It is wise business practice for a person contracting the
creation of copyright works to obtain an assignment of the
copyright in those works, or clearly scope the terms of their
licensed use of those works. However, what terms will govern
the use of those copyright works when you commission a third
party to print them?
In the recent Federal Court case of Futuretronics.com.au
Pty Ltd –v– the Graphix Labels Pty Ltd
& John Atta, the Court adjudicated a dispute between a
printer and the copyright owner regarding the printer's
later use of the printed copyright works without the
owner's express permission, and where no express terms
of use had been agreed at the time of engagement of the
Futuretronics is a designer, importer and wholesaler of
electronic goods and accessories. Graphix is a printer.
Futuretronics approached Graphix and asked Graphix to
manufacture some 'skins' –
form-fitting vinyl covers for mobile phones, iPods, handheld
games and electronic games controllers (like the Microsoft XBOX
pictured, right). Mr Atta is an employee of Graphix.
Futuretronics contracted Graphix to make skins bearing
artworks provided to it by Futuretronics and then deliver the
skins to Futuretronics (who has kindly provided some images of
its skins to illustrate this article).
Graphix printed the skins bearing Futuretronics'
artworks and delivered them as ordered to Futuretronics.
However, it also gave some spare skins bearing the artworks to
other potential competitors of Futuretronics as samples, to
demonstrate what Graphix could do for those competitors.
Graphix also printed up brochures prominently displaying skins
with Futuretronics' artworks on them. Graphix handed
the brochures to other companies and potential competitors of
Futuretronics to market Graphix's skin-printing
The artworks provided by Futuretronics were created by an
employee of Futuretronics and Futuretronics owned the copyright
in the artworks.
The Court found:
Graphix's printing of the brochures infringed
Futuretronics' copyright in the artworks depicted on
the skins in the brochures. Further, Mr Atta authorised that
the supply by Graphix to its potential customers of
samples bearing Futuretronics' artworks did not
infringe Futuretronics' copyright.
it was an implied term of the contract between Graphix
and Futuretronics that Graphix would only use
Futuretronics' artworks for purposes authorised by
Futuretronics, namely, fulfilling orders from Futuretronics
for skins. Graphix breached that implied term by supplying
sample skins bearing those artworks to potential Graphix
The Court ordered Graphix and Mr Atta to:
deliver to Futuretronics' solicitors all copies
of the brochure and samples of skins bearing
Futuretronics' artwork in its possession; and
provide details of all brochures and skins sent to anyone
outside Graphix, including details identifying those to whom
the skins or brochures were sent. In December this year the
Court will consider submissions from the parties on the
amount of damages to be awarded for the infringement, and who
should pay legal costs in the case.
What Can We Learn From This?
When dealing with copyright material, parties should agree
upon and, preferably, clearly document the terms of its
creation, reproduction and permitted use of the copies
produced. Specifically, if one party wants to use any of the
other party's materials, or works produced using those
materials, to advertise its own goods or services, the parties
should agree on express licence terms.
This will reduce the risk of one party infringing copyright
in the material, or the need for court adjudication of a
dispute regarding the scope of permitted use of that
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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