Court told licensing at risk in computer case

Press, 26 May 1984, Page 4

Court told licensing at risk in computer case

PA Auckland A wrong decision in a computer case in the High Court at Auckland “would invite a breakdown of the whole system of international licensing,” the Court has been told. The claim came from Mr Michael Crew, counsel for Acorn Computers, the British manufacturers of the 8.8. C. and Electron computers, and for their New Zealand agent, Barson Computers. The two companies are seeking damages totalling more than $500,000 and an injunction to stop John Gilbert and Co, Ltd, of Auckland, from importing and selling the two computers. Hearing of submissions on the case before Justice Prichard has concluded and a decision on an interim injunction is expected next month. Mr Crew said that if the injunction were not granted, it would mean that the

exclusive licensees of the copyright for Acorn products in New Zealand could not stop Gilberts importing those products. “That inclusion would invite the breakdown of the whole system of international licensing,” he said. “It would invite manufacturers to extract front-end payments from those licensees, and then dump large quantities of their products on the Hong Kong market and say good luck to you, you can take it into New Zealand, our ‘exclusive licensee’ there cannot stop you.” The case was about Gilberts taking advantage of Barson’s advertising of the two computers, and undercutting Barsons because it did not have to pay for servicing or liaison with schools which bought them, he said. The Copyright Act was “intended to encourage licensing technology through an exclusive license.” .

“For a country like New Zealand, it is important to encourage arrangements that make that licensing of technology possible,” Mr Crew said. Mr Bob Fisher, for Gilberts, said however, that the best arrangement was to rely on the law of contract, rather than that of copyright. “A copyright holder (such as Acorn) may breach contract by selling in New Zealand contrary io the exclusive licensee, but is not breaching copyright,” Mr Fisher said. “This whole issue is about the wholesaler’s profit which Barsons seeks to extract from my client (Gilberts), rather than face him in the market.’” Legally, both Mr Fisher and Mr Crew asked his Honour to interpret section 10 of the Copyright Act, 1962, which states that copyright is infringed by anyone who imports an article, except for his private use, “if

to his knowledge the making of that article constituted an infringement of that copyright, or would have constituted such an infringement if the article had been made in the place into which it is so imported.” Mr Crew said that of nine Commonwealth cases on this point, eight had granted injunctions because, in his view, copyright was infringed if the importer did not have the authority of the licensed copyright holder to sell the goods. Mr Fisher said the ninth case was the only one where the law was exactly the same as in New Zealand, and the licensed copyright holder in the importing country (in this case, Acorn) was also the maker of the goods being imported. He also cited comments by judges in some of the other cases which supported his view that copyright was not infringed in this latter case.