Australia: License it expressly or you may lose it – a cautionary tale of implied copyright licences

The recent case of Hardingham v RP Data Pty Ltd [2019] FCA 2075 provides a good reminder of potential pitfalls for content creators who do not have express copyright licence arrangements in place, especially where the content is to be uploaded to third party websites by the party transacting with the creator or its sub-licensees.

Background

Hardingham involved a claim for copyright infringement against the operator of online real estate analysis and information provider Core Logic (RP Data Pty Ltd) (RP Data) by a professional photographer, Mr Hardingham, and his company, Real Estate Marketing Australia Pty Ltd (REMA).

REMA, of which Mr Hardingham was the sole director, carried on the business of taking photographs, and creating floor plans, of properties at the request of real estate agencies for the purpose of those agencies advertising the properties for lease or sale.

Invoices were paid by agencies to REMA. There was no evidence of express copyright ownership or licensing provisions were in place between REMA and the agencies. A key use of this content by agencies was to upload it to a widely used online property listing platform, realestate.com.au (operated by realestate.com.au Pty Ltd (REA)). Mr Hardingham and REMA were aware that this was one use for which their photography and associated services had been commissioned.

Amongst other things, the terms and conditions of REA's realestate.com.au included an expansive express licence to REA over content uploaded by agencies, including a right to sub-license which also survived any termination of the user agreement between agencies and REA.

RP Data had a contract with REA. RP Data reproduced content generated by Mr Hardingham and uploaded by agencies to realestate.com.au on its own website corelogic.com.au.

The central question was whether RP Data had a licence to reproduce REMA's content.

In 2014, the applicants' solicitors initially wrote to RP Data alleging copyright infringement. RP Data's solicitors disputed there was any infringement, citing the terms and conditions on realestate.com.au (in particular the copyright licence provisions which agencies uploading material had to agree to). The applicants next wrote to RP Data's solicitors in 2018 (4 years later), recasting assertions of copyright infringement and making demands. The applicants commenced proceedings shortly afterwards.

The parties agreed that there would be an initial hearing and decision on a separate question, to be determined before all other issues in the proceeding. This separate question was whether copyright infringement could be established with respect to photographs and floorplans for 20 representative properties created by the applicants and supplied to agents, which in turn were supplied through to REA and then RP Data. The determination of the question of infringement regarding other properties, any pecuniary relief (damages or account of profits), and a cross-claim by RP Data against REA for contractual indemnification, was deferred.

Arguments

Whilst the applicants accepted that the content Mr Hardingham generated was impliedly licensed to agencies for the purpose of marketing (with a right to sub-license), they argued that this licence was limited only "to use the photographs and floor plans for the limited purpose of marketing for sale or lease". In particular, the applicants contended the implied licence did not extend to use once the sale or lease of a property was completed. RP Data continued to reproduce the relevant content on its website after this time.

RP Data ran two alternative arguments:

  1. The agreement between REMA and the agencies contained an implied term that copyright would be assigned to the agencies when required by the agencies, and that as a result of this "equitable ownership", "the agencies were entitled to and did grant a licence to REA... and to grant a sub-licence."
  2. An express or implied licence had been granted by the applicants to the agencies, which in turn they had passed on to REA when agreeing to REA's express terms and conditions for uploading content to realestate.com.au, and which REA had effectively then passed on to RP Data.

The basis proposed by RP Data for inclusion of such an implied term was "the way in which real estate properties were and are marketed to the public, including the internet by way of real estate agents' websites, residential property portals (such as realestate.com.au) and social media platforms, where that marketing comprises current and historical listings in respect of the properties".

Findings

In the absence of evidence indicating any formal written contract between the applicants and agencies, the Court noted that:

"it is important to understand the context in which the parties dealt with each other in order to form a view as to both: (a) what the terms of the contract were, including any terms inferred from conduct... and (b) what terms might be implied into that contract."

Considering the evidence before it, the Court accepted that the evidence demonstrated that:

  • "the overwhelming majority of Australian real estate agencies use the realestate.com.au platform and, as a matter of practical commercial reality, would use the platform in marketing properties for sale or lease;
  • the prospect of selling or leasing a property is enhanced by using the realestate.com.au platform and the consequent exposure that provides;
  • one of the principal purposes for which the agencies commissioned photographs and floor plans from the applicants was to obtain works to upload to the realestate.com.au platform; and
  • whilst theoretically possible, at a practical level agencies are not able to negotiate out of the usual terms and conditions required by REA in order for the agencies to upload content to the realestate.com.au platform."

The Court also observed that the applicants continued to work with agencies, despite at least since early 2014 having been on notice of the fact that agencies were uploading content to realestate.com.au and of the specific copyright licensing terms set out in REA's terms and conditions on that website. Secondly, the applicants as well as agencies, knew photographs persisted on realestate.com.au even after a sale or lease was completed and also that within a few days of upload to REA's website, these works would also appear on RP Data's website pursuant to an agreement between REA and RP Data. Finally, the applicants set their fees for each of the properties for which they had generated content since 2014 in full knowledge of these facts and the applicants did not suggest that any of their content had ever been removed after upload from REA or RP Data's websites.

Despite the absence of evidence as to whether the agencies had actually read the realestate.com.au terms and conditions, the Court observed that the applicants "must have known that the works they had been commissioned to prepare had been and were being uploaded in accordance with terms and conditions imposed by REA. These were freely available on the realestate.com.au website". The Court concluded that either as a result of the conduct and interactions between the applicants and the agencies, or due to a term implied in the agreement between the applicants and the agencies necessary for business efficacy:

"the applicants agreed that the agencies were authorised, by way of licence from the applicants, to upload the photographs and floor plans to the realestate.com.au platform and grant to REA a licence in the form required by REA and contained in REA's usual terms and conditions."

The Court concluded that equitable ownership of copyright by agencies which had commissioned the content from the applicants had not been established. A right for the agencies to call for an assignment was not necessary, because an implied licence would achieve business efficacy in the circumstances.

Implications

This case illustrates the determinative role frequently played by the prevailing commercial facts and arrangements in determining the scope of an implied copyright licence. Interestingly, ongoing publication of photographs and floor plans on realestate.com.au and corelogic.com.au was found to be so commonplace that the Court was prepared to find that the photographer always knew full well of the uses that would be made by the real estate agents, their sub-licensees (REA) and further sub-licensees (RP Data). This set of circumstances was fatal to the copyright owners' claims, as they could not establish that their initial licence to the agents was limited to use during a sales campaign, when they knew such content remained on the realestate.com.au and corelogic.com.au platforms as part of historical sales data (e.g., in the "Sold" section).

In other cases, circumstances may be different such that a copyright owner may able to establish that the terms of an initial licence are more limited because the copyright owner had no actual or constructive knowledge of uses intended by its licensee.

Given the strong dependency of an implied licence on the surrounding factual matrix, and the consequent potential lack of certainty in its scope, this case serves as a reminder to copyright owners that clear express licence terms are preferable.

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.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

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