Medallion Homes Pty Ltd v Lares Homes Pty Ltd: When interlocutory injunctions are not appropriate remedy for copyright infringement

February 22, 2016

On 22 January the Federal Court of Australia handed down an interesting decision in the case of Medallion Homes Pty Ltd v Lares Homes Pty Ltd.

Medallion was seeking an urgent injunction to stop a competitor from allegedly infringing copyright. Medallion Homes wanted to restrain Lares Homes from producing floor plans and constructing homes that they alleged were copied from their plans. Medallion Homes alleged that the floor plans prepared by Lares Homes were reproductions of their designs. The designs in question were created by one of the Directors of Lares Homes in his capacity as a contractor and subject to a Deed to provide those services exclusively to Medallion Homes.

The Directors of Lares Homes, a company formed in 2015, were previously employed as employees and subcontractors of Medallion Homes for about 18  and they set up in opposition to their former employer.

The Court found that, although Medallion Homes may have been able to prove breach of copyright, the balance of convenience did not favour them. The balance of convenience is a test used in urgent applications for interlocutory injunctions to assess which party would be most inconvenienced if the application were granted.

The Court determined that whilst refusal of the injunction might cause Medallion Homes to lose business, they would be able to prove their damages and would be less inconvenienced than Lare Homes. An injunction would force Lares Homes to create new house plans and construct a new display home based on those plans, which would cause a great loss for a company attempting to market itself.

The Court refused to grant the interlocutory injunction as it decided that Lare Homes would be more inconvenienced than Medallion. It ordered the parties to keep sales records until the matter was finalised

This does not mean that Lares Homes would evidently be successful. It could be found to be liable for damages although it was successful in being able to use the plans and continue for the time being with its operations.

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