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[1994] ZASCA 141
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Appleton and Another v Harnischfeger Corporation and Another (495/92) [1994] ZASCA 141; 1995 (2) SA 247 (AD); [1995] 2 All SA 693 (A) (30 September 1994)
Case Number 495/92
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
JOHN APPLETON
First Appellant
BEDFORD MECHANICAL
AND
PUMP SPARES CC
Second Appellant
and
HARNISCHFEGER CORPORATION
First Respondent
HARNISCHFEGER [SA] [PROPRIETARY]
LIMITED
Second Respondent
CORAM
: CORBETT CJ, VAN HEERDEN, NESTADT, HARMS JJA et NICHOLAS
AJA.
DATES OF HEARING
: 3 and 4 March 1994
DATE OF JUDGMENT
: 30 SEPTEMBER 1994
JUDGMENT
/CORBETT
CJ
2
CORBETT
CJ:
The first respondent, Hamischfeger Corporation ("Hamischfeger"), a
company incorporated in accordance with the laws of Delaware, United
States of
America, and having its principal place of business in Milwaukee, Wisconsin,
USA, carries on business as a manufacturer
and supplier of heavy machinery,
including electric mining shovels. An electric mining shovel is a large machine
used for digging
and moving earth in open-cast mining operations. One such
machine, the P & H 2300 Electric Mining Shovel, has been manufactured
by
Hamischfeger since the late 1960's and has proved a very successful product in
many parts of the world, including South Africa.
This machine and other similar
products are sold to mining companies. A major part of Hamischfeger's business
is the manufacture
and sale to customers of spare parts for these
machines.
The second respondent, Hamischfeger (SA)
Proprietary
3 Limited ("Hamisa"), is a company incorporated under the laws
of
South Africa and having its principal place of business in
Alrode,
Transvaal. It is a wholly-owned subsidiary of
Harnischfeger
International SA, a company incorporated under the
laws of Panama
and an associate company of Harnischfeger. From the late 1970's
and until about 1988 Harnisa's business related solely to the
manufacture and distribution of spare parts for the various
Harnischfeger machines, including the 2300 Electric Mining
Shovel.
In about 1988 Hamisa began manufacturing and selling complete
machines as well.
The first appellant, Mr John Appleton
("Appleton"),
entered the employ of Hamisa in March 1976 as a sales manager.
He
remained with the company until May 1989, by which time he had
risen to the position of the parts and service director and his
only
superior in the company was the managing director. Various
disagreements between Appleton and the managing director, Mr R
L
4 Drollinger, resulted in Appleton then resigning. On 25 May 1989
he
signed a letter of resignation, in which he agreed, inter alia, not
to
take any company property with him; that all documents or
other
records containing company information belonged to the
company
and had to be returned to the company before he left; and that
he
was not permitted to retain copies thereof or extracts therefrom.
The
letter also recorded that Appleton was not entitled to divulge any
of
the company's confidential information or trade secrets to any
other
person or company or to use any of them directly or indirectly.
This
letter is hereafter referred to as "Annexure E".
After leaving Harnisa and in October 1989 Appleton
took
up employment with second appellant, Bedford Mechanical and Pump
Spares CC ("Bedford"), a close corporation incorporated under
the
laws of South Africa and having its principal place of business
in
Germiston, Transvaal. There is some dispute as to the nature of
the
business carried on by Bedford. According to the
respondents,
5 Bedford manufactures and sells engineering parts;
according to the
appellants, Bedford does not manufacture, but merely buys and
sells
such parts. As matters have turned out nothing turns on this
dispute.
In October 1991 the respondents instituted proceedings by notice of
motion in the Witwatersrand Local Division in terms of which they
claimed, inter
alia, orders interdicting the appellants from infringing the first respondent's
copyright in certain engineering drawings;
interdicting the appellants from
committing acts of unlawful competition against the respondents and from
breaching the terms of
the agreement contained in Annexure E by using drawings
emanating from the respondents or information contained therein for the
manufacture
of parts and/or by disclosing to any person such drawings or
information contained therein.
In the founding affidavit Mr J C Grisdale, the financial director of
Hamisa, explained that Hamischfeger had a library of many thousands
of
engineering drawings relating to parts for the
6 various machines
manufactured by it. These drawings had been
created over the years by employees of Hamischfeger. To
enable
Harnisa to manufacture spare parts in South Africa,
Hamischfeger
had provided Hamisa with a substantial number of such
drawings,
which were used in many instances to manufacture parts
required by
a customer.
Mr Grisdale further alleged that respondents had discovered that Appleton
had copies of various drawings of Hamischfeger in his possession
and that he and
Bedford were using these drawings to copy parts for Hamischfeger electric mining
shovels and were selling the parts
so made to customers of Harnisa at reduced
prices: hence the claims of infringement of copyright and unlawful
competition.
As regards the alleged infringement of copyright, the respondents limited
their claim to three particular drawings relating to parts
of the 2300 Electric
Mining Shovel, viz (i) the intermediate
7 hoist gear as reflected in
drawing no 1N1110; (ii) the drive tumbler
as reflected in drawing no 4J139; and (iii) the lever-propel
steering
as reflected in drawing no 6N525. During the hearing in the
Court
a quo the respondents abandoned any reliance on drawing no
6N525,
thus limiting their claim to the other two drawings.
In the Court a quo the matter was heard by
Flemming
DJP. Having heard argument, he made an order in the following
terms:
"1. Respondents are interdicted from causing or permitting the
reproduction of drawings 1N1110 and 4J139 which were identified in
the
papers.
2. Respondents are interdicted from reproducing any drawing for any part
of a Harnischfeger machine otherwise than by reverse engineering
in respect of
such a part (for as long as reverse engineering is lawful according to statute)
unless the drawing has been obtained
from somebody who discloses his source of
acquisition of the drawing, and the disclosure in itself or together with
accompanying
facts which explain the
8
circumstances of such acquisition, bring fair satisfaction to respondents
that such drawing is in itself probably not a reproduction
of a drawing of which
copyright vests in first or second applicant.
3. Respondents are ordered to pay 70% of the costs of
applicants."
("Respondents" are the present
appellants and "applicants" are the present respondents.) The case has been
reported: see Hamischfeger
Corporation and Another v Appleton and
Another
1993 (4) SA 479
(W).
It is clear from the judgment of Hemming DJP that he granted no relief in
respect of the causes of action based on unlawful competition
and the agreement
(Annexure E). The reason for this was that there were critical disputes of fact
which could not be resolved on
affidavit. The learned Judge refused a request
for the hearing of oral evidence and held further that the "balance of fairness"
was
against the grant of an interim interdict pending action.
9 On appeal (leave having been granted by the Judge
a
quo) the first point taken on behalf of
the appellants was that there
was no basis for the grant of para 2
of the order of the Court a quo
and that in this respect, at least,
the appeal should be allowed.
It seems clear that para 2 of the order is designed
to
restrain copyright infringement. The language of the order
itself
demonstrates this; and in view of the Court's findings in regard
to
the allegations of unlawful competition the order could not be
based
upon this cause of action. Yet respondents limited their claim
of
copyright infringement to (eventually) the two drawings referred
to
above, viz. no 1N1110 and no 4J139, and para 1 of the order
grants
relief in respect thereof. Para 2 of the order, which seeks to
impose
a restraint on the reproduction of "any drawing for any part of
a
Harnischfeger machine", thus goes far beyond what was claimed by
the respondents and on the papers has no foundation in fact or
law.
Respondents' counsel disavowed it. Accordingly, in so far as
the
10 appeal seeks the elimination of para 2 from the order of the
Court a
quo it must succeed.
Appellants' counsel further submitted,
on various grounds, that the respondents had failed to make out a case for
infringement of
copyright in respect of drawings nos 1N1110 and 4J139. In order
to appreciate the first of these grounds it is necessary to review
historically
our national copyright legislation, with particular reference to works produced
or published in foreign countries.
After Union the first legislation dealing with copyright was contained in
Chapter IV of the Patents, Designs, Trade Marks and Copyright
Act, 9 of 1916.
The effect of Chapter IV was to introduce, with certain minor changes and
adaptations, the whole of the British Copyright
Act of 1911 ("the British Act"),
which was set out in the third schedule to Act 9 of 1916. This was done by sec
143 which declared
the British Act to be in force in the Union as
11
from the commencement of Chapter IV of Act 9 of
1916, "subject to the modifications and additions provided by" Chapter IV. The
British
Act was divided into two main parts, Part I dealing with "Imperial
Copyright" and Part II with "International Copyright". Sec 1 (in
Part I)
provided that copyright should subsist "throughout the parts of His Majesty's
dominions" to which the Act extended in every
original literary, dramatic,
musical and artistic work if -
(a) in the case of a published work, the work was 5rst published within such
dominions, and
(b) in the case of an unpublished work, the author was at the date of the
making of the work a British subject or resident within
such
dominions.
Sec 1 further stipulated that
copyright should subsist in no other works except so far as the protection
conferred by the Act was
extended by an Order in Council thereunder relating to
a self-governing dominion (to which the Act did not otherwise extend)
and
12 to a foreign country. This must be read with sec 25(1) of the
British
Act which made it clear that the Act did not apply to a self-governing
dominion (of which the Union of South Africa was one: sec 35(1)
of the British
Act) unless declared by the legislature of the dominion to be in force therein,
with or without -
"such modifications and additions.... as may be enacted by such
legislature."
The introduction of the British Act by
Chapter IV of Act 9 of 1916 was done in pursuance of sec 25 of the British Act:
see sec 143
of Act 9 of 1916.
As regards international copyright, sec 29(1), contained in part II of
the British Act, provided that His Majesty might by Order in
Council direct that
the Act should apply -
(a) to works first published in a foreign country to which the Order
related in like manner as if they were first published within
the parts of His
Majesty's dominions to
13
which the Act extended;
(b) to literary, dramatic, musical and artistic works the authors whereof
were at the time of the making of the work subjects or citizens
of the
aforementioned foreign country in like manner as if the authors were British
subjects;
(c) in respect of residence in such a foreign country in like manner as if
such residence were residence in the parts of His Majesty's
dominions to which
the Act extended.
These provisions in sec
29(1) were made subject to a number of
provisos, including the following:
(i) that before making such an Order in Council His Majesty had to be
satisfied that the foreign country (being one other than a country
with which
there was a convention relating to copyright) had made or had undertaken to make
provisions for the reciprocal protection
of works entitled to copyright under
part 1 of the British Act;
(ii) that the
Order in Council might provide that the term of copyright so accorded within His
Majesty's dominions should not exceed
that conferred by the law of the foreign
country; and
14
(iii) that the Order in Council might provide that the enjoyment of the
rights conferred by the Act should be subject to the accomplishment
of such
conditions and formalities (if any) as might be prescribed by the
Order.
Section 30(2) (in Part II) of the
British Act further provided that the Govenor-in-Council of a self-governing
dominion to which the
Act extended might, with respect to that dominion, make
like orders under this part of the Act. And in sec 144 (g) of Act 9 of 1916
it
was enacted that the powers, which under the British Act the Govemor-in-Council
of a self-governing dominion might by order exercise,
should in the Union be
exercised by proclamation of the Governor-General in the Gazette.
On 9 June 1924 the Governor-General of the Union of South Africa, acting
in terms of this legislation, issued a proclamation (no 118
of 1924) entitled
"Copyright Agreement with United States of America". The preamble to this
proclamation made reference to the powers
granted under sec 144(g) of Act 9 of
1916, to Part II of
15 the British Act and to the powers granted
under sec 30(2) of that Act.
It further recorded the intention of the Government of the
United
States of America to make reciprocal arrangements affording
South
African citizens the benefits of the United States Copyright
Act of
1909; and also that it was desirable to provide protection within
the
Union for the unpublished works of citizens of the United States
of
America and for their works published simultaneously in the
United
States of America and in the Union. The substantive portion of
the
proclamation enacted that the British Act, subject to the
modification
and additions provided by Chapter IV of Act 9 of 1916, should
apply (I quote only the relevant parts) -
"(a) to literary, dramatic, musical and artistic works the authors
whereof were, at the time of the making of the works, citizens
of the United
States of America, in like manner as if the authors had been subjects of the
Union of South Africa;
(b) in respect of residence in the United States of America,
16
in like manner as if such residence had been residence in the Union of South
Africa;
provided that -
(i) the term of copyright within the Union of South Africa
shall
not exceed that conferred by the law of the United
States of
America;
(ii) the enjoyment of the rights conferred by
this
Proclamation shall be subject to the accomplishment
of
the conditions and formalities prescribed by the law
of
the United States of
America; "
Proclamation 118 of 1924 continued to govern
the recognition in South Africa of copyright in what for the sake of brevity I
shall
call "American works" until its repeal by Proclamation 231 of 1973, which
was promulgated on 5 October 1973. In the meanwhile Act
9 of 1916 had been
repealed and replaced by the Copyright Act 63 of 1965, which came into force on
11 September
17 1965. It followed closely the terms of the British
Copyright Act of
1956 which had repealed and replaced the British Act of 1911.
In defining the ambit of copyright protection, Act 63
of
1965 dealt separately with literary, dramatic and musical works
on
the one hand (sec 3) and artistic works on the other hand (sec
4).
As the copyright claimed in the present case is that pertaining
to
artistic works I shall refer only to sec 4. This provided that
copyright should subsist in every original artistic work which
was
unpublished and of which the author was a "qualified person"
when
the work was made. "Qualified person" was defined to mean, in
the
case of an individual, a person who was a South African citizen
or
was domiciled or resident in the Republic; and, in the case of a
body
corporate, a body incorporated under the laws of the Republic.
In
the case of a published artistic work copyright subsisted, or
continued
to subsist, therein if (i) the first publication of the work took place
in
the Republic, or (ii) the author of the work was a qualified person
at
18
the time when the work was first published, or (iii) the author
died
before that time but was a qualified person immediately before
his death.
Sec 32(1) empowered the State President to provide by proclamation that
the Act should apply to, inter alia, artistic works of foreign
origin in similar
manner to that previously provided by sec 29(1) of the British Act, incorporated
by Act 9 of 1916. And in pursuance
of these powers Proclamation No R73 of 1966
was promulgated on 18 March 1966. This extended the relevant provisions of Act
63 of
1965 to, inter alia, artistic works emanating from certain foreign
countries, namely those who were then members of the Berne Copyright
Union. The
United States of America was not included among these countries. But in 1973,
acting in terms of the same section, the
State President did extend the
provisions of Act 63 of 1965 to works emanating from the United States of
America (see Proclamation
no R231 of 1973, promulgated on 5 October
1973).
19
The proclamation did so by applying the provisions of
Proclamation
R73 of 1966 to the United States of America subject to
certain provisos, one of which was to the effect that the term of copyright
within South Africa should not exceed that conferred by the law of the United
States of America. As I have indicated, the proclamation
also repealed
Proclamation 118 of 1924.
The next piece of Parliamentary legislation was the
Copyright Act 98 of
1978
, which repealed and replaced Act 63 of
1965. Act 98
of 1978 deviated more
from British precedents than its predecessors. It came into force on 1 January
1979. Sec 37
of the Act made provision in terms virtually identical to its
predecessor (viz sec 32 of Act 63 of 1965) for the extension of the
application
of the Act to foreign works. One difference was that the extension could be done
by a notice in the Gazette by the responsible
Minister instead of by
presidential proclamation. Shortly before Act 98 of 1978 came into operation
such a notice was published (no
R2565 of 22
20 December 1978)
extending the provisions of the Act to countries of
the Berne Copyright Union (which still did not include the
United
States of America) and repealing Proclamation 73 of 1966. This
was
followed on 13 March 1981 by a further such notice (no R566 of
1981) which applied the provisions of notice R2565 of 1978 to
the
United States of America in the same way as it applied to the
countries referred to in notice R2565, but again subject to the
proviso
that the term of copyright which subsisted in South Africa in a
work
should not exceed the term of copyright enjoyed by that type of
work
under the laws of the United States of America. Notice R566 of
1981 also repealed Proclamation 231 of 1973.
Notice R2565 of 1978 was itself repealed and
replaced
by notice 704 of 1987 which also applied Act 98 of 1978 to
countries
of the Berne Copyright Union, but introduced some minor
amendments and added some new countries to the Union list.
Notice 704 of 1987 was thereafter repealed and replaced by
notice
21 136 of 1989, which again effected a minor amendment. The lists
of
members of the Berne Copyright Union as reflected in notices 704
of
1987 and 136 of 1989 still did not include the United States
of
America.
In February 1990 and again acting in terms
of sec 37(1) of Act 98 of 1978 the Minister issued notice 125 of 1990 which
simply provided,
without qualification or proviso, that the provisions of that
Act, as amended, should apply in the case of certain countries specified
in the
notice. These included the United States of America. And in June 1991 and by
notice 484 of 1991, dated 7 June 1991, the Minister
withdrew notice R566 of
1981.
That was the state of the law when the respondents initiated legal
proceedings and when judgment was given in the Court a quo. As
appears from this
legislative history, the recognition of what I have termed "American works" for
copyright protection under South
African law has been governed by four pieces of
subordinate
22
legislation:
(1) Proclamation 118 of 1924, which contained the provisos (i) that the term
of copyright within South Africa in respect of an American
work should not
exceed that conferred by the law of the United States of America and (ii) that
the enjoyment of such copyright protection
should be "subject to the
accomplishment of the conditions and formalities prescribed by the law of the
United States of America".
(2) Proclamation R231 of 1973, which repealed Proclamation 118 of 1924 and
applied the provisions of Proclamation R73 of 1966 (relating
to members of the
Berne Copyright Union) to the United States of America subject to a proviso
similar in terms to proviso (i) to
Proclamation 118 of 1924, but not subject to
any proviso corresponding to proviso (ii) of the 1924
Proclamation.
23
(3) Notice R566 of 1981, which repealed Proclamation R231
of 1973 and applied the provisions of notice R2565 of 1978 to the United
States of America, but again subject to the proviso relating
to the term of the
copyright appearing in Proclamation 118 of 1924 and Proclamation R231 of
1973.
(4) Notice 125 of 1990, which omitted
to repeal or withdraw
notice R566 of 1981 (subsequently done by
notice 484
of 1991) and applied the provisions of Act 98 of 1978
in
the case of, amongst other countries, the United States
of
America without any qualifications or provisos.
I
must now revert to the facts. According to respondents, drawing no 1N1110,
relating to the intermediate hoist gear for the model
2300 Electric Mining
Shovel, was created in 1967 by a Mr Zimmerman, a product designer in the employ
of Harnischfeger, acting on
instructions given to him by Mr L A
Price,
24 then the chief engineer for electric mining shovels at
Harnischfeger.
Zimmerman created this drawing in the course of his
employment
with Harnischfeger under a contract of service and at the
time he was
a citizen of the United States of America and was
domiciled in
Milwaukee, Wisconsin, USA. At this stage none of these
statements
of fact is in dispute. A further averment in the founding
affidavit
that drawing no 1N1110 is an original artistic work is, however,
challenged on the score of originality. I shall deal later with
this
point.
The position in regard to drawing no 4J139 is not
quite
so straightforward. This relates to a driving tumbler which
engages
the crawlers for the propulsion of the model 2300 Electric
Mining
Shovel. In 1969 Price instructed a Miss C Dennison, who was at
the
time employed by Harnischfeger to draft engineering drawings, to
create a drawing for such a driving tumbler. She created a
drawing,
no 4J84, under Price's supervision and in the course of
her
25 employment under a contract of service with Hamischfeger. She
was
at the time a citizen of the United States of America and was domiciled
in Milwaukee, Wisconsin, USA. During 1977 Mr J W Hansen, then
a draftsman in the
employ of Hamischfeger, was instructed to reproduce and effect certain minor
modifications to drawing no 4J84.
For this purpose he was given a marked,
blueprint copy of the original drawing no 4J84. He redrafted the original
drawing incorporating
the amendments in accordance with his instructions. The
resultant drawing was numbered 4J139. Although respondents originally (and
more
particularly in their notice of motion) claimed copyright in drawing no 4J139,
they now concede that the original artistic work
to which copyright attaches is
drawing no 4J84 and they apply for an amendment to the notice of motion
substituting the latter for
the former. The application for amendment was
opposed by appellants, but their counsel were unable to advance any ground of
prejudice
which could not, if necessary, be cured by
26
an appropriate order as to costs. In my view, the amendment
should
be allowed and an appropriate order to that end will be made.
Again the facts stated above in regard to these two drawings are not
now in
dispute; the only issue being that of originality.
Further, it is now common cause that towards the end of 1990 Appleton had
in his possession copies of drawings nos 1N 1110 and 4J139;
that he reproduced
these drawings by telefaxing drawing no 1N1110 to a Mr R Pierce of the firm
Mitre Engineering, which, according
to respondents, was in the process of
manufacturing an intermediate hoist gear from that drawing; and by telefaxing
drawing no 4J139
to a Mr J Bruce of the firm Eclipse Foundry. At this stage
appellants do not dispute the telefaxing of the drawings and that this
in itself
constitutes evidence of infringement of the copyright (should such be found to
exist) in drawing nos 1N1110 and 4J84 (drawing
no 4J139 itself being a
reproduction of drawing no 4J84). It is, in essence, these infringements upon
which the respondents rely.
27 I come now to appellants' first ground of attack
upon
respondents' case of infringement of copyright in the drawings
in
question. It is submitted on appellants' behalf that having regard
to
the dates upon which these drawings were made (1967 and 1969)
and
the fact that they were made in the United States of America,
the
subsistence in South Africa of copyright in such drawings has to
be
determined in the light of the provisions of Proclamation 118 of
1924; that in terms of this proclamation (more particularly
provisos
(i) and (ii) to section 1) the term of the copyright within South
Africa
cannot exceed that conferred by the law of the United States of
America and the enjoyment of such copyright is subject to
compliance with the formalities prescribed by the law of the
United
States of America; that in order to ascertain whether there
is
compliance with these two provisos it is necessary to establish
the
relevant provisions of the law of the United States of America;
that
the onus was on the respondents to do so; and that, inasmuch as
they
28 had omitted to do so, the infringement claim should
fail.
The foundation of this argument is the proposition that the recognition
in South Africa of Hamischfeger's copyright in the drawings
in question is
governed by Proclamation 118 of 1924, which it will be recalled was repealed by
Proclamation R231 of 1973. The correctness
of this proposition must now be
investigated.
The starting point in this investigation is the current
Copyright Act 98
of 1978
. The normal ambit of the Act in regard to works eligible for copyright
is defined with reference to two basic criteria: (i) the nationality,
domicile
or residence of the author of the work at the time of the making of the work
(sec 3(1) of the Act); and (ii) the country
of origin of the work, in the case
of an artistic work where it was first published (sec 4(1)). Category (ii)
applies where category
(i) does not. In terms of sec 3(1) the nationality,
domicile or residence must, in the case of an individual, be South African;
while
in the case of a juristic person the criterion is
incorporation
29 under the laws of South Africa (such persons being
called "qualified
persons"). And in terms of sec 4(1) the country of origin must
be
South Africa.
As I have indicated, sec 37(1) empowers the Minister
by
notice in the Gazette to decree that the provisions of the Act shall
in
the case of any specified country apply (a) in relation to, inter
alia,
artistic works first published in that country as they apply in
relation
to artistic works first published in South Africa; (b) in relation
to
persons who at a material time are citizens or subjects of that
country
as it applies in relation to persons who at such time are South
African
citizens; (c) in relation to persons who at a material time are
domiciled or resident in that country as it applies in relation
to
persons who at such time are domiciled or resident in South
Africa;
and (d) in relation to bodies incorporated under the laws of
that
country as it applies in relation to bodies incorporated under the
laws
of South Africa. In other words, the criteria defining the ambit
of
30 copyright recognition, such as South African nationality,
domicile and
residence in the case of the author and a South African origin for
the
work itself, may by a notice under sec 37(1) be extended to the
case
where corresponding criteria relate to a foreign country. The
foreign
country is treated in effect as being a territorial extension of
South
Africa. Sec 37(2) states that such a notice may provide, inter
alia,
that any provisions referred to therein shall apply subject to
such
"exceptions or modifications" as may be specified therein.
Notices R2565 of 1978, 704 of 1978 and 136 of 1989 followed the formula
set forth in sec 37(1) in applying the Act to the Berne Convention
Countries.
Notice R566 of 1981 applied the provisions of notice R2565 to the United States
of America and thereby incorporated this
formula. But notice 125 of 1990 simply
decreed that the provisions of Act 98 of 1978 should apply in the case of, among
other countries,
the United States of America.
The argument advanced by appellant's counsel
hinged
31 mainly on a particular interpretation of sec 43(a) of Act 98 of
1978,
as amended by sec 14(a) of Act 52 of 1984, but prior to
its
amendment by sec 33(a) of Act 125 of 1992. The relevant
portion
of sec 43(a) then provided as follows:
"This Act shall apply in relation to works made before the commencement of
this Act as it applies in relation to works made thereafter:
Provided that
-
(a) . . . nothing in this Act contained
shall -
(i) affect the ownership, duration or validity of any copyright which
subsists under the Copyright Act, 1965 . . . . ; or
(ii) be construed as creating any copyright which did not subsist prior
to 11 September 1965;....."
The opening words of sec 43(a) make it abundantly clear that
its
32 provisions apply to works made both before and after
the
commencement of the Act (1 January 1979). It follows that notice
125 of 1990 makes the Act applicable to American works made
both
before and after 1 January 1979. Prima facie, at least, the
Act
would in all respects apply to drawings nos 1N1110 and
4J84.
Appellants argue, however, that the recognition of these drawings
is
governed by Proclamation 118 of 1924 - on the ground that that
was
the legislation recognising American works current when these
drawings were made - and that notice 125 of 1990 does not apply.
Jurisprudentially I find this a curious contention. It would seem
to
rescue from the grave and give present legal effect to a piece
of
legislation which was totally and unconditionally repealed in
1973.
It is true that in sec 46 of Act 98 of 1978 there is a provision
which
would preserve and give extended legal life to a proclamation
having
effect under the Copyright Act of 1965 (and amendments thereof)
after the repeal of the 1965 Act. This section, however, states
that
33 such proclamation "shall continue in force . . . and may be
repealed,
amended or altered" as if made under the 1978 Act. That means
that
the then existing proclamations derived their force from the
1978 Act
and are to be deemed to be proclamations under it. And the
1965
Act (in sec 48(2) ) contained a similar provision in regard to
a
proclamation made in terms of the 1916 Act. Sections 46 of the
1978 Act and 48(2) of the 1965 Act serve to emphasize the need
for
preservatory measures in such circumstances and contemplate the
repeal of such a preserved proclamation. I cannot think that it
was
intended that a proclamation so repealed should thereafter have
any
legal effect.
It is a part of, or a logical corollary to,
appellants'
argument that the recognition of American works made between 5
October 1973 (the date of promulgation of Proclamation no R231
of
1973) and 13 March 1981 (the date of promulgation of notice no
R566 of 1981) would today be governed by the repealed
34
Proclamation no R231 of 1973; and that the recognition of such
works made between 13 March 1981 and 23 February 1990
(when
notice no 125 of 1990 was promulgated), or perhaps 7 June
1991
(when notice no R566 of 1981 was formally withdrawn) would
today
be governed by notice no R566 of 1981. It seems very unlikely
that
such a patchwork of recognition was intended.
Moreover, as Dr Dean, it would seem correctly,
points
out (see Dean,
Handbook of South African Copyright Law
3-41,
para
4.14 and also his doctoral thesis entitled
The Application of
the
Copyright Act. 1978
. to Works Made prior to 1979
. pp 426-7)
the
interpretation contended for by the appellants would result in
South
Africa breaching its obligations under art 4(1) of the Berne
Convention which requires South Africa, as a signatory, to protect
the
works of authors of foreign countries in the same way as we
protect
the works of South African authors. (The reference to art 4(1) is
to
the Brussels text of 1948. In the case of the Paris text of 1971
the
35 corresponding provision is to be found in art 5(1).) Dr Dean
cites
the example of an Egyptian literary work made in 1930. Copyright
protection in South Africa to Egyptian works was first extended
by
notice no 2565 of 1978. A literary work made by a South African
author in 1930 would, so Dr Dean argues, enjoy copyright in
South
Africa; and likewise South Africa was required, as from the
coming
into effect of notice no 2565 of 1978, to protect a literary work by
an
Egyptian author in 1930. Non-recognition on the ground that an
Egyptian work was not recognized in 1930 when it was made would
thus run counter to our obligations under the Convention. (See
also
the comments by Dr Dean on the judgment a quo in the present
case
at 3-42/3, paras 4.16 and 17.)
Similar anomalies could arise with reference to
countries
that have joined the Berne Convention since the promulgation of
the
1978 Act and which were not covered by a proclamation similar to
the 1924 Proclamation. One such country is Peru. The first
36
recognition of Peru for copyright purposes is to be found in
Notice
125 of 1990. Although the notice took effect on date of
publication, it extends, by virtue of the substantive part of sec 43, copyright
protection to works that not only predate the notice, but also to works that
predate the 1978 Act. That means that the subsistence
of copyright of say a work
made by a qualified Peruvian in 1971, is to be adjudged with reference to the
1978 Act, whereas, on the
argument of the appellants, works of Chilean origin
are assessed in the light of the 1965 Act, simply because Chile had joined the
Convention before 1979.
I return to the provisos. In interpreting them it must be reiterated that
they qualify a general provision making the Act applicable
to works made both
before and after the commencement of the Act and appear to be aimed at works
which came into existence prior to
the commencement of the Act. Moreover, sec 43
is general in its application: it is not directed specifically at local
or
37 at foreign works. The general provision is also in accordance
with
the general scheme of the 1965 Act. In terms of sec 48(1) and
(2),
the 1916 Act was repealed subject to the transitional
provisions
contained in the Sixth Schedule. Para 1 of the Schedule
makes it
quite clear that subsistence of copyright in old works had
to be
determined with reference to the 1965 Act. But, insofar as the
1965
Act introduced additional requirements, those were declared not
to
apply to old works. As far as duration was concerned, para
2
preserved the 1916 term only in respect of old photographs since
that
was shorter than the 1965 term. The same underlying idea is to
be
found in the balance of the provisions of the Schedule.
The effect of proviso (i) to sec 43(a) is no different.
All
it states is that nothing in the 1978 Act can affect the
ownership,
duration or validity of copyright which subsists under the 1965
Act.
For it to apply, there must have been, at the date of
commencement
of the 1978 Act subsisting copyright under the 1965 Act.
If
38 copyright did not subsist under the 1965 Act, proviso (i) has
no
application at all. On the other hand, and assuming that
copyright
did subsist under the 1965 Act, the question arises
whether something
in the 1978 Act affects the duration or validity
of that copyright. (It
was not suggested that ownership was
affected.) The argument, as
I understand it, was that since the duration and validity provisions
of
the 1924 and 1973 Proclamations on the one hand and the 1990
Notice on the other differed, duration and validity were
affected.
But, that was not as a result of anything contained in the Act
but
rather a consequence of the repeal of the earlier Proclamations and
a
differently worded ministerial notice.
The meaning of sec 43(a) and its provisos have
been
considered in the following reported cases:
Scaw Metals Ltd v
Apex
Foundry (Pty) Ltd and Another
1982 (2) SA 377
(D);
Tolima(Pty)
Ltd v Cusacius Motor Accessories (Pty) Ltd
1983 (3) SA 504
(W);
Saunders Valve C o Ltd v Klep Valves (Pty) Ltd
1985 (1) SA
646
39 (T);
Schultz v Butt
1986 (3) SA 667
(A); and
Klep
Valves (Pty)
Ltd v Saunders Valve Co Ltd
1987 (2) SA 1
(A).
In the
Tolima
case Goldstone J stated, with
reference to
drawings made in 1977 and 1978 (at 506 in fin - 507 A):
"The drawings of the plaintiff which form the basis of this action were made
prior to 1 January 1979. The 1965 Act would thus apply
to questions relating to
the 'ownership, duration or validity' in the copyright which it is common cause,
subsists in the drawings.
Those questions, however, are not relevant to the
issue in this case. The present dispute relates only to the question of
infringement
and that must, therefore be determined by the provisions of the
1978 Act."
No reasons for the statement,
which was clearly obiter, were given. However, a similar statement appears in
Saunders Valve Co Ltd v Klep Valves (Pty) Ltd
(supra) where, applying sec
43(a), it was held that the subsistence of copyright in drawings made in the
United Kingdom between the
years 1938 and 1958 had to be determined
in
40 accordance with Act 9 of 1916, whereas the remedies available
to the
owner of the copyright was governed by the 1978 Act. On
appeal
(Klep Valves (Pty) Ltd v Saunders Valve Co Ltd,
supra)
E M
Grosskopf JA, having quoted sec 43(a), said (at 18 I - 19
A):
"11 September was the date of commencement of the 1965 Act. The effect of s
43 of the 1978 Act accordingly is to render earlier legislation
applicable to
the question whether copyright subsists in works made prior to the commencement
of the 1978 Act, whereas the 1978 Act
governs the remedies for infringement of
copyright and the procedures thereto. It was common cause in argument before us
(otherwise
than in the written heads of argument) that the 1916 Act governs the
subsistence of copyright in the respondent's engineering drawings,
which, as I
have indicated, were made before the Act was in force. I assume, without
deciding, that the parties' attitude in this
regard is correct, particularly
since I do not consider that the outcome of the case would be any different if,
as had been urged
by the appellant in its heads of argument, the transitional
provisions of s 48 of the 1965 Act were to be
applied."
41 This dictum in the
Klep
Valves
case is somewhat widely worded, but
it must be read in its context. The issue was whether the 1916
Act
gave protection to engineering drawings as artistic works and it
was
in that respect necessary in the light of proviso (ii) to consider
the
subsistence of copyright under the repealed Act. (For the sake
of
clarity I should mention that this proviso is of no application to
the
present case.) The true scope of sec 43 of the 1978 Act was also
not argued and the dictum was based on an acceptance by counsel
on
both sides that the subsistence of copyright had to be determined
with
reference to one or other of the repealed Acts. It did not form
part
of the ratio of the court, and, on reconsideration. I have come to
the
conclusion that it is too wide insofar as it stated that the
subsistence
of copyright is determined with reference to the legislation in
force
when the work was made. The same applies to the unreported
decision of this Court in
Topka v Ehrenberg Engineering (Pty) Ltd
(8
March 1983) referred to by the Court a quo (at 487 I-J of
the
42 reported judgment) and its finding at 487 F to 488
G.
To sum up, the general, or substantive, provision in
the
opening words of sec 43 means that the 1978 Act applies to
all
works, whenever made. As far as proviso (i) is concerned,
the
position is as follows: If copyright subsisted under the 1965 Act,
it
must mean that it was, at least at the date of the promulgation of
the
1978 Act, valid copyright. In this situation the proviso can
only
mean that the new Act preserves rights. The validity or
invalidity
of copyright under the 1965 Act is thus not an enquiry which one
need pursue. As regards ownership of copyright, there was
initially
a material difference between the two Acts. (See in this regard
5
LAWSA (first reissue) para 3, p 5.) It was accordingly necessary
to
preserve rights of ownership. But the question of ownership does
not arise in the present case and in any event as a result of an
amendment in 1980 this difference no longer exists (see sec 9 of
Act
56 of 1980). There are some differences between the two Acts
43
relating to term or duration of copyright, but these do not apply
to
artistic works and consequently in the present case the question
of the application of the proviso does not arise.
It follows that the subsistence of copyright in the works in question in
the present case must be determined by reference to the 1978
Act and Notice 125
of 1990. Applying this notice, it was not incumbent upon Hamischfeger to prove
any aspect of the law of the United
States of America. Appellants' first attack
upon the case for infringement must accordingly fail.
The second attack was based upon the contention that the drawings in
question were not shown to be original works. In my view, there
is no substance
in this contention. As was held in the
Klep Valves
case, supra, at 22 H -
23 B, originality in this context does not require that the work should embody a
new or inventive thought
or should express a thought in a new or inventive form.
Originality refers to original skill or labour in execution: it
demands
44 that the work should emanate from the author himself and
not be
copied. This does not mean that a work will be regarded as
original
only where it is made without reference to existing
subject-matter.
An author may make use of existing material and yet
achieve
originality in respect of the work which he produces. In
that event
the produced work must be more than a slavish copy: it must in
some measure be due to the application of the author's own skill
or
labour. Precisely how much skill or labour he need contribute
will
depend upon the facts of each particular case.
Appellants' contention as to lack of originality was based mainly on the
fact that in the legend appearing on each of the drawings
in question there is a
small block in which are printed the words "Similar to" and in which another
drawing number has been . inserted:
in the case of drawing no 4J84 the insertion
is "4J71", and in the case of drawing no 1N1110 it is "1J87".
The question of originality is dealt with by respondents
45
in the affidavits of Price and Zimmerman. As regards 4J84,
Price
stated that Miss Dennison created this drawing under his
supervision and instructions and in accordance with parameters and other
relevant information supplied by him. In his replying affidavit Price dealt with
the "similar to" point. He attached drawing no 4J71
and advanced reasons for
averring that drawing number 4J84 was not a copy of drawing no 4J71. It is not
necessary to go into details
but I am satisfied that the denial of copying is
well-founded. As regards 1N1110, similar evidence was given on affidavit by
Price
and the author of the drawing, Zimmerman. Again drawing no 1J87 was
produced and convincing grounds given for contending that there
are material
differences between the two drawings and that 1N1110 is not a copy of 1J87.
Nothing in Appleton's supplementary answering
affidavit persuades me to the
contrary.
The final point argued on appeal by appellants related to an undertaking
contained in Appleton's answering affidavit and given
46 on behalf
of both appellants. It is to the effect that appellants will
not use any of respondents' drawings or the information
contained
therein to procure the manufacture of or to make parts
for
Harnischfeger machines. Appleton states however:
"This does not mean that the second respondent will discontinue procuring
the manufacture of and selling parts for Harnischfeger machines.
It will
continue procuring the lawful manufacture of parts on behalf of customers such
as ISCOR (who supply their own drawings which,
as will appear below, are drawn
by employees of ISCOR from samples of Harnischfeger parts) and by copying the
applicants' parts themselves
without recourse to the applicants' drawings and
the information contained therein."
As I
have held, and as is conceded in this Court, Harnischfeger established that
appellants, despite their denials, infringed its
copyright in the two drawings
in question. The undertaking given in Appleton's answering affidavit is not an
unequivocal one. It
is coupled with the statement that Bedford
will
47 continue to procure the manufacture of and sell parts
for
Harnischfeger machines, using drawings emanating from
other
sources. Attached to Grisdale's founding affidavit is a
transcript of
certain telephone conversations between Appleton and
certain
customers of Bedford. These were made by a Mr O J Fourie,
a
private detective engaged by respondents to investigate possible
copyright infringement and unlawful competition on the part of
the
appellants. The correctness of the transcript and the fact that
these
conversations took place is not denied by the appellants.
Passages
in certain of these recorded conversations suggest, prima facie
at any rate, that drawings were to be made for Bedford
surreptitously
and in a manner to suggest that they were Bedford's original
drawings. It is also possible to infer that the drawings to be used
to
make these faked drawings related to Harnischfeger machinery and
originally emanated from one or other of the respondents.
Another
inference to be drawn, prima facie, from the transcripts is that
48
Appelton felt vengeful towards the respondents and aimed "to
get
them back".
In all the circumstances, I consider that the respondents were entitled
not to be satisfied with the undertaking and to press for
an order of court
imposing an interdict in the terms set forth in para 1 of the order of the Court
a quo. This ground of appeal must
accordingly be rejected.
In their heads of argument respondents' counsel advanced contentions as
to why the Court a quo should have granted interim relief
in respect of the
cause of action based on unlawful competition. Before us counsel conceded that
in the absence of a cross-appeal
(and there was none) it was not open to the
respondents to make these contentions. This, therefore, fell away.
I come now to the question of costs. Flemming DJP ordered the respondents
(present appellants) to pay 70% of the costs of the applicants
(presents
respondents). As I have held, para 2 of
49
the order of the Court a quo cannot stand. Moreover,
the
respondents failed altogether on the issue of unlawful
competition which figured largely in the papers. Hamischfeger, the owner of
the
copyright, nevertheless achieved a substantial measure of success in obtaining
relief in terms of para 1 of the order of Court.
Hamisa, on the other hand,
failed to obtain any relief, though it may benefit indirectly from the relief
granted under para 1. Both
respondents made common cause and were represented by
the same attorneys and counsel. It would be very difficult to separate the
costs
incurred by them as individual litigants. In the light of all this, I consider
that justice would be served by an order that
the present appellants pay 70% of
the costs of the respondents in the Court below. In other words, the order of
the Court a quo should
stand.
As regards the position on appeal, the appellants succeeded in
eliminating para 2 of the order of the Court a quo. In argument this
was not
contested by the respondents and the main
50
battle was fought over para 1 of the order. This battle the
appellants
lost. This did not result in any direct success for
Hamisa, but again a separation of costs is very difficult. Taking all these
factors
into account, I am of the view that appellants ought to pay two-thirds
of respondents' costs of appeal.
The following order is made:
(1) The application by respondents for the amendment of the notice of motion
by the substitution of the number "4J84" for the number
"4J139" is
granted.
(2) The appeal against paragraph 2 of the order of the Court a quo is
allowed and the order is amended by the deletion of this paragraph.
In addition,
para 1 of the order is amended by the substitution of the number "4J84" for the
number "4J139". Subject thereto and
para 3 being renumbered 2, the order of the
Court a quo stands.
51 (3) The appellants are ordered to
pay two-thirds of the costs of the
respondents on appeal to this Court.
M M CORBETT.
NESTADT JA) HARMS JA) CONCUR
NICHOLAS AJA)
E N T
VAN HEERDEN
JA :
2 I agree with the order set out in the judgment of the
Chief Justice,
and in the main also with his reasoning. Save as indicated below, I
prefer,
however, not to express a view on the meaning of
s 43(a)(i)
of the
Copyright
Act 98 of 1978
.
In terms of the proviso contained in that paragraph nothing in the
Act
contained shall affect the ownership, duration or
validity of copyright subsisting
under the 1965
Copyright Act. At
the commencement of the 1978 Act
copyright in American works could
have subsisted by virtue of the provisions
of the 1965 Act as
applied by Proclamation R231 of 1973. However, when
that
proclamation was repealed and replaced by notice R566 of 1981
there was no
longer any question of copyright in such works
continuing to subsist under the
1965 Act. Hence, whatever its true ambit may be, the proviso could, in
relation
to American works, no longer qualify the general provision
of s 43(1). (Since,
subject to a number of immaterial exceptions,
the 1965 Act also pertained to
3 works made before and after its
commencement, the 1924 Proclamation too
became of no effect after its repeal and replacement by the 1973
Proclamation).
I am not unmindful of the fact that in terms of s
12(2)(c) of the Interpretation Act 33 of 1957 the repeal of a law - which
includes
subordinate legislation - does not affect inter alia any right acquired
under the repealed law. This is so, however, only if a contrary
intention does
not appear, and it seems clear to me that the 1981 notice was intended to
replace the 1973 Proclamation in all respects.
Copyright subsisting under that
proclamation was thus not notionally kept alive. In other words, the question
whether copyright subsisted
in American works had thenceforth to be determined
solely with reference to the terms of the 1981 notice and the provisions of the
1978 Act applied by it. (The same obtained after the 1981 notice had been
replaced and repealed by notices 125 of 1990 and 484 of
1991.)
In view of what has been said above, it is unnecessary to determine
the
4 meaning of the word "affect" in s 12(2)(c) of the
Interpretation Act.
H TO VAN HEERDEN
JA