Nine Network Australia Pty Ltd v Australian Broadcasting Corp

The issues for decision 9 There is no dispute between the parties as to the way the matter of interlocutory relief is to be dealt with. The applicant to succeed must show that there is an arguable issue to be tried. Practically that means here that Channel Nine must show that it is arguable that it is the exclusive licensee of rights of copyright otherwise vested in the City Council, that the broadcast by Channel Two as contemplated would be an infringement of those rights and that any defences Channel Two may have are not good. Next, Channel Nine must show that the balance of convenience favours the granting of an injunction restraining Channel Two as public broadcaster from broadcasting parts of the event throughout Australia. In looking at the balance of convenience the question of the strength of the arguable case will be of relevance. The public interest may also be a matter of importance. Finally, it will be relevant to consider whether any discretionary matters such as delay disentitle Channel Nine to relief.

In what is copyright alleged to exist? 10 In considering whether there is an arguable case for Channel Nine, it is necessary first, to outline what it is in which it is claimed that copyright subsists and of which Channel Nine is said to be the exclusive licensee from the City Council. 11 First, copyright is said to exist in a drawing as an artistic work of the Sydney Harbour Bridge on which is superimposed a face or faces ("the bridge face device"). The idea is not unlike what has happened in previous years although on the evidence as it presently stands the drawing has sufficient originality, so far as that arguably can exist in the whole drawing which includes a representation of the Sydney Harbour Bridge. That drawing is ultimately to be manifested by the erection of a scaffolding or support on the actual Sydney Harbour Bridge to which are to be attached light tubes in the shape of the face which light up at the appropriate time, so far as I can understand, in a sequence of lights. It is claimed that copyright exists in the combination of the scaffolding and lights as a sculpture or work of artistic craftsmanship. 12 Next, there is said to be an original artistic work comprising a drawing again of the Sydney Harbour Bridge and showing in copperplate writing the word "Eternity" superimposed upon the bridge ("the bridge word design"). The copperplate version of the word emanates from a Mr Stace, who during the 1960s and 1970s as a result of a religious conversion and recovery from alcoholism secretly wrote the word in that script on footpaths throughout the city. That design, if I can call it that, is again, to be erected through scaffolding or supports on the bridge to which are attached light tubes which when lit will show the word "Eternity" in its copperplate script superimposed on the bridge. This is likewise claimed to be a sculpture or work of artistic craftsmanship in which copyright subsists. 13 The third matter covers an original drawing of 18 stylised and recognisable sea creature shapes, for example, dolphins. Copyright is claimed to exist in these drawings as an artistic work. In the meantime, from the drawings have been created 18 3-dimensional lanterns which, mounted on barges, are to proceed around the harbour or parts of it. They are claimed to be sculptures or otherwise works of artistic craftsmanship in which copyright subsists. 14 Finally, copyright is claimed to subsist in what are said to be dramatic works. Underlying the claimed copyright interests is what may be called a script or a schedule of what is to happen on the harbour at various times. The so-called script sequentially details the particular fireworks in the order in which they are to be ignited in time or rhythm relationship to music (non-original) which is to accompany the fireworks show. There are other combinations which it is unnecessary to detail in which it is said copyright subsists. 15 Assuming copyright can exist in any or all of these so called works, Channel Nine has at least at the interlocutory stage, shown that what might be called the mechanical requirements of copyright, such as, residence, employment of the originator and assignment are satisfied so that each of the four matters could give rise to copyright rights subsisting in the Council of the City of Sydney. 16 I should say at this stage that although I have been provided with quite extensive written submissions on various legal matters time neither permitted all those matters to be agitated in oral argument or for that matter to form the subject of this judgment. In part that is because Channel Two accepts that there are arguable issues involved, although the strength of those arguable issues is a matter of some dispute between the parties. 17 For Channel Nine its strongest case of copyright is with the drawing of the sea creatures and the lanterns which reproduce those drawings in a 3-dimensional form. The drawings are on any view of the matter original and copyright exists, in my view, in those drawings and in the 3-dimensional form the drawings take being, at the least, works of artistic craftsmanship. 18 In my view, the weakest copyright case for Channel Nine, on the other hand, is the claimed copyright said to exist in the dramatic work originating from the schedule dealing with the fireworks display and what written submissions of senior counsel for Channel Nine referred to as "the fireworks production". As I understand it, each type of firework produces a particular effect. Randomly set off the effect of those fireworks might be chaotic. It takes skill and artistry, perhaps, to determine the order in which particular kinds of fireworks are set off and to produce the spectacular effect which is hoped for to meet the occasion. The relationship between the music, its beat or rhythm, and the exploding fireworks is no doubt also of importance. 19 Having said that I have difficulty in the conclusion that if the schedule is itself followed precisely, because that would have to be a pre-requisite of the copyright protection, (it is certainly contemplated that that will be the case although I suspect that fine tuning may still be possible between now and 31 December) the exploding fireworks display is a dramatic work within the definition of that expression in s 10(1) of the Copyright Act. That section defines dramatic work to include: "(a) a choreographic show or other dumb show; and (b) a scenario or script for a cinematograph film; but does not include a cinematograph film as distinct from the scenario or script for a cinematograph film." The expression of course has its ordinary English meaning in addition to the defined meaning to which I have referred. 20 The question really is whether the setting off of the fireworks spectacular, ephemeral as it is, is a "dramatic work" in the ordinary sense of those words. It is not a matter upon which I have formed a concluded view but there are certainly difficulties it seems to me with the argument. It is or will be if the matter goes to trial the case for Channel Nine, that because the fireworks show alone or in combination with other events such as the barge display is in the nature of a series of composed events and has dramatic unity and interest, it is therefore a dramatic work. 21 There is also the question whether the ultimate fireworks show is really a material form of what was planned. The requirement that it be scripted, directed and staged, assuming Sydney Harbour to be a gigantic outdoor stage for the present purposes may more readily be accepted to the extent that it is planned, but as I have already suggested there may be many a slip between the actual plan and the ultimate performance. It can be argued not to involve improvisation: Karno v Pathé Frčres Limited (1908) 24 TLR 588 at 590-591 affirmed on appeal (1909) 25 TLR 242 and see Australian Olympic Committee Inc v The Big Fights Inc [1999] FCA 1042 (3 August 1999) per Lindgren J at para 42. 22 It is, one would think, common place in at least a half of the present decade that firework shows with music are planned. It has never been suggested to my knowledge, and there is no reported case in which the matter has been subjected to legal analysis which has suggested that copyright subsists in a fireworks show set to music just because the sequence of events is scripted. That does not mean that copyright might not exist. It may merely be the result either of difficulties of enforcing the non filming of such events or it may be that no one has thought deeply about the issue. At the heart of the problem may well be that copyright is a monopolistic right existing not to protect ideas as such but the physical manifestation of some original literary, artistic or dramatic work. 23 Channel Nine's argument cannot be said to be doomed to failure although at the present I am inclined to the view that it is not strong. The question of subsistence of copyright in the bridge face or bridge word drawings and the related question of the photography, recording and then showing of images of the actual bridge with the lit designs constituting infringement also had difficulties for Channel Nine. In each case the drawing of the bridge is a substantial part of what is said to be the original artistic work. No doubt a drawing of the bridge is capable of being an original artistic work but what is photographed is the actual Harbour Bridge, on any view an object in the public domain, to which is affixed a representation in lights of either the face or the word "Eternity". The face itself is, on the evidence as it stands no doubt an original drawing, but I have reservations in whether copyright can subsist in a representation in copperplate in lights of the word "Eternity" made if not popular, at least prominent, as I have said, by Mr Stace. 24 Though a substantial part of the drawing is the bridge, it seems to me incorrect to say that a photo of the bridge itself could infringe any copyright so that the real issue for trial may well be whether the face or the word "Eternity" as the case may be lit up can be the subject matter of copyright. That is an alternative way in which Channel Nine puts its case. The lighted face may be a manifestation of the original drawing and perhaps a work of artistic craftsmanship. I have some doubts as to whether the lighted word "Eternity" can be said to be a work of artistic craftsmanship. 25 It is inappropriate to attempt, in the time available, a resolution of the numerous copyright issues which underpin the claim that copyright subsists in one form or other in these various "works". As I have said it is accepted that there are arguable issues to be tried, the strength of which, as I have noted, may be thought to vary. 26 Before turning to the question of balance of convenience however it is necessary to note three matters, success in any of which would lead to victory by Channel Two. First, it is submitted on behalf of Channel Two that on the evidence Channel Nine is not the exclusive licensee of any copyright which is said to subsist. The question is one of construction of the agreement between Channel Nine and Channel Two to which I have already referred. 27 To understand the argument it is necessary to set out in more detail the terms of the agreement. 28 Clause 11 of the letter provides: "The City shall own all intellectual property rights in relation to the Event (save for the broadcast, which shall be jointly owned), including its name and shall retain the exclusive right to distribute merchandise relating to the Event." The word "event" is defined in the letter as meaning each of the Sydney NYE events. Clause 8 of the letter provides as follows: "Nine shall be the official television broadcaster of the Event and will broadcast all or part of the Event on a live basis. In that respect, the City grants to Nine the exclusive right to: (a) record all performances, the fireworks spectacular and other entertainment organised by the City and connected with the Event ("coverage"); (b) televise such coverage throughout Australia and PNG by all forms and means of television (free and pay) and on-line studio visual exploitation; (c) promote and publicise Nine's association with the Events; and (d) subject to clause 9, utilise the Event sites controlled by Spectak ... Nine acknowledges that an official radio broadcaster has been appointed for the Event which will have equivalent rights in relation to radio coverage. Nine acknowledges that if it has not demonstrated to the City that it has taken all steps to ensure that a live broadcast takes place and on-line audio visual exploitation occurs by 15 December in any one year, the City may appoint a third party to perform these services."

Finally clause 9 provides: "Nine acknowledges that due to the nature of the Event, the City will not be able to prevent other television stations from broadcasting aspects of the event that are held in public. However, the City will: (a) use all reasonable endeavours to stage the Event in a manner conducive to Nine's exclusive rights; (b) not authorise any other broadcaster to record coverage of the event including by refusing filming permission from sites controlled by Spectak or Council under the Event Contract if requested; and (c) use reasonable endeavours to ensure that no other person establishes any scaffolding or other structure on Council land for the sole purpose of recording Coverage of the Event." 29 Channel Two places specific emphasis on clauses 8 and 9 of that document. The submission would have it that the reference to "equivalent rights" in clause 8 makes it clear that no exclusive rights were being conferred with respect to copyright in any suggested artistic work or dramatic work. In respect of clause 9 it is submitted that that clause is merely an acknowledgment that the City is unable to prevent other television stations filming or broadcasting the Events. It is said that this accurately states the position and is inconsistent with the document being an exclusive licence of copyright then existing or to exist in the future of which it was contemplated that the City of Sydney would become the owner or assignee of copyright rights. 30 In my view the legal effect of the agreement, while perhaps not well expressed, is that the City purports to grant, exclusively to Channel Nine, the right to record performances at least by television on the assumption that copyright does or could exist. The parties in clause 9 are acknowledging it seems to me not that Channel Nine is not the exclusive licensee but rather that there may be practical and perhaps legal reasons why other channels may not be able to be prevented by the City Council from broadcasting aspects of the Event including, for example, s 42 of the Copyright Act. 31 I do not think that this argument provides an answer to Channel Two to the arguable issue which Channel Nine has raised in respect of copyright infringement.

The proposed defences of Channel Two if copyright subsists 32 By its defence filed in court Channel Two relies on ss 65 and 67 and s 42 of the Copyright Act. These sections provide a more likely defence for Channel Two than the other one to which I have already referred. I shall deal first with s 42. That section provides relevantly in subparagraph (1): "A fair dealing with a literary, dramatic, musical or artistic work or with an adaptation ... does not constitute an infringement of the copyright in the work if ... (b) it is for the purpose of, or is associated with, the reporting of news by means of broadcasting or in a cinematograph film." 33 Two issues arise if s 42 is to be relied upon by Channel Two. First is the question whether the extent of its coverage could be said to be in the context of the section a fair dealing of any work in which copyright subsists, and second whether what it proposes to show can be said to be for the purpose of or associated with the reporting of news by means of broadcasting. 34 In my view there is a strong argument that what Channel Two proposes to do falls within s 42 although there are questions of degree involved. No doubt the whole event is newsworthy, so much was conceded by Channel Nine. The question is whether the showing of this newsworthy event in the course of a program designed to cover New Year's Eve celebrations around the world in many cities and countries can be said to be news or at least that part of it which deals with the coverage of what happens on Sydney Harbour. 35 A suggestion was made arising from cross-examination of a witness from Channel Two that because H.G. Nelson and Roy Slaven (to use their stage names) will be anchors of the ABC coverage but with Mr George Negus as well meant that hyperbole and humour would reign and impliedly negate any possibility of the program being treated as news. I should say that the evidence did not suggest that these two gentlemen were required to treat their anchoring role in quite that way although perhaps given their particular style it might well be the case. 36 For my part I find the distinction between news and entertainment a very difficult one. It is not one I think which can be resolved by looking at the dictionary definition of the word. In some ways it may well be as difficult as the issue that has dominated the news press over the last few months of some suggestion of difference between commentary and info-tainment or entertainment. 37 In my view the fact that humour is used does not necessarily negate the fact that what is being broadcast may be news. Hopefully the fact that news coverage is interesting or even to some entertaining likewise does not negate the fact that it could be news. As I have already said the celebrations of the City of Sydney this New Year's Eve are of both national and international significance. The reporting and showing of a part of them on TV by Channel Two as national broadcaster could well fall within s 42. 38 One difficulty of course in deciding this at the present stage lies in not really knowing the extent of the coverage or indeed what actually will happen apart from the confidential schedule to which I have referred. It suffices merely to say at the moment that the argument of Channel Two on this point is not a weak one. 39 Defences based on ss 65 and 67 of the Copyright Act, again involve issues that may be of substance depending ultimately on what happens. Those sections provide relevantly - s 65 which bears the heading "Sculptures, and certain other works in public places": "(1) The section applies to sculptures and to works of artistic craftsmanship of the kind referred to in paragraph (c) of the definition of artistic work in section 10. (2) The copyright in a work to which this section applies that is situated ..... in a public place ... is not infringed by the making of a ..... photograph of the work or by the inclusion of the work in a cinematographic film or in a television broadcast."

40 Section 66 is concerned with buildings or models of buildings and I have some difficulty in seeing any building necessarily involved, though perhaps it is said that the structures erected on the Sydney Harbour Bridge could be a building. 41 Section 67 provides without prejudice to the last two preceding sections, that copyright in an artistic work is not infringed by the inclusion of the work in a cinematographic film or in a television broadcast if its inclusion in the film or broadcast is only incidental to the principal matters represented in the film or broadcast. 42 As I have already indicated some of the so called works are capable of being referred to as works of artistic craftsmanship to which s 65 could apply if they are included in a television broadcast. Section 67 has more difficulties factually because of the requirement that the inclusion in the broadcast be only incidental to the principal matters represented in the broadcast. As I have said there are matters of degree involved in this which clearly at the moment could not be resolved. 43 However, these sections demonstrate I suppose that it does not follow that the filming or inclusion of the filming in a television broadcast is necessarily an infringement. It may or may not be depending on whether the defences in those sections can be ultimately availed of. 44 There is a question also of what the principal matters are within the meaning of those words in s 67 that will be included in the broadcast contemplated to be made by Channel Two. If the principal matters are the fireworks and the argument for Channel Two that the fireworks display is not the subject of copyright prevails, a photo or a picture in the broadcast fleetingly of the faces or the word, illuminated, could very well be said to be merely incidental to the broadcast of the fireworks: cf IPC Magazines Ltd v MGN Ltd [1998] FSR 431 at 432. 45 A consideration of these matters serves no more than perhaps to demonstrate both that the issues involved, if the case proceeds to final trial, are complex and that there are substantial but competing arguments on both sides which time does not permit to be resolved and which at least in interlocutory context cannot be. The fact that this is so makes the question of the balance of convenience even more significant than it normally would be.

Balance of convenience 46 The evidence shows that Channel Nine is likely to make a contribution to the cost of staging the celebration, spectacular, or event, in the order of $450,000 - a not insignificant but on the other hand perhaps not large amount and but a fraction of the actual cost of staging the actual event. On its evidence of course its real interest is in sponsorship for the broadcast and perhaps attracting or luring away from other channels non Channel Nine viewers. It has incurred costs to date of some $400,000 in its staging and advertising of its coverage. If there is a shortfall under the agreement between the City Council and Channel Nine it may be that Channel Nine has to pay more than the figure I have indicated. 47 Channel Two has likewise incurred expenditure in its participation with the consortium in preparation for its telecast in Australia of the events of the 25 hours. If enjoined of course Channel Two would be unable to broadcast in Australia that part of the segment of what happens on Sydney Harbour. There would presumably be a blank screen in its presentation subject of course to s 42 which Channel Nine acknowledges would have to be excised from any injunctive relief. 48 Channel Two is not a commercial station; it obtains no direct sponsorship income so the loss to it may not be financial except so far, perhaps, as government funding may be measured by ratings which might include the New Year's event. However, there is no evidence that this is the case at this stage. On the other hand it is a public broadcaster to whom many look for reporting of significant events without the interruption of paid commercials. There is some evidence that those with poor Channel Nine reception but better Channel Two reception may perhaps miss out viewing the celebration if the available choice was only Channel Nine. 49 There is also in my view in this case a public interest. True it is not as strong as it would have been had Channel Nine maintained its position that it could stop Channel Two filming and providing to overseas countries, footage of what might show much to the world Australia's ability to celebrate an important occasion and indeed promote the country. However, the public interest is there in ensuring that the nation's public broadcaster be able to show segments of the celebration to those who choose to watch it. As I have said it has made a financial commitment which in real terms is not recouped merely by providing film for showing by others around the world leaving Australian screens blank. 50 For Channel Nine it is submitted that good will with sponsors will be lost and that this is not compensable by way of damages. I accept that there can be difficulties in proving loss of good will. Such difficulties arise in many cases but there is no reason why such a loss cannot be proved at least sufficiently to demonstrate damage which is capable of being compensated. It is commonplace that proof of damages is controversial and Judges regularly have to do the best they can in trying to assess damages that are suffered if any are. That does not mean to say that in such a case injunctive relief should be not granted nor does it mean that injunctive relief should be refused just because of difficulties with proving damage. It is necessary to weigh up all relevant factors in coming to that conclusion. 51 It is further submitted on behalf of Channel Nine that it has a strong prima facie case. If that is true of course it is relevant to the question of balance of convenience. As the above discussion indicates I think that the case of Channel Nine ranges from strong to weak depending upon which particular copyright is said to be infringed. It is also true I think that to some extent again depending on the facts that Channel Two may have a strong defence to any infringement claim. 52 These matters do not persuade me that the balance of convenience favours Channel Nine particularly as injunctive relief could frustrate as well the preparations which Channel Two has put in place for its broadcast at some expense.

Discretionary matters 53 Finally there is the question of whether I should take into account the delay of Channel Nine in commencing the proceedings. It was I think at the end conceded by Senior Counsel for Channel Nine that the ultimate action could be brought for infringement of copyright in works not yet completed, subject of course to the facts of a particular case. However I think that there has been delay in the present case and that it is a factor that I should take into account particularly where the issues in the present case both as to infringement and balance of convenience are quite difficult. 54 The fact is that the drawings and the so-called script, whether or not the subject of any adjustment which occurs thereafter and may continue to occur before New Year, were all in existence by August of this year. That Channel Two intended to broadcast was a fact well known to Channel Nine yet no action was taken until just a couple of weeks before Christmas Day. The only explanation for the delay that is given through counsel is the suggestion that there may be a difficulty of copyright not yet being in existence. A suggestion made by counsel for Channel Nine that Channel Nine thought Channel Two would film for the international consortium but not broadcast the program in Australia was to say the least, fanciful. 55 It is for these reasons that I propose to refuse interim injunctive relief. I am fortified also by the fact that framing an injunction so as to ensure that Channel Two has the advantage of s 42 of the Copyright Act presents difficulties. To issue an injunction restraining in terms conduct other than that which falls within s 42 would lead the respondent to that injunction liable to a charge of contempt of court if it gets wrong its interpretation of s 42, a section which appears to have had very little judicial attention and on which it seeks to rely for its defence against infringement. 56 I should say by way of addition that in the course of the argument yesterday, senior counsel for Channel Nine in open court suggested as a fallback position to injunctive relief that Channel Two could make its broadcast as long as it made, presumably repetitively, acknowledgment of the fact that Channel Nine was the exclusive licensee of copyright rights. That was the offer it made in open court. It would clearly leave the possibility of the Court making an order which would contravene the Trade Practices Act 1974 because the announcement might ultimately turn out to be misleading and deceptive. That was changed subsequently to the suggestion that words such as, Official Broadcaster Channel Nine might be used. 57 From correspondence which has been produced and which I think I should mark as an exhibit, recording as it does discussions between the parties overnight, it appears that the parties have been unable to agree on any form of satisfactory wording that might on the one hand acknowledge such interest as Channel Nine might ultimately be found to have and on the other be practical in the way in which the footage is shown in Australia. Part of the problem I understand lies in the suggestion by Channel Nine that the statement be broadcast frequently throughout the broadcast of Channel Two, and the position of Channel Two that it be noted only once at the beginning of the first broadcast of any coverage of the events on New Year's Eve. 58 I think that it is inappropriate of me to endeavour to impose upon Channel Two a particular form of acknowledgment to Channel Nine. No doubt the management of Channel Two and its advisers will need to direct their attention to whether voluntarily some acknowledgment might assist should ultimately Channel Nine succeed in any action for damages for breach of copyright which may hereafter be continued. 59 One final matter that occupied submissions may be mentioned. It was suggested, probably on discretionary grounds or alternatively on the grounds of balance of convenience, that I should pay particular attention to the fact that the Council of the City of Sydney is not presently a party to these proceedings. If the matter does proceed further then the Council as copyright owner, of course, would need to be a party. For interlocutory purposes it is unnecessary that it is. The suggestion is apparently that by not becoming a party or coming before the Court the City Council is in some way demonstrating its lack of support for Channel Nine in these proceedings. With respect, I do not think that submission is a good one. There could be many reasons why the City Council did not participate in these proceedings not the least of which might be their desire not to be liable for the costs of it should it be unsuccessful. 60 The motion for interlocutory relief is therefore for these reasons dismissed. 61 I direct that Channel Nine pay the costs of the motion. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill.

Counsel for the Respondent: J M Ireland QC; R Cobden

Solicitor for the Respondent: Australian Broadcasting Corporation

Date of Hearing: 22 and 23 December 1999