Zomba Production Music (Australia) Pty Limited v Roadhouse Productions Pty Limited

Federal Court of Australia|2001-10-31|Before: Stone J

the second respondent has infringed the applicants' copyright in the musical works Shangri-La and Freedom World (Works);

the second respondent has infringed the applicants' copyright in the sound recordings of the Works;

the second respondent has authorised the infringement of copyright in the Works and the sound recordings of the Works.

the second respondent deliver up to the applicants all infringing copies of the Works and the sound recordings of the Works in his possession, power or control;

the second respondent pay the applicants' costs of this proceeding to the date of these orders, excluding the costs incurred on 26 July 2001;

the applicants have leave to have the costs in order 6 above taxed forthwith;

the proceeding be stood over for further directions at which time a date will be fixed for the hearing on the issue of quantum of monetary relief;

the parties have liberty to apply on three days' notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BETWEEN: ZOMBA PRODUCTION MUSIC (AUSTRALIA) PTY LIMITED (ACN 055 031 297)

EMI MUSIC PUBLISHING AUSTRALIA PTY LIMITED (ACN 000 040 951)

AUSTRALASIAN MECHANICAL COPYRIGHT OWNERS SOCIETY LIMITED (ACN 001 678 851)

AND: ROADHOUSE PRODUCTIONS PTY LIMITED (IN LIQUIDATION) (ACN 058 271 686)

1 The applicants' claims are contained in their further amended statement of claim ("statement of claim") filed on 4 June 2001, and can be summarised as follows: (a) the first applicant is the owner of copyright in the musical work Shangri-La and in sound recordings of that work; (b) the second applicant is the owner of copyright in the musical work Freedom World and in sound recordings of that work; (c) the third applicant is the exclusive licensee in Australia of copyright in Shangri-La and Freedom World ("Works") insofar as it relates to the right to license · mechanical productions (other than advertisements) of the Works for the purpose of television broadcast; and · mechanical reproductions and television broadcasts of sound recordings of the Works; (d) the first respondent made or authorised the making of reproductions and sound recordings of the Works without the applicants' permission; (e) the second respondent authorised the broadcast of the Works and sound recordings of the Works without the applicants' permission; (f) the respondents' acts were flagrant within the meaning of s 115(4) of the Copyright Act 1968 (Cth) ("the Act"); and (g) the applicants have suffered loss and damage. 2 The further amended application ("application") seeks orders against both respondents. The first respondent is currently in liquidation and, as the applicant does not have leave to proceed against it, the applicant now seeks orders against the second respondent only. Accordingly, on 18 July 2001, the applicants filed a notice of motion (served on the second respondent on 9 August 2001) seeking orders against the second respondent in terms similar to those in the application, but excluding orders relating to damages. This omission was presumably because of the order I made on 26 April 2001 that issues relating to liability and remedies be heard separately. Thus I do not need to consider the claims in pars (f) and (g) above at this stage.

procedural background 3 The applicant commenced proceedings in this Court on 4 September 2000. A copy of the original application and amended statement of claim were served on the second respondent on 16 October 2000. No notice of appearance has been filed on behalf of either respondent and neither respondent has appeared at any of the four directions hearings. On 26 April 2001, I listed this matter for hearing on 26 July 2001 and ordered that issues relating to liability and remedies be heard separately. I also made orders for the filing of evidence and submissions.

4 On 15 June 2001, the following documents were served on the second respondent: · the further amended application filed 4 June 2001; · the further amended statement of claim filed 4 June 2001; · an affidavit of Stuart Livingston sworn 22 May 2001; · an affidavit of Madeleine Kortegast sworn 26 April 2001; · an affidavit of Belinda Yates sworn 15 March 2001; and · short minutes of order setting out the directions I made on 26 April 2001. 5 On 26 July 2001, the matter was listed for mention in relation to a notice of motion at 9.30 am and for hearing at 10.15 am. At both times, the matter was called outside the Court and on both occasions there was no appearance for either respondent. On the applicants' request, the hearing was adjourned to a date to be fixed. On 31 July 2001, the hearing was fixed for 21 August 2001 at 10.15 am. On 9 August 2001, the second respondent was served with the notice of motion filed on 18 July 2001 seeking orders against the second respondent and a letter dated 8 August 2001 from the applicants' solicitors informing Mr Numa that the hearing on liability would take place on 21 August 2001 at 10.15 am and drawing his attention to O 32 r 2(1)(d) of the Federal Court Rules.

6 On 21 August 2001, the matter was called both inside and outside the Court and there was no appearance for the respondents. At the request of the applicants I decided to proceed with the trial on liability in accordance with O 32 r 2(1)(d) of the Federal Court Rules for the following reasons: · I was satisfied tht the second respondent had been notified of the applicants' proposal to invoke O 32 r 2(1)(d); · the applicants were entitled to have their claims considered notwithstanding the respondents refusal to acknowledge this proceeding; and · no apparent purpose would be served by further delay.

Existence and ownership of copyright in the works and sound recordings (pars (a) and (b)) 7 Section 126 of the Copyright Act 1968 (Cth) provides: In an action brought by virtue of this Part: (a) copyright shall be presumed to subsist in the work or other subject-matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject-matter; and (b) where the subsistence of the copyright is established - the plaintiff shall be presumed to be the owner of the copyright if he or she claims to be the owner of the copyright and the defendant does not put in issue the question of his or her ownership. 8 The applicants have specifically pleaded that the first applicant is the owner of copyright in the work Shangri-La and sound recordings thereof and that the second applicant is the owner of copyright in the work Freedom World and sound recordings thereof. As no defence has been filed, these matters have not been put in issue by the respondents. In accordance with s 126, the existence and ownership of copyright in the Works and sound recordings thereof can be taken to be as pleaded.

Exclusive licensee (par (c)) 9 The exclusive licensee is a necessary party to the action; s 120 of the Act. The term "exclusive licence" is defined in s 10 of the Act as, "a licence in writing, signed by or on behalf of the owner or prospective owner of copyright, authorizing the licensee, to the exclusion of all other persons, to do an act that, by virtue of this Act, the owner of the copyright would, but for the licence, have the exclusive right to do".

10 Pursuant to an agreement between the first and third applicants dated 14 February 1992 and an agreement between the second and third applicants dated 4 November 1986 (the second applicant is referred to in the agreement by a previous name), the third applicant has an exclusive licence to: · make reproductions, other than advertisements, of all musical works in relation to which the first and second applicants own or control the right of mechanical reproduction for the purpose of broadcasting in certain countries; · broadcast sound recordings that form part of a mood music library recording in relation to which the first or second applicant owns or controls the right of mechanical reproduction; and · reproduce musical works or sound recordings that form part of a mood music library recording in relation to which the first or second applicant owns or controls the right of mechanical reproduction. 11 Evidence adduced on behalf of the applicants shows that the musical works and sound recordings of Shangri-La and Freedom World are contained, respectively, in the first applicant's "library of works and sound recordings" and in the second applicant's "catalogue". I infer from this that the Works are in the "mood music library" of the relevant applicant. As noted above, I am entitled to presume that the first applicant owns copyright in Shangri-La (as a work and a sound recording) and that the second applicant owns copyright in Freedom World (as a work and a sound recording). Accordingly, both Shangri-La and Freedom World are listed on the third applicant's database as works in which they hold an exclusive licence; affidavit of Madeleine Kortegast affirmed 26 April 2001, par 19. The alleged infringement took place in or about 1999, after the licensing arrangements were entered into (see [16] below).

Infringement of copyright (pars (d) and (e)) 12 Section 36(1) of the Act provides: Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright. 13 Section 101(1) is in similar terms to s 36(1), except that it applies to subject-matter other than works, including sound recordings. The reference to "any act comprised in the copyright" is a reference to any act that the owner of copyright has the exclusive right to do under the Act; s 13 of the Act. This includes reproducing the work (or a substantial part of it) in a material form (s 31(1)(a)(i), s 14(1)) and making a copy of a sound recording (or a substantial part of it) or communicating it the public (pars 85(1)(a) and (c), s 14(1)). The exclusive right to do an act in relation to a work or sound recording includes the exclusive right to authorize a person to do that act; s 13(2). 14 Exhibits 1 and 2 in this proceeding are two videos that record, respectively, episodes 19 and 23 ("Episodes") of series 6 of a television program entitled "Rex Hunt's Fishing Adventures". Belinda Yates, Creative Services Manager of the second applicant, states in her affidavit affirmed 15 March 2001, that the musical work, Freedom World, is included twice in Exhibit 1. Ms Yates attaches to her affidavit a cue sheet headed "HSV Channel 7 / APRA Music Usage Return" that records Freedom World as being included in episode "RHFA 6019". The applicant submits that this is a reference to episode 19 in series 6 of Rex Hunt's Fishing Adventures. Ms Yates refers to the relevant episode in her affidavit as "episode 23" which, based on the above, is clearly an error. Stuart Livingston, director and company secretary of the first applicant, states in his affidavit affirmed 22 May 2001, that the work Shangri-La is included in Exhibit 2 and attaches to his affidavit a cue sheet headed "HSV Channel 7 / APRA Music Usage Return" that records Shangri-La as being included in "RHFA 6023". 15 Annexed to the affidavit of Madeleine Kortegast, affirmed 26 April 2001, is a document headed "Rex Hunt Fishing Adventures International Versions Series 5 & 6" that was sent by the first respondent to "APRA" (presumably the Australasian Performing Right Association). That document would seem to suggest that the Episodes were broadcast on "NET. 7" and "DISCOV". A facsimile from APRA to the second respondent dated 30 June 1999 attaches a document described as a "break down of all episodes produced from 1 Jan 95 to 17 June 1999". This document suggests that the Episodes were broadcast on "NET 7" (described as "NETWORK SEVEN Australia (Free to Air)") and "DISCOV" (described as "DISCOVERY CHANNEL - EUROPE - Europe, Russia & Sth Africa (Pay TV)"). Another document annexed to Ms Kortegast's affidavit was said to set out "a summary of the information that [the third applicant] has received in relation to the reproductions and broadcasts of [Rex Hunt's Fishing Adventures] in the period 1 January 1995 to 4 August 1999" based on information supplied by the respondents and the Seven Network to the third applicant. That document indicates that the Episodes were broadcast on "NET 7" and "DISCOVERY". 16 On the basis of the above material, and in the absence of any evidence to the contrary, I am able to conclude that the contents of Exhibits 1 and 2 (which include sound recordings of the Works) were broadcast on the Seven Network in Australia. It would appear that the Episodes were broadcast in 1999 because the "Date of Production or Date of Broadcast in Australia" of the Episodes are 14 May 1999 and 17 June 1999; exhibit F to the affidavit of Madeleine Kortegast affirmed 26 April 2001.

Reproduction of works in a material form 17 Section 21(1) of the Act provides: "For the purposes of this Act, a…musical work shall be deemed to have been reproduced in a material form if a sound recording or cinematograph film is made of the work, and any record embodying such a recording and any copy of such a film shall be deemed to be a reproduction of the work." 18 As noted at [14] above, sound recordings of the Works are contained in Exhibits 1 and 2. Exhibits 1 and 2 are themselves cinematograph films as defined in s 10 of the Act. Accordingly, by virtue of s 21(1), the Works have been reproduced in material form.

19 The applicants submitted that the respondents could be said to have · made the Episodes available to the public because they were broadcast on Channel 7; or · made the Episodes available to the public by supplying them to Channel 7 for broadcast. 20 I have already concluded (see [16] above) that the Episodes were broadcast on Channel 7. The phrase "to the public" implies that the communication will take place to the copyright owner's public, usually in a "commercial" setting. Provided, however, that others are prepared to bear the cost, it is irrelevant that the public themselves would not expect to pay for the communication; Telstra Corporation Ltd v Australasian Performing Right Association Ltd (1997) 191 CLR 140 at 157 per Dawson and Gaudron JJ (with whom Toohey and McHugh JJ agreed). Communication to the public includes situations where the communication is available to members of the public in a private or domestic setting and where only some members of the public actually receive the communication; Telstra Corporation Ltd v Australasian Performing Right Association Ltd (above) at 156 - 157 per Dawson and Gaudron JJ (with whom Toohey and McHugh JJ agreed).In my view, there is no doubt that broadcasting a sound recording on free-to-air television constitutes making that sound recording available to the public. The act of broadcasting was presumably done by the Seven Network. I have, however, found that the acts of the Seven Network were authorised by the respondents (see [29] and [32]).

Without licence 21 The applicants must show that the respondents did not have the licence of the owner of the copyright to reproduce the work in a material form; Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 at 94 - 95 per Mason CJ, Deane and Gaudron JJ, at 105 per Dawson J and at 119 - 120 per McHugh J. The evidence of Madeleine Kortegast, Production Music Manager of the third applicant, supports this allegation. In her affidavit affirmed on 26 April 2001, Ms Kortegast states that she is the person responsible for the administration of the licensing of the works and sound recordings in the third applicant's repertoire and that she has access to the third applicant's records in relation to such licensing. She also states that "[a]t no time did either of the Respondents obtain a licence from [the third applicant] to use any of the works or sound recordings in the [third applicant's] repertoire for reproduction in [Rex Hunt's Fishing Adventures] prior to the broadcast of the works and sound recordings." 22 As the third applicant is the exclusive licensee in relation to the Works and sound recordings thereof (in the sense described in [9] - [10] above) and in the absence of any evidence or even pleadings to the contrary, I conclude that the respondents did not have a licence to reproduce the Works in material form or to copy, broadcast or make available to the public sound recordings of the Works.

First respondent's involvement 23 Section 131 of the Act provides: "Where the name of a person appeared on copies of a cinematograph film as made available to the public in such a way as to imply that the person was the maker of the film and, in the case of a person other than a body corporate, that name was his or her true name or a name by which he or she was commonly known, that person shall, in an action brought by virtue of this Part, be presumed, unless the contrary is established, to be the maker of the film and to have made the film in circumstances to which subsection 98(3) does not apply." 24 In this case, the name "Roadhouse Productions Pty Limited" did not appear on the programs recorded on the videotapes that are Exhibits 1 and 2. However, in both Episodes the name "Roadhouse Productions" appears as the final name in the list of credits. 25 In Film Investment Corporation of New Zealand v Golden Editions Pty Ltd (1994) 28 IPR 1 at 18 ("Film Investment"), that when applying s 131 to the name of a corporation on a cinematograph film, the "very name" of the corporation must be used. In that case, the film had purported to be "A Burbank Film Australia Production". Burchett J said that this was not sufficient to presume, using s 131, that either Burbank Film Managers Ltd or Film Funding and Management Pty Ltd (who had traded under the name "Burbank Films") made the film. 26 The applicant submitted that Film Investment could be distinguished because, in this case, the name on the film and the first respondent's name differed only in the use of the words "Pty Limited". In particular, the applicants referred to Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation (1987) 8 IPR 285, a trade mark case. Section 64(1)(a) of the Trade Marks Act 1955 (Cth) provided that a the respondent would not infringe a trade mark if the use complained of was as part of the respondent's name and was in good faith. Following Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265, King J held in Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation (above) that the protection afforded by s 64(1)(a) extended to use of the trade mark as part of the company's name with words such as "Ltd" or "Inc" omitted because such an abbreviation would not reduce the name used to less than the ordinary name of the corporation concerned. I accept this submission; in my view that fact that the name "Roadhouse Productions" was used is sufficient. 27 In Microsoft Corporation v DHD Distribution Pty Ltd (1999) 45 IPR 459 at 461, Lehane J held that where a legend on the work indicated that Microsoft Corporation claimed copyright in the work this could be treated as a reference to the fact that Microsoft Corporation issued or caused to be issued copies of the works and therefore "published" the works. His Honour concluded that Microsoft Corporation purported to be the publisher of the work for the purposes of s 128 of the Act. As indicated above, the name "Roadhouse Productions" appears at the end of the list of credits following each Episode; it is given considerably more prominence than any other name in the list. In my opinion, the prominence that is given, both visual and aural, implies that this is the name of the producer or maker of the film. 28 The applicant was also required to show that copies of the work were made available to the public in order to be able to invoke s 131. I have concluded in [20] above that this was the case. 29 Having concluded that the first respondent was the maker of the cinematograph films in the Episodes and in the absence of any evidence to the contrary, I have concluded that the acts of reproducing of the Works in a material form and making sound recordings of the Works available to the public were done by or authorised by the first respondent.

Authorisation by second respondent 30 When considering whether the second respondent authorised the first respondent's infringement of copyright, a relatively broad view should be taken and it is not necessary for the applicants to show that the second respondent gave formal permission or approval for the infringing acts; Nationwide News Pty Ltd v Copyright Agency Ltd (1996) 65 FCR 399 at 422, citing University of New South Wales v Moorhouse (1975) 133 CLR 1. The question of whether or not the second respondent authorised the infringement is a question of fact that depends on the circumstances of the case; University of New South Wales v Moorhouse (above) at 21 per Jacobs J. Some degree of connection or control must be proved; WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274 at 286 - 287. 31 The applicant pointed to a number of factors as indicating that the second respondent had authorised the infringement of copyright: · the second respondent was the sole director and company secretary of the first respondent (this is evident from the company extract for the first respondent); · the second respondent was described in the credits of the Episodes as "Executive Producer" of the program; · the second respondent represented the first respondent in its dealings with the third applicant in relation to a licence for music used in Rex Hunt's Fishing Adventures. 32 On the basis of these three factors, I find that the second respondent authorised the first respondent's infringement of copyright.

"Innocent" infringement 33 Section 115(3) of the Act provides: "Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not." 34 In Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 61 FCR 479 at 487, Kiefel J (with whom Burchett and Tamberlin JJ agreed) held that the onus of proof in this section fell on the infringer. Accordingly, in the absence of a filed defence, any evidence or submissions from either respondent, it is not necessary for me to consider whether this section would apply.

Orders 35 The applicants seek declarations that the second respondent has authorised the infringement and has infringed the applicants' copyright in the Works and in the sound recordings of the Works. As I have found that the infringements of which the applicants complain have occurred, I am prepared to make the declarations sought.

36 In addition to the above declarations, the applicants also seek a number of orders including that: 1. the second respondent by himself, his agents or otherwise be restrained from reproducing, broadcasting or authorising the reproduction or broadcasting of the whole or a substantial part of the Works, the sound recordings of the Works and any and all works controlled by the applicants; 2. the second respondent deliver to the applicants all infringing copies of the Works and the sound recordings thereof in his possession, power or control (see s 116(1)(a) of the Act); 3. the second respondent pay the applicants' costs to date; 4. the applicants have leave to have those costs taxed forthwith. 37 Counsel for the applicants submitted that the order in (4) is appropriate because it would increase the chances of the second respondent appearing before the Court in future. In this respect, Mr Cobden, counsel for the applicants, referred me to affidavit evidence of conversations between the second respondent and the applicants' solicitors in which the second respondent stated that he would ignore the application and pleadings in this proceeding. In the circumstances, I am prepared to make order (4).

38 For the reasons given above, I am prepared to make the orders sought by the applicants except that I see no occasion to extend the restriction in order 1 above to "any and all works controlled by the applicants". It is sufficient to confine the orders to the infringements established by the applicants. I have also modified order (3) because the hearing on 26 July 2001 was adjourned at the applicants' request. I certify that the preceding thirty-eight (38) paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate: Dated: 31 October 2001 Counsel for the Applicants: Mr R Cobden

Solicitor for the Applicants: Banki Haddock Fiora 7 Counsel for the Respondents: No appearance

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