Watching your step –
How to avoid unintentional
infringement while working
with third parties
The factual situation in Campaigntrack v Real Estate Tool Box 1 is not an
uncommon one. Wanting a better software program for its operations, a
business enters into an arrangement with a software developer who has
experience in that area to develop a new program with reference to a
competitor program’s functionality. What was interesting and should
encourage businesses and individuals to consider their actions when faced
with allegations of copyright infringement, was the Full Federal Court’s
opinion on what constitutes authorisation of infringement of copyright.

Inspire November 2022
Background 8
In this case, Biggin & Scott
Corporate Pty Ltd (Biggin & Scott),
a real estate agent, had been using
Campaigntrack software until
May 2015, when it transitioned
to using DreamDesk (at that time
also owned by Campaigntrack) for
running its marketing campaigns
for the sale of real estate.

Mr. Semmens had previously
developed DreamDesk in
competition with Campaigntrack
and admitted he had knowingly
included third-party IP that
he was not authorised to use.

Campaigntrack subsequently
bought DreamDesk in July 2016.

When Biggin & Scott wanted an
enhanced marketing campaign
tool in August 2016, they entered
into an arrangement with Mr
Semmens to build Real Estate Tool
Box (RETB Software). As part of
that arrangement, they set up a
joint venture company, Real Estate
Tool Box Pty Ltd (RETB), with
Ms Bartels, a director of Biggin
& Scott, as Company Secretary.

Mr Stoner, another director of
Biggin & Scott, instructed Mr
Semmens to build marketing
campaign software “that does not
breach any other [company’s] IP or
ownership, particularly DreamDesk
or Campaigntrack”. To make the
point again, Mr Stoner further
wrote in the same letter, “In simple
terms, we do not want [anything]
used that can be claimed as owned
by the two companies above”.

In late September 2016,
Campaigntrack became aware
that the RETB Software potentially
reproduced the DreamDesk source
code, and on 29 September 2016,
Campaigntrack’s lawyers put
Biggin & Scott on notice that they
were aware of “ improper access”
and “duplication of [DreamDesk]
code”. Campaigntrack sought
undertakings from Biggin & Scott
and all relevant parties that any
1 intellectual property already
obtained would not be used for any
purpose and would be destroyed.

Mr Semmens did not sign the
undertaking. On 10 October 2016,
Campaigntrack terminated Biggin
& Scott’s access to DreamDesk.

The RETB Software went
live on 10 October 2016 and
continued to be used by Biggin
& Scott until June 2018.

First Instance Decision
At first instance, Campaigntrack
was only partially successful.

Justice Thawley found that
Mr Semmens, as the primary
developer of the RETB Software,
had directly infringed copyright
in the DreamDesk source code
and had authorised the infringing
acts which other developers
carried out under his supervision.

However, Justice Thawley did
not find against the other parties
RETB, Biggin & Scott, DreamDesk,
Mr Stoner and Ms Bartels.

Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2022]



On appeal, Campaigntrack was
successful in showing that Biggin
& Scott, RETB, Mr Stoner and
Ms Bartels had authorised Mr
Semmen’s direct infringement as
they had received specific notice
of the risk of infringement and took
no action despite having the power
to prevent the continued violation.

Authorisation as
infringement The Copyright Act 1968 (Copyright
Act) provides copyright owners
exclusive rights to carry out
certain acts with their copyright
works. Section 36(1) states
that infringement occurs when
another person carries out those
acts exclusive to the copyright
owner without a licence from said
owner or where someone else
authorises the infringing act.

The Court considered section 36(1A)
of the Copyright Act, which specifies
the matters that need to be taken
into account when considering
whether someone has authorised
copyright infringement, namely:
(a) the extent (if any) of the person’s
power to prevent the doing of the
act concerned;
(b) the nature of any relationship
existing between the person
and the person who did the act
concerned; (c) whether the person took any
reasonable steps to prevent
or avoid the doing of the act,
including whether the person
complied with any relevant
industry codes of practice.

In this case, the Court looked at
the steps taken by Biggin & Scott
to prevent the direct infringement
by Mr Semmens and found that
Biggin & Scott failed to take
sufficient steps to prevent or avoid
the infringement, even after being
put on notice by Campaigntrack
of the alleged infringement.

The letter from Campaigntrack
putting Biggin & Scott on notice
was the turning point in determining
whether Biggin & Scott, RETB,
Mr Stoner and Ms Bartels had
authorised the infringement by
Mr Semmens. Before that, Biggin
& Scott had said that it trusted
Mr Semmens to develop the RETB
Software without infringing any
other third party’s intellectual
property. Once Biggin & Scott were
put on notice of the possibility of
Mr Semmens directly infringing the
DreamDesk code, rather than taking
reasonable steps to determine
whether the RETB Software did
infringe and take actions necessary
to prevent further infringement,
Biggin & Scott continued to use
the RETB Software for commercial
purposes and continued to
engage with Mr Semmens.

As part of its decision, the Court
considered the role of knowledge
in determining whether a party
has authorised infringement as
Campaigntrack had argued that
authorisation does not require
specific knowledge of the
infringement. The Primary Judge
had reasoned that authorisation
connotes a mental element, in
that in order to authorise an act
comprised in copyright it must
be known about. His Honour found
in the first instance decision,
that Biggin & Scott, RETB,
Mr Stoner and Ms Bartels did not
have the requisite knowledge.

This case has
shown that even an
agreement between the
parties as to the use
of other’s intellectual
property will not be
sufficient to protect
against a claim.

Noting that knowledge is relevant
to determining whether someone
had the power to prevent the
doing of the act comprised in the
copyright, the Full Federal Court
held that it is necessary to prove
on the balance of probabilities
that the person either had:
> Express knowledge of the act
of infringement ;
> Constructive knowledge of the
of the act of infringement, as a
“matter of inference or implication
drawn from conduct amounting
to a “general permission or
invitation”…” > Wilful blindness to the infringing
acts taking place “the conduct is
of the character of…..indifference
or wilful inactivity to the doing of
the….act comprised in copyright.”
to establish that they had
authorised the infringement.

The Court held that Biggin &
Scott knew, or ought to have
known, Mr Semmens would
copy the DreamDesk code or had
already copied the DreamDesk
code. Further, in considering the
application of section 36(1A), the
Court found that Biggin & Scott, who
had the power to prevent the act due
to both a contractual relationship
and a business relationship (through
the joint venture) with Mr Semmens,
failed to take any reasonable steps
to prevent him from engaging in
conduct that infringed copyright.

Key Takeaways
When engaging third-party
developers, it may not always be
possible to know what code they are
using or how they are developing
new software. This case has shown
that even an agreement between
the parties as to the use of other’s
intellectual property will not be
sufficient to protect against a claim
of authorising copyright infringement
if there is reason to suspect that
third-party code is being copied.

Inspire November 2022
Appeal Decision
9 Melissa Wingard | Special Counsel
BA(Eng&Hist) LLB(Hons) GradDipLegPrac
GradDipAppFin&Inv MCyberSecOps
melissa.wingard@pof.com.au