Posts Tagged ‘Copyright’
Besanko J has awarded Insight SRC $32,510.00 for the infringements of its copyright in the School Organisational Health Questionnaire by the Australian Council for Educational Reseaarch (ACER). The award consisted of $10 nominal damages and $32,500 by way of additional damages. There are some interesting points about ownership, assignment and damages.
The questionnaire consisted of 57 questions arranged under 12 headings or modules. ACER reproduced some 25 of these questions from 5 modules between 2006 and October 2009 as part of a project with Independent Schools Victoria.
There was no dispute that copyright subsisted in the questionnaire or that ACER had reproduced a substantial part. Rather, ACER disputed Insight SRC’s title to the copyright and whether Insight SRC had suffered any damage.
ACER’s basic point was that, as Dr Hart made the questionnaire in the course of his employment by the Victorian Department of Education, the Department (or the Crown) and not Dr Hart was the owner of the copyright pursuant to s 35 or the Crown Copyright provisions (here and here) of the Copyright Act 1968. If Dr Hart was not the original owner of the copyright, Insight SRC had no title since its rights depended on a chain of assignments starting with Dr Hart and not involving the Department (or the Crown).
Besanko J agreed with ACER that Dr Hart had created the questionnaire while employed by the Victorian Department of Education. However, his Honour found that Dr Hart and the Department (through Dr Hart’s superior) had agreed Dr Hart would retain ownership of the copyright and so s 35(6) and s 176 were excluded by the operation of s 35(3) and s 179.
The interesting point here is that the agreement between Dr Hart and his superior was purely oral but, as Besanko J pointed out, unlike the case with assignments pursuant to s 196 or s 197, there was no requirement for an agreement which excluded the operation of s 35(6) and s 176 to be in writing.
Besanko J did also find that s 176 would not have applied as Dr Hart, although an employee of the Department, was not acting under the control or direction of anyone in the Department in creating the questionnaire.
Insight SRC claimed to be the owner of the copyright in the questionnaire by assignment. The assignment of copyright to it was made on 1 October 2009; that is, after ACER had ceased its infringing conduct.
The main point of interest is that prior to 12 May 2011, none of the assignments – to Hart Cultural Lodges or Insight SRC – included the right to sue for past infringements. Deeds assigning the right to sue for past infringements from Dr Hart to Hart Cultural Lodges and then from Hart Cultural Lodges to Insight SRC were executed only on 12 May 2011.
After a review of the case law, including Trendtex and the High Court’s ruling in Equuscorp v Haxton, Besanko J accepted that Australian law now permitted the assignment of “bare” rights to litigation provided the assignee had a pre-existing genuine commercial interest in enforcing the claims of the assignor:
…. It must now be taken to be established in Australia that the circumstances in which a bare or mere right of action may be assigned include a case where the assignee has a pre-existing genuine commercial interest in enforcing the claims of the assignor.
While Besanko J was somewhat bemused why there was an assignment to Hart Cultural Lodges, his Honour considered that the ownership of the copyright in the questionnaire was a sufficient pre-existing genuine commercial interest to validate the late assignment of the right to sue for past infringements.
ACER generated some $213,000 in revenue from its infringing use of the questionnaire. Independent Schools Victoria in turn earned some $807,000 from supplying the questionnaire to its associated schools in infringement of the copyright.
Besanko J refused to award Insight SRC general damages; his Honour awarded nominal damages of $10 only.
The basis for this refusal to award general damages was that all Insight SRC obtained through the assignment of the right to sue for past infringements was whatever rights Dr Hart had to assign. Dr Hart himself had no right to general damages because:
118 …. Dr Hart was not personally conducting a business involving the use of the [questionnaire] between the beginning of 2006 and 1 October 2009 and it has been no part of their case before me that Dr Hart personally would have exploited any commercial opportunities with ISV. Furthermore, Dr Hart did not claim that he could recover any such loss as the major shareholder of Insight SRC and that the Court could lift the corporate veil. On the other hand, what Dr Hart did have as the copyright owner was a right to nominal damages for infringement of copyright and a right to claim additional damages under subs 115(4). An award of nominal damages is appropriate to vindicate the invasion of a copyright owner’s proprietary right….
That is, as Dr Hart was not himself in the business of selling the questionnaire, he could not claim the profits lost on the sales made by an infringing “competitor” – he was not in competition with ACER.
If general damages had been available, Besanko J would have assessed them at $130,000. Rather questionably (with respect), his Honour started with the revenue earned by ACER and reduced that amount by its costs to reflect the profits it made.
Besanko J would not have made any allowance for the revenues made by Independent Schools Victoria as that was not how Insight SRC put its case. The judgment does not explain why Insight SRC did not pursue such a claim. Presumably, it would not have claimed a share of Independent Schools Victoria’s revenues if it [or its exclusive licensee, rather] had secured the contract instead of ACER.
Besanko J found that ACER’s infringement was flagrant and awarded $32,500 by way of additional damages pursuant to s 115(4). ACER had a permissions unit to secure copyright licences where necessary and well knew of its obligations not to use copyright for commercial purposes without an appropriate licence. The fact that the officer in charge of ACER’s program did acknowledge Dr Hart’s authorship in footnotes did not save ACER either.
The amount of any additional damages is highly discretionary and notoriously difficult to predict. Given his Honour’s finding that ACER made $130,000 profit and the permissibility of taking into account that profit in assessessing the amount of additional damages, the award may seem surprisingly low given his Honour’s characterisation of the infringement as flagrant.
- The situation was rather more complicated: Dr Hart had assigned, or purported to assign, his copyright in the questionnaire to Hart Cultural Lodges (Dr Hart’s family trust) by two deeds, both dated 30 June 2009 and Hart Cultural Lodges in turn assigned its interests to Insight SRC by deed dated 1 October 2009. Dr Hart was the director and major shareholder of Insight SRC. To complicate matters further, Insight SRC granted an exclusive licence to another “Insight” company of which Dr Hart was also the director and major shareholder. That other Insight company having been the operating entity between 2006 and 2009, but not having a written agreement in place to qualify it as an exclusive licensee in terms of the Act. ?
- See Aristocrat Technologies v DAP Services (Kempsey)  FCAFC 40 at , -. ?
- At  in the face of ACER’s claim at  that it made no profits at all. ?
- See Aristocrat Technologies v DAP Services (Kempsey)  FCAFC 40 at - and Facton Ltd v Rifai  FCAFC9 at –42] and . ?
In an attempt to provide some structure to the anticipated submissions, the Issues Paper propounds some 55 questions over a range of topics including:
- should (maybe that should include “can”) Australia adopt a “fair use” exception (questions 52 – 53) – an earlier assessment by the CLRC (pdf – see p.7 for the recommendations);
- is there a need for greater freedom for “transformative uses” such as ‘sampling’, ‘remixes’, and ‘mashups’ (questions 14 – 18)
- to what extent should copying for private and domestic use be permitted more freely, including should Optus be able to provide its Optus TV Now service (questions 7 – 13);
- orphan works (questions 23 & 24);
- library and archive exceptions (questions 19 – 22);
- data and text mining (questions 25 – 27);
- educational institutions (questions 28 – 31);
- Crown use (questions 32 – 34);
- retransmission of free-to-air broadcasts (questions 35 – 39);
- do the statutory licensing schemes work efficiently in the digital environment and are new licences needed (questions 40 – 44);
- should there be any other free use exceptions and should any existing exceptions be done away with (questions 48 – 51);
- to what extent should people be able to “contract out” of copyright exceptions (questions 54-55) – see what the CLRC thought (pdf).
The Issues Paper is available on the web, as a pdf, an ePub and also in rtf components. (So far as I can see, it does not appear to be available in “dead tree” form.)
Submissions are sought by 16 November 2012. The ALRC itself is required to report by November 2013.
If you are looking for an overview of what is already in place, the Australian Copyright Council’s take is here (pdf).
In addition to finding Sanofi’s patent infringed, the Full Court affirmed Jagot J’s conclusion that Apotex had no implied licence to reproduce the copyright in Sanofi’s product information documents (PID).
Before a (medicinal) drug can be offered for sale in Australia, it must be registered in the Australian Register of Therapeutic Goods by the Therapeutic Goods Administration. One of the requirements for registration is the submission of a PID, describing the drug, what it can be used for and how and providing warnings about potential problems and risks.
Apotex argued that it was industry custom or usage for the suppliers of generic drugs simply to provide PID for their generic drugs in substantially the same terms as the originator’s PID. It provided evidence of many cases where this had happened, including a number of cases in which Sanofi’s generic arm had simply re-used a competitor’s original PID itself. This included:
13 drugs of which Sanofi-Aventis was the innovator and 22 generic versions of the same drug,
the top 10 drugs by value on the PBS and 62 generic versions of the same drug,
some eight drugs of which companies other than Sanofi-Aventis were the innovators and generic versions of those drugs of which Sanofi-Aventis was the issuer.
The TGA did not require PID submitted by generics to be in the same terms as the originator’s PID. If a generic’s PID was different in substance or terms, however, the TGA may require the generic to submit additional safety or efficacy data to support registration of its own formulation.
On the last day of trial, Sanofi was also allowed to introduce evidence showing that some generics did in fact prepare and register their own PIDs rather than just copy the originator’s PID.
In this state of affairs, the Full Court unanimously upheld Jagot J’s conclusion that the evidence of an implied licence was at best equivocal and so rejected the implication. (Keane CJ -, Bennett and Nicholas JJ -)
It is difficult to resist the impression that, if instead of being sober judges their Honours (at least Bennett and Nicholas JJ) were teenagers, the suggestion that a licence could be implied between parties who were not in any type of contractual or consensual relationship would have been met with:
As to the public interest, Parliament was forced to intervene (at the legislative equivalent of the speed of light) and create yet another specific defence and, in due course, Jagot J found that Apotex could rely on it as a defence (for acts done after the amendment came into force).
So far, 2012 is not proving an easy year for those trying to claim they have an implied licence to protect themselves from infringement allegations.
Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 2)  FCAFC 102
Following my post on the ALRC’s reference re exceptions in the digital environment, a couple of people kindly pointed out the Attorney General’s department is also conducting a review of the exceptions to technological protection measures.
A technological protection measure is … well, anyway, since the Sony v Stevens stuff up, the definition has been “fixed up” to close that gulf by adding access control technological protection measure as well.
Section 116AN provides for a number of exceptions – e.g. interoperability, encryption testing, security testing, online privacy, law enforcement and national security, libraries – and s 116AN(9) provides a regulation making power to create additional exceptions.
The existing “additional” exceptions are found in Schedule 10A of the Copyright Regulations.
The US Copyright Office is currently a large way through its 5th 3 year “ad hoc” rulemaking exercise for the counterpart arrangements under the US Act.
Submissions about the exceptions should be in by 17 August 2012
Responses to those submissions should be in by 5 October 2012.
(Congratulations to the AGD for a sensible, structured approach to submissions which recognises that some people will definitely have something to say about what other people submit!)
Gotye and Kimbra had that smash hit “Somebody I used to know“.
Prof. Tushnet gives extra points for the artwork. I wonder about that, does it go too far? I guess there is that dig at the artwork too …
While we’re having fun:
Walk off the Earth did this theatrical cover of Gotye/Kimbra.
Then, in the Key of Awesome really took the sledgehammer to it.
Copyright Act 1968 (Cth) s 41A.
(see: it was IP related)
The Government has announced the finalised terms of reference for the Australian Law Reform’s inquiry into copyright:
I refer to the ALRC for inquiry and report pursuant to subsection 20(1) of the Australian Law Reform Commission Act 1996 the matter of whether the exceptions and statutory licences in the Copyright Act 1968, are adequate and appropriate in the digital environment.
Amongst other things, the ALRC is to consider whether existing exceptions are appropriate and whether further exceptions should:
- recognise fair use of copyright material;
- allow transformative, innovative and collaborative use of copyright materials to create and deliver new products and services of public benefit; and
- allow appropriate access, use, interaction and production of copyright material online for social, private or domestic purposes.
As one might expect, the ALRC is directed not to duplicate work being undertaken by other inquiries and the like. It turns out that, amongst other things, these include
not duplicate work being undertaken on: unauthorised distribution of copyright materials using peer to peer networks; the scope of the safe harbour scheme for ISPs; a review of exceptions in relation to technological protection measures; and increased access to copyright works for persons with a print disability.
Anyone know what that work is?
The ALRC is required to deliver its report by 30 November 2013.
Terms of reference here.
Apparently inspired by this report, Senator Conroy, the Orwellian named Minister for Broadband, Communications and the Digital Economy, has acted to announce a new inquiry to be undertaken by the House of Representatives’ Standing Committee on Infrastructure and Communications.
Now, as a purchaser of digital files, I am hardly unbiased but it does seem hard to justify price differentials of 50% or more. Seems like there is economic reasoning that challenges the Gerry Harvey-esque explanations.
Only problem, almost 20 years ago, the Prices Surveillance Authority recommended (what became in effect) this provision and some record companies got into big trouble trying to circumvent their own corresponding provision, but it would seem nothing has changed. Gartner analyst, Brian Prentice, reported here might be on to something suggesting the problem is the territorial nature of copyright itself. A (copyright) world without borders. Imagine!
Now I’ve had some time to look at the Roadshow decision, I think it falls near the territory of the House of Lords’ Amstrad ruling but doesn’t go as far as the Supreme Court of Canada’s CCH Canada ruling.
The only issue before the High Court was whether or not iiNet (the ISP) was liable for authorising the infringements of copyright committed by 11 of its subscribers, who made available online various infringing copies of films through BitTorrent (even though it can be used for lawful purposes, I think I’ll let you go find your own copy if you’re so inclined). Given that iiNet had no role in BitTorrent, its subscribers’ choices to use BitTorrent or what they downloaded with BitTorrent, the film companies sought to put iiNet’s liability on the basis that (at ):
- the provision by iiNet to its customers (and to other users of those customers’ accounts) of access to the internet, which can be used generally and, in particular, to access the BitTorrent system;
- the infringement of the copyright in the appellants’ films by customers of iiNet who have made the films available online in whole or in part using the BitTorrent system;
- the knowledge by iiNet of specific infringements, as drawn to its attention by notices from the Australian Federation Against Copyright Theft (“AFACT”), representing the appellants;
- the technical and contractual power of iiNet to terminate the provision of its services to customers infringing copyright; and
- the failure by iiNet to take reasonable steps to warn identified infringing customers to cease their infringements and, if appropriate, to terminate the provision of its services to them. 
As you no doubt know by now, the High Court ruled unanimously that iiNet did not auhorise the infringements of the film companies’ copyrights.
The first thing to note is we’ve got those 2 teams giving separate judgments again: (French CJ, Crennan and Kiefel JJ; Gummow and Hayne JJ). Not quite sure where that is going although 2 members of team 1 will still be there after June 2013.
Next, all 5 judges agreed whether someone is liable for authorising is largely a question of fact to be determined in all the circumstances.
Then, despite what we had all thought since Moorhouse, all 5 judges agree that “authorise” does not mean “sanction, approve, countenance”. “Countenance” in particular includes connotations which ‘are remote from the reality of authorisation which the statute contemplates’ (at ) and go well beyond the ’core notion of “authorise”’ (at ).
Instead, in deciding whether or not there has been an authorisation all 5 judges directed attention to the 3 criteria specified in 101(1A) and 36(1A):
(a) the extent (if any) of the person’s power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
All 5 judges recognise that the 3 s 101(1A) criteria are not exhaustive; they are the starting point (at ) and essential (at ), however, in this case at least they are the only criteria considered.
In applying these 3 factors, the 2 judgments reach pretty much the same conclusions:
(78) The extent of iiNet’s power was limited to an indirect power to prevent a customer’s primary infringement of the appellants’ films by terminating the contractual relationship between them. The information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts. For these reasons, iiNet’s inactivity after receipt of the AFACT notices did not give rise to an inference of authorisation (by “countenancing” or otherwise) of any act of primary infringement by its customers.
(146) The present case is not one where the conduct of the respondent’s business was such that the primary infringements utilising BitTorrent were “bound” to happen in the sense apparent in Evans v E Hulton & Co Ltd, and discussed earlier in these reasons. Further, iiNet only in an attenuated sense had power to “control” the primary infringements utilising BitTorrent. It was not unreasonable for iiNet to take the view that it need not act upon the incomplete allegations of primary infringements in the AFACT Notices without further investigation which it should not be required itself to undertake, at its peril of committing secondary infringement.
These conclusions, however, summarise the results of a very multi-faceted and many layered inquiry. Any “power” that iiNet had was too “indirect” or “attenuated” essentially because:
- iiNet had no involvement in BitTorrent or a user’s choice to use BitTorrent or what the user used BitTorrent for;
- unlike Grokster (pdf) and Kazaa, iiNet did not encourage its users to use BitTorrent or seek to profit specifically from their infringing use;
- iiNet did have a contractual power to suspend or terminate an account for breach (including for copyright infringement) but:
- its obligation was to provide internet access which could be used for non-infringing or infringing purposes, not just infringing purposes;
- terminating an account would not stop the user just using a different account, possibly with a different ISP;
- iiNet would be liable for breach of contract if it suspended or terminated a user in response to an allegation and it turned out the user was not in fact infringing copyright. 
A third consideration highlighted in both judgments was the inadequate notice of infringements given through the AFACT notices. Remember, in keeping with Gibbs J,  the film companies argued that iiNet had knowledge that its requirement that users not infringe copyright was being ignored.
It was accepted that iiNet knew that more than half of its user’s usage involved BitTorrent (although not all of that constituted infringements). (at , ; but iiNet was no different to any other ISP in that regard).
The film companies also sent iiNet on a weekly basis AFACT notices which purported to set out information about subscriber’s accounts that were being used to communicate infringing copies. By the trial, iiNet accepted that these AFACT notices did in fact identify infringements. There were, however, a number of problems.
Most importantly, when the notices were sent, there was no explanation of how they were prepared or how they worked (not that that would have made any difference to how iiNet would have treated them) ; it was only after discovery and provision of expert evidence that iiNet could understand them sufficiently to accept their veracity ( and , ).
This raises the question: what is iiNet’s situation now that it has had explained to it and accepted as reliable the AFACT notices? That seems rather less clear.
The ‘reasonableness’ of iiNet’s inaction was at least in part predicated on its lack of knowledge given the problems with the AFACT notices.
First, French CJ, Crennan and Kiefel JJ say at , however, that there cannot be liability for authorisation without power to prevent the primary infringement and, as already noted, any such power is lacking or too indirect. Gummow and Hayne JJ do not make so explicit a statement (and their Honours endorse imposition of liability where infringement is “bound” to happen). Nonetheless, their Honours do at several points emphasise the presence or absence of control, or direct power to control, the primary infringement as key facts. For example,  and in contrast to Moorhouse at  from which iiNet’s situation was “well removed”.
Secondly, the High Court seemed very reluctant to leave iiNet with the burden of having to check back to see whether a particular user was still infringing particularly in circumstances where it would have been dependent on the use of the film companies’ technology to do so. So French CJ, Crennan and Kiefel JJ said:
(74) Whatever responses iiNet received to warnings, iiNet would be obliged to update the investigative exercise underlying the AFACT notices either itself or by reference to subsequent AFACT notices (allowing an appropriate interval for compliance with a request to cease infringement) before proceeding further.
(75) Updating the investigative exercise in the AFACT notices would require iiNet to understand and apply DtecNet’s methodology – which, among other things, involved a permission to DtecNet from AFACT to use the BitTorrent system to download the appellants’ films. Before the filing of experts’ reports in the proceedings, the information in the AFACT notices did not approximate the evidence which would be expected to be filed in civil proceedings in which interlocutory relief was sought by a copyright owner in respect of an allegation of copyright infringement. Also, any wrongful termination of a customer’s account could expose iiNet to risk of liability. These considerations highlight the danger to an ISP, which is neither a copyright owner nor a licensee, which terminates (or threatens to terminate) a customer’s internet service in the absence of any industry protocol binding on all ISPs, or any, even interim, curial assessment of relevant matters.
Thirdly, both judgments refer with approval to the Blank Tapes case and the majority’s recognition there that manufacturers of products such as blank tapes and video recorders, which have both lawful and unlawful uses, will not be liable for authorising copyright infringement even if they know it is likely that their products will be used to commit infringements (at  and ).
Both judgments conclude with calls for the legislature and/or co-operative industry codes to deal with the challenges these issues pose. It had seemed that a co-operative industry code required the near death experience in the Full Federal Court for motivation, but at least the 5 major ISPs kept plugging away.
Finally, what is the status of Moorhouse itself? Here the difference with Amstrad and CCH Canadian comes clearest. The House of Lords plainly thought Moorhouse was a copyright liability too far and, as the Roadshow High Court interpreted the judgment, limited authorisation to cases where the defendant granted, or purported to grant, the primary infringer the right to do the infringing act. The Supreme Court of Canada went even further and held that a law library was not liable for authorising infringements by photocopying in largely similar circumstances to Moorhouse (if one can overlook any difference between a reference library for lawyers and a university library). In contrast, the Roadshow High Court explained that the University was liable in Moorhouse because of the extent of its control over the photocopier, the books and the primary infringer’s activities: the circumstances in Roadshow were “well removed” from those in which liability was imposed on the University (at , see also ). This approach may reflect the legislative codification of criteria from Gibbs J’s judgment, but it also reflects the way iiNet put its case (at  – ).
Roadshow Films Pty Ltd v iiNet Ltd  HCA 16
- Slightly different formulation by Gummow and Hayne JJ at . ?
-  – , ;  Gummow and Hayne JJ go so far as to point out that termination would deny the user access to the internet for non-infringing activities. Despite the criticisms directed at Higgins J’s opinion in Adelaide Corporation, all 5 judges appear to agree with his Honour’s view that a right to terminate a contract was wholly disproportionate (but, of course, there are all those other factors to, er, factor in). The Grokster / Kazaa point is made explicitly only by Gummow and Hayne JJ at  ?
- See e.g. at  and at  in austlii’s online version of Moorhouse. ?
- See the evidence recounted by Jagot J at  –  in the Full Court. ?
- See also the summary of iiNet’s argument at  and Gummow and Hayne JJ at  –  and . ?
The Full Court (Finn, Emmett and Bennett JJ) has unanimously allowed the appeal from Rares J’s finding that Optus TV Now did not infringe the copyright held by the AFL, the NRL and Telstra in broadcasts (or films) of the footy.
Based on the summary, the Full Court has found that Optus either made the copies of the broadcast and films or Optus and the subscriber did so jointly.
As Optus was the (or a) maker, it could not rely on the “home taping” defence provided s 111 as the copy was hardly for “private and domestic use”.
This is, of course, the opposite result to that reached by the Second Circuit in the US in the Cartoon Network case in different legislative setting.
The second point would seem to follow necessarily from the first, but the first could render the protection of s 22(6) largely nugatory to those who carry transmissions of infringing material across their networks. The reasoning on this point will need closer consideration. Of course, Optus was storing the copy longer than may be the case of an ISP whose network is used to download some infringing material. Wonder what this provision means?
National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd  FCAFC 59
Lid dip Australian Copyright Council