It's far from clear if the Crown use provisions in
the Copyright Act apply to computer programs.
A case scheduled for hearing in the Federal Court later this
year will test whether the Commonwealth and State Governments can
use software without a licence agreement.
Working Systems Software, a subsidiary of Global Health,
commenced court action against the South Australian Government when
it continued using the CHIRON patent administration system after
its licence agreement ended. Global Health claims the SA Government
infringed its copyright in the CHIRON system and is seeking damages
and an injunction to prevent continued use of the system. The SA
Government admits it continued using the system after the licence
agreement ended, but says it can rely on the Crown use provisions
in the Copyright Act to keep using the software.
Crown use under the Copyright Act for computer programs: clear
So, do the Crown use provisions in the Copyright Act apply to
computer programs? Because of some peculiar drafting in the Act,
the answer is far from clear.
The Crown use provisions allow the Commonwealth and States (but
not local governments) to use copyright works for the services of
the Commonwealth or State without permission from the copyright
owner. The specific section in the Copyright Act that deals with
this, section 183, states that copyright in a literary work (which
ordinarily would include a computer program) is not infringed by
the Commonwealth or a State where the copyright is used for the
services of the Commonwealth or State.
Where a government relies on the Crown use provisions, it has to
notify the copyright owner and pay a reasonable licence fee.
However, importantly, the government cannot be ordered to stop
using the copyright work and will not be liable for damages (which
might otherwise include punitive or aggravated compensatory
On the face of it, this is seems fairly straightforward. There
is nothing in the text of section 183 that excludes computer
programs. However, confusion arises from the heading of section
183, which is: "Use of copyright material for
the services of the Crown" [my emphasis]. The term
"copyright material" is defined elsewhere in the
Copyright Act in a way that excludes computer programs. So, the
heading of section 183 seems to exclude computer programs, but the
text of section 183 does not. This appears to have caused at least
one leading Australian commentator to conclude that the Crown use
provisions do not apply to computer programs.1
What will this mean for government use of software?
Without wishing to pre-empt the Federal Court's decision, we
think Global Health has a difficult road ahead. The inconsistency
between the heading and text of section 183 appears to have arisen
from amendments made to the Copyright Act in 1998, and it is fairly
clear (to us at least) from the background material that those
amendments were not intended to exclude computer programs from the
Crown use provisions.
Many software licences are perpetual, so a time-based licensing
issue like in this case will be less common. However, most software
licences contain use limitations (for example, a limit on the
number of named or concurrent users). If the Crown use provisions
apply to computer programs, then the Commonwealth and States can
exceed these use limitations and pay a reasonable licence fee. This
is a good position to be in where a software vendor refuses to
increase the use limitations or insists on unreasonable terms.
Government agencies should remember that while the Crown use
provisions might allow them to use software without a licence
agreement, they will not entitle them to vendor support. That said,
using unsupported software may be a far better outcome than not
being able to use it at all.
1Lahore, Copyright and Designs: Commentary,
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 bulletin.
Persons listed may not be admitted in all states and
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Ugg boots case revolves around who holds the trade mark rights to the word 'Ugg' in relation to sheepskin boots.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).