Implied terms in copyright licences

In the generation of software licencing, online subscriptions and software as a service (Saas Contracts), terms and conditions are often agreed to without ever being read and understood.  The case of Hardingham v RP Data Pty Ltd [2019] FCA 2075 has demonstrated why it is essential for content creators to develop standard terms and conditions when providing services, especially when those services lead to the creation of intellectual property.

Case background

James Hardingham, a professional photographer and the sole director of Real Estate Marketing Australia Pty Ltd (REMA), produced photographs and created floor plans for numerous real estate agencies.  Those agencies listed this content to the owner of realestate.com.au (REA) website who then shared it with RP Data Pty Ltd (RP Data), operator of the Core Logic subscription website that provides historical data on the sale and leasing of properties.  Under section 115 of the Copyright Act 1968 (Cth), REMA and Mr Hardingham (Applicants) brought proceedings against RP Data for infringing the copyright in the photographs and floor plans without a licence.  However, RP Data claimed that the materials were used under the licence of REA, as REA permitted materials published on its platform under licence from the real estate agencies who engaged the Applicants.

Since there was no formal written agreement between the Applicants and the real estate agencies, the Court needed to establish what the terms of the licence were to determine whether RP Data’s use of the photographs and floorplans was allowed.

The scope of the licence granted to the real estate agencies

It was not in dispute that the Applicants had granted a licence that allowed sub-licensing to the real estate agencies.  Despite this, the arguments that the Applicants raised were that the licence was only intended for marketing purposes; and the licence would not be used after completion of a sale or leasing transaction, however RP Data and REA proceeded to utilise the agencies data on a historical site after this time.  RP Data and REA subsequently argued that the licence was similar to the express licence the agencies granted to REA, which was perpetual and irrevocable.

The context of the licence

In paragraph 58 of Hardingham v RP Data Pty Ltd, Thawley J stated that, in the absence of formal contracts:

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.”

In consideration of the nature of the relationship between the parties, it was determined that one of the main purposes of real estate agencies commissioning photographs and floor plans from the Applicants was to upload them to the REA website.  It was also determined that the Applicants and those agencies were aware of the availability of photographs and floorplans on the platform after a sale or lease transaction.

The Court also determined that the Applicants continued to work with the agencies and provide photographs and floor plans for use on the REA website despite knowing (from as early as 2014) that RP Data was receiving the materials under licence from REA, and that REA was doing so because it received a licence from the agencies under its standard terms and conditions, which agencies must agree to when using the platform.

It did not matter whether or not the applicants had read the REA terms, as the Court found 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” (paragraph 67 of Thawley J’s judgment).

Moreover, the Court held that the Applicants would have known that the agencies could not practically negotiate out of the REA’s terms and conditions, and additionally that the Applicants would have known that the agencies would not have engaged with them if they were not allowed to use the materials on the REA website.

It is also worth noting that His Honour found that the real estate agencies were not the equitable owners of copyright in the floor plans and photographs.  RP Data was not able to identify any interest or right on the part of the agencies which would be insufficiently recognised by a licence in contrast with copyright assignment.

Court finds implied licence exists

His Honour ruled in favour of RP Data, stating that in the absence of written terms and conditions, there was an implied licence granted to the real estate agents by the Applicants, which must have incorporated the right to sublicence consistent with REA’s terms and conditions.  Since there was no evidence that supported RP Data’s dealings with the resources outside the scope of the terms of the sub-licence, it was concluded that the copyright of the Applicant has not been infringed by RP Data.

Since digital content such as photographs and floor plans created by Mr Hardingham, is often widely reproduced and distributed, creative individuals and organisations should understand the importance of intellectual property law and establish clearly written licence terms to have their copyright assigned or mandate the required licence.

Links and further references

Related articles

Implied terms in software development contracts – the submarine in the code

Implied contracts formed post term

Computer-implemented inventions and patentability

Infringement of copyright in computer code

Legislation

Copyright Act 1968 (Cth)

Cases

Hardingham v RP Data Pty Ltd [2019] FCA 2075

Further information

If you need advice on intellectual property licensing or have a dispute about intellectual property, please contact me for a confidential and obligation free discussion:

Malcolm BurrowsMalcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013 (preferred)
Mobile: 0419 726 535
e: mburrows@dundaslawyers.com.au

 

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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