The full court of the Federal Court has recently handed down its decision in Hardingham v RP Data Pty Limited  FCAFC 148, in which the Court, by a 2:1 majority, held that the operators of corelogic.com.au had infringed a professional photographer’s copyright in photographs and floor plans he had created for real estate marketing campaigns. The Full Court has upheld the photographer’s appeal from the decision of Justice Thawley at first instance, which you can read here.
This case rings the alarm bell on potential pitfalls for website operators who have written copyright licensing agreements in place with content uploaders, but not with the copyright owner of the uploaded content.
Mr Hardingham is a Sydney photographer who specialises in the supply of images (including photographs and floor plans) to real estate agencies. In the transactions relevant to the litigation, Hardingham was commissioned by various agencies to attend various properties and to produce and supply images to be used in marketing campaigns for those properties. On each occasion, the agency engaged his services verbally over the telephone, and the conversation went along the lines of “Hi James, we have just listed [property address]. The campaign is due to start [date]. Can you attend this week to take the photos for the campaign?” Hardingham then produced and supplied the images in editable digital form. Invoices were issued to the agencies and on each occasion the invoiced fee was paid. The parties did not enter into formal written contracts.
Hardingham accepted that, as part of the marketing campaign for a particular property, the images he produced would be uploaded onto the platform, realestate.com.au, operated by Realestate.com.au Pty Ltd (REA). However, in order to upload images onto the platform, each agency must agree to the written terms and conditions of the website (REA Agreement), including the following clauses:
5. Your acknowledgements
You acknowledge and agree that at all times during the Term of this Agreement:
- … you grant us an irrevocable, perpetual, world-wide, royalty free licence to publish, copy, licence to other persons, use and adapt for any purpose related to our business any content you provide to us during the Term, and this licence survives termination of this Agreement…
(d) we may vary this Agreement or any of its constituent documents at any time …
There was no direct evidence that Hardingham, or any of the agencies, had in fact read the REA Agreement or knew of its precise scope. It had later transpired that in reliance on the REA Agreement, REA granted a further sub-licence to RP Data Pty Limited (RPD) to reproduce content provided by the agencies (including the Works) on RPD’s platform, corelogic.com.au.
Issues in dispute
The undisputed facts were:
- the images were original artistic works (Works) protected under the Copyright Act 1968;
- Hardingham was the author of the Works;
- Hardingham had entered into an oral agreement with each agency whereby he granted the agency a licence to, at the very least:
- reproduce the Works;
- communicate the Works to the public by making them available online; and
- sub-license the Works for use by others (including REA),
for the purposes of the marketing campaign for the relevant property (Oral Agreement).
However, Hardingham claimed that RPD had infringed his copyright as the Works were reproduced on corelogic.com.au within a few days of them being uploaded onto realestate.com.au.
In response, REA and RPD argued that the scope of the licence granted by Hardingham to the agencies extended beyond the marketing campaign for each property. Further, they contended that Hardingham, either expressly or impliedly, agreed to permit the agencies to sub-license the Works to REA, on the terms and conditions set out in the REA Agreement. REA was then able to pass on that licence to RPD. The corollary of that argument was that RPD had not infringed Hardingham’s copyright. Justice Thawley, at first instance, agreed with this line of argument.
The central issues to be decided on appeal were:
- what was the scope and content of the Oral Agreement?
- do the terms of the REA Agreement need to be inferred and implied into the Oral Agreement, to define its boundaries?
Full Court’s findings
On appeal, Justice Greenwood (with whom Justice Rares agreed) held that Justice Thawley had erred in concluding that the Oral Agreement was subject to the REA Agreement. Justice Greenwood rejected the argument that the terms of the REA Agreement could be inferred as having been included in the Oral Agreement as a matter of actual intention of the parties or alternatively, that they should be implied into the Oral Agreement as something that the parties would have agreed on, had they turned their minds to it.
Justice Greenwood noted that the expansive scope of the REA Agreement was significantly against Hardingham’s interests as that agreement would have enabled REA to “virtually expropriate the ownership of the copyright” in the Works and to vary the terms of the agreement at any time. In the absence of clear evidence that Hardingham and the agencies had knowledge of the precise contents of the REA Agreement, his Honour concluded that it could not be inferred as a matter of actual intention, that the parties had agreed that the Oral Agreement was subject to the REA Agreement.
His Honour also considered various High Court authorities on the principles applicable to the implication of terms into contracts. Whilst acknowledging that the criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 provide the necessary starting point for determining whether a term should be implied into a contract, his Honour cautioned against a rigid or formulaic application of those criteria in the case of an oral contract. In particular, his Honour followed the High Court’s approach in Byrne v Australian Airlines Limited (1995) 185 CLR 410 that, in determining whether a term should be implied into an informal oral contract, the most important criteria to be satisfied are:
- whether the term is “so obvious it goes without saying” (per Brennan CJ, Dawson and Toohey JJ at 422); and
- whether the term is “necessary for the reasonable or effective operation of the contract in the circumstances” (per McHugh and Gummow JJ at 442).
By applying the above tests, Justice Greenwood concluded that in the circumstances, it was not clear at all that the implication of the REA Agreement was “so obvious that it goes without saying”, or that such implication was necessary to give business efficacy to the Oral Agreement.
Accordingly, as the REA Agreement could neither be inferred or implied into the Oral Agreement, RPD were found to have infringed the copyright in Mr Hardingham’s photographs and floor plans.
You can access the full text of the Court’s decision here.