Authorising Infringement: The Campaigntrack Full Federal Court Decision on Software Copyright

Can you be liable for copyright infringement committed by a developer you hired — even if you told them not to copy anyone's code? The Full Federal Court's 2022 decision in Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2022] FCAFC 112 answers that question with a firm warning: giving a general instruction not to infringe is not enough. If you have the power to prevent copying and fail to take reasonable steps to stop it, you may be found to have authorised the infringement.

Background

Campaigntrack Pty Ltd owned copyright in "DreamDesk," a cloud-based real estate marketing platform that allowed real estate agents to create and manage marketing materials — brochures, flyers, digital assets and campaigns. DreamDesk was a sophisticated software system with significant commercial value in the competitive real estate technology market.

Real Estate Tool Box Pty Ltd, together with associated parties including Biggin & Scott Corporate, Dream Desk Pty Ltd, Mr Stoner, Ms Bartels and Mr Meissner, engaged a software developer — Mr Semmens — to build a competing system called "Toolbox." The central allegation was that Mr Semmens had copied DreamDesk's source code, database structures and other copyright works when building Toolbox.

At first instance, the primary judge found that Mr Semmens had directly infringed Campaigntrack's copyright. However, the primary judge largely dismissed the claims against the other respondents on the basis that they had not authorised Mr Semmens's infringing acts. On appeal, the Full Federal Court (Greenwood, Cheeseman and McElwaine JJ) reversed that conclusion — at least in relation to the Biggin & Scott parties.

The Law of Authorisation: Section 36(1A)

Australian copyright law does not only penalise those who directly copy a work. Under section 36(1A) of the Copyright Act 1968 (Cth), a person who authorises another to infringe copyright is also liable. The term "authorise" means to sanction, approve or countenance the infringing act.

The Act sets out three specific factors that a court must consider when determining whether authorisation has occurred:

1. Power to prevent: Did the alleged authoriser have the power to prevent the infringement from occurring?

2. Nature of the relationship: What was the nature of the relationship between the alleged authoriser and the direct infringer?

3. Reasonable steps: Did the alleged authoriser take any reasonable steps to prevent or avoid the infringement?

These factors are not a mechanical checklist — they must be weighed together in the circumstances of each case.

The Full Court's Findings on Authorisation

Power to Prevent

The Full Court found that the Biggin & Scott parties had real and practical power to prevent Mr Semmens from copying DreamDesk. They had engaged him, they directed the scope and purpose of the project, and they were in a position to terminate the engagement or demand compliance with lawful development practices.

Nature of the Relationship

The relationship between the Biggin & Scott parties and Mr Semmens was one of principal and developer — not an arm's length transaction. They were actively engaged in the development project, receiving updates and providing directions. This relationship gave them both the knowledge and the leverage to prevent infringement.

Reasonable Steps: Where the Primary Judge Erred

The critical point on which the Full Court departed from the primary judge was the assessment of whether reasonable steps had been taken. Mr Stoner had given Mr Semmens a general instruction to build a system that "does not breach other companies' copyright." The primary judge treated this as a meaningful precaution.

The Full Court disagreed. A general instruction not to infringe, given at the outset, is insufficient when circumstances subsequently arise that put the principal on notice that infringement may be occurring. Once it became apparent — or ought to have become apparent — that the Toolbox system was closely replicating DreamDesk's functionality and architecture, the Biggin & Scott parties were obliged to take active, specific steps to investigate and prevent copying. They did not do so, and that failure was fatal to their defence.

The Appeal Chain: Context Matters

It is important to note that this Full Court decision was itself subject to further appeal. In December 2023, the High Court of Australia in Real Estate Tool Box Pty Ltd v Campaigntrack Pty Ltd [2023] HCA 38 partially restored the primary judge's position, setting aside the Full Court's orders. The High Court clarified the authorisation test — finding that something more than general knowledge of risk is required to establish authorisation. However, the Full Court's 2022 decision remains important for its detailed treatment of the three statutory factors and the inadequacy of a general "don't copy" instruction in the face of specific warning signs.

Strategic Takeaways for Software Businesses

• A general "don't copy" instruction is not enough. If your developer is building software that competes with an existing product, you must take active, documented steps throughout the development process to ensure copyright compliance — not just at the beginning.

• Include IP warranties in developer contracts. Your agreement with any developer should include warranties that their work does not infringe third-party copyright, and indemnities if it does. This both deters copying and gives you contractual recourse.

• Conduct code reviews. If you are commissioning software that overlaps with a competitor's product, arrange for independent code review to verify originality. This is a concrete "reasonable step" that courts will recognise.

• Know the warning signs. If a competitor's features are appearing in your build at suspicious speed, investigate. Deliberate ignorance will not protect you if you had the power and the reason to act.

• Understand authorisation liability. Even business executives and directors who are not personally writing code can be found liable for infringement they authorise through their commercial relationships and decisions.

Conclusion

The Campaigntrack Full Court decision — read alongside the High Court's 2023 resolution — is essential reading for any business that commissions software development. The law of authorisation is not a technicality; it is a genuine and powerful tool that copyright owners can use to pursue not just developers, but the businesses that engage them. If your developer copied a competitor's code to build your product, you may share the liability.

Stellar IP Law advises on all aspects of software copyright — from protecting your own code to responding to infringement allegations. Contact our team to discuss your situation.