The Fortnightly Review’s Legal Eagle surveys Australian laws addressing cyber-bullying and sexting. In our second article, lawyer Michael Crawford reports on a recent conference regarding controversial copyright cases – the Telstra directories case, the Men at Work case and the iiNET case. Finally Associate Professor Paul Jensen provides an economist’s perspective on what the damages in the Men at Work case should be.
by Michael Crawford
On March 18th 2010, the CMCL and IPRIA jointly hosted a conference entitled Authorship, Anthems and Authorisation: a legal and economic review of the copyright triptych. The conference was convened in order to discuss three very significant and recently decided cases; Telstra Corporation Limited v Phone Directories Company Pty Ltd  FCA 44 , Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited  FCA 29 and Roadshow Films Pty Ltd v iiNet Limited (No. 3)  FCA 24. See our post here for a summary of the cases.
The panel, chaired by Jock Given, consisted of David Brennan of the Melbourne Law School, Melissa de Zwart of the University of South Australia, David Lindsay of Monash University, Beth Webster of IPRIA and Philip Williams of Frontier Economics.
1. Authorship – Telstra case
The decision in Telstra v PDC, a recent judgment of Gordon J of the Federal Court, was discussed in considerable detail by David Lindsay. In Telstra v PDC, Gordon J applied both plurality judgments in IceTV Pty Limited v Nine Network Australia Pty Limited  HCA 14 in concluding that no copyright subsisted in Telstra telephone directories on the grounds that they were not original literary works.
Dr Lindsay discussed, amongst others, two elements of the case. The first was her Honour’s reliance on IceTV. Dr Lindsay commented that, as a matter of basic legal method, Gordon J ought not to have considered the comments in IceTV concerning subsistence as binding law. This is because, as subsistence was conceded by the defendant in that case, the comments were purely obiter dicta. That is, the comments were incidental to the holding of the case.
The second and more substantive criticism concerned Gordon J’s insistence that subsistence under Part III of the Copyright Act 1968 requires the plaintiff to identify each author who has contributed to the work in suit. Telstra’s inability to do this meant that it could not establish copyright in the directories. Dr Lindsay argued that by insisting on authorial identification as a prerequisite for subsistence, her honour erroneously imposed an additional hurdle not required by Part III of the Copyright Act, which requires only that the work be original. Dr Lindsay concluded that, to the extent that both Telstra v PDC and IceTV impose this additional obligation of authorial identification, they represent a serious departure from accepted understandings of subsistence under Part III and are wrong.
Philip Williams also spoke about the decision in Telstra v PDC, in particular about the need for the introduction of a new legal regime for the protection of commercially valuable collections of information that are expensive to compile and, since the decisions in Telstra v PDC and IceTV, not protected by copyright. However, Dr Williams also cautioned that the creation of any such regime will require considerable care because of the need to protect the beneficial uses to which such information is put by third parties. The example given was the rise of web-sites which, in response to a particular search query, trawl through on-line auction sites and provide users with a list of the lowest priced items and their locations. The challenge is thus to create a regime that is flexible enough to permit innovative and desirable third-party uses of database-type information whilst also guaranteeing a level of protection that provides a commercial incentive for organisations to engage in the costly and time-consuming process of compiling a database.
2. Anthems – “Down Under” case
The widely publicised decision of the Federal Court in Larrikin Music v EMI Songs Australia was discussed by Melissa de Zwart. Dr de Zwart’s pithy summary of the very complex expert evidence provided by the musicologists was most enlightening to those of us who found the discussion in the case impenetrable. Moreover, her expertise with Power Point enabled a direct aural comparison between Kookaburra and the infringing flute riff from Down Under. The audience was then asked if they could detect the apparently objective similarity. Opinion was relatively evenly divided, though perhaps a majority claimed they could hear the similarity. In any case, that there was a substantial minority who could not hear the resemblance suggests either that the Court did not abide by the “ordinary reasonably experienced listener test” or that lawyers are particularly tone deaf. One suspects the latter.
3. Authorisation – iiNET case
The final case in the trio was Roadshow Films Pty v iiNet, a case concerning the authorisation liability of internet service providers (ISP’s) whose customers illegally download copyright works using the “BitTorrent” software and the applicability of the ISP safe harbour provisions introduced into the Copyright Act as part of the AUSFTA.
Both issues were thoroughly discussed by David Brennan, who gave a concise summary of the enormous judgment. Dr Brennan’s critique of both the Court’s legal analysis of authorisation liability and iiNet’s apparently lackadaisical approach to those of its customers who routinely infringed copyright casts doubt over whether the courts are adequately enforcing the bargain which was struck with ISPs, as represented in the changes wrought by the Copyright Amendment (Digital Agenda) Act 2000 and the safe harbour provisions under the AUSFTA.
The final speaker of the day was Beth Webster from IPRIA, whose discussion of the fundamental economic policy goals underlying copyright law complimented the predominately legal analysis of the preceding speakers. The lively debate which followed Dr Webster’s address showed that the audience enjoyed the opportunity to discuss whether or not the present copyright regime efficiently achieves the economic and social ends it was established to serve.
Congratulations are to go to the CMCL, IPRIA, Jock Given for chairing and, of course, the panellists whose expertise and engaging presentations made for a most entertaining and informative day.
This was a fascinating seminar featuring a learned panel who were discussing the implications of three recent contentious copyright cases in Australia. I will focus my attention on Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited  FCA 29 (the Larrikin/Men At Work case), primarily because it cuts right to the heart of the fundamental rationale for the existence of copyright. Melissa de Zwart did an excellent job of engaging the audience on this vexed issue. And, by playing the “Kookaburra” and “Down Under” songs to the seminar participants and taking a straw poll, she was able to demonstrate (rather surprisingly) that only around 50% of people can detect the similarities between the two. Despite this, there seemed to be consensus amongst the legal commentators that Men at Work had reproduced a substantial part of the Kookaburra song.
Given this, the more interesting issue is whether (and how much) compensation Larrikin is entitled to. And on this issue, there was some interesting debate. As noted by Melissa, this was an issue that Justice Jacobson provided scant guidance on. In fact, he was careful to state that his judgement made no determination about the issue of damages. However, the lawyer for Larrikin, Adam Simpson, is on the record as stating with regard to damages that: “Obviously the more the better, but it depends. I mean, anything from what we’ve claimed which is between 40 and 60 [per cent] and what they suggest which is considerably less.”
For the legal scholars, the debate on damages hinges on whether the flute riff which constituted the “copying” is in fact an important component (or that it is the “hook”) of the song Down Under. Such logic would suggest that if it is a trivial part of the song, then damages should be minimal, but if it is the key “hook”, the compensation should be much larger. This logic makes perfect sense from the ‘natural rights’ view of intellectual property – where you are entitled to capture the fruits of your intellectual labour (in this case, the contribution that the flute riff made to the total sales revenue generated by the song).
From an economist’s perspective, this makes no sense whatsoever, as Beth Webster was at pains to point out. What matters from an economic point of view is whether the copying has done any damage to the incentive to create new pieces of music. Following this, the logic of the compensation rule should be “damage-based”, not “gains-based”. The focus should not be how much of Men at Work’s revenues Larrikin is entitled to, but how much damage Men at Work’s copying did to the ex ante incentive to create original musical material. The fact that the original creator of the Kookaburra tune licensed it on very reasonable terms only seems to reinforce the notion that Larrikin is entitled to little or nothing.
More generally, this case underpins an important (and ongoing) debate about the rationale for the intellectual property system. In my view, the sort of copying observed in the Larrikin case is not analogous to piracy, looting, or theft. To argue this would be to deny the fundamental nature of information as a non-rivalrous good. As long as such “copying” causes no harm to the incentives to create original material, it shouldn’t be a concern.
In this edition, Jason Bosland and Vicki Huang comment on the Lara Bingle bungle. Also in this edition, Chris Dent gives us his thoughts on the Francis Gurry Intellectual Property Lecture presented by Alison Brimelow CBE, President of the European Patent Office. In that lecture Brimelow discussed the question of whether the patent system was still fit for purpose.
On March 1, 2010, Woman’s Day published a nude picture of Lara Bingle which was allegedly taken in 2006 while she had a “secret” affair with AFL star Brendon Fevola (who was and still is married to Alex Fevola).
The image shows Bingle in a shower trying to cover herself with her hands. The expression on her face clearly depicts distress. Apparently, the photo had been passed by Fevola to other people and had been “doing the rounds” for years.
The day after publication by Woman’s Day, Lara Bingle by way of her publicist Max Markson, announced she would take legal action against Fevola for 1) breach of privacy, 2) defamation and 3) misuse of her image.
Fiona Connolly said that Woman’s Day which has about 400,000 readers, published the photo because it was “going to come out anyway”. She also said that Woman’s Day did not pay for the photo and would not disclose how they came to obtain the photo.
Lara Bingle’s publicist is reported to have said that Bingle had retained all her contracts and would move past the incident.
In an interesting turn of events, on March 8, Woman’s Day (the same magazine that printed the photo) published an exclusive interview with Bingle depicting “her side of the story”. The fee for the interview was not disclosed but is rumoured to be around $200,000. According to her publicist, Bingle has decided to give an “undisclosed amount” of money to the White Ribbon Foundation which is a charity that opposes domestic violence.
The controversy has sparked a myriad of comments. The Fortnightly Review looks at the issue from a legal perspective. We believe it is an important case given the rise of cyber-bullying and “sext-ing” in the community – something we will be commenting on in a future issue of the FR. We emphasise that Bingle’s statement of claim has not become available so we comment on the facts that are thus far publicly known.
Privacy and Misuse of Image
It is unclear just what causes of action is meant by the terms “breach of privacy” and “misuse of image”. Is Bingle’s intention to argue that an Australian court should recognise a common law cause of action for breach of privacy (flagged as a possibility in ABC v Lenah Game Meats) – or will she be content to rely on the existing law of breach of confidence, as used for instance in the recent Victorian Court of Appeal decision in Giller v Procopets. Unfortunately, she will have to traverse this tricky field of developing law very carefully. The picture is even more confused when it comes to the claim for misuse of image. Is this again shorthand for privacy arguments considered above? Or might she be considering actions for passing off and misleading or deceptive conduct under the Trade Practices Act 1974 (Cth), as celebrities have often done in the past (including Bingle herself). The difficulty with a passing off or TPA claim is that Bingle will have to show that Fevola made some kind of misrepresentation in the course of trade – and we find it hard to see either a misrepresentation or conduct in the course of trade on facts currently known to us.
The civil remedies we believe she may be seeking are uncertain here. Perhaps the criminal law as suggested by other bloggers may give her some satisfaction. Nevertheless, her arguments as to defamation do target a well developed area of law, however it is unclear as to whether she can satisfy the legal elements.
From the facts known, it appears that Bingle is claiming that the distribution by Fevola of the photograph between various members of the AFL and the Australian Cricket Team amounts to defamation.
In order to make out the defamation cause of action, she is required to show that the publication of the photograph, assessed as a whole, conveyed one or more defamatory imputations about her. There are three non-exhaustive ‘tests’ for determining whether an imputation carries a defamatory meaning. At a very basic level, it must, in the eyes of the ordinary, reasonable reader or viewer:
- lower the plaintiff in the estimation of others;
- cause the plaintiff to be shunned or avoided; or
- expose the plaintiff to hatred, contempt or ridicule.
And, herein lies the main obstacle for Bingle’s claim. It is difficult to see how the first two tests – the ‘lowering estimation’ and ‘shun and avoid’ tests – could be satisfied merely on the basis that Bingle was naked in the shower and had an unwanted photograph taken of her. Indeed, we have all been naked in the shower, and it is unlikely that the ordinary, reasonable person would think less of Bingle or shun and avoid her simply on that basis. Certainly, as required under the ‘lowering estimation’ test, it is hard to see how a reasonable, ordinary viewer of the photograph could ascribe any blame to Bingle for the taking of the photograph.
A conclusion about this, of course, depends on any additional material that may have accompanied the distribution of the photograph and which may modify the imputations carried by its publication – ie, it may, depending on the circumstances of the publication, carry an imputation of promiscuity or that she acquiesced in the taking and distribution of the photograph (see, in particular, Shepherd v Walsh & Ors ). There is also the possibility, of course, that Bingle might plead defamatory meaning based on ‘true innuendo’ (ie by relying on extrinsic facts that were, in fact, known to its recipients).
Under the third test, however, there is authority to suggest that Bingle might have, at the very least, an arguable case on the basis of the publication of the photograph itself. Thus, it was held in the well-known case of Ettinghausen v Australian Consolidated Press that the publication in a magazine (called ‘HQ’) of a photograph of the plaintiff, a famous Rugby League footballer, naked in the shower with his penis exposed, had the capacity to defame the plaintiff by exposing him to a more than trivial degree of ridicule. The imputation pled by the plaintiff in that case was simply that ‘[t]he plaintiff is a person whose genitals have been exposed to the readers of the defendant’s magazine ‘HQ’, a publication with a wide readership.’ The ease with which the judge, Hunt J, arrived at his conclusion is astounding (although this can be, at least partly, explained on the basis that this imputation was pled in the alternative). There was absolutely no analysis whatsoever as to how this imputation had the capacity to expose the plaintiff to ridicule, which has been held to mean ‘deserving to be laughed at’ or ‘absurd’ (see Boyd v Mirror Newspapers Ltd  NSWLR 449 at 453). Significantly, there was no suggestion that there was anything unusual about the way the plaintiff was depicted. There was nothing ‘grotesque, monstrous or obscene’ about the photograph and it did not seem to make a ‘preposterously ridiculous spectacle’ of the plaintiff. It was simply a photograph of a naked man in a communal shower, as is the usual practice following any football match.
In light of this yardstick, it is difficult to see how the photograph of Bingle – which also involves mere nudity – should be decided any differently, at least in relation to the judge’s question as to whether or not the photograph has the capacity to defame. This leaves, of course, the further question of whether the photograph in fact bears the defamatory meaning – a question of fact not answered by the jury in Ettinghausen.
One potential problem for Bingle, however, is that even if defamatory meaning is established on the basis that a reasonable reader would view the plaintiff in a ridiculous light, it would be particularly easy for Fevola to rely on the defence of justification. Thus, it is likely that Fevola could defend the publication on that basis that the imputation – the nudity – is, in fact, true. In NSW, the scope of the truth defence in this context underwent particularly significant change following the introduction of the uniform defamation laws across Australia. In particular, it removed the requirement under the justification defence (as it had previously operated in that state) that the publication must also serve the public interest. Indeed, one of the issues raised when the Defamation Act 2005 (NSW) was passed was that the removal of the public interest requirement under the justification defence would put a stop to defamation acting as de facto privacy protection. Defendants would escape liability for invasions of privacy by simply proving that the defamatory imputations concerning the plaintiff’s private life were true. This case brings such concerns to the fore, but also highlights the inherent problem of protecting what are essentially privacy interests under a cause of action for which it is not designed.
We look forward to reading Bingle’s statement of claim. We also look forward to your comments.
(for a profile on this seminar click here)
Alison Brimelow, in her lecture, raised many of the policy challenges that face the patent system in this globalised economy. Her perspective was that of an outgoing EPO President and, therefore, included a focus on workloads of the European Patent Office, backlogs and the appropriate pricing structure for patents. Acknowledging that the system was a victim of its own success, Alison Brimelow highlighted that patents, now, are being seen as a good in themselves, rather than as a grant that marks innovation. Particular issues such as unnecessary complexity, avoidable duplication and whether the patent system should remain a one-size-fits-all model were raised. Looking forward, the practical difficulties of negotiation amongst self-interested nations were raised, as was the importance of the Development Agenda for the economically emerging countries. In short, Alison Brimelow asked us to look again at the overall system and to have the courage to either reform it effectively or to admit that it is beyond our capabilities. Chris Dent attended the lecture and gives us his thoughts.
Alison Brimelow, the now outgoing President of the European Patent Office (EPO), gave a typically entertaining and challenging presentation as the 2010 Francis Gurry Intellectual Property Lecture. I now have the pleasure of engaging with her words and offering my reflections on the issues she raised.
I’ll start, as she did, with a quote from John Donne – in fact, these are the words that immediately precede those that she gave:
Why grass is green, or why our blood is red,
Are mysteries which none have reached unto.
In this low form, poor soul what wilt thou doe?
When wilt thou shake off this Pedantry,
Of being thought by sense, and Fantasy?
The work that this is taken from is “The Second Anniversary: Of the Progress of the Soul”; and, according to Martz, is Donne telling us of the ‘true end of Man’ – that empirical investigations miss the ‘essential truth’ of our existence (‘John Donne in Meditation’ (1947) 14 ELH 247, 269). Such call may be taken as suggesting a focus on research and technological innovation is not in the interests of our spiritual health…
Now, I do not mean to come across as “clever-clever”, trying to outdo someone who is, by now, back on the other side of the world. My point is connected to the thrust of her lecture – possible changes to the patent system. In particular, my goal is consider reform in terms of temporally sited nature of the system and the temporally specific nature of any reforms that could be proposed.
First, the system itself. I do not think we can look at what we have as a cohesive whole – it is fragmented by nation, region and time. Our 21st century setup is, to a large extent, a 20th century structure that sits on a 19th century framework and yet still has links to its 16th and 17th century origins. Even in England, much as changed since Elizabeth I and William Cecil chose to use privileges granted by the Crown to further the English economy – even the 1624 Statute of Monopolies (12 years post Donne’s poem) preceded both the English Enlightenment and the 1648 Treaty of Westphalia that is said to underpin the concept of the nation-state. By the time of the reforms of the 19th century (and the debate as to whether the patent system should continue) there were radical shifts in the understandings of knowledge, governance and economics (from mercantilists to the classical theorists like Smith). Further, since the 1850s, there have been more changes in the governance, the relationships between states and economics (the likes of Veblen and Marshall working at the end of the 19th century). There are also questions whether the shifts in international negotiations and the concerns that face the system in the 21st century (the privileging of “green” technology and issues around the development agenda) mean that what we have now is/should be distinct from the 20th century system.
The nature of the system/s informs, and is informed by, its purposes – the purpose as understood by the nation-state that grants the patent and the purpose/s as seen by the players in the system. While, to an extent, every government has considered patents to be a tool for economic development and most patentees see them as a way of making money, it is the subtleties of policy assumptions and strategic practices of patentees and their competitors (made possible by the tinkerings of nation-states that arose, in part, out of the complaints of the users of the system) that have changed over time – with each shift limited by the opinions, attitudes and prevailing mind-sets of those making them. And let it not be forgotten that the historical and cultural differences between the regimes in place in different countries…
Alison Brimelow went so far as to acknowledge that the London Agreement on translations for the EPO and even the European Patent Convention itself are creatures of their own time – the former concluded in the dying months of the 20th century and the latter in the distant past of 1973. If these significant reforms are already less than ideal after such a short period of time, is it possible that more effective, longer-lasting, changes are possible? This prompts a further question: against what criteria should we judge major reforms? One of the specific calls Alison Brimelow made was for a reduction of complexity – and yet complexity is not, in itself, a bad thing. In the time of Donne, people are alleged to have said “God is in the detail”; now that is where the Devil resides. Efficiency, too, is a lauded principle that is attached to present understandings of the economy and society.
Leaving aside practicalities, such as the backlog and the fee structures at the EPO (which may be seen as details to occupy the minds of accountants and Presidents), if we are to build the future, as Alison Brimelow exhorted us to, to build a truly global system, then we should first consider if there is a solid foundation upon which to start. The fractured nature of the system, to my mind, suggests that any major reforms – those that do not involve wiping the slate clean – will be compromised by the lack of cohesion in what we have at the moment. If, as Martz also said, Donne believes that true knowledge comes through humility, then perhaps we should choose one of Alison Brimelow’s options – to have the courage to fail quickly. Reforms that go further consciously situated tinkering may be beyond the capabilities of divided community of nations.
For those interested in the early days of the patent system, you can have a look at a couple of my articles available from SSRN: http://ssrn.com/author=393897.