The Kookaburra laughs again….

April 21, 2011

By Dr Melissa de Zwart

In EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited [2011] FCAFC 47 (31 March 2011) the Full Federal Court, comprising Emmett, Jagot and Nicholas JJ, upheld the first instance decision of Jacobson J in Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2010] FCA 29 (4 February 2010). Each judge gave a separate judgment, Emmett J taking the lead on the approach to the test of infringement, Jagot J focusing upon authorisation liability and the scope of the orders to be made by the Court, and Nicholas J making some observations on the approach of an appellate court to the findings of the primary judge and the nature of ‘substantial part’.

EMI had appealed the decision on the grounds that the primary judge erred in determining that the recording in question involved a reproduction of a substantial part of the ‘Kookaburra’ song, in particular the manner in which the primary judge came to a determination of aural similarity and substantial part. Larrikin also cross-appealed on the basis that the trial judge erred in the finding that two Qantas advertisements did not reproduce a substantial part of Kookaburra, and in the question of EMI’s liability for authorisation of acts of infringement with respect to the reproduction of ‘Down Under’ in Qantas advertisements and other works.

In the unlikely event that the reader requires a refresher on the facts (this being one of the most widely reported copyright cases of the past few years, and one on which everyone has an opinion), the question before the Court was whether the recordings of the ‘iconic Australian musical work’, the Men At Work song ‘Down Under’ involved the reproduction of a substantial part of ‘another iconic Australian musical work’, the campfire classic loved by the Scouting/Guiding movement worldwide, ‘Kookaburra’, originally composed by music teacher, Marion Sinclair. Sinclair composed the little song, to be sung as a round, in response to a competition run by the Girl Guides in 1934. Ownership of the copyright had been acquired by Larrikin Music Publishing with effect from 21 March 1990. (See Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2009] FCA 799 (30 July 2009).

At first instance, Jacobson J held that the 1979 and the 1981 recordings of ‘Down Under’ (‘the recordings’) infringed copyright in ‘Kookaburra’. However, Larrikin also claimed that EMI had authorised acts of infringement in relation to the reproduction of ‘Down Under’ in other works, including two Qantas advertisements in which ‘Down Under’ was featured. The trial judge held that the Qantas advertisements did not involve the infringement of copyright in ‘Kookaburra’. An order relating to damages was made on 6 July 2010 and discussed in Fortnightly Review.

The Full Court dismissed EMI’s appeal and allowed in part Larrikin’s cross-appeal. In particular, it remanded back to the trial judge the task of determining the matter of authorisation, other than in respect of the Qantas advertisements.

The judgment of Emmett J contains a lengthy discussion of the development of copyright law, not an unusual thing in itself in recent Federal Court decisions, but unusual in this instance due to the fact it begins with a discussion of Roman Law. He observes: ‘The Romans disliked monopolies just as much as common lawyers’ (para. 30) and recognised ‘no exception for copyright’. Rather, questions of ownership with respect to creative outputs were dealt with according to concepts such as ‘accessio’ and ‘specificatio’. However, the invention of printing and other technologies facilitating multiple reproduction necessitated the intervention of the state, and hence the evolution of the modern copyright statutes. After this general discussion, Emmett J considered the relevant test to be applied to the infringement of a musical work, concluding that it involves an objective stage, where ‘the inquiry is whether the alleged infringing work is similar to the copyright work’, and the subjective stage, ie the question whether the copyright work was copied.

Emmett J was prepared to conclude that the primary judge had erred in principle in some respects and that the Full Court should consider de novo the question of infringement. He based this assessment on five key arguments made on behalf of EMI and Hay: first, the primary judge had placed too much reliance on Hay’s performance of ‘Kookaburra’ in conjunction with ‘Down Under’ at certain live performances; second, that he overlooked the importance of ‘Kookaburra’ being a round; third, that the primary judge misapplied the concept of originality; fourth, that ‘the finding of objective similarity was based on a consideration of certain elements of Kookaburra, namely, melody, key, tempo, harmony and structure’, that Jacobson J considered in isolation from each other, and that his Honour ‘appeared to give melody greater weight than the other elements without explaining the basis for that approach’ – this approach being ‘overly mechanistic’; and finally, that Jacobson J had erred with respect to assessing the relative parts of the two works in considering the concept of ‘substantial part.’ Emmet J accepted that the primary judge had only been ‘able to detect the resemblance between the relevant bars of Kookaburra and the Impugned Recordings with the assistance of the experts and of Mr Hay, and that there was force in the submission that the primary judge had become sensitised to the similarities’. In particular, this related to Hay’s admission that for a period of about 2- 3 years from 2002, when he performed Down Under at live concerts, he would sing the words of Kookaburra in place of the flute riff, thus leading Jacobson J to conclude that the ‘short answer’ to the qualitative test requirement was to be found in Hay’s own performance of both works together.

Whilst Emmett J agreed that the ‘short answer’ was not to be found in this way, and on this point the trial judge had erred, his Honour observed (at para. 86):

‘A similarity between part of Kookaburra and the flute phrase is clearly perceptible. True it is that that similarity went largely unnoticed for in excess of 20 years, notwithstanding that each work is said to be an iconic Australian work. Nevertheless, the question is one of objective similarity. The aural resemblance need not be resounding or obvious. The relevant test is not the effect upon a casual listener of the whole of the versions of Down Under in the Impugned Recordings. Sensitised though the primary judge may have been to the similarity, it is not erroneous to direct oneself to the relevant parts of the works, to listen to the works a number of times, and to accept the assistance of the views of experts, in determining the question of objective similarity. In those respects, I do not consider that the primary judge erred.’

With respect to the argument regarding lack of aural similarity, Emmett J noted that there was no similarity between the works in terms of their genres, styles, objects or purposes, but the quotation from Kookaburra was intended to be perceived by listeners as ‘a quotation, or a reproduction, of part of Kookaburra, and the musical genres or styles associated with Kookaburra.’ However, he continued, neither ‘the existence of the quotation or reproduction, nor its capacity to be discerned, is affected by casting it as a tribute or reference to an Australian cliché or iconic melody. The flute phrases in the Impugned Recordings are a clear departure from the genre of a rock anthem, and therefore distinguish the part taken from Kookaburra from the other parts and musical elements of Down Under.’ Ultimately, therefore, what the listener hears is ‘a reproduction of part of Kookaburra’. (para 92).

Emmett J rejected any need to establish animus furandi in order to make out infringement, concluding rather that ‘the quotation or reproduction of the melody of Kookaburra appears by way of tribute to the iconicity of Kookaburra, and as one of a number of references made in Down Under to Australian icons.’ (para. 99) However, the fact that Kookaburra is used in this way is no defence to the infringement action.

Perhaps the most surprising part of Emmett J’s judgment is his lament regarding the state of modern copyright law. He concludes his discussion of the question of infringement with the following:

If, as I have concluded, the relevant versions of Down Under involve an infringement of copyright, many years after the death of Ms Sinclair, and enforceable at the behest of an assignee, then some of the underlying concepts of modern copyright may require rethinking. While there are good policy reasons for encouraging the intellectual and artistic effort that produces literary, artistic and musical works, by rewarding the author or composer with some form of monopoly in relation to his or her work (see Ice TV at [24]), it may be that the extent of that monopoly, both in terms of time and extent of restriction, ought not necessarily be the same for every work. For example, it is arguably anomalous that the extent of the monopoly granted in respect of inventions under the Patents Act 1990 (Cth), being a limited period following disclosure, is significantly less than the monopoly granted in respect of artistic, literary or musical works, being a fixed period following the death of the author or composer, irrespective of the age of the author or composer at the time of publication.

Of course, the significance of the anomalous operation of the Copyright Act can be addressed in terms of the remedies and relief granted in respect of infringement. Nevertheless, one may wonder whether the framers of the Statute of Anne and its descendants would have regarded the taking of the melody of Kookaburra in the Impugned Recordings as infringement, rather than as a fair use that did not in any way detract from the benefit given to Ms Sinclair for her intellectual effort in producing Kookaburra. (paras. 100-101.)

It remains to be seen how this general regret may be taken up in later Federal Court decisions.

Jagot J also considered the argument that the trial judge’s approach to the aural comparison was ‘overly mechanistic’ and ‘fragmented’ but rejected this on the basis that although Jacobson J made use of expert evidence and made reference himself to the fact that he had become sensitised to the similarities during the course of the hearing, the trial judge was entitled to have regard to expert evidence on the question of objective similarity and also to have regard to Hay’s own evidence regarding the playing of the two songs together:

The fact that Mr Hay’s performances are not the infringement sued upon, in this context, is immaterial. As the trial judge put it, the capacity to sing the Kookaburra melody directly over the relevant parts of the Down Under flute riff “graphically” illustrates that the fourth bar of Example D and the second and fourth bars of Example E are unmistakably the melody of Kookaburra. The trial judge was entitled to use that evidence as he did. (para. 218)

Jagot J delivered the leading judgment with respect to the question of authorisation. The trial judge’s findings regarding the Qantas advertisements stands, but the authorisation case, other than in respect of the Qantas ads is to be remitted to the trial judge. The Qantas ads were found by the primary judge not to infringe copyright in Kookaburra and no error in that conclusion had been established. Larrikin’s argument was that by granting licences to reproduce Down Under to third parties EMI and Hay authorised the infringement of copyright in Kookaburra by those uses. EMI and Hay argued that any individual reproduction of Down Under may not involve an infringement of Kookaburra, as Down Under appears in many forms which do not involve Kookaburra, as it did not form part of the original composition, but was added later by Mr Greg Ham.

As the other matters raised by Larrikin in the cross appeal, ie liability of EMI under ss 36 and 115 of the Copyright Act with respect to damages, account of profits, and the ordering of injunctions against EMI, depend upon the determination of the authorisation case, these issues are left to be dealt with by the trial judge.

Nicholas J agreed with the reasoning used and orders made by Jagot J.

The outcome of the appeal reflects the difficulties of applying the test of infringement to musical works, as well as the general frustration that many have had with the outcome ie the finding that a much loved Australian song infringes a tune that many people considered to be a ‘folk song’, and therefore long since out of copyright term. It is likely that musicians will still continue to struggle with the concepts of originality and substantial part. Ultimately, the case reflects nothing new or novel in the approach to the interpretation and application of copyright law, although it will inevitably continue to generate bad press for the doctrine of musical copyright for some time to come.

Dr Melissa de Zwart is an Associate Professor in Law at the University of Adelaide.

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Newsflash: Kookaburra damages award case sounds like bad economics

July 6, 2010

By Assoc. Profs. Beth Webster and Paul Jensen

Yesterday’s decision of Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No. 2) – [2010] FCA 698 to grant damages to Larrikin Music heralds a new chapter in bad economics.  To understand why, consider the economic rationale for the existence of IP rights.  As a matter of economic principle, IP rights only exist to stimulate investment in creation of new technology, music or books.  IP rights achieve this by protecting against imitation, thereby enabling their owner to sell their works for a higher price than would otherwise be the case.  So, decisions to award damages for breach of IP rights should depend solely on the loss of profit sustained by the IP owner.

In February’s judgment, (click here for a summary) Justice Jacobson ruled that Men at Work’s song ‘Down Under’ had indeed infringed Larrikin’s copyright in the tune ‘Kookaburra Sits in the Old Gum Tree’.  Yesterday’s ruling dealt with the issue of the damages that this infringement caused.  Using our simple economic framework, it is obvious that damages should only be paid if it can be shown that Larrikin suffered an economic loss as a result of the infringement.  The relevant question is the following: if ‘Down Under’ had not been recorded and sold, would Larrikin’s profits from ‘Kookaburra’ be higher?  The answer is clearly “no”.

So, what did Justice Jacobson rule with regard to damages?  Well, he awarded Larrikin damages equal to 5% of profits since 2002.  Given the success of the song, this will probably amount to several hundred thousand dollars.  Justice Jacobson makes it clear in his judgment that these are not damages for copyright infringement.  So far, so good.  Instead, they are damages payable under s82 of the Trade Practices Act 1974 as a result of misrepresentations made by the composers (and recording companies) of ‘Down Under’ to musical royalty collection agencies APRA and AMCOS.

Say that again?  You mean the damages are due because the composers of ‘Down Under’ falsely filled out their APRA form when identifying who wrote the song (and therefore who was entitled to the royalty revenue stream)?  In other words, they failed to recognise the contribution of the composer of ‘Kookaburra’.  But that’s absurd.  The sales of ‘Kookaburra’ were not affected in any way shape or form by the success of ‘Down Under’.  Quite simply, Larrikin should not be due any damages at all.

However, upon a finding of infringement, the parties agreed that damages be determined by taking a percentage of Men at Work’s royalties.  The parties agreed that the percentage be based on the hypothetical bargain that would have been struck between a willing licensor and a willing licensee of the copyright in Kookaburra.  The judge stated that “this approach is in accordance with the principles commonly applied in assessing damages for the infringement of the rights of the owner of an item of intellectual property.”

Once again, this approach illustrates how IP law and IP practitioners operate under a veil of ignorance with regard to the economic rationale of IP rights.  The problem is quite simple: the law typically assumes that IP rights are based in ‘natural rights’.  Viewed through this lens, Larrikin is entitled to capture some of the value created by ‘Down Under’ because it relied on a tune owned by Larrikin.  But this is clearly flawed logic: the only reason copyright exists is to provide sufficient incentive for artists to create new works.

We don’t use ‘natural rights’ logic to determine the rewards for doctors who save lives, civil engineers who bring us clean drinking water, or teachers who teach our children to read and write, so why should we use this rule for the creators of music?  Hopefully, the outrage over this decision will force a major re-think about the way in which we view IP infringement cases.

Beth Webster and Paul Jensen, IPRIA, University of Melbourne

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