograph was Jason Fraser” – his actual words appear above, and are in my view clearly sufficient to identify him as the author. The second appearance of Beckham 12 is sufficiently clearly linked with the first appearance to carry over the identification The third appearance is more distanced in time and when the programme has moved on. One cannot say that the identification is carried over in the same way. However, the photograph is sufficiently clearly a repetition of the earlier photograph for the identification to be carried over simply by virtue of its being the same photograph. I do not think that the concept of identification means that there has to be a precisely or virtually contemporaneous act of identification. Once the identification has been provided then it is capable of operating in relation to a later appearance of the copyright material, and I find that on the facts that is what has happened here. There is therefore sufficient identification of the author in all three appearances of Beckham 12.

The claimant then says there is no sufficient identification in relation to both appearances of Beckham 13. The first occurrence follows very shortly after Beckhams 11 and 12. Its appearance (the subject matter is very similar to 11 and 12), its positioning in the programme and the fact that its showing is accompanied by Mr Fraser speaking, makes it sufficiently plain that it has the same author. This is so whether or not Mr Fraser was, subjectively speaking, talking about this photograph during his interview. What matters for these purposes is how the material appears in the programme, and there is a sufficient link to make the identification. This is sufficiently clearly a repetition of the previous photograph for the identification to carry over for the purposes of the acknowledgment provision.

I therefore find that there was a sufficient acknowledgment in relation to all occurrences of Beckhams 1-13.

Conclusions on fair dealing

It follows from the above, and I find, that the defendants are entitled to the benefit of the fair dealing provisions of section 30(1) in relation to each of Beckhams 1 to 13.

Incidental inclusion

Section 31(1) provides:

“Copyright is not infringed by its incidental inclusion in an artistic work, sound recording or broadcast”.

The defendants rely on this provision as an additional or alternative defence in relation to the third appearance of Beckham 12, and the appearance of Beckham 14. Their case is that both photographs were included as an integral part of the headlines or coverage of the kidnap plot.

Guidance as to the law as to incidental inclusion can be found in Football Association Premier League Ltd v Panini UK Ltd [2004] FSR 1. In that case the defendants had published photographs of Premier League footballers in their club strip, which included Premier League or club logos; the League and clubs claimed copyright in their logos. The defendants relied on the defence of incidental inclusion, and it was rejected on the facts of the case. Chadwick LJ said that the question of whether there was incidental inclusion:

“is to be answered by considering the circumstances in which the relevant artistic work – the image of the player as it appears on the sticker or in the album – was created”

And whether or not the inclusion is incidental

“turns on the question: why – having regard to the circumstances in which the [allegedly infringing work] was created - has [the original copyright work] been included in [the former].” (at p 12)

He went on to hold that commercial, as well as aesthetic, considerations came into play in that consideration. Mummery LJ (at p 15) observed that

“incidental is an ordinary descriptive English word … The range of circumstances in which the word ‘incidental’ is commonly used to describe a state of affairs is sufficiently clear to enable the courts to apply it to the ascertainable objective context of the particular infringing act in question.”

Accordingly, my task is to review the use of the photograph in its context and consider whether it was incidental (which must mean incidental to some other purpose) in the ordinary sense of that word.

The programme contains many shots of newspaper pages containing photographs, headlines and text. In most cases the camera zooms in or occasionally out, or it pans across its subject matter. It may well be that very often an image of a still subject will move in order to make it more interesting – a series of static images appearing for seconds at a time in a TV programme will not be as visually interesting or stimulating as a moving image. However, I have come to the conclusion that in many if not most of the cases of movement there is a further purpose – to provide or demonstrate the context of part of the image. I certainly consider that there is a similar purpose in the treatment of the third occurrence of Beckham 12. I have described its appearance above. The camera starts by including most of the newspaper rendition of the photograph in its shot. A small part at the bottom is obscured

by some sort of shadow, to which I will return. It ends by concentrating on the headline, having zoomed in on it. The inclusion of the photograph in the newspaper was obviously deliberate – a picture of the potential victim of the kidnap plot holding her young baby. This was a programme about the newspaper treatment of celebrity stories about the Beckhams, including the kidnap story. The juxtaposition of photograph and headline (and copy) is part of that treatment. When that treatment is considered by the programme it is that combination that makes the display of the photograph something that occurs for the purpose of criticism and review. But that same factor means that the photograph cannot have been incidentally included. The producers of the programme were not interested in the headline alone. They were interested in the headline in the context of the Beckham celebrity treatment, which included the use of sympathetic photography. I am satisfied that the broad picture of the page, including the photograph, followed by the zooming in, was not merely a production technique in order to show the page in an interesting form or of producing a moving image which is more interesting than a still one; it was a deliberate way of placing the page in the context of the overall story and then focusing on the aspect then being considered (the kidnap plot). In that context the inclusion of Beckham 12 was not incidental.

I consider that this conclusion is strengthened by the shadow to which I have referred. At first sight it looks like a casual introduction, or even an accident, but in fact I think it is something else. It obscures the bottom part of the photograph, but leaves Romeo’s appearance intact, and it also obscures most of what is probably an advertisement in the box below. Its effect is to concentrate the eye on the upper three-quarters of the photograph, and on that part of the page which shows the newspaper story. There are three significant features of this shading. First, there is a similar darkening effect to the left of the newspaper page, suggesting a deliberate framing. Second, the framing effect of such shading is apparent on earlier portrayals of newspaper articles, where it is obviously used to frame a headline or photograph, or to obscure other non-Beckham material on the same page, or both. Third, those first two points indicate that the shading is deliberate, in order to focus attention. That being the case, it is significant that the shading was not applied to the whole of the photograph. If the real point was the headline, I would have expected the programme makers to have done that. But the photograph was left unshaded, and within the frame. That suggests that the photograph was significant in the eyes of the programme makers, which in turn suggests that its inclusion was not incidental.

I have reached a different conclusion in relation to Beckham 14. This is the small photograph appearing within a newspaper headline. The focus of the filmed shot in the programme is on the headline. It zooms in slightly during the 4 seconds it is shown, but that is obviously to create a little drama or visual interest. In the run up to this shot the story was introduced by Mr Morgan, and there were three separate shots of headlines appearing in the News of the World, followed by a brief clip from a BBC News broadcast of the item. Then the relevant headline and Beckham 14 appear. I am satisfied that the headline appears as an example of another sensational headline; that is why it is there. In that context the small photograph of Mrs Beckham is incidental – it is there because it happened to be there in the original. While it might have been there to lend interest to the original headline, its appearance in the programme shot was, in everyday terms, incidental. In Panini the publishers of the photographs would not have wanted to publish photographs without the relevant logos. The logos were important to the photographs. That is not true of Beckham 14. As far as I can judge, the headline was chosen as a headline, not because it also contained a photograph of Mrs Beckham. That conclusion is fortified by the fact that at least one of the reproductions of the News of World headlines is without any photographic accompaniment – it is there for the drama of the headline, and that is true of the headline accompanying the appearance of Beckham 14.

In the circumstances I find that there was no infringement in relation to the appearance of Beckham 14 because its inclusion in the programme was incidental.

Additional damages – flagrancy

I was asked to make findings in relation to additional damages within the meaning of section 97(2) of the Act. Since I have found no breach of copyright the question of damages does not arise, and strictly speaking it could be said I need not make any findings under this head. However, I heard evidence and argument on this point, and in case it should matter in the future I will express my conclusions on it briefly.

If my conclusions are wrong as to infringement, I do not think that there is any basis at all for seeking additional damages. Miss Michalos’s opening skeleton focused on the flagrancy of the alleged breaches, but her closing arguments were broader than that and focused on other factors. Dealing first with flagrancy, so far as Miss Williamson’s evidence bore on the point it contained no positive evidence pointing that way, and nothing implicit or unsaid could be taken to point that way either. There was evidence that she took advice on

fair dealing generally, which demonstrates conscientiousness, not a desire to try to evade in a manner which would make the breach flagrant. The matter was, on the evidence, considered carefully. The suggestion that she did not follow the advice of Mr Bonnington is in my view completely misplaced. Nor is there any material in the evidence of Mrs Mitchinson, or in the documents, which would support the allegation of flagrancy. This is not a case where it can be said that the breach was flagrant.

So far as other factors are concerned, I have not identified any which would give rise to a right to additional damages. Miss Michalos submitted to me that the defendants knew that they were running a risk, and it is right that if that risk eventuates then the breach should be considered to be sufficiently serious as to attract additional damages. In this context she relied on a passage from Sillitoe v McGraw-Hill Book Company (UK) Ltd at page 557, where HH Judge Mervyn Davies QC said:

“What the defendants have done here and knowing of the plaintiffs’ comments and the facts on which the complaints were based, was to take the risk of finding their legal advice wrong. If a person takes a deliberate risk as to whether what he is doing is wrong in law, I do not see that he can say later that he did not, at the time, know that what he was doing was wrong, if in the event his actions are held to be wrong.”

That passage concerned a different point, namely whether the defendant should be treated as having knowledge of an infringement for the purposes of the then importation provisions in section 5(3) of the Copyright Act 1956. That is not the same point that arises in relation to a claim for additional damages. It does not follow that knowing there was a risk automatically translates a breach into a more serious one for the purposes of additional damages. Miss Williamson strongly denied that they knew there was a serious risk in what they were doing and did, and I accept that evidence. I also find that no other relevant person thought there was a serious risk of infringement in broadcasting what was ultimately broadcast. The decision to use the material was taken as a result of an honest belief of entitlement to do so. Even if that belief was wrong, it was not so wrong, or so dishonest, or so reckless, or so calculating, or even so negligent (assuming that one or more of those factors is relevant to additional damages) as to attract a claim to additional damages. Miss Michalos also relied on the way Mr Fraser had been treated – his consent was asked for and refused, and then he was asked to appear (and did appear) in the programme. Since I have found that the initial request for use is not established this point is weakened on the facts. The other request or requests (for general display of his shots during his interview) and his subsequent participation is not such as lead to, or contribute to, a claim for additional damages. The defendants honestly thought they were entitled in law to make use of the material that they used in the manner in which they used it, and the fact that a contributor participated on a false assumption does not mean that if their belief was wrong then additional damages should follow. It does not materially increase the seriousness of the breach. I would have reached the same conclusion even if I had found for Mr Fraser in relation to the original request.

It follows that, had I been required to do so, I would have found against any claim for additional damages.

Conclusion

Accordingly I shall dismiss this claim.

GRAMOPHONE CO LTD v MUSIC MACHINE (PTY) LTD AND OTHERS 1973 (3) SA 188 (W)

Citation

1973 (3) SA 188 (W)

Court

Witwatersrand Local Division

Judge

Moll J

Heard

July 10, 1972; July 11, 1972; July 12, 1972

Judgment

August 1, 1972

Annotations

Link to Case Annotations

Judgment

MOLL, J.:

This is the extended return day of rule nisi granted on 10th May, 1971, in terms whereof the respondents were called upon firstly to show cause why an order should not be granted interdicting the respondents jointly and severally pending an action to be instituted by the applicant against the respondents for a final interdict and other relief from manufacturing, importing, selling or advertising for sale records (which term includes stereo cartridges) embodying the sound recordings known as 'The Beatles - Let it be' and 'George Harrison - All things must pass'; and further calling upon the respondents to show cause why they should not pay the costs of the said application. The first part of the said rule was ordered to operate as an interim interdict.

It is not disputed that the first respondent is a company incorporated in South Africa and that the second and third respondents are directors of the first respondent and that they distributed certain records, including stereo cartidges, through the first respondent. The second and third respondents had been cited in the present proceedings, so I was informed by counsel for the applicant, because there had initially been some doubt about the status of the first respondent. The estate of the second respondent has meanwhile been sequestrated and there has as yet been no meeting of creditors. In the event of the applicant succeeding in the present application I was asked to postpone the matter sine die as against the second respondent. No objection was made to this suggested procedure.

There is no dispute about the fact that one Laurence John Hall, a duly admitted solicitor of the Supreme Court of Justice in the United Kingdom, is employed in the capacity as a solicitor by a company known as EMI Ltd., hereinafter referred to as E.M.I.; that he has intimate knowledge of matters relevant to the present dispute and that he has been authorised by E.M.I. to institute these proceedings. According to the said Hall's affidavit, and this is not disputed, the applicant is a wholly owned subsidiary of E.M.I., having its registered office at Blyther Road, Hayes, Middelsex, England.

On 26th January, 1967, so Hall testifies, the applicant entered into an agreement in terms whereof it acquired the exclusive right to theservices for recording purposes of certain artists, among them one George Harrison, which said artists were and are professionally known as 'The Beatles'. The relevant terms of the said agreement are set out and are not disputed by the respondents. In terms thereof the said agreement is to operate for a period of nine years from 27th January, 1967; and as from the said date for a period of five years the said artists are obliged to attend at places and on times convenient to the parties to render such performances as the applicant shall elect for reproduction in, by, or on any record. The said artists bind themselves not to render any performance whatsoever during the currency of the said agreement nor to perform any work recorded by the applicant under the said agreement for a period of ten years immediately following the termination of the said agreement or any extension thereof, on their own account or for any person, firm or corporation other than the applicant, whereby such performance might be recorded in any form from which any gramophone record, magnetic tape or any other sound bearing contrivance or appliance may be offered to the public. The applicant was, moreover, in terms of the said agreement, granted the following rights namely,

   'the sole right of production, reproduction, sale (under such trade marks as it may select) use and performance (including broadcasting) throughout the world by any and every means whatsoever of records manufactured in pursuance of this agreement'.

The said Hall then refers to a schedule which forms part of his affidavit. The said schedule bears four columns, respectviely headed 'Date of recording', 'Place', 'Title' and 'Date of first issue in the United Kingdom'. It is not disputed that upon the dates reflected in the first column and which fall within the period specified in the said agreement the said artists at the request of the applicant attended at the places mentioned in the second column to render performances whereby recordings bearing the titles set out in the third column were produced. As already indicated the two records embodying the sound recording known as 'Let it be' by the Beatles and 'George Harrison - All things must pass' appear inter alia under column three of the said schedule.

According to the said schedule the date of recording of 'Let it be' was between 22nd February, 1969, and 15th August, 1969; the place is given as Trident Studios and E.M.I. Recording Studios, London, and the date of first issue in the United Kingdom is given as 27th February, 1970. With regard to 'George Harrison - All things must pass' the date of recording is between 1st November, 1970, and 30th November, 1970, at E.M.I. Recording Studios, London; the date of first issue in the United Kingdom being given as 4th December, 1970.

It is furthermore not disputed that the said recordings together with others mentioned in the said schedule were not only made at the request of the applicant but also at its expense and that they are the sole property of the applicant. It is, however, denied that the applicant by reason of the aforegoing is the copyright owner of the said recordings or that the said recordings enjoy copyright protection.

On behalf of the first respondent it is not disputed that E.M.I. (South Africa) (Pty.) Ltd. obtained by way of agreement from Parlophone Company Ltd. the right to be supplied by the latter company with all recordings owned by it in order that E.M.I. (South Africa) (Pty.) Ltd. should manufacture and sell records derived from such recordings, including tape records whether in casette or cartridge form, within the territory of South Africa. The said agreement has not yet been terminated.

Following upon the aforesaid agreement the applicant, according to the said Hall, entered into an agreement with the said Parlophone Company Ltd., in terms whereof the applicant acquired all the latter's busines and undertaking including the ownership of the 'Parlophone' trade mark. Hall testified that,

  'the recordings specified in the schedule therefore have been made available to E.M.I. (South Africa) (Pty.) Ltd. under the terms of the said agreement they having been made by the Gramophone Company Ltd. on the dates specified which are within the period of the said agreement with E.M.I. (South Africa) (Pty.) Ltd.'.

Hall's averment that only E.M.I. (South Africa) (Pty.) Ltd. and no other person, firm or company has been given the right to make or market records (including tape records) embodying the recordings set out in the said schedule in South Africa is not challenged on behalf of the first respondent.

It is common cause that the first respondent has been and is desirous of continuing to market in South Africa records (including tape records whether in casette or cartridge form) under the name of 'Windsor' which embody, inter alia, the said 'Let it be' and 'All things must pass', and that it has not and is not paying any fees to either E.M.I. Ltd., The Parlophone Company Ltd., the applicant, E.M.I. (South Africa) (Pty.) Ltd., or any of the artists performing in the said recordings. The said records so being marketed by the first respondent are being offered to the public at a lower price than charged by E.M.I. (South Africa) (Pty.) Ltd.

In addition to the affidavit of the said Hall, one Fraser, the copyright and contracts manager of E.M.I. (South Africa) (Pty.) Ltd., hereinafter referred to as EMI (S.A.), has filed an affidavit. I deal with Fraser's said affidavit and the affidavits attached thereto in so far as they are relevant to the issues which arise in this matter. The said Fraser confirms the effect of the agreement between EMI (S.A.) and The Parlophone Company Ltd. referred to by Hall and with which I have already dealt. Certain submissions are made as to why the two sound recordings entitled 'The Beatles - Let it be' and 'George Harrison - All things must pass' would, by reason of the law in England and South Africa together with the international arrangement which exists, enjoy copyright protection in the present circumstances. This aspect of the matter will be dealt with at a later stage.

The said Fraser deals with the history which gave rise to the present application and this requires to be referred to briefly. It appears that a full page advertisement appeared in the Sunday Times, a newspaper with a country-wide circulation, on 4th April, 1971, and again on 11th April, 1971. A tear sheet of the advertisement which so appeared on 11th April, 1971 is annexed to the papers (annexure 'E'). From this it appears that there was then available to the first respondent a number of '8 - track stereo cartridges', among these the 'Beatles - Let it be'. As a result of the said advertisement appearing as aforesaid the Southern African Record Manufacturers and Distributors Association, an organisation representing the interests of the major record manufacturers and distributors in South Africa, met to consider the matter. One John Edmond was requested to proceed to the first  respondent's premises at the address as advertised in the said newspaper, in order to purchase some of the cartridges which had been advertised.

From Edmond's affidavit it appears that on 8th April, 1971, he proceeded to the first respondent's premises and requested to purchase some of the cartridges advertised as aforesaid but was informed that these were out  F of stock; that supplies were however expected. He was, however, able to purchase certain cartridges, among them 'The Beatles - Let it be'.

Subsequently information was received to the effect that the first respondent was offering for sale certain cartridges not referred to in the Sunday Times advertisement, among which a cartridge labelled 'Windsor 8' and entitled 'George Harrison - All things must pass'. The affidavit of an attorney, one Morris Joffe, is to the effect that he went to the premises of the first respondent on 17th April, 1971, in order to purchase certain cartridges. He in fact purchased seven cartridges and received a substantial reduction in price. Among the said cartridges was one labelled 'Windsor 8' and entitled 'George Harrison - All things must pass'.

It is clear from the papers before me that the applicant's attorney of record proceeded to London with the said two cartridges labelled 'Windsor' and entitled 'The Beatles - Let it be' and 'George Harrison - All things must pass'. In England he handed the said cartridges to one Walter John Ridley.

The affidavit of the said Ridley, a musician who has been working in the musical profession for over 40 years as a composer, arranger and recording manager, is to the effect that he played and listened to recordings manufactured by E.M.I. of 'George Harrison - All things must pass' and 'The Beatles - Let it be'. These recordings he has compared with recordings under the label 'Windsor' and in his opinion they are identical.

A meeting of the Southern African Record Manufacturers and Distributors Association resolved to authorise a past chairman of the said Association, one Arnold Golembo, to approach the respondents in regard to the advertising and sale of the stereo cartridges. According to the affidavit of the said Golembo, the contents whereof are not, on the papers before me, denied by the respondents, he went to the premises of the first respondent on 14th April, 1971, and there met the second and third respondents, to whom he pointed out that.

   'they were not permitted to sell the stereo cartridges since the South African copyright in the stereo cartridges they were selling vested in other parties'.

Golembo was informed by them that they had taken legal opinion; that they were satisfied that they were entitled to sell the cartridges and that they intended proceeding with the sales. Golembo was, moreover, told that additional stocks of stereo cartridges were on order; that they would be received within a short period and be placed on sale.

 The said Golembo warned them that the record industry was concerned about their conduct and intended taking urgent proceedings in Court against them.

As a result of the said Golembo's interview with the second and third respondents the applicant consulted its attorneys. There is no dispute about the fact that the applicant's said attorneys wrote to the first respondent on 14th April, 1971, in their capacity as attorneys for the major musical publishing companies in South Africa. The letter states that it is written as a result of the said advertisement in the Sunday Times newspaper.

In their letter the said attorneys state that their clients are the copyright holders in South Africa of all rights to recordings of musical works. It expresses surprise at the fact that the first respondent was advertising for sale 8 track stereo cartridges of performances of numbers of which the copyright subsisted in their clients. The first respondent is required to desist from selling 'these unauthorised recordings', failing which the first respondent is warned that action will be taken 'for damages and for interdict'. The first respondent is called upon to indicate its attitude before 16th April, 1971.

On 16th April, 1971, and the next few days, certain discussions took place between the attorney acting on behalf of the applicant and the respondents' attorney. There is some dispute as to the effect of these discussions. It is, however, clear that these discussions were concerned with the interests of various companies, including the applicant, in regard to stereo cartridges which were being sold by the first respondent.

One such company had obtained an order from this Court on 22nd April, 1971, and in regard to another, Decca Record Company Ltd., a certain undertaking had been obtained from the respondents.

It is common cause that the stereo cartridges in question together with others were imported by the first respondent from the United States of America. It appears from the affidavit of the third respondent, that these cartridges were obtained from a firm known as Scorpio Music Distributors Inc. of Philadelphia, U.S.A. This firm had advertised its cartridges in a publication known as 'The International Bilboard Buyers Guide' of 12th September, 1970. This publication it  appears is a recognised trade directory to which all the major recording companies in the world either subscribe or use for advertising purposes.

According to the respondents it never occurred to them that the said cartridges were illegitimate duplicates of copyright material. They took it for granted that the merchandise supplied by the said firm could be legitimately sold.

The fact that the cartridges were offered at a very low price is not, in the respondents' view, indicative of illegitimate merchandise. Examples are quoted by the third respondent to explain how legitimate merchandise bearing well-known labels is sometimes offered cheaply. It is pointed out by the third respondent that American records invariably have the word 'Copyright' or an abbreviation thereof or a circle with a small 'c' in it, on them, which would indicate that the number is copyright. None of these indications or for that matter a date appear on the cartridges imported by the first respondent. It seems incorrect to say that American records invariably have the said copyright mark. Copyright as I understand it does not subsist in the United States of America in sound recordings. There is the suggestion that legislation in this regard has recently passed Congress. Adverting to the first respondent's defence on the papers to the applicant's complaint, the third respondent, as I have indicated, has submitted that the applicant is not the copyright owner of the sound recordings entitled 'The Beatles - Let it be' and 'George Harrison - All things must pass'. In regard to the latter recording the third respondent annexes a photostate copy (annexure 'P') of the box in which the cartridges are packed and observes that no mention is made thereon of the year in which the recording is made although the words 'recorded in England' appear thereon.

It is submitted by the third respondent by reference to sec. 12 (6) of the English Copyright Act, 1956, that the copyright in a sound recording is not infringed by a person who makes a record embodying that recording in the United Kingdom if it should appear that the records embodying that recording were issued to the public in the United Kingdom while neither the records nor the containers in which they were issued bore a laber or other mark indicating the year in which the recording was first published. It is then submitted that the said section of the English Act corresponds roughly with sec. 13 (5) of the South African Copyright Act, 1965. The two statutes read together deprive the applicant of copyright  H protection, because the records in the form of 8 track stereo cartridges were issued and are freely on sale to the public in South Africa and they carry no label or other mark indicating the year of publication or any other year.

In reply to the third respondent's allegation that the boxes in which the cartridges entitled 'George Harrison - All things must pass' are packed, bear no mention of the year in which the recording is made, the said Fraser points out that, although that is factually correct, it is irrelevant. The recordings he says are embodied on tapes which are packed in plastic containers bearing printed labels. The said labels bear a clear indication, according to him, in the usual form of the year of first manufacture. He then refers to the labels which are annexures WF1 and WF2 on which appears a symbol of the letter 'P' enclosed in a circle and followed by the year '1970'. This according to the said Fraser is the normally accepted and universally used method of indicating the year of manufacture of the first recording, in order, so he says, to comply with sec. 13 (5) of the South African Copyright Act and sec. 12 (5) and (6) of the English Copyright Act.

In regard to 'George Harrison - All things must pass' the said Fraser denies that any recording of this record in the form of 8 track stereo cartridges, tapes or any other form were issued by the applicant or EMI (S.A.) for sale to the public in South Africa without bearing an indication on the said label of the year of first manufacture of the sound recording, nor were they ever so issued in the United Kingdom.

In so far as the third respondent's aforesaid allegations refer to the position in South Africa, reliance is placed on the affidavit of one Becker, an attorney of this Court, who testifies that on 10th May, 1971, he proceeded to various businesses in Johannesburg to enquire whether the records 'The Beatles - Let it be' and 'George Harrison - All things must pass' were available in cartridge form. He was advised that the said cartridges were readily available and for sale. According to him he purchased a copy of each of the said cartridges from a firm called 'Top Twenty Record Bar' and examined the sleeves in which they were packed. It appeared that neither of the 'sleeves' bore any mark indicating that it enjoyed copyright protection nor was there any mention of the date of first publication. I have already indicated that according to the said Fraser the box or 'sleeve' affords no assistance. The labels attached to the plastic containers however, contain the necessary marks indicating the date of first publication thereof. This statement is borne out by looking at the box and plastic container with its label in the case of the recording in cartridge form of 'George Harrison - All things must pass'.

In regard to the cartirdges embodying the recording of 'The Beatles - Let it be' it is admitted that the copy purchased by the said Becker does not bear the aforesaid indication.

The said Fraser explains the position as follows:

   'This cartridge was manufactured and labelled in South Africa and due to an oversight the label did not bear the required indication of the year of first issue to the public. This cartridge was one of a batch of cartridges manufactured in South Africa during the period May to August, 1971, and the omission was not noticed. I point out, however, that the   records of the aforesaid sound recording first issued to the public in South Africa were gramophone records which bore the required mark. The cartridges of the Beatles 'Let it be' which bore no mark or indication of the year of first issue were issued by EMI (South Africa) (Pty.) Ltd., and the omission of the mark was in error and did not take place with the sanction of the applicant.'

The gramophone record to which reference is made was handed into Court and bears the required mark.

The said Hall in an affidavit attached to Fraser's replying affidavit, deals with this aspect. He iterates the fact that this was done without the knowledge and consent of the applicant. He refers to the agreement which is annexure 'B' to the said Fraser's original affidavit and particularly to para. 7 thereof which places an obligation on EMI (S.A.) to ensure that all copyright obligations would be fulfilled.

He points out that EMI (S.A.) had for many years issued records on behalf of the applicant. In the case of gramophone records it has since the coming into effect of the Copyright Act, 1965, seen to it that the year of first making of such record was placed on the label or container. It is submitted by the said Hall that there were no other reasonable steps which the applicant could have taken to ensure that records embodying the applicant's recordings bore the required mark.

 In regard to the position in the United Kingdom the third respondent states that he paid a visit to London during June, 1971. While there he ascertained that eight track stereo cartridges embodying the sound recordings known as 'George Harrison - The Beatle' were freely on sale in London under the labels of Parrot Records Inc. and London Records Inc. The knowledge, he says, he imparted to one David Lee, an attorney of the firm of Tringhams, who has been practising law in England for 15 years. The said Lee, so it is averred, expressed the opinion that, having regard to the provisions of sec. 12 (5) and (6) of the English Copyright Act,

   'it would not constitute an infringement of the copyright in the sound recording as such if a person made records embodying the recording by reason of the fact that the records were issued without a label or other mark indicating the year in which the recording was first published'.

According to the third respondent an affidavit setting out the aforesaid had been called for from the said Lee and would be filed upon arrival.

Apart from other considerations no such affidavit was before me at the hearing of this matter.

It seems clear that the sound recordings referred to by the third respondent as 'George Harrison - The Beatle' was intended to be 'George Harrison - All things must pass' and 'The Beatles - Let it be'. Two affidavits which have been filed in reply to the third respondent's factual allegations are that of the said Hall and that of one Laurie Krieger. The former describes the allegations by the third respondent as being false. It is stated that the applicant has never marketed the said recordings under the labels of Parrot Records Inc. or London Records Inc. It is stated that the only manner in which tape  G recordings of the said sound recordings are offered for sale by the applicant in the United Kingdom are as indicated by boxes and labels which have been annexed by the said Hall. From these it is clear that there is no reference to either of the said two firms. It is, moreover, indicated by the said Hall that all records including tape recordings sold by the applicant in the United Kingdom have on them the latter 'P' in a circle together with a date which is the accepted way in which the record industry indicates the year of publication. Krieger, a record dealer in London having upward of twenty retail shops and who has been associated with the record industry for ten years, says that he has never had in his stock or sold records, tapes or cartridges of 'All things must pass' by George Harrison and 'Let it be' by the Beatles under either the 'Parrot' or 'London' labels. He has in any event never heard of such recordings being sold or distributed under such labels in the United Kingdom.

It is clear from the aforegoing that the first respondent's defence on the papers to the present application was twofold. It is in the first instance denied that the sound recordings concerned in the present matter enjoy copyright protection for the reason that when the original recordings were issued they did not bear the marks to which I have referred. This defence relates to the provisions of sec. 13 (5) of the South African Copyright Act, 63 of 1965, as amended, with which I shall presently deal.

In the second instance the question is raised as to whether the first respondent when it imported the said cartridges and sold them had knowledge that it was infringing copyright.

Counsel for the applicant in his main argument proceeded to deal with the matter on this basis, and the position in regard to the South African Copyright Act was first considered.

Section 13 (1) of the said Act provides as follows:

   'Copyright shall subsis, subject to the provisions of this Act, in every sound recording which is made in the Republic or of which the maker was a qualified person at the time when the recording was made.'

 The definition of 'sound recording' in sec. 1 of the said Act is as follows:

   ''Sound recording' means the aggregate of the sounds embodied in and capable of being reproduced by means of a record of any description, other than a sound track associated with a cinematograph film.'

Having regard to this definition it seems clear to me, as was suggested by applicant's counsel, that the sound recording in which copyright subsists takes the physical form of a record, i.e. the sound as reproduced on a record.

With regard to the provisions of sec. 13 (1) of the said Act it is obvious that the recordings with which one is here concerned were not made in South Africa. As to whether the 'maker' was a qualified person at the time when the recording was made regard must be had to the definition of 'qualified person' as set out in sec. 1 of the said Act which deals therewith as follows:

   ''Qualified person,' for the purposes of any provisions of this Act which specifies the conditions under which copyright may subsist in any description of work or other subject-matter, means

   (a)   in the case of an individual, a person who is a South African citzen or is domiciled or resident in the Republic; and

  (b)   in the case of a body corporate, a body incorporated under the laws of the Republic.'

In the light of this definition it follows that the applicant without more derives no protection from sec. 13 (1) of the said Act.

The contention put forward on behalf of the applicant that it was an English company was challenged by counsel for the respondents. I shall deal with this question when I come to the submissions put forward on behalf of the respondents. Accepting for the moment that the applicant is an English company, the necessary protection must be found elsewhere and it was submitted that such protection was to be found under international arrangement which must be sought in the Berne Convention to which both the Republic of South Africa and the United Kingdom are signatories. Before proceeding to examine the position in terms of the said Convention and the protection afforded by legislation both here and in the United Kingdom in relation to the international arrangement, it is apposite to refer to the other provisions of sec. 13 of the South African Copyright Act. In terms of sec. 13 (2) the copyright referred to in sub-sec. (1) enjoys protection for a period of 50 years from the end of the calendar year in which the recording is made.

Sec. 13 (3) provides that it is only the maker of a sound recording who is entitled to copyright protection. The proviso to this sub-section is not for present purposes applicable.

Sec. 13 (4) provides for protection of copyright in regard to sound recordings against direct infringement, i.e. the making of a record embodying the recording, that is to say, where the person himself makes a copy.

In sec. 13 (5) the following is provided:

   'The copyright in a sound recording is not infringed by a person who does any act referred to in sub-sec. (4) in the Republic in relation to a sound recording or part of a sound recording, if -

   (a)   records embodying that recording or that part of the recording, as the case may be, have previously been issued to the public in the Republic; and

   (b)   at the time when those records were so issued neither the records nor the containers in which they were so issued bore a label or other mark indicating the year in which the recording was made.

   Provided that this sub-section shall not apply if it is shown that the records in question were not issued by or with the licence of the owner of the copyright or that the owner of the copyright had taken all reasonable steps for ensuring that records embodying the recording or part thereof would not be issued to the public in the Republic without such a label or mark either on the records themselves or on their containers.'

From the facts, and particularly those put forward on behalf of the respondents, it is clear that the provisions of sec. 13 (5) of the said Act, to which I have referred, are of importance in the present matter.

As I have indicated sec. 13 (4) of the said Act is concerned with direct infringement, i.e. where a person himself makes a record embodying the recording. Sec. 17, however, deals with indirect infringement of copyright subsisting, inter alia, in sound recordings.

Sec. 17 (2) provides that

  'Any copyright subsisting by virtue of this Chapter is infringed by any person who without the licence of the owner of copyright imports an article (otherwise than for his private or domestic use) into the Republic, if to his knowledge the making of that article constituted an infringement of that copyright or would have constituted such an infringement if the article had been made in the place into which it is so imported.'

Sec. 17 (3) reads as follows:

  'Any such copyright is also infringed by any person who in the Republic and without the licence of the owner of the copyright -

   (a)   sells, lets for hire or by way of trade offers or exposes for sale or hire any article; or

   (b)   by way of trade exhibits an article in public, if to his knowledge the making of the article constituted an infringement of that copyright or (in the case of an imported article) would have constituted an infringement of that copyright if the article had been made in the place into which it was imported.'

On the facts to which I have referred it must be accepted that the first respondent imported the said stereo cartridges into the Republic and that it offered the said cartridges for sale.

It was also submitted by Mr. Kentridge, on behalf of the applicant, that on the papers it was clear that the first respondent did not have the licence of the copyright owner, the applicant, for doing the aforesaid. I shall at a later stage return to the question as to whether the applicant is for the purposes of the said Act the copyright owner but, accepting this contention for the moment, it seems to me that in terms of the said sub-sections of sec. 17 an infringement takes place if any person without the licence of the owner of the copyright of a sound recording imports a copy of the sound recording into the Republic (otherwise than for his private or domestic use), if to this knowledge either (i) the making of the copy constituted an infringement of the copyright; or (ii) the making of the copy would have constituted an infringement if the copy had been made in the Republic. Even if, therefore, a copy may lawfully have been made in the place where it was made, its importation into the Republic without the licence of the owner of the copyright could constitute an infringement of the copyright in this country. See Halsbury, Laws of England, 3rd ed., vol. 8, para. 782, pp. 431, 432, which goes so far as to suggest that, even if the copy was made with the permission of the copyright owner in the place where it was made, it would constitute an infringement to import such copy without the permission of the owner of the copyright in the place where they were so imported.

Adverting to the position in the present case it is clear, in the first instance, that no copyright protection subsists in the U.S.A.; that, although the said cartridges were made in the U.S.A. without the licence of the copyright owner, no infringement of copyright occurred by reason thereof. The importation thereof into the Republic, however, could constitute an infringement of copyright if such importation takes place without the licence of the owner of the copyright.

As will be seen from an examination of sub-secs. (2) and (3) of sec. 17 knowledge on the part of the infringer is a prerequisite. Respondents in their affidavits say that they had no knowledge that copyright subsists in regard to the said cartridges. In an action for damages arising from an infringement of copyright it appears that mere notice to the infringer is not sufficient. A reasonable opportunity must be afforded to enable the infringer to ascertain whether there has in fact been an infringement of copyright. See Copeling. Copyright Law, p. 142; Van Dusen v Kritz, (1936) 2 K.B. 176 at p. 182.

Regard being had to the nature of the present proceedings, however, it was submitted on behalf of the applicant that, apart from the fact that notice was in fact given to the respondents before the present application was brought, they had knowledge from the time of service upon them of the applicant's affidavits. Respondents have, however, despite this persisted up to the present time in their attitude that they are entitled to import and sell the cartridges which form the subject of this application. I shall return to this aspect when I come to deal with the submissions made by respondents' counsel on the question of knowledge.

In his main submission to the Court applicant's counsel contended that, in view of the aforegoing, the only question, on the papers, was whether it has been shown that the said articles are subject to copyright. In this regard it was contended by him that it was not necessary for the applicant to rely on the presumptions created by secs. 13 (6) and 21 (6) of the said Act because it was not disputed on the papers that the applicant was the maker of the said recordings.

Provided, therefore, the applicant could show that the provisions of the said Act were applicable to it, the submission was that the following had been established:

   (1)   that the applicant is the owner of the copyright in the said recordings;

   (2)   that the applicant has given no licence for the importation or sale of the said recordings;

   (3)   that if the said recordings had been made in the Republic instead of being imported such making would have constituted an infringement of its copyright;

   (4)   that the respondents having had knowledge of the position from the time of the commencement of these proceedings it follows that the importation and sale of the said recordings constituted an infringement of applicant's copyright.

The applicant being an English company it was, however, as already indicated, required to have recourse to the international arrangement in order to avail itself of the protection afforded by the provisions of the South African Copyright Act.

Reference was made to sec. 32 of the said Act, the relevant provisions whereof are as follows:

   '(1) The State President may by proclamation in the Gazette provide that any provisions of this Act specified in the proclamation shall in the case of any country so specified apply -

   (a)   in relation to literary, dramatic, musical or artistic works, cinematograph films or editions first published, and sound recordings first made, in that country, as it applies in relation to literary, dramatic, musical or artistic works, cinematograph films or editions first published, and sound recordings first made, in the Republic;

   (b)   in relation to persons who at a material time are citizens or subjects of that country as it applies in relation to persons who at such a time are South African citizens;

   (c)   in relation to persons who at a material time are domiciled or resident in that country as it applies in relation to persons who at such a time are domiciled or resident in the Republic;

  (d)   in relation to bodies incorporated under the laws of that country as it applies in relation to bodies incorporated under the laws of the Republic;

   (e)   .....

   (2) A proclamation under this section may provide -

   (a)   that any provisions referred to therein shall apply subject to such exceptions or modifications as may be specified in the proclamation; (b) that such provisions shall so apply either generally or in relation to such classes of work or classes of cases as may be so specified.'

Subject to the condition therein stated sub-sec. (3) of sec. 32 provides that no proclamation is to be issued in terms of the said section in respect of any country which is not a party to a convention relating to copyright to which the Republic is also a party.

It is, therefore, clear that the basis of extending the provisions of the said Act to other countries depends upon the existence of reciprocity with such other countries.

By Proc. R. 73 of 1966, published in Government Gazette 635 of 18th March, 1966, the State President exercised the powers vested in him by sec. 32 of the said Act. The said Proclamation is headed 'Extension of Copyright Protection to Countries which are members of the Berne Copyright Union'. The said Copyright Union is the Union constituted by the Berne Convention. It is common cause, as I have already indicated, that the Republic of South Africa and the United Kingdom are signatories to the said Convention and members of the said Union.

Sub-paras. (a), (b), and (c) (ii) of para. 3 are relevant to the present matter. They provide as follows:

   '3. Subject to the following provisions of this Proclamation, the provisions of Chaps. I and II (except sec. 15) of the Act, and all the other provisions of the Act relevant thereto, being the provisions relating to literary, dramatic, musical and artistic works, sound recordings, cinematograph films and published editions of literary, dramatic or musical works, shall apply in the case of each of the countries mentioned in the First Schedule hereto as follows:

  (a)   in relation to literary, dramatic, musical or artistic works, cinematograph films or published editions first published and sound recordings first made in that country just as they apply in relation to such works, films or editions first published and sound recordings first made in the Republic;

   (b)   in relation to persons who, at a material time are citizens or subjects of, or domiciled or resident in that country, just as they apply in relation to persons who, at such a time, are nationals of the Republic or domiciled or resident in the Republic;

   (c)   in relation to bodies incorporated under the laws of that country, just as they apply in relation to bodies incorporated under the laws of the Republic: Provided that -

      (i)   .....

      (ii)   where copyright subsists by virtue of this Proclamation in any sound recording, it shall subsist only to the extent that protection in the nature of or related to copyright is granted under the laws of its country of origin in respect of a sound recording first made in the Republic of South Africa, and no such sound recording shall enjoy any wider protection by virtue of this Proclamation than is enjoyed in its country of origin by a sound recording first made in the said Republic.'

   'Country of origin,' in so far as it is relevant in the present case, is defined in sec. 2 of the said Proclamation as meaning

  '(i)   in the case of published work or subject-matter, if the country of first publication is a country mentioned in the First Schedule hereto, that country.'

The United Kingdom is one of the countries mentioned in the said First Schedule.

The provisions of sec. 3 of the Proclamation to which I have referred seem to indicate that an English company and sound recordings first made in the United Kingdom are equated to the position of South African companies and sound recordings first made in the Republic. In terms of sec. 3 (c) (ii) the Proclamation, however, only affords protection in a sound recording to an English company to the extent that the laws of the United Kingdom gives protection in a sound recording first made in the Republic to a South African company.

Provided, therefore, that the provisions of sec. 3 (c) (ii) of the said Proclamation are complied with, the provisions of the South African Copyright Act, and more particularly those I have already dealt with, would be applicable to the applicant.

On behalf of the applicant reference was made to Hall's affidavit annexed to Fraser's reply, in which he mentions the English Copyright Act, 1956, and refers particularly to sec. 12 of the said Act which is quoted in full.

In his main argument it was submitted by counsel for the applicant that sec. 13 of the South African Copyright Act was based on sec. 12 of the English Copyright Act.

Reference was had to the United Kingdom Order-in-Council of 1964 which was annexed by the said Hall to his aforesaid affidavit and which is the counterpart, so to speak, of our Proclamation of 1966. In terms thereof, so it was submitted, the protection of the English Copyright Act is extended, inter alia, to the Republic of South Africa. It was contended that there was complete reciprocity between the Republic of South Africa and the United Kingdom and that the applicant as an English company should, regard being had to the provisions of the said Proclamation, be looked at as though it were a South African company and therefore a 'qualified person'.

If the aforegoing submissions are correct and if the applicant is in fact an English company, then, regard being had to the facts relating to the various agreements and the manner in which the said two recordings came into existence, it would appear that the applicant is in fact the maker of and the holder of copyright in the said two recordings.

The submissions made on behalf of the applicant with regard to the applicability of the provisions of the said Proclamation and hence that of the provisions of the South African Copyright Act were challenged by counsel for the respondents in argument before me. For the sake of convenience I have underlined certain words which follow hereinafter.

It was contended that the basic and essential difference between the provisions of sec. 13 (1) of the South African Copyright Act and sec. 12 (2) of the English Copyright Act lay therein that in the former copyright protection is only extended to recordings made in the Republic whereas the latter affords copyright protection to recordings first published in the United Kingdom. The definitions of 'maker' and 'publication' as they appear in sec. 1 of the South African Copyright Act, so it was argued, made it clear that they are different concepts to which different tests are applicable.

It was conceded that copyright protection was, however, also granted to a 'qualified person' and that in this respect sec. 13 (1) of the South African Copyright Act and sec. 12 (1) of the English Copyright Act were the same but, it was argued, that there was no complete reciprocity between the Republic and the United Kingdom because of the different tests applied in the extension of copyright protection.

The question was posed as to whether South African copyright extended to sound recordings made in the United Kingdom. In arguing that it does not so extend counsel for the respondents referred to sec. 32 (1) (a) of the South African Copyright Act and contended that it is clear that the State President is empowered by proclamation to extend the provisions of the South African Copyright Act to, inter alia, the United Kingdom, in relation to sound recordings first made (not published) in that country as it applies to sound recordings first made (not published) in the Republic. If regard is had to the Proclamation, then para. 3 (a) thereof makes it clear that the provisions of the South African Copyright Act are made applicable, inter alia, to the United Kingdom in relation to sound recordings first made in that country just as they apply in relation to sound recordings first made in the Republic.

With regard to bodies incorporated under the laws of that country it was pointed out that the proviso contained in para. 3 (c) (ii) of t hesaid Proclamation states that no sound recording shall enjoy any wider protection by virtue of the said Proclamation than is enjoyed in its country of origin by a sound recording first made in the said Republic.

 Counsel for the respondents put forward the following rhetorical question and answer.

   'What protection would the United Kingdom give to a sound recording first made in the Republic? The answer is none.'

In support of this reference was had, firstly, to the provisions of sec. 12 of the English Copyright Act, and it was pointed out that in terms thereof there is no copyright protection in the United Kingdom for sound recordings made in the United Kingdom; for copyright protection the emphasis is on the first publication of the recording in the United Kingdom. It follows, therefore, so it was contended, that copyright protection under the provisions of the English Copyright Act cannot be extended to sound recordings made in the Republic.

The United Kingdom Order-in-Council, moreover, makes it clear that the provisions of the English Copyright Act relating to sound recordings are, inter alia, extended to the Republic in relation to soundrecordings first published in that country as they apply in relation to such recordings first published in the United Kingdom.

According to the contention of the respondents' counsel it is in the end result the last part of the proviso in para. 3 (c) (ii) of the Proclamation of 1966 which prevents copyright protection being granted to recordings from the United Kingdom and it was submitted that the fact that the applicant may have shown that it is by reason of the international arrangement a 'qualified person' in no way assists it, because the last portion of the said proviso prevents reciprocity in the full sense.

In my opinion it is, of course, correct to say that while the South African Copyright Act gives protection to sound recordings made in the Republic wherever published (sec. 13 (1)), the English Copyright Act gives protection to sound recordings first published in the United Kingdom wherever made (sec. 12 (2)), but I agree with the submission made by applicant's counsel in his reply, that both Acts furthermore provide that copyright subsists in sound recordings of which the maker was a 'qualified person' at the time when the recording was made, wherever the recording was made or published. The latter provision is of course disjunctive. Copeling, supra at p. 61; Copinger & Skone James on Copyright, 10th ed., para. 811, p. 304.

In regard to the latter provision the two Acts are therefore identical.

As I have already indicated the United Kingdom Order-in-Council of 1964 extends copyright to the Berne Convention signatories of which South Africa is one. This it does on two bases:

   '(a)   in relation to literary, dramatic, musical or artistic works, sound recordings, cinematograph films or published editions first published in that country, as they apply in relation to such works, recordings, films or editions first published in the United Kingdom',

and

   '(b)   in relation to persons who, at a material time (as hereinafter defined) are citizens or subjects of, or domiciled or resident in that country, as they apply in relation to persons who, at such a time are British subjects or domiciled or resident in the United Kingdom,

   (c)   in relation to bodies incorporated under the laws of that country as they apply in relation to bodies incorporated under the laws of any part of the United Kingdom'.

Copinger & Skone James, supra, pp. 747 - 8; see also record p. 128.

If regard is had to the definitions of 'qualified person' in the South African Copyright Act as also in the English Copyright Act - as to which see Copinger & Skone James, supra at p. 511, - then sub-paras. (b) and (c) of the said Order-in-Council, in my view, have reference to 'qualified persons'.

It follows, therefore, that in regard, inter alia, to sound recordings copyright protection is extended not only to sound recordings first published in South Africa but also to sound recordings made by South African 'qualified persons' wherever made or published. The said sub-paras. (b) and (c) of the said Order-in-Council, in other words, extend to South Africans the protection given to United Kingdom 'qualified persons' under sec. 12 (1) of the English Copyright Act.

It is, therefore, not without more, correct to say, as counsel for the respondents put it, that the United Kingdom would give no protection, to a sound recording first made in the Republic. Protection would, it is  D true, not be afforded solely by reason of the fact that it was made in the Republic, but full protection would, in my opinion, be given to it if its maker were a South African 'qualified person' or company.

I turn now to the provisions of the Proclamation of 1966. Para. 3 (a) thereof deals with sound recordings first made, inter alia, in the United Kingdom. Paras. 3 (b) and (c) make the provisions of the South African Copyright Act, including sec. 13, applicable to United Kingdom qualified persons, and in regard to bodies incorporated in the United Kingdom the said provisions apply just as they apply in relation to bodies incorporated in the Republic. This is, of course, subject to the proviso contained in para. 3 (c) (ii), to which I have already referred.

The words 'only to the extent that' in the first part of the proviso and the words 'any wider protection' in the second part thereof are of importance, and I agree with the submission made by counsel for the applicant in his reply, that in each case where one seeks to invoke the provisions of the Proclamation one must, regard being had to the said words in their context, ask the question 'to what extent do the laws of the country of origin of this recording protect a recording first made in South Africa?' From what I have said above the answer in the present case would be only to the extent that it is made by a South African qualified person or company. A United Kingdom recording, therefore, only enjoys protection to the extent that it is made by a United Kingdom qualified person or company. It, therefore, does not enjoy 'any wider protection' than is enjoyed in the United Kingdom by a recording first made in the Republic.

It seems to me that it could not have been the intention that the law of our country should correspond exactly with the law of the country of origin, and I find myself in agreement with counsel for the applicant when he says that had this been the intention the words 'only to the extent that' would not have been used. Those words in the view I take of the matter indicate that partial reciprocity can exist and this for the reason that it was appreciated that the copyright laws of the various countries mentioned in the First Schedule to the said Proclamation in regard to sound recordings must vary the one from the other. The aforegoing in my view disposes of the first point raised on behalf of the respondents.

The next point raised by counsel for the respondents was that, although it was argued on behalf of the applicant that it was an English company and by reason of the international arrangement a 'qualified person' for the purposes of the South African Copyright Act, it had failed on the papers to establish its status. It was argued that there was no allegation in the applicant's affidavit to the effect that it was incorporated in the United Kingdom nor for that matter was there any submission that it is a 'qualified person'. In reply it was urged upon me by counsel for the applicant that this Court would be entitled to proceed on the legal inferences to be drawn from all the allegations of fact in the papers. The Court is not, so it was contended, bound by submissions of law made in the founding affidavit. Having regard to the decisions in Van Rensburg v Van Rensburg en Andere, 1963 (1) SA 505 (AD) at pp. 509 - 510; Smith v Ring van Keetmanshoop N.G.K., Suidwes-Afrika, 1971 (3) SA 353 (SWA) at pp. 359 - 360, I am of the view that the aforesaid submissions are correct.

The present case is, moreover, not a case, in my opinion, where, if the submission had been made specifically the respondents could have had contradictory evidence. Cf. Sentrale Kunsmis Korporasie (Edms.) Bpk. v Kunsmisverspreiders (Edms.) Bpk., 1970 (3) SA 367 (AD) at p. 404E.

Furthermore, it does not appear to me that the respondents could or might seriously have disputed the status of the applicant.

Adverting to the applicants founding affidavit, I have already in dealing therewith indicated that Hall states that the applicant's registered office is at Blythe Road, Hayes, Middelsex, England. This was not disputed by the respondents.

The notarial certificate which appears on p. 9 of the papers refers to 'the English company styled the Gramophone Company Limited'.

There are, moreover, numerous references in the annexures to 'The Gramophone Company Limited, Hayes, Middelsex, England'. (See in this regard annexures W.F.1 and W.F.2 at p. 104; H.B.1 to H.B.8 at pp. 119 to 126; P at p. 75).

Regard being had to the papers before me it is my view that the inference to be drawn is that the applicant is a company incorporated in the United Kingdom. It is difficult to conceive that a non-United Kingdom company would have its registered office in the United Kingdom. Cf. sec. 2 (1) (b) read with sec. 107 of the English Companies Act, 1948.

It was furthermore argued on behalf of the respondents that the applicant has failed to show that the first recording of the recordings in question occurred in the United Kingdom. In support of this contention respondents' counsel referred to the schedule in Hall's main affidavit. It was pointed out that there is no reference in this schedule to a date of first recording in the United Kingdom. What does appear is merely a column headed 'Date of recording' with no crisp date given. As against this there is, however, a column headed 'Date of first issue in the United Kingdom' in which crisp dates are given.

I do not think there is substance in this contention.

The said schedule has to be read in conjunction with the rest of Hall's said affidavit. From this it is clear, as I have already indicated when dealing with the facts, that it was not disputed by the respondents that in regard to the recordings 'Let it be' and 'All things must pass' the artists attended at the request and expense of the applicant at the places mentioned in the second column of the schedule to render performances whereby these recordings were produced.

According to the schedule both recordings were produced at London studios.

The fact that the precise dates of the recordings are not given does not in my view take the matter any further. As to whether they were first recordings, this, in my view, follows from Hall's affidavit. The performances rendered by the said artists were 'live' performances and the recordings produced were obviously first recordings. It has, in my opinion, therefore, been shown on the papers before me that the recordings 'Let it be' by the Beatles and 'All things must pass' by George Harrison were first recorded during the periods mentioned in the said schedule; that they were so recorded in the United Kingdom and that the applicant is the maker of the said recordings.

The next point raised by respondents' counsel deals with the meaning of the 'P' mark on recordings. It was contended that, even where the 'P' mark appeared on the South African recordings, it is by no means clear from the applicant's affidavits that the use of this mark in the Republic indicates the year of making the recording as required by the provisions of sec. 13 (5) of the South African Copyright Act. The deponents on behalf of the applicant, so it was argued, have by the indiscriminate use in relation to the 'P' mark of words such as 'published', 'publication', 'manufacture', 'issue' and 'making' demonstrated complete confusion.

In setting out the facts in the present matter I was careful in dealing with the averments by deponents in regard to the use of the letter 'P' on recordings to use the words employed by them when dealing with this letter. While I think it is correct to say that Fraser in dealing with the letter 'P' on recordings in South Africa has not consistently used the words 'manufacture' or 'make' but has also employed the words 'issue' and 'publication' he has when employing the latter words, it seems to me, done so in reply to the third respondent and the deponent Becker who have themselves used the latter words in the wrong context. What confusion there is seems to me to have arisen in this way.

But even if I am wrong in this assessment, it seems to me that the point raised on behalf of the respondents is in any event disposed of for the following two reasons.

It is quite clear that both Hall and Fraser have a clear understanding of the meaning of the letter 'P' on recordings. According to Hall the letter 'P' with a date is in the United Kingdom the accepted way in which the record industry indicates the year of publication. Fraser on the other hand when dealing with the provisions of sec. 13 (5) of the South African Copyright Act and sec. 12 (5) and (6) of the English Copyright Act, and more particularly with certain cartridges the boxes whereof were alleged to have had no indication on them as to when the recordings were first made, says that the letter 'P' enclosed in a circle and followed by a date is the accepted way of indicating the year of manufacture of the first recording. In the context Fraser, in my view, is clearly referring to the position in the Republic.

In the second instance it is, in my view, regard being had to the provisions of sec. 13 (5), for the respondents to allege and prove that records previously issued did not bear 'a label or other mark indicating the year in which the recording was made'. This the respondents have, in my opinion, failed to do. There is nothing to this effect in the affidavit of the third respondent nor for that matter in the affidavit of Becker. On the contrary their affidavits as I have already indicated, merely allege that neither the said records nor containers bore a label or other mark indicating the year in which the recording was first published.

It becomes necessary to deal more specifically with the two recordings in question. With regard to 'All things must pass,' it seems clear that this recording in the Republic always bore the 'P' mark followed by the date, 1970.

The schedule in Hall's affidavit moreover, bears out the fact that 1970 was the year of first making as well as first issue.

Sec. 13 (5) of the South African Copyright Act does not, therefore, assist the respondents in any way.

In respect of the sound recording 'Let it be' I have already indicated that this was issued in cartridge form in South Africa without the 'P' mark. When dealing with this aspect I quoted Fraser's explanation from which it appeared that the cartridges in question were manufactured in South Africa and were issued during the period May to August, 1971. It cannot be disputed that the infringing recordings were issued by the first respondent in April, 1971. It follows, therefore, that the cartridges which did not bear the required label or mark were not previously issued to the public in the Republic. The provisions of sec.13 (5) of the said Act do not, therefore, assist the respondents.

The fact that the date of recording, as reflected in the schedule in Hall's affidavit, is in 1969 and to which the respondents referred in argument does not, therefore, as I see it, take the matter any further.

By reason of the aforegoing the question as to whether the applicant took all reasonable steps to ensure that the said recording would not be issued in the Republic without the necessary label or mark as set out in the proviso to sec. 13 (5) of the said Act falls away. I am nevertheless of the view that the applicant has shown, in the circumstances of the present case, that all reasonable steps were taken.

The submission on behalf of the respondents that, having regard to the provisions set out in paras. 12 (e) and 13 of the agreement between E.M.I. (S.A.) and the Parlophone Company Ltd., annexure 'B' to Fraser's main affidavit, the applicant could and should have availed itself of the rights therein recorded, does not persuade me to take the contrary view.

In terms of the said paragraphs the applicant has the right to inspect the records and the methods and processing of pressing and preparing them on the premises where the records are pressed and prepared by E.M.I. (S.A.). In addition the applicant has the right to call for copies of all recordings made by E.M.I. (S.A.) for issue.

There is, so it was contended, nothing to indicate that the applicant had taken any of these steps by which it could have ensured that the necessary label or mark appeared on the said recordings. In my view regard must be had to the particular circumstances of the case. An experienced and reliable licensee had been appointed who, so it would appear, knew and appreciated the importance of the mark. From the papers it would appear that in general the mark was in fact applied. Had the steps referred to by the respondents, therefore, been applied by the applicant from time to time this fact would have emerged to satisfy the applicant that the agreement in this respect was being adhered to.

The last issue to be dealt with relates to the question of knowledge. I have already touched upon this question and I then indicated that in terms of sec. 17 (2) and (3) of the South African Copyright Act, knowledge on the part of the infringer is a prerequisite.

Sec. 17 (3) of the said Act deals, inter alia, with infringement by sale or offer for sale. These are interdict proceedings. Having regard to this the applicant is at this stage seeking, as I see it, to prevent the issuing of infringing records. For present purposes, therefore, it seems to me to be correct to say that knowledge at the time of sale or offer is all that need be shown. This knowledge the respondents would now have.

I propose, however, to examine whether on the papers it can be said that the respondents had knowledge at the time of the importation of the said recordings or alternatively when these proceedings were instituted.

Before proceeding to deal with the facts it is necessary in view of the arguments put forward on behalf of the respondents to determine what is meant by 'knowledge' in terms of sec. 17 (2) and (3) of the said Act. In this regard I can find no fault with the submission that it means

   'notice of facts such as would suggest to a reasonable man that a breach of copyright law was being committed'.

See Halsbury, Laws of England, 3rd ed., vol. 8, para. 782, p. 431, footnote (e).

Knowledge of who the copyright owner is would, therefore, not be necessary.

I have already in dealing with the facts set out how the respondents came to import the said cartridges. That to which they testified is borne out by certain correspondence between the Scorpio Music Distributors Inc. and the company which conducted negotiations on behalf of the first respondent.

It was submitted on behalf of the applicant that no reasonable man in the record business could honestly have believed that recordings by 'The Beatles' were not subject to copyright. I do not see sufficient on the papers before me to make such a finding. The fact that the said cartridges which were offered by the said American company were advertised in a publication which I must accept to be a recognised trade directory seems to me to mitigate against a finding such as I have been asked to make. The matter, in my view, is, on the papers before me, open to doubt.

On the papers before me, however, I am able to make a more positive finding on the question as to whether the respondents had the requisite knowledge at the time when these proceedings were instituted.

There is in the first instance the letter from the applicant's attorney, dated 14th April, 1971. It is true that this letter may not have indicated which recordings were being complained of nor exactly who the copyright owners were in respect of particular recordings. In regard to the latter I have already indicated that this was not necessary.

As far as the former was concerned the said letter does not stand in isolation.

On the same day the said Golembo had visited the premises of the first respondent and had there pointed out to the second and third respondents that the

   'South African copyright in the stereo cartridges they were selling vested in other parties'.

The respondents' attorney on 16th April, 1971, undertook 'to investigate the position'. Despite this I find nothing in the papers to suggest that any real enquiries were made with regard to the copyright in these recordings.

Thereafter, and on 22nd April, 1971, as I have indicated, one of the companies which had an interest in the stereo cartridges sold by the first respondent obtained an order from this Court, while on 26th April, 1971, an undertaking was given by the respondents to Decca Record Company Ltd. It is, moreover, clear that the cartridges bought by Becker, the respondents' attorney, contained a clear indication that copyright subsists (see annexure 'O'). Regard being had to the aforegoing it seems to me to be clear that the respondents at the commencement of these proceedings had notice of facts such as would suggest to a reasonable man that a breach of copyright was being committed.

By reason of the aforesaid I have come to the conclusion that the probabilities of success in the main action are overwhelmingly in favour of the applicant. I am in any event of opinion that the balance of convenience or hardship favours the applicant.

The question of costs has afforded me some difficulty. It was submitted by counsel for the applicant that the respondents ought not, particularly after the replying affidavits had been filed during November, 1971, to have persisted in the defences put forward. Their attitude in doing so, it was argued, was unmeritorious. The respondents, it was submitted, could have consented to the temporary interdict and put the applicant on terms as to the main action. It was urged upon me that I should, in the circumstances, not follow the normal procedure of reserving the costs for the decision of the trial Court.

I have come to the conclusion that some of the matters in issue were complex and difficult and were points which the respondents were entitled to raise at this stage, and that I should not accede to the submissions put forward on behalf of the applicant. In so far as it may be necessary I am clearly of the view that the fees of two counsel would be justified.

In the result para. 1 (a) of the rule nisi granted on 10th May, 1971, will be confirmed against the first and the third respondents. In regard to the second respondent the matter is postponed sine die.

 The applicant is ordered to institute its action within one month from the date hereof. The costs of this application is to be reserved for decision by the trial Court. In the event of the applicant failing to institute action as aforesaid the respondents will be entitled to their costs and the fees of two counsel will be allowed.

Applicant's Attorneys: Sloot, Broido, Hesselson & Liknaitzky. Respondents' Attorneys: Joel Melamed & Hurwitz.

JACANA EDUCATION (PTY) LTD v FRANDSEN PUBLISHERS (PTY) LTD 1998 (2) SA 965 (SCA)

Citation

1998 (2) SA 965 (SCA)

Case No

305/96

Court

Supreme Court of Appeal

Judge

Harms JA, Schutz JA, Scott JA, Zulman JA, Plewman JA

Heard

November 21, 1997

Judgment

November 27, 1997

Counsel

A B S Franklin for the appellant
A J Bester for the respondent

Annotations

Link to Case Annotations 

Judgment

Schutz JA:

Two competing maps of the Kruger National Park ('the park'), each with supplemental matter, are the subject of a copyright dispute. The appellant ('Jacana') was the first in the field. Later it was the unsuccessful applicant for a final interdict before Van Dijkshorst J in the Transvaal Provincial Division. The respondent is Frandsen Publishers (Pty) Ltd ('Frandsen').

Jacana's map is printed on both sides of a large foldable sheet. The actual map is broken into three sections, called northern, central and southern. As befits a map of the park, it depicts features such as the perimeter, roads, gates, rivers and camps. A striking feature of it is that pronounced colours are used to illustrate 16 different kinds of 'ecozone' or natural area, each having its own combination of underlying rock and soil, rainfall, elevation and slope, leading to differing patterns of vegetation and animal distribution. An illustrated cross-section of each of these areas is provided. Various commonplaces are included, such as a distance and travelling time table and a key to symbols depicting features such as waterholes, look-out points, camps and the like. The map includes a grid, plotting camps on one axis and a variety of services and facilities on the other. I shall describe it more fully later. The grid is also the subject of alleged infringement. The map contains the statements 'Created by Jacana Education and Kruger National Park' and 'Published by \C Jacana Education, Johannesburg 1993. It is common cause that the reference to Jacana is a reference to the appellant, Jacana Education (Pty) Ltd, which has traded under the name Jacana Education throughout, despite the fact that the company was formerly styled Term Holders (Pty) Ltd.

Unlike the map, which is sold at entrance gates and shops, Jacana distributes free copies of a leaflet showing gate opening and closing times, the trading hours of shops and restaurants, and the 'Rules and Regulations of the Kruger National Park' (the 'Rules'). These Rules deal with a diversity of matters such as not using roller skates in camp, adhering to the speed limits, remaining in one's car and not disturbing or feeding the animals. Jacana's version of the Rules is a further subject of alleged copyright infringement. At the foot of the last page of the leaflet appears the expression '\C Jacana Education' followed by a stylised depiction of a bird, the African Jacana. 

Frandsen's map is strikingly different in appearance and get-up. It comes in the form of a fold out booklet. The map is divided into seven sections, each on a separate page, preceded by a contents page showing the outline of the park and its division into seven sections. This makes the map more easy to use in a confined space than is Jacana's. The background colour is uniform and there is no attempt at all to indicate 'ecozones'. Again, boundaries, roads, gates, rivers, camps and the like are indicated. The roads are stylised compared with those of Jacana. Kinks have been ironed out. The symbols on the key are quite different, except for the general rondavel sign for camps, the statutory 'no entry' sign and the imagined blue of the lowveld rivers. Among the differences are Jacana's marking of a waterhole by a giraffe drinking, against Frandsen's more prosaic 'W'; Jacana's depiction of a swing gate against Frandsen's 'G'; and the former's depiction of a picnic site with a cup and saucer symbol against the latter's 'P'. The letters W, G and P are enclosed in coloured surrounds. When the two maps are compared there are differences in the print used, the spelling of names and their positions on the maps. Frandsen's map gives the elevation of hills whilst Jacana's does not. Hills are depicted in a different way. There is not an entire identity as to the hills which are depicted. Nor are all their positions identical. Some of the details of the courses of rivers differ. A distinctive feature of Frandsen's map is that the sheets are surrounded by drawings of wild animals. A striking difference in content is the depiction of neighbouring private reserves, such as Sabi Sabi, Londolozi and Timbavati. These do not appear on Jacana's map. A table of distances and a list of gate opening and closing times are included. There is also a grid, plotting camps against services and facilities, and a version of the Rules bearing similarity to that of Jacana, at least as far as content is concerned.

Unlike its map, which is divided into three parts, Jacana's grid is divided into two, northern and southern. The camps are listed on the vertical axis, and the facilities on the horizontal. The descriptions of the latter, which appear at the top and which read vertically, are tilted diagonally towards the right to make reading easier. The colour is white on green with black print. The camps are divided into four groups: main, such as Satara and Skukuza, private, bushveld and camping. Nineteen facilities are listed, such as 'petrol station', 'shop', 'restaurant' and 'conference facilities'.

Frandsen uses a single grid for the whole park, with the same basic layout. The colouring is near-black and blueish-grey upon white. The camps, needless to say, are the same. Frandsen adopts a classification the same as that of Jacana, save that it does not have the separate category of 'camping'. Another difference is that Jakkalsbessie is shown as a bushveld and not as a private camp. As with Jacana's grid, the ordering of camps within each category is, unsurprisingly, alphabetical. Seventeen facilities are shown on the grid. Another three, which appear on Jacana's grid as available only at Skukuza, 'doctor', 'bank' and 'post office', are listed as a separate item below Frandsen's grid. As can also cause no surprise, the facilities shown are largely common to the two grids, although their order differs. Items such as 'petrol', 'shop' and 'caravan site' are to be found on both grids. Examples of differences in selection for inclusion are that Jacana makes provision for 'educational display' and 'car hire' whereas Frandsen does not. The latter, on the other hand, lists 'refrigeration', 'first aid centre' and 'night drives', whereas the former does not. In some instances there is conflict as to whether a facility common to both grids is to be found at a particular camp, for instance whether there are camping and caravan facilities at Orpen camp. The visual appearance of the contrasted grids, in so far as that matters in a literary work, differs considerably.

Jacana claims copyright in the map as an 'artistic work', and the grid and Rules as 'literary works' - this in terms of s 2(1) of the Copyright Act 98 of 1978 ('the Act'). Under the subsection, in order to be eligible for copyright, these works must be 'original'. Although there is a dispute as to who the 'author' was, it is common cause that whoever or whatever that person was, he, she or it was a 'qualified person' for purposes of s 3(1).

Jacana further claims that Frandsen infringes its copyright in the map, the grid and the Rules, relying on ss 6, 7 and 23(1) of the Act, in that Frandsen's booklet constitutes a reproduction of Jacana's three works.

Frandsen opposes Jacana's application on two main grounds: first, that subsistence of copyright has not been proved because the originality requirement has not been established; and secondly that, in any event, an essential ingredient of infringement, copying, has also not been proved. Prominent in this part of the defence was stress on the common sources available to the parties, earlier maps and the like, which tended to make copying less likely and proof of it more difficult. Evidence on such matters tended to merge into that relevant to the first ground of opposition, lack of originality, because the existence of prior material tends also to limit the scope for originality and to require more exacting proof of its existence than is the case with truly original works. Although evidence of this kind may be relevant to what are two notionally distinct spheres, originality and copying, when one takes a broad look at the evidence of the preceding sources in this case, before one descends into the caverns of the law, one wonders how copyright infringement of a map of terra cognita is to be proved, unless reliance is to be placed upon the copying of special features ('Jock's last hunt', 'The fight with the crocodile', to take a famous example), rather than of mere cartographical commonalities.

In Jacana's founding affidavit the stand was taken that because of the operation of s 26 in relation to 'anonymous authors', it was rebuttably presumed that (a) copyright subsisted (s 26(3)); (b) Jacana, as publisher, owned the copyright (s 26(3)); and (c) the works were original (s 26(4) and (5)). Consequent upon this stand, practically no evidence of originality beyond bare assertion was tendered in the founding affidavit. Consistently with this view of the onus, some evidence was tendered in reply.

The learned Judge a quo accepted, for the sake of argument, that the s 26 presumptions did operate in Jacana's favour, but decided the case against it mainly on the basis that no infringement had been proved. However, notwithstanding the assumption as to the existence of copyright, the Judge commented on all three works, to the effect that in some respects, at least, they could not be original. There was no harm or inconsistency in this, as it was contended there was, because there was no confusion on the Judge's part and because the presumptions, even if they do apply, are rebuttable. So much for the proceedings below. In considering the appeal I think that the applicability of the presumptions should be addressed first.

The presumptions

Section 26 is contained in the infringement chapter of the Act and is headed 'Onus of proof in proceedings'. The relevant subsections read:

   '(3) Where in any proceedings brought by virtue of this chapter with respect to a literary, musical or artistic work or a computer program which is anonymous or pseudonymous it is established -

   (a)   that the work or program was first published in the Republic and was so published within the period of 50 years ending with the beginning of the calendar year in which the proceedings were brought; and

   (b)   that a name purporting to be that of the publisher appeared on copies of the work or program as first published,

   then, unless the contrary is shown, copyright shall be presumed to subsist in the work or program and the person whose name so appeared shall be presumed to have been the owner of that copyright at the time of the publication: Provided that this subsection shall not apply if the actual name of the author of a pseudonymous work is commonly known.

   (4) Where in any proceedings brought by virtue of this chapter with respect to a literary, musical or artistic work or a computer program it is proved or admitted that the author of the work or program is dead, the work or program shall be presumed to be an original work or program unless the contrary is proved.

   (5) Subsection (4) shall also apply where a work or program has been published and -

   (a)   the publication was anonymous or under a name alleged by the plaintiff or the State to be a pseudonym; and 

   (b)   it is not shown that the work or program has ever been published under the true name of the author or under a name by which he was commonly known or that it is possible for a person without previous knowledge of the facts to ascertain the identity of the author by reasonable inquiry.'

Common to the invocation of ss (3) and (5) is Jacana's assertion that the author of the map and the Rules (they being contained in two different publications) is anonymous. Indeed, it is a fact essential for Jacana to prove in order to bring the presumptions into operation. Yet the path to anonymity, after some strange twists, seems to me to peter out. Surprisingly, the deponent to the founding affidavit (Mrs Thomas) reveals herself and two others, Lana du Croq and Greg Stewart, to be authors in the normal sense. But she refrains from attempting to describe what they originated. Of course, she was not in the position of 'stout Cortez with eagle eyes' as he 'star'd at the Pacific . . . Silent, upon a peak in Darien'. The Kruger Park was well explored and well mapped. To establish that a new map which is original had been created would have required exacting demonstration. The resort to the presumptions spared this arduous labour. If the course adopted is a permissible one it must open a new chapter in copyright litigation. Anonymity, real or, even better, pretended, must become the preferred mode. If this case were not capable of decision on the footing that the authorship of both publications is not anonymous, it might have been necessary to enquire whether a plaintiff, who well knows who the author is, may resort to the presumptions arising from anonymous authorship. 

However that may be, Mrs Thomas in her founding affidavit justifies the absence of evidence of originality by claiming that the author was anonymous. The immediate enquiry is then whether that is in fact so.

The map (which includes the grid) states that it was 'created' by Jacana Education and the Kruger National Park. The two complementary verbs used in the definition of 'author' in s 1 are 'makes or creates'. Therefore the use of the word 'creates' is an indication of a claim to authorship. Is the authorship indicated anonymous or not? A publication is anonymous where the name of an author is wanting. That is not the case here. Two names are given, Jacana Education and Kruger National Park. The existence of anonymity appears to be a simple fact, unrelated to whether there has been a misnomer, that is where the wrong person has been named as author. On the face of it, accordingly, the author of the map is not anonymous. Jacana seeks to overcome this difficulty by contending that only a natural person can be the author of a literary or artistic work. I do not propose entering into the elaborate debate to which this submission may lead. Even if Jacana be correct about artificial persons, I fail to see how a person is not named when he is in fact named, even though he is not in law entitled to be an author. In any event, the name Jacana Education is not on the face of it that of a corporation, but rather that of a firm. So even the elementary factual basis for this elaborate legal argument is lacking.

As far as the leaflet containing the Rules is concerned, it simply says '\C Jacana Education'. Supposing that the Rules do constitute an original compilation, this name could be that of the publisher, that of a third party who has acquired the copyright, or that of the author. Once the third alternative is a clear possibility, to my mind Jacana fails to establish, also in the case of the leaflet, that the author was anonymous.

In reply there was an attempt to introduce pseudonymity (also catered for by s 26(3) and (5)). The point was not raised in the founding affidavit as a basis for the application of the presumptions. For that reason it cannot be raised now. Pseudonymity was not pressed in oral argument in this Court.

My conclusion is that the presumptions contained in s 26(3), (4) and (5) do not apply to either publication. As there was no attempt to prove originality by means of evidence in the founding affidavit, such a conclusion is fatal to the appeal. Mr Franklin rightly conceded as much. However, lest Jacana should feel that it has lost on a technicality or as a result of bad advice, I will say something brief about what would have been the merits of the case if the presumptions had operated and the onus of disproving originality had rested on Frandsen, with the consequence that Jacana would have been entitled to deal with originality in reply. 

The map

Even with reference to the reply there is a question whether Jacana has succeeded in meeting Frandsen's rebutting evidence upon which its denial of originality is based. I do not intend exploring that question because I consider that Jacana has, in any event, failed to establish infringement, where it bears the onus. As Corbett JA pointed out in Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A) at 280B--D, in order to prove copyright infringement by reproduction the plaintiff must establish two distinct things, namely

   '. . . (i) that there is sufficient objective similarity between the alleged infringing work and the original work, or a substantial part thereof, for the former to be properly described, not necessarily as identical with, but as a reproduction or copy of the latter; and (ii) that the original work was the source from which the alleged infringing work was derived, ie that there is a causal connection between the original work and the alleged infringing work, the question to be asked being: has the defendant copied the plaintiff's work, or is it an independent work of his own?'

It is upon the first element that I would focus. The existence of prior subject-matter may render proof of objective similarity more difficult for a plaintiff. Burger J said in Bosal Afrika (Pty) Ltd v Grapnel (Pty) Ltd and Another1985 (4) SA 882 (C) at 889C--D:

   'Mr Puckrin, on behalf of defendants, is correct when he argues that "the objective similarity'' must be judged in the light of the state of the art as at the date of the making of the alleged original work. Thus, although the alleged infringement and the original work may bear a close resemblance, this resemblance may be explained by the fact that they both incorporate common prior art.'

See also the remarks of Nicholas J in Laubscher v Vos and Others 3 JOC (W) at 6, where the learned Judge observed that in the case of truly original artistic works a mere comparison usually provides a ready answer, whereas the answer may not be so readily reached if the copyright and the alleged infringing works may have a common source.

The importance of the plaintiff's identifying those parts of his work which he alleges have been copied is made clear by Millett J in a case where a 'Dog-N-Boots' design was alleged to be a reproduction of a 'Puss-N-Boots' design. The case was Spectravest Inc v Aperknit Ltd [1988] FSR 161. The relevant passage appears at 170:

   'Accordingly, where the reproduction of a substantial part of the plaintiffs' work is alleged, a sensible approach is first to identify the part of the plaintiffs' work which is alleged to have been reproduced and to decide whether it constitutes a substantial part of the plaintiffs' work. The test is qualitative and not, or not merely, quantitative. If it does not, that is an end of the case. If it does, the next question is whether that part has been reproduced by the defendant. Reproduction does not mean exact replication. A man may use another's work as an inspiration to make a new work of his own, treating the same theme in his own manner; but he is not entitled to steal its essential features and substance and retain them with minor and inconsequential alterations. The question is whether there is such a degree of similarity between the salient features of the two works that the one can be said to be a reproduction of the other. In considering whether a substantial part of the plaintiffs' work has been reproduced by the defendant, attention must primarily be directed to the part which is said to have been reproduced, and not to those parts which have not.'

Moving from the general to the particular, a decision of the High Court of Australia concerning a map is instructive. It is reported as Sands & McDougall (Pty) Ltd v Robinson [1917] 23 CLR 49. The plaintiff was the author of an original work because:

   'He had unquestionably prepared it by taking the common stock of information in Australia and, by applying to it personal, that is, independent, intellectual effort in the exercise of judgment and discrimination, had produced a map that was new in the sense that, in respect of its size and outlines, its contents and arrangement and its general appearance, it presented both in its totality and in specific parts distinct differences from other existing maps.'

(Per Isaacs J at 52.)

The defendants (the appellants) had infringed the plaintiff's copyright for these reasons: 

   'It is true that the appellants changed the colours of the political divisions, corrected the Balkan boundaries, introduced some places that had then acquired recent prominence, and cut out some places that were interfered with by some further features of arrangement of their own map. Their map was not a mere copy in the ordinary sense of the term, but it was clearly a reproduction of a substantial part of the respondent's map in a material form, which necessarily violated the respondent's copyright if his work be protected by the Act. Notwithstanding all the differences referred to, there still remained in respect of size, of draftmanship, of style, of printing type, and geographical selection and general appearance, a manifest wholesale adoption of the individual work which the respondent had bestowed upon his map, and which had given to it its distinct characteristics and individuality.'

(At 52--3.)

How do the two maps in this case compare? Needless to say there were numerous maps of the park in circulation long before the parties entered the field. As one must have expected, those maps, like the maps of the parties, show the same boundaries, roads, rivers, camps, gates and so forth. Nor does one learn with any surprise that both parties used earlier maps, with the result that much is similar or the same. But the common features contained in the earlier maps should be put aside in considering whether there is an objective similarity between the maps in issue, such a similarity as may lead one to say that the one appears to be a reproduction of the other. Mrs Thomas made this important statement in her reply: '(Jacana) at no time stated that (Frandsen's) map and (Jacana's) map look alike. They do not.' The Judge below added his observation: 'Visually one would never say that the one map has been copied from the other.' I agree with him entirely. Had I not read the papers in this case it would never have occurred to me that Frandsen's map is a reproduction of Jacana's. Having heard argument that impression remains. It was pressed upon us that there had been a reproduction of a selection of features included by Jacana in its map. I have mentioned many of the similarities and dissimilarities between the two maps earlier in this judgment. Apart from overall impact, a study of details dependent on choice confirms the impression that the one map is not a reproduction of the other. This conclusion makes it unnecessary to consider the second element mentioned in Galago, causal connection, about which there was much evidence. The distinction between the two separate elements may be illustrated in this way. Suppose a tyro of great ineptitude attempts to paint a copy of a masterpiece, but the ensuing work is not recognisable as a copy. There would be no reproduction, however great the application of the tyro.

For these reasons I am of the opinion that Jacana has failed to prove infringement of the map.

The grid

The legal principles and problems mentioned in relation to the map are relevant also to whether the grid has been reproduced, so that there has been an infringement. Again I shall assume, without deciding, that Jacana displayed originality in making its compilation.

Jacana has rightly disavowed reliance on a grid format as such, on the division of camps into classes and on the idea of showing which facilities are available at which camps. Its complaint is that it has expended skill and effort in compiling the information set out in its grid and that Frandsen has reproduced it. In deciding whether there has been a reproduction regard must be had not only to similarities but also to dissimilarities. Many of the similarities are almost inevitable in two competent lists, for instance 'shop' or 'caravan park'. So they are of no real account. When one looks at the dissimilarities, they are quite numerous and they are not unimportant. I have set out some of them above. Jacana lists some facilities that Frandsen does not. And vice versa. In some instances there is a conflict as to the facts.

On balance I am not persuaded that there has been a reproduction of Jacana's grid. For this reason I would hold that infringement in this respect also has not been proved by the onus-bearer, Jacana.

The Rules

Here again Jacana relies on a compilation. For reasons given earlier it is not entitled to rely on the presumptions. Assuming for the sake of argument that it may rely on them, Frandsen has demonstrated, in trying to rebut them, that various of the Rules had been compiled previously in a variety of publications. However, it has not produced a complete version of the Rules (assuming such a thing existed) antedating Jacana's leaflet. Nor has Jacana produced such a document in reply, despite its claim that its originality lay in 'rewriting' the Rules. More generally it has not shown what prior forms of the Rules were available to it or what its input was in 'rewriting' them. This is important because even an Ovid might have difficulty in metamorphosing such unyielding material as do not feed the animals, stay in your car and vacate your accommodation by 9.00h. And, if Jacana's originality consisted in collecting rules from various sources and arranging them, it has failed to show exactly what it did. In short, once Frandsen disturbed the operation of the presumptions (still assuming that they operated) Jacana failed to demonstrate what exactly it did, something peculiarly within its own knowledge. So even with the presumptions operating Jacana should fail for absence of originality.

The appeal is dismissed with costs.

Harms JA, Scott JA, Zulman JA and Plewman JA concurred. 

Appellant's Attorneys: Jacobsen, Rosen & Wright, Parktown; Jacobsen & Levy, Pretoria; Webbers, Bloemfontein. Respondent's Attorneys: E Sklar, Johannesburg; Spoor & Fisher, Pretoria; Lovius-Block, Bloemfontein.

KLEP VALVES (PTY) LTD v SAUNDERS VALVE CO LTD 1987 (2) SA 1 (A)

 Citation

1987 (2) SA 1 (A)

Court

Appellate Division

Judge

Corbett JA, Joubert JA, Grosskopf JA, Galgut AJA and Nicholas AJA

Heard

September 2, 1986 

 Judgment

 December 15, 1986 

 Annotations

Link to Case Annotations 

Judgment

Grosskopf JA:

Introduction

The respondent is a British company which designs and manufactures valves. Among its products are diaphragm valves which are widely used for the handling of industrial fluids. The respondent has been selling its valves in South Africa for many years. Two types of diaphragm valves which have been popular in South Africa are described as the type KB or straight through diaphragm valve and the type A or weir diaphragm valve. Although the respondent manufactures a full range of these valves, the present case is concerned with only one model of each type, viz the 2- inch (50mm) type A and type KB valves. For convenience I shall express all dimensions in imperial units, as was done in the affidavits.

The appellant, a South African company, also manufactures valves. Diaphragm valves of the type with which we are now concerned are used in South Africa mainly in the mining industry. In the 1970's the appellant came to realise that a demand existed for valves which were interchangeable with those already being used on the mines. The appellant investigated whether the respondent's valves were protected by patents, and came to the conclusion that any patents which might have been relevant had already lapsed. It is common cause that this conclusion was correct. Accordingly the appellant has since 1977 been manufacturing and selling components which are  interchangeable with the components used in the respondent's valves. For purposes of its trade it has issued illustrated brochures, two of which are before the Court. They bear, respectively, the headings 'Klep Type A Diaphragm Valve' and 'Klep Type KB Diaphragm Valve'. After setting out advertising material and particulars concerning the valve with which it deals, each brochure contains the following:

   'Interchangeable with "Saunders" Diaphragm Valves. All Klep Diaphragm Valve parts are independently manufactured and are interchangeable with "Saunders" diaphragm valves.'

It is common cause that engineering drawings are essential to the production of equipment such as the valves manufactured by the parties. Such drawings serve the purpose of controlling the processes of repetitive manufacture. In manufacturing its 2-inch types A and KB valves, the respondent uses 11 engineering drawings which were executed at different dates between 1938 and 1958. Six of these relate to the type A valve and five to the type KB.

On 4 October 1982 the respondent, through a firm of South African patent agents, wrote to the appellant inter alia as follows:

   'Our client holds the copyright in certain drawings covering their well-known type "A" and type "KB" diaphragm valves and parts thereof. Up until having recently consulted with us, our client was not aware of the existence of its rights.

   We have examined certain valves manufactured by you and it is our opinion that such manufacture constitutes a reproduction by you in a three-dimensional form of our client's drawings and as such infringes our client's copyright.'

The letter then continued by calling upon the appellant to stop infringing the respondent's rights as set out in the letter. The appellant's attorneys replied, disputing both that the appellant had infringed the respondent's copyright, and, indeed, that any copyright existed as claimed by the respondent. The respondent subsequently instituted proceedings on motion in the Transvaal Provincial Division in which it claimed an order interdicting the appellant from infringing the respondent's copyright in the said drawings by

   'manufacturing and/or selling valves or components for valves known as type 'A' or type 'KB' valves, which manufacture and sale of such valves or components therefor constitute a reproduction and/or adaptation and/or publication of the said original drawings or a substantial part thereof in three-dimensional form'.

In addition, the respondent claimed various ancillary orders, some of which will be considered in more detail later. The respondent also complained that the above-mentioned brochures infringed its registered trade mark 'Saunders' and claimed an order interdicting such infringement. The matter came before O'Donovan J, who decided in favour of the respondent. His judgment is reported as Saunders Valve Co Ltd v Klep Valves (Pty) Ltd1985 (1) SA 646 (T). References hereinafter to the judgment of the Court a quo will be to this report. With the leave of the Judge a quo the matter now comes on appeal to this Court.

The applicable law

 It will be convenient to commence by sketching the legislative background against which this case falls to be decided. When the drawings on which the respondent relies were made, copyright in this country was governed by the Patents, Designs, Trade Marks, and Copyright Act 9 of 1916. Section 143 of this Act declared that the 1911 British Copyright Act (1 & 2 Geo 5 ch 46) would thenceforth be in force in South Africa subject to certain minor modifications and additions. The British Act was set out in the Third Schedule to the 1916 Act.

One effect of the 1916 Act was to create virtual uniformity between South African and British copyright law. This continued until 1956 when the British Copyright Act of that year was promulgated (4 & 5 Eliz 2 c 74). In 1965 a new Copyright Act (Act 63 of 1965) was introduced in South Africa. This Act was substantially modelled on the British Act of 1956. The Act of 1965 was in turn repealed by the Copyright Act 98 of 1978 which now governs copyright in this country. Section 43 of this Act provides (in so far as it is relevant):

   'This Act shall apply in relation to works made before the commencement of this Act as it applies in relation to works made thereafter; provided that -

   (a) nothing in this Act contained shall -

      (i)   ... affect the ownership, duration or validity of any copyright which subsists under the Copyright Act 63 of 1965; or

      (ii)   be construed as creating any copyright which did not subsist prior to 11 September 1965;'

 11 September 1965 was the date of commencement of the 1965 Act. The effect of s 43 of the 1978 Act accordingly is to render earlier legislation applicable to the question whether copyright subsists in works made prior to the commencement of the 1978 Act, whereas the 1978 Act governs the remedies for infringement of copyright and the procedures relating thereto. It was common cause in argument before us (otherwise than in the written heads of argument) that the 1916 Act governs the subsistence of copyright in the respondent's engineering drawings, which, as I have indicated, were made while that Act was in force. I assume, without deciding, that the parties' attitude in this regard is correct, particularly since I do not consider that the outcome of the case would be any different if, as had been urged by the appellant in its heads of argument, the transitional provisions of s 48 of the 1965 Act and the Sixth Schedule to that Act were to be applied.

I turn now to the question whether the respondent's engineering drawings were entitled to the protection of copyright pursuant to the 1916 Act. Section 1(1) of the 1911 British Act, which, as noted above, was incorporated in the 1916 Act as the Third Schedule thereto, reads as follows:

   '1 (1) Subject to the provisions of this Act, copyright shall subsist throughout the parts of His Majesty's Dominions to which this Act extends for the term hereinafter mentioned in every original literary dramatic musical and artistic work, if -

   (a) in the case of a published work, the work was first published within such parts of his Majesty's Dominions as aforesaid; and

   (b) in the case of an unpublished work, the author was at the date of the making of the work a British subject or resident within such parts of his Majesty's Dominions as aforesaid;

   but in no other works....'

In terms of s 35 'artistic work' includes 'works of painting, drawing, sculpture and artistic craftmanship, and architectural works of art and engravings and photographs'.

The questions which arise in this appeal under s 1(1) of the 1911 British Act are whether the respondent's drawings are 'artistic works'; whether they were original; and whether paras (a) or (b) were complied with. I shall first consider these questions before turning to other issues which were raised.

Are the drawings 'artistic works' ?

Mr Plewman, who appeared for the respondent in this matter, contended that the engineering drawings in issue are 'artistic works' because, as 'works of drawing', they fall within the definition quoted above. This contention was contested by Mr Kentridge, who appeared for the appellant. He submitted that the words 'works of drawing' when read in their context are confined to works made with artistic intent. Drawings of a purely technical nature would, according to this submission, not fall within the concept of 'artistic works'.

Both these contentions start from the premise that the word 'drawing' in its ordinary sense has no necessary relationship with the fine arts. I agree with this approach. The Shorter Oxford Dictionary defines 'draw' (in its relevant sense) as, primarily, '(t)o trace (a line, figure, etc) by drawing a pencil, pen, or the like, across a surface;... (t)o make by drawing lines; to design, delineate'. 'Drawing' is defined,  inter alia, as '(t)he formation of a line by drawing some tracing instrument from point to point of a surface; representation by lines; delineation, as dist from painting;' and '(t)hat which is drawn; a delineation by pen, pencil or crayon'. These definitions do not suggest that the word 'drawing' is more properly used to connote artistic than technical or any other works. I turn, therefore, to the context in which the word is used in the British Act of 1911.

The immediate neighbours of the expression 'works of drawing' in the definition of 'artistic work' are 'works of painting', 'works of sculpture', 'works of 'artistic craftmanship'. 'architectural works of art', 'engravings' and 'photographs'. It is noteworthy that in respect of two of these items, viz works of artistic craftmanship and architectural works of art,  the Legislature found it necessary to use the words 'artistic' and 'art' to indicate that an artistic element was necessary to bring the work in question within the definition of' an artistic work. The expression 'architectural work of art' is further expressly defined in s 35 of the Act to emphasize that the protection of the Act is confined to the 'artistic character and design' of an architectural work, and does not extend to 'processes or methods of construction'. The other items mentioned in the definition of artistic work (namely, works of painting, works of drawing, works of sculpture, engravings and photographs) have, in their ordinary meanings, a greater or lesser affinity with the fine arts, but are not confined thereto. A painted advertising sign would fall within the expression 'work of painting' as naturally as would a work by Rembrandt. The expression 'work of sculpture' is defined in s 35 to include casts and models. The ordinary meaning of these words would encompass works made for aesthetic reasons as well as many, others. 'Engravings' is defined to include 'etchings, lithographs, wood-cuts, prints, and other similar works, not being photographs'. 'Photograph' is defined to include 'photolithograph and any work produced by any processes analogous to photography'. There is nothing in the language relating to engravings and photographs to suggest that only those specimens are covered which were made for artistic reasons.

It is apparent therefore that, save for works of craftsmanship and architectural works, the items mentioned in the definition of 'artistic work' do not in terms require any element of artistic endeavour. Indeed, the words used suggest a wider meaning, and where the Legislature wanted to introduce some specific artistic requirement for works of craftsmanship and architecture, it did so in express terms.

Moreover, when one looks at the nature of the various items covered by the definition of 'artistic work', it seems most unlikely that the Legislature intended to include only works made with an artistic intent. This applies to all of them (save, of course, works of craftsmanship and architectural works) but to none as clearly as photographs. Can it really be imagined that the Act impliedly distinguished between photographs taken with artistic intent, which would be protected by copyright, and others which would not? What purpose would be served by such a distinction? One needs only to think of press photographs, whose claim to protection does not rest on their aesthetic appeal but is nevertheless very strong. It is difficult to imagine that such photographs, and indeed all the others without artistic pretensions, could be copied with impunity under the 1911 Act. And how would one distinguish in practice between a photograph which was taken with artistic intent and one which was not?

These considerations apply also to drawings. It must be extremely difficult, and, indeed, often impossible, to determine what the draughtsman's intent was when making a drawing. This difficulty is increased when it is borne in mind that opinions can legitimately differ on what constitutes art. As stated by Laddie, Prescott & Vitoria The  A Modern Law of Copyright at 104: 'There are those who think that the engineer has not infrequently produced undoubted works of art, not least because of his insistence on function.' Moreover, when regard is had to the policy of the Act to protect authors who, by their skill and labour, produced original works, there would not appear to be any reason to exclude drawings merely because they were made for utilitarian rather than aesthetic reasons.

I consider therefore that, if regard is had both to the wording and the practical effect of the definition of 'artistic work', it cannot be said to colour the expression 'work of drawing' in the manner suggested on behalf of the appellant. The only feature which seems to me to provide some support for the appellant's contention is the labelling of these works as 'artistic'. Before giving further consideration to this feature, I propose examining whether there is anything in the wider context of the Act as a whole which casts light on this issue.

The manner in which the Act deals with literary works is, I think, apposite. 'Literary work' is defined in s 35 as including 'maps, charts,.) plans, tables and compilations'. In the leading case of University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601, Peterson J, in holding that examination papers constituted literary works under the British Act of 1911, said the following (at 608):

   'It may be difficult to define "literary work" as used in this Act, but it seems to be plain that it is not confined to "literary work" in the sense in which that phrase is applied, for instance, to Meredith's novels add the writings of Robert Louis Stevenson. In speaking of such writings as literary works one thinks of the quality, the style, and the literary finish which they exhibit. Under the Act of 1842, which protected "books", many things which have no pretensions to literary style acquired copyright; for example, a list of registered bills of sale, a list of foxhounds and hunting days, and trade catalogues; and I see no ground for coming to the conclusion that the present Act was intended to curtail the rights of authors. In my view the words "literary work" cover work which is expressed in print or writing, irrespective of the question whether the quality or style is high. The word "literary" seems to be used in a sense somewhat similar to the use of the word "literature" in political or electioneering literature, and refers to written or printed matter.'

This case has been consistently followed, inter alios by the House of Lords in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 (HL) ([1964] 1 All ER 465 (HL)) in which it was held that a football pool coupon constituted a literary work. See also Kalamazoo Division (Pty) Ltd v Gay and Others1978 (2) SA 184 (C) at 191; Copinger & Skone James on Copyright 12th ed at 59 - 60; Laddie, Prescott & Vitoria The Modern Law of Copyright para 2.10; and AJC Copeling Copyright Law at 30 - 32; Copyright and the Act of 1978 at 8 - 9.

It is clear from the above that 'literary works' did not require any literary merit or pretension to be protected under the 1911 Act. Consequently,

   'in a statute which frequently uses words in a special sense differing from their normally accepted meaning it should not be surprising to find that "artistic works" includes things which neither are nor purport to be objects of beauty, however slight'

(Laddie, Prescott & Vitoria (op cit at 106).) I do not consider, therefore, that the use of the label 'artistic work' is sufficient by itself to import a requirement of artistic intent which is not found in the language used to describe the relevant items covered by that label and which seems inconsistent with the practical needs served by the Act.

There seems to be no direct authority under the 1916 Act or the British 1911 Act on the point in issue. Copinger & Skone James (op cit at 68) state:

   'It was generally considered under the Act of 1911 that the word "artistic" was merely used as a generic term to include the different processes of creating works set out in the definition section and that, provided that a work was produced by one of such processes, and that its creation involved some skill or labour on the part of the artist, it was protected. The use of the word "artistic" was thought to be akin to that of the word "literary", which... was held to refer only to the nature of the material being written or printed matter.'

In Purefoy Engineering Co Ltd and Another v Sykes Boxall & Co Ltd and Others [1955] 72 RPC 89 (CA) copyright was held to subsist in a catalogue of mechanical parts. The catalogue contained, inter alia, photographs of the parts and line drawings or diagrams indicating the dimensions tabulated in the text. Although the photographs and the drawings were held to be protected by copyright, the Court reached this conclusion by regarding the whole work, that is, including text, photographs and drawings, as a literary work in terms of the Act. No attention was given to the question whether the photographs and drawings would have been covered by the definition of 'artistic work'. Although this case is therefore no direct authority for present purposes, it does underline the practical interrelationship between literary works and artistic works. This interrelationship is also shown by the inclusion in the definition of 'literary work' of maps, charts and plans. All this fortifies the view that the Legislature was not likely to require an element of artistic intent for artistic works although no analogous requirement was laid down for literary works.

Mr Kentridge referred us to several recent publications in which it was contended, or suggested as a possibility, that technical drawings were not included in the definition of 'artistic work' in the 1911 British Act or later Acts. I do not propose considering these views separately since I have dealt above with the arguments on which they were based.

 For the reasons I have stated I come to the conclusion that the respondent's engineering drawings are 'artistic works' as defined in the 1911 British Act.

Were the drawings 'original' ?

The next question is whether the respondent's drawings qualified as 'original' works for the purposes of s 1 of the 1911 British Act. The principles relating to originality in this context were not in dispute between the parties and are conveniently set out by Prof AJC Copeling in the following passage (Copyright and the Act of 1978 at 15):

   'To be original a work need not be the vehicle for new or inventive thought. Nor is it necessary that such thoughts as the work may contain be expressed in a form which is novel or without precedent. "originality", fir the purposes of copyright, refers not to originality of either thought or the expression of thought, but to original skill or labour in execution. All that is required is that the work should emanate from the author himself and not be copied...

   The requirement that the work should emanate from the author himself and not be copied must not be interpreted as meaning that a work will be regarded as original only where it is made without reference to existing subject-matter. Indeed, were this so the great majority of works would be denied the benefit of copyright protection. It is perfectly possible for an author to make use of existing material and still achieve originality in respect of the work which he produces. In that event, the work must be more than simply a slavish copy; it must in some measure be due to the application of the author's own skill or labour. Precisely how much skill or labour he need contribute is difficult to say for much will depend upon the facts of each particular case.'

These principles were applied in the unreported judgment of this Court in W K Topka t/a Topring Manufacturing and Engineering v Ehrenberg Engineering (Pty) Ltd delivered on 30 May 1983. See also Kalamazoo Division (Pty) Ltd v Gay and Others (supra at 190).

The evidence on behalf of the respondent disclosed that nine of the 11 drawings in issue had been made by R Jarrett and one each by G Pearson and L Burton. Pearson and Jarrett are both deceased. Section 26 of the 1978 Act which deals with the onus of proof in copyright actions, provides in ss (4) that where it is proved or admitted that the author of a work is dead, 'the work shall be presumed to be an original work unless the contrary is proved'. It is common cause that this provision applies to the present case. The third draughtsman, Burton, filed an affidavit in which he testified that the relevant drawing

   '... is a drawing which I recognise as having been drawn by myself... This drawing was drawn by myself on the instructions of Mr Jarrett and was not copied from any other drawing or article. I expended skill and labour in executing such drawing. The drawing represented a significant change in the design of the diaphragm for the 2-inch type "KB" valve......'

On behalf of the appellant a twofold attack was launched on the contention that the drawings were original. First it was pointed out that the development and the design of the valves which were represented in the drawings, resulted from team efforts involving a number of people in addition to the draughtsmen. How can it then be said, it was asked, that the drawings were the original work of the draughtsmen? Moreover, it is common cause that the drawings now in issue represented developments of earlier valves. How do we know, the appellant asked, that the draughtsmen devoted sufficient of their skill and labour to the present drawings to render them original works in accordance with the tests set out above? Or, to pose the question differently, how do we know that the present drawings are not mere copies of curlier ones, perhaps with insignificant changes? To enable these questions to be answered, it was submitted on behalf of the appellant, the matter should have been referred for oral evidence, to give the parties a proper opportunity of testing the witnesses in cross-examination after having had full discovery. The contention that oral evidence was necessary for a proper determination of the case was made also with reference to other issues to be considered in due course, but can be conveniently dealt with now in its present context.

Should oral evidence have been allowed ?

It is apparent that the affidavits do not contain a direct conflict of evidence relating to the originality of the drawings: the appellant's contention is that these are matters peculiarly within the respondent's knowledge which the appellant should have been given the opportunity to probe by discovery and cross-examination, particularly where the appellant was required to discharge the statutory onus. This attitude on the appellant's part seems to me to amount to that expressed as follows in Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd1949 (3) SA 1155 (T) at 1163:

   '"Or... he" (ie a respondent in motion proceedings) "may state that lie can lead no evidence himself or by others to dispute the truth of the applicant's statements, which are peculiarly within applicant's knowledge, but lie puts applicant to the proof thereof by oral evidence subject to cross-examination."'

This attitude, Murray AJP points out in the Room Hire case loc cit has been held in Peterson v Cuthbert & Co Ltd 1945 AD 420 not to give rise to a genuine or real dispute of fact. If the respondent in such a case requires oral evidence he can apply to cross-examine witnesses (in terms of what is today Rule of Court 6 (5)(g)) and such cross-examination is sufficient safeguard for him without requiring the case to be sent to trial (Room Hire case at 1164). See also Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd1984 (3) SA 623 (A) at 634I - 635B. I should add that a respondent who requires discovery can make application therefor under Rule of Court 35(13).

To determine whether the Court a quo dealt with this issue correctly one must have regard to the manner in which the issue was raised. I deal first with the contention that the appellant was prejudiced by the lack of discovery. In this regard it appears that, prior to the lodging of opposing affidavits, the appellant issued two notices pursuant to Rule of Court 35 (12) calling for the production of documents to which reference was made in the respondent's affidavits (including 'all issue cards and drawings'). These notices were amplified by a letter from the appellant's attorneys. In an affidavit filed on behalf of the respondent, its design manager, Mr MI Pearce, explained which engineering drawings were in existence and he annexed to his affidavit those which he had been advised should be produced. Mr R M Miles, the respondent's executive chairman, stated in a replying affidavit that he had 'ensured that all the drawings in the (respondent's) possession relevant to the manufacture of the valves in the sizes in issue (had) been extracted from the records of the (respondent)'. These drawings were available for inspection at the offices of the respondent's attorneys.

It was not contended on behalf of the appellant that the respondent had failed to produce all relevant drawings - indeed, it is not clear whether the appellant availed itself of the opportunity to inspect the drawings tendered to it. In these circumstances the appellant can hardly be heard to say that it was deprived of the opportunity to obtain discovery. On the face of it the appellant was given everything it asked for which, in respect of the documents requested by it, seems to have been fully as much as it would have been entitled to on discovery. If anything had been omitted, the appellant might have asked therefor. And, of course, formal discovery might have been applied for if the appellant had so wished.

The submission that oral evidence should be allowed was raised as follows in the Court a quo. The appellant as respondent in that Court contended in the course of its argument that the evidence adduced by the respondent (applicant in that Court) did not show that the drawings upon which it relied were original. The argument then proceeded as follows, according to written heads of argument handed in to the Court a quo :

   'Alternatively, it is submitted that if this Court should deem fit that (sic ) the matter should be referred to trial, alternatively to the hearing of oral evidence on this issue and that the applicant should be obliged to make a full discovery, which will then enable both the respondent and this Court to determine whether indeed any originality and therefore any copyright vests in the drawings relied on by the applicant.'

It is clear therefore that no substantive application in terms of Rule of Court 6(5)(g) was made by the appellant during the hearing in the Court a quo. In De Beers Industrial Diamond Division (PTY) Ltd v Ishizuka1980 (2) SA 191 (T) at 206A a Full Bench of the Transvaal Provincial Division indicated that it is sound practice that an application for evidence viva voce should be made in limine. I agree with this observation although this does not of course mean that a Court may not in appropriate circumstances allow such an application to be brought at some other stage of the proceedings. I need not however pursue this matter since in the present case no clear application was made at any stage. The Court a quo can in my view not be faulted for declining an invitation to refer the matter for the hearing of oral evidence in circumstances such as the present where there is no conflict of evidence and the invitation was extended somewhat tentatively in the course of the respondent's argument as an alternative to a submission on the merits. I consider therefore that the Judge a quo acted correctly in deciding the issue of originality on the papers before him.

On the record as it stands, the respondent has, I consider, shown that the drawings were original. On behalf of the respondent Mr Pearce explained how engineering drawings are made in practice. His evidence in this regard was not contradicted. I need not repeat his explanation in detail. What it amounts to is that, although a draughtsman normally works in co-operation with a design engineer, he exercises a great deal of independent skill and labour when converting the ideas of the design engineer into detailed specifications for practical manufacture. Similar skill and labour are required to modify an existing design. The draughtsman is required to calculate the suitability of the components in a design (whether original or modified) and to plan the inter-relationship between the part as it will be manufactured with other inter-connecting parts. He has to have regard, inter alia, to the method of manufacture, the materials to be used, the tolerances to be allowed, national or international standards to be applied and the degree of rationalization required by the manufacturer. In view of this evidence it can make no difference per se that the drawings were team efforts in that the engineering designs emanated mainly from others. Copyright subsists in the drawings made by the draughtsmen provided the drawings themselves were original in the sense discussed above. Nor can it matter that earlier drawings were followed provided that the draughtsmen contributed sufficient skill or labour to the present drawings. In the instant case we not only have the assurance by the respondent's witnesses that there are substantial differences between the drawings in issue and earlier versions, but the appellant was given an opportunity to verify this, as I have recounted above, and failed to dispute the respondent's evidence. In these circumstances I agree with the Court a quo that the drawings in question were shown to have been original within the meaning of s 1 of the British Act of 1911.

Were ss 1 (a) or (b) complied with ?

The next question which arises under s 1 of the 1911 British Act is whether ss 1(a) or (b) were complied with. These subsections lay down different requirements for published and unpublished works. Published works are protected if their first publication took place within 'the parts of His Majesty's Dominions to which this Act extends', whereas unpublished works are protected if their authors were at the date of the making of the works British subjects or residents of 'His Majesty's Dominions'. In the present case the respondent's drawings were not published in the ordinary sense of the word and the Court a quo dealt with them as unpublished works. On this basis the question presents no difficulty since the evidence is clear that the draughtsmen were British subjects resident in Britain when the drawings were made.

It is only if the drawings were published works that some difficulties arise. One would therefore have thought that the parties would have debated the question whether these drawings were 'published works' or not. They did not however do so. Mr Kentridge contended that the respondent's case in the affidavits was that the drawings were published works whose first publication had been in Britain by way of reproductions in three-dimensional form (ie by the 'publication' of valves made in accordance with the drawings). This case, his contention proceeded, was not established. Mr Plewman, on the other hand, submitted that the respondent had proved its case on both of the possible alternatives.

The facts upon which the Court a quo held that the drawings, if unpublished, were entitled to the protection of copyright were fully canvassed in the papers and were not in dispute. There could accordingly be no objection to the Court's reaching a conclusion on the basis of such facts. The only aspect of the Court's reasoning which may be open to attack is the finding that the drawings were unpublished. This finding was not, however, challenged. In the result, the present issue may probably be resolved on the simple ground that the conclusion of the Court a quo has not been shown to be wrong. However, in view of the arguments presented, I consider it better to give some consideration to what was required for the 'publication' of the drawings and how the subsistence of copyright would have been affected thereby.

The question whether or not the drawings were published turns on the meaning and effect of s 1(3) of the 1911 British Act. This reads: 'For the purposes of this Act, publication, in relation to any work, means the issue of copies of the work to the public...'. If this provision governs the meaning of 'published work', 'first published' and 'unpublished work' in s 1(1) of the Act, the enquiry would be whether copies of the drawings were issued to the public and, if so, whether this happened first in Britain. For present purposes I assume in favour of the appellant's contention that the provision does apply (vide Francis, Day and Hunter v Feldman & Co [1914] 2 Ch 728 (CA)), and that the issue to the public of valves made in accordance with the drawings would amount to the issue of copies of the work to the public. The only remaining question then is: what is meant by 'issue to the public'? In this regard Mr Kentridge accepted the correctness of the following passage from British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 at 67:

   '... an artistic work is "issued to the public", and so published, when reproductions of the work are put on offer to the public... Passive availability suffices, without active offering.'

Although the British Northrop case dealt with the 1956 British Act, Megarry J, in coming to the above conclusion, relied, inter alia, on Francis, Day and Hunter v Feldman & Co (supra ) a case decided under the 1911 Act, and his reasoning was in my view applicable to the interpretation of both Acts. It should, in my view, be followed.

The evidence in support of the respondent's case on this aspect was twofold. First there was evidence from its product evaluation manager, Mr D A Thomas. Mr Thomas was not in the respondent's employ when the drawings were made and his evidence was based purely on records under his control. He stated that, according to these records, the drawings were not published in two-dimensional form. However, in the ordinary course of production, valves incorporating the components shown on the drawings would have been manufactured, offered for sale and sold, first in the United Kingdom and thereafter elsewhere in the world.

Then there was evidence from Mr P C E Rose, who joined the respondent's service in 1937 as a costing clerk and retired in 1974 after having been appointed managing director in 1971. Mr Rose stated that

   '(a) 11 of the components depicted in the drawings... were first published in the United Kingdom in three-dimensional form in the sense that valves were produced incorporating such components and were offered for sale and sold in the United Kingdom to the general public.'

It seems clear that Mr Rose meant to convey that first publication took place in Britain (in the manner stated) and his evidence, if accepted, would therefore be decisive of this question. Mr Rose's evidence was undisputed and accords with the probabilities to which Mr Thomas testified. I can consequently see no reason for rejecting his evidence. I also do not think that the Judge a quo erred in deciding this issue without the assistance of oral evidence, as was suggested on behalf of the appellant.

To sum up: it has not been suggested that the drawings were published in any other way than by the 'issue' to the public of components depicted on the drawings. If such 'issue' did in law amount to publication of the drawings for the purpose of s 1(1) of the Act, the evidence discloses that the publication first took place in Britain, thereby rendering s 1(1)(a) applicable. If such 'issue' did not amount to publication, the drawings were unpublished. Since the evidence discloses that the authors were British subjects resident in Britain when the drawings were made, s 1(1)(b) would then be applicable. In either event the relevant requirement for the subsistence of copyright was satisfied.

 The effect of legislation relating to designs

The last obstacle to the subsistence of copyright in terms of the 1911 British Act is found in ss 22(1) thereof. This subsection reads as follows:

   'This Act shall not apply to designs capable of being registered under the Patents and Designs Act, 1907, except designs which, though capable of being so registered, are not used or intended to be used as models or patterns to be multiplied by any industrial process.'

In terms of s 144(c) of the 1916 Act, the reference to the Patents and Designs Act, 1907, must be construed as a reference to the corresponding provisions of chapter 11 of the 1916 Act, being the chapter dealing with designs. For present purposes the relevant provision is the definition of 'design' in s 76 which reads as follows:

            '"design" shall mean any design applicable to any article whether for the pattern, for the shape or configuration, or for the ornament thereof or for any two or more of such purposes and by whatever means it is applicable whether by printing, painting, embroidering, weaving, sewing, modelling, casting, embossing, engraving, staining, or any other means whatever, manual, mechanical, or chemical, separate or combined, not being a design for sculpture;'

This definition is identical in all material respects to the definition in the British Act of 1907 to which reference is made in the above-quoted s 22 of the 1911 Act, as well as to that in the British Patents, Designs and Trade Marks Act of 1883.

The only decision in our law in which the definition of 'design' in the 1916 Act was considered is Allen-Sherman-Hoff Co v Registrar of Designs 1935 TPD 270. At 273 - 4 of that case Tindall J, with whom Barry J concurred, held that, in deciding whether certain features constituted a design,

   '... one has to see whether that which it is desired to register is something which can be treated as a design appealing to the eye, or whether the shape is obviously nothing more than part and parcel of the function without any appeal to the eye as a design, in which case there should be no registration.'

The quoted words were an extract from the judgment in In the Matter of Wingate's Registered Design [1935] 52 RPC 126 at 131. In the present case the Court a quo, applying the test approved in the Allen-Sherman-Hoff case (supra ), held that

    'valves which find their practical application on the mines are strictly utilitarian in character, their features of shape and configuration being dictated solely by the function which they are required to perform'

(at 650H of the report).

On behalf of the appellant it was contended that both the Court  in the Allen-Sherman-Hoff case and the Court a quo applied a wrong test for, so it was contended, the definition in the 1916 Act did not exclude a design which was dictated solely by function or require that its features appeal to and be judged solely by the eye. These requirements, so it was contended, were introduced into English law by statute between 1919 and 1949, and Wingate's case supra was decided pursuant to the British Act of 1919.

I would be most reluctant to overrule the Allen-Sherman-Hoff case, a Full Bench decision which has stood since 1935 and which must have been applied many times in practice before the 1916 Act was repealed (in so far as it dealt with designs) by the Designs Act 57 of 1967. Fortunately I do not think it necessary to do so. For, while it is correct that the requirements set out in the passage from Wingate's case (supra ) were not explicitly stated in the definitions in the British statutes of 1883 and 1907 but were introduced by later legislation, it is also clear that, as stated in Homecraft Steel Industries (Pty) Ltd v S M Hare & Son (Pty) Ltd and Another1984 (3) SA 681 (A) at 692E - F, this later legislation 'incorporates principles which had long been accepted in the law relating to designs, namely that a feature which is necessarily determined by the function of the article in question is not registrable as a design and that registered designs must be judged by the eye alone...'.

See also ibid at 690H - I. Thus, for instance, in In the Matter of Bayer's Design [1907] 24 RPC 65 (CA) at 77 Fletcher Moulton LJ said, referring to the definition of 'design' in the Act of 1883:

   'It deals entirely with the shape, or configuration, or  ornament or pattern: they are all things which the eye has the complete power of learning from representation.... That such is the case is recognised in the classic decision of Lord Herschell in the Hecla Foundry case (Hecla Foundry Co v Walker, Hunter & Co (1889) 6 RPC 554 - also a case on the 1883 Act), where he points out that the eye is the judge of infringement; and, if the eye be the judge of infringement, it must be because the eye is the competent judge of that which is to be infringed. I am satisfied, therefore, that nothing but that which can be for the eye to see can be a good subject of design.'

See also ibid at 74 and 80; Amp Incorporated v Utilux (PTY) Ltd [1972] RPC 103 (HL) at 119 - 120 (Lord Pearson).

I need not, however, labour this aspect because the appellant did not contest in its argument that a design required 'an individuality of appearance in comparison with others' (I quote from the written heads of argument). This seems to recognize the importance of the eye in judging whether a registrable design has been created. Cf the Homecraft case supra at 691, Robinson v D Cooper Corporation of SA (Pty) Ltd 1984 (3) SA 699 (A) at 704C - G. And the appellant accepted that purely functional features were not entitled to registration as designs, but contended:

   'If it is shown that the respondent's valve is not required to be in its particular shape, and in that shape only, in order to work, in other words that there are other actual or possible shapes for the article, then the artistic works embodying that valve are capable of design registration under the 1916 Act'.

(Quoted from the heads of argument.)

A similar argument was addressed to the Court in Amp Inc v Utilux (Pty) Ltd (supra ) where the Court was dealing with the definition of 'design' in the British Registered Designs Act of 1949. In that definition there was a specific exclusion of 'features of shape or configuration which are dictated solely by the function which the article to be made... has to perform' (the definition in the South African Act of 1967 has a similar provision). At 109 of the Amp Incorporated case Lord Reid said:

   'The respondents' argument is that a shape is only dictated by function if it is necessary to use that precise shape and no other in order to perform the function. Admittedly if that is the meaning the scope of this provision would be reduced almost to vanishing point because it is difficult to imagine any actual case where one shape and one shape alone will work. A key was suggested. Its function is to turn a particular lock, and only one shape of key will do that. But that is not quite true. In most cases at least a skeleton key of different shape will also turn the lock. In the end no actual case was found where only one precise shape would do.

   It seems improbable that the framers of this definition could have intended to insert a provision which has virtually no practical effect, so I look to see whether any other meaning produces a more reasonable result.

   Again I think that a clue can be found from a consideration of what must have been the object of the provision. If the purpose of the Act was to give protection to a designer where design has added something of value to the prior art then one would expect an exclusion from protection of those cases where nothing has been added because every feature of the shape sought to be protected originated from purely functional considerations.'

His conclusion was (at 110):

   'If the shape is not there to appeal to the eye but solely to make the article work then this provision excludes it from the statutory protection.'

In the same vein Lord Morris of Borth-y-Gest said (at 113):

   'It was argued on behalf of Amp that as there could be variations of shape in terminals that would successfully do what was required of them then the "features of shape" would not have been "dictated solely" by the function which the terminals would have to perform. In my view, this contention is not sound. If there are alternative features of shape but if each one is "dictated solely" by the function which is to be performed by the article then each one would be excluded from the expression "design"'.

See also at 117 - 18 (Viscount Dilhorne) and 122 (Lord Pearson). The fifth member of the Court (Lord Donovan) concurred in the judgment of Lord Reid.

If it is accepted that purely functional features are in general not entitled to design protection (and, as I have indicated, the appellant rightly does not dispute this) the Amp Incorporated case demonstrates, I consider, that the appellant's argument on this aspect cannot prevail. It does not matter therefore that that case was concerned with a statutory exclusion whereas we are dealing with a similar rule derived from the intrinsic nature of design protection.

In support of its contention, the appellant relied on certain Australian cases, namely Malleys Ltd v J W Tomlin Pty Ltd (1961) 35 ALJR 352 and Ogden Industries Pty Ltd v Kis (Australia) Ltd 1983 FSR 691. In view of my conclusion that the Allen-Sherman-Hoff case supra accords with the law in Great Britain, upon which our legislation was based, I do not consider it helpful to determine whether the Australian law might be different.

Applying the principles I have discussed to the facts of the case, I am of the view that the drawings clearly do not qualify as 'designs'. The valves are functional articles, designed to operate with maximum efficiency over long periods in adverse conditions such as in the mines and in other industries. Some of the components depicted on the drawings are inside the valves and would not ordinarily be visible. But even the general shape and other visible features, we have been told on affidavit by Mr Pearce, were determined by purely functional considerations. This was not disputed and seems overwhelmingly probable. If it were to be correct that the same functional purposes could have been served by designing a valve with a somewhat different shape, as was contended on the papers by Prof Duggan on behalf of the respondent, it would in my view make no difference in the light of the legal principles discussed above.

To conclude, I consider that the drawings in question were not designs capable of being registered under the 1916 Act and were accordingly not excluded from copyright by s 22 of the 1911 British Act.

The ownership of the copyright

The next question to be considered is whether the respondent has established that it owns the copyright in all the drawings on which it relies. This question arises as follows. In September 1933 Mr P K Saunders (the inventor of the original Saunders valves) and Mr A L Trump commenced business as a partnership under the name of the Saunders Valve Company. In February 1934 they registered a company known as the Saunders Valve Company Ltd. This company carried on business until 1948. During the period between 1933 and 1948 five of the drawings on which the respondent relies were executed. These drawings were made in the course of their employment by employees of the Saunders Valve Company Ltd. Consequently the ownership of the copyright vested in the company pursuant to s 5(1)(b) of the 1911 British Act.

On 12 February 1948 an agreement was entered into between, on the one hand, Saunders Valve Company Ltd and Cwmbran Engineering Company Ltd (together called the 'vendor companies' in the agreement) and, on the other, the present respondent (then called Saunders Valve Company (Cwmbran) Ltd). The respondent was called 'the new company' in the agreement. The effect of the agreement was that the 'new company' bought the assets and businesses of the vendor companies, which were to go into liquidation thereafter. The question to be determined now is whether the agreement effected a valid transfer to the respondent of the copyright in the drawings belonging to the earlier Saunders Valve Company Ltd.

In terms of s 5(2) of the 1911 British Act, an owner of copyright may assign it to another 'but no such assignment... shall be valid unless it is in writing signed by the owner of the right in respect of which the assignment... is made, or by his duly authorized agent'. Apart from writing no formalities were required. The question therefore is purely one of construction of the agreement. Although the agreement was executed in Great Britain and related to a transaction which was to be performed there, neither counsel suggested to us that any principles of English law which differed from our law should be applied in its interpretation.

The part of the agreement which is of most relevance for present purposes reads as follows:

   '1. Each of the vendor companies shall sell and the new company shall purchase as at 30 April 1947

   First: the goodwill of each of the businesses now carried on by the vendor companies respectively with the exclusive right to use the name of each of the vendor companies and the right to represent the new company as carrying on such respective businesses in succession to and in continuation of the vendor companies respectively and the trade marks owned by or connected with the businesses of each of the vendor companies.

   Secondly: all the freehold and leasehold properties belonging to each of the vendor companies in connection with their respective businesses, short particulars of which are contained in the schedule hereto.

   Thirdly: all the plant machinery loose plant patterns and jigs motor cars and other vehicles and fixtures fittings and office and canteen equipment work in progress stock in trade materials and chattels patents patent rights and licences to which the vendor companies are entitled respectively in connection with their respective businesses.

   Fourthly: the full benefit of all pending contracts engagements and orders of each of the vendor companies in connection with their respective businesses....

   Fifthly: any post-war refund or releases of excess profits tax to which either of the vendor companies is or may be entitled subject to the provisions of clause 6 hereof

   Sixthly: all other property to which the vendor companies are respectively entitled in connection with their respective businesses .......'

It should further be noted that in terms of clause 13, each of the vendor companies undertook to take all necessary steps to procure its voluntary winding-up within three months.

The respondent relies on the words 'all other property to which the vendor companies are respectively entitled in connection with their businesses' in the sixth clause quoted above as establishing an assignment of the rights in question. The appellant on the other hand contends that these words do not disclose any intention to transfer copyright, which is not even mentioned in the clause. But, as stated by Laddie, Prescott & Vitoria (op cit at 334):

'There does not seem to be any requirement that the assignment should specifically mention copyright. Thus the transfer of "all assets" of one business to another, if in writing, would be effective to transfer any copyrights to the transferee.'

I agree with this statement. The result consequently is that the wording of the agreement was in my view wide enough to cover copyright. And the surrounding circumstances seem to  support this interpretation. It is almost unthinkable that the parties would have intended to transfer the businesses of the vendor companies, including the engineering drawings themselves, which were in use at the time and some of which have been in use up to the present, but would have intended the copyright to remain vested in the vendor companies which were due to be wound up within three months. But, the appellant contends, the respondent was not aware of the subsistence of copyright in the drawings, and for that reason, probably, made no specific provision for the transfer of copyright. The Judge a quo found himself

   'unable to accept the validity of such a purely subjective approach to the interpretation of a written agreement, in terms of which the (respondent) acquired all the rights of its predecessor in title'

(report at 649C). I agree with this finding, but would add that the record provides no support for the factual statement that the respondent was not aware in 1948 that copyright subsisted in the drawings. Those who were in charge of the respondent at the time did not testify in the present proceedings and are in all probability no longer available to testify. There is accordingly no direct evidence before us that the respondent was unaware of the existence of copyright in the drawings, and it would be idle to speculate about the probable state of its knowledge. What does appear from the record is that the persons who now control the respondent and its licensee were not aware until 1982 that the copyright in the drawings might be used to prevent the appellant from manufacturing the valve components which are depicted on the drawings. Even if it be supposed that in 1948 the respondent was also unaware of this possible incident of copyright, it would not mean that the respondent was unaware of the existence of copyright as such.

My view is accordingly that the agreement of 1948, if properly construed, covered the copyright in the drawings existing at the time. The appellant did not contend that if copyright were comprehended by the above quoted clause VI of the agreement, any further document of transfer would have been required. This seems to me to be the correct approach. It has been held that if an artistic work is sold with its copyright the natural inference is that ownership of the work and of the copyright would pass at the same time. As was stated by Fry LJ in London Printing and Publishing Alliance Ltd v Cox (1891) 3 Ch 291 (CA) at 304:

   '... it seems to me extremely improbable that the picture should pass and the copyright remain in the vendor. That is a possible but an unnatural dissociation of two kinds of property, which I think we ought not to infer and ought not to think probable.'

I am in respectful agreement with this view.

It was also suggested on behalf of the appellant that oral evidence should have been allowed in order to determine the exact ambit of the agreement of 1948. I have already given my reasons for agreeing in general with the refusal of the Judge a quo to refer the matter for oral evidence. On the specific question of the interpretation of the 1948 agreement I would add that there is nothing on record to suggest that oral evidence would be of any assistance in interpreting the agreement, particularly if one bears in mind the limited role assigned to parol evidence in this field.

The infringement of the copyright

I turn now to the question whether the appellant has infringed the respondent's copyright in the drawings. Section 23(1) of the 1978 Act provides that

   '(c)opyright shall be infringed by any person, not being the owner of the copyright, who, without the licence of such owner, does or causes any other person to do, in the Republic, any act which the owner of the copyright may authorize.'

The enquiry is therefore directed towards what the owner of copyright is entitled to authorize. That depends on the ambit of his right. And, as I have already indicated, s 43 of the 1978 Act disavows any intention of creating copyright which did not exist prior to the commencement of the 1965 Act. It follows that in the present case one must look at the 1916 Act (incorporating the 1911 British Act) to ascertain what the ambit of the respondent's copyright was so that one can determine whether the acts which the appellant did were acts which the respondent might authorize.

In terms of s 1(2) of the 1911 British Act 'copyright' means

   'the sole right to produce or reproduce the work or any substantial part thereof in any material form whatsoever... and shall include the sole right... to authorize any such acts as aforesaid.'

The respondent's complaint in the present case is that the appellant has manufactured and distributed valve components which were reproductions in three-dimensional form of the components depicted on the respondent's drawings. For purposes of argument it was accepted that the appellant probably never saw the respondent's drawings. However, it was contended that the copying of valves which were manufactured in accordance with the drawings constituted a sufficient indirect copying of the drawings to entitle the respondent to relief. This type of copyright infringement by what has been called 'reverse engineering' has been considered in a number of cases, here and in England. It will be convenient to sketch briefly the origin and development of this part of the law.

The principles on which this type of infringement rests were authoritatively settled in a field far removed from engineering. In the case of King Features Syndicate Inc and Segar v O and M Kleeman Ltd [1940] Ch 806 (CA) ([1940] 2 All ER 355 (Ch)); [1941] AC 417, the facts were briefly as follows. One Segar, an American artist who died in October 1938, was the author of a large number of drawings or cartoons depicting as the central figure 'a grotesque and fictitious character known as "Popeye", or "Popeye, the sailor"'. (1940 Ch at 807). These cartoons had appeared in the form of comic strips running to very large numbers in the United States of America, Canada and Great Britain. The copyright in these drawings or cartoons was vested in Segar's personal representative, or in King Features Incorporated, or both of them (the plaintiffs). The figure and get-up of Popeye having become very popular, the plaintiffs granted licences to certain persons and companies to manufacture and sell brooches and mechanical dolls simulating the figure of Popeye. Large quantities of these articles were sold. The defendant, without obtaining a licence, ordered from a Japanese company, and sold, a large number of 'Popeye brooches' and celluloid mechanical figures and plaster dolls representing Popeye. The plaintiffs sued for infringement of the copyright in the cartoons. The trial Court found that the defendant had infringed copyright in the drawings even though its brooches and dolls may have been copied, not from the drawings, but from the articles made by the plaintiffs' licensees. This conclusion was upheld by the Court of Appeal, Clauson LJ saying the following (at 816 of 1940 Ch):

   'There can be no doubt at all that a figure which in fact reproduces an original artistic work consisting, in substance, of a sketch of that figure, is none the less a reproduction of the original artistic work, because the maker of it has copied it not directly from the original but from some representation derived directly or indirectly from the original work. It seems to have been suggested in the Court below that the fact that the alleged infringement was in three dimensions, whereas the original was in two, prevented the plaintiffs making good their claim. I agree with the learned Judge that while this circumstance may add to the difficulty of forming a conclusion on the degree of resemblance between the infringing article and the original, the plain words of the Act ("in any material form") get rid of any difficulty there might otherwise have been in treating a copy in three dimensions as an infringement of copyright in a sketch in two dimensions.'

See also Luxmoore LJ at 826 - 828.

On further appeal to the House of Lords the defendant did not contest the above findings but, in respect of the point now in issue, confined itself to an argument on the facts. In considering this argument the House of Lords applied the law as laid down by the Court of Appeal.

The King Features case was decided under the 1911 British Act and is therefore of direct relevance for present purposes. It was, however, not until the 1956 British Act was already in force that the principles approved in the King Features case were applied to articles manufactured in accordance with engineering drawings (I should add, however, that in my view nothing turns on the changes effected by the new Act). See, for instance, Dorling v Honnor Mann Ltd [1965] Ch 1 (CA) ([1963] 2 All ER 495 (Ch); [1964] 1 All ER 241 (CA)); British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 (Ch); Solar Thomson Engineering Company Ltd v Barton [1977] RPC 537 (CA) and L B (Plastics) Ltd v Swish Products Ltd [1979] RPC 551 (HL), the last mentioned case ending in the House of Lords. These cases have been followed in South Africa. See Scaw Metals v Apex Foundry (Pty) Ltd and Another1982 (2) SA 377 (D) and Tolima (Pty) Ltd v Cugacius Motor Accessories (Pty) Ltd1983 (3) SA 504 (W).

Recently the House of Lords again considered this matter in British Leyland Motor Corporation Ltd and Another v Armstrong Patents Co Ltd and Another [1986] 2 WLR 400. The facts were briefly as follows. The plaintiffs were designers and manufacturers of motor cars and they also produced some of the spare parts for their cars. In addition, they licensed other manufacturers to copy and sell spare parts in consideration of a royalty payment. The defendants declined to obtain a licence from the plaintiffs, but produced replacement exhaust pipes for the plaintiffs' cars by copying the shape and dimensions of the original. The plaintiffs instituted action, alleging that the defendants had by indirect copying infringed the copyright in the plaintiffs' original drawings of the exhaust system. The trial Court held in favour of the plaintiffs. This decision was upheld by the Court of Appeal and also by the House of Lords (Lord Griffiths dissenting).

The result of the British Leyland case therefore does not support the appellant's contentions in the present case. Mr Kentridge pointed out, however, that several of the Law Lords, although considering themselves bound by the LB (Plastics) case supra, nevertheless expressed reservations about the correctness of the decision, while Lord Griffiths regarded it as clearly wrong. We were accordingly urged to consider this matter afresh.

It may be convenient first to discuss the reasons given by Lord Griffiths for disapproving of the LB (Plastics ) case supra. They turn on the interpretation of s 3(5) of the 1956 British Act which reads as follows:

   'The acts restricted by the copyright in an artistic work are -

   (a) reproducing the work in any material form.'

It is well settled that copyright may be infringed by copying something which is itself a copy of the plaintiff's work (called indirect copying). If the original work has been reproduced it is no answer to say that it has been copied from a work which was itself a copy of the original. This is accepted by Lord Griffiths at 436 - 9, with reference to authority. However, while he recognizes the correctness and value of this principle when applied to works of fine art, he does not think that it should have been extended to mechanical drawings or blueprints of purely functional objects. His ultimate conclusion is (at 443):

   'I would, therefore, hold that "reproducing" in s 3(5) should not be given the extended meaning of "indirect copying" in cases in which the mechanical drawing or blueprint is of a purely functional object. In such cases the scope of artistic copyright should be limited to the natural meaning of the words, namely direct copying including using the drawing to make the object it depicts.'

I cannot, with respect, agree with this view. The word 'reproducing' applies to all works which are subject to copyright, and, in particular, to all artistic works, whether they are functional or not. There does not seem to me to be any warrant for assigning a different meaning to the word 'reproducing' according to the nature of the artistic work with which one is dealing. No rule of interpretation of which I am aware can lead to this result. I can understand that the nature of a particular work may make it difficult to prove that an alleged reproduction is in fact a copy of the original (a matter to which I return later), but the difficulty in this regard would be a factual one and would neither require nor justify a different interpretation of the Act.

Moreover, the result for which Lord Griffiths contends would appear to create as many problems as it attempts to solve. First, there is, of course, the problem of distinguishing between drawings of purely functional objects and others. I need not elaborate on that. But even in regard to drawings of what are clearly functional objects there would appear to be as much need of protection against indirect copying as in regard to any other work. Can it be suggested, for instance, that it should be a good defence for the user of a pirated engineering drawing to show that he copied, not the original drawing, but a photograph thereof?

On analysis, it appears that what caused the learned Law Lords disquiet was not the principle that drawings of functional objects are protected against indirect copying (which principle must be unobjectionable) but the particular application of this principle with which they were dealing. This was stated as follows by Christine Fellner in 'BL v Armstrong in the House of Lords: Our Souls Redeemed from the Company Store' (1986) 4 EIPR 117:

'The argument which caught their Lordships' attention was that the Court should look at the nature of the original contribution which confers copyright, and consider whether it is that which an alleged infringer has taken. In the case of a drawing of a functional object, the original contribution which confers copyright is the draughtsman's graphic skill and his labour. If the drawing is traced or photographed, that skill and labour is directly taken. If the drawing is used as a guide to making the object, again that skill and labour is taken. But if it is the object which is copied, then what is taken is not the draughtsman's skill and labour, but that of the designer who designed the object; and no one suggests that this is entitled to copyright. Indirect production of functional design is therefore not infringement.'

The answer to this argument, I would suggest, is the following. It is accepted in copyright law, as I have tried to show above, that an original work is protected even though the author may have borrowed extensively from others. Of course, if infringement is alleged the plaintiff must show that it is the author's work (and not that of somebody whose work he had borrowed) which was copied. This is a matter of fact which might be difficult to establish in particular circumstances, and this difficulty may be increased where the copy not only reflects the work of more than one progenitor, but does so in a different form, such as where there is a three-dimensional reproduction of drawings. The latter difficulty was recognized as far back as in the King Features case (see the above-quoted passage from the judgment of Clauson LJ). However, if it is established as a fact that the three-dimensional object is a copy (direct or indirect) of the original drawing (as distinct from a mere embodiment of the designer's idea) there would not appear to be any rule of copyright law whereby protection could be denied the aggrieved owner of the copyright in the drawing. If the result is considered unsatisfactory, it is only the Legislature which can, in my view, alter it (as it has done in some respects in this country - a matter to which I advert later).

To sum up, I am in respectful agreement with the cases which have held that indirect copying of the sort with which we are here concerned is in principle an infringement of the copyright in the original drawings. Concerning the question whether there was in fact an infringement in the present case, I agree with the following conclusion by the Judge a quo (report at 648):

   '... it has been incontestably shown that the respondent has for the purpose of manufacture and sale copied valves made in accordance with the applicant's drawings. The respondent was requested to produce the engineering drawings which it used for the manufacture of its own valves, but has declined to do so. Indeed the clearest evidence of copying is to be found not only in a visual comparison of the two products but in the answering affidavit deposed to by Mr Bell, the managing director of the respondent, in which he states: "The respondent in 1977 starting manufacturing components which could be interchanged with the components used in the Saunders type diaphragm valves found on the mines. The measurements of the respondent's components were made in conformity with those requirements."'

In argument Mr Kentridge pointed to certain differences between the parties' valves as indicating, so he contended, that the appellant's valves were more than mere copies of the respondent's drawings. In my view these minor differences cannot detract from the conclusion that there has been a reproduction of at least a 'substantial part' of the respondent's drawings within the meaning of s 1(2) of the 1911 British Act.

The appellant's final argument on this aspect was that oral evidence should have been allowed to determine whether the respondent's drawings were copied or not. I have indicated in general why I do not think the case should have been referred for oral evidence. In regard to the present issue I also do not think that oral evidence could have made any difference.

I conclude therefore that the respondent has established that copyright subsisted in its drawings pursuant to the 1911 British Act as incorporated in our Act of 1916, and that the appellant has infringed its copyright.

It is interesting to note in passing that some of the difficulties and anomalies in this branch of the law have recently received the attention of our Legislature. Act 66 of 1983 has amended the 1978 Act by including, within the definition of 'drawing', any drawing of a technical nature'. In future proceedings under that Act there will accordingly be no doubt that such drawings are 'artistic works'. 'Reproduction' was defined in the original 1978 Act as including, in relation to artistic works, 'a version produced by converting the work into a three-dimensional form, or, if it is in three dimensions, by converting it into a two-dimensional form'. By Act 66 of 1983 the definition of 'reproduction' was extended to include, in relation to any work, 'a reproduction made from a reproduction of that work'. Consequently the definition of reproduction now makes explicit provision for indirect reproduction and for reproduction of two-dimensional artistic works in three-dimensional form. These changes are not of any consequence: in both respects the Act merely repeats what was clear law before. What is of greater importance was the introduction of s 15(3A) by Act 66 of 1983. The effect of this section is, broadly, to limit the duration of copyright protection to a period of ten years for the industrial reproduction of utilitarian articles which infringe the copyright of artistic works - in other words, cases of reverse engineering like the present. This meets a major objection to the preexisting law, namely that the protection was available for an anomalously long period.

The respondent's locus standi

Having concluded that the respondent is the owner of copyright in the drawings on which it relies and that the appellant has infringed its copyright, I have now to consider whether the respondent had locus standi to institute proceedings in respect of such infringement. It appears that as from May 1978 a company called Valve Makers of South Africa (Pty) Ltd, which was then a subsidiary of the respondent, was granted an exclusive licence in South Africa in respect of the copyright in the respondent's aforesaid engineering drawings. In June 1982 there was a rearrangement of interests, the exclusive licence being granted to Stewarts & Lloyds of South Africa Ltd with Valve Makers becoming exclusive sub-licensee. The appellant contends that only the exclusive licensee or the exclusive sub-licensee had locus standi to bring the present proceedings. A similar argument was rejected in the Full Bench decision of Video Parktown North (Pty) Ltd v Paramount Pictures Corporation; Video Parktown North (Pty ) Ltd v Shelbume Associates and Others ; Video Parktown North (Pty) Ltd v Century Associates and Others1986 (2) SA 623 (T). I agree with the conclusion reached by the Full Bench and propose doing no more than setting out briefly my reasons for so agreeing.

The appellant's argument is based on an interpretation of certain provisions of the 1978 Act. Section I provides inter alia that

'"exclusive licence" means a licence authorizing a licensee, to the exclusion of all other persons, including the grantor of the licence, to exercise a right which by virtue of this Act would, apart from the licence, be exercisable exclusively by the owner of the copyright; and "exclusive licensee" shall be construed accordingly.'

Section 24 provides that, subject to the provisions of the Act, 'infringements of copyright shall be actionable at the suit of the owner of the copyright.'

Section 25 then lays down that '(t)he exclusive licensee shall have the same rights of action and be entitled to the same remedies as if the licence had been an assignment.'

If one reads ss 24 and 25 together their effect is reasonably clear. Whereas the owner is, in terms of s 24, the party who is primarily entitled to institute action against infringers, s 25 grants to the licensee the rights of action and remedies of an assignee (which in effect are the same as the owner's). The section does not, however, say that the grant of rights to the exclusive licensee is to be accompanied by a corresponding diminution of the owner's rights, nor does it say that the exclusive licensee is to be regarded as in all respects equivalent to an assignee, which might have implied such a diminution. Purely as a matter of interpretation it would accordingly seem that the owner has not been deprived of locus standi in favour of the exclusive licensee.

This view is fortified if one has regard to the respective rights of the owner and the exclusive licensee. By granting an exclusive licence, even in the widest possible terms, the owner does not lose his ownership. The practical value of his ownership might vary, but in most cases it would remain important since both his right to receive royalties from the licensee and his right of reversion if the licence were to terminate for any reason, would depend on it. It seems unthinkable therefore that the Legislature would have intended to deprive the owner of the locus standi which he might need to protect the rights which he has retained despite the grant of an exclusive licence.

We were referred to the legislative history of these provisions. In view of the relative clarity of the wording of the relevant sections I do not think that there is really any need to consider this history, but in any event I do not think that it leads to a different conclusion. As was pointed out in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation (supra at 632), a licence was historically only an authority enabling the licensee to do lawfully what he could not do without the licence, and granted no proprietary interest in the copyright. Under the 1911 British Act it was uncertain whether an exclusive licensee was entitled to sue in his own name for infringement of copyright. See Copinger & Skone James (supra para 431), for the English cases. In Kinekor Films (Pty) Ltd v Movie Time1976 (1) SA 649 (D) at 658 - 9 it was held that the exclusive licensee did not have locus standi. See also Clifford  Harris (Pty) Ltd v S G B Building Equipment (Pty) Ltd1980 (2) SA 141 (T) at 143 - 149 and cases there quoted.

This uncertainty was set at rest in the 1965 Act. The 1965 Act set out in detail the rights and remedies of the owner against infringers (ss 18 and 19). Section 20 then explicitly granted those rights and remedies to an exclusive licensee 'as if the licence had been an assignment', but specified that some of 'those rights and remedies shall be concurrent with the rights and remedies of the owner of the copyright' (s 20(2)(a); whereas in respect of others the exclusive licensee supplanted the owner in the exercise of the rights in question (s 20(2)(c)). Section 20 also contained elaborate provisions governing the manner in which proceedings were to be instituted and conducted by owners and exclusive licensees and how the Court should decide cases involving both owners and exclusive licensees.

For present purposes it seems to me that the only significant feature of the 1965 Act is that, when the Legislature expressly granted an exclusive licensee locus standis if the licence were an assignment, it did not regard the licensee's locus standi as inconsistent in principle with that of the owner.

In the 1978 Act the Legislature obviously decided to simplify the whole system by providing merely that both the owner and the exclusive licensee would have locus standi to institute action against infringers, leaving it to the Courts to resolve any competition between them. This the Courts could do by applying ordinary legal principles.

It appears, however, that this solution was not considered completely satisfactory, for s 25 was replaced by Act 39 of 1986 with the following:

   'An exclusive licensee and an exclusive sub-licensee shall have the same rights of action and be entitled to the same remedies as if the licence were an assignment, and those rights and remedies shall be concurrent with the rights and remedies of the owner of the copyright under which the licence and sub-licence were granted.'

I do not consider it necessary to analyse the new section or to determine whether or to what extent it has changed the law. Presumably the amendment was prompted by the view that, under the unamended section, the owner's rights and remedies were not concurrent with those of the exclusive licensee, or that it was uncertain whether they were. Whatever may be the true reason, it does seem clear to me that this new provision, which expressly lays down that the owner's locus standi is to be concurrent with that of the exclusive licensee, does not thereby imply that, in the Legislature's view, the owner previously had no locus standi whatever, not even to protect his undoubted rights and interests.

For the reasons I have stated I consider that, despite the grant of an exclusive licence, the respondent in the present case retained its locus standi to act against infringers.

Joinder of the exclusive licensee and the exclusive sub-licensee

During the course of argument the Court raised the question whether the exclusive licensee and the exclusive sub-licensee should not have been joined as parties to these proceedings. The appellant and the respondent both indicated that they did not desire the joinder of the licensee or the sub-licensee. Of course, the desire of the parties cannot be conclusive in this matter. As was pointed out in Amalgamated Engineering Union v Minister of Labour1949 (3) SA 637 (A) at 649, the fact that the two parties before the Court desire the case to proceed in the absence of a third party cannot relieve the Court from inquiring into the question whether the order it is asked to make may affect the third party. Consequently, after judgment was reserved on all issues, the Court intimated to the parties by letter that a decision on the joinder issue might be necessary unless there were to be filed a written consent by each of the licensee and sub-licensee agreeing to be bound by the Court's judgment, notwithstanding that it has not been cited as a party to the proceedings. Such consents have now been filed, and it has accordingly become unnecessary to determine whether, in the absence of such consents, the non-joinder of these persons would have precluded the Court from deciding some or all of the issues in this appeal.

The relief granted to the respondent

As I indicated in the introductory part of this judgment, the respondent's main prayers in the Court a quo were for interdicts restraining the appellant from infringing the respondent's copyright in the drawings and its trade mark 'Saunders'. The respondent also prayed for, and was granted, relief ancillary to these main prayers. On appeal the appellant contended that the Court's ruling on one ancillary prayer, viz the prayer for an account of profits in respect of the copyright infringement, was wrong and should be set aside. No objection was taken to any other form of relief granted by the Court a quo and I express no view on the correctness of any order in this regard.

The matter of an account of profits was treated very tersely in the proceedings before the Court a quo. In its notice of motion the respondent prayed in bare terms for 'an account of profits'. No substantive averment was made in the founding affidavits to support this prayer. It is not clear what argument, if any, was presented to the Court a quo in support of, or in opposition to, an order for an account of profits. The judgment does not deal with any argument in this regard: in fact, the only reference in the judgment to this issue is in the order, which contains the following:

   'The prayer for an account... is referred as a separate issue for the hearing of oral evidence. Leave is granted to the parties to apply for amplification of this latter order, if necessary.'

The parties did not make use of the leave to apply for amplification of the order, and it is accordingly not clear what precisely the issue was which, in the view of the trial Court, called for the hearing of oral evidence. What is clear, however, is that the Court has not granted or refused any order for the giving of an account of profits, nor has the Court expressed any view on the circumstances which would justify such an order, or the effect which such an order would have. All these matters would appear to be still open to the Court a quo at the resumed hearing which is envisaged by the direction which I have quoted above. In these circumstances, the question arises whether this direction is appealable at all.

Section 20 of the Supreme Court Act 59 of 1959, makes provision for an appeal to this Court against 'a judgment or order' of the Court of a Provincial or Local Division. See particularly ss (1) and (4). It has often been held that 'judgment' here relates to a decision given upon relief claimed in an action and 'order' to a decision given upon relief claimed on application or on summons for provisional sentence. See Desai v Engar and Engar1966 (4) SA 647 (A) at 653B - C, Constantia Insurance Co Ltd v Nohamba1986 (3) SA 27 (A) at 42H - 43G, and the earlier authorities cited in these two judgments.

The question then is whether the direction referring the present issue for the hearing of oral evidence amounts to an 'order'. The judgment in Union Government (Minister of the Interior) and Registrar of Asiatics v Naidoo 1916 AD 50 appears to be direct authority on this point. In that case the respondent had applied to a Judge in Chambers to set aside a deportation warrant, to interdict his deportation and for other specified relief. The application was opposed on the ground, inter alia, that the Court had no authority to hear the matter. The Judge expressed himself in favour of the view that the Court had authority to go into the question, but found himself unable to settle it upon the affidavits before him. He therefore directed that oral testimony should be adduced, and adjourned the case for that purpose. The Government applied to the Appellate Division for special leave to appeal. Innes CJ, who delivered the judgment of the Court, said the following (at 51 - 2):

   'Is there under these circumstances any decree in existence against which we should be justified in granting leave to appeal? In Dickenson's case (1914 AD 424) a ruling upon evidence was held not to be an order against which leave to appeal could be granted, because it did not constitute a decision upon an application for specific relief. This is a converse case. There has been an application for relief, but no decision upon it. The prayer of the petition falls under nine separate heads, and in regard to none of them has any order been made. The application has merely been postponed for further evidence. When the enquiry is resumed the Judge may decide in favour of the present applicants on the facts; or he may possibly, though very improbably, revise his view of the law upon further argument. But if he does neither; if he finds against the applicants on the law and the facts, and grants the relief prayed for, it will then be competent for them to appeal and to raise every point upon which they now wish to rely. The fact is that the present application is for leave to appeal not against the order of the learned Judge - for he has made none - but against his reasons.'

The judgment in Naidoo's case has consistently been followed in this Court. See, for instance, Tropical (Commercial and Industrial) Ltd v Plywoods Products Ltd1956 (1) SA 339 (A) at 343C - E, Heyman v Yorkshire Insurance Co Ltd1964 (1) SA 487 (A) at 491B, Desai's case supra at 653D - E and Nohamba's case supra at 43E - F.

The present case is clearly indistinguishable from Naidoo's case. It follows that the direction given by the Judge a quo in the present matter, was not an order and was consequently not appealable. The fact that the leave to appeal granted by the Judge a quo included this direction obviously cannot affect this conclusion. Leave to appeal is a prerequisite for an appeal against a 'judgment or order' (see s 20(4) of the Supreme Court Act) and can consequently have no effect unless there is a 'judgment or order' to appeal against.

In the result the appellant's attack upon the Judge's direction relating to an account of profits cannot be sustained.

Trade mark infringement

The last substantive point in this appeal relates to trade marks. The respondent is the proprietor of the trade mark 'Saunders' which is registered in various classes. In the introductory part of this judgment I quoted an extract from brochures issued by the appellant. It will be recalled that these brochures contained the words 'All Klep diaphragm valve parts... are interchangeable with "Saunders" diaphragm valves'. The respondent contended that this represented an infringement of its trade mark pursuant to s 44(1)(b) of the Trade Marks Act 62 of 1963, as being 'unauthorized use in the course of trade, otherwise than as a trade mark, of a mark so nearly resembling it as to be likely to deceive or cause confusion... in relation to or in connection with goods... for which the trade mark is registered... likely to cause injury or prejudice to the proprietor of the trade mark.'

The Court a quo agreed with the respondent and granted an order restraining the infringement of the trade mark.

On appeal the appellant does not contest that its conduct falls within the terms of s 44(1)(b). Its sole point is that the trade mark is not entitled to protection and is liable to expungement from the register. Since this contention places the validity of the trade mark in issue, the appellant has petitioned the Court to join the Registrar of Trade Marks as a party to this appeal. It was held by this Court in Esquire Electronics Ltd v Executive Video1986 (2) SA 576 (A) that such joinder is necessary in a case like the present. Neither the Registrar nor the respondent opposes the petition and it will be granted subject to payment by the appellant of all costs occasioned thereby.

The appellant relies for its contention on s 41 of the Trade Mark Act. Section 41(1) lays down:

   '(1) If a trade marks consists of a word which has become generally recognized by the public as the only practicable name or description for any article... for which it is registered and has commonly been so used by persons carrying on business in relation to such article... (not being used in relation to goods... connected in the course of trade with the proprietor... of the trade mark...), the registration of such trade mark shall... be deemed to be an entry wrongly remaining on the register for the article... in question'.

This subsection lays down two requirements, viz

   (a) that the trade mark should consist of a word which has become generally recognized by the public as the only practicable name or description for an article; and

   (b) that the word should have been commonly so used, with reference to goods unconnected with the trade of the proprietor of the trade mark, by persons carrying on business in relation to such article.

In my view the appellant has not established either of these requirements. The evidence on which it relies is mainly that of Prof T O Duggan, who is an associate professor of engineering at the University of the Witwatersrand. He states the following:

   'Ever since I came into the field of mechanical engineering in the late 1940's, diaphragm valves of this type have been known to me as "Saunders valves". It is a term which has been in general use in this field to describe them. In my view, the use of the term "Saunders valve" is common in industry to describe this type of valve. I am supported in this view by what is stated in Engineering dated 18 September 1931, being annexure TD25, which refers to these valves as Saunders valves.'

The extract from Engineering does not seem pertinent. The references to 'Saunders valves' in the article seem to be only to valves manufactured by the respondent's predecessor or its licensee.

 In the passage quoted above, Prof Duggan refers to 'diaphragm valves of this type'. He does not, however, indicate what type of diaphragm valve is appropriately described as a 'Saunders valve'. Mr T P Bell, the appellant's managing director, is equally vague. He states that he has been aware of Saunders valves for many years 'and I consider it as being a particular type of diaphragm valve'. This evidence can hardly be said to indicate that there is any article, other than a valve made by the respondent, which is commonly called a Saunders valve, and still less that this name is the only practicable name or description for such article, if it exists. Expungement of a trade mark can have serious consequences for its proprietor and should not be authorized except on clear evidence.

But the matter does not end there. The appellant itself describes its valves in the aforesaid brochures as 'Klep type "A" diaphragm valve' and 'Klep type "KB" diaphragm valve'. Obviously these descriptions were considered sufficient to identify the valves. Also, as already stated, the brochures indicate that the parts of the appellant's valves are interchangeable with '"Saunders" diaphragm valves'. The reference to 'Saunders' valves is clearly to the respondent's valves, and not to articles of a particular type which may have been manufactured by somebody else. These brochures seem to negative any suggestion that the term 'Saunders valve' has become the only practicable name or description for the article.

On the evidence as a whole it seems clear that the appellant has not established the requirements of s 41(1) of the Trade Marks Act.

In the alternative the appellant relied on s 41(3) of the Act. This section lays down inter alia that the provisions of ss (1) would apply to trade marks consisting of a word which is the 'only practicable name or description of an article... for which such trade mark was registered, if such article... was the subject of Letters Patent in the Republic which have expired or lapsed'. As I have indicated, however, I do not think that the appellant has established that Saunders is the only practicable name or description of any article.

It follows, therefore, that in my view the appeal on this aspect should also fail.

The order

In the result the appellant's attack on the order of the trial Court fails in all respects. The order of this Court is accordingly as follows:

            (1)   prayer 1 of the appellant's petition for joinder is granted, the appellant to pay all costs occasioned thereby;

(2)   the appeal is dismissed with costs;

            (3)   the orders for costs are to include costs occasioned by the employment of two counsel.

Corbett JA, Joubert JA, Galgut AJA and Nicholas AJA concurred.

Appellant's Attorneys: Godfrey Rabin & Partners, Johannesburg; Savage, Fooste & Adams, Pretoria; Israel & Sackstein,  I Bloemfontein. Respondent's Attorneys: Spoor & Fisher, Pretoria; McIntyre & Van der Post, Bloemfontein.

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METRO GOLDWYN-MAYER INC AND OTHERS v ACKERMAN AND OTHERS

SOUTH-EASTERN CAPE LOCAL DIVISION

KROON J

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JUDGMENT

Each of the nine plaintiffs is a legal persona, either a corporation or a limited partnership, duly incorporated under the laws of the State of Delaware, United States of America and each conducts business as a producer and distributor of cinematograph films.

The first defendant is a businessman and the sole member and manager of the second defendant. The second defendant is a close corporation which conducts business in Port Elizabeth, under the style of Film World, as a distributor by way of sale or hire, to members of the public, of video tape copies of cinematograph films.

The nine plaintiffs each instituted a separate action against the defendants for certain relief the cause of action relied upon in each case being an alleged infringement of copyright and, where applicable, an alleged unauthorised use of a trade mark. The allegations related to an alleged illegal use by the defendants of certain cinematograph films. After the close of pleadings an order consolidating the nine actions was granted by this court.

When the hearing commenced I was advised by Mr Cullabine, who appeared for the plaintiffs, that the sixth plaintiff, Buena Vista Pictures Distribution Incorporated, was not proceeding with its claims against the defendants. A collective reference hereinafter to the plaintiffs will accordingly be a reference to the remaining eight plaintiffs. I was further advised that the latter plaintiffs were not proceeding with their claims insofar as same related to a large number of the cinematograph films/trailers referred to in the pleadings and were restricting their claims to allegations in respect of certain specified films/trailers details of which will appear below.

The following is common cause or not in dispute:

(1) At all material times

(a) valid copyright subsisted in the Republic of South Africa in terms of the provisions of the Copyright Act (no 98 of 1978) in the cinematograph films the titles of which appear under the headings of `Films' and `Trailers' in the schedule set out below;

(b) the plaintiffs were respectively the copyright owners or exclusive licensees, within the meaning of the Copyright Act, of those films the titles of which appear below the name of each plaintiff in the schedule;

(c) the films were duly registered in terms of the provisions of the Registration of Copyright in Cinematograph Films Act (no 62 of 1977) in the name of the plaintiff in question either as copyright owner or exclusive licensee;

(d)  each of the plaintiffs was accordingly vested with the exclusive right in respect of the applicable films and trailers to do or to authorise in the Republic of South Africa the acts envisaged in section 8 of the Copyright Act.

(e)  the trailers reflected in the schedule were substantial parts of the films in question.

(f) the defendants were aware that copyright subsisted in the said films.

SCHEDULE

[...]

(2) At all material times

(a)  the respective plaintiffs reflected in the schedule set out below were the proprietors in the Republic of South Africa of the registered trade marks listed below the name of the applicable plaintiff;

(b)  the said trade marks were valid, subsisting and of full force and effect in the Republic of South Africa and the provisions of section 60 of the Trade Marks Act (no 62 of 1963) were applicable thereto;

(c)  the respective trade marks were registered in respect of, inter alia, cinematograph films and recorded video tapes;

(d) The respective trade marks appeared on the applicable films/trailers reflected in the said schedule and the video cassettes in which they were contained (all such films/trailers being included in the schedule set out earlier in this judgment).

SCHEDULE
[...]

(3) (a) During the course of a search, referred to in the evidence as a raid, conducted at the premises of the second defendant in the presence of the first defendant on 11 August 1993 by one Van As, an inspector in the South African Police Services, one Potgieter, a senior field inspector in the employ of the Motion Picture Association of America, and another member of the South African Police Services, video cassettes containing recorded video copies of the films and trailers referred to above together with a number of other video cassettes containing copies of films were found in a locked walk-in safe. Possession of all the said video cassettes was thereupon taken. They were exhibit `1' at the trial.

(b)  The labels on the cassettes, which depicted the names of the films contained therein, were handwritten and some bore the word `Master'.

(c)  All of the copies of the films/trailers referred to earlier had been made without the authority of the relevant copyright owner or exclusive licensee for the Republic of South Africa or any other party who could grant any relevant rights in respect of films subject to copyright and were accordingly copies which infringed the copyright therein.

(d)  Any use by the defendants thereof in the course of business of the second defendant would have constituted unauthorised use, as envisaged in section 44(1)(a) and (b) of the Trade Marks Act, of such trade marks as appeared thereon or on the cassettes and accordingly an infringement of the rights held in such trade marks.

(4) (a)Certain companies were at all material times the duly appointed exclusive licensees of the respective plaintiffs in the Republic of South Africa in respect of the said films and trailers, viz., CIC Video (Pty) Ltd for the third and ninth plaintiffs; Nu-Metro Video (Pty) Ltd for the first, second, fifth and eighth plaintiffs; Ster-Kinekor Films (Pty) Ltd for the fourth and seventh plaintiffs.

(b) Formal notice of the institution of these proceedings was given on behalf of the plaintiffs to the said companies as envisaged in section 24(1C) of the Copyright Act and the companies responded by intimating that they had no objection to the proceedings and did not intend to intervene therein.

(5)  A minimum royalty of R50 000,00 would have been payable by a licensee in the Republic of South Africa to the respective copyright holders in respect of any of the films referred to earlier. The average of such royalties would have been the sum of R70 000,00. By way of explanation it should be recorded that during the course of the trial Mr Cullabine advised me from the Bar that the parties had agreed on the figure of R70 000,00 as being the minimum royalty which would have been payable in respect of any of the films. It appeared during argument, however, that there had been a misunderstanding in this regard and an agreement between the parties in the terms set out above was recorded at that stage.

(6)  On a previous occasion the defendants had, in response to a complaint and demand made on behalf of the owner of the copyright in a film titled `One Flew Over The Cuckoo's Nest' founded on the defendants' possession of a copy thereof, paid the sum of R5 000,00 to the local representatives of the Motion Picture Association of America. In respect of a still earlier incident, the details of which were not canvassed during the evidence, the defendants had paid the sum of R1 500,00.

In respect of the first leg of its claim, ie that founded on alleged infringement of copyright, it is the allegation of each plaintiff that, without the requisite authority and in breach of the plaintiff's rights as copyright owner or exclusive licensee in respect of the relevant films, the defendants engaged in:

(a) making reproductions and/or adaptations of the films or substantial parts thereof,

(b)letting or offering or exposing for hire by way of trade, directly or indirectly, reproductions or adaptations of the films or substantial parts thereof,

(c) importing into the Republic of South Africa for a purpose other than their own private and domestic use and/or selling, letting or by way of trade offering or exposing for sale or hire and/or distributing for the purpose of trade or for some other purpose to an extent where the plaintiff or, where the plaintiff was the exclusive licensee, the copyright owner was prejudicially affected, reproductions of the films or substantial parts thereof, the making of which, to the knowledge of the defendants, constituted infringement of the copyright in the films, or would have constituted such infringement if such manufacture had taken place in South Africa.

In respect of the second leg of its claim, ie that founded on alleged infringement of trade mark(s), each plaintiff alleges that, without the requisite authority and, as envisaged in section 44(1)(a) and (b) of the Trade Marks Act, in breach of the plaintiff's rights in the relevant trade mark(s), the defendants used the plaintiff's trade mark(s) in relation to the relevant films/trailers by

(a) selling, letting or, by way of trade, offering or exposing for sale or hire the films/trailers;

(b) distributing the films/trailers for the purposes of trade.

The further allegation of each plaintiff is that it apprehends on reasonable grounds that the defendants will continue their unlawful activities referred to above unless restrained from doing so by an order of this court and that it has no other remedy available.

The relief sought by each of the plaintiffs as set out during the argument of Mr Cullabine, is:

(1)  an order interdicting the defendants from infringing its rights to copyright in the relevant films;

(2)  an order interdicting the defendants from infringing its rights to its trade mark(s);

(3)  the payment of damages for infringement of copyright;

(4) the payment of additional damages for infringement of copyright as envisaged in section 24(3) of the Copyright Act;

(5)costs of suit.

Each summons also contained prayers for relief in the form of delivery up of all copies of the films/trailers, but in that the plaintiffs had already secured possession of same the plaintiffs did not persist in seeking such relief.

The allegations made in the respective particulars of claim in support of the claim for additional damages referred to above were couched thus:

'Having regard to the flagrancy of the First and Second Defendant's copyright infringement, and the benefit which has accrued to the First and Second Defendants by reason of the infringement as a consequence of unauthorised copying having taken place without payment of any consideration or royalties and as effective relief would not otherwise be available to the Plaintiff, the Plaintiff has suffered additional damages within the meaning of section 24(3) of the Copyright Act ...'

The evidence on behalf of the plaintiffs concerning or bearing on the search conducted at the premises of the second defendant on 11 August 1993 was as follows:

One Askew, the Director of the Film Security Office of the Motion Picture Association of America in South Africa, testified that the Association which is comprised of the nine plaintiffs, all major American film studios, which finance it, was formed to combat what was referred to as piracy, ie acts done by persons in infringement of the copyright and trade mark rights of members.

Potgieter testified that in his capacity as a senior field inspector in the employ of the Association he received certain information from one Holtzhausen, who was then in the employ of the second defendant. Holtzhausen further furnished him with a video tape recording (exhibit `2') of certain portions of the interior of the premises of the second defendant. The recording was played during the trial in a television set brought into the courtroom for that purpose. It depicted, inter alia, someone opening the walk-in safe with a key, various film cassettes—included amongst which were the cassettes containing copies of the films which are the subject matter of these proceedings—in the safe, a workshop area in which were, inter alia, two video machines, one on top of the other and a cassette holder bearing the name of a film, `Robin Hood, Prince of Thieves' on top of the video machines. Arrangements were made for a meeting in Port Elizabeth between Potgieter, Holtzhausen and members of the Sanab branch of the South African Police Services. Inspector van As interviewed Holtzhausen and on the strength of information so received obtained a search warrant authorising a search of the second defendant's premises. Potgieter, van As and another policeman repaired to the premises of the second defendant where van As identified himself to the first defendant and gave him a copy of the warrant. He, Potgieter, also identified himself to the first defendant. According to Potgieter the warrant authorised a search for material which infringed copyright in films and the first defendant was so advised. The latter had no objection to the search being carried out and in fact co-operated fully. Although Potgieter knew, because of what Holtzhausen had told him, that the tapes that he was looking for were in the safe, in order to protect the identity of his informant, the search was commenced behind the counter, thereafter through the stalls and eventually in the safe, which the first defendant unlocked at their request. In the safe, amongst other items, the video cassettes comprising exhibit `1', which included the cassettes containing copies of the films that are the subject matter of these proceedings, were found and possession thereof was taken. The tapes were on the face of it illegal ones and Potgieter sought an explanation from the first defendant for them whereupon the first defendant stated that he had made the tapes to use as his `masters' because the tapes that were his stock-in-trade suffered a `lot of damages in the market place' and instead of buying new tapes he would make copies from the `masters' to replace the damaged tapes. At no stage did the first defendant proffer the explanation that he had acquired the tapes from someone in George and a proposition to that effect by Mr Vlok, who appeared for the defendants, was rejected. The handwritten labels on the tapes were different from the labels on tapes marketed to the public. The scenes of the work area shown on exhibit `2' indicated to him that copying of tapes was undertaken there. He denied the proposition put to him under cross-examination that while the first defendant did refer to `masters' the reference was to his own collection of classical films and was not a reference to the subject tapes.

Inspector van As confirmed the correctness of a statement which he had made on 30 August 1993 concerning the incident (exhibit `H'). The essence thereof was that on 11 August 1993 his informant—ie Holtzhausen—advised him that the first defendant was in possession of pornographic material stored at the premises of the second defendant. On the strength of that information he secured a search warrant and he, Potgieter and another policeman proceeded to the premises in question. The purpose of his visit was explained to the first defendant who was also favoured with a copy of the warrant. In what he referred to as the storeroom—the reference clearly being to the walk-in safe—a large number of video cassettes was found. Inspection thereof revealed no pornographic material. Potgieter made the observation that the cassettes had been `oorgetape' and that an infraction of the Copyright Act had taken place and he enquired from the first defendant if he hired the cassettes out to the public to which the first defendant replied in the affirmative. The cassettes were seized and the first defendant was advised that a case docket relating to a charge under the Copyright Act would be opened against him. Subsequently the first defendant's attorneys submitted to him a statement by the first defendant (exhibit `I'). Under cross-examination van As affirmed that he had gone to the defendants' premises to search for pornographic material, but that Potgieter had also identified himself to the first defendant and stated that he, too, wished to carry out an inspection. Van As also rejected the proposition that when the first defendant used the word `masters' the reference was not to exhibit `1' but to other tapes in the safe. He similarly rejected the proposition that the first defendant had proffered the explanation that he had obtained exhibit `1' from one Sonnen of George. He was unable to recall whether the first defendant had made mention of tapes in his stock-in-trade being damaged, but he added that he was not throughout in the immediate company of Potgieter and the first defendant.

The first defendant's version of what occurred on the occasion in question and his explanation in respect of the subject cassettes will be set out and discussed presently. At this stage it may be recorded that, as already indicated earlier, he did not dispute that the cassettes containing copies of the films which are the subject of these proceedings were found in the possession of himself and the second defendant and were amongst those found in the safe in the premises.

Accordingly, section 26(10) of the Copyright Act came into play. It provides as follows:

`In any proceedings by virtue of this Chapter with regard to the alleged infringement of the copyright in a cinematograph film, a sound recording or a computer program, it shall be presumed, until the contrary is proved, that any person trading in the selling, letting or distribution of copies of any of the said works, and who was found in possession of a copy of such works, sold or let for hire or by way of trade offered or exposed for sale or hire such copy.'

The evidence offered by the defendants in rebuttal of the presumption provided for in the section was the following:

The first defendant stated that he was advised by a Mrs van den Berg, also a video shop owner in Port Elizabeth, that the owners of a video shop in George, Mr and Mrs Sonnen, were desirous of disposing of a quantity of video tape cassettes. Initially the asking price was R5 000,00 which was too high for the first defendant. The price was subsequently reduced to R1 500,00. Being under the impression that the items constituted legal stock-in-trade of the Sonnens albeit he did not ascertain the titles of the films, he contacted Mrs Sonnen telephonically and agreement was reached that he would purchase the tapes, 300 in number, for R1 500,00 representing a price of R5,00 per tape. At her request he deposited the sum of R1 500,00 into her bank account at Trust Bank. The boxes containing the tapes were delivered in his absence and his staff, as was their custom, opened same and commenced putting the firm's labels on the tapes. He arrived while this exercise was in progress, but, on observing straightaway that the tapes were illegal copies of films, locked them away in the safe. What moved him to that conclusion was the very unusual circumstance that a number of the tapes comprised copies of two films and the handwritten labels on the cassettes. He explained that he would have put the tapes, which were in good physical condition to a legitimate use, ie by wiping them clean and then using them for the purpose of making copies of home or other private video films for customers. Wiping the tapes clean would entail running them through a video machine with the `play' and `record' buttons depressed, a process taking three hours for each tape. He received the tapes during June/July 1993 and by the time he deposited the purchase price in the relevant account the Sonnens had left for overseas. It was therefore impossible for him to cancel the contract and he had in any event acquired them for a cheap price even for blank tapes. The films on the tapes were not of the kind favoured by his clientele who came predominantly from the Black section of the community and who preferred `action' or `karate' films. He was the only one who had a key to the safe and had been shocked to observe on the video film, exhibit `2', someone using another key to open the safe. After the events in question he had come across another key to the safe behind a television set in the premises which key had clearly been acquired by nefarious means. His explanation for the two video machines which were shown in the film was that the business engaged extensively in what he referred to as `dubbing', ie legitimately making copies of home or private video films for customers who requested same. He dealt at some length with his relationship with Holtzhausen and the character of the latter who had since disappeared—but it is unnecessary for purposes of this judgment to refer thereto. As to the events on 11 August 1993 he confirmed that when van As, Potgieter and the other policeman arrived van As introduced himself and explained that the purpose of their visit was to search for pornographic material. He registered no objection. At their request he unlocked the safe. It was after the films comprising exhibit `1' were discovered that Potgieter introduced himself as a representative of the Motion Picture Association of America and advised him that the cassettes in question were being confiscated. He, the first defendant, furnished the boxes into which the films were packed. He did state to Potgieter that the tapes in the safe were his `masters', but, so he explained, the reference was not to the tapes which had been confiscated but to his private collection of old classical films which were also in the safe and which he thought were also going to be confiscated. He stamped the evidence of Potgieter and van As as to the explanations he allegedly gave as blatant lies. He did not explain the origin of the confiscated tapes to Potgieter, a statement he confirmed when his attorney repeated the relevant question. He later added that he did not have to volunteer that information—meaning presumably that no explanation was sought from him—and intimated that in any event he would not have been believed. Moreover, his attorneys had advised him not to make any statements. He knew that Potgieter wished to check if the tapes were `pirate' copies. He added that he already had legitimate copies of approximately 90% of the confiscated tapes amongst his stock-in-trade and, with reference to his earlier evidence that his clientele was largely uninterested in such merchandise, explained the presence of such stock by pointing to the fact that when purchasing new stock video shop owners are obliged to accept a package which includes such unwanted material, referred to as `fillers'. The tapes were not available for hire out to the public or loan to his friends. Hiring out thereof would have been difficult as the tapes had not been numbered or catalogued and would, by reason of the condition of the tapes, have damaged his reputation. He confirmed that exhibit `I' was a statement made by him in consultation with his attorneys and submitted by them to the police. It contained the details of his defence. He conceded that some of the tapes confiscated had been retrieved from the work area in his premises in regard to which he said that Holtzhausen must have duplicated the safe key and removed some of the tapes to the work area and then video- taped the scene so as to create the impression that duplicating of the tapes was being undertaken.

Mrs van den Berg confirmed that the Sonnens, who were friends of hers, had contacted her sometime after May 1993 offering video tapes for sale. Their initial asking price was R5 000,00 and the number of tapes involved was 150, a figure of which she was sure. She herself was not interested in acquiring the tapes, but told the Sonnens that she would make enquiries from other video shop owners. One of those approached by her was the first defendant. He balked at the price of R5 000,00. She heard subsequently from the first defendant that he had in fact purchased the tapes from the Sonnens for R1 500,00. The conversation between them on that occasion also canvassed the fact that the tapes had only cost R5,00 each and that the defendant could put them to good use as blank tapes. She had given his telephone number to the Sonnens. She expressed some disbelief at the suggestion that the defendants would have wanted to trade in `fillers', the reference being to the confiscated tapes.

One Pienaar testified that while he was studying at the University of Port Elizabeth he engaged in part-time shift employment with the defendants during the period 1988 to about May 1994. Since approximately 1990 he had gone out of town once a week to sell videos on behalf of the business. He had never seen exhibit `1' on the premises and as far as he was aware the defendants had never traded therein or in any other illegal material. Part of his duties consisted of making copies of private films for customers. He confirmed that the practice in the business was for staff to open consignments of stock, label the cassettes and list them alphabetically and numerically. He conceded that in the nature of things there had been many times when the first defendant was in the shop and he was absent. The safe did contain spare copies of films purchased second hand to replace copies in stock which became damaged. Such replacements would be done on the instructions of the first defendant who was the only one who had a key to the safe.

It was the submission of Mr Cullabine that on a proper assessment of the evidence in its entirety the defendant had failed to discharge the onus imposed on them in terms of section 26(10) of the Copyright Act. Indeed, he argued that even if the plaintiffs were not assisted by any presumption they had nevertheless succeeded in establishing that the defendants had, in breach of the copyright of the plaintiffs, traded illegally in the films in question.

On a conspectus of all the evidence I hold that these submissions must be upheld. My reasons for that conclusion are the following:

The evidence of Pienaar did not take the case any further and specifically it did not and could not exclude that the defendants dealt illegally with the films in question. Apart therefrom that it need hardly be said that good reasons existed why such activities would not have been undertaken in his presence, on his own showing he was frequently absent from the premises and he could naturally not comment on what occurred during such absences.

Mrs van den Berg was a witness who proved to be voluble in the extreme. That appeared to be no more than a personality trait, however, and I do not consider that her credibility was affected thereby. Her evidence did offer support for the defendants on the issue of the origin of the offending tapes, viz to the extent that she testified that she was approached by the Sonnens, that she corroborated the first defendant's testimony that she passed on to him the information concerning the tapes which were for sale and stated that she gave the defendants' telephone number to the Sonnens and that she subsequently heard from the first defendant that he had in fact acquired the Sonnen tapes. She was, however, unable of her own knowledge to confirm same. It is true that she stated that she was sure that the Sonnens wished to dispose of 150 tapes whereas the first defendant said that he purchased 300 tapes from them. It cannot be excluded, however, that the extent of the merx could have been changed in the negotiations which the first defendant alleges he had with the Sonnens.

One other aspect of Mrs van den Berg's testimony requires consideration. Her expressed disbelief in regard to the likelihood of the defendants trading in copies of the offending films on the grounds of the latter being in the nature of `fillers' did not stand up to scrutiny and may have been an indication of a partiality on her part in favour of the defendants. She herself was constrained under cross-examination to concede that some ten of the films, the titles of which were put to her, were in fact not `fillers', but `top' films. On the other hand she indicated that three of these films were old and that another had not been a success in South Africa and she questioned why anyone would want to trade in pirate copies thereof. The comment may be made that the mere fact that a `top' film was somewhat dated would not mean that there would not be a sufficient market for it.

The first aspect of the first defendant's evidence to be considered is his claim as to the origin of the offending tapes.

Much was said by Mr Cullabine in criticism of the first defendant in this regard. The criticism was not misplaced. As set out earlier, it was the first defendant's case in this court that he took delivery of the tapes during June/July 1993, ie approximately one to two months prior to the visit of van As and Potgieter to his premises. However, in exhibit `I', the statement made by the first defendant for submission to the police, he said that he had acquired the tapes approximately one year prior to the incident. That, he said, was a mistake. The difference between one or two months and approximately one year is not without importance—because a much longer period would have elapsed without his attending to wiping any of the tapes clean—and it is difficult to understand how the mistake could have occurred even if the statement was signed sometime in 1994. He conceded that his attorney had told him that it was a serious matter and that he should be careful in what he said. When asked if he had properly checked the statement before signing it he said that if he was at the time `in a state' and did not trust the attorney and was about to `leave' him he may not have checked the statement thoroughly. At best the statement was a non sequitur. If he did entertain doubts as to the attorney's integrity or competence all the more reason existed to check the contents of the statement with care before he allowed it to be submitted to the police. It may be noted further that a handwritten correction in the statement was initialled by the first defendant. In his various pleas the following statement appeared:

`Gemelde bande was teen R5,00 per band aangekoop en was V erweerders bona fide en redelik onder die indruk ten tye van die aankope, welke transaksie telefonies geskied het, dat gemelde bande blanko bande daar sou stel. Verweerders se bedoeling was om gemelde bande as blanko bande te verkoop. By aflewering het Verweerderes vasgestel dat gemelde bande egter bestaan uit bande wat inhoudmateriaal bestaande uit 'n verskeidenheid van films bevat het.'

This statement is at variance with his evidence in a material respect, viz in regard to the content of the tapes which he was purchasing. The first defendant sought to rely on the possibility of a mistake on the part of the typist who typed the pleas or of a misunderstanding during the relevant consultation between him and counsel, the latter having been Afrikaans speaking and the consultation having been conducted in English. Neither of those possibilities commend themselves for acceptance. One cannot envisage how a typist could have made a mistake of this nature leaving aside the question that the plea was presumably checked by both counsel and the attorney, who was present at the consultation, prior to its being filed. By virtue of the detail contained in the plea one similarly has difficulty in envisaging how both counsel and attorney could have laboured under the same mistaken impression. Moreover, the plea was filed during March 1995 and there was no attempt made at any stage to seek an amendment thereof. The third criticism relates to the inability of the first defendant to produce any documentary proof of the transaction with the Sonnens and specifically proof of the deposit of cash into their account which the first defendant alleged he made. He claimed he was unable to trace the deposit slip and he said that without his furnishing the account number the local branch of the Trust Bank was not able to assist him. Even if this were so, which may be doubted, a similar problem should not have been encountered at the George branch of the bank. The fourth criticism arises out of the discrepancies between what was put on behalf of the defendants to the plaintiffs' witnesses and the first defendant's own evidence on the question of whether the first defendant had on the occasion when the premises were searched proffered the explanation that he had obtained the tapes from the Sonnens—as to which see the resumé of the evidence set out earlier. The fact that, on his own later showing, he did not proffer that explanation in circumstances when the explanation, if true, would have been immediately forthcoming—as to which circumstances, see below—is a serious derogation of the acceptability of his evidence. It should finally be noted that it was Potgieter's evidence that the first defendant admitted that he had `made' the tapes.

Had the first defendant's evidence stood alone the above criticisms would probably have been sufficient to found a rejection of the evidence. However, there is the additional feature that Mrs van den Berg testified that she subsequently heard from the first defendant that he had purchased the tapes that the Sonnens had offered for sale. In the context of her evidence that discussion would have taken place prior to the date on which van As and Potgieter visited the premises of the second defendant. If that evidence is true it constitutes cognisable support for the case of the defendants as to how they came by the tapes. There is a suspicion that Mrs van den Berg was not an impartial witness, and the criticisms of the first defendant's evidence referred to above also bear on the acceptability of her evidence. However, I intend to proceed on the basis, without making a positive finding to that effect, that no sufficient basis exists for holding that the evidence of Mrs van den Berg was mendacious and that, whatever shortcomings there were in the first defendant's evidence, the support constituted by Mrs van den Berg's evidence is sufficient to carry the day for the defendants in the matter of the acceptability of their explanation as to the origin of the tapes in question.

Such a finding would, however, not mean that the case must be disposed of in the defendants' favour. The statements which the defendant made concerning the offending tapes, the findings in regard to which are set out below, after their discovery by van As and Potgieter, seen in the light of certain surrounding circumstances, establish that the defendants were dealing in the tapes in breach of the plaintiffs' copyright therein. As intimated earlier that conclusion would follow whether on the basis that the defendants failed to rebut the presumption imposed on them in terms of section 26(10) of the Copyright Act or whether on the basis that the onus rested on the plaintiffs to positively prove such dealing.

The surrounding circumstances to which I refer are the facts that the defendants are dealers in video recorded films by way of hire or sale and that on the first defendant's own showing the business was equipped and well able to make copies of video films.

In my judgment the evidence of van As and Potgieter as to the statements made by the first defendant as to what he was doing with the tapes must be accepted and that of the first defendant rejected as false.

As far as the narrow issue of demeanour in the witness box is concerned, an aspect which is not to be overstated, I do not consider that either van As or Potgieter were subject to valid criticism. The first defendant was possibly a little excitable, but that is not a criticism of any moment. It is with regard to the content of their respective testimonies that the acceptability of the former two and the non-acceptability of the latter appears clearly. I would, however, preface my discussion of the content of the evidence with the observation that van As was clearly an independent and unbiased witness and the same applies to Potgieter notwithstanding that Mr Vlok sought to suggest that in the light of the nature of his work he would have an interest in, as it were, `securing a conviction'.

I have not lost sight of the fact that Potgieter testified that the search warrant authorised a search for material that infringed copyright and that the first defendant was so advised which, in accordance with the evidence of van As, was in fact not the case. This is not a feature which should be overstated and it may have found its origin in Potgieter's own interest being restricted to the possible presence on the premises of material which infringed copyright. I also bear in mind that there was not an exact coincidence in the statements which van As and Potgieter, respectively, ascribed to the first defendant. Common to both, however, was an admission by the first defendant that he was dealing in the tapes.

On two material issues the probabilities are overwhelmingly in favour of the plaintiffs, viz whether Potgieter sought an explanation for the offending tapes and whether the first defendant responded thereto. The sole reason why Potgieter was present on the occasion in question was to ascertain whether the defendants were in possession of material which fell foul of the copyright of the plaintiffs. Such material was in fact found and it was manifest that it was offending material. The most natural thing for him to do was to require an explanation thereof or to enquire whether the defendants were dealing in the material. Such an enquiry would not have been ignored by the first defendant who would either have responded directly thereto or responded in the form of declining to furnish an explanation. The first defendant's claim that no such explanation was sought and therefore that he did not offer any explanation simply does not wash and must be rejected as false. The falsity of this claim is further demonstrated by the fact that in cross-examination of the plaintiffs' two witnesses Mr Vlok did not place in issue that Potgieter required the first defendant to explain the presence of the tapes and what he was doing therewith and on the contrary put it to the witnesses that the first defendant had offered an explanation which embraced the acquisition of the tapes from the Sonnens and, presumably, his intention to use the tapes by way of wiping them clean and selling them as blank tapes. An allied aspect relates to the first defendant's claim that the statement he did make referred to his collection of old classical films. He said that the statement, ie that he hoped that they—van As and Potgieter—would not remove his `masters', was born of an apprehension that those films, too, were to be removed. There was, firstly, no indication that van As and Potgieter would remove those films or indeed showed any interest therein. Secondly, the first defendant's alleged use of the word `masters' with reference to old classical films would, to put it at its lowest, have been inappropriate. When questioned on the meaning of the word `master' in the context of the video film industry the first defendant did not proffer the claim that it could refer to old classical films; instead, in common with a number of the other witnesses who testified in the trial, he stated that one of the meanings of the word connotes a reference to a master copy of a tape from which other copies are made. Such a meaning would have been quite appropriate within the context of the statements attributed to the first defendant by Potgieter and van As, to which should be added the defendants' ready ability to engage in the activities referred to in the statements ascribed to him.

I am not impressed with the reasons that the first defendant proffered why he would not have traded in the films in question. His first alleged reason was that his reputation would have been harmed if he hired out tapes in the bad condition in which these particular tapes were. He could not have been referring to the quality of the recordings because, firstly, he never said so and on the contrary stated that he had not viewed any of the films and that he immediately locked the tapes away because they were manifestly contraband and his sole intention was to trade in them as blank tapes; he would therefore have had no reason to view the quality of the recordings. If the reference was to the physical condition of the tapes he was then hoist on his own petard in that his other evidence was that the tapes were in good condition, hence his intention to sell them as blank tapes. In any event, what was attributed to him, on the strength of his statements, was not that he traded in the tapes themselves, but in copies which he made therefrom. His second reason was that the nature of the films were not of the type sought after by his clientele. But on his own showing he had 90% of the titles on his shelves already and was therefore trading in them, at least to an extent, and such titles were available to those members of the public who did not fall within the alleged main source of his custom. In this regard it bears repetition that, as mentioned earlier, certain of the films were `top' films and they were also of the `action' (or `hard') variety which he had earlier said fell within the type of film that the majority of his clients wanted, a statement from which he subsequently sought to resile when questioned on the fact that some of the films were of this variety by saying that what he had mentioned was the `karate' type of the film.

Two final examples of unacceptable evidence given by the first defendant should be mentioned. His claim that, contrary to what was said by van As and Potgieter, the search warrant was not shown to him and he was not given a copy thereof, is so against the probabilities that it must be rejected as false. Why the first defendant resorted to this evidence is a matter for speculation. The second aspect is his questioning, at a very late stage in his evidence and despite the relevant admissions which had been made on his behalf, whether certain films canvassed with him were in fact included amongst exhibit `I'.

It was not argued, and correctly so, that the statements which I have found the first defendant did make, did not justify the inference that the defendants dealt in the films in breach of the plaintiffs' copyright therein. The conduct in question falls squarely within the ambit of the acts which in terms of section 23, read with section 8, of the Copyright Act, constitute infringement of copyright.

In regard to the second leg of the plaintiffs' claim—relating to infringement of trademark, Mr Cullabine argued that a finding that the defendants had dealt in the films in breach of the copyright therein, albeit such finding was reached on the basis of the defendants having failed to rebut the presumption provided for in section 26(10) of the Copyright Act, was a finding of fact that could and should operate in respect of the plaintiffs' claim that the defendants had breached the trade marks in the relevant films. He conceded that if the claim had only related to an infringement of trade mark as envisaged in the Trade Mark Act, he would not have been entitled, as far as a finding concerning the relevant facts was in issue, to invoke a presumption contained in a different Act, the Copyright Act. He submitted, however, that it would be illogical and impermissible to act on a particular finding of fact for the purposes of one leg of the claim but to hold that that fact had not been established for the purposes of the other leg of the claim; in other words, because the alleged acts relied upon for both legs of the claim were the same and not severable, a finding thereon for the purposes of the first leg was necessarily also applicable to the second leg. Counsel did not cite any authority for his argument. Mr Vlok very properly referred me to a decision which could be invoked to support Mr Cullabine's proposition, viz the judgment of Steenkamp J in S v Bruhns 1983 (4) SA 580 (NC). In that judgment it was held that a conviction of an accused person on a charge of failing to stop his vehicle after having been signalled by a traffic officer to do so in contravention of a provision of the then Road Traffic Ordinance of 1966, which conviction flowed solely from the invoking of a presumption provided for in the Ordinance that the registered owner of a vehicle was the driver thereof at the relevant time, was to be taken into account by the court as a relevant fact in considering whether the accused was guilty on a second charge of driving his vehicle, at the same time and place, at a speed in excess of the limit prescribed in other legislation, viz the Petroleum Products Act of 1977. However, the report referred to by counsel wrongly reflects that the judgment was that of a full bench concurred in by Erasmus AJP and Basson J. In fact the reported judgment was a minority one. The majority judgment of the other two members of the court (per Basson J) which was to the contrary effect, is reported in 1984 (1) SA 481 (NC). Both judgments referred to the earlier decision of the Appellate Division in S v Khanyapa 1979 (1) SA 824 (A) Steenkamp J holding that it was applicable to the matter before him and Basson J, holding that it was distinguishable. In Khanyapa's case it was held that the conviction of the accused of an assault on his wife, based on her evidence she having been a competent witness against the accused in respect of that charge, was a relevant factor to be taken into account in considering whether the accused was guilty on a second charge of murdering his father-in-law, allegedly committed on the same occasion, notwithstanding that the accused's wife was not a competent witness against the accused in respect of this charge. The essence of the basis on which Basson, J, distinguished Khanyapa's case was that, in his view, it referred to convictions based on actual evidence and not to convictions founded on a presumption which may in the result be fictional convictions.
Insofar as it may be necessary for present purposes I would record that in my respectful view the approach of Basson J in Bruhns' case is to be endorsed. However, as shown earlier, the finding that the defendants had not rebutted the presumption and the consequential finding that they had dealt in the films in question was based on evidence and the latter finding would have been reached even in the absence of any presumption against the defendants. Such a finding is, on the evidence, positively made on the second leg of the claim.

I turn now to the relief which the plaintiff's are seeking in these proceedings. It was correctly not disputed that both defendants are liable in respect of whatever relief the plaintiffs are entitled to. Harnischfeger Corporation and another v Appleton and another 1993 (4) SA 479 In my judgment the plaintiffs are entitled to both of the interdicts sought. The defendants infringed the copyright and trade mark rights in question; their denial thereof has been rejected as false; no undertaking that the conduct in question will not be repeated has been forthcoming. In such circumstances, provided that it cannot be said there is no likelihood of a future infringement occurring, an interdict against future infringing conduct is the normal and proper remedy and it is not necessary to invoke the further fact that the defendants on two previous occasions met the demand of the Motion Picture Association of America—based in each case on their possession of a copy of a film—for the payment of a sum of money, which the first defendant in any event sought to explain away. The fact that the first interdict sought in terms refers to infringements of the copyright of the plaintiffs in the specific films which are the subject of this judgment and that all of the offending copies of the films or their trailers have been removed from the possessor of the defendants—hence the abandonment of the relief in the form of a delivering up to the plaintiffs of all infringing copies or reproductions thereof—does not preclude the plaintiffs being granted the relief they seek. In the light of the circumstances referred to above I consider that a reasonable apprehension exists that the defendants will again utilise unauthorised copies of the films or their trailers in breach of the plaintiffs' copyright and trade mark rights. My conclusion that the plaintiffs are entitled to the interdicts sought is in accordance with the dicta in Performing Right Society Ltd v Berman and another 1966 (2) SA 355 (R) at 357 and the CCP Record Co case, referred to below, at 448 G.

The plaintiffs are further entitled to damages. The first category of damages in respect of which Mr Cullabine sought an order is that referred to in section 24(1) of the Copyright Act which provides that infringements of copyright shall be actionable at the suit of the owner of the copyright for such relief in the form of, inter alia, damages as would be available in any corresponding proceedings for the infringement of other proprietary rights. Section 24(1A) provides as follows:

`Damages contemplated in subsection (1) may, at the option of the plaintiff, be calculated on the basis of a reasonable royalty which would have been payable under the circumstances by a licensee or sub-licensee in respect of the copyright concerned.'

The option referred to in the subsection was exercised by the plaintiffs. It was the initial simple submission of Mr Cullabine that the section meant no more and no less than that in casu the respective plaintiffs were entitled to damages in the sum of R50 000,00 in respect of each copy of a film the copyright in which formed the subject of the claim of the respective plaintiffs, the said sum having been agreed upon between the parties as representing the minimum figure of the royalty which would have been payable as contemplated in the section. Counsel did not contend that the damages should be fixed with reference to the figure of R70 000,00 being the agreed average royalty which would have been so payable. The argument, however, overlooked the provisions of subsection (1B) which reads as follows:

`In the determination of the amount of damages referred to in subsection (1A) the court shall, in addition to all other material considerations, take the following factors into account:
(a) the extent and nature of the infringement of copyright;

(b)the amount which could be payable to the owner in respect of the exercise of copyright by some other person.'

In his work, Handbook of South African Copyright Law, at 1-47/48, the learned author, Dr Dean, states the following in regard to subsections (1A) and (1B) which were introduced into the Act in 1992:

`In lieu of the erstwhile remedy of an account of profits, the Copyright Amendment Act, 1992, introduced specific reference to a reasonable royalty as a form of compensation to a copyright owner for the misuse of his work, apparently as an alternative to conventional damages which would usually take the form of loss of profits through diminished exploitation of the work by the copyright holder. The payment by an infringer of a reasonable royalty to the copyright owner for the unauthorised use made of his work as a form of compensation arising from copyright infringement is not new in our law. Damages in this form have been awarded by the court in the past in several cases. However, the compensation by way of a reasonable royalty provided for in the amendment has something of a notional character to it. More specifically the amendment provides for a reasonable royalty which would have been payable under the circumstances by a licensee or sub-licensee, and that the court, in determining the amount, must take into account the extent and nature of the infringement of copyright and the amount which would be payable in respect of the exercise of copyright by some other person. In other words, the reasonable royalty is not necessarily the actual amount which the infringer would have been required by the copyright owner to pay in respect of the exercise of the right in question but rather an amount that a notional licensee could have been required to pay. ...'

After further debate at the Bar Mr Cullabine conceded that his initial submission was incorrect and that the proper approach was to read the two subsections together and to adjust whatever figure was arrived at on an application of subsection (1A) in the light of the considerations referred to in subsection (1B). The concession was rightly made. This approach not only accords recognition to the words `calculated on the basis of' in subsection (1B)—which are used in contradistinction to words such as `fixed in a sum equal to'—but also accords a meaning to the provisions of subsection (1B) in the context of both sections read together. A different approach would have the effect of rendering the provisions of the latter subsection pro non scripto.

The figure arrived at on an application of the provisions of subsection (1A) is, in terms of the agreement between the parties, the sum of R50 000,00 per film. What adjustment thereof must be effected by reason of the considerations referred to in subsection (1B)? It seems to me that what is required of the court is essentially the exercise of a value judgment.

In regard to the provisions of paragraph (a) of subsection (1B) the evidence discloses that the conduct of the defendants consisted of their retaining in their possession the infringing copies for the purpose of utilising same to make unauthorised copies to replace copies in their stock-in-trade as and when the latter became damaged and utilising same for that purpose. That was the nature of the infringement. As to the extent thereof the evidence only discloses the extent to which the defendants engaged in the activity of retaining the infringing copies in their possession for the purposes mentioned, viz the retention of each infringing copy for a period of a month or two. The evidence does not reveal the extent to which the defendants actually implemented that purpose. In my judgment, on an overall conspectus of all the relevant evidence, the extent and nature of the infringement of copyright are not to be overstated.
As to the consideration referred to subparagraph (b) of subsection (1B) the only evidence before me is that contained in a paragraph in exhibit `I', the statement of the first defendant submitted to the police. Subject to what has been said earlier in this judgment the first defendant confirmed the correctness of the contents of the statement. Paragraph 11 of the statement records that at the relevant time new and properly authorised copies of films cost approximately R200,00 to R250,00 per copy. That was therefore the amount which could be payable to the owner in respect of the exercise of copyright by the `other person' referred to in subparagraph (b).

Subsection (1B) further enjoins the court, in assessing the quantum of damages, to take into account, in addition to the matters referred to in sub-paragraphs (a) and (b) `all other material considerations'. Subject to what is said later in this judgment it is not necessary for me to discuss what factors would or could fall within the ambit of this phrase; counsel presented no argument thereanent.

In the exercise of the value judgment which I am enjoined to do in this matter I am faced with the difficulty of where to draw the line between the figures of R200,00/R250,00 (being the figure in casu envisaged in subparagraph (b) of subsection (1B)) and the figure of R50 000,00 (being the figure in casu envisaged in subsection (1A)). On a conspectus of all the relevant circumstances and in particular the somewhat limited scope of the extent and nature of the infringement of copyright in respect of each relevant film and of the inroad into the licensee's rights in respect of the marketing of the film, I have come to the conclusion that a figure of R1 500,00 in respect of each film would be fair and reasonable. I place on record the confession that the fixing of the award in this figure is characterised by a measure of arbitrariness; it is a matter of assessment rather than computation.

The other damages claimed are those envisaged in section 24(3) of the Copyright Act. The section reads as follows:

`Where in an action under this section an infringement of copyright is proved or admitted, and the court having regard, in addition to all other material considerations, to —

(a)  the flagrancy of the infringement; and

(b)  any benefit shown to have accrued to the defendant by reason of the infringement, is satisfied that effective relief would not otherwise be available to the plaintiff, the court shall in assessing damages for the infringement have power to award such additional damages as the court may deem fit.'

Mr Cullabine, adverting to the fact that in terms of section 27(6)(a) of the Act a person convicted of infringing copyright in an article is, in the case of a first conviction, liable to a fine not exceeding R5 000,00 or to imprisonment for a period not exceeding three years, or to both such fine and imprisonment, for each article to which the offence relates, adopted the stance that an appropriate award in respect of each offending film or trailer would be in the sum of R5 000,00. It was his submission that such an award was justified by reason of the following considerations which he contended were present:

(a)  the conduct in question of the defendants in infringing the copyright of the plaintiffs had indeed been flagrant;

(b)  a benefit, albeit unquantified, must have accrued to the defendants in consequence of their infringing conduct;

(c)  by reason of the evil done in the video cassette industry by large scale piracy (testimony concerning which was given by a number of witnesses including testimony that an estimated 15% of the total annual countrywide turnover in the industry constituted pirate turnover involving many millions of rands—evidence which was not disputed by the first defendant who himself spoke of the evil of piracy and registered his strong objection thereto) there was a need to effect a deterrence thereof by way of such an award;

(d)  effective relief would not otherwise be available to the plaintiffs.

The approach of the courts to an application for an award of damages in terms of section 24(3) has not been harmonious. In South African Music Rights Organisation Ltd v Trust Butchers (Pty) Ltd 1978 (1) SA 1052 (E), which concerned an infringement of copyright in certain musical works by way of playing a radio in a butchery shop, Addleson J had to consider an application for an award of `exemplary' or `penal' damages under section 18(3) of the Copyright Act of 1965 (the precursor of section 24(3) of the present Act). He held as follows (see 1057 H et seq):

Such damages could not be awarded under section 18(3)(b) since it had not been `shown' that any benefit had accrued to the defendant, by reason of the infringement, on which such damages could be calculated. Difficulties in the way of making such an award under section 18(3)(a) by reason of the alleged flagrancy of the infringement were the following: Firstly, such additional damages were only permissible if the court were satisfied `that effective relief would not otherwise be available to the plaintiff'. The award to the plaintiff of the actual pecuniary loss it had suffered together with the grant of an interdict did in fact accord effective relief. Secondly, no yardstick was available by which such damages could be assessed and although it was suggested by Copeling (Copyright Law) that the amount to be awarded was entirely in the court's discretion he could not simply pluck a figure out of the air without some basis on which to assess it. Thirdly, although the defendant's conduct was open to criticism it did not seem to be comparable to the type of conduct referred to in English cases or by the English writers or a `flagrancy' deserving of a special award of exemplary damages. The case was accordingly not an appropriate one for an award of damages beyond the normal ambit of compensation for pecuniary loss.

In Priority Records (Pty) Ltd v Ban-Nab Radio and TV; Gramophone Record (Pty) Ltd v Ban-Nab Radio and TV 1988 (2) SA 281 (D) it was found that the defendant had breached the copyright of the respective plaintiffs by unlawfully selling two audio cassettes. On the interpretation of section 24(3), Page J held as follows: The section appears to have been intended to provide a substitute for the aggravated or exemplary damages available under the English common law. It does not, however, empower the court to award any form of damages unrecognised by South African common law. What is empowered is the award of additional damages when the court is of the view that the remedies afforded by section 24(1)—now to include sections 24(1A) and (1B)—or any other provision of the law are insufficient to recompense him adequately for all the damage, into whatsoever legal category it may fall (ie whether under the actio iniuriarum or any other remedy recognised by our law) occasioned by the infringement. This approach is in accordance with the English law as appears from the following passage in Copinger and Skone James, Copyright, 12th ed, para 644 at 272-3:

`The section is directed to providing effective relief for the plaintiff. If, for example, effective relief is available to the plaintiff in respect of another cause of action, such as libel or breach of confidence, relief may not be given by an award of additional damages for infringement of copyright. It is thought that damages under this section might be appropriate where a defendant adopts a policy of continual infringement, but an injunction is not an appropriate remedy because the defendant reproduces different material on each occasion. Additional damages may also be awarded where the conduct of the defendant has been deceitful or treacherous, thereby obtaining benefits for himself and inflicting on the plaintiff humiliation for which it is difficult to compensate. Flagrancy implies scandalous conduct, deceit including deliberate and calculated infringement where a defendant reaps a pecuniary advantage in excess of the damages which he would otherwise have to pay. Other relevant considerations are the defendant's general conduct with regard to the infringement and his motives for it, the plaintiff's corresponding behaviour, the injury to the plaintiff's feelings and the indignities and distress he has suffered and the defendant's lack of regret for the hurt and humiliation he has inflicted on the plaintiff. ... The subsection is a comprehensive code for additional damages in that there is no place for the award of aggravated, exemplary or punitive damages outside that subsection.'

The judgment continues as follows at 294 A to I:
`In support of his invocation of the section, counsel for the plaintiffs has submitted that the Court should infer from the readiness with which the infringing copies were produced that they were part of a larger stock and indicated that the defendant was pursuing a deliberate and calculated course of infringement for monetary gain. It was further submitted that although the paucity of evidence prevented the plaintiffs from proving the extent of such gain, it could be inferred that it was considerable. It should also be found, in the light of the evidence of Mr Ellis, that the harm resulting to the plaintiffs as members of the trade from the defendant's conduct was considerable and far transcended that flowing from the sale of exhs 1 and 2. The Court should accordingly find (so the argument ran) that effective relief would not be available to the plaintiffs in the absence of an order under s 24(3). I have difficulty in accepting the factual basis of this argument. There is nothing in the evidence to justify the conclusion that the particular infringements complained of were extensive or of long duration or that the defendant derived great financial benefit from those infringements. The making of the copies of the particular musical recordings in issue could well have been an isolated incident and the probability that the defendant was also infringing other copyright material does not alter the position, since it is the effectiveness of the relief for the particular infringement to which the action relates which the section has in mind. I am unpersuaded that an order for an interdict, the actual damages and costs would not constitute effective relief in respect of that infringement. There is, furthermore, no evidence to justify the conclusion that the infringements proved were ``flagrant'' within the meaning of the section or that the defendant derived any great financial benefit from them. It was submitted by counsel for the plaintiffs that the prevalence of this type of infringement, the ease with which it can be committed, the difficulty experienced in detecting it, the enormous cumulative damage which it inflicts upon the industry and the virtual impossibility of proving and recovering the damages suffered, all constituted circumstances which justified the Court in making an exemplary or punitive award of damages so as to deter not only the defendant but also other potential infringers from such conduct. I do not, however, consider it justifiable to visit the sins of other infringers upon the head of this defendant because he has been unfortunate enough to be caught whilst others have not. Furthermore, the Act makes 47 provision for criminal sanctions which could have been invoked against the defendant and which make provision for substantial penalties which should in themselves prove an adequate deterrent.'

CCP Record CO (Pty) Ltd v Avalon Record Centre 1989 (1) SA 445 (C) was also a case which concerned the unlawful sale, in breach of the plaintiff's copyright, of an audio cassette. At 449 C et seq Conradie J gave consideration to the effect of section 24(3). The views which he expressed are as follows: While it is to be acknowledged that the reference in the section to an absence of `effective relief' could forcefully found the argument that, for the provisions of the section to operate, another cause of action (but an `ineffective' one) must be shown to exist (even if it is not pursued) in which event the award of `additional damages' would be supplementary to ordinary damages (as indeed the expression itself suggests), it is to be doubted whether one should conclude from that alone that where relief by way of the actio legis Aquiliae and the actio iniuriarum is not competent, the plaintiff may not be awarded `additional damages'. Actions for damages are seldom ineffective where the plaintiff is able to show that he has suffered some (patrimonial or non-patrimonial) damage, the court being obliged to do the best it can in the assessment of damages on the material placed before it provided that the plaintiff has adduced all the evidence that could reasonably be expected of him.

Accordingly, the scope for an award of additional damages of a kind which have actually been suffered but cannot be proved must, if it exists at all, be small bearing in mind that damages for breach of copyright are said to be `at large'. Accordingly, the words `effective' and `additional' in the section must not cause the court to lose sight of the fact that, by making benefit to a defendant and flagrancy criteria for an award of damages, the section not merely augments existing delictual remedies by widening the power of the court to award damages, but introduces relief where no cause of action for relief had existed before. Additional damages are therefore damages of a kind which would not, but for the provisions of section 24(3), be recoverable at all, either because they are unprovable (and the scope for finding damages unprovable in our law is small) or because, other than in section 24(3) no cause of action for their recovery exists. Section 24(3) accords the court a wide discretion in awarding such damages, limited only by the consideration that the money which the defendant is made to pay must go to providing relief for the plaintiff and the defendant may not simply be fined. Because of imported confusion and controversy surrounding the terms `punitive' and `exemplary' it is not helpful to apply those terms to the `additional damages' envisaged in section 24(3). In English law the Copyright Act (which is the same as ours) envisages purely compensatory damages, including aggravated compensatory damages (which the plaintiff is fairly entitled to receive) which should be contradistinguished from punitive or exemplary damages (which the defendant ought to be made to pay as punishment for outrageous conduct). In cases where it is appropriate for section 24(3) to be invoked the court should seek, by an award of damages, to do what is fair having regard thereto sustained. In this regard the judgment proceeds as follows at 451 I to 453 A:

`In Nichols Advanced Vehicle Systems Incorporated and others v Rees Oliver and others (1979) RPC 127 elements of deceit and treachery, and the infliction of humiliation on the plaintiff linked with the obtaining of an unconscionable advantage by the infringer were held to make the infringement flagrant.

Deceit, including deliberate and calculated infringement linked with a peculiar advantage in excess of the damages which the infringer would have had to pay had it not been for the additional damages provision, was, in Ravenscroft v Herbert and another (1980) RPC 193 at 208 held to constitute flagrant conduct.

Both the Nichols Advanced Vehicle Systems and Ravenscroft cases supra described an invasion of another's copyright as flagrant if it is scandalously dishonest.
In casu, I consider that the invasion of copyright was scandalously dishonest. The defendant was a trader in records, including the plaintiff's records. The scope for infringement by such a trader is huge, and the harm, not only to the plaintiff, but to the artists with whom it contracts, and ultimately to the recording industry, may be great. I think that there is a strong moral duty on a retailer of any product which is vulnerable to piracy to avoid exploiting a supplier of copyright material who has entrusted such material to him in the expectation that it will be sold for the benefit for both of them. A copyright infringement of this kind is easy to perpetrate and difficult to detect. A single work may be reproduced almost endlessly and at insignificant cost to the reproducer. The profits of the unlawful conduct are enormous.

My impression from the evidence of what occurred in the shop when the recording was made is that the defendant treated the plaintiff's rights contemptuously. The impression is fortified by the defendant's subsequent conduct in denying the infringement when it must have known that it would not dare put the person alleged to be responsible for the infringement on the witness stand. The defendant, moreover, until the morning of the second day of the trial, refused to even acknowledge the existence of the copyright or the plaintiff's ownership, although it must have been manifest to the defendant from the facts deposed to in the interim application that the plaintiff had made out a clear case of subsisting copyright of which the ownership vested in it.

In the defendant's favour I think I should stress that the purchase was a so-called trap-purchase. This means that the defendant was, if not instigated, then prompted to make the copy. He was given to understand that the customer could not afford to buy the records; he may, in a weak moment, have succumbed to the temptation of not losing a sale.

In deciding whether to award additional damages on the ground of flagrancy alone, I have had regard to the fact that the infringement, although flagrant, was not shown to have been repeated. Although it probably caused the plaintiff annoyance, it could hardly have caused any of its officers distress. The plaintiff was, of course, put to considerable trouble and expense. It complained to the Association of the South African Phonographic Industry. Its work schedule was disrupted when its officers had to consult, consider papers and attend Court. It incurred costs which it will not recover under the tariff. I am sure that the plaintiff would not have bothered about the infringement it had not been so flagrant, if it had not been an infringement by a dealer under circumstances where the potential harm was significant. The flagrancy of the infringement was the direct result of the actions taken to stop it.

I accordingly consider that an award of additional damages ought to be made. I think that an amount of R3 000 is in the circumstances neither too small nor too large.
It is to be noted that it is clear from the report that Conradie J was not made aware of the judgment in the Ban-Nab case before he delivered his judgment.

In an article titled `Additional Damages and Section 24(3) Of The Copyright Act', appearing in the 1989 South African Law Journal (Volume 106) at 467, V.V.W. Duba, a senior lecturer law at the University of Fort Hare, subjects the judgment in the CCP Record case to criticism. The criticism is in essence of a two-fold nature. He suggests, firstly, that it is unfortunate that Conradie J declined to call the additional damages envisaged in section 24(3) `exemplary' or `punitive' damages. These terms, he points out, are not unknown in South African law and awards for eg defamation, often include an element of exemplary damages where the defendant's conduct warrants such censure. Secondly, he joins issue with the approach of Conradie J, in granting additional damages in a case where actual damage (even if it not be susceptible of precise quantification) has in fact not been proved. He argues that a prerequisite for an award of damages is proof of damage, in respect of which the plaintiff bears the onus. His views are summed up in the following passage:

`One can only advise that, in future the award of additional damages made in terms of s 24(3) of the Copyright Act should be treated as a South African form of what the English courts refer to as exemplary or punitive damages; before such an award may be made, however, there must be adequate proof of the existence of a cause of action and also of harm sustained by the defendant—thereby preventing the courts from making awards under s 24(3) in cases where the plaintiff has failed altogether to establish damage.'

In my judgment the principles applicable to the interpretation of section 24(3) are the following:
(1) Additional damages as envisaged in the section may only be awarded by the court when, firstly, the plaintiff already has a cause of action for relief dehors the provisions of the section and, secondly, such relief cannot effectively be obtained by the plaintiff.
I consider that such an approach was implicit in the judgment in the Trust

Butchers case where Addleson J recorded that one of the reasons why he could not award additional damages was that the award to the plaintiff of his actual pecuniary loss and the grant of an interdict had in fact accorded the plaintiff effective relief. (The circumstance that Addleson J was in the context dealing only with a claim for additional damages based on the alleged flagrancy of the infringing conduct does not qualify the ambit of his approach). Mr Cullabine submitted that the decision in this case was wrong and that the approach in the CCP Record case was preferable. I am, however, bound by the decision in the Trust Butchers case unless I am convinced that it is wrong. I am not so convinced; on the contrary I am persuaded that it is correct. The phrase `effective relief would not otherwise be available to the plaintiff' refers in my view, to relief to which the plaintiff is entitled—ie he has a valid cause of action in respect thereof—but cannot effectively avail himself of such relief. I further therefore agree, with respect, with the approach of Page J in the Ban-Nab Radio case that the court is not empowered to award any form of damages not otherwise recognised in our law, but is empowered to supplement the remedies provided for in subsections (1), (1A) and (1B) where those remedies are insufficient to recompense the plaintiff adequately for all the damage, whatever the legal categorisation thereof, occasioned to him by the infringement and that the manner in which it would do so is by awarding exemplary damages. This approach is in accordance with what is advocated by Duba in the article referred to above the reasoning behind which commends itself for acceptance. I would comment that the factors referred to in the section to which the court must have regard in determining whether effective relief would not otherwise be available to the plaintiff are all factors which could found an award of exemplary damages. Insofar as the reasoning of Conradie J in the CCP Record Co case is contrary to the above approach I am, with respect, unable to align myself therewith. In particular, for the reasons stated above, I do not agree that the intention of the legislature, in enacting section 24(3), was to create a new cause of action in addition to, and as opposed to augmenting, any remedies which are already available to the plaintiff.

(2) In determining whether it may be satisfied that effective relief would not otherwise be available to the plaintiff the court will have regard not only to the flagrancy of the infringement and any benefit shown to have accrued to the defendant, but also to all other relevant considerations. The wording of the section makes it clear, in my view, that the legislature drew a distinction between the first two considerations referred to above and `all other relevant considerations'. I accordingly, again with respect, am unable to agree with the approach of Conradie J that the phrase `other material considerations' in the section is to be taken into account only insofar as such other considerations bear on the concepts of flagrancy and benefit to the defendant. That approach would require the unattractive, indeed unwarranted, finding that the words `all other material considerations' are to be interpreted eiusdem generis with the words that follow or even pro non scripto. Nor do I agree that it is not possible to conceive of any other considerations apart from the two concepts referred to above which could justify an award of exemplary damages. See in this regard the passage from Copinger and Skone James quoted earlier when the judgment in the Ban-Nab Radio case was being analysed. A further consideration which springs to mind is extreme difficulty in quantifying the damage sustained, notwithstanding, as Conradie J pointed out, that a court is enjoined, when faced with a damages claim, to do the best it can on the material placed before it provided that no blame attaches to the claimant in respect

(3) A consideration which is not relevant in the enquiry whether `effective relief which would not otherwise be available to the plaintiff' is the need to deter not only the particular defendant from infringing conduct but also other potential infringers.

That there is such a need arises from the prevalence of instances of infringement, the ease with which it can be committed, the difficulty experienced in detecting it, the enormous cumulative effect which it inflicts upon the industry and the difficulty in proving and recovering damages. However, I am in respectful agreement with the views expressed in this regard by Page J in the Ban-Nab Radio case, viz that it is not justifiable to visit on the defendant the sins of other infringers who have not been caught and that, moreover, the Act makes provision for substantial criminal sanctions which should serve the purpose of adequate deterrence. Punishment of a particular defendant by way of an award of exemplary damages is not the vehicle whereby that purpose is to be achieved. The contrary dicta by Conradie J in the CCP Radio Co case are, respectfully, not endorsed.

(4) The fact that there is no yardstick by which additional damages are to be assessed on the grounds of the flagrancy of the infringement of copyright is no bar to the award of damages.
The court is required to exercise a value judgment in the matter. The

perception of Addleson J in the Trust Butchers case that this was a difficulty in the way of making an award on the ground of flagrancy was expressed obiter, did not receive endorsement in the two later cases referred to above and, with respect, evinced a wrong approach.

The question to be answered in the present matter is whether the plaintiffs have in fact been accorded effective relief or whether, by reason of the factors referred to in section 24(3), such effective relief is not available to them. A distinction must be drawn between the copies of the films and the copies of the trailers. In the case of the former the plaintiffs have not only been granted an interdict but have also been awarded damages. It was not suggested during argument that any expenses which the plaintiffs may have incurred in respect of investigations undertaken to ascertain whether the defendants had in fact infringed the copyright in question should found an award of additional damages. The grant of the interdict and the award of damages in my view adequately meet all the exigencies of the matter, including recognition of the considerations referred to in section 24(3), and the plaintiffs have therefore received the full relief to which they are entitled. The plaintiffs have accordingly not made out a case for the award of additional damages in respect of the defendant's infringement of their copyright in the respective films.

The trailers stand on a different footing. The defendants infringed the respective plaintiffs' copyright in the films of which the trailers are substantial parts. The establishment of the damage occasioned thereby as envisaged in section 24(1) would be an extremely difficult, if not impossible, task. The already difficult task of applying the provisions of subsection (1A) and (1B) would be further bedeviled by the circumstances that it is not copies of the films themselves but copies of trailers thereof that are involved and that the evidence does not disclose what amount, if any, would be paid for authorisation to use the trailer. Proof of the plaintiffs' damage would accordingly at best have been an extremely problematical exercise. Effective relief in respect of the infringement of the copyright in the films has, on that ground alone, been shown to be not available to the plaintiffs and the plaintiffs are therefore entitled to an award of additional damages. Can the plaintiffs rely in addition on the two features referred to in subparagraphs (a) and (b) of subsection 24(3)? The answer in respect of the second subparagraph must be in the negative. There is no evidence as to what benefit accrued to the defendants by reason of their nefarious use of the offending trailers. The question must, however, be answered affirmatively in relation to the consideration referred to in subparagraph (a), ie that of the flagrancy of the infringement and it may fairly be said that this consideration increased the damages to which the plaintiffs otherwise were entitled. As to what constitutes flagrancy reference may be had to the relevant dicta in the authorities analysed earlier. An application of those dicta to the present matter results in a finding that flagrancy must be attributed to the defendants. The conduct of the defendants fairly attracts the epithets of deceitful and scandalously dishonest. The defendants were from the outset fully aware that the cassette tapes in question contained unlawful material including such trailers as there may have been on the tapes. They were aware of the odiousness of piracy in the video film industry. Their conduct was deliberate and calculated and was motivated by monetary gain. The defendants have given no indication of regret or remorse for their conduct. On the other hand there can be no talk of their actions having occasioned the plaintiffs distress or humiliation, as opposed to annoyance, and the conduct in question related, after all, only to trailers which were manifestly not the main item traded in, ie the films, and had, as it were, merely been tacked onto the films and they would not have served to enhance the viewing attractiveness of the tapes to any marked degree. Furthermore, it may be repeated, the conduct was persisted in only for a relatively short period. These last features, in my view, dictate that the additional damages awarded be circumscribed in extent. The amount I fix in respect of each trailer is the sum of R200,00.

The remaining issue is that of costs. It was agreed that the sixth plaintiff, which did not proceed with its claims, should be ordered to pay the defendants' costs incurred in the action instituted by it up and until the date on which the actions were consolidated. Mr Vlok realistically did not seek any further order in respect of the costs of the sixth plaintiff's action as from the date of consolidation. Mr Vlok did, however, raise a further contention. He submitted that the costs had been unnecessarily inflated by reason of the plaintiffs having initially instituted separate actions. Pointing to the circumstance that to a substantial extent the factual evidence on which the respective plaintiffs' cases were founded was identical and that the same issues of law arose in each case he argued that no sufficient reason existed why a single composite action should not have been instituted in the first place, a course which would have circumscribed the costs by avoiding unnecessary duplication of pleadings. Adverting thereto that the factors relied upon by Mr Vlok were in fact the basis on which consolidation of the actions was subsequently sought and granted Mr Cullabine was constrained to concede the validity of the point taken by Mr Vlok.

In the result the following orders will issue:

(1) The defendants are interdicted and restrained from infringing the respective plaintiffs' copyright in the films which are the subject of this judgment by doing or causing or authorising in relation thereto any of the relevant acts referred to in section 23 read with section 8 of the Copyright Act (no 98 of 1978).

(2) The defendants are interdicted and restrained from doing any act infringing the trade mark(s) of the respective plaintiffs which are the subject of this judgment.

(3) Judgment is granted as set out below in favour of, respectively, the first, second, third, fourth, fifth, seventh, eighth and ninth plaintiffs against the defendants jointly and severally, the one paying the other to be absolved.

(a)  First plaintiff: payment of the sum of R400,00 as and for additional damages;

(b)  Second plaintiff: payment of the sum of R4 500,00 as and for damages and the sum of R1 800,00 as and for additional damages;

(c)  Third plaintiff: payment of the sum of R4 500,00 as and for damages and the sum of R400,00 as and for additional damages;

(d)  Fourth plaintiff: payment of the sum of R10 500,00 as and for damages and the sum of R2 800,00 as and for additional damages;

(e)  Fifth plaintiff: payment of the sum of R12 000,00 as and for damages and the sum of R2 000,00 as and for additional damages;

(f)  Seventh plaintiff: payment of the sum of R4 500,00 as and for damages and the sum of R1 400,00 as and for additional damages;

(g)  Eighth plaintiff: payment of the sum of R15 000,00 as and for damages and the sum of R1 600,00 as and for additional damages;

(h)  Ninth plaintiff: payment of the sum of R600,00 as and for additional damages;

(i) Payment of interest in each case on the sums set out above calculated as from today's date to the date of payment.

(j) (i) Payment of the costs of suit; provided that the costs of suit shall be restricted to such costs as would have been incurred had the plaintiffs initially instituted a single composite action in respect of the relief claimed in their separate actions;

(ii)Payment of interest on the taxed costs calculated as from the date of taxation to the date of payment.

(4) The costs of the action instituted by the sixth plaintiff up and until the date of consolidation of the actions, together with interest thereon calculated from the date of taxation to the date of payment, shall be paid by the sixth plaintiff.

SOUTH AFRICAN MUSIC RIGHTS ORGANISATION LTD v TRUST BUTCHERS (PTY) LTD 1978 (1) SA 1052 (E)

Citation

1978 (1) SA 1052 (E) 

Court

Eastern Cape Division

Judge

Addleson J

Heard

May 23, 1977; May 24, 1977

Judgment

June 30, 1977

Annotations

Link to Case Annotations

Judgment

ADDLESON, J.:

The plaintiff claims an interdict and damages in the sum of R1 000 against the defendant for alleged breach of copyright.

The defendant's plea put practically all the plaintiff's material allegations in issue but the disputes were substantially curtailed by an agreement reached at the pre-trial conference and recorded in the minute handed in under Rule 37. As a result the following facts are not in dispute:

    (a) The plaintiff is a non-profit company, limited by guarantee. It holds, by assignment, the copyright "of the majority of original musical works written and published in South Africa since 1962". The copyright owned by the plaintiff includes the right to perform those musical works in public and to authorise others to perform them and to collect royalties for such performance. The plaintiff also holds, by assignment from the Performing Rights Society of England, the copyright in a very large number of similar works written and published in the United Kingdom, North America, Europe and South Africa.

   (b) The copyright referred to is that which exists under the Copyright Act, 63 of 1965, to which reference will later be made; and as a result the plaintiff at all material times had the exclusive right in South Africa to authorise public performances, and to collect royalties for such performances, of the musical works in which it held the copyright. Such authorisation is permitted by the plaintiff by way of licence to, or the payment of royalties by, the persons so authorised.

    (c) The defendant has since 1968 conducted the business of a butchery in Mount Road, Port Elizabeth, to which butchery (which is a retail self-service institution) the public have access.

   (d) For a period which is in dispute the defendant has had a radio receiver on the premises and has from time to time operated that receiver to receive broadcasts from the South African Broadcasting Corporation. During the time when those broadcasts were being received, including 12 and 21 March 1975, a number of musical (to use that word in its most generous sense) works were "played" by the defendant in its butchery; that is, the works were emitted from the loudspeaker of the radio in the butchery. The names of these works are set out in para. 10 of the plaintiff's particulars of claim and are works in which the plaintiff holds the copyright.

 It is common cause that the defendant was not licensed by the plaintiff to perform in public any of the works in question.

The plaintiff contends that the defendant has caused those works to be performed in public "since at least November 1972... to date hereof" and has also caused other works in which the plaintiff holds the copyright to be performed and has thereby infringed the plaintiff's rights in such works; and that it believes that the defendant will continue to infringe those rights. The plaintiff therefore claims an order interdicting the defendant from performing or permitting the performance in public, without the plaintiff's authorisation, of the musical works in which the plaintiff holds the copyright. The plaintiff also claims damages in the sum of R1 000 for the defendant's past infringement of copyright, the details of which claim I shall discuss later.

In terms of the Rule 37 minute "the only issues between the parties for determination" by this Court are said to be:

   "(ii) whether the performance of the musical works by the defendant as alleged by the plaintiff was public";

and

  "(ii) whether the plaintiff has established damages in the sum claimed."

However, since the defendant has also disputed the plaintiff's right to an interdict, that claim also has to be determined.

The first issue really involves two questions of fact. Firstly, was the radio on the defendant's premises played sufficiently loudly to be heard  G by members of defendant's staff and customers in the shop; or was it played so softly that it could only be heard by the defendant's managing director, Mr. Coleske and his wife in their office? In the former event, it was conceded by the defendant that this would constitute the "public" performance of the works in question; that is indeed clear from the discussion of the meaning of "public performance" in Copyright Law by Copeling at pp. 76 - 77, and Copinger and Skone James on Copyright, 10th ed. at pp. 198 - 200, and see also The Performing Rights Society v Rangers F.C. Supporters Club and Others, 1975 R.P.C. 626 at pp. 635 et seq.

The first question, whether the performance was public, seems to me to present no difficulty of decision and does not require extensive reference to the evidence. In fact, Mr. Rossouw for the defendant, in the course of his argument, did not attempt to attack the substance of the plaintiff's evidence in this regard - and in my view, wisely so. There is clear and acceptable evidence from Mr. Bell, an inspector employed by the plaintiff, and his assistant, Mr. Chauke, that on 21 October 1972, 13 February 1975, 12 March 1975 and 31 March 1975 they visited the defendant's premises and heard musical works playing in the butchery - and indeed, that the music was audible from the pavement outside; that they saw a radio connected to two extension loudspeakers on either side of the store from which the music was emanating and that it was clearly audible to staff and customers in the butchery. On 12 and 21 March, Mr. Bell made arrangements to tape-record the same music as was being played in the butchery (excluding a gramophone record which was at one stage played on a record player there) and established that over a period of several hours the defendant caused to be publicly performed, as part of a programme being broadcast on the radio, a number of works in which the plaintiff holds the copyright. The names of these works are recorded on Mr. Bell's reports, exhs. "D" and "E".

As far as this part of the case is concerned, the evidence of Bell and Chauke was not seriously or effectively attacked in cross-examination. While I am aware that they are employees of the plaintiff and might therefore be inclined to favour and to attempt to re-inforce the plaintiff's case, I can find no basis for doubting their evidence. By contrast the evidence for the defendant on this issue was singularly tentative and unimpressive. In effect Mr. Coleske admitted that between October 1972 and August 1975 (when the summons in this case was served on him) the radio with its two loudspeakers was played in a fairly central and entirely open position in the butchery. Although he contended that the loudspeakers were next to each other and not on opposite walls; and that the quality of the radio reception was not always good (when machinery was being used in the butchery) I prefer and accept the evidence of Bell and Chauke, whose demeanour and credibility were superior to that of Coleske. The other witness for the defendant, an employee named Coetzee, was most unsatisfactory and unconvincing. He was thoroughly ill at ease in the witness-box and hesitant and vague in his answers and I feel that I can place no reliance whatsoever on his evidence. In addition, when Mr. Bell visited Mr. Coleske, the latter did not deny that the music was clearly audible in the butchery. Similarly, a number of letters to the defendant between 1 November 1972 and 4 January 1973, and again between 21 February 1975 and 23 June 1975, specifically alleged that the defendant was "publicly performing copyright music in your store"; and the defendant's only reaction throughout that period was a letter of 9 January 1973 in which it was stated that

   "the radio playing in the above business is merely a radio, no tapes, records or any other compositions are attached or played. The radio is for my own use and not for public use."

In the light of the evidence, the statement in the last sentence is clearly not correct and the defendant's attitude in general seems to me to support the evidence for the plaintiff that the defendant had created facilities in its butchery whereby music was publicly performed, in that the music received on the radio was clearly audible to staff and customers on the premises.

The second factual question is the period over which this public performance took place. Mr. Coleske said that he acquired control of the defendant in 1968 and at that time had a small portable radio in his office, which he played for his own benefit and for that of his wife, mainly in order to hear the news. In 1972 that radio was stolen in a burglary and he then acquired the present apparatus - a combination of radio and record-player with the two separate loudspeakers. Because reception was poor in the centre of the shop, he placed the new radio near the front door, where it was seen by Bell and Chauke. When he received the plaintiff's summons in August 1975, he caused the radio to be disconnected and to be stored with its loudspeakers on top of the office partition - as it appears in the transparencies, exhs. F1 and F2, which were taken by the plaintiff in December 1976. He admitted that, approximately one week ago, Bell saw the radio and loudspeakers in the same position as they had been during his previous visits; but he explained that they had recently  C been placed in that position in case they were required for inspection for the purposes of this case.

There is evidence that the portable radio remained in the defendant's office and that the position of the office itself has been moved from time to time since 1968. Coleske himself is hard of hearing; the office consisted of partitions without a "ceiling" and with a swing door. Coleske in fact did not seriously deny that radio could have been heard by staff and customers and such denials as he made were very half-hearted and unimpressive. It seems clear to me that his attitude, all along, was that he possessed a radio listener's licence and was entitled to play his radio in the butchery; and presumably he was not even conscious up to 1972 that he might be infringing copyright in doing so. I have already indicated that I can attach no value whatsoever to the evidence of Coetzee. While, therefore, there is no evidence for the plaintiff as to the date when these public performances commenced, it seems to me that on the evidence of Coleske, his attitude towards his right to play his radio as he wished and on the probabilities, I am entitled to find that the public performance of music over the radio commenced in 1968 and took place continuously thereafter.

As to the date on which the performances ceased, however, I can find no basis for rejecting Coleske's evidence (supported, for what it is worth, by Coetzee) that he disconnected the radio when he received the summons in this case. It seems probable that he would do so, at least until the action were determined, when faced with a claim for an interdict, damages and Supreme Court costs. Moreover there is some corroboration for his evidence in the fact that the radio was apparently not in use when the transparencies, Fl and F2, were taken in December 1976. While I am sceptical of his explanation for recently restoring it to its previous position, I cannot reject that explanation on the evidence before me.

 I find therefore that the defendant regularly caused public performances, to take place, from 1968 to August 1975, of musical works broadcast by the South African Broadcasting Corporation and received by the radios, then in the butchery. Since it is not disputed that the plaintiff holds the copyright in approximately 90 per cent of the works in which copyright subsists, it follows on a balance of probabilities that there was an infringement of the plaintiff's copyright in each of the years from 1968 - 1975 inclusive. There is no reason to believe - nor was it suggested by the defendant - that music was not "played" on the radio in the defendant's premises in any of those years, or that in any particular year the "playing" of the radio was so limited as to exclude the probability that there was a breach of the plaintiff's copyright in any of those years, of the works in which it held the copyright.

Since it is common cause that the defendant was not licensed by the plaintiff for such public performances, the defendant's breach of copyright entitled the plaintiff to damages.

Sec. 18 of the Copyright Act provides as follows:

   "(1) Subject to the provisions of this Act, infringements of copyright shall be actionable at the suit of the owner of the copyright, and in any action for such an infringement all such relief by way of damages, interdict, accounts or otherwise shall be available to the plaintiff as is available in any corresponding proceedings in respect of infringements of other proprietary rights.

   (2) Where in an action under this section an infringement of copyright is proved or admitted, and the court having regard (in addition to all other material considerations) to:

   (a)   the flagrancy of the infringement; and

   (b)   any benefit shown to have accrued to the defendant by reason of the infringement,

   is satisfied that effective relief would not otherwise be available to  D the plaintiff, the court shall in assessing damages for the infringement have power to award such additional damages as the court may consider appropriate in the circumstances."

The actual damages suffered by the plaintiff would include the licence fees which the defendant should have paid for the years during which the copyright was infringed. See Performing Rights Society v Berman and Another, 1966 (2) SA 355 (SR) at p. 356. The evidence of Mr. Roos, the secretary of the plaintiff, explains the basis on which such licence fees are calculated, namely on the area of the premises in which the performance takes place and the number of staff there employed. On the information which was finally disclosed by the defendant at the trial and  F the calculations done by Mr. Roos on exh. "T", the total licence fees, together with interest at 10 per cent, which the plaintiff should have received for the years 1968 - 1975 inclusive, amount to R220,13 and this sum must therefore be awarded to the plaintiff.

In addition, Mr. MacArthur, for the plaintiff, has asked that damages include the costs incurred by the plaintiff in establishing the breach of copyright. He contended that this would at least include a pro rata share of the cost of investigations by Bell and Chauke. Mr. Roos estimated that these could conservatively be calculated as follows, taking into account the daily cost of such investigations:

Two visits of one hour each in 1972      R15

Two visits of one hour each in 1975   R20

Two full days of taping the performances in the defendant's

premises in March 1975 and checking the information and

writing the necessary reports   R160

   ______

   Total   R195

   ______

Mr. Roos emphasised that these costs excluded a pro rata share of many related costs, such as administrative expenses, correspondence etc. and he contended that R195 was the minimum amount expended by the plaintiff in establishing the defendant's infringement of copyright.

The defendant was not in a position to dispute the figures quoted by Mr. Roos but Mr. Rossouw contended that these costs were not damages but were part of the costs of preparing for this action and should therefore be recoverable, if at all, as part of the costs of a successful action. Although he did not quote any authority for this proposition, he equated the investigations of Bell and Chauke with the cost of a medical examination intended to qualify a doctor to give evidence on damages in an action arising out of a motor accident.

Although I regret that counsel on both sides did not give me more assistance on the question of damages, I do not think that Mr. Rossouw's analogy is a good one. It is part of the plaintiff's functions to collect licence fees in respect of the performance of works of which it holds the copyright: and, in order to protect the artists to whom royalties are due, the plaintiff must necessarily investigate whether infringements of the nature with which this case is concerned are occurring. It seems to me that, if a person is persistently infringing such rights, he cannot complain if the plaintiff claims from him the reasonable and necessary costs of establishing that such an infringement has occurred. The position would in my view be different in regard to investigations which take place after a clear infringement has been detected and which are then done solely for the purpose of proving the infringement in Court. In the present case, however, the plaintiff's ability to enforce and protect its copyright depended on discovery that such copyright was being infringed and that could only be done by the investigations in question. Moreover it must be borne in mind that the defendant failed to respond satisfactorily to written complaints that he was infringing the copyright. The plaintiff was therefore obliged to incur expenses, not in proving the infringement, but establishing whether there was such an infringement in order to take steps to protect its rights. Such expenses do not seem to me to be too remote from the defendant's wrongful conduct to disqualify them from being regarded as damages flowing from that conduct. The expenses of Bell and Chauke itemised above seem to me to have been part of the cost of establishing that the defendant was causing public performances of the works in question and that such performances were regularly taking place. The last such visit in respect of which these expenses are claimed was on 21 March 1975 and it seems to me that up to that stage those expenses were reasonably incurred by the plaintiff in determining whether an infringement of copyright was taking place, the extent of such infringement and whether action could and should be brought to protect the copyright. I am therefore of the view that they constitute damages flowing directly from the defendant's infringement and that the amount of R195 should be awarded to the plaintiff.

Mr. MacArthur also asked that I award an additional sum under sec. 18 (3) of the Act as "exemplary" or "penal' damages. Such damages could not be awarded under sec. 18 (3) (b), since it has not been "shown" that any benefit has accrued to the defendant, by reason of the infringement, on which such damages could be calculated. It was suggested that an award could be made under sec. 18 (3) (a) having regard to "the flagrancy of the infringement". I have however several difficulties with that contention.

Firstly, such additional damages may only be awarded if the Court is satisfied "that effective relief would not otherwise be available to the plaintiff". In the present case, I propose to award the plaintiff the actual pecuniary loss it has suffered and an interdict, which, it seems to me, should constitute effective relief to the plaintiff. Secondly, no yardstick has been suggested by which such additional damages can be assessed; and, although it is suggested in Copeling, op. cit. at p. 153, that the amount to be awarded is entirely in the Court's discretion, I cannot simply pluck a figure out of the air without some basis on which to assess it. None of the cases (all of which are English authorities) to which I was referred seem to me to be in pari materia. Thirdly, even though the defendant's conduct is open to criticism (as I shall indicate later when dealing with costs), it does not seem to me to be comparable to the type of conduct dealt with in the English cases, or discussed in Copeling and Copinger and Skone-James (at p. 217), or of a "flagrancy" deserving of a special award of exemplary damages. Mr. MacArthur said that the matter was res nova in South Africa and in my view it is not an appropriate case for the award of damages beyond the normal ambit of compensation for pecuniary loss.

In the circumstances it seems to me that the plaintiff's damages must be limited to the two amounts mentioned above, namely R220,13 and R195, a total of R415,13.

Although the granting of an interdict against the defendant was not one of the matters put in dispute in the Rule 37 minute, Mr. Rossouw argued that I should not grant this relief because the evidence for the defendant (which the plaintiff cannot contest) is that he ceased to infringe the plaintiff's copyright in August 1975. If that is the case I do not see how (subject to the question of costs) he can in any way be prejudiced by the granting of the interdict which the plaintiff seeks. This was the view taken in Performing Rights Society v Berman and Another, supra at pp. 357 - 8. In that case, as here, the defendant had given no undertaking not to repeat the infringement and there is no guarantee that he will not repeat such infringement in the future, unless he is prevented from doing so. His past conduct, his contemptuous disregard for the plaintiff's letters, warnings and requests that he pay a licence fee, ("ek het dit as belaglik beskou") his specious reliance on the fact that he held a radio listener's licence; the fact that he only ceased his infringements when served with a summons; and the fact that he has restored the radio to its former place (for reasons of which I am somewhat sceptical) do not inspire confidence that he will not in the future resume his infringement of the plaintiff's copyright. Up to three days before trial he was persisting in his denial of the plaintiff's rights and his denial that he had breached them. It seems to me therefore that the plaintiff has established the requisites for the granting of an interdict and that it should be granted against the defendant.

Finally, as regards costs, I am of the view that, despite the fact that the damages awarded are only some R415 and that the matter fell within the jurisdiction of a magistrate's court, this is a proper case to award the plaintiff costs on the Supreme Court scale. My reasons are briefly as follows:

   (a)   The defendant pleaded a complete denial of all the plaintiff's allegations, including the plaintiff's copyright and denied anyinfringement of such rights. All the material facts were in dispute until three days before the trial.

   (b)   Apart from its letter of 9 January 1973 the defendant did not respond in any way to the letters from the plaintiff. In particular, it made no rebuttal of the basis on which the plaintiff calculated the licence fees due, nor did it give any information as to how long the performance of the works had been taking place. The plaintiff therefore had no way of accurately assessing the damages which might be awarded to it.

  (c)   The defendant at no time, even after issue of summons, placed on record that it had ceased allowing the public performance of the copyright works nor did it acknowledge the plaintiff's right to a licence fee if copyright works were being publicly performed; nor did it undertake, if it were breaching such copyright, to cease to do so.

   (d)   Up to three days before trial, therefore, the plaintiff had to come to Court prepared to prove every material allegation in its particulars of claim. These were not simple issues at that stage and it does not seem to me to have been unreasonable to have decided to proceed in the Supreme Court to establish them. The position would have been quite different if the issues had been limited to those on which the trial eventually proceeded.

For the above reasons it seems to me to be proper that the plaintiff should recover its costs on the Supreme Court scale. I therefore order that:

1. The defendant is interdicted and restrained from performing in public  or causing or authorising or permitting the performance in public of, without the plaintiff's authorisation or consent, any musical work, the performing rights of which are owned by the plaintiff.
2. The defendant pay the plaintiff damages in the sum of R415,13.
3. The defendant pay the costs of this action.

Plaintiff's Attorneys: Espin & Espin. Defendant's Attorneys: W. J. Olckers & Son.

SOUTHERN AFRICAN MUSIC RIGHTS ORGANISATION LTD v SVENMILL FABRICS (PTY) LTD 1983 (1) SA 608 (C)

Citation

1983 (1) SA 608 (C)

Court

Cape Provincial Division

Judge

Berman AJ

Heard

October 27, 1982

Judgment

November 4, 1982

Annotations

Link to Case Annotations

Judgment

BERMAN AJ:

Music, to misquote William Congreve, hath charms to soothe a factory staff. Or so defendant apparently believes, for it provides, without charge, music for the entertainment of its employees whilst they are at work in its factory in Parow. This music is broadcast from a radio station of the South African Broadcasting Corporation in the Republic and is relayed through extension speakers strategically located in the factory building. The only persons who hear this music are the 400-odd persons employed by defendant whilst they are at work in its factory where it processes or manufactures fabrics; the factory  stands on private property and the public has no access to it, and is not entitled, save by invitation, to enter defendant's premises to hear this music.

Plaintiff, on the allegations that it owns the copyright, viz the right to perform this music in public, and that it has neither given its licence nor consent to defendant to do so, seeks an interdict restraining defendant from providing this entertainment for its employees whilst they are at work and so infringing its (plaintiff's) copyright in such music, and damages.

The parties, much being common cause between them, have applied to this Court in terms of Rule of Court 33 (4) for it to determine - separately from any other question and before the action for the interdict and for damages is further proceeded with - this question: is defendant, in providing music for its employees at its Parow factory during normal working hours, performing the musical works in public and thereby infringing plaintiff's rights under the provisions of the Copyright Act 98 of 1978, as amended ("the Act")?

Mr Hoffman, who appeared for defendant in support of it contention that this question falls to be answered in the negative, has taken two points; firstly, that the supply of music in the form it takes in defendant's factory does not constitute a performance, and secondly, that, if it does do so, such performance does not take place in public. Mr MacArthur, who appeared for plaintiff, contended to the contrary, submitting that defendant was performing the musical works in public. To resolve the parties' dispute and to answer the question posed, it is necessary to consider both points raised by Mr Hoffman. I turn to do so separately hereunder.

Is defendant giving a performance?"Performance" is defined in s 1 of the Act as -

   "including any mode of visual or acoustic presentation of a work, including any such presentation by the operation of a loudspeaker, a radio, television or diffusion receiver... or by the use of a record or by any other means,... and references to 'perform' in relation to a work or an adaptation of a work shall be construed accordingly; provided that 'performance' shall not include broadcasting or re-broadcasting or transmitting a work in a diffusion service".

Now I did not understand Mr Hoffman to dispute that what defendant was doing in its factory constituted an acoustic presentation of a work by the operation of an extension - or loudspeaker and/or a radio. What Mr Hoffman urged upon the Court was that defendant's conduct fell within the terms of the proviso to the definition set out in extenso above, and was  thus not a "performance" within the meaning of the Act.

The words "broadcast", "rebroadcasting" and "diffusion service", found in the proviso to the definition of "performance" as set out above, are all defined in s 1 of the Act. "Broadcast" means -

   "a broadcasting service as defined in s 1 of the Broadcasting Act 73 of 1976 and includes the emitting of programme-carrying signals to a satellite";"rebroadcasting" means -

   "the simultaneous or subsequent broadcasting by one broadcasting organisation of the broadcast of another broadcasting organisation";"diffusion service" means -

   "a tele-communication service of transmissions consisting of sounds, images, signs or signals, which takes place over wires or other paths provided by material substance and intended for reception by specific members of the public; and diffusion shall not be deemed to constitute a performance or a broadcast or as causing sounds, images, signs or signals to be seen or heard; and where sounds, images, signs or signals are displayed or emitted by any receiving apparatus to which they are conveyed by diffusion in such manner as to constitute a performance or a causing of sounds, images, signs or signals to be seen or heard in public, this shall be deemed to be effected by the operation of the receiving apparatus".

A "broadcasting service" is in turn defined in the Broadcasting Act 73 of 1976 as -

   "a tele-communication service of transmissions consisting of sounds, images, signs or signals which take place by means of radio and is intended for reception by the general public".

From this definition (and from the definition of "broadcast" in the Act) it is clear that whatever defendant is providing by way of entertainment for its factory staff it is certainly not conducting a broadcast service, nor is it broadcasting. Nor again is it "re-broadcasting" within the meaning of the definition of that word set out above. Indeed, it did not seem to me that Mr Hoffmanwas contending that defendant was broadcasting or re-broadcasting. As I followed his argument on this point (which, I interpolate, was adverted to in his heads of argument only obliquely, if at all, and which appeared to be something of an afterthought), it was his contention that defendant was providing a "diffusion service". Now as I understand it a "diffusion service" is something of an amenity such as is provided to a hotel guest or to a hospital patient in his room; he presses one of a series of buttons or turns one of a series of knobs and thereby selects the programme of one or another of the services provided by the South African Broadcasting Corporation, or that of an in-house service, ie a series of musical items being played on the record-player of the hotel or hospital. The exemption afforded in the Act to a "diffusion service" applies only down to the stage where the work arrives at the receiving apparatus, in this case at the radio on defendant's premises, and not beyond that point; so that the subsequent emission of the sounds by this receiving apparatus constitutes a "performance" which, when done in public and without authority, infringes plaintiff's rights. See The Modern Law of Copyright by Laddie, Prestcott and Vitoria (1980) at 65. This means that defendant, by relaying through extension speakers to the staff in its factory a musical programme broadcast by the South African Broadcasting Corporation, is not transmitting a musical work in a diffusion service and defendant is thus not entitled to claim that this service which it provides to its employees falls within the ambit of the proviso to the definition of "performance".

It follows then that Mr Hoffman's first submission fails. Defendant - in and by relaying music for the entertainment of its factory staff - is giving a performance within the meaning of that word as defined in the Act.

Is the performance a public one?

Mr Hoffman's second submission, viz that defendant is not performing the musical works in public, but rather playing the music to a private, domestic, or quasi-domestic circle, is in my view without merit. Indeed, Mr Hoffman argued it but faintly. This is hardly surprising, considering the weight of judicial authority against his submission. As Mr MacArthur rightly pointed out, the word "public" is not defined in the Act, and "the public" is a term of uncertain import, which must be limited in every case by the context in which it is used. See Jennings v Stephens (1936) 1 All ER 409 (CA). As was laid down in this case the true criterion is the character of the audience listening to the music and in every case, when one has to decide whether or not a performance is being give "in public", it is thus the character of the audience which must be ascertained. In deciding in any particular case what the character of the audience is, the Courts of the United Kingdom have held that the meaning of the word "public" must be considered in the light of the relationship between the audience and the owner of the copyright and not in the light of the relationship between the audience and the performer, viz in this case defendant. See Jennings v Stephens (supra at 420) and The Performing Right Society Ltd v Rangers FC Supporters Club, Greenock, and Others 1975 RPC 626 at 636. As was pointed out in the former case, the real difference between a performance in private and one in public is that in the former case the entertainment forms part of the domestic or home life of the person who provides it; in the latter case the entertainment forms part of the nondomestic or outside life of the audience,  and is in no sense part of their domestic life. On this basis it becomes readily apparent that defendant's performance is not private insofar as it (or its staff) is concerned.

With regard to the distinction to be drawn between "public" and "private", and the interest and concern therewith on the part of the copyright holder, the remarks of Lord GREENE MR in Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd (1943) 1 All ER 413 (CA) at 416 are particularly apposite:

   "In the present case, having regard to the character of the audience and all the relevant facts which bear upon that matter, I have no doubt that these performances were performances in public. In Jennings v Stephens, to which I have referred, I ventured to suggest that in considering the character of the audience the primary matter to consider was the relationship of the audience to the owner of the copyright, rather than the relationship of the audience to the performers. I am confirmed in that view by a consideration of the present case. When the Legislature under the Copyright Act conferred upon the owner of copyright a monopoly, it no doubt intended that that monopoly should be a real and not an illusory right of property, and it is, therefore, in my opinion, important to consider whether a particular performance, the character of which is in question, is of a kind calculated to whittle down that monopoly to any substantial extent. To take a case at one end of the scale, a purely domestic performance, or what is sometimes called a quasi-domestic performance, is not a thing which is calculated to whittle down the value of the monopoly. It is a thing which can have no substantial effect in depriving the owner of a copyright of the public from who he receives the value of the work of his brain and his imagination. If you take the other end of the scale, where there is a performance  unquestionably in public, such as at a public theatre or a public concert hall obviously if that were permitted that would whittle down the value of the monopoly. The monopoly is, of course, confined to performance in public, but in considering whether a performance is in public its effect upon the value to the owner of the copyright of the statutory monopoly is, I venture to think, a consideration to which at any rate great importance should be given."

Now the object of the copyright legislation in the United Kingdom is the same as that of the Copyright Act in this country, and has long been so. The language employed in the enactments on this topic of the two countries is largely similar and, regard being had to the paucity of authority in South Africa (there being little apart from SA Music Rights Organisation Ltd v Trust Butchers (Pty) Ltd1978 (1) SA 1052 (E), which is clearly distinguishable on the facts), no apology is required for calling in aid the English cases dealing with the point under consideration. Furthermore, the facts in the Ernest Turner Electrical Instruments Ltdcase are happily on all fours with the one at present under consideration here, and it might without exaggeration be said that the only distinguishing features to be found in these two cases is that in the 1943 English case the music relayed for the entertainment of the factory staff was doubtless of a sentimental wartime nature, whereas the music being relayed in defendant's factory for the entertainment of its employees is no doubt listed in what is known nowadays as the "Top Twenty"! The Court of Appeal in this English case had no difficulty in holding that the factory proprietor was performing the musical works being relayed through its extension speakers in public; there is nothing one can usefully add to the judgment of the MASTER OF THE ROLLS and to those of Lord Justices LUXMOORE and GODDARD in the Ernest Turner Electrical Instruments Ltdcase, and there is no good reason why this decision should not be followed here in appropriate circumstances. The facts of the two cases, being wellnigh identical, the statutes largely similar in language and content and their objects the same, I have no difficulty in following this decision. See also Performing Rights Society Ltd v Harlequin Record Shops Ltd (1979) 2 All ER 828; Copinger and Skone James on Copyright 12th ed (1980) at para 563 et seq.

It follows that Mr Hoffman's second submission, viz that the performance was not a public one, also fails. I hold, as did the Court of Appeal in the Ernest Turner Electrical Instruments Ltd case, that the relaying through extension speakers of music in a factory from a programme broadcast by a national broadcasting corporation, constitutes a performance in public, and that the owner of the copyright in that music is entitled to have its right therein protected. It follows further that the question posed in the special case stated in terms of Rule of Court 33, viz whether or not defendant, in playing music to its employees at the factory in Parow during normal working hours, is performing the work in public and thereby infringing the rights of plaintiff under the provisions of the Copyright Act 98 of 1978 falls to be answered in the affirmative, viz in plaintiff's favour.

It remains only to deal with the question of costs. Plaintiff's contention has been upheld and there is no good reason why costs should not follow the event. Defendant is accordingly ordered to pay plaintiff's costs incurred in connection with the special case stated under the aforementioned rule.

It was agreed between the parties that, in the event of plaintiff succeeding in the special case, plaintiff would be entitled to judgment in terms of claims 1,2 and 4 of the particulars of claim, viz:

1. An order interdicting and restraining the defendant from performing in public or causing or permitting the performance in public, without the plaintiff's authorisation or consent, any musical works, the performing rights whereof are owned by the plaintiff.
2. Payment of the sum of R3 000 as and for damages.
3. Costs of suit.

It is so o

rdered; costs to include the costs of the special case.

Plaintiff's Attorneys: Findlay & Tait. Defendant's Attorneys:  Sonnenberg, Hoffmann & Galombik.

PRISM HOLDINGS LTD AND ANOTHER v LIVERSAGE AND OTHERS 2004 (2) SA 478 (W)

Citation 

2004 (2) SA 478 (W)

Case No

20957/2001

Court 

Witwatersrand Local Division

Judge

Hoffman AJ 

Heard

November 21, 2001; November 22, 2001

Judgment

December 12, 2001

Annotations

Link to Case Annotations

Judgment

Hoffman AJ:

The applicants have applied for an interdict restraining the respondents, pendente lite, from:

   (1)   adapting, marketing or selling certain computer software ('the software'); and

   (2)   selling the software to Econet Wireless International Ltd (Econet).

In addition, an order is sought compelling the respondents to deliver the software to the Sheriff pending the outcome of the action to be instituted.

Yet further relief is claimed against the first and second respondent. It is alleged that they are in breach of undertakings in restraint of competition concluded between them and Accord Technologies Ltd (Accord), which restraints have been ceded to the first applicant.

It is convenient to deal, first, with the interdict sought against the first and second respondents arising out of allegations of breach of the restraint undertakings referred to above. In order to do so it is necessary to refer, briefly, to the history of the covenants in restraint of competition.

In 1998 the first and second respondents entered into contracts in terms of which they were employed by Accord. It is alleged by the applicants that when they did so both the first and second respondents signed covenants in restraint of trade in terms to which I shall refer hereunder.

The restraint undertaking signed by the first respondent is annexed to the papers. That signed by the second respondent has, according to the applicants, been lost. It is alleged that the document which she signed is in its terms identical to that signed by the first respondent. 

The first respondent admits signing the covenant in restraint of trade. The second respondent denies having done so. While there are indications in the papers that the second respondent would, in all likelihood, have signed a covenant in restraint of trade similar to that signed by the first respondent, I cannot make a positive finding to this effect. In the circumstances, given the fundamental dispute of fact in this regard, it would be inappropriate for me to grant relief against the second respondent at this stage.

I turn now to the undertaking signed by the first respondent. It was signed by him on 11 August 1998 and in its terms restrains him in favour of Accord and its subsidiaries, inter alia, as follows:

   '. . . (The) employee undertakes that he will not directly or indirectly either as principal, agent, partner, representative, shareholder, director or employee or any other like or similar capacity:

   . . . be associated with, interested in . . . or interest himself in any firm, person or group carrying on business in competition with the company in the research and development, promotion, marketing,  distribution, repairs, rental or sale of cellular, car radio, card security, multimedia or video conferencing products, and/or technology and/or training methods or systems in relation to any of the aforegoing and in particular, in the development, marketing, sale and/or support of GSM Middleware Software;

   . . . knowingly solicit in competition with the company, the custom of any person who, within the 12-month period immediately preceding at the date of termination of the employee's employment with the company, was a customer of the company, or any of them;

   . . . solicit, interfere with or entice or endeavour to entice away from the company any person who, within the 12-month period immediately preceding the date of termination of the employee's employment with the company, was employed by the company.'

The area of the restraint is South Africa.

On 10 May 2000 Accord Technology Investments (Pty) Ltd (Accord Technologies) sold the business of Accord to the first applicant and, in terms of the sale agreement, Accord ceded to it the restraint of trade agreements concluded 'with each of the key management' personnel.

In the circumstances there can be little doubt (indeed, counsel for the respondents did not seriously contend otherwise) that the restraint agreement operates in favour of the first and second applicants (it is not disputed that the second applicant is a subsidiary of the first applicant, and that the restraint undertaking operates in its favour).

A contract in restraint of trade is to be 'regarded as a part of the goodwill of the business' sold (Botha and Another v Carapax Shadeports (Pty) Ltd1992 (1) SA 202 (A)) and thus, on the sale of the Accord businesses, the benefits of the restraint agreement were, ipso facto transferred to the first applicant. Accordingly, even if Accord had not ceded the restraint agreement to the first applicant, it would have acquired the benefits of the restraint as part of the goodwill sold to and acquired by it. The cession, of course, puts this beyond doubt: the first respondent is restrained for a period of three years (the period of the restraint) from engaging, in South Africa, in the competitive activities detailed in the restraint undertaking.

It is common cause that on 3 July 2000 the respondents concluded contracts of employment with the first applicant. In addition, the first and second respondents concluded contracts of employment with the second applicant, pursuant to which they were to be appointed directors of the second applicant. Their employment endured until 8 June 2001.

It is not in dispute that, subsequent to the termination of their employment with the applicant companies on 8 June 2001 (the date on which they resigned their employment), the respondents set up business in Petervale, Gauteng, and this business competes, directly, with that of the applicants. It is also common cause that Econet, formerly a customer of the applicants, has taken its business away from them and has purchased competing suites of computer programs from the business now being conducted by the respondents.

The only serious challenge mounted by the first respondent to the applicants' claim to be entitled to enforce the undertaking in restraint of competition is that the restraint is limited to South Africa, that he does not and will not, for a three-year period, sell into South Africa and that he accordingly is not in breach of the undertaking. I pause to mention that Econet is a Zimbabwe company which does business in that country.

The first respondent's reasoning is fallacious. He conducts his business in competition with the applicants in Gauteng. He sells from this province. The fact that his customer base is situate outside South Africa is irrelevant. (See Elcock & Co v Elcock 1928 WLD 121 at 126; Wolmer v Rees and Others 1935 TPD 319; Arlyn Butcheries (Pty) Ltd v Bosch1966 (2) SA 308 (W).)

In the circumstances the first respondent is in breach of the restraint undertaking signed by him, and acquired by the first applicant. The applicants are, accordingly entitled to an interdict restraining them from competing with it in this fashion.

It is not suggested in the respondents' papers that the restraint is unreasonable. Accordingly I shall order, pendente lite, that the first respondent be restrained in the terms sought in the notice of motion, save only that I shall limit the ambit of the restraint, both as to area (South Africa), and time (three years  from 8 June 2001, or the final determination of the action to be instituted, whichever is the sooner).

I pause to observe that, in my view, the applicants have established a clear right to this relief and the remaining requisites for a final interdict.

Had this been sought I would have granted final relief against the first respondent for breach of his restraint undertakings. 

I turn now to the question of copyright.

The first matter to be considered is whether the applicants, or either of them, own(s) the copyright in the computer programs in issue: If they do, then they are entitled, in terms of the provisions of s 24 of the Copyright Act 98 of 1978 (the Act) to an interdict to prevent infringement thereof. 

Section 2 of the Act, of course, makes eligible for copyright 'a computer program' as defined in s 1, which would include the source code to any such program.

In order to determine the question of copyright, it is necessary to examine the genesis and history of the two suites of computer programs which the applicants seek to protect.

It is apparent from the papers that the first and second respondents are skilled computer programmers and have gathered around them a talented team of assistants (the remaining respondents). They have developed considerable abilities, particularly in the field of programs written for the cellular telephone industry. 

Prior to his association with, and employment by the Accord Group of companies, the first respondent, according to what is stated in his affidavit, developed his suites of programs which ultimately evolved into the programs now owned and sold by the first applicant under the names 'AirComm' and 'AirTrax'.

It is apparent that prior to the Accord era, while the first respondent wrote programs during the course of his employment with several employers, he was astute to retain, expressly, ownership of the copyright in all the programs so written; thus, effectively, he licensed his employers to use and exploit the copyright in what he created for them while retaining ownership of copyright in the works he produced. Ordinarily, of course, copyright in works created in the course and scope of his employment with the companies for which he worked would have vested in the employers concerned (s 21 of the Act).

The reservations of ownership of copyright in the various programs were, prior to the first respondent taking up employment with the Accord Group, express and specific. Thus, for example, when he, the second respondent and one Ria van Zyl, formed and became shareholders in a company, World-wide Solutions Gateway (Pty) Ltd (WSG), the following is specifically recorded in the 'Founders Agreement':

   'WSG will have exclusive rights to sell the products developed by Johan Liversage unless the directors and shareholders mutually agree upon distributors. The intellectual property and copyright and source code will at all times remain the property of Johan Liversage and will not be sold with the products.'

During 1998 the first respondent took up employment with the Accord Group. Contemporaneously:

1. WSG sold its business, including all technology which it owned, to a shelf company.
2. The first respondent sold to the shelf company, for a purchase price of R150 000, what is referred to as the 'technology'. This is defined as 'GSM Middleware Software and Communications Gateways and Connectivity Solutions. . .'. This software comprised early versions of what became the AirComm and AirTrax programs.

The issued share capital in the shelf company, to which I shall refer as 'Datagate' (its name was changed to this) was owned as to 50% thereof by the Accord Group on the one hand, and as to the remaining 50% thereof by the first and second respondents, and Ria van Zyl.

It is thus to be seen that WSG sold its business to a company which was partially owned by the first and second respondents, and in which they and their associate Ria van Zyl had a direct interest. It is apparent therefore, that the first and second respondents stood to benefit from their association with Accord. 

For reasons which are not relevant, the shareholding in Datagate, which was owned by the first and second respondents and Ria van Zyl, was later acquired by Accord. Thus, Datagate became a wholly-owned subsidiary of Accord.

The respondents contend that what was sold to Datagate by, particularly, the first respondent was only the business that WSG conducted. This, as I have observed, included the early versions of what became the AirComm and AirTrax programs. The applicants, on the other hand, contend that at the time of the conclusion of the agreement WSG already had exclusive rights to sell the products (the early versions of the programs) and, accordingly, all that the first respondent had left to sell was the intellectual property in those products. It was argued that 'technology' must, therefore, have included the intellectual property in the programs.

In my view, the applicants' contentions in this regard are correct. The first respondent was to be employed by the Accord Group to develop the programs that Datagate was entitled, exclusively, to sell.  In developing the programs, copyright in anything which he wrote after taking up employment would, by virtue of his employment, have vested in Datagate. Thus, ultimately, he had nothing else to sell but his interest in the technology itself. This must have included copyright in the early versions of the programs. Thus, I conclude that the first respondent did sell to Datagate copyright in the programs comprising the earlier versions of AirComm and AirTrax. Pursuant to the sale agreement that copyright was assigned to Datagate in terms of s 22(3) of the Act (Klep Valves (Pty) Ltd v Saunders Valve Co Ltd1987 (2) SA 1 (A) at 31 - 2).

I am strengthened in my view by the warranties given by the first respondent in terms of the agreement referred to above. Thus he warranted, inter alia, that:

   '1   he is the sole and beneficial owner of the technology and is entitled to sell and pass ownership thereof to the purchaser;

   2   save for the right of WSG . . . to use the technology no person currently has, nor will any person have any option or right to acquire any of the technology or to acquire or to use any of the  technology;

   3   the technology sold to the purchaser in terms of this agreement constitutes all and any technology of which Johan is the registered and beneficial owner relating in any manner whatsoever to the business.'

The Accord Group found itself in financial difficulties, and in May 2000, and as I have stated above, the first applicant purchased from Accord Technologies (a wholly-owned subsidiary of Accord) the  'Accord Business Solutions business and the Datagate Software business'.

Accord Technologies thus sold the businesses which Datagate had acquired from WSG; no doubt what was intended was to sell all business assets owned by Datagate, including copyright in the software which was to be developed further and culminated in the AirComm and AirTrax programs. This included the developments which took place during the period 1998 to 2000. There was, however, no formal assignment of copyright, and there is no evidence that Datagate (which owned the copyright) signed any document, the effect of which was to transfer to the first applicant ownership of its copyright (see Klep Valves (Pty) Ltd v Saunders Valve Co Ltd (supra)). That being so, the requirements of s 22(3) of the Act have not been complied with and there has been no effective assignment of copyright to the first applicant in the computer programs which were developed into AirComm and AirTrax. No doubt this was due to an oversight and the matter can be rectified. However, as things stand, Datagate remains the owner of the copyright in the software as it existed in July 2000. 

The question of the formal requirements for the assignment of copyright was not raised by counsel for either the applicants, or for the respondents, and it was only when I was preparing this judgment that I became alive to the problem. I would have preferred to have given counsel an opportunity of addressing further argument on this  issue. There is, however, some urgency in the matter, and in the circumstances this is not practicable. In any event, for reasons which will become apparent from what I say later in this judgment, the end result is not affected by the fact that the first applicant does not own the copyright in the programs it acquired from Datagate. 

As I have stated, the respondents took up employment with the first applicant in accordance with contracts concluded by them on 3 July 2000. In addition the first and second respondents were to have been appointed to the board of directors of the first applicant. There is a dispute between the parties whether the appointments were made but nothing turns upon this. 

During the period 3 July 2000 to 8 June 2001 (when the respondents left the applicants' employ) there were developments to the computer programs acquired from Datagate. It is common cause that the first applicant owns the copyright in whatever was written by the respondents in the course of their employment, and the question which now arises is whether the applicants are entitled to an order restraining the respondents from infringing that copyright.

After 11 June 2001 the first respondent established a business which trades as Ianitor International (Ianitor) and which competes directly with the applicants. Ianitor has sold to Econet two suites of computer programs which are called 'Nuntius' and  I 'Thuros'. These programs perform the same functions as the AirComm and AirTrax programs sold by the applicants.

Prior to establishing Ianitor, and in May 2001, the first and second respondents held a meeting at their home with the remaining respondents and certain other persons, including one Paul Boshoff (Boshoff) (then, and still, an employee of the first applicant). Boshoff attended the meeting because he was offered employment by the first and second respondents in the business which they proposed to set up and which became Ianitor. What the first and second respondents proposed at that meeting was, inter alia, that:

   1   they would set up a new 'company' (Ianitor); 

   2   the respondents and Boshoff would resign from their employment with the applicants, and take up employment with Ianitor;

   3   Econet would be targeted as a potential client of the new company;

   4   the respondents were to make copies of all programs comprising AirComm and AirTrax, and take these with them for use by the new company;

   5   the laptop computers used by the respondents were to be wiped clean (formatted) prior to their leaving the employ of the applicants.

This indeed happened (save only that Boshoff remained in the employ of the first applicant after initially resigning his employment, but withdrawing that resignation). The respondents state that they took away nothing with them to which they were not entitled. This, however, rings hollow. Their actions must be seen in the most sinister of lights. There can be no reason for them to have copied the programs as they did if they did not intend to use them for their own benefit, and that of Ianitor.

Subsequent to the setting up of Ianitor the applicants launched what has come to be known as an 'Anton Piller' application. When they searched the respondents' premises they found evidence which indicated unequivocally that the respondents had in their possession copies of all programs comprising the AirComm and AirTrax suites.

The respondents admit copying the programs. They say, however, that:

   (1)   copyright in those programs does not vest in the applicants;

   (2)   the use to which they have put the programs in writing, Nuntius and Thuros, is not significant;

   (3)   Nuntius and Thuros are 'revolutionary' and new, and that they could recreate them from scratch within a matter of weeks;

   (4)   in any event, in creating Nuntius and Thuros the first respondent used what might loosely be referred to as the tools of his trade - standard programming commands which he has used over many years.

The respondents' contentions fall to be rejected for the following reasons: 

1. It took the first respondent and his team in excess of three years to develop the AirComm and AirTrax programs. It is hardly likely that he and his team could have created new programs which serve the same purpose within a matter of weeks, and which are, to use the first respondent's own word, 'revolutionary'.
2. If the first respondent intended to create a new suite of programs it would hardly have been necessary to copy AirComm and AirTrax.
3. The tools of his trade would, readily, have been available to the first respondent. They would not reside exclusively in the programs which belong to the applicants, and it would not have been necessary for the respondents to copy those programs.

In the circumstances, had I been able to find that the first applicant owned copyright in the software written prior to July 2000, I would have granted the applicants interim relief, restraining the respondents from infringing that copyright. As things stand, however, I cannot do so.

I turn now to the works created after 3 July 2000 during the course of the respondents' employment with the first applicant. It is common cause that the first applicant owns the copyright in this work. The question which must be posed is how much of this work has found its way into the Nuntius and Thuros programs, and whether the respondents, in selling those programs, contravene the provisions of s 11B of the Act, in that their programs amount to an adaption of the works, of which the applicants own the copyright, or are a reproduction of a substantial part of those works (s 1(2A) of the Act).

After seizing documents and programs pursuant to the Anton Piller order, the applicants engaged an expert to determine the extent of the similarities between AirComm and AirTrax, and Nuntius and Thuros. He concluded that there were indeed substantial qualitative similarities (see Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A)).

The applicants' expert did not seek to distinguish between work done prior to 3 July 2000 and work done thereafter. Indeed he could not have done so - he compared the final AirComm and AirTrax programs with the Nuntius and Thuros programs.

Accordingly I am unable to rely on the expert evidence tendered by the applicants to support infringement. It is true that Boshoff stated in his affidavit that substantial work was done on both AirComm and AirTrax during the year, approximately, that the respondents were employed by the applicants. There is a logical attractiveness to this  evidence: The respondents worked primarily on the development of the two suites of programs during this time, and there must have been considerable development work done on both. In addition, by copying the final programs, the respondents themselves indicate that there was material which they required in order to write their programs. In my view, however, this is not sufficient. 

At the end of the day, I am unable to discern, on the basis of the evidence tendered, whether substantial parts of the work done after 3 July 2000 have been reproduced in Nuntius and Thuros. It is, thus, not appropriate that interdicts against the respondents be granted, restraining them from infringing copyright in the works created by them for the applicants while working on the AirComm and AirTrax programs during the period of their employment with the applicants.

I should mention that the respondents deny substantial copying of any of the works in order to write Nuntius and Thuros. The first respondent, apart from asserting that this is the case, ran a computer program to highlight differences between AirComm and AirTrax, and Nuntius and Thuros. He concludes that there are insignificant similarities. His evidence on this aspect must be rejected for the following reasons:

1. The results of the analysis using the computer program (a commercial program not written by the first respondent) are hearsay and inadmissible. 
2. The respondents cannot, and indeed have not attempted to, explain adequately why they copied and removed the AirComm and AirTrax programs.

It is now necessary to consider the final basis upon which relief is sought. Each respondent signed an employment contract which contains identical clauses. These contain the following clauses:

   (1)   Each of the respondents will not be

      '. . . entitled, whether for your own benefit or that of others, to make use of or disclose to others or avail yourselves or others of or derive profit or benefit from any information concerning the business affairs of the company or its clients, suppliers or trade connections which you may have acquired by reason of your position or association with the business and affairs of the company or its clients';

      and

   (2)   each respondent acknowledged

      '. . . that ownership of all intellectual rights regarding the hardware and software design, documentation etc produced while employed by the company shall be vested in the company'.

The respondents, as I have stated, made copies of the programs on which they worked while in the employ of the applicants. I am satisfied that they must have used the material they filched to compete with the applicants. That material was confidential to the applicants and, in acting as they did, the respondents competed unlawfully with them. (See Faccenda Chicken Ltd v Fowler and Others; Fowler v Faccenda Chicken Ltd [1985] 1 All ER 724 (Ch); Knox D'Arcy and Others v Jamieson and Others1992 (3) SA 520 (W); Telefund Raisers CC v Isaacs and Others1998 (1) SA 521 (C) Triomed (Pty) Ltd v Beecham Group plc and Others2001 (2) SA 522 (T).)

There is, of course, nothing to prevent the respondents (including the first respondent if he moves his place of business outside of South Africa) from writing programs de novo, and selling them in competition with the applicants. What they are not entitled to do is to use the confidential information gleaned during  H the period of their employment with the applicants, and Accord, and use that to compete with the applicants. Nor may they use that information as a springboard to compete, and springboard it remains for so long as they use programs which are based on material filched by them. (See Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd and Another 1977 (1) SA 316 (T).)

It follows that the requirements for an interim interdict have been established. Thus:

1. A prima facie case, at the very least, has been established.
2. The applicants have undoubtedly suffered irreparable harm, and there must be the potential for further harm. They have already lost one client (Econet), and the prospect of Ianitor concluding other contracts in competition with the applicants, and selling their Nuntius and Thuros programs to potential customers of the applicants is self-evident.
3. The balance of convenience unquestionably favours the applicants: As I have already observed, there is nothing to stop the respondents (including the first respondent if he were to set up business outside South Africa) from writing new suites of programs without copying. If this takes some time, then so be it. I repeat that the respondents themselves claim to be able to create completely new programs within a matter of weeks.
4. There is no other remedy available to the applicants. An award of damages some years down the line would be cold comfort for the potential losses which the applicants stand to sustain. In any event, damages would be difficult if not impossible to quantify. Furthermore, there is no guarantee that the respondents would be able to meet any award which the applicants might obtain. 

In the circumstances it is appropriate to interdict the respondents, pendente lite, from selling the Nuntius and Thuros programs, or any adaptations thereof.

It follows from what I have said earlier that it is appropriate to grant an order, pendente lite, for delivery up of the Nuntius and Thuros programs. They were written at a time when the respondents had access to AirComm and AirTrax and had filched those programs for purposes which, on the face of it, were nefarious. Furthermore, the two programs were written primarily by the first respondent in circumstances where he was in breach of the restraint provisions which operate in favour of the applicants. 

I shall do no great hardship to the respondents in ordering them to deliver up the Nuntius and Thuros programs more particularly, as the first respondent, on his own say-so claims to be able to write their equivalents in a matter of weeks. (He must, of course, ensure that, if he does so, he avoids a further breach of his restraint.)  Accordingly, the prejudice caused by such an order is not significant.

There will be an order in the following terms:

1. The first respondent is interdicted from:
2. Carrying on, or conducting business in South Africa in competition with the applicants in the research and development, marketing, sale and support of GSM Middleware software, including the Ianitor International, Nuntius and Thuros software.
3. Soliciting any business from Econet Wireless International Ltd, or any of its subsidiaries, or any other client of the applicants which was a client of the applicants or either one of them during the time of the first respondent's employment with the applicants.
4. The respondents are interdicted from:
5. Marketing or selling Nuntius or Thuros software, or any adaptation thereof, or any software copied or adapted from the  A applicants' AirComm or AirTrax software.
6. Selling to Econet Wireless International Ltd, or any subsidiary thereof, Nuntius or Thuros software copied or adapted from the applicants' AirComm or AirTrax software.
7. The respondents are ordered, forthwith, to deliver up to the Sheriff of the High Court the Ianitor Nuntius and Thuros software and any developments thereof.
8. The interim interdicts and the order granted in terms of paras 1A, B and C above shall endure until 8 June 2004, or the final outcome of the action to be instituted, which is referred to in para 4 below, whichever is the sooner. 
9. The orders granted in terms of para 1A, B and C above shall not preclude:
10. The second to thirteenth respondents from carrying on business developing, marketing and selling software in competition with the applicants, provided that any such software is not copied or adapted from the applicants' AirComm or AirTrax software.
11. The first respondent from carrying on business developing, marketing and selling software in competition with the applicants, provided that any such software is not copied or adapted from the applicants' AirComm or AirTrax software, and provided further that he does not carry on nor conduct such business in South Africa.
12. The applicants are to institute proceedings against the respondents for final relief by not later than 20 January 2002, failing which this order shall lapse and become of no force nor effect.
13. Costs of this application, and the costs of the application under case No 18306/01 shall be costs in the cause of the action to be instituted, save that in the event that the action is not instituted by 20 January 2002, the costs, including costs of the application under case No 18306/01 shall be paid by the applicants jointly and severally.