Sealegs’ Amphibious Crafts Constitute Copyright Material and Held to be Infringed
In Sealegs International Limited v Zhang  NZHC 1724 the Judge upheld Sealegs’ claim of copyright infringement against several defendants in relation to its retractable wheel system for amphibious crafts...
The Judge was satisfied that the prototype boats for Sealegs’ retractable amphibious system are original artistic works that constitute a novel and unique arrangement of features for which copyright protection can exist. The Judge therefore rejected the defendant’s submission that the later produced CAD model was the original work. Further, the original expression of the idea of a retractable amphibious system was held not to exist until the respective prototypes were created, with the prior sketches and drawings merely being design work undertaken in the course of a design pathway having the objective of the creation of a final prototype. Where such preliminary design work was undertaken by third parties, the Judge was satisfied that this was done on a commissioning basis meaning that Sealegs owned the copyright therein.
The Judge’s infringement analysis was made using the sequential three step test of objective similarity, causal connection and substantiality, while also noting that the addition of original material to an infringing copy does not make a work non-infringing.
On a visual appearance basis the Judge found the defendant’s designs to be objectively similar, and in doing so declined to separate out the functional constraints on the basis that the separation of functional constraints is only relevant to the second and third steps.
The Judge held that causal connection was established on the basis of some of the defendant’s prior employment by Sealegs and the lack of evidence of an independent design path. Further, the evidence showed that the defendants started with and sought to improve upon Sealegs’ amphibious system while avoiding infringement of Sealegs patent, but in doing so did not also consider liability for copyright infringement. While the defendant’s system introduced some differences, the Judge found these to be dependent upon the underlying core features of the Sealegs’ system rather being evidence of an independent design path. The defendant’s attempts to establish an independent design path was further found to be implausible given that the lack of evidence of early concept design contrasted with the high level of documentation for the design features that the defendant’s introduced. The Judge also held that the causal connection could not be explained away by appealing to functional constraints that dictate design. The claimed functional constraints do not apply to all amphibious systems, but rather only apply if the unique arrangement of features used by Sealegs is used.
The Judge found that the defendants appropriated the core design concepts and features of the Sealegs system and in doing so copied a substantial part of works in which Sealegs has copyright. Hence, given the findings on objective similarity, causal connection and substantiality, copyright infringement was established. The Judge granted Sealegs a worldwide injunction preventing the majority of the defendants from infringing Sealegs’ copyright and from manufacturing, displaying, offering for sale or selling copies of Sealegs’ copyright works or the Orion S25 crafts.
However, the Judge found that Sealegs’ New Zealand registered design had not been infringed. The Judge noted both similarities and differences between the registered design and the defendants product to the effect that while the two are broadly similar they are not substantially the same in appearance. In particular when the rear legs and wheels of the registered design are retracted they are substantially covered and enclosed, while the Defendants wheels remain entirely visible when retracted. The Judge was not swayed by Sealegs’ submission that the degree of novelty of its design should effectively give it a wide monopoly.