FEDERAL COURT OF AUSTRALIA

Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16

Citation: Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16

Appeal from: Acohs Pty Ltd v Ucorp Pty Ltd [2010] FCA 577

Parties: ACOHS PTY LTD (ACN 009 572 187) v UCORP PTY
LTD (ACN 062 768 094) and BERNARD
BIALKOWER

File number(s): VID 506 of 2010

Judges: JACOBSON, NICHOLAS AND YATES JJ

Date of judgment: 2 March 2012

Catchwords: COPYRIGHT – literary work – originality – whether

copyright subsists in HTML source code of material safety
data sheets (MSDSs) rendered by computer program –
whether work of joint authorship – where HTML source
code is generated by computer program and includes data
entered manually – whether copyright subsists in only part
of the relevant copyright work

COPYRIGHT – literary work – originality – whether

copyright subsists in MSDSs created by a process of
transcription of third party MSDSs

COPYRIGHT – infringement – implied licence arising as

a matter of law – scope of licence – where manufacturers,
importers and suppliers of hazardous substances required
to comply with legislative regimes for the provision of
MSDSs – where first respondent reproduced appellant’s
MSDSs in anticipation of receipt of customer requests for
their provision

COPYRIGHT – infringement – whether appellant

discharged onus to prove absence of licence in
circumstances where primary judge found many MSDSs
were the subject of a customer request for their provision
and many were not – whether respondents carried an
evidentiary burden to show acts falling within the scope of
the implied licence found

Legislation: Copyright Act 1968 (Cth) ss 10, 14(1)(b), 35(6), 36,

196(3), 197(1)
Evidence Act 1995 (Cth) s 140
 -2-

National Occupational Health and Safety Commission Act

1985 (Cth)
Occupational Health and Safety (Safety Standards)
Regulations 1994 (Cth)

Cases cited: Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 37
IPR 542
Acohs Pty Ltd v Ucorp Pty Ltd (No 2) (2009) 82 IPR 493
Australian Broadcasting Commission v Australasian
Performing Right Association Limited (1973) 129 CLR 99
Beck v Montana Constructions Pty Ltd (1963) WN (NSW)
1578
Blatch v Archer (1774) 1 Cowp 63
Breen v Williams (1996) 186 CLR 71
Byrne v Australian Airlines Limited (1995) 185 CLR 410
Castlemaine Tooheys Ltd v Carlton & United Breweries
Ltd (1987) 10 NSWLR 468
Commonwealth v Verwayen (1990) 170 CLR 394
Concrete Pty Limited v Parramatta Design &
Developments Pty Ltd (2006) 229 CLR 577
Coogi Australia Pty Ltd v Hysport International Pty Ltd
(1998) 86 FCR 154
Copyright Agency Limited v State of New South Wales
(2008) 233 CLR 279
De Garis v Neville Jeffress Pidler Pty Limited (1992) 37
FCR 99
Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113
ALR 225
Esso Australia Resources Limited v Plowman (1995) 183
CLR 10
Express Newspapers Plc v News (UK) Ltd [1990] 3 All ER
376
IceTV Pty Limited v Nine Network Australia Pty Limited
(2009) 239 CLR 458
Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty
 -3-

Ltd (1985) 5 IPR 213

Ladbroke (Football) Ltd v William Hill (Football) Ltd
[1964] 1 WLR 273
Mandurah Enterprises Pty Ltd v Western Australian
Planning Commission (2008) 38 WAR 276
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Powerflex Services Pty Ltd v Data Access Corporation (No
2) (1997) 75 FCR 108
Purkess v Crittenden (1965) 114 CLR 164
R & A Bailey & Co Ltd v Boccaccio Pty Ltd (1986) 4
NSWLR 701
Telstra Corporation Ltd v Phone Directories Company Pty
Ltd (2010) 194 FCR 142
The Commissioner of Taxation of the Commonwealth of
Australia v Casuarina Pty Ltd (1970) 127 CLR 62

Date of hearing: 3 - 4 March 2011

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 217

Counsel for the Appellant: Mr G Dalton

Solicitor for the Appellant: White Ellis Lawyers

Counsel for the Respondents: Mr R Garratt QC with Mr P Wallis and Mr S Rebikoff

Solicitor for the Holding Redlich

Respondents:
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VID 506 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN: ACOHS PTY LTD (ACN 009 572 187)

Appellant

AND: UCORP PTY LTD (ACN 062 768 094)

First Respondent

BERNARD BIALKOWER
Second Respondent

JUDGES: JACOBSON, NICHOLAS AND YATES JJ

DATE OF ORDER: 2 MARCH 2012
WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The parties submit within 14 days draft orders giving effect to the reasons for
judgment published today.

2. Leave be granted to the parties to file and serve within 14 days written submissions on
the question of costs identified in the reasons for judgment, such submissions not to
exceed, in each case, four pages in length.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VID 506 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN: ACOHS PTY LTD (ACN 009 572 187)

Appellant

AND: UCORP PTY LTD (ACN 062 768 094)

First Respondent

BERNARD BIALKOWER
Second Respondent

JUDGES: JACOBSON, NICHOLAS AND YATES JJ

DATE: 2 MARCH 2012
PLACE: SYDNEY

REASONS FOR JUDGMENT

1 Under various legislative regimes in Australia, a manufacturer, importer or supplier

(an MIS) of hazardous substances and dangerous goods must provide a material safety data
sheet (an MSDS) which sets out prescribed categories of information about the product in
question. Employers and the occupiers of certain premises using, or having on site, products
of these kinds must have ready access to a copy of the relevant MSDS for each such product.

2 The appellant and the respondents are competitors in the business of producing
MSDSs, or providing copies of MSDSs, to MISs and users of the relevant products.

3 This appeal concerns the question of copyright in relation to particular kinds of

electronic MSDSs and separate underlying works.

4 Relevantly for the purpose of this appeal, the appellant’s case at trial was that it was
the owner of copyright subsisting in each MSDS created by it, and in the source code for each
such MSDS, and that the respondents had infringed that copyright. In the case of the first
respondent the copyright was alleged to have been infringed by the first respondent
 -2-

reproducing each MSDS and its source code, and supplying or communicating those works,
without the appellant’s licence. In the case of the second respondent the copyright was
alleged to have been infringed by the second respondent authorising the first respondent’s
acts of reproduction and communication, without the appellant’s licence.

5 The primary judge found that copyright did not subsist in the source code or in the
MSDSs created by the appellant, except for certain MSDSs that had been authored, as
opposed to transcribed, by the appellant’s employees. Although finding that the first
respondent had reproduced the authored MSDSs, the primary judge found that these acts had
been impliedly licensed by the appellant.

6 In this appeal the appellant challenged the primary judge’s findings that copyright in
the source code of the MSDSs and copyright in the transcribed MSDSs does not subsist. It
also challenges the primary judge’s finding that the first respondent’s acts in reproducing the
MSDSs, whether authored or transcribed by the appellant’s employees, were impliedly
licensed by the appellant.

7 The respondents raised a number of contentions to support the judgment below.

8 In order to understand the context in which the appeal is brought, it is necessary to set
out some background facts which were the subject of findings by the primary judge. There
was no challenge to these findings.

BACKGROUND

Aspects of the regulatory regime

9 The primary judge (at [2]-[18]) gave a detailed exposition of the relevant legislative
requirements for MSDSs as they exist under Commonwealth law and under the various
regulatory regimes of the States and Territories. For the purposes of this appeal it is only
necessary to record, by way of background, some milestones relating to those requirements,
as they pertain to the format and content of an MSDS.

10 The primary judge found (at [3]) that, originally, there was a certain degree of “ad
hocery” about that format and content. However, in 1986 the National Occupational Health
and Safety Commission established under the National Occupational Health and Safety
 -3-

Commission Act 1985 (Cth) (the NOHSC Act) published a “guidance note” which provided
general instructions on how to compile an MSDS, with standard content and format, that was
relevant and suitable for use in Australia.

11 In 1994 the National Code of Practice for the Preparation of Material Safety Data
Sheets (the 1994 preparation code) was published under the NOHSC Act. It was advisory
only. It provided “general guidelines” for the preparation of MSDSs. It identified “core
information” (essential information that should be included in an MSDS) and “conditional
information” (information that should be included where relevant and available). The
guidelines included a “recommended format” for an MSDS. This recommended format came
to be known as the “4-section” or “4-header” format for MSDSs, referring to the fact that it
comprised four main sections of substantive information.

12 The 1994 preparation code was replaced in 2003 by the National Code of Practice for
the Preparation of Material Safety Data Sheets, 2 nd edition (the 2003 preparation code). It
introduced a “16-section” or “16-header” format for MSDSs. Regulation 6.05(2) of the now
Occupational Health and Safety (Safety Standards) Regulations 1994 (Cth) was amended to
provide that an MSDS must be prepared in accordance with the 2003 preparation code.

13 The primary judge (at [8]) accepted the following evidence given by Ian Cowie, the
director of the appellant:

The [4-header] structure and the 16 Header structure do not dictate the layout
presentation and appearance of MSDS. In my experience, MSDS authored in
accordance with each structure vary considerably in the way they look by reason of
the author’s choice of formatting variables such as heading font sizes, spacing,
underlining, type faces, the use of sub-headings and tables and many other variables.

The Infosafe system

14 The Infosafe system is the system by which the appellant authors, transcribes and
supplies MSDSs. By using the expression “authors”, we do not seek to imply, without more,
the notion of authorship for copyright purposes.

15 The appellant maintains a large relational database called the Central Database (the
CDB). The CDB stores all the data required to generate some 200,000 MSDSs. When access
to a particular MSDS is required, computer programs call up the necessary components from
 -4-

the CDB and assemble those components so that they are represented on a user’s computer
screen as the MSDS of interest.

16 Specifically, the primary judge found (at [24]) that the “technical centre” of the
Infosafe system was a computer program written in Visual Basic language (the Infosafe
program). The primary judge found that the Infosafe program functions by receiving a
request for the generation of a particular MSDS, calling up the data and other elements from
the CDB, compiling the relevant HTML source code and sending that code to a user’s
computer, thereby causing the MSDS to appear in its intended form on the user’s screen.

17 To this end, the Infosafe program uses routines called “GETHTML”,

“Generate_MSDSReport” and “GenerateHTML”. These routines are run by a fourth routine
called “WebClass_Start”.

18 Importantly, the primary judge (at [24]) described the source code as follows:

The source code will contain all the content of the electronic document which is to
appear on the screen (ie the “data”), as well as the “tags” and other instructions
necessary to give a particular layout, presentation and appearance to an MSDS.
Thus, for example, the instruction that finds its way into the source code of the
MSDS to require a heading to be placed within a box will be an element of the
routine. The routine will combine that instruction with data retrieved from the CDB
(in this case, the heading itself). The same instruction – to apply the box – will be
used time and again with different headings as may be appropriate to the situations of
different MSDSs being electronically generated.

19 The Infosafe program was written over the period 1996 to 1998 by a consultant to the
appellant, assisted, at least in later stages, by two programmers employed by the appellant.
The consultant acted on instructions from Mr Cowie concerning the layout, presentation and
appearance which he (Mr Cowie) wanted for the Infosafe MSDSs.

20 The appellant has two commercial applications which enable its customers to view
and, in some circumstances, to create an Infosafe MSDS.

21 The first is called Infosafe 2000 Web. This application, which is provided by
subscription, allows a user to have online access to the particular MSDSs covered by the
user’s subscription. The primary judge (at [29]) described the operation of this application as
follows:
 -5-

Without having to go to the web site of the MIS concerned, the user may call up the
MSDS of interest electronically from the CDB. The Infosafe program will then
cause the elements of the HTML source code for the MSDS in question to be
collected from the CDB, assembled and sent down the line to the user’s computer.

22 The second application is called Infosafe 2000 Client Server (I2000CS). The primary
judge (at [29]) described the operation of this application as follows:

In the case of I2000CS, selected elements of the CDB of relevance to the user will,
together with the necessary application software, be installed on the user’s own
computer, so that the user may view all MSDSs of interest without going on line.
I2000CS also contains the editor module, enabling a customer who is the relevant
MIS to author its own MSDSs, and to modify an MSDS from time to time, whether
the MSDS had been authored originally by it or by Acohs for it. It may, but need not,
transfer the data it entered – whether on the original creation of an MSDS or on a
variation – to Acohs for inclusion in the CDB.

23 A particular Infosafe MSDS can come into existence in one of three ways.

24 First, it can be created through a process of data entry, which the primary judge (at
[25] and [26]) described as follows:

Authoring of MSDSs is a service which Acohs offers to its customers who are MISs.
Such authoring is carried out by Acohs employees in the [Professional Services
Group] who have qualifications in science or science-related disciplines. The means
by which new MSDSs are created by the authors employed by Acohs were explained
by one of them, Nga Dam, a chemical engineer who has been employed by Acohs
since 2002. To author an MSDS, Ms Dam uses the editor module in the Infosafe
software. This program displays a menu of items and categories on Ms Dam’s
computer screen, by reference to which the appropriate data are entered. The menu
of items reflects the 16 headers in the format for MSDSs mandated by the 2003
preparation code. Each of those items may be expanded to reveal a list – and in some
cases a very extensive list – of subheadings. When Ms Dam selects one of the
headings or subheadings on the menu, the body of the screen provides the visual
environment for the entry of the appropriate data. In some cases, the data will be
entered by reference to preset categories, whilst in others a short passage of text must
be used. In the latter respect, Ms Dam has access to an extensive collection of
standard risk phrases, which are part of the software.

At no stage while Ms Dam is entering data in the way described above does the
partially-completed MSDS itself appear on the screen. She is not in the position of
someone conventionally writing a new document by way of a word processor, for
example. Rather, what appears to her is a series of data-entry screens by reference to
which she enters the content that will ultimately make up the MSDS. However,
having [completed] the task of entering data for a new MSDS, Ms Dam will exit
from the editor module of the Infosafe software, and will call up the completed
MSDS on her screen, for the purpose of ensuring “that I had completed the MSDS in
accordance with the regulations and that the MSDS is internally consistent and
accurate.”
 -6-

25 The primary judge (at [27]) described the related function of reviewing and updating
MSDSs in similar terms.

26 Secondly, an MSDS can be brought into existence by a process of “transcription”.

The primary judge (at [28]) described that process as follows:

The second means by which a new Infosafe MSDS might come into existence is
“transcription”. Here transcribers employed by Acohs (or, since about 2003, by
Acohs (Shanghai) Information and Technology Pty Ltd) will take an existing MSDS
(ie a non-Acohs MSDS) and, using the editor module, faithfully enter into the CDB
every piece of information which is set out on the existing MSDS. This is because
neither Acohs nor the customer for whom it transcribes has the authority to alter an
MSDS as issued by the MIS. Thus, when the Acohs version of the MSDS is called
up from the CDB, it will be identical in point of content and expression with the
original, but will have the general appearance, layout and presentation of all Acohs
MSDSs. In his affidavit sworn on 3 July 2008, Mr Cowie provided several examples
of MSDSs as issued by the original MIS, and as generated by the Infosafe system
after transcription by Acohs’ staff. Appendices 3 and 4 to these reasons are,
respectively, the MSDS for a product called “Bettazyme II” as issued by the MIS and
the corresponding MSDS generated by the Infosafe System. It will be seen that the
layout and appearance of the version generated by Infosafe differs somewhat from
the original. There is, however, no difference in the content.

27 Thirdly, an MSDS can be brought into existence by a customer modifying an existing

MSDS using the editor module in I2000CS, described above.

28 Mr Cowie gave evidence that the software routines enabling the Infosafe system to
generate MSDSs were “continually being updated” and that the two Infosafe 2000
applications were “continually being upgraded”.

The first respondent’s system

29 The primary judge found (at [20]) that when the first respondent “authors” an MSDS
for an MIS it creates an electronic document which it stores in an electronic library called
“the Collection”. The documents are stored, and can be viewed, in various formats.

30 The primary judge also found that the first respondent obtains MSDSs by other
means, which include locating an MSDS on the Internet and downloading it as an entity.
Such MSDSs are also stored as part of the Collection. Any non-MIS who might require
access to these MSDSs could, under appropriate commercial arrangements with the first
 -7-

respondent, achieve that access. The primary judge found that each such MSDS was
identical in content and appearance to the “original” MSDS from which it had been derived.

THE HTML SOURCE CODES AS ORIGINAL LITERARY WORKS

The primary judge’s findings

31 In its seventh further amended statement of claim, the appellant claimed that
copyright subsisted in “the source code of each of the HTML and PDF files for MSDS
rendered by the Infosafe system”: see paragraph 8(a).

32 For reasons given by the primary judge (at [45]), the appellant ultimately confined its
claims in this regard to the HTML source code for each MSDS and abandoned its claims for
copyright in the source code of each of the PDF files.

33 The primary judge reasoned (at [47]), correctly in our view, that there was no a priori
reason to deny a body of source code, such as that described, the status of a literary work.
The significant question, however, was whether the HTML source code for each identified
MSDS, generated and rendered by the Infosafe system as described, was an original literary
work for copyright purposes.

34 The primary judge recorded (at [49]) two submissions by the appellant as to when, in
each case, the relevant source code was reduced to material form. His Honour said:

The point at which the need arises to identify the author is (in the case of an
unpublished work) the moment when the work is first reduced to a material form or
(in the case of a published work) the moment when the work was first published in
Australia (IceTV, 239 CLR at 495 [103]). In the present case, Acohs submitted:

The HTML source code for the Infosafe MSDS in Annexure A was in each
case reduced to a material form over the period from the writing of the
HTML generating routines in the Infosafe System and to the end of the
process of creating the particular MSDS so that the HTML source code was
able to be generated to enable the MSDS to be viewed. It is during that
period that the HTML source code was reduced to a form of storage from
which it was capable of being reproduced. That is, it is reduced to a material
form for the purposes of the Act: Roland Corporation v Lorenzo & Sons Pty
Ltd (1991) 33 FCR 111.

And:

Once the author or transcriber of an MSDS completes the process of

authorship or transcription using the Editor Module, they view the completed
 -8-

MSDS on the screen and conduct a formal check to ensure it is accurate and
internally consistent. Where the MSDS is viewed by an author or transcriber
on the screen in HTML, the completed HTML source code is stored in a file
named “Default.htm”. That HTML source code contains other HTML source
code that creates internal hyperlinks that are not present in the HTML source
code of an HTML MSDS produced by Infosafe 2000 Web or Client Server.
For that reason it is not identical to the final HTML source code. However,
in order to view the MSDS in HTML it is necessary that the corresponding
HTML file exists somewhere in the computer. It is submitted that the HTML
source code for each MSDS is stored as a complete source code when the
author or transcriber checks the MSDS at the end of the process of authorship
or transcription.

Aside from such issues as may arise from the existence of the internal hyperlink
referred to in this passage, it is at least clear that Acohs contends that the source code
said to be a literary work is first reduced to a material form at the point when the
author or transcriber has completed his or her task and checked the appearance of the
completed MSDS on his or her screen.

35 The primary judge also recorded (at [54]) the appellant’s submission concerning
authorship in relation to the relevant source code. His Honour said:

This leads me to the way that Acohs in fact conducted its case in this proceeding. It
did not submit that either the programmers or the authors/transcribers were, alone,
the authors of the relevant source code in the copyright sense. Rather, it submitted:

… that the authors of the HTML source code for each MSDS in Annexure A
were:

(a) Danny Lau … and/or Feng Liu Yang … Chien Yu Lee … and
Sai Nghi Tran … who were the computer programmers who wrote
the “GenerateHTML” routines including the HTML instruction tags
that are retrieved by the Infosafe System and placed into the HTML
source code for the MSDS; and

(b) the individual who “authored” or transcribed the data for each MSDS
into the Infosafe System.

That is to say, Acohs’ case was one of joint authorship ...

36 The primary judge rejected the appellant’s claim that copyright subsisted in the
HTML source code of each identified MSDS as an original literary work for the following
reasons.

37 First, it could not be said that the author, for copyright purposes, of the source code
for each MSDS was the person who entered data into the Infosafe system; that person did not
write the source code either in a “traditional” way or by using a computer. Of those persons,
the primary judge said (at [52]):
 -9-

They were not computer programmers, and there is no suggestion that they either
understood source code or ever had a perception of the body of source code which
was relevant to the MSDSs on which they worked.

38 The primary judge further reasoned that it was the routines and the Infosafe system
that gathered together the elements needed for the source code and then “generated it”. In
short, the source code, as a complete work, was not written by any single human author but
was generated by the Infosafe program: see at [50].

39 Secondly, the primary judge reasoned that it could not be said that the programmers
who wrote the routines and instruction tags in Visual Basic language were the authors of the
source code for each identified MSDS. His Honour (at [53]) said:

In my view … it would be artificial to regard the programmers as involved in the task

of writing the source code for thousands of MSDSs yet to take a material form
merely because they wrote, and amended, the program which, when prompted, would
put together a selection of the fragments of source code which they did write with
other fragments later contributed by the authors and transcribers.

40 Thirdly, the source code for each identified MSDS was not a work of joint authorship.
After noting (at [55]) that the definition of “work of joint authorship” in s 10 of the Copyright
Act 1968 (Cth) (the Copyright Act) required the work to have been produced by the
collaboration of two or more authors, the primary judge held (at [57]) that it would be quite
artificial to say that the programmers, and the “authors” and “transcribers” who entered data
into the CDB, collaborated with each other in writing the relevant source code. His Honour
(at [57]) said:

The programmers wrote the program which caused the Infosafe system to operate as
it did: to generate source code in response to defined inputs by those using the
system. They also wrote so much of the source code as caused particular layouts,
and appearance attributes, to appear on the user’s screen. However, the essence of
their contribution was not the writing of the source code for a particular MSDS.
Having written the program by reference to which source code would, under certain
conditions, be generated, they had no further contribution (other than to amend the
Visual Basic program from time to time). In no realistic sense did the programmers
collaborate with every author and transcriber whose efforts directly led to the
creation or transcription of an MSDS.

41 In relation to MSDSs that involved contributions by the appellant’s customers, the

primary judge (at [62]) identified a further difficulty with the appellant’s case. Even if the
programmers and the external “authors” could be considered to be, jointly, the authors of the
source code for a particular MSDS, the appellant, not being the employer of all such
 - 10 -

“authors”, could not rely on s 35(6) of the Copyright Act to claim ownership of any
corresponding copyright. It is implicit in the primary judge’s finding in this regard that no
evidence of any assignment of copyright by external “authors” was adduced.

42 The primary judge concluded (at [60]) as follows:

Since the source code the subject of para 8(a) of Acohs’ pleading was not the work of
any one human author, and was not a work of joint authorship, that code cannot be
regarded as an original literary work within the meaning of the Copyright Act.

The appellant’s case on appeal

43 This part of the appellant’s case on appeal is to be found in a single ground of appeal
in the amended notice of appeal on which it ultimately relied, expressed as follows:

The Infosafe system generates HTML source code for Infosafe MSDS by the
operation of various routines in the system known as “GETHTML”,
“Generate_MSDSReport”, “GenerateHTML” and “WebClass_Start” (the HTML
routines). His Honour erred in holding that the computer programmers who wrote
the HTML routines in the Infosafe system were not authors of the HTML source code
of the Infosafe MSDS.

44 That ground, expressed as it is, does not adequately identify error in the primary
judge’s ultimate conclusion that the HTML source code of each identified MSDS was not an
original literary work for copyright purposes; nor does it adequately reflect the scope of the
appellant’s submissions advanced on appeal.

45 As argued, the appellant’s submissions focussed on the primary judge’s ultimate

conclusion (at [60]), quoted above, that the source code could not be regarded as an original
literary work within the meaning of the Copyright Act.

46 The appellant submitted that this finding involved a number of errors.

47 First, it submitted that the proposition contained in the quoted passage was “not
correct”. It sought to elucidate that submission by calling in aid the proposition that, where a
literary work is contributed to by the efforts of more than one person, the question of whether
any one or more of them has expended sufficient effort of a literary nature to be considered
an author of that work is a question of fact and degree: IceTV Pty Limited v Nine Network
Australia Pty Limited (2009) 239 CLR 458 at [99]. It submitted, in that regard, that it may be
 - 11 -

the case that there is no original work; a single original work with one author or joint authors;
or there may be “more than one original work comprised in the subject matter”.

48 Secondly, it submitted that the challenged finding proceeded on the erroneous basis
that the appellant “in all eventualities” claimed “the entire HTML source code of MSDS[s]”
whereas, in certain cases, it asserted copyright only in “that part of the source code that
determines the layout presentation and appearance of the MSDS”.

49 Thirdly, it submitted that, although finding that the programmers wrote the HTML
instruction tags that were incorporated into the HTML source code and the routines that
caused the instruction tags to be assembled into the source code of a particular MSDS, the
primary judge, nevertheless, “mischaracterised the nature of the programmers’ contribution”.

Consideration

50 In order to understand the significance of these submissions, it is necessary to bear in

mind the particular copyright works which the appellant advanced at trial. Paragraph 8(a) of
the seventh further amended statement of claim identified, relevantly for present purposes,
the copyright work, in each case, as being the source code of the HTML file for the MSDS
rendered by the Infosafe system. The appellant particularised its claims in that regard by
reference to a DVD which contained MSDS files “generated and rendered by the Infosafe
system”.

51 There can be no doubt that, in putting its case in that way, the appellant was confining
its claims to the source code, in HTML format, for each identified MSDS as “generated and
rendered by the Infosafe system”.

52 In its particulars, the appellant drew a distinction between MSDSs that had been
“authored” or “transcribed” wholly by it (in which it claimed copyright “in respect of all
aspects of the MSDS other than the bare unformatted data therein”) and MSDSs “authored”
by it and its licensees (in which it claimed copyright in “that part of the source code that
determines the layout presentation and appearance of the MSDS”). It pointed to this last-
mentioned statement in support of its submission that the primary judge erroneously assumed
that it claimed copyright in the entire source code of each MSDS. However, this statement
 - 12 -

sits oddly – indeed, inconsistently – with the appellant’s identification of the copyright work,
in each case, as being the source code generated and rendered by the Infosafe system.

53 In this connection it is to be noted that the source code is generated by routines in the
Infosafe program acting in combination to cause elements of the HTML source code for each
MSDS to be collected from the CDB and assembled in a form such that, in that particular
form of expression, a particular MSDS can be viewed on a user’s computer screen. The
appellant’s copyright claims were not directed to each routine, considered as a separate
copyright work, or to the separate tags, or to some combination of these discrete elements,
but to the specifically assembled, computer-generated works that were, in each individual
case, the bespoke HTML source code for a particular MSDS.

54 The essence of the appellant’s case on appeal in this regard was that the HTML source
code of each identified MSDS was simply a combination of “MSDS content” (namely, the
specific data about a particular hazardous substance entered into the CDB of the Infosafe
system by one of the appellant’s employees, agents or customers) and HTML instruction tags
that were written into the routines. Thus, when the routines were run and the source code was
assembled, it was possible to identify, within the particular source code that was generated,
the instruction tags that had originally been inserted into the routines. The end point of this
reasoning seems to be that, according to the appellant, copyright subsists in only part of the
relevant copyright work, specifically the instruction tags taken from the routines in the course
of the Infosafe program compiling the source code with other elements (such as the MSDS
content) taken from the CDB.

55 This is a novel proposition. It confuses the copyright work with identifiable elements
within it. It is, in reality, no more than an argument of convenience which seems to be
inspired by the thought that, in order to prove copyright infringement, it is only necessary to
show the reproduction of a substantial part of the copyright work: see s 14(1)(b) of the
Copyright Act. However, as Drummond J observed in Coogi Australia Pty Ltd v Hysport
International Pty Ltd (1998) 86 FCR 154 at 172, by reference to Lord Reid’s analysis in
Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 276-277:

What that entity the subject of copyright is in any given case cannot be governed by
what the copyright claimant chooses to say it is. It must be a matter for objective
determination by the Court. Otherwise a person suing for infringement of copyright
could, by narrowing the subject matter of his claim, deprive a defendant of what
 - 13 -

might be a good defence that what the defendant took did not involve the taking of a
substantial part of the true object of the claimant’s expenditure of skill and effort.

The fact that copyright, once established, can be infringed by the copying of
something less than the entire work, that is, by copying a substantial part of the
whole, does not detract from the basic principle that before an infringement action
can succeed, the claimant must, where its claim to copyright is put in issue, prove
copyright in the particular entity that constitutes the “work”: Lord Reid pointed out
in Ladbroke (Football) Ltd v William Hill (Football) Ltd at 276-277 that it is wrong
to conflate the exercise of identifying the subject matter of the copyright claimed
with the exercise of determining whether there has been an infringement of the
copyright by the reproduction of a substantial part of that subject matter.

56 In the context of literary works that are computer programs, it is possible that a
routine, or perhaps even an information tag, if it is original, sufficiently substantial and
functionally separate from the entirety of the program of which it forms a part, might
constitute a separate copyright work: see the observations in Powerflex Services Pty Ltd v
Data Access Corporation (No 2) (1997) 75 FCR 108 at 127. This, however, was not the case
pleaded or advanced by the appellant either at trial or on appeal. The fact that, in compiling
the HTML source code for each identified MSDS, routines written by the programmers
functioned so as to include within the source code information tags written into those routines
by the programmers, does not mean that the programmers thereby became the authors of the
HTML source code for each particular MSDS. Such reasoning ignores the fact that the
HTML source code was its own discrete form of expression, generated by the Infosafe
program, which also included data entered into that system with respect to the particular
substance to which the corresponding MSDS related.

57 On appeal the appellant sought to invoke the notion that in any given case of a literary
work whose creation has been assisted by computer, the question whether the work has been
created by a human author or by human authors is one of fact and degree: Telstra
Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142 at [118] per
Perram J and [169] per Yates J. To this end, we were taken in the course of argument, to an
example of the relevant source code. This example simply confirmed the discrete nature of
the source code as a separate work created by the operation of the Infosafe program on other
elements entered into the Infosafe system. It did not emanate from authors. It was not an
original work in the copyright sense.
 - 14 -

58 We are not persuaded that the primary judge erred in concluding that the source code
of each identified MSDS was not an original work for copyright purposes. Indeed, we agree
with the primary judge’s analysis based on the facts as he found them to be.

59 It follows that this ground of appeal must fail.

THE MSDSS AS ORIGINAL LITERARY WORKS

The primary judge’s findings

60 In its seventh further amended statement of claim the appellant claimed that copyright
subsisted in each MSDS that it had identified in “annexures” to that pleading, having its
layout, presentation and appearance in accordance with one or other of the templates
identified in another “annexure”: see paragraph 8(b).

61 This aspect of the appellant’s pleading marked a departure from a previous allegation,
no longer made, that copyright subsisted in the layout, presentation and appearance of each
Infosafe MSDS rendered by the Infosafe system.

62 The primary judge once again reasoned (at [65]), correctly in our view, that each
MSDS was properly characterised as a literary work within the meaning of the Copyright
Act. In this connection the appellant had advanced the case that each such MSDS was a
compilation in respect of which information about the substance supplied by the MIS, the
appropriate risk phrases and other standard expressions as available in the Infosafe software,
any new phrases or expressions that were required to be devised, and the pre-determined
visual and organisational elements of the MSDS as governed by the underlying Infosafe
program, were brought together to create the particular MSDS.

63 The primary judge found (at [68]-[69] and [73]) that each “Acohs-author” of an
Infosafe MSDS (that is, each member of the appellant’s staff who created an MSDS in the
first way we have described at [24]) was properly to be regarded as the “copyright-author” of
that work, and that such work was an original work in which copyright subsisted. The
appellant did not challenge the reasoning that led to that finding. However, the respondents
contended that, in reaching that finding, the primary judge departed from the appellant’s
 - 15 -

pleaded case and, accordingly, erred because the respondents were denied the opportunity to
test that case. That is a contention to which we shall return.

64 The primary judge rejected the appellant’s claim to copyright in the MSDSs created
by transcription or by the appellant’s customers (that is, those MSDSs created in the second
and third ways we have described at [26] and [27]).

65 The primary judge’s reasons for rejecting those claims were as follows.

66 First, unlike the position with an “Acohs-author”, an “Acohs-transcriber” made no

original contribution to the MSDS being transcribed. The primary judge (at [70]) said:

Unlike the author, he or she does not select the appropriate sub-headings, and the
order in which they should be arranged; and he or she does not select the appropriate
risk phrases and the like. Indeed, I do not accept that the process of transcription is a
compilation. The transcriber of an MSDS does not bring together different elements
from various sources. It was made quite clear that the transcriber must be faithful to
the underlying MSDS being transcribed. This being the case, I consider that the
transcriber is engaged in the mere task of copying.

67 Secondly, the primary judge noted but rejected (at [71]-[72]) the appellant’s
submission that copyright subsisted in the transcribed MSDSs simply because of their layout,
presentation and appearance. In this connection it is critical to note that the appellant, by its
pleading and in its submissions to the primary judge, specifically disavowed the layout,
presentation and appearance of an MSDS as a separate copyright work. It submitted,
however, that it owned copyright in each identified MSDS because its employees authored
the layout, presentation and appearance of the MSDS.

68 In this connection the primary judge reasoned that transcribers could not be
originators of the layout, presentation and appearance of the MSDSs because they had no
control over such matters in respect of the MSDSs they transcribed. Furthermore, the
primary judge reasoned that the appellant was not assisted by introducing, as it sought to do,
the contributions of Mr Cowie and the programmers. The primary judge (at [72]) said:

Given that each MSDS was now alleged to be an original work (ie as contrasted with
the original formulation of Acohs’ pleading, in which only the layout, presentation
and appearance was alleged to be such a work), it was necessary for Acohs to bring
in the transcribers with Messrs Cowie, Lau etc, and to contend that the finished
product was work of joint authorship. There are, however, two reasons why this
submission should not be accepted. The first is that it would be quite artificial to
 - 16 -

regard Mr Cowie and the programmers as authors of any one MSDS. That they
devised, wrote and later amended the computer program which gave Infosafe MSDSs
their particular appearance, as distinct from making any contribution to their content,
does not make them authors in the copyright sense. Neither does it give originality to
a work which, because it was necessarily copied from something else, would not
otherwise be original. The present case is, in relevant respects, quite different from
Ladbroke (Football), Ltd v William Hill (Football), Ltd [1964] 1 All ER 465, on
which Acohs relied, and from Lamb v. Evans [1893] 1 Ch 218, referred to in
Ladbroke. The second reason is that, for the reasons given at paras 52-57 above,
Mr Cowie and the programmers could not be regarded as joint authors together with
the transcribers. On no fair usage of the language could they be regarded as having
collaborated to produce the works constituted by the MSDSs.

69 Thirdly, the primary judge concluded (at [74]) that, by analogous reasoning, the
MSDSs authored by the appellant’s customers could not be original literary works.

The appellant’s case on appeal

70 The single ground of appeal on which the appellant proceeded in this regard was
expressed as follows:

His Honour erred in holding at [72] that Mr Cowie and/or the computer programmers
who wrote the HTML routines were not authors of the MSDS in the copyright sense.

71 The appellant submitted that layout, presentation and appearance may be the subject
of copyright protection: Ladbroke; Kalamazoo (Aust) Pty Ltd v Compact Business Systems
Pty Ltd (1985) 5 IPR 213; Phone Directories at [102]. Here the appellant submitted that the
layout, presentation and appearance of an Infosafe MSDS is determined by templates. The
appellant pointed to the primary judge’s findings, and the underlying evidence, that
Mr Cowie gave instructions as to the basic layout, presentation and appearance that he
wanted for the MSDSs, which were actioned by the programmers writing the code in the
Infosafe program that would achieve that outcome.

72 The appellant submitted that the primary judge mischaracterised the evidence in
relation to authorship by failing to recognise that part of the original form of expression of the
Infosafe MSDSs was their layout, presentation and appearance, and that the primary judge
had an unduly narrow appreciation of the appellant’s copyright claim in this regard.

Consideration

73 In our view this ground of appeal cannot be sustained.

 - 17 -

74 When considering this ground of appeal it is of central importance, once again, to

correctly identify the copyright works in suit.

75 During the course of the trial the appellant abandoned its case that copyright subsisted
in the layout, presentation and appearance of each MSDS “rendered” by the Infosafe system,
that is, that copyright subsisted in the templates themselves. The primary judge carefully
traced the development of the appellant’s copyright claims in this regard (at [31]-[44]); see
also the primary judge’s reasons for ultimately allowing the appellant’s pleadings to be
amended: Acohs Pty Ltd v Ucorp Pty Ltd (No 2) (2009) 82 IPR 493.

76 In its seventh further amended statement of claim the appellant plainly identified the
case it ultimately pursued as one in which copyright subsisted in each identified MSDS which
had a layout, presentation and appearance in accordance with one or other identified
templates. It is at this point, however, that the appellant’s case at trial, which it repeated on
appeal, appears to have adopted a chameleon-like quality. Whilst apparently continuing to
eschew a case that the layout, presentation and appearance of each identified MSDS
constituted a separate copyright work, and whilst apparently affirming its case that copyright
subsisted in each of the identified MSDSs, the appellant sought to argue that copyright
subsisted in an MSDS “because its employees authored the layout, presentation and
appearance of the MSDSs” and that that was an “original contribution” to each MSDS: see
the submissions recorded by the primary judge (at [71]). In putting its case in this way, the
appellant appears, once again, to have confused certain elements of the identified MSDSs
with the MSDSs themselves.

77 It is trite that the postulated copyright work, as a whole, must be considered in order
to see whether it is protected by copyright. When dealing with the question of the subsistence
of copyright in the identified MSDSs that had come into existence by way of transcription,
the primary judge correctly recognised that his attention must be directed to each MSDS,
considered as a whole. Of course, when each Infosafe MSDS is considered in that way, its
content cannot be ignored. It is this content which gives each MSDS its essential character as
a particular MSDS dealing with a particular hazardous substance.

78 In this connection it is to be noted that, when advancing its case in relation to MSDSs
created by Acohs-authors, the appellant submitted that the Acohs-authors were those
 - 18 -

individuals who brought together the information about the substance supplied by the MIS,
including the appropriate risk phrases as available in the Infosafe system or as devised by that
author, as well as the pre-determined visual and organisational elements of the MSDS as
governed by the Infosafe software. In short, the appellant’s own submissions at trial in
relation to those MSDSs recognised that the copyright work must be considered as a whole
and that the focus of attention was the intellectual effort of the Acohs-authors. The primary
judge (at [65]) recorded those submissions and (at [69]) accepted that the Acohs-author of an
Infosafe MSDS should be regarded as the copyright-author of that work. His Honour’s
reason for so finding was as follows:

Even in a case in which every verbal and numerical element of an MSDS created by
an author was to be found in the CDB, the author was still required to select from the
menu of sub-headings those that would be used and those that would be irrelevant
(and thus would not be used). The electronic documentary entity which he or she
thereby brought into existence was not merely the result of copying from something
else.

79 This passage of the primary judge’s reasons must also be considered in light of the
passage in [70], which we have quoted above. In that passage the primary judge compared
the work of the Acohs-transcribers, noting that those persons did not select the appropriate
sub-headings or the order in which they should be arranged; nor did they select the
appropriate risk phrases and the like.

80 On appeal there was no challenge by the parties to the correctness of the primary
judge’s finding in relation to the work of the Acohs-authors, although the respondents
contended that, by so finding, the primary judge departed from the appellant’s pleaded case (a
matter to which we shall return). Importantly for present purposes, it is implicit in his
Honour’s finding that authorship, for copyright purposes, in each MSDS resided in the
Acohs-authors, not those writing the computer programs in the Infosafe system that were
used by the Acohs-authors to create a particular MSDS.

81 In expressing his finding about copyright subsistence in the MSDSs brought into
existence by the Acohs-authors, the primary judge noted (at [69]) that the electronic
documentary entity that was brought into existence (that is, the particular MSDS) was not
merely the result of copying from something else. However, for the MSDSs created by the
Acohs-transcribers, this was a point of distinction. The primary judge found (at [70]) that the
transcribers were not bringing together different elements from different sources. The
 - 19 -

primary judge found that, properly characterised, the Acohs-transcribers were merely
engaged in the task of copying MSDSs that had been compiled by others. There was no
challenge to that finding on appeal by the parties.

82 When, at trial, the appellant sought to advance its case on copyright subsistence in
relation to the Acohs-transcribed MSDSs, in the way that we have described, the primary
judge well understood that the appellant was pressing on him what it regarded to be the
necessity of considering the involvement and contribution of Mr Cowie and the programmers
in respect of the layout, presentation and appearance of the Infosafe MSDSs.

83 It is in this context that one must consider the primary judge’s statement (at [72]) that
Mr Cowie and the programmers who wrote the HTML routines were not “authors in the
copyright sense”. Here the primary judge was directing his statement to authorship in respect
of the relevant works put forward by the appellant, namely each identified and completed
MSDS. His Honour was not addressing some abstract proposition concerning copyright
authorship at large.

84 The primary judge properly and carefully distinguished between the question of
authorship of each alleged copyright work (that is, each identified Infosafe MSDS) and the
separate (and relevantly hypothetical) question of the authorship of the antecedent and
underlying works to which Mr Cowie and the programmers were said to have contributed.
The primary judge correctly recognised that Mr Cowie and the programmers were not authors
of each MSDS created by the Acohs-transcribers simply because they wrote and amended
computer programs in the Infosafe system that were used by the Acohs-transcribers, at the
time when those transcribers came to do their work in creating, by transcription, each MSDS.

85 The primary judge also correctly recognised that, whatever originality might have
been involved in the activities undertaken by Mr Cowie and the programmers in writing the
underlying computer programs in the Infosafe system, those activities were separate and
distinct from the activities involved in creating each MSDS, including those created by way
of transcription. This is why the primary judge stated (at [72]) that the activities of Mr Cowie
and the programmers could not confer originality on the MSDSs created by transcription.
 - 20 -

86 The primary judge also correctly realised that by advancing the activities of Mr Cowie
and the programmers as relevant to the question of copyright subsistence in the MSDSs
themselves, the appellant could not avoid the consequence that it was propounding a case that
each identified MSDS was a work of joint authorship. For the reasons he gave at [52]-[57] in
relation to the similar question arising with respect to copyright subsistence in the HTML
source code for each identified MSDS, the primary judge correctly found that it could not be
said that Mr Cowie and the programmers collaborated with each Acohs-transcriber to
subsequently create each relevant MSDS.

87 The appellant has not demonstrated that the primary judge erred in rejecting the case
that copyright subsisted in the identified MSDSs that had come into existence by way of
transcription or that had been “authored” by the appellant’s customers.

IMPLIED LICENCE

Introduction

88 After having found that copyright subsisted in the Acohs-authored MSDSs, and after
having dealt with a separate issue about whether the appellant had assigned the relevant
copyright, in certain cases, to particular MISs (an issue to which we will also return), the
primary judge turned to the question of whether the identified Acohs-authored MSDSs had
been reproduced by the respondents without the licence of the appellant: see s 36 of the
Copyright Act. As we have noted, the appellant’s case, in that regard, was that the first
respondent had reproduced the MSDSs and that the second respondent had authorised those
reproductions.

89 Although formally denying the allegation that they had “copied … the copyright
works”, the respondents do not appear to have strenuously contested the fact that the first
respondent had reproduced, in the copyright sense, the MSDSs relevant to this appeal.
Indeed, the primary judge recorded (at [87]) that “the respondents did not dispute the
proposition that, if the HTML source code was, and if the MSDSs themselves were, original
literary works, they had reproduced them in material form”. The primary judge made no
separate, express finding about authorisation.
 - 21 -

90 The main area of contest was whether the first respondent’s acts in reproducing the
MSDSs were done without the appellant’s licence. As finally argued, this defence had two
components.

91 First, the onus of proving that the first respondent’s impugned acts were done without
the appellant’s licence, rested on the appellant. The respondents contended that the appellant
had not discharged that onus. The primary judge (at [131]) accepted that contention. We
shall return to consider whether his Honour erred in that regard.

92 Secondly, the respondents contended that the impugned acts were done pursuant to an
implied licence granted to the appellant’s customers, that is to say, the MISs who issued the
MSDSs created by the appellant. It is necessary to say something more about this component
of the respondents’ defence.

93 In their last filed defence, which was before the amendment to paragraph 8(b)
introduced by the seventh further amended statement of claim (see above at [60]-[61]), the
respondents, in response to the allegation that they had infringed the alleged copyright in the
layout, presentation and appearance of each Infosafe MSDS, pleaded that:

(a) the appellant “has impliedly granted to [the appellant’s MISs] an unconditional,
irrevocable licence to use any copyright of [the appellant] in the templates that is [sic]
reproduced in the MSDS created by or at the direction of the [the appellant’s MISs]”;
and

(b) “the alleged copyright works were reproduced pursuant to a licence given by [the
appellant] to [the appellant’s MISs] to reproduce and licence [sic] the further
reproduction of the alleged copyright works for the purpose of ensuring the ready
availability and accessibility of the MSDS[s], which licence is to be implied by law
and/or so as to give business efficacy to the agreements between [the appellant] and
[the appellant’s MISs] with respect to the creation and transcription of MSDS[s] …”.

94 As to the allegation in (b) above, the respondents specifically relied on the following
facts, matters and circumstances arising under the State and Territory legislative regimes:

(a) The MIS of each identified Infosafe MSDS is responsible for ensuring that each
MSDS contains accurate and current information and that the MSDS is provided or
 - 22 -

made available to any person to whom the substance the subject of the MSDS is
supplied (other than for retail sale) and to any employer on request for the provision
by the employer to its employees.

(b) Each such MIS who is also an employer to which a hazardous substance (the subject
of each identified Infosafe MSDS) has been supplied is responsible for ensuring that it
has obtained a current MSDS and made it readily accessible to any employee who has
the potential to be exposed to the substance.

(c) The layout, presentation and appearance of the MSDS is substantially prescribed by
the requirements of the 1994 code and the 2003 code.

(d) The layout, presentation and appearance of each MSDS is also substantially
determined by the MIS depending upon the substance that is the subject of the MSDS.

(e) Each relevant MIS pays the appellant a fee for the appellant to perform the services
and/or provide the software applications in relation to the creation of the MSDS in
accordance with the MIS’s directions, so as to enable the MIS to meet its obligations
referred to above.

95 The point of present relevance is that the implied licence relied upon by the
respondents was said to be one granted by the appellant to the particular MIS at whose
direction an MSDS was created by the appellant.

96 In its reply, the appellant:

(a) admitted that “an implied licence exists from [the appellant] to its customers for such
customers to use MSDSs for the purpose of compliance with the various regulations
but such implied licence goes no further and in particular does not extend to
permission for customers to provide such MSDSs to a commercial competitor of [the
appellant] at no cost and for such competitor’s own commercial benefit”; and

(b) admitted that “there is an implied licence to [the appellant’s] customers to view and
store such MSDS[s] and make them available to their own customers in order to
comply with their obligations under the regulatory regime but nothing more”.

97 In context, the reference in the reply to the appellant’s “customers” must be taken to
be a reference to the MIS at whose direction a particular MSDS was created by the appellant.
 - 23 -

98 The primary judge treated these parts of the pleadings as extending to the amendment
to paragraph 8(b) of the seventh further amended statement of claim. This appears to reflect
the manner in which the parties conducted this part of the case. No issue arises on this appeal
about his Honour adopting that course. The only question that arises is the scope of the
implied licence on which the respondents relied and, in particular, whether the respondents’
impugned acts fell within that scope.

99 As to those acts, the respondents pleaded that, so as to enable its customers to comply
with their obligations under the various legislative regimes, the first respondent obtained
MSDSs (created by persons other than itself) from employers (who obtained MSDSs from
MISs and provided them to the first respondent), from MISs (upon the request of an
employer), and from the websites of MISs in both hard copy and a variety of electronic
formats, and compiled and made available to its own customers, in a conveniently searchable
form, such MSDSs in the format in which they had originally been provided. Their defence
makes clear (subject to certain qualifications that are not relevant for present purposes) that
such MSDSs included those that had been created using the Infosafe system.

100 The respondents’ defence does not make clear who their “customers” are and, in
particular, whether they are MISs, employers or occupiers and the like who are required,
under the legislative regimes, to obtain MSDSs and make them readily accessible to
employees who could be exposed to the products in question.

101 The primary judge found (at [128]) that the first respondent continuously searched the
Internet for MSDSs generally, and that its activities in that regard were not confined to the
satisfaction of requests by, or to the needs of, its existing customers.

102 In that connection the primary judge (at [20]) made the following finding:

… When [the first respondent] is required to give access to an MSDS of which it has
not been the author for the relevant MIS, it will locate the MSDS on the Internet
(and/or by direct communication with the MIS), download the MSDS as an entity
and then store it as part of the Collection, from where any of its non-MIS customers
who might require access to the MSDS could, under appropriate commercial
relationships with [the first respondent], achieve that access. Necessarily, such an
MSDS will be identical in content and appearance to the “original” MSDS from
which it was derived.
 - 24 -

103 The primary judge also appears to have accepted (at [93]) that most of the MSDSs in
the Collection had been added without any particular request from a customer and that the
first respondent obtained such MSDSs by “trawling” the Internet to find them. This evidence
was in fact given by the second respondent in the course of cross-examination.

104 It is clear from these findings that the first respondent’s “customers” include non-MIS
customers with whom the first respondent enters into arrangements to provide MSDSs from
the Collection.

105 It is also important to note that, in support of their case that there was an implied
licence, the respondents relied upon the judgment of Merkel J in Acohs Pty Ltd v R A
Bashford Consulting Pty Ltd (1997) 37 IPR 542. As it happens, the second respondent was a
respondent in that proceeding who had cross-claimed against the present appellant alleging
copyright infringement of 43 MSDSs that had been transcribed by the appellant and added to
the CDB as Infosafe MSDSs. In that case Merkel J upheld the present appellant’s defence to
that cross-claim. His Honour found that, by transcribing the MSDSs and storing the relevant
data in the CDB and by thereafter making them available for a fee, the present appellant was
acting pursuant to an implied licence.

106 In the present case, the primary judge recorded (at [128]) that the appellant did not ask
him to depart from Bashford, either in point of principle or at the level where Merkel J held
that the “industrial use” and the “library use” of MSDSs were implicitly licensed by the
copyright owner. We describe these particular uses later in these reasons.

107 Be that as it may, it is nevertheless important for us to discuss the reasoning and
ultimate finding on the question of implied licence in Bashford for two reasons. The first
reason is that the appellant argued that the respondents’ impugned acts fell outside the scope
of the implied licence found in that case. The second matter, which we will discuss further
below, is that the primary judge (at [141]) accepted that the content of the implied licence
which he found in the present case was broader than that recognised by Merkel J in Bashford.

108 The apparent acceptance by the parties of the correctness of Bashford has important
ramifications for this appeal. As the parties conducted both the trial before the primary judge
and the present appeal on that basis, the occasion does not arise for us to proceed otherwise
 - 25 -

than in accordance with, and to the extent of, that acceptance. In so proceeding, we do not
wish to be taken as endorsing the correctness of all aspects of that decision.

The reasoning and ultimate finding in Bashford

109 In Bashford Merkel J took as his starting point the statement of principles discussed
by Jacobs J in Beck v Montana Constructions Pty Ltd (1963) WN (NSW) 1578 with respect
to implied licences.

110 Beck was a case involving the copyright in architects’ plans. In that case architects
were engaged to prepare sketch plans for a building to be erected on certain land. The clients
who had commissioned the architects later sold the land, with the plans. The purchaser of the
land then engaged another architect to prepare further plans. Those plans were found to be a
substantial reproduction of the sketch plans. The original architects sued the purchaser and
its architect for infringement of the copyright in the sketch plans.

111 In dealing with the question of whether there was an implied licence, Jacobs J
identified two steps. The first step was to determine whether the original client obtained the
right to use the copyright work in the manner in which it was ultimately used. The second
step was to determine whether the purchaser of the land (in circumstances where it had been
held out to the purchaser that plans were available and approved) had obtained that same
right.

112 As to the first step, Jacobs J (at 1581) said:

The question raised is quite a broad one because it applies not only to architects but
would apply for instance to artists who are engaged to prepare a particular work
which would of its nature be reproduced, for instance a cartoon for a tapestry or a
mosaic, or which would apply to persons who prepared written material with the
intention that it should be used in a particular manner. It seems to me that the
principle involved is – that the engagement for reward of a person to produce
material of a nature which is capable of being the subject of copyright implies a
permission or consent or licence in the person making the engagement to use the
material in the manner and for the purpose in which and for which it was
contemplated between the parties that it would be used at the time of the engagement.
It seems to me that this must be regarded as a principle of general application.

113 Later (at 1582) his Honour said:

I think it is a principle which can be found to be applied in a number of cases. It

 - 26 -

relates to permission or consent to what must have been taken to have been within
the contemplation of the parties at the time of the engagement. After all, it must be
borne in mind that it is the engagement which brings the copyright material into
existence.

When that principle is applied in the present case it seems to me to be inevitable that
one should conclude that the payment for sketch plans includes a permission or
consent to use those sketch plans for the purpose for which they were brought into
existence, namely, for the purpose of building a building in substantial accordance
with them and for the purpose of preparing any necessary drawings as part of the task
of building the building.

114 As to the second step, his Honour (at 1581) said:

Assuming the right of the owner of land to make use of sketch plans for the purpose
of erecting a building substantially in accordance with that sketch I think that when
he sells the land and holds out to the purchaser that plans are available and approved
from all authorities and shows those plans to the purchaser then on the sale of the
land there should be implied an agreement collateral to the sale of the land whereby
the vendor grants to the purchaser such right as he has to the use of the plans. This
assumes that the right, that is to say, the licence, permission or consent, however it is
described, is assignable and that depends on the implied terms of grant of the original
licence, permission or consent. It therefore seems to me that subject to the first
matter then the second question may be answered in the affirmative.

115 In Bashford, Merkel J (at 559) took Beck as establishing a principle that, if copyright
material is produced for a particular purpose, there is an implied permission, consent or
licence to use that material to carry out that purpose. This general statement of the principle
had been articulated earlier by Young J in R & A Bailey & Co Ltd v Boccaccio Pty Ltd (1986)
4 NSWLR 701 at 711 and adopted by Beaumont J in De Garis v Neville Jeffress Pidler Pty
Limited (1992) 37 FCR 99 at 110. However, his Honour recognised (at 559-560) the
importance of identifying, with precision, the particular purpose for which the copyright work
was brought into existence and whether use for that purpose was restricted to the person to
whom the licence was granted. In that connection his Honour also identified the importance
of an associated question, namely whether the licence could be “transferred”. It is clear that
his Honour (at 562) saw the answer to that associated question as being closely related to the
scope of the purpose for which the copyright work was created.

116 His Honour (at 560-561) reasoned that the licence considered in Beck was implied by
law to a particular class of contract as opposed to one implied to give business efficacy to a
particular contract: see, in that regard, Castlemaine Tooheys Ltd v Carlton & United
Breweries Ltd (1987) 10 NSWLR 468 at 486-487; cf Devefi Pty Ltd v Mateffy Pearl Nagy Pty
 - 27 -

Ltd (1993) 113 ALR 225 at 239-241. His Honour nevertheless concluded (at 565) that, if he
was in error in that regard, such a licence would be implied, in any event, in each particular
contract for the commissioning of each MSDS, as a term necessary to give business efficacy
to the contract.

117 His Honour (at 562) saw the contract of engagement before him as an “open contract”
(that is, one not dealing with the ambit of the licence or with the terms on which an
assignment of that licence might be effected). His Honour saw the contract of engagement as
being one “to prepare written material, being MSDSs, with the intention that they be used for
a particular purpose, being the provision of ready access to the information contained in the
MSDSs for safety related purposes”. His Honour concluded that the licence was one that
permitted or consented to the use of the MSDSs to carry out those purposes. This purpose
was determined objectively by reference to the contract entered into by the parties and the
regulatory and factual matrix in which the transaction took place. His Honour said (at 562):

There is little difficulty in ascertaining the relevant matrix in the present case. The
MSDSs were commissioned by manufacturers and importers to be in the Worksafe
Australia standards format for use, inter alia, as set out in the standards. Bialkower
accepted that he was commissioned to prepare MSDSs which would be distributed
by manufacturers and importers on the sale of their products in accordance with the
standards. They were commissioned in relation to substances, including hazardous
substances, for the purpose of ensuring the ready availability and accessibility of the
MSDSs for safety related purposes for or at any workplace in Australia at which the
substances are or will be stored, used or transported.

118 His Honour also said (at 564):

In the regulatory and factual matrix to which I have referred, there is little difficulty
in identifying the manner in which the parties contemplated that the Chemwatch
MSDSs commissioned by manufacturers and importers were to be provided. The
availability and accessibility of the MSDSs for or at workplaces was to be in a
photocopy or microfiche format or from a computer database. The reproduction or
copying of the MSDSs in any of these formats may be commissioned by a
manufacturer, importer, supplier, retailer, a public emergency service or by or for any
employer from contractors engaged for the purpose if for any reason that is not
achieved “in house”.

119 His Honour (at 564) concluded:

I am satisfied that, in accordance with Beck, an accurate copying, reproduction or

adaptation of any of the 43 Chemwatch MSDSs in the manner and for the safety
related purposes to which I have referred falls within the implied licence of
Bialkower.
 - 28 -

120 The implied licence thus found by Merkel J was one that extended, in the first
instance, to manufacturers, importers, suppliers, retailers, employers and to any other person
requiring an MSDS for the safety related purposes for which it was prepared. However, his
Honour said (at 564-565) that, if he was in error in that regard, he would reach the same
conclusion as that reached in Beck in respect of the right to “transfer” the licence, namely that
it must inevitably be implied in the contract of engagement that the MIS who commissioned
the MSDSs had the right to “transfer” that right to retailers, employers and other persons
requiring MSDSs for the same safety related purposes.

121 It is clear that the implied licence pleaded by the respondents in the present case was
one in favour of the appellant’s customers (namely, each MIS who commissioned the creation
or transcription of its relevant MSDSs), and not other persons. However, in accordance with
Merkel J’s alternative formulation, the respondents also pleaded that each such MIS had the
right, in turn, “to reproduce and licence [sic] the further reproduction of the alleged copyright
works for the purpose of ensuring the ready availability and accessibility of the MSDS”.

122 The implied licence admitted on the pleadings by the appellant did not go that far.
However, on appeal the appellant accepted that an MIS’s contractual rights would be
“sufficiently protected” by the implication of a licence that permitted the MIS and any
employer or occupier who used the relevant product to reproduce and to authorise others to
reproduce the necessary MSDS on their behalf. Nevertheless, in expressing that acceptance,
the appellant submitted that any implied licence in the contract for the creation of the
copyright works should not be wider than necessary to avoid undermining the rights
conferred under the contract: Byrne v Australian Airlines Limited (1995) 185 CLR 410 at
450; Concrete Pty Limited v Parramatta Design & Developments Pty Ltd (2006) 229 CLR
577 at [59].

123 When Merkel J came to examine the impugned use of the MSDSs in the case before
him against the background of his findings about the nature and scope of the implied licence,
he identified two uses which he referred to as the “industrial use” and the “library use”.

124 The “industrial use” referred to the acts of transcribing MSDSs to form part of the
Infosafe system. These acts were described as having been specifically commissioned by an
MIS or employer using the hazardous or other products the subject of the MSDSs and having
 - 29 -

access to the system. This use was found by Merkel J (at 565) to fall within the implied
licence he had found.

125 The “library use” referred to the acts of maintaining MSDSs (including the
transcribed MSDSs) on the CDB and making them available as a “library”, for a fee, to
public emergency or safety organisations, as well as to the Commonwealth Surgeon-General
for use by sections of the Defence Forces using chemicals.

126 His Honour considered it to be “less clear” that the “library use” was within the
implied licence he had found. Nevertheless his Honour (at 565) concluded that this use fell
within the safety related purposes for which the relevant MSDSs were brought into existence,
saying:

The sole function of the library use is to ensure that public emergency services or
organisations can provide instant access to MSDSs for safety related purposes to
those in need of that information. The only reason for any of these entities to obtain
or provide access to an MSDS is that such access is necessary for that entity to
provide safety information to those in need of it, as a result of using the chemical the
subject of the MSDS.

127 His Honour therefore found the “library use” to fall within the implied licence.

128 It should be noted at this juncture that the appellant distinguished the “industrial use”
and the “library use” found by Merkel J from the impugned use in the present case. In the
present case the primary judge recorded the appellant’s contention (at [128]) as follows:

[The appellant] says that the evidence discloses, at least for the main part, that [the
first respondent] reproduces MSDSs, and places them into the Collection, not on the
specific request of users of the substances involved (employers, occupiers etc), but at
its own initiative and as part of its own commercial operation, entirely with a view to
stocking the Collection with every MSDS available in the electronic universe, so as
to be in a position to market its services by reference to the claim that the Collection
has no equal in the range of MSDSs which it contains.

129 It is now convenient to turn to the primary judge’s reasons and conclusions on the
question of implied licence in the present case.
 - 30 -

The primary judge’s findings

130 The primary judge (at [136]) reasoned that, in considering the scope of the implied
licence, the focus must be upon the use to which the MSDSs copied into the Collection might
ultimately be put.

131 The primary judge found that the storage of the MSDSs in the Collection by the first
respondent was in contemplation that access to them would, later if not sooner, be required by
its customers, present or future. The primary judge reasoned that, seen in this way, the first
respondent’s purpose in reproducing and storing Infosafe MSDSs was to facilitate the
“industrial use” of those MSDSs. Implicitly the primary judge treated these facilitative steps
as tantamount to the “industrial use” found in Bashford.

132 The primary judge (at [137]) also considered that the first respondent’s copying and
storing of MSDSs fell within the “library use” found in Bashford. In so reasoning, the
primary judge recognised that, in Bashford, the MSDSs were only placed in the CDB after
they had been altered or transcribed for a particular customer. However, the primary judge
considered this to be a distinction without a difference. The primary judge observed that if
the relevant purpose relates to a later use of a particular MSDS, it was beside the point that
the initial creation of the document had a different purpose. His Honour (at [137]) said:

The question was (and still is): what was the purpose for which the “library” was
stocked with MSDSs? If it was to make them available to those who would or might
require access to them in connection with their responsibilities under the regulations,
that purpose should, in my view, give rise to a Bashford-type implied licence.

133 In short, the primary judge reasoned that the steps taken by the first respondent to
reproduce and store in the CDB an MSDS created by a third party in contemplation that one
of the first respondent’s existing or potential customers might later require such a copy of that
MSDS from the first respondent, were covered by an implied licence granted by the
copyright owner, of which the first respondent had the present benefit.

134 In support of this approach, the primary judge (at [139]) referred to the fact that, in
some Australian jurisdictions, an MIS is required to provide an MSDS to any person who
“reasonably requires a copy”; or to “any member of the public who requests a copy”; or “on
request”. The primary judge reasoned that provisions of this kind made it more difficult to
confine the implied licence in the way the appellant had contended: if any person could
 - 31 -

obtain a copy of an MSDS, there was no reason why that person could not be the first
respondent.

135 The primary judge (at [141]) concluded:

Either because the ultimate purpose of such copying would inevitably be the
“industrial use”, or because [the first respondent’s] activities fell squarely within the
“library use”, I consider that the implied licence extends to it.

The parties’ submissions

136 On appeal the appellant accepted that an implied licence existed. In that connection it
submitted that there was nothing to stop the first respondent “from making or obtaining a
copy of an Infosafe MSDS on behalf of an employer or occupier customer who actually
requires a copy” and who “does enjoy the benefit of an implied licence from [the appellant]”.

137 However, although accepting that an implied licence existed, the appellant submitted
that the primary judge erred in three respects concerning the scope of that licence.

138 First, it submitted that the primary judge failed to have proper regard to the
requirement of “necessity”.

139 Secondly, it submitted that the primary judge erred in considering that the “purpose”
in respect of the use of the MSDSs was one imposed by law rather than seen as a question of
fact.

140 Thirdly, it submitted that the primary judge erred in extending the benefit of the
implied licence to the first respondent when it was not a party to or otherwise privy to rights
under the contracts of engagement between the appellant and its customers who were MISs.

141 The respondents answered these submissions in the following way.

142 First, they submitted that the primary judge followed and applied the principles in
Beck and that, to the extent that “necessity” is the foundation for the implication, that
requirement is involved in the test in Beck. In any event, they submitted that “necessity” is
not the sole basis upon which terms will be implied by law in a class of contracts.
 - 32 -

143 Secondly, they disputed that the primary judge considered the question of “purpose”
without regard to questions of fact. In that connection they pointed to the primary judge’s
acceptance (at [135]) of Merkel J’s observation in Bashford that the content of the licence
was informed by “the regulatory and factual matrix in which the transaction took place”:
Bashford at 562.

144 Thirdly, as to the question of whether the primary judge erred in extending the licence
to the first respondent, the respondents submitted that the implied licence must extend to
service providers “given their legitimate role in assisting MIS[s], employers and occupiers to
meet their obligations under the regulations”. In this connection the respondents pointed to
the concerns of large organisations dealing with large numbers of substances, large numbers
of employees or large numbers of work sites.

Consideration

145 In our view there can be no doubt that, in the context of Australian copyright law, a
licence will only be implied when there is a necessity to do so. This principle was made clear
in the unanimous judgment in Copyright Agency Limited v State of New South Wales (2008)
233 CLR 279 at [92] (CAL), which also cited in that regard Concrete at [13]-[14] (per
Gummow A-CJ) and [96] (per Kirby and Crennan JJ); Byrne at 450 (per McHugh and
Gummow JJ); and Breen v Williams (1996) 186 CLR 71 at 91 (per Dawson and Toohey JJ), at
102-103 (per Gaudron and McHugh JJ) and at 124 (per Gummow J).

146 In the present case the parties treated the licence as arising as a matter of law in a
particular class of contract between an MIS and a service provider, such as the appellant or
the first respondent: cf Concrete at [18]. “Necessity”, in that context, means necessary for
the reasonable or effective operation of all contracts of that particular class lest the enjoyment
of rights be “rendered nugatory, worthless, or, perhaps, be seriously undermined”: Byrne at
450; see also Concrete at [59].

147 The implication of such terms is to be distinguished from terms implied in the
circumstances of the particular case to give business efficacy to the contract. In that latter
category of case the terms implied are unique to the particular contract in question, depending
upon the form of the contract, the express terms and the surrounding circumstances: Byrne at
448. In those cases, the implication is taken to reflect the actual intention of the parties. In
 - 33 -

cases of contracts of a particular class, wider considerations are at play and the term is
implied as a legal incident of such contracts: Byrne at 448; Esso Australia Resources Limited
v Plowman (1995) 183 CLR 10 at 30; Castlemaine Tooheys at 487-489.

148 The decision in Beck must be read subject to the requirement that a licence will only
be implied when there is a necessity to do so, although, having made that observation, we
would add that Jacobs J’s treatment in Beck of the implication of licences is consistent with
that approach.

149 The respondents’ submissions tended to treat the requirement of necessity in a

somewhat attenuated way, especially in submitting that “necessity” is not the sole basis upon
which a licence would or could be implied in the present case. In our view that submission
cannot be accepted in light of the unequivocal statement of the High Court in CAL.

150 We should add that, although the respondents’ defence pleaded, as an alternative, the
existence of an implied licence to give business efficacy to the agreements between the
appellant and its MIS customers, the parties did not contend on appeal that, under that theory,
a different result would ensue in the present case. Indeed, the parties’ submissions did not
seek to differentiate between the two possible bases for implying a licence raised in this case.

151 It is in this context that the appellant’s second submission concerning “purpose” falls
to be determined. The primary judge plainly proceeded on the basis that the case before him
was one concerning a licence implied as a legal incident of a particular class of contract, not
to give business efficacy to a particular contract or to particular contracts. It is not suggested
that his Honour was in error in so approaching the matter. However, the appellant’s
submission on “purpose”, focusing as it does on particular facts, appears to be directed to a
licence implied to give business efficacy. If so, that submission is misdirected insofar as it
was also sought to be related to the question of whether a licence should be implied to
contracts of a class. In any event, the “facts” to which the appellant points in that regard are
really no more than the facts of “contemplated use” common to all contracts of engagement
between an MIS and a service provider for the creation of MSDSs. It is plain that the
primary judge took into account the relevant factual matrix concerning the creation of
MSDSs and their use in the relevant circumstances. In the end, we do not see the appellant’s
second submission as establishing any error in the approach taken by the primary judge in
 - 34 -

this regard. It seems to us that the real focus of attention for the purposes of this aspect of the
appeal lies in the first and third submissions made by the appellant.

152 As the primary judge acknowledged (at [141]), the content or scope of the implied
licence he found was broader than that recognised by Merkel J in Bashford. Both the
“industrial use” and the “library use” described by Merkel J were, in the case of transcribed
MSDSs, limited to where a person having the benefit of an implied licence to reproduce, or to
authorise others to reproduce, an MSDS, requested a service provider, such as the first
respondent, to carry out that work on its behalf. The appellant makes no complaint about
such conduct. But here the primary judge found that the first respondent also copies
(reproduces) MSDSs in anticipation that users will at some point engage it to provide access
to a suite of MSDSs in the Collection. The primary judge justified these antecedent acts by
looking to the ultimate purpose for which such reproduced MSDSs would be put. In so doing
his Honour erred by attributing to the first respondent, in reproducing these MSDSs, consents
or permissions it did not then have and might never have. In these cases, therefore, the first
respondent, without the licence of the copyright owner (relevantly, the appellant), did an act
comprised in the copyright, and thereby infringed that copyright.

153 We can see no reason of necessity why a licence in favour of a service provider to
engage in these antecedent or anticipatory acts should be implied in contracts of engagement
to create an MSDS, to which the service provider is not a party. While arguments of
convenience or expediency might be advanced for the availability of such a facility, these
alone would not justify the implication, by law, of a licence to that effect. No different
answer is required in the present case if the matter is approached by considering whether such
a licence should be implied in each contract of engagement to give business efficacy to that
contract.

154 In our view, therefore, the implied licence did not extend to the first respondent’s
reproduction of the Acohs-authored Infosafe MSDSs or its communication or supply of those
works in the absence of a request for those works for safety related purposes.
 - 35 -

ABSENCE OF LICENCE

The primary judge’s findings

155 It is necessary for us to return to the first component of the respondents’ defence,
which was that the appellant had not discharged the onus of showing that the impugned acts
were done without its licence. This issue arose in the context where, at least at the time of
final submissions, the parties agreed that an implied licence existed, but the scope of that
licence was disputed. The primary judge dealt with the issue on the basis that the availability
to the first respondent of an implied licence to reproduce the Infosafe MSDSs turned upon
whether a request to copy (reproduce) a particular MSDS had been received by the first
respondent from a customer who had present regulatory obligations to provide or to have
access to the MSDS in question (that is, in circumstances which all parties accepted were
covered by an implied licence).

156 In this connection the primary judge found (at [128]) that there was a question as to
the identification of the appellant’s MSDSs that had been reproduced by the first respondent
“without the present needs of any customer in mind”. That is to say, there was a question as
to the identification of those Infosafe MSDSs that had been reproduced by the first
respondent pursuant to a request (and hence covered by the agreed implied licence) and those
MSDSs that had been reproduced by the first respondent in anticipation of receiving such a
request.

157 The primary judge appears to have accepted the general tenor of the evidence given
by the second respondent that the first respondent receives “four or five thousand” requests
each week to add MSDSs to the Collection. The second respondent also gave evidence that
the first respondent was “routinely provided with copies of Infosafe MSDS[s] by [the first
respondent’s] customers so that those customers can access the MSDS[s] using the
Chemwatch [that is, the first respondent’s] system”. A limited number of examples of
correspondence containing such requests were in evidence.

158 The primary judge found (at [131]) that many of the Infosafe MSDSs copied by the
first respondent were copied upon the requests of customers. His Honour also found that
many were copied in the absence of such requests. His Honour found that the evidence was
 - 36 -

not such as to fairly raise an inference that “any particular MSDS was copied in the latter,
rather than the former, situation”.

159 In this connection the primary judge stressed that, although it lay principally within
the first respondent’s power to deal with the matter by evidence, it was not its burden to
establish the existence of an implied licence in any instance, but for the appellant to prove the
contrary.

160 It followed from the primary judge’s findings as to what his Honour saw as
shortcomings in the appellant’s evidentiary case, that it had not discharged its onus of
establishing that the Infosafe MSDSs in suit (of which there were approximately 72,000) had
been reproduced by the first respondent without its licence.

The parties’ submissions

161 The appellant contended that the primary judge’s conclusion that it had failed to
discharge its onus of proof was attended by two errors: first, that the primary judge failed to
have any or any sufficient regard to the principle that evidence is to be weighed according to
the proof which is in the power of one party to produce and in the power of the other to
contradict; secondly, the primary judge’s finding that many of the Infosafe MSDSs had been
copied at the request of customers was not supported by the evidence.

162 Neither of these matters was identified as a ground of appeal in the amended notice of
appeal on which the appellant ultimately proceeded. The respondents raised no objection to
this omission and we heard argument on both matters. In the circumstances we propose to
deal with both contentions as if they had been formally raised as grounds of appeal.

163 Reduced to its essence, the appellant’s submission was that, having established a case
that many MSDSs had been reproduced by the first respondent without a customer request,
an evidentiary burden was cast upon the first respondent to show which of the MSDSs it had
reproduced pursuant to such a request. It submitted that this information was peculiarly
within the knowledge or means of the respondents, rather than the appellant. It submitted
that the generalised evidence given by the second respondent on this question was not
sufficient to discharge that burden.
 - 37 -

164 The respondents, on the other hand, submitted that the primary judge expressly took
into account the fact that it lay principally within their power to deal with the question of the
extent of customer requests by evidence. They submitted, however, that the primary judge
can be taken to have held that any evidentiary burden borne by them had been discharged.
They submitted that, in any event, this was not a case in which the respondents could or
ought reasonably to have called evidence to establish the existence of a request in respect of
each MSDS the subject of the appellant’s claim, given the number of such MSDSs in issue.

165 With respect to the second alleged error, they submitted that it was open to the
primary judge to find that “many” of the MSDSs reproduced by the first respondent were
copied at the request of customers. In that connection they pointed to the fact that this
finding was based on the primary judge’s favourable credit findings in respect of the second
respondent.

Consideration

166 In our view the appellant has not established error on the part of the primary judge in
concluding that many of the Infosafe MSDSs copied by the first respondent were copied upon
the requests of customers. In arriving at that conclusion, the primary judge gave particular
emphasis to the second respondent’s evidence. Although acknowledging that the second
respondent was “only generally familiar with the detailed process by which MSDSs were
copied”, the primary judge accepted the second respondent as a witness of truth. Importantly,
the primary judge considered the second respondent’s evidence, in light of the size of the first
respondent’s operations, to be inherently probable. These subsidiary findings were matters of
judgment based upon the primary judge’s overall evaluation and appreciation of the evidence
before him. The appellant has not established any sound basis to interfere with those
findings. Those findings entitled the primary judge to come to the broadly-stated conclusion
which the appellant now challenges. However, it is important to note the limitations of that
conclusion: except by reference to a very small number of examples, the respondents did not
identify which Infosafe MSDSs had been reproduced by the first respondent acting pursuant
to a customer’s request.

167 It is also important to note that the primary judge’s broadly-stated conclusion does not
in any way gainsay his Honour’s acceptance (at [93]) of the following evidence that was
given by the second respondent under cross-examination:
 - 38 -

And is it the case that most of the MSDSs in the Collection have been added without
any particular request from a customer? — I think that’s probably a fair estimate.

And the way you get them is simply to trawl the Internet to find MSDSs? — That’s
right.

Yes. And any MSDSs you find then get put into the Collection? — I think that’s
probably true, yes.

Yes, and they are put in the Collection in the form in which you find them? — That’s
right.

Which could be HTML or PDF or Word or other forms? — True.

168 The real issue on this part of the appeal is whether the primary judge was in error in
concluding, in effect, that the appellant could not succeed, in any event, because its
evidentiary case did not rise to the level of establishing which of the Infosafe MSDSs had
been reproduced by the first respondent in circumstances where no present request to
reproduce the MSDS had been made by a person impliedly authorised by the appellant to
make that request.

169 It is without question that the appellant had the onus of proving infringement.
However, that onus was one to be discharged upon the whole of the evidence: Purkess v
Crittenden (1965) 114 CLR 164 at 168. It was the respondents who raised, by their pleaded
defence, the existence of an implied licence, in answer to the appellant’s allegations of
infringement. The defence pleaded was, in terms, somewhat more limited than that found by
the primary judge. As we have noted, it was pleaded as a licence to the appellant’s customers
(not to either of the respondents) to reproduce and license the further reproduction of the
alleged copyright works. In those circumstances, any lawful consent or permission for the
first respondent to reproduce an Infosafe MSDS or for the second respondent to authorise the
first respondent to do so, could only derive from a customer having the benefit of such a
licence, hence the importance of identifying whether a particular MSDS was reproduced by
the first respondent acting pursuant to such a request.

170 It is in these particular circumstances that the appellant sought to invoke the common
law principle stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER
969 at 970 that all evidence is to be weighed according to the proof which is in the power of
one side to have produced, and in the power of the other side to have contradicted. In Medtel
Pty Ltd v Courtney (2003) 130 FCR 182 Branson J at [76] (with whom Jacobson J at [81]
 - 39 -

agreed) observed that s 140 of the Evidence Act 1995 (Cth), which is concerned with the
standard of proof in civil proceedings, is to be understood as incorporating that common law
rule.

171 Here, in response to the respondents’ pleaded defence that they could avail themselves
of a licence implied by law in favour of the appellant’s customers, the appellant had
established that most of the MSDSs in the Collection had been added without any particular
request from a customer. It was within the power of the respondents, who, in furtherance of
their defence, either knew or must be taken as having the means of identifying which of the
Infosafe MSDSs had been added to the Collection upon the requests of customers, to place
that evidence before the Court. They did not do so. Rather, they sought to rely merely upon
the fact that requests had been made, without going further, except in the limited cases that
were exemplified. The evidentiary landscape, in that regard, was somewhat similar to the
“ominous rumbling references” described by Windeyer J in The Commissioner of Taxation of
the Commonwealth of Australia v Casuarina Pty Ltd (1970) 127 CLR 62 at 72 when dealing,
in an appeal against the Commissioner of Taxation’s assessment of taxation (in which the
taxpayer bears the onus of proof), with a particular instance of the evidentiary burden placed
upon the Commissioner to raise a particular matter in evidence so as to enable the taxpayer to
deal with that issue in discharge of the taxpayer’s overall burden of proof.

172 It was for the respondents to make good the evidentiary foundation for their defences
in relation to the copyright works on which they had been sued for infringement. This
included not only the factual matrix necessary to establish the existence and scope of the
licence on which they relied, but also the identification of the specific reproductions that fell
within that licence.

173 By adducing evidence merely sufficient to enable the conclusion to be drawn that
many of the Infosafe MSDSs in the Collection had been reproduced upon the requests of
customers, without identifying (except in a very limited number of cases) which MSDSs had
been so reproduced, the respondents did not thereby effectively throw upon the appellant the
evidentiary burden of establishing the identity of those MSDSs. The identity of those
MSDSs could only have been known to the respondents. In effect the respondents sought to
place upon the appellant the burden of making good or filling gaps in the respondents’
 - 40 -

evidentiary case in ways that were essential to completing the respondents’ defence to
copyright infringement.

174 For these reasons, the primary judge erred in finding, effectively, that the appellant
had failed to discharge its onus of proof to negative the existence of a licence in favour of the
respondents in respect of the Infosafe MSDSs reproduced by the first respondent.

175 It follows from this conclusion that the primary judge ought to have held that, except
in the very limited number of cases shown by the respondents, the evidence fell short of
establishing that any particular MSDS in the Collection had been reproduced with the
permission or consent of the appellant (that is, within the limits of the implied licence
defence). In those circumstances, the primary judge should have further held that, on the
whole of the evidence, the appellant’s case on infringement of the Acohs-authored MSDSs
(except in the very limited number of cases shown by the respondents) had been established
to the required standard.

NOTICE OF CONTENTION

Introduction

176 The respondents advanced four contentions for arguing that the judgment below
should be affirmed.

177 First, they contended that the copyright in each MSDS, or in the HTML source code
for that MSDS, created by the appellant for Castrol Australia Pty Ltd (Castrol), BP Australia
Pty Ltd (BP) or Dow Chemicals (Australia) Ltd (Dow) had been assigned to those companies
pursuant to ss 196(3) and 197(1) of the Copyright Act.

178 Secondly, they contended that, to the extent that the first respondent had reproduced
any HTML source code for Infosafe MSDSs, it did so pursuant to an implied licence granted
by the appellant.

179 Thirdly, they contended that, by denying the existence of an implied licence
authorising the respondents’ impugned acts, the appellant was seeking, impermissibly, to
“approbate and reprobate”.
 - 41 -

180 Fourthly, they contended that the appellant’s contribution to the Infosafe MSDSs, as
set out in certain particulars, and in a letter from the appellant to the respondents, was not
sufficient to render the appellant the owner of any copyright subsisting in the Infosafe
MSDSs as original literary works. The contention developed in submissions by the
respondents was that, by finding that copyright subsisted in the Acohs-authored MSDSs, the
primary judge erred by travelling beyond the appellant’s pleaded case, such that the
respondents were denied the “opportunity to test the case upon which the primary judge
found for [the appellant]”.

181 We shall deal with each contention in turn.

Assignment

182 The primary judge found (at [107]) that, in February 1997, the appellant and Castrol
entered into an agreement for the provision of “MSDS authoring services” by the appellant.
The agreement contained the following provision:

Acohs shall assign the copyright of all prepared MSDS[s] to Castrol.

183 The respondents had submitted that this term was not a promise to assign but an
operative assignment that was effective upon execution of the agreement in 1997. The
primary judge (at [107]) rejected that submission.

184 The primary judge found (at [109]) that, in 2002, the appellant and BP entered into a
consultancy/service agreement. The agreement contained the following provision:

The Consultant shall assign to BP AUSTRALIA all intellectual property rights (if
any) in any compilation of data compiled on behalf of BP AUSTRALIA and in any
MSDS written by the Consultant for and on behalf of BP AUSTRALIA by the
Consultant. Where the Consultant is required to write software (other than
amendments to the Consultant’s own software) the Consultant will, if required, enter
into an agreement to assign all IPR to BP AUSTRALIA.

185 The primary judge also found this provision to be a promise to assign rather than a
present assignment.
 - 42 -

186 The primary judge further found that an agreement made in February 2002 between
the appellant and Dow contained a provision in relevantly the same terms as that quoted with
respect to the agreement between the appellant and BP.

187 The primary judge found (at [111]) that, in late 2007, the appellant entered into what
were described as “deeds of rectification” with, relevantly, Castrol and BP. In the case of
Castrol, the deed provided for the deletion of the provision to assign copyright. That
provision was replaced by the following provision:

The consultant shall assign to Castrol Australia Pty Ltd all intellectual property rights
(if any) in any data authored by the consultant for and on behalf of Castrol Australia
Pty Ltd (which includes the data inserted in an Infosafe MSDS but excludes the
layout and presentation of any Infosafe MSDS or any source code generated by the
Infosafe programs in order to display an Infosafe MSDS on the world wide web or a
computer). Where the consultant is required to write software for and on behalf of
Castrol Australia Pty Ltd (other than amendments or enhancements to the
consultant’s own software) the consultant will, if required, enter into an agreement to
assign the intellectual property referred to in this paragraph to Castrol Australia Pty
Ltd.

188 It can be seen that this provision concerned rights of, arguably, a more limited kind
than copyright in the MSDSs.

189 The primary judge recorded (at [111]) that a similar amendment was made to the
agreement with BP.

190 The primary judge reasoned (at [114]-[115]) that these “deeds of rectification”
changed the promises to assign “in point of content”. But, importantly, the original
agreement in each case only created a promise to assign, in any event. The primary judge
found that, had copyright passed under the original agreements, “the applicable deed of
rectification would not have made any difference to that circumstance”.

191 The respondents contended that the primary judge’s construction of the agreements, in
each of the three cases, does not reflect what a reasonable person would understand the
expression “shall assign” to mean. They contended that, as each agreement contemplated the
creation of a large number of MSDSs, on an ongoing basis, a reasonable person would not
read the words “shall assign” as requiring the appellant to execute an assignment each time
an MSDS came into existence. They contended that “a more practical construction” would
 - 43 -

read the word “shall” as simply reflecting the fact that the MSDS had not yet come into
existence. They contended that the construction found by the primary judge “leads to
unreasonable, inconvenient and unjust consequences and ought not be preferred if another
interpretation is reasonably open”: Australian Broadcasting Commission v Australasian
Performing Right Association Limited (1973) 129 CLR 99 at 109.

192 They contended that, in each of the three cases, the primary judge ought to have held
that each relevant MSDS had been assigned to the particular customer by operation of
s 197(1) of the Act.

193 There can be no doubt that future copyright can be presently assigned, such that, when
the copyright comes into existence, it vests in the assignee. So much is clear from s 197(1) of
the Act. The only issue here is whether the words “shall assign” are words of present
assignment, rather than a promise to assign at a future time.

194 In our view the words “shall assign” in their particular context are words of futurity
referable to a discrete act. They are not words of present assignment.

195 The respondents’ arguments based on convenience and practicality cannot justify a
construction which the words “shall assign” do not naturally bear. Moreover, we do not
accept the proposition, implicit in the respondents’ contention, that the requirement for a
separate assignment of copyright is a matter of inconvenience or impracticality. The
respondents’ contention, in this regard, proceeds on the basis that, if their proffered
construction is not accepted, the appellant would need to execute an assignment “each time
an MSDS came into existence”. This is plainly not the case. Although an assignment would
be needed, it would be open to the appellant and the other parties to the agreements to effect
such an assignment at a time of their choosing and in respect of as many MSDSs as had been
created by the appellant, as those parties might require. We can see nothing inconvenient or
impractical in that setting.

196 In our view, therefore, this ground of contention fails.

 - 44 -

HTML source code: implied licence

197 Given that we are not persuaded that the primary judge erred in concluding that the
source code of each identified MSDS was not an original work for copyright purposes, the
question of the existence of an implied licence to reproduce the code does not arise for
determination.

198 We would observe, however, that, even if, contrary to our finding, copyright did
subsist in the HTML source code for each Infosafe MSDS, any implied licence to reproduce
the HTML source code that might arguably be found could not be broader in scope than the
implied licence to reproduce the MSDSs themselves.

Approbation and reprobation

199 The essence of the respondents’ contention in this regard is that the appellant has
advanced, in the present case, a position on the question of the scope of the implied licence
that is, in substance, inconsistent with the position it had successfully advanced, by way of
defence, in Bashford.

200 The particular principle on which the respondents rely was stated by Browne-
Wilkinson V-C in Express Newspapers Plc v News (UK) Ltd [1990] 3 All ER 376 at 383-384,
as follows:

There is a principle of law of general application that it is not possible to

approbate and reprobate. That means you are not allowed to blow hot and
cold in the attitude that you adopt. A man cannot adopt two inconsistent
attitudes towards another: he must elect between them and, having elected to
adopt one stance, cannot thereafter be permitted to go back and adopt an
inconsistent stance.

201 The nature of this principle was explored in Mandurah Enterprises Pty Ltd v Western
Australian Planning Commission (2008) 38 WAR 276 by McLure JA at [95]-[125]. In that
case her Honour observed that the notion of approbation and reprobation is used
interchangeably in the case law with election, waiver and estoppel. Her Honour (at [108])
observed that it is difficult to confidently identify from the cases the material elements of any
independent doctrine of approbation and reprobation.
 - 45 -

202 In the Commonwealth v Verwayen (1990) 170 CLR 394 at 421 Brennan J (as he then
was) said:

A doctrine closely related to election, and sometimes treated as a species of election,

is the doctrine of approbation and reprobation. This doctrine precludes a person who
has exercised a right from exercising another right which is alternative to and
inconsistent with the right he exercised as, e.g., where a person “having accepted a
benefit given him by a judgment, cannot allege the invalidity of the judgment which
confers the benefit”: Evans v Bartlam [1937] 2 All E.R. at 652 per Lord Russell of
Killowen.

203 It is not necessary for us to explore the nature of this doctrine, the basis for it, or the
extent to which it could apply in the present case, for the simple reason that the fundamental
premise for the respondents’ contention is missing. Here the appellant has not, ultimately,
adopted a position that is inconsistent with the defence on which it successfully relied in
Bashford. As we have already noted, the primary judge recorded (at [128]) that the appellant
did not ask him to depart from Bashford, either in point of principle or at the level where
Merkel J held that the “industrial use” and the “library use” of MSDSs were implicitly
licensed by the copyright owner. The appellant’s case was that the respondents were driven
to rely on the existence of an implied licence broader in scope than that found in Bashford. In
so putting its case, the appellant was not acting inconsistently. Accordingly, this ground of
contention fails.

Departure from the pleaded case

204 As we have noted, the contention developed in submissions by the respondents was
that, by finding that copyright subsisted in the Acohs-authored MSDSs, the primary judge
erred by travelling beyond the appellant’s pleaded case, such that the respondents were
denied the opportunity to test the case upon which his Honour found for the appellant.

205 We have referred to the chameleon-like quality of the appellant’s case in relation to
copyright subsistence in the Infosafe MSDSs. In the end result, however, the following
matters are clear.

206 First, the appellant’s pleaded case was clear in that copyright was claimed in each
MSDS identified by the appellant in “annexures” to the seventh further amended statement of
claim. Plainly, the primary judge appreciated this fact.
 - 46 -

207 Secondly, in relation to the Acohs-authored MSDSs, the appellant claimed copyright
“in respect of all aspects of such MSDS[s] other than the bare unformatted data therein”: see,
for example, paragraph (xvi)(a) of the amended particulars of copyright ownership.

208 Thirdly, in correspondence with the respondents’ solicitors (quoted by the primary
judge at [43]-[44]) dealing with the meaning of “bare unformatted data”, the appellant made
clear that this meant the variable data in the MSDSs. Thus the appellant was not advancing a
case that the variable data, as an unbroken string of words, divorced from the particular
MSDS to which they related, constituted, in themselves, a copyright work.

209 Fourthly, the same letter drew attention to headings and sub-headings of fixed content
in the MSDSs. The appellant said that the arrangement and selection of those headings and
sub-headings in each Infosafe MSDS was part of the original content of that work (our
emphasis).

210 Fifthly, the same letter made clear that the appellant relied on selection, arrangement
and layout as contributing originality to each such MSDS.

211 Sixthly, the primary judge noted (at [63]) the respondents’ position that “each MSDS
as a whole, including the words and data in the MSDS and the [manner] in which the words
and data are laid out, presented and appear” constituted a single literary work for the purposes
of the Act. The primary judge noted, in this regard, that nothing in the way that the
respondents had presented their case, even after the appellant had amended its statement of
claim, amounted to a withdrawal from, or a qualification of, that contention. The primary
judge thus recorded the position ultimately reached by both parties to be that each MSDS in
issue was a literary work for copyright purposes.

212 Seventhly, the primary judge’s finding that the MSDSs created by the Acohs-authors
were original copyright works was based on his Honour’s acceptance (at [69]) that, even if
every verbal and numerical element of an MSDS created by an author was to be found in the
CBD, the author was still required to select the sub-headings that would be used, and those
that would not be used. This finding was within the appellant’s case, identified by its
pleading and particulars, and especially by the letter to which we have referred, that stated
 - 47 -

that the arrangement and selection of headings and sub-headings was part of the original
content of the Infosafe MSDSs on which the appellant relied for copyright subsistence.

213 For these reasons we are satisfied that the primary judge’s finding (at [69]) did not
mark a departure from the appellant’s case. Accordingly, this ground of contention fails.

DISPOSITION

214 We would allow the appeal insofar as it concerns the appellant’s case on infringement
of the Acohs-authored MSDSs reproduced by the first respondent without the prior request of
a customer, and set aside orders 1 and 2 made by the primary judge on 10 June 2010. The
proceeding should be remitted to the primary judge to deal with all outstanding issues
including costs of the trial.

215 We are of the view that injunctive relief should be granted to restrain the respondents
from reproducing or authorising the reproduction of the Acohs-authored MSDSs, without the
licence of the appellant.

216 We are of the view that an order for costs of the appeal should be made in favour of
the appellant subject to an allowance reflecting the measure of the respondents’ success on
the issues arising for determination on the appeal. We will hear from the parties on that
particular question by way of written submissions, which should be filed and served within
14 days. We will then determine that question on the papers. The submissions are not to
exceed four pages in length.

217 The parties are to bring in draft orders otherwise giving effect to these reasons within
14 days.

I certify that the preceding two

hundred and seventeen (217)
numbered paragraphs are a true copy
of the Reasons for Judgment herein
of the Honourable Justices Jacobson,
Nicholas and Yates.
 - 48 -

Associate:

Dated: 2 March 2012