+ IT Law Update-Spring 2008

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Centrestage Management Pty Ltd-v-Riedle [2008] FCA 938

This case involves a dispute about a contract for the supply of a computer program. One issue that fell to be determined was whether a licence to used the “application” included the implied right to access and use the source code. It was contended that a contract for the supply of a computer program carries with it an implied licence to use the program and call for the source code.

There are a number of rules that have to be satisfied before a court will imply any term into any agreement. One is that the term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it. The term must be needed in order to make the agreement work or conversely in order to avoid an unworkable situation.

In the above case, common sense prevailed and it was held that no such term as that contented could be supported on the business efficacy basis.

  IT Transition Service Agreements

There are many reasons why transition service agreements cannot be approached in the same way as conventional IT service delivery arrangements.

Firstly, it is true to say that the service provider is usually not in the business of providing the transition services on a commercial basis. The service provider’s only experience of providing the transition services will have been confined to providing these services to related group companies and business units.

Secondly, the services will usually be provided on an ‘as is where is” basis with no promise of enhancement or no road map for change or innovation. This principle is usually essential to the service provider who has more than likely pursued a strategy of moving toward greater operational efficiencies and who does not want to be obliged to upgrade technologies, employ more staff or purchase more resources.

Thirdly, this is not intended to be a long term relationship as is the case with many IT and business process outsourcing transitions. In the majority of cases a TSA will be in place for no more than 12 months but the usual length is around 6 months.

Compilations under Australian Law – a discussion of the Ice TV Case: [2008] FCAFC

Channel Nine broadcasts between 168 and 210 programs per week. The selection, arrangement and ordering of programs requires the investment of considerable skill and labour. Nine’s programming decisions were reduced to material form in Weekly Schedules. The Weekly Schedules were not issued to the public. They were sent to television program aggregators (Aggregators) who combined the information with comparable information received from other television broadcasters to produce further programs (Aggregated Guides). Aggregated Guides were available to the public online and in print. Not all of Nine’s programming information was disclosed to the Aggregators in the Weekly Schedules; late change notices were sometimes issued.

It was common ground that Nine had copyright in the relevant Weekly Schedules. The question was whether Ice TV had infringed Nine’s copyright by indirectly copying time and title information from the Weekly Schedules by viewing the Aggregated Guides.

Originality was held to have derived largely from Nine’s creativity in the selection and arrangement of programs for broadcast. The originality of that information lay in the skill and labour expended in selecting and arranging the programs as opposed to the form in which Nine presented it.

The time and title information was a crucial aspect of the compilation. Everything else in the Weekly Schedules, such as synopses and program classifications, was subsidiary. The time and title information reflected the expenditure of a great deal of skill and labour. That skill and labour was not separate and discrete from the skill and labour involved in setting those decisions down in the form of Weekly Schedules. It was part of a single process leading to the creation of the copyright work, being the written record of Nine’s programming decisions and the associated program information.

It was held that Ice TV’s use of many pieces of time and title information, indirectly copied from the Weekly Schedules on a weekly basis, involved the reproduction of more than slight or immaterial portions of Nine’s work.

For the Full Court, given the quality of the material taken, namely the most creative elements of the skill and labour exercised by Nine in creating the Weekly Schedules, the substantiality of the material taken was apparent.

Ice was accordingly found to have infringed. It has lodged an application for special leave to appeal to the High Court of Australia.

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