Heinz-Watties (NZ) Ltd v Effem Foods Pty Ltd & Anor

Auckland High Court, CP 421/99

Master Kennedy-Grant

17 August 2001)

This case concerned an application for summary judgment pursuant to section 130 of the Copyright Act 1994, under which a court may make a declaration that the bringing of proceedings alleging copyright infringement was unjustified.

The parties were manufacturers and marketers of rival pet-food products.  In September 1999, the plaintiff filed proceedings against the defendants alleging, inter alia, infringement by the defendants of the plaintiff’s copyright in the label for its “GOURMET” cat pet-food.  The plaintiff alleged that both the defendants’ “DINE” pet-food label and the defendants’ “MY DOG” pet-food label infringed its copyright.

In October 1999, the defendants filed a statement of defence denying copyright infringement and counterclaiming for relief under section 130 of the Copyright Act 1994 claiming unjustified proceedings.  In November 2000, the plaintiff discontinued its proceeding against the defendants and in April 2001 the defendants brought this application for summary judgment on their counterclaim. 

The defendants contended that they were entitled automatically to the relief sought under section 130 unless the plaintiff proved that the defendants had in fact infringed its copyright.  Master Kennedy-Grant did not accept that submission.  Section 130(1) gives the court a discretion to grant the relief specified in the section.  Section 130(2) precludes the court from exercising that discretion in favour of the applicant where the respondent to the application proves that copyright has been infringed.  Master Kennedy-Grant commented that this was obvious as a matter of common sense - the bringing of proceedings logically cannot be said to be unjustified if it has been successful or, if pressed to a conclusion, would be successful.  It does not follow that the bringing of the proceeding could never be justified on other grounds. 

Master Kennedy-Grant accepted that if a plaintiff had issued proceedings for the infringement of copyright in the genuine belief, held on reasonable grounds and after taking advice, that there had been or might have been an infringement of its copyright, the issuing of the proceedings would be “justified”.

Master Kennedy-Grant then turned to consider whether, on the facts, the plaintiff had established an arguable basis for a finding that it had acted in such a belief.  The plaintiff had not disclosed to the Court the legal advice on which it relied in bringing the proceeding, and the Master noted that, certainly where advice is given by a recognised expert in the field of copyright and clearly advises that there has been or may have been an infringement of the plaintiff’s copyright, the disclosure of the opinion would strengthen the case for the existence of reasonable grounds for bringing proceedings. 

On an analysis of the points of similarity and difference between the respective labels, Master Kennedy-Grant concluded that the plaintiff had no reasonable grounds for instituting its infringement proceedings in respect of the defendants’ “MY DOG” pet-food label.  The labels were totally different.  The Master made a declaration that the issuing of proceedings in respect of that label was unjustified.

There was, however, an arguable case that the plaintiff was justified in bringing its proceedings for infringement of copyright in respect of the defendants’ “DINE” pet-food label.  The defendants’ application for summary judgment in relation to this label was dismissed, and the matter transferred to the standard track.