Court of Appeal Clarifies Ownership and Eligibility of Foreign Owners
In 2017 NZCA 217 ESR Group v Burden the Court of Appeal overturned the trial Judge’s findings in respect of ownership, holding that while Burden was a joint author of technical drawings he was not the owner of copyright in the drawings...
As a result of a copyright notice that Burden had lodged with NZ Customs ESR had furniture items seized and detained in 2014. The copyright notice is in Burden’s name, but the technical drawings for the furniture that Burden sells were produced by staff at companies that Burden is a director of – PGT International (registered in the British Virgin Islands) and PGT Vietnam (registered in Vietnam). These companies were joined as second and third plaintiffs before the High Court and as second and third respondents before the Court of Appeal. Burden claimed that the technical drawings were based on his preliminary sketches and subsequent input. The trial Judge accepted this and held that Burden’s creative input into the production of the technical drawings qualified him as a joint author and joint owner thereof, and found ESR liable as a secondary infringer of Burden’s copyright.
On appeal Burden conceded that the unavailability of the preliminary sketches meant there was insufficient evidence to support a finding of copyright existing in the preliminary sketches, but nonetheless maintained that the technical drawings were original works in which copyright subsisted. It was also accepted on appeal that the evidence showed Burden to be an employee of PGT International, with the consequence that copyright in the technical drawings variously belonged to PGT International and PGT Vietnam.
On account of Vietnam not being a convention country at the relevant time it was alleged that PGT Vietnam’s copyright could not be recognised in New Zealand. PGT International’s copyright would be recognised on account of the United Kingdom being responsible for the international relations of the British Virgin Islands. Nonetheless, given that Burden was found to be a joint author, the technical drawings were held to qualify for protection in New Zealand under section 18(3) on account of Burden being a citizen of Australia, which is a prescribed foreign country. The Court of Appeal found that the owners of the copyright, including PGT Vietnam, could still sue for infringement on account of the works qualifying for protection under section 18.
A point of contention in establishing secondary infringement was the date at which ESR knew or had reason to believe that the imported goods were infringing copies. While Burden’s copyright notice predated all importations, this was held not to be sufficient for ESR to know or have reason to believe. The Court of Appeal held that a period of 2-3 weeks after being informed by Burden’s solicitors of the alleged infringement was sufficient for ESR to investigate and take legal advice. Consequently, ESR was held to be a secondary infringer in respect of the second and subsequent importations.