Underexposure: Shining a Light on Implied Terms in Your Contract
RP Data Pty Limited v Hardingham [2022] HCA 39; REA Pty Limited v Hardingham [2022] HCA 39
By: Ryan J Leck, Paralegal
At Arts Law, we’ve been thinking more and more about the case of RP Data Pty Limited v Hardingham [2022] HCA 39 (RP Data v Hardingham). It has become increasingly relevant as more and more photographers see their works being uploaded on image-sharing platforms without their express permission. It is always distressing to hear about our clients whose works have been used without their consent and without acknowledging them. Photographers engaging with businesses should keep in mind the commercial realities that surround their agreements, as the Courts take a surprisingly business-minded approach when interpreting the implied terms in these agreements.
Background
RP Data Pty Ltd v Hardingham involved a dispute between Mr James Hardingham, a professional director and director of Real Estate Marketing Australia Pty Ltd (REMA), and RP Data Pty Ltd (RP Data), operators of a website that provides current and historical sale and leasing data. Several real estate agencies engaged Mr Hardingham to take photographs and create floor plans for upcoming sales and leases, which would then be uploaded onto Realestate.com.au Pty Ltd’s (REA) website, realestate.com.au. However, Mr Hardingham had not signed any formal written agreement with these agencies and instead provided these images on a casual, over-the-phone basis. RP Data had already arranged a sub-licence with REA, where it would download these same images from realestate.com.au, and upload them onto its own website, corelogic.com.au. REA required real estate agencies to enter into a broad written subscription agreement that permitted REA to use and sub-license these images without time restrictions.
REMA brought proceedings against RP Data in 2018, alleging that RP Data and REA had infringed its copyright by reproducing its images on corelogic.com.au. REA argued that its Terms & Conditions granted an irrevocable, perpetual, worldwide, royalty-free licence from real estate agencies to REA to use images uploaded to their website, including their aforementioned sub-licence with RP Data. At the first instance, the Judge found that RP Data did not infringe copyright due to the nature of the sub-licensing agreement, which was either:
- To be inferred from the conduct of REMA and the real estate agencies, considering their course of dealings, or;
- To be implied in the agreements between them, in order to give business efficacy (the power to produce an intended result) to the agreements.
First Appeal
REMA subsequently appealed, where the majority of the Full Court concluded that the contracts contained an express term that a licence and sub-licence to the works was limited to the purposes of marketing campaigns for the sale or lease of properties. The Full Court held that there was no requirement to consider the implied terms.
Second Appeal
Following the Full Court decision, REA and RP Data appealed to the High Court. The High Court emphasised that the approach to constructing contracts was objectivity, and that the actual intentions or subjective views of the parties to a contract are irrelevant. They asked: “What would a reasonable person have taken the parties to agree to, considering their conduct in the surrounding circumstances?”
In this case, REA had been uploading photographs onto RP Data since 2003, and REMA and the agencies knew that photographs and floor plans had been uploaded to REA as well. This was, as the Court described, an “accepted commercial reality”. A reasonable person in the position of the parties would be able to discern that the main purpose of REMA providing the photographs and floor plans to various agencies was to allow further dissemination of these materials to REA. This would imply a sub-license to REA to use the materials indefinitely and to provide them to RP Data.
Ultimately, the Court found in favour of REA and RP Data: the agreement between REMA and the agent contained the “natural and obvious implication” that RP Data was permitted to use the photographs on its platform, particularly for the purposes of business efficacy.
Conclusions
There are several lessons to be learned from this case. The first is that photographers should clearly articulate the terms in their licences to avoid similar disputes on implied terms. This is because the Court may find implied terms in favour of commercial realities unless they are expressly addressed otherwise. In commercial contracts, such realities are always taken into consideration. For creatives using image-hosting platforms, always be aware of the T&Cs, and ensure that contracts to display your works on these platforms are clearly expressed in writing.
Arts Law has several resources available to guide copyright owners and creatives.
To read the full case, click here.
To read our information sheet on copyright infringement, click here.
To look through our photography contract templates, click here.
If you have any questions or would like to speak with one of our lawyers, please contact us.
