The battle against online digital piracy
The ever-vexing issue of online digital piracy made front page news after the Federal Government released its Online Copyright Infringement Discussion Paper on 30 July 2014. The Discussion Paper contains a number of proposals to address the issue, including extending authorisation liability for copyright infringement, the availability of injunctive relief to block infringing overseas websites, and the extension of the safe harbour scheme that is currently restricted to carriage service providers.
Interestingly, the Government seems to accept that its proposals are less than perfect, requesting submissions on whether there are 'alternative measures to reduce online copyright infringement that may be more effective'.
Submissions closed on Monday 1 September. It is evident from submissions that have already been published that debate between copyright holders, ISPs and the digital industries - in particular, as to who will bear the cost of any anti-piracy scheme that may be adopted - is still intense and has some way to go before resolution on the issue can be achieved.
Copyright and the Digital Economy - fourth time lucky for 'fair use'?
Perhaps the most important copyright development in recent times has been the finalisation of the Australian Law Reform Commission's Report on Copyright and the Digital Economy, which was given to the Attorney General in November 2013 and released publicly in February this year. The Report followed an Inquiry lasting 18 months during which extensive consultations were held. The Discussion Paper released by the ALRC attracted over 1,000 submissions.
The ALRC made 50 recommendations for change including, most controversially, that the defence to copyright infringement should be the open-ended defence of 'fair use' as opposed to the current defence of 'fair dealing' which is confined to certain defined uses.
The Report met a mixed reception but will form the basis of a continuing debate about whether a fair use regime should be implemented. The Government has yet to indicate its attitude and this may not be apparent until the outcome of the current review (see below).
Following the ALRC's report, there is no doubt that the rest of this year will see continued agitation of the 'fair use' versus 'fair dealing' debate as well as discussion and commentary on the different and opposing views held by the various stakeholders.
Reform of the Copyright Act 1968 in focus
One of the outcomes of the ALRC Report is the announcement by the Attorney General that he is instigating a total review of the Copyright Act which he has described, with some justification, as being overly long, unnecessarily complex, often comically outdated and all too often, in its administration, pointlessly bureaucratic.
The Attorney-General's Department has established a small group of copyright experts to undertake a complete review of the Act. Perhaps we have already seen the fruits of their labour, with the issue of online piracy (discussed above) having been identified by the Attorney General as needing urgent attention.
ACCC determination: APRA's application in relation to acquisition and licensing of performance rights in music
After a lengthy investigation, on 6 June 2014 the ACCC has again authorised APRA' s licensing arrangements for five years subject to some conditions requiring APRA to:
- publish plain English guides to licence fees, including information on how fees are determined, fee ranges for each type of licence and whether the fees are negotiable;
- publish plain English guides to opt-out and licence back provisions, including outlining situations where they may be of benefit and the steps involve in making use of the provisions; and
- establish a comprehensive alternative dispute resolution scheme; where the resolution of disputes is to be managed by an independent facilitator approved by the ACCC. The scheme must be fully available by 31 March 2015.
The conditions imposed by the Tribunal are far-reaching. It will be interesting to see if they have the desired effect of placing some restraints on the market power that APRA can exercise as a virtual monopoly. Users, and particularly organisations representing users, should also carefully consider using one or more of the methods of alternative dispute resolution proposed if they are dissatisfied with APRA's 'bottom line' following their negotiations with APRA.
Copyright in compilations revisited
Copyright in compilations was revisited by Justice Wigney in the Federal Court in Sports Data Pty Ltd v Prozone Sports Australia Pty Ltd [2014] FCA 595 on 6 June 2014.
Sports Data Pty Ltd (Sports Data) sought an injunction to restrain Prozone Sports Australia Pty Ltd (Prozone) from using its confidential information and infringing its copyright in database tables it had created and developed as the official supplier of certain statistics to the National Rugby League (NRL) from 2002-2013. From 2014 onwards, Prozone worked with the NRL to develop its own Rugby League 'coding template'. Sports Data alleged that in developing its coding template, Prozone had copied Sports Data's database tables.
Sports Data sought interlocutory orders but its application was refused. While Justice Wigney found that the work was sufficiently original, a finding of copyright infringement was complicated by Sports Data's identification of the copyright work as a small extract of a larger work (four tables from its larger database table). In rejecting the argument that a substantial part of the work had been taken by Prozone, Justice Wigney expressed dissatisfaction in the way the work had been identified by Sports Data. Although it appeared that Prozone had received some of Sports Data's information that was used to develop its own event templates, it was found that there was no objective similarity between the two works to constitute a substantial part taking. The identification of the work as a compilation was relevant to this finding, with substantial similarity in the selection, structure and arrangement between compilation works being necessary for a finding of copyright infringement.
Our analysis of the case is available in 'Classifying copyright in compilations: Sports Data v Prozone'.
Life's not a beach for infringers – City Beach liable in damages for copyright infringement
It is common practice in the fashion industry to use others' garments and artwork as 'inspiration' for new designs. A decision on 1 April 2014 in the Federal Court illustrates the financial consequences for those who cross the line where inspiration ends and infringement begins.
In Seafolly Pty Limited v Fewstone Pty Ltd [2014] FCA 321, Justice Dodds-Streeton found that Fewstone (trading as City Beach) infringed Seafolly's copyright in three artistic works by instructing its designers and manufacture to make swimwear based on pictures and samples of Seafolly's swimwear. Whilst Seafolly had sought damages in the amount of $610,999.18, only about 40% of this amount was awarded ($250,333.06), with the case also providing a useful illustration of how courts will approach the assessment of damages in copyright infringement cases.
The dangers of litigation
Some recent decisions are illustrative of the dangers of litigation particularly where the plaintiff pursues a copyright action which is of doubtful merit.
At what cost? Indemnity costs awarded for an unreasonable pursuit of an innocent infringer
The case of Tamawood Limited v Habitare Developments Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 6) [2013] FCA 1383 decided on 17 December 2013, considered the costs to be awarded following a decision by Justice Collier that Bloomer Constructions (Qld) Pty Ltd and its director made out a defence of innocent infringement under section 115(3) of the Copyright Act 1968 (Act) in respect of one of Tamawood's housing plan designs.
In considering the costs to be awarded between the Bloomer respondents and Tamawood, Justice Collier noted:
- while declarations were made in favour of Tamawood, these were heavily qualified given that the Bloomer respondents had been innocent in their infringement;
- the Bloomer respondents did not obtain any profits from the project and this information was provided to Tamawood during the trial;
- Bloomer's director's evidence was that he had no knowledge of any infringement issue until the projects were almost or totally completed; and
- the Bloomer respondents offered to settle the proceedings with Tamawood and to bear their own costs on two occasions but both offers were rejected by Tamawood.
Given the Bloomer respondents were successful in making out an innocent infringement defence, Tamawood was ordered to not only pay its own costs but also the Bloomer respondents' costs incurred prior to the first settlement offer on a party-party basis and thereafter on an indemnity basis. In Justice Collier's view, Tamawood acted unreasonably in rejecting the settlement offers, stating that 'Tamawood was determined to pursue the matter to its conclusion irrespective of the facts put before it'.
An undesired damages outcome
The decision in ACP Machinery Australia Pty Ltd v Aerospace Technologies of Australia Ltd (No 4) on 22 November 2013 highlighted a major risk applicants take when opting to pursue litigation, with ACP Machinery awarded a mere $10 in damages for the infringement of its copyright in engineering drawings.
ACP Machinery argued that it was entitled to compensatory damages in the amount of the gross profit that it would have made through obtaining a contract for its products with the recipient of the infringing drawings. It claimed that the infringement prevented it from securing this contract, as it had taken away a powerful bargaining chip of granting access to the drawings that it could have otherwise deployed in the negotiations.
Justice Jessup rejected this argument, stating that, on the evidence, the price of the products would have been the decisive factor in the decision not to contract with ACP Machinery and not the access to the drawings. His Honour held that ACP Machinery had not suffered any damage as a result of the infringement and awarded $10 in nominal damages. ACP Machinery's claim for additional damages was also rejected.
Enforcing IP rights globally - evidentiary challenges
The decision in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] HCA 21 in September 2013 served as an intriguing illustration of the evidentiary challenges confronting those seeking to enforce their intellectual property rights in a global marketplace.
The Full Federal Court on appeal held that critical evidence of emails between Global and international purchasers, used by Aristocrat to demonstrate the existence of a joint venture involving the production and sale of infringing pokie machines, was inadmissible. This is because the strict notice requirements for tendency evidence under section 97 of the Evidence Act 1995 (Cth) had not been complied with.
Aristocrat reminded us of the strict requirements accompanying the use of tendency evidence, and that the assessment of whether evidence is being adduced to establish a tendency will be a matter of substance over form.
Breach of fiduciary duty … and copyright as well?
It is becoming increasingly common for copyright claims to be included in claims for breaches of fiduciary duties where a person, usually an ex-employee, has removed and copied material belonging to the employer. Such was the case in July 2013 in Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd where it was alleged that a former employee had breached his fiduciary duties, breached confidences, engaged in misleading and deceptive conduct as well as infringing copyright in some documents and logos.
However, the Applicant had very limited success in its claims for copyright infringement.
It either could not show ownership of the relevant copyright or that it had been infringed. Where copyright was claimed in certain taglines, it was held that copyright did not exist where the work in question 'simply involved the stringing together of a series of ordinary and commonplace words'. While infringement was proved in relation to some material the only relief granted by the Court was declaratory relief.
Perhaps this case remains a clear warning to be careful before making infringing claims which cannot be substantiated.
Damages increased on appeal
Not all decisions have such a bad result for the Plaintiff.
In June 2013, Insight SRC IP Holdings was far more successful when it appealed against a finding that it was only entitled to $32,500 damages following a breach of its copyright in a health questionnaire which had been copied by the Australia Council for Educational Research Ltd (ACER) in a project for Independent Schools Victoria (ISV). The Full Court found that the trial judge had erred in how he had approached the issue and should have awarded damages of $130,000, being the profit generated by the contract between ACER and ISV: Insight SRC IP Holdings Pty Ltd v Australian Council for Education Research Ltd.
The measure of damages for copyright infringement is always a difficult issue and this decision provides some useful guidance on how this task should be approached
Use of images without permission
The use of photographs without permission is a common occurrence despite the significant risks that are involved. In the past 18 months there have been at least three examples of proceedings involving unauthorised use of photographs.
Ita's image
In the case of Buttrose & Anor v The Senior's Choice (Australia) Pty Ltd & Anor [2013] FCCA 2050 on 5 December 2013, Justice Jones made an order for summary judgment for the infringing use of a photograph of Ita Buttrose without permission and corresponding claims of passing off and misleading and deceptive conduct.
The case concerned the use of an image of Ita Buttrose sent by her agent in response to the respondents' enquiry into having Ita Buttrose feature in a TV commercial promoting the respondents' 'The Seniors Choice' business. The respondents did not proceed to engage Ita Buttrose but instead used the image on their website without permission as well as to advertise 'The Senior's Choice' business online. In addition, the image became the subject of adverse Facebook posts regarding the connection of Ita Buttrose with 'The Senior's Choice' business. Given the respondents admitted their conduct was without permission, they were found to have no reasonable prospects of successfully defending the claim of copyright infringement.
Stock photographs
In December 2013, the Federal Circuit Court found against a travel agent who posted a stock image on her website without obtaining a licence. In awarding damages (including additional damages) against the travel agent, the Court emphasised the need to deter the increasing practice of people who unwittingly use images without a licence.
Mr Tylor, an American stock photographer, successfully argued that Ms Sevin, a travel agent, had engaged in copyright infringement by publishing one of his photographs on her website. Damages of US$1,850 were awarded, determined by reference to Mr Tylor's usual fee for his stock images (even though this was higher than the fee charged by well known stock photo agencies, Mr Tylor successfully argued that his images were more exclusive and of a higher quality).
Judge Raphael also awarded additional damages of AU$12,500 in light of Ms Sevin's conduct, who had first tried to blame her web designer for the infringement, and then did not participate in proceedings or exhibit remorse for her actions.
The Corbys
In April 2013, the Federal Court handed down a decision in the Corby family's favour in proceedings they had taken against Allen & Unwin Publishers of Sins of the Father, a book about the Schapelle Corby and the alleged drug dealing activities of her father.
The author of the book, Eamonn Duff, had supplied to the publisher various photographs of Schapelle and her father, five of which were alleged to breach the copyright of either the sister, brother or aunt of Schapelle. Mr Duff had received the photographs from either Mr Corby, a friend of the Corby's or Fairfax's private archives. There was no suggestion that the photographs had been improperly obtained. However, the Court held that where a licence had been given to publish the photographs, the licence was restricted to the use for which the photograph had been given (which was generally reports supporting Schapelle following her arrest) and such licence did not extend publication in a book that was certainly not supportive of either Schapelle or her father.
The Court awarded damages for infringement by way of compensation of $9,250 and additional damages of $45,000 by reasons of the flagrancy of the infringement. It also ordered that all unsold copies of the book be delivered up to the Corbys.
Lots more to come ...
With the outcome of both the online digital piracy discussion paper and the Attorney-General's review of fair dealing and copyright law still in the balance, and a plethora of copyright cases in our courts, it will no doubt continue to be a fascinating year in Australian copyright law.