Alert – Two significant Australian copyright decisions handed down

5 February 2010

The Federal Court handed down two significant copyright decisions yesterday.

In Roadshow Films Pty Ltd v iiNet Limited, Justice Cowdroy considered whether internet service provider (ISP) iiNet should be held liable for the copyright infringing activities of its users, on the basis that iiNet had authorised those infringements. This is reportedly the first judicial decision in the world on the authorisation liability of ISPs, consequently attracting widespread international attention.

In Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited, Justice Jacobson considered whether the flute riff in Men at Work’s iconic song ‘Down Under’ constituted an infringement of the classic Australian round ‘Kookaburra sits in the old gum tree’.

Roadshow Films Pty Ltd v iiNet Limited (No 3) [2010] FCA 24

These proceedings were brought against iiNet (respondent), the third largest ISP in Australia, by 34 applicants comprising many of the major film studios and their exclusive licensees in Australia (applicants).

Background

The Australian Federation Against Copyright Theft (AFACT), acting on behalf of the applicants, had gathered evidence of copyright infringement by iiNet users occurring by means of the BitTorrent protocol, a highly efficient way for users to distribute and share large quantities of data over the internet. Evidence presented to the Court (and which the Court accepted) showed that the infringements related to various of the applicants’ films and TV shows.

AFACT sent information gathered by its investigations to iiNet. It wanted iiNet to send warnings to infringing users, and then suspend or terminate those users’ internet service if they persisted in their activities. In addition, it suggested that iiNet block certain BitTorrent-related websites. iiNet refused to do so.

The key issue

Having found that iiNet users have engaged in primary infringement, the key issue was that of copyright authorisation, specifically whether an ISP such as iiNet can be said to have authorised the infringing acts of its users if those users, without licence, download films and TV shows in respect of which copyright is claimed.

The decision

The Court held that although iiNet knew infringements were occurring and did not act to stop them, iiNet did not authorise copyright infringement by its users. There were three reasons for this:

  1. In order to have authorised infringement, there is a threshold requirement that the authoriser must have provided the ‘means’ by which the infringement can be committed. Importantly, the mere provision of facilities by which an infringement can occur will not necessarily constitute infringement.

    The Court held that it was ‘obvious’ that iiNet’s provision of internet access was a necessary precondition for the infringements which occurred. However, there were other necessary preconditions required to bring about infringement (for example, having a computer or operating system). Conversely, the use of BitTorrent was not just a precondition to the infringement; it was the very ‘means’ by which the applicants’ copyright was infringed. That is, the infringing users had to install a BitTorrent client, and seek out the .torrent files themselves. But in doing so, they were provided with no assistance from iiNet, nor could iiNet either monitor them or prevent them from doing so.

    The Court distinguished the earlier internet-related cases of Cooper and Kazaa, on the basis that the respondents in those cases provided the ‘means’ by which copyright infringement occurred: in Cooper, this was the hosting of Mr Cooper’s website (which the Court there found was used overwhelmingly for the purpose of copyright infringement); in Kazaa, it was file sharing software (which was found to be predominantly used as the means to infringe copyright). By contrast, the Court here held the internet can be used to virtually any end, and its mere provision cannot be construed as an invitation for users to use iiNet’s facilities to infringe copyright.
     
  2. His Honour held that, even if iiNet had provided the ‘means’ by which infringement occurred, it did not authorise infringement, as:

    (a) it did not have the power to prevent the infringements occurring. As iiNet did not control any aspect of the BitTorrent system, the only relevant power was to warn users or suspend or terminate their accounts, or perhaps block particular websites. However, the Court considered there to be inadequate evidence before it as to the scope and effectiveness of such mechanisms. In relation to the suspension or termination of user accounts, the Court found that, in the absence of judicial consideration of infringement of each account, it would be unreasonable for iiNet to do so;

    (b) the mere existence of a contractual relationship between iiNet and its users is not sufficient to authorise infringement, in that there was simply no sufficient nexus between iiNet’s profitability and commercial interests on the one hand, and the infringing activity on the other;

    (c) there was insufficient evidence before the court of reasonable steps that could have been taken, and in particular, insufficient evidence that iiNet could have effectively blocked particular websites or that the applicants (through the AFACT notices) had made it sufficiently clear that this should occur;

    (d) although iiNet had knowledge of infringement, mere knowledge - as well as the power to prevent - is not (of itself) authorisation, for all of the reasons discussed above.
  3. Finally, iiNet did not ‘sanction, approve, countenance’ the infringements of iiNet users. His Honour held that these words require that the authoriser must have officially approved or favoured what is said to be authorised. He found there to be no evidence that iiNet approved or favoured infringing activities; rather, iiNet did no more than provide an internet service to its users.

Unfortunately, it is not clear from His Honour’s reasons whether the applicants would have succeeded if, for example, they had proven elements (1) and (2) above, but not element (3).

Other aspects of the decision

Although the Court found in favour of iiNet on the basis that it had not authorised copyright, it nevertheless went on to consider certain other issues argued before it:

  1. iiNet had argued that it was prohibited from acting on the notices received from AFACT on the basis of certain privacy-related provisions under the Telecommunications Act 1997. The Court held that there were two particular exceptions under the Act which would have enabled iiNet to disclose and use the AFACT information.
  2. The Court held that the section 112E defence to copyright infringement has been deprived of meaningful operation by previous decisions of the Full Federal Court. The defence provides that a person who provides facilities for making or facilitating communications is not taken to have authorised infringement merely because another person uses those facilities to do something the right of which is included in the copyright. As iiNet had knowledge of infringements by users, those decisions meant that their use involved ‘something more’ than mere use of facilities. iiNet could therefore not rely on section 112E as a defence.
  3. Finally, the Court found that iiNet would have satisfied the requirements of the safe harbour provisions under Division 2AA of Part V of the Copyright Act, on the basis that it adopted and reasonably implemented a repeat infringer policy.

Impact of the decision

The decision reverses a prevailing trend in Australian copyright law in more recent times – the steady expansion of the authorisation infringement doctrine. By distinguishing a line of previous cases and confining them to their facts, Justice Cowdroy has arguably circumscribed the reach of this doctrine.

Strongly influencing the Court was what it called the ‘central role’ played by the internet in all aspects of modern life, citing (as examples) email, social networking, VOIP, online banking and entertainment, online media, and games. Moreover, perhaps adverting to the internet’s role in the reporting of the tumultuous events in the Middle East last June, the Court took ‘judicial notice’ of the fact that the internet is increasingly the means by which news is ‘disseminated and created’. Because of this ‘central role’, the Court held that mere provision of the internet ‘could not possibly justify’ a finding that it was the ‘means’ of copyright infringement.

The film studios will almost certainly appeal the decision to the Full Federal Court, with a further appeal to the High Court likely to follow.

In parallel, copyright industry groups will step up their lobbying efforts to achieve a legislative solution to copyright infringement occurring on the internet. This was foreshadowed in yesterday’s media release by AFACT following the decision, in which it stated that it is ‘confident that the Government does not intend a policy outcome where rampant copyright infringement is allowed to continue unaddressed and unabated via the iiNet network’.

Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2010] FCA 29

Background

Larrikin, the applicant in these proceedings, owns copyright in the iconic Australian round ‘Kookaburra sits in the old gumtree’ (Kookaburra). The respondents are the composers, owner and licensee of the classic Men at Work song ‘Down Under’, first recorded in 1979. Larrikin’s claim related to the iconic flute riff in Down Under, heard immediately after the percussion introduction and then at two further points during the song.

Larrikin claimed, amongst other things, that Down Under infringed its copyright in Kookaburra, on the basis that the flute riff constitutes a reproduction of a substantial part of Kookaburra.

The issues

Larrikin’s copyright infringement action turned on two issues.

First, was there a reproduction of Kookaburra? Jacobson J held that this issue involves two elements:

  1. there must be a sufficient degree of objective similarity between the two works – for musical works, this is not simply determined by a note-by-note comparison, but depends, to a large extent, on the aural perception of the judge (casting himself or herself in the role of the ordinary reasonably experienced listener) assisted by expert evidence; and
  2. there must be a causal connection between the two works – that is, the infringer must have copied the plaintiff’s work. (The respondents in this case admitted to the requisite causal connection.)

Second, even if there is a reproduction of the plaintiff’s work, does the reproduction constitute a substantial part of that work? The test here is not complete and accurate correspondence between the works, but whether the substance of the copyright work is taken. The emphasis here is on the quality, rather than the quantity, of what is taken.

The decision – objective similarity

Jacobson J found there to be a sufficient degree of objective similarity between Kookaburra and Down Under’s flute riff.

In reaching this conclusion, His Honour conducted an aural comparison of the musical elements comprised in the songs (namely, melody, key, tempo, harmony and structure), as well as a visual comparison of the notated songs. In all of these areas, he was satisfied that the requisite degree of objective similarity existed.

Two factors in particular appear to have persuaded the Court on this point.

First, Jacobson J considered it to be ‘graphically’ illustrative (of objective similarity) that Colin Hay, one of Down Under’s composers, had sung the relevant bars of Kookaburra, in place of the flute riff, during performances of Down Under at a number of concerts from 2002.

Second, Greg Ham, who had originally inserted the flute riff into Down Under, was not called by the respondents as a witness at the hearing. His Honour was willing to draw adverse inferences against Mr Ham for his failure to appear, including (most damagingly to the respondent) that Mr Ham had deliberately included the bars from Kookaburra in the flute riff for the purpose of evoking a particularly Australian flavour in the song.

The decision – substantial part

The Court found that the reproduction in Down Under did not completely correspond to Kookaburra, due to the separation (in Down Under) between Kookaburra’s musical phrases. However applying the qualitative test, the Court observed that a note-for-note reproduction is not required for the substantial part threshold to be met. Rather the ‘short answer’ to the qualitative test, according to the Court, was Colin Hay’s performances of the words of Kookaburra to the tune of the flute riff.

His Honour also observed that although the question of quantity is secondary to that of quality, two of the four bars of Kookaburra were reproduced in Down Under.

The wrong test?

The Court reached its conclusion despite it not being until 2007 that the connection between the songs was exposed, on an episode of ABC’s panel quiz show, Spicks and Specks – 28 years after Down Under’s first release.

The respondents’ central contention was that if the songs really were objectively similar, why was this resemblance not uncovered before 2007? Indeed as the Court noted, even on Spicks and Specks the panel members had some difficulty recognising the connection between the two songs.

The Court’s answer to this point was that that the ‘sensitised listener’ would be able to detect the resemblance between the two songs. Yet the test of objective similarity (as approved by the Court itself) is that of the ‘ordinary reasonably experienced listener’ – not the ‘sensitised listener’. In making its assessment of objective similarity, did the Court perhaps apply the wrong test?

Author(s) Paul Kallenbach