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29 Mar 2012

One good reason to take care before threatening legal action in copyright disputes

by Mary Still, Jessica Cowell

Be careful when you claim someone has infringed your copyright, because an unjustifiable claim can be expensive.

A recent case has highlighted the importance of exercising due caution prior to threatening another person or company with copyright infringement. In Bell v Steele (No 3) [2012] FCA 246, $147,000 plus costs were awarded to the victim of an unjustifiable threat of copyright infringement.

A US woman, Tanya Steele, was engaged by an Australian artist, Richard Bell, to assist him to capture film footage in the US. Steele was paid for her services. When Bell published the film trailer for his artwork "The Blackfella's Guide to New York", Steele threatened copyright infringement and insisted that Bell immediately take the trailer down. He did as she demanded – removing the film trailer from the gallery and other websites where it was posted, postponing an upcoming exhibit, and delaying the sale of his next catalogue as it featured a still shot from the trailer.

Bell then brought proceedings under section 202(1) of the Copyright Act 1968 (Cth), which provides protection for a person who is threatened with legal action by another in relation to copyright infringement, when the person making the threats has no right to do so. The protection available is that the victim may recover any damages sustained because of the threats, stop continued threats, and have the threats declared unjustifiable by the Court.

In the judgment handed down on 16 March 2012 by Justice Collier of the Federal Court of Australia, Bell was awarded his costs of $22,224 for bringing the proceedings, as well as damages of $147,000.

The judge emphasised that any damages claimed must flow from the making of the threats. For this reason, the Court relied on the evidence of Bell's agent, who calculated that the lost opportunity to advertise Bell's work using the trailer had resulted in a loss of sales totalling $243,000, of which $147,000 would be received by Bell. Although Steele was served with Court documents, she did not defend the matter, and so the judge was given no reason to doubt this evidence.

Bell also gave evidence that "there was a cloud" over his reputation because others in the art world were aware of the threats. However, the judge made it clear that losses arising from rumours that may spring up but are not attributed to the party making the threat, will not be compensated as damage sustained by unjustified threats.

 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.