Court of Appeal throws out Fisher & Paykel software case

Karum lawyer Zane Kennedy

A $10 million software dispute between Fisher & Paykel Finance (FPF) and American firm Karum group was thrown out of the Court of Appeal last week.

A panel of Justice Rhys Harrison, Justice Lynton Laurence Stevens and Justice Forrest Miller agreed with the High Court’s conclusion in a decision released last week (scroll to end to view full judgment).

In December 2012, the Auckland High Court heard arguments over whether FPF effectively stole parts of Californian-based Karum’s credit management software. A source told NBR ONLINE Karum wanted $10 million in damages.

The proceeding involved 19 witnesses and was believed at the time to be New Zealand’s longest running intellectual property trial.

Karum had created the software behind the Farmers card, which was acquired by FPF from the department store owner. FPF then proceeded to integrate the original software’s functionality in a new program it had developed.

Karum alleged at the High Court trial the acquisition was “bungled” because FPF did not realize it was only buying a licence, not the software itself.

Justice Rodney Hanson rejected the claims, and said FPF took a commercially ethical approach to negotiating a new licence.

The Court of Appeal agreed with the lower court, tossing out claims for misrepresentation, misleading and deceptive conduct, copyright infringement and breach of confidence.

It found there was nothing original in what F&P were using, and if so it was not substantial.

“Generally speaking, what Karum seeks to protect falls into the same category as that described in the authorities we have discussed and by the trial judge in this case; it is the programmer’s choice of structure,” the judgment says.

Karum’s lawyer, MinterEllisonRuddWatts partner Zane Kennedy said his client had not yet given instructions on whether to appeal.

Proceedings for the long-running case were first filed in 2006.

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