Love was not in the air – Part 2

In a previous post, we looked at why Perram J held that Glass Candy’s “Warm in the Winter” and Air France’s “France is in the Air” reproduced a substantial part of the musical work in Love is in the Air, but not the literary work comprising the lyrics.

A further set of issues his Honour had to untangle was which acts involving the streaming and downloading of Warm or France infringed and who owned those rights.

You will recall that Glass Candy are an American electronic duo based in America who, in 2011, released “Warm in the Winter”. Glass Candy wrote and recorded “Warm in the Winter” in the USA. They made it available for streaming and download on, first, the Big Cartel website and then the IDIB website.[1] They or their rights management agent, Kobalt, also made the recording available through iTunes / Apple Music, Google Play, Youtube, Spotify etc.

Subsequently, Glass Candy provided a version of “Warm in the Winter” to Air France for use by the latter in its Air France: France is in the Air promotional campaign. Until this litigation started, Air France used “France is in the Air” in TVCs and radio advertisements in 114 countries (but not Australia), posted the advertisments on its Youtube channel (which could be downloaded from Australia) and, if you rang up its office from Australia and all its customer service operators were tied up, for its “music on hold” service.

Infringement, or not

Having found that Warm and France reproduced a substantial part of Love, Perram J turned to determing which conduct engaged in by Glass Candy, Kobalt and Air France actually infringed any copyright in Australia and who owned those rights.

In summary, Perram J held that:

(1) the streaming and downloading of Warm from the Big Cartel and IDIB websites infringed the copyright in Love;

(2) the streaming and downloading of Warm from the streaming services iTunes/Apple Music, Google, Play, Spotify and Youtube did not infringe copyright as it was licensed; and

(3) the playing of France to Australians via Air France’s music on hold service did infringe, but the streaming and downloading via Youtube did not.

The infringing acts

The streaming of Warm to Australia and its downloading by subscribers in Australia entailed a number of acts:[2]

(1) the making and recording of Warm;

(2) the uploading of a copy of Warm on to the servers of each streaming service;

(3) the making available of that copy to be accessed by end-users in Australia;

(4) the streaming of the recording to someone located in Australia; and

(5) in the case of downloads, the downloading of a copy of Warm on to the end user’s computer (or smart device) in Australia.

Making and recording – the reproduction right

The making and recording of Warm and France did reproduce a substantial part of Love but, having taken place in the USA (or the USA and France), were not infringements of the copyright in Australia.[3]

There does not appear to have been evidence about where the servers of the streaming services such as iTunes / Apple Music, Google Play, Spotify or Youtube were located, but Perram J was not prepared to assume they were in Australia. So loading the copy on to the streaming service’s server was not an infringing activity either.

Making the recording available to be accessed – the communication right[4]

Although storing the copies on the streaming services’ servers was not a reproduction implicating Australian copyright, Perram J considered that Glass Candy’s acts of communicating the copies of Warm to the streaming services (uploading them) could infringe copyright in Australia and the acts of streaming and downloading in Australia would be damage suffered by the copyright owner in Australia. At [376], his Honour said:

…. That act of infringement seems to me to occur by communicating Warm to iTunes (and if it had been proven the other online music services). That was the infringement. Each time thereafter that the streaming service raised revenue by streaming or downloading Warm that was evidence of the damage suffered by the Applicants or the profits made by Glass Candy. Viewed that way, whether the streaming and downloading of Warm from the online music services is a contravention is irrelevant.

From the context, however, it appears that that act of communicating the copy to the streaming service(s) was not an infringement alleged against Glass Candy. I am not sure how that “infringement” would work, however, given his Honour’s further findings.

The alleged infringements the subject of the proceeding

That left as infringing acts being pursued by the Applicants:

(1) the streaming of Warm to Australians from the Big Cartel and IDIB websites – an exercise of the communication right;

(2) the making of the copies of Warm by users in Australia from the Big Cartel and IDIB websites – an exercise of the reproduction right; and

(3) the streaming of Warm to Australians from the streaming services – also an exercise of the communication right;

(4) the making of the copies of Warm by users in Australia from the streaming services – (at [276]) an exercise of both the communication right (by the streamng service) and the reproduction right (by the end-user); and

(5) in the case of France, the playing of “music on hold” to callers from Australia.

These allegations gave rise two problems: (a) who was the owner of the relevant right and (b) what licences of these copyrights had been granted. The issues that arose are a good illustration of the kind of tracing the chain of title fun the long term of copyright requires you to engage in to make sure you have identified the right person as the copyright owner.

In summary, Perram J found that Boomerang had no standing to sue anyone for infringing the communication right as it was not the owner of the relevant copyright; APRA was. Boomerang was the owner of the copyright in respect of the reproduction right, but its interest was partial or concurrent with AMCOS’ interest as the exclusive licensee of that right.

However, the streaming and downloading from the streaming services, iTunes / Apple Music, Youtube, Google Play and Spotify did not not infringe as those services held licences from APRA and AMCOS for those acts.

The copyright and ownership – a chain of title history

Harry Vanda and the late George Young – the Easybeats, Flash in the Pan – composed Love is in the Air in 1977.

In 1978, they assigned all their copyright in the literary and musical works comprised in Love to Alberts.

Subsequently, in 2016, when Alberts sold its business to BMG, it excluded from the sale the back catalogue of songs written by Vanda, Young and a third member of the Easybeats, Stevie Wright. Alberts instead assigned these rights to Boomerang – a new company owned by members of the Albert family.

However, in 1972 Vanda and Young had become members of the Australasian Performing Right Society (APRA), the collecting society for public performance rights and, as it was before the introduction of the broadly based communication right[5] by the Copyright Amendment (Digital Agenda) Act 2000, the cable diffusion right.

When Vanda and George Young became members of APRA, like everyone else who becomes a member, they assigned to APRA the exclusive rights:

(a) to perform in public; and

(b) to transmit via a diffusion service,

in all of their existing copyrights and any copyright works made in the future while still a member of APRA.[6]

So, the rights in Love is in the Air assigned by Vanda and Young to Alberts did not include the public performance or diffusion rights, as they had already been assigned to APRA.

An interesting point to note here is that the assignment to APRA in 1972 was not an assignment of the broad communication right, as there was no such right under Australian law at that time. Further, the repeal of the diffusion right and its replacement with the broad communication right did not affect that earlier assignment. The earlier assignment did not catch, however, the broader rights encompassed in the communication right, apart from the diffusion service, when the broader right came into force as the terms of the assignment were limited just to the diffusion right.

After the assignments from Vanda and Young, Alberts had also entered into agreements which affected the rights of reproduction and communication.

In 1986, Alberts had entered into a licence with AMCOS granting AMCOS the exclusive rights to authorise the making of records from the Alberts catalogue, including Love. Over time this was amended so as to include the making of digital records. The exclusive licence included the right to authorise the making of reproductions for the purposes of broadcasting in Australia. There were, however, three exclusions from these exclusive rights: they did not extend to making reproductions for inclusion in advertisements, or cinematographic films for the purpose of being broadcast in Australia. They also did not extend to licensing a number of named record companies.

In 1992 and again in 2005, Alberts had also entered into assignments with APRA. The 2005 assignment included an assignment of the right of communication to the public (introduced by the Digital Agenda Act in 2001).

Finally in 2016, after the assignment from Alberts of its copyright in Vanda, Young and Wright works, Boomerang also granted an exclusive licence over its copyright to AMCOS and assigned its public performance and communication rights to APRA.

At [299], Perram J found Boomerang and AMCOS had mutually abandoned the earlier licence granted by Alberts and replaced it with the 2016 licence.[7] The 2016 licence granted AMCOS exclusive rights to authorise reproduction of Love to make records, for digital downloading and communication to the public. AMCOS was not licensed to authorise use of Love in advertisements or synchronisation into a film.

A summary

So, at [326] and [342] Boomerang had no standing to sue Glass Candy or Air France in respect of any streaming or the playing of ‘music-on-hold’ as APRA was the owner of the relevant rights.

Boomerang was the owner of the reproduction right (at [334] – [335], [342]), but its interest was concurrent with AMCOS as the exclusive licensee under s 119 and s 120. AMCOS of course also had concurrent rights under those sections.

Which acts of streaming / downloading infringed?

The straightforward case on infringement was the streaming and downloading from the Big Cartel and IDIB websites. The position of iTunes / Apple Music, Google Play, Spotify, Youtube was complicated by licences those entities had from APRA and AMCOS.

iTunes / Apple Music, Spotify et al.

The evidence showed that sales of Warm through Apple’s services amount to $85.41 (although some of these were probably to the Applicants’ solicitors).

Perram J held that the streaming and downloading of Warm from these services did not infringe as they held licences from APRA and AMCOS which permitted these acts.

In January 2010, Apple Pty Ltd had entered into a licence agreement with APRA and AMCOS. By cl. 9.1, the licence was a non-exclusive licence to:

(a) reproduce AMCOS Works;

(b) authorise the reproduction of AMCOS Works;

(c) communicate in the Territory the APRA Works (including authorising their electronic transmission from Your Digital Music Service to Your customers);

(d) authorise Your Affiliates to communicate the APRA Works to customers in the Territory as necessary in the course of providing the Digital Music Service,

in the form of Downloads (whether by You, or Your customers in the Territory, onto storage devices) for the purpose of Sale or to complete a Sale, including in the form of Clips provided at no charge for the sole purpose of demonstrating the Clip to customers and potential customers of Your Digital Music Service …

Love was included in the APRA and AMCOS Works.

Perram J held that the rights to reproduce and communicate to the public included the rights, not just to reproduce or communicate the whole of Love, but also a substantial part of it through the operation of Copyright Act 1968 s 14. As Warm and France reproduced a substantial part of Love, they were covered by the licences. At [352], his Honour explained:

Because Love is in the AMCOS and APRA catalogues it follows that since 2010 Apple has been fully licensed to provide digital streaming and downloading of Love. And because the doing of an act in relation to a work is taken by s 14 of the Copyright Act to include a reference to the doing of that act in relation to a substantial part of the work, it also follows that Apple has at all material times been licensed by APRA and AMCOS to make available for streaming or digital download a substantial part of Love. Of course, the Applicants’ principal contention in this case is that making Warm available for streaming or digital downloading involves the communication or reproduction of a substantial part of Love. However, it would appear that iTunes is lawfully entitled to make Warm available for streaming or downloading even if it does involve a communication or reproduction of a substantial part of Love. Consequently, the Applicants can have no possible case against Apple for making available Warm for streaming or downloading from iTunes.

Similar conclusions followed in respect of the other streaming services which also had licences with APRA and AMCOS.

As Apple did not infringe by streaming or authorising the downloading of Warm, so also Glass Candy could not be liable for authorising the (non-)infringement.

There was an additional wrinkle on this part of the case. Kobalt admitted there had been streaming from Google Play, Spotify and Youtube, but Glass Candy did not. Perram J considered the evidence did not actually establish there had been streaming or downloading from these services so, if the licences did not cover these activities, Kobalt alone would have been liable by reason of its admissions.

The Big Cartel and IDIB websites

The evidence showed that Warm had been downloaded 12 times for $11.50 in revenue from Big Cartel and only once from IDIB. There were also payments to Kobalt Australia of $266.60 from AMCOS and $366.43 from APRA. Warm was still being advertised for sale for $1 from the IDIB website.

The position of downloads from the websites Big Cartel and IDIB was straightforward. The evidence showed Padgett uploaded Warm or caused it to be uploaded and Ida No received payments from time to time from the sites. Therefore, at [348] they were liable for authorising the communications to the public and downloading from those websites.

The position of streaming was more complicated. Padgett and Ida No had licensed their distribution / streaming rights to BMI in 2010. APRA’s own records recorded BMI as the owner of copyright in Warm for the public performance and communication rights. IDIB had also licensed streaming rights in relation to its website to Kobalt US. At [390], this meant that the person liable for authorising the streaming from the idib website was either BMI or Kobalt US, neither of which was a party. The receipt of royalties by Kobalt Australia from APRA was not sufficient to find it liable for authorising the streaming.

I am not sure why, if Padgett and Ida No had licensed their rights to BMI or Kobalt USA, they were nonetheless not liable for authorising infringing conduct by those entities or authorised by them.

Air France

The case against Air France for streaming promotional videos from Youtube failed because of Youtube’s licence from APRA for the reasons Apple’s licences protected streaming and downloading. There was still liability for the music-on-hold, however, as Air France did not hold a licence from APRA.

Remedies

Glass Candy contended that any damages would be de minimis and so relief should be withheld.

At [432] Perram J rejected this argument. First, his Honour found that the copying of Love had been deliberate so the infringements were flagrant. That meant additional damages may well be awarded. In addition, his Honour anticipated that the compensatory damages award might not be so modest:

Further, whilst it is tempting to think that the damages might be limited by the apparently modest infringements I have found, the Respondents (other than Kobalt) will no doubt have to deal with a contention by the Applicants that their damages should be assessed on a foregone licence basis. Without wishing to lend colour to that contention, damages on that basis may not be so modest.

[Boomerang Investments Pty Ltd v Padgett (Liability)][2020] FCA 535[8]


  1. Italians Do It Better – a record label jointly owned by Padgett (aka Johhny Jewel) and a DJ, Mike Simonetti.  ?
  2. Similar analysis applies to the uses of France by Air France which, additionally involved the transmission of France via a diffusion service to callers on hold.  ?
  3. As noted in my previous post, Perram J may have been interested in exploring whether or not an Australian court could hear and determine questions of infringement under US law.  ?
  4. Copyright Act 1968 s 31(1)(a)(iv): the exclusive right to communicate the work to the public.  ?
  5. Copyright Act 1968 s 31(1)(a)(iv): the exclusive right to communicate the work to the public.  ?
  6. Of course, that would not apply to copyright which had been assigned to someone else before becoming a member of APRA.  ?
  7. As Alberts successor in title, Boomerang was bound by the terms of the 1986 licence granted to AMCOS: Copyright Act 1968 s 196(4).  ?
  8. The applicants’ subsequent attempt to have the Reasons revised or to re-open their case was given short shrift.  ?

Online copyright infringement reforms announced

The Attorney-General and the Minister for Communications have issued a joint media release announcing the Government’s response to July’s Issues Paper:

  1. First step: they have written to “industry leaders” and told them to come up with an agreed industry code for a “graduated response” regime[1] to be registered with the Australian Communications and Media Authority (ACMA) under Part 6 of the Telecommunications Act 1997;
  2. Second step: if the “industry leaders” cannot come up with an agreement within 120 days [2]:

    the Government will impose binding arrangements either by an industry code prescribed by the Attorney-General under the Copyright Act 1968 or an industry standard prescribed by the ACMA, at the direction of the Minister for Communications under the Telecommunications Act.

  3. Third step: the Government will also amend the Copyright Act to enable rights holders to get injunctions ordering ISPs to block access to websites outside Australia that provide access to infringing content.

Well, at least, Option 1 in the Issues Paper seems to have died a deserved death.[3] The media release does not mention, however, whether or not the Government will extend the “safe harbour” provisions to “service providers” and not just “carriage service providers”.

The letter the Government sent to “industry leaders” did provide some general direction about the contents of the anticipated industry code:

  • that ISPs take reasonable steps (including the development of an education and warning notice scheme) to deter online copyright infringement on their network, when they are made aware of infringing subscribers, in a manner that is proportionate to the infringement
  • informing consumers of the implications of copyright infringement and legitimate alternatives that provide affordable and timely content
  • providing appropriate safeguards for consumers
  • fairly apportioning costs as between ISPs and rights holders
  • ensuring smaller ISPs are not unfairly or disproportionately affected, and
  • include a process for facilitated discovery to assist rights holders in taking direct copyright infringement action against a subscriber after an agreed number of notices

and included the exhortation:

Any code must be sustainable and technology neutral. It should be educative and attempt to address the reasons that people are accessing unauthorised content. Consumer interests must be given genuine consideration in your negotiations.

There is no more detail on what sanctions, if any, would apply.[4]

The media release also includes a warning, of sorts, to the right holders:

The issue of affordability and accessibility of legitimate content is a key factor in reducing online copyright infringement. The Government welcomes recent action by content owners and expects industry to continue to respond to this demand from consumers in the digital market.

It will be interesting to see if the “industry leaders” can come up with an agreed code, given they have failed to reach agreement for over a decade now. Even if the Government is forced to impose a code, it may also be interesting see which ISPs join in the scheme. If there is an industry code and significant ISPs join in, would that be a basis for reconsidering the High Court’s ruling of non-authorisation in the iiNet case which was predicated, at least in part, on the ability of subscribers to jump ship from iiNet to another ISP if sanctions were imposed.

Lid dip: David Andrews.


  1. That is a system whereby subscribers get some number of notices that their account is (allegedly) being used to infringe copyright and warning them to stop or …. All the media release says at this stage:  ?

    The code will include a process to notify consumers when a copyright breach has occurred and provide information on how they can gain access to legitimate content.

  2. According to the letter the Government sent to “industry leaders”, the industry code must be agreed by 8 April 2015. (Update: you can now read the letter via this link (scroll down).At the moment, I don’t seem to be able to find a copy of the letter, which was attached to the media release, online.)  ?
  3. The media release says that the effectiveness of these measures will be reviewed in 18 months as in “a world of rapid changes in technology and human behaviour, there is no single measure that can eliminate online copyright infringement.”.  ?
  4. Yesterday’s press reports suggested that “harsh measures” like internet throttling would not be available.  ?

What the EU Commissioner said on the Internet and Downloading

Commissioner Reding, the EU’s Commissioner for information society and media, has attracted a degree of attention planning an overhaul of internet downloading rules.

Her comments were part of a wide ranging speech on what the EU is doing and will be doing about broadband, access and …. So, what did she actually say?

After identifying access to digital content as the first of 4 priority issues, Ms Reding said:

1. My first and most important priority for Digital Europe is: To make it easier and more attractive to access digital content, wherever produced in Europe. The availability of attractive content that appeals to European viewers, listeners and readers will be decisive in driving further the take-up of high-speed broadband internet. It is therefore regrettable that we currently have an extremely polarised debate on the matter: While many right holders insist that every unauthorised download from the internet is a violation of intellectual property rights and therefore illegal or even criminal, others stress that access to the internet is a crucial fundamental right. Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side.
In the meantime, internet piracy appears to become more and more “sexy”, in particular for the digital natives already, the young generation of intense internet users between 16 and 24. This generation should become the foundation of our digital economy, of new innovation and new growth opportunities. However, Eurostat figures show that 60% of them have downloaded audiovisual content from the internet in the past months without paying. And 28% state that they would not be willing to pay.
These figures reveal the serious deficiencies of the present system. It is necessary to penalise those who are breaking the law. But are there really enough attractive and consumer-friendly legal offers on the market? Does our present legal system for Intellectual Property Rights really live up to the expectations of the internet generation? Have we considered all alternative options to repression? Have we really looked at the issue through the eyes of a 16 year old? Or only from the perspective of law professors who grew up in the Gutenberg Age? In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers.
I f we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers .

1. My first and most important priority for Digital Europe is: To make it easier and more attractive to access digital content, wherever produced in Europe. The availability of attractive content that appeals to European viewers, listeners and readers will be decisive in driving further the take-up of high-speed broadband internet. It is therefore regrettable that we currently have an extremely polarised debate on the matter: While many right holders insist that every unauthorised download from the internet is a violation of intellectual property rights and therefore illegal or even criminal, others stress that access to the internet is a crucial fundamental right. Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side.

In the meantime, internet piracy appears to become more and more “sexy”, in particular for the digital natives already, the young generation of intense internet users between 16 and 24. This generation should become the foundation of our digital economy, of new innovation and new growth opportunities. However, Eurostat figures show that 60% of them have downloaded audiovisual content from the internet in the past months without paying. And 28% state that they would not be willing to pay.

These figures reveal the serious deficiencies of the present system. It is necessary to penalise those who are breaking the law. But are there really enough attractive and consumer-friendly legal offers on the market? Does our present legal system for Intellectual Property Rights really live up to the expectations of the internet generation? Have we considered all alternative options to repression? Have we really looked at the issue through the eyes of a 16 year old? Or only from the perspective of law professors who grew up in the Gutenberg Age? In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers.

I f we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers .

She then gave 2 examples.

The first was facilitating online licensing across all 27 member states. [Why stop there? As Prof. Gans has pointed out, albeit inaccurately under the rubric of parallel imports, this is a global problem.]

The second is to create a modern set of rules to encourage the digitisation of books:

Let us be very clear: if we do not reform our European copyright rules on orphan works and libraries swiftly, digitisation and the development of attractive content offers will not take place in Europe, but on the other side of the Atlantic. Only a modern set of consumer-friendly rules will enable Europe’s content to play a strong part in the digitisation efforts that has already started all around the globe. (The Commissioner’s emphasis)

Read the full text of the Commissioner’s speech here (the downloading wars start about 80% of the way ‘down’).

The idea of looking at the issue from the eyes of 16 year olds, rather than people who grew up in the 50s and 60s, is rather Lessig-ian (watch the Ted Talk video).

Bit of a stretch, blaming the law professors though!

Meanwhile, the very same day, Euro publishers, demonstrating the “us” versus “them” mentality Commissioner Reding criticised, took the opportunity to open another front on their war against Google, linking and aggregating. Publishers’ announcement and Hamburg declaration via here.

post-publication postscript: Chris Anderson from Wired on “Free”, reviewed in NYT.

The Internet Wars (copyright campaign) come to ISPs down under

The big movie studios have brought proceedings against iiNet, one of the larger (in a non-Bigpond sort of way) ISPs seeking to impose liability on the ISP for infringing downloading by its subscribers.

The Application is here (pdf) and the Statement of Claim is here (pdf).

Various analyses:

Nic Suzor has a detailed view here

Kim Weatherall here

Australian PC Mag here

The Film Industry outlines its position here

IPRoo carries a quote from the Internet Industry Association’s CEO here.

As you can see from this coverage, this has really set the cat among the pigeons.  The striking thing about this action, however, is that one might have characterised iiNet as a general purpose ISP, not existing just to promote infringing downloads like the Court’s found Mr Cooper’s mp3s4free.com or substantially like Kazaa.

Thus, the distinction propounded by the record companies in Cooper (at [123]) and both questioned and side-stepped by Branson J (at [40]) appears to be very squarely off the table. So, as many of the bloggers note, it is not too much of a stretch to claim that the future of the internet is at stake here.  Will the old Copyright Convergence Group‘s analogy to the postal system – imposing liability only on the person who introduces (posts) the material – be confirmed or will we, through the Courts, turn back into a closed, monitored system?

The ISPs can hardly be surprised:

(a) s 101(1A(c) expressly provides for the development of an industry code to establish norms;

(b) the copyright owners have directly attacked the ISPs in Eire;

(c) the UK government has “brokered” some sort of more “pro-active” role on ISPs too.

No doubt, if the matter goes to trial, we can expect to see a volume of evidence about the volume of iiNet’s P2P traffic vis a vis its other activities and, before then, perhaps some applications for discovery of traffic details.

Given that liability appears to be predicated on authorisation, it will also be particularly interesting to see how the movie producers circumvent the prohibition on intercepting communications over a telecommunications system and, perhaps, (if an ISP is a carriage service provider) the prohibition on use or disclosure of information the contents of any communication carried by a carriage service provider.

Jammie Thomas wins – sort of?

Ms Thomas, a single mother of two, is was the first person successfully prosecuted to a substantive trial by the RIAA in the USA for copyright infringement by P2P file “sharing” – using KaZaa, she downloaded and “shared” 24 copies of protected sound recordings.

The jury awarded RIAA statutory damages of US$220,000 by the jury (or $9,250 per song file downloaded).

Well, (pending the appeal), it’s all coming unstuck – a bit.  The trial judge, of his own motion (they do things differently over there?), recalled the matter, heard further argument and has granted a retrial on the basis that his instruction to the jury was erroneous. 

Jury Instruction No. 15 was as follows:

“The act of making copyrighted sound recordings available for electronic distribution on a peer?to?peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.”  

The error appears to be in those words “regardless of whether actual distribution has been shown”.  

US copyright law, like much in the US I guess, is rather different.  The US Copyright Act does not include a “making available” right (see art. 8 WCT and arts 10 and 14 WPPT).  In the funny way they do things there, copyright owners do not get an exclusive right to communicate a work electronically; rather they get – in addition to publication and reproduction rights – (1) a right to publicly perform it and (2) to distribute copies: see 17 USC §106, in particular (3):

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.”   

The “public performance” right is how they provide control over broadcasting.  It turns out, however, that distributing copies requires that there be an actual distribution, not just a making available for distribution.

Four comments:

First, the trial judge has granted a new trial.  

Even on the narrow approach taken by the trial judge (putting to one side the potential for an appeal), Ms Thomas seems to be extremely exposed.  For example, the RIAA argued that the error didn’t matter because Ms Thomas infringed the copyright by downloading the recordings: an exercise of the reproduction right.  The trial judge noted that may well be right, but it was impossible to tell whether the jury awarded the US$220,000 damages on the basis of infringing the reproduction right or the erroneous instruction no. 15, or some combination of factors.

Similarly, the only proof of “distribution” was the copy downloaded by the RIAA’s private investigator.  Ms Thomas argued that this could never be a distribution because the copyright owner (and its authorised agents) can’t infringe its own copyright.  The trial judge rejected this:

The Court holds that distribution to MediaSentry can form the basis of an infringement claim.  Eighth Circuit precedent clearly approves of the use of investigators by copyright owners.  While Thomas did not assist in the copying in the same manner as the retail defendant in Olan Mills – by actually completing the copying for the investigator – or as the retail defendants in RCA/Ariola – by assisting in selecting the correct tape on which to record and helping customers copy – she allegedly did assist in a different, but substantial manner.  Plaintiffs presented evidence that Thomas, herself, provided the copyrighted works for copying and placed them on a network specifically designed for easy, unauthorized copying.  These actions would constitute more substantial participation in the infringement than the actions of the defendants in the Eighth Circuit cases who merely assisted in copying works provided by the investigators.   

That is, by using KaZaa, Ms Thomas placed (whether knowingly or not) unauthorised copies of the recordings in her “shared” file so that other KaZaa users could access it and copy it.  That would be sufficient for liability for distribution if a copy were shown actually to be distributed.  A retrial was necessary, however, because it wasn’t possible to tell how much that infringing act contributed to the damages award and how much as a result of the erroneous Jury Instruction No. 15.

Secondly, the trial judge’s interpretation of the distribution right seems somewhat narrower than what some people had been arguing: that distribution required distribution of physical copies, not transmission of electrons.

Thirdly, Ms Thomas’ imaginary Australian cousin, would not have much hope: see e.g. ss 31(1)(a)(iv) and 85(1)(c) of the Copyright Act 1968, bearing in mind the “communicate” is defined in s 10910 to mean

make available online or electronically transmit (whether over a path, or a combination of paths, provided by a material substance or otherwise) a work or other subject-matter, including a performance or live performance within the meaning of this Act.

and there would also be the small matter of the reproduction of the infringing copy on her computer.

She would not of course be exposed to statutory damages.  As Howard Knopf, over at Excess Copyright notes, the trial judge is extremely upset about the imposition of statutory damages in this context.

Although if the imaginary Australian cousin continued after receipt of a letter of demand “additional damages” might loom large: see Review v Innovative Lifestyle at [55] – [65] (a registered designs case).

Finally, trade war?  Well, not yet.  Who knows whether there will be an appeal and how long it will take.  In any event, the making available right is in the WIPO Copyright Treaty and the WIPO Performers and Phongrams Treaty.  These are not obligations that are required to be implemented by TRIPS and so are not subject to the WTO dispute resolution procedures.

But hey, may be Australian copyright owners could lobby the Australian government and get it to take matters up under the Free Trade Agreement procedures.  One can imagine (well fantasise is perhaps more accurate) that the US administration and Congress would be terrified at the offence to their treaty partner’s rights amidst all that Wall Street “flu”.  At least, it might be something to poke them back in the eye with (in due course and providing they are not wearing lipstick).

Case is Capitol Records Inc v Jammie Thomas here.