Software AG (Australia) Pty Ltd v Racing & Wagering Western Australia [2009] FCAFC 36

Software AG (Australia) Pty Ltd v Racing & Wagering Western Australia [2009] FCAFC 36

The right to make a copy of software for 'emergency restart purposes' under the licence agreement is to be interpreted commercially as encompassing both the making and reasonable testing of the disaster recovery copy, including installation at the disaster site, to ensure it will function in a true emergency. Such testing is not prohibited by other restrictive clauses of the agreement. However, the Copyright Act 1968 (Cth) s 47F does not authorise the testing of a disaster recovery copy as 'testing the security of the original copy', as this section is directed at security testing against unauthorised access or flaws, not disaster recovery testing. The award of indemnity costs on the...

Jurisdiction
Australia
Judgment Date
20 March 2009
Procedural Posture
Appeal / Judgment on Appeal From a Single Judge of the Federal Court of Australia
Outcome
Appeal dismissed except for a variation of the third declaration.
Legal Topics
['software Licence Agreement Interpretation' 'copyright Exceptions for Computer Programs' 'emergency Restart/disaster Recovery of Software Systems' 'indemnity Costs and Calderbank Offers']
['contract' 'copyright' 'costs'] ['software Licence Agreement Interpretation' 'copyright Exceptions for Computer Programs' 'emergency Restart/disaster Recovery of Software Systems' 'indemnity Costs and Calderbank Offers']

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Procedural Posture

Appeal / Judgment on Appeal From a Single Judge of the Federal Court of Australia

Legal Issues

  1. 1 ['Whether clause 12.3 of a software licence permits copying, installation and testing of the system at a disaster recovery site for emergency restart purposes' "Whether testing the disaster recovery copy at a disaster recovery site is authorised by the Copyright Act 1968 (Cth) s 47F as 'testing the security of the original copy'" 'Whether costs should be awarded on an indemnity basis after rejection of a settlement offer and pursuit of an exaggerated cross-claim']

Ratio Decidendi

The right to make a copy of software for 'emergency restart purposes' under the licence agreement is to be interpreted commercially as encompassing both the making and reasonable testing of the disaster recovery copy, including installation at the disaster site, to ensure it will function in a true emergency. Such testing is not prohibited by other restrictive clauses of the agreement. However, the Copyright Act 1968 (Cth) s 47F does not authorise the testing of a disaster recovery copy as 'testing the security of the original copy', as this section is directed at security testing against unauthorised access or flaws, not disaster recovery testing. The award of indemnity costs on the...

Court Disposition

Appeal dismissed except for a variation of the third declaration.

Orders

  • ["The third declaration made by the primary judge be varied by deleting the words 'and in any event pursuant to s 47F of the Copyright Act 1968 (Cth)'." 'Otherwise, the appeal be dismissed.' "The appellant (SAG) pay the respondent's (RWWA) costs of the appeal."]