Insight SRC IP Holdings Pty Ltd v The Australian Council for Educational Research Limited

In Insight SRC IP Holdings Pty Ltd v The Australian Council for Educational Research Limited [2012] FCA 779 (24July 2012) the Federal Court heard a claim for damages for infringement of copyright under the Copyright Act 1968 (Cth) (the Act) s 115(2). 

Background

The applicants claimed that the respondent infringed their copyright in a questionnaire known as the School Organisational Health Questionnaire (“SOHQ”). At trial the applicants sought damages rather than an account of profits and claimed from the respondent additional damages under s 115(4) of the Act.  Further, the applicants claimed a declaration of ownership of the SOHQ and an injunction restraining various acts by the respondent.

The applicants were incorporated on 30 April 2009 by Dr Hart the director and major shareholder of the company establishing subsequently an exclusive licensee with the same rights of action as the owner of the copyright (s 119(a) of the Act) incorporated on 6 November 1997 as Social Research Consultants Pty Ltd which on 3 April 2000 then changed its name to Insight SRC Pty Ltd. The respondent Australian Council for Education Research Ltd (“ACER”) are a not-for-profit company.

The SOHQ is a questionnaire which consists of 57 questions arranged under 12 headings or modules. The applicants’ argued that SOHQ was part of an article entitled “Development of the School Organisational Health Questionnaire: A measure for assessing morale and school organisational climate” published in the British Journal of Educational Psychology (2000), 70:211-228 (“British Journal Article”). Three studies were said to have been carried out for the purpose of developing the questionnaire. The applicants accept that these studies were carried out between 1990 and 1992 while Dr Hart was employed by the Ministry of Education in Victoria as PHD Researcher.

From early 2006 to October 2009, ACER reproduced the SOHQ as part of a project with Independent Schools Victoria Inc. (ISV) called the Building Educational Effectiveness project (the BEE project). Not all of the questions in the SOHQ were reproduced and provided to ISV.  Only 25 questions and 5 modules were reproduced. It was not suggested by ACER that that did not amount to infringement of the copyright in the SOHQ.

The case proceeded on the following issues:

Ownership

The question of ownership of the copyright in the organisational health questionnaire involved consideration of the author of the SOHQ (the now managing director and major shareholder of the applicants' previous employment as a PhD researcher by the Department of Education during the period in which the questionnaire was made and:

• whether the questionnaire was in fact made in pursuance of the terms of his employment with the Department under the Act s 35(6)

• whether the questionnaire was made by or under the direction or control of the Crown within the meaning s 176(2) of the Act

• whether operation of s 35(6) excluded by agreement between the author and Department  

• whether the agreement about vesting of copyright was within the Act s 179 .

Held: The circumstances in which the questionnaire was made fell outside the operation of ss 35(6) and 176(2) of the Act. The author of the questionnaire is the owner of copyright.

Assignment

The purported assignment of copyright from author to first applicant in 2009 where corporate trustee of author’s family trust was part of chain of assignment and the purported exclusive licence of copyright from the first to  the second applicant in 2009 - whether this was an effective assignment of copyright.

The subsequent purported assignment of accrued bare rights of action from author to the corporate trustee to the first applicant in 2011 – whether this was a valid assignment of bare rights of action and whether there was a “genuine commercial interest”.

Held: The deeds of assignment were effective to transfer copyright in the questionnaire and rights of action for infringement.

Damages

Where the cause of action accrued prior to the assignment by the author to first applicant and where the owner of the copyright at time of infringement was not engaged in commercial exploitation of the copyright the following issues arose:

• whether actual loss suffered

• whether general damages were available

• the calculation of loss of profits

• nominal damages or whether an award of additional damages warranted Act s 115(2), (4).

Held: The applicants are entitled to an award of nominal damages and additional damages.

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