02 June 2016

Copyright: Oraka Technologies v. Geostel

After eleven years litigation, Waikato inventors of the world’s first asparagus grading machine got damages of $4.1 million against a Hawkes Bay company which breached copyright constructing a similar grading machine for rivals who ripped off the original inventor.
Tirau-based Schwarz family struggled in the 1980s with the world-wide problem of grading their asparagus crop.  Harvested asparagus is difficult to handle.  It does not roll like fruit.  It does not behave uniformly when carried in water.  It cannot be dumped out of bins or shovelled.  Michael Schwarz developed his Oraka Grader which was able to automatically grade delicate asparagus through use of a tip cup assembly.
It was so successful that others ripped off the idea.  Paul Daynes, who had provided software services to the Schwarz, together with Gordon Robertson, who had been their sales agent in Greece, stole the idea asking Napier Tool and Die Ltd to make a duplicate machine.  The Court of Appeal ruled this was in breach of copyright.  The High Court assessed damages.
When it came to recovering damages, Daynes and Robertson were penniless, the High Court was told.  This left Napier Tool and Die as the last man standing.  Napier Tool said the Court of Appeal had awarded judgment in favour of the copyright holder: a Schwarz family company called Oraka Technologies Ltd.  But Oraka did not suffer any losses directly.  Business operations damaged by the breach of copyright were run through a different company.  At best, Oraka could get nominal damages only, it said. 
The Copyright Act allows copyright to be enforced only by the copyright holder or anyone holding an exclusive written licence from the holder.  The Schwarz’ production company neither held copyright nor a licence to use the copyrighted machinery.
Justice Hinton ruled Oraka Technologies by its conduct informally granted an exclusive copyright licence to the separate production company.  A rival operation using machinery in breach of copyright prevented Oraka Technologies indirectly, and the Schwarz family production company directly, from earning income.
The court ordered payment of $4.1 million damages to Oraka Technologies, assessed on lost business income together with lost salary suffered by Mr Schwarz.
Oraka Technologies v. Geostel – High Court (2.06.15)

16.091