19 December 2024
High Court Clarifies Copyright Liability for Businesses
Earlier this year in the final appeal of Real Estate Tool Box Pty Ltd v Campaigntrack Pty Ltd, the High Court of Australia ruled that companies can be held liable for copyright infringement if they are "indifferent" to it, particularly when warned. However, proving liability requires specific evidence, and decisions depend on case-by-case facts.
The Case Overview
The dispute involved "Toolbox," real estate software alleged to have copied the source code of "DreamDesk," owned by Campaigntrack. While the software developer was found guilty of infringement, the High Court ultimately ruled that two other groups—the real estate franchisor Biggin & Scott and the original DreamDesk owners—did not authorise the infringement.
Key Findings
The High Court highlighted three factors under the Copyright Act 1968 (Cth) to determine liability:
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Power to prevent infringement.
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Relationship with the infringer.
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Steps taken to prevent infringement.
Biggin & Scott reasonably trusted the developer’s assurances and took steps to prevent misuse, while the DreamDesk parties cooperated fully with requests and had no direct involvement in the infringement.
Lessons for Businesses
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Ignoring infringement warnings can lead to liability, but only if negligence is proven.
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Agreements with software developers should include clauses requiring non-infringement of third-party IP, as well as warranties and indemnities.
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Promptly investigate and address any infringement notices to avoid risks.
This decision highlights the importance of vigilance and due diligence to prevent unintentional copyright liability when you are commissioning software, websites and other copyright related materials from 3rd party suppliers.
