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The Full Federal Court recently handed down its ruling in a matter involving an appeal of an earlier decision of the Federal Court involving two electronic gaming machine companies Aristocrat Leisure Industries Pty Ltd and Pacific Gaming Pty Ltd.

The original decision found that Aristocrat had copyright in four written specifications prepared by it for games to be played on its electronic gaming machines and that Pacific had infringed Aristocrat’s copyright by reproducing a substantial part of Aristocrat’s written specifications in it own written specifications and in data in electronic form.

The games were used to replace poker machines that had mechanical spinning wheels operated by pulling a lever (hence the name “one armed bandits”) by simulating the movement of the wheels with moving video images.

The specifications consisted of basic playing information, the rules of the game, the profits returned for each setting, any special features of the game, a list of the reels’ symbols and prize combinations and amounts. The specifications can be found at http://www.austlii.edu.au/cgi-bin/disp.pl/au/cases/cth/federal%5fct/2001/1636.html

The documents that were of primary importance to the case were the written specifications lodged by each party with the Liquor Administration Board of New South Wales. The primary judge accepted that to establish infringement, it was necessary to consider the objective similarities between the two sets of specifications and assess the nature and extent of these similarities. The question was whether any substantial part of Aristocrat’s specifications had been copied, having regard to the qualitative as well as the quantitative aspects.

At first instance, the Court found that Pacific had infringed Aristocrat’s copyright by: (a) making a reproduction of a substantial part of Aristocrat’s specification in Pacific’s written specifications for games and (b) in the EPROMs (erasable programmable read only memory) containing instructions for the operation of each of the Pacific games.

Pacific was therefore restrained from: reproducing any of Aristocrat’s specifications or a substantial part of them, in a material form, including reproducing the written specifications for the Aristocrat games or manufacturing EPROMs for the Pacific games; and selling or distributing by way of trade any of the specifications, EPROMs or artwork for the Pacific games. Pacific was also ordered to destroy all infringing game specifications, EPROMs or artwork for the Pacific games.

On appeal the Court confirmed the first instance decision in so far as it found that Pacific could not explain the objective similarities between the four sets of written specifications and that the evidence presented by Pacific in relation to the mathematical calculations performed was not inconsistent with Pacific having deliberately copied a substantial part of each of the Aristocrat specifications.

The Full Court also approved of the reasoning of the first instance decision that the Pacific specifications were an infringement of the Aristocrat specifications. The Full Court did not accept that the doctrine that copyright protects expression and not ideas should be strictly applied. The Court instead preferred to say that it can readily be seen that Pacific used essential parts of Aristocrat's specifications (in particular various tables in the specifications) and that the differences in expression were changes in form only (eg different pictures on the reels were used). These differences, therefore, did not constitute a barrier to the primary Judge making a finding that Pacific had taken a substantial part of Aristocrat's literary work.

On the question of the EPROMs, Pacific argued that the High Court had previously decided in the matter Computer Edge v Apple Computer Inc. that, although source code could be a literary work, for the purposes of the Copyright Act, object code was not a reproduction of the source code even if it was derived from the source code and so, the object code did not infringe copyright in the source code. Members may recall that for many years Apple clones were available for sale in Australia until amendments were made to the Copyright Act in 1986.

Pacific argued that because Aristocrat’s written specifications were one step further removed from the electronic form of information than the source code, the EPROMs did not infringe the copyright in Aristocrat’s written specifications.

The Court found that while the information in the EPROMs, together with the base computer program had the capacity to provide the commands under which a machine would play the game in conformity with the specifications relating to it, this does not of itself involve creating a reproduction of the written specifications relating to it in a material form. There was no ineluctable inference that the information on the EPROMs reproduced or was capable of reproducing the written specifications from which they were derived. The Court acknowledged that this may have been different if evidence was adduced at trial to show how the EPROMs reproduced the specification but this was not the case. As a result, Aristocrat was granted no relief in relation to the EPROMs.

From an industry perspective it is clear that the Federal Court is now prepared to revisit the concept that copyright may, in some circumstances, protect ideas or function - a path which has been attempted before and rejected each time by the highest courts in Australia, the UK and USA.


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