Copyright: Infringement Does Not Automatically Equate to Compensable Damage

In ACP Machinery Australia Pty Ltd v Aerospace Technologies of Australia Ltd (No 3) [2013] FCA 718 it was held that the Respondent had infringed the Applicant’s copyright in CAD drawings by providing them to a third party who was assessing a quotation for the supply of actuators by the Applicant. As highlighted by the subsequent decision in ACP Machinery Australia Pty Ltd v Aerospace Technologies of Australia Ltd (No 4) [2013] FCA 1237, infringement does not automatically equate to compensable damage.

The Applicant put its case for compensatory damages in two ways. Firstly, it said that its ability to make acceptance of its quotation a condition of access to the CAD drawings would have been a powerful negotiating tool in its hands justifying a conclusion that but for the infringing conduct it would have been awarded a contract to supply the actuators. On this basis, it claimed its damage was the loss of profits it would have made in fulfilling that contract.

The Court rejected this approach finding that on the evidence, the CAD drawings were only of utility if the actuators were sourced from the Applicant. Price was overwhelmingly the consideration which stood in the way of the Applicant’s quotation being accepted and the possibility of access to the CAD drawings would not have justified a price that was otherwise unacceptable. Indeed the Court concluded that “any attempt by the applicant to use access to the CAD drawings as a bargaining chip … would have made it less, not more, likely that the applicant’s quotation would have been given serious consideration”.

Further, this was not a case where the Court needed to estimate the probability of the applicant succeeding in a contest from which it was excluded by the infringing conduct. Rather than being excluded, the applicant was said to be the frontrunner with the CAD drawings providing “the wherewithal to understand the spatial and other engineering requirements which the use of the applicant’s actuators would have involved. Aside from price, it is hard to think of how the applicant could have been any more favourably placed.”

The Court also rejected the Applicant’s secondapproach to calculating compensatory damages by treating them as “at large” such that the Court should award “what amount I think right as if I were a jury”. Such an approach was said to be justified where damage was suffered but its assessment was problematic. Here, the Court was not satisfied that any damage resulted from the infringing conduct.

Ultimately, the Court awarded nominal damages of $10 and rejected the Applicant’s claim for additional damages.