Tuesday, July 6, 2010

Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited (No 2) [2010] FCA 698 (6 July 2010)

UPDATED: In this decision Jacobson J was required to assess the copyright liability of the (respondents) composers of the song ‘Downunder’ for the sampling of the song ‘Kookaburra Sits in the Old Gum Tree’. Having held in February this year that a substantial part of the song was sampled, the court in this instance was required to assess the damages payable under the Trade Practices Act to the applicants.

Drawing from Ludlow Music Inc v Williams (No 2) [2002] EWHC 638 (Ch) (“Ludlow Music”) at [38] - [48] Jacobson held the relevant principles to be, at [29] – [34]:

First, the respondents being wrongdoers, damages should be liberally assessed but the object is to compensate the applicant, not to punish the respondents. Second, it is common practice in the music industry for the owner of the copyright in a work to grant a licence to a person who seeks to use part of the original work in a derivative work. In those instances the owner of the copyright will grant a licence in return for a share of the copyright (or a share of the income) in or from the derivative work. Third, when an infringer uses the copyright work without a licence, the measure of the damages it must pay will be the sum which it would have paid by way of royalty if, instead of acting “illegally”, it had acted legally. Fourth, where (as in the present case) there is no “normal” rate of royalty or licence fee, evidence may be adduced of practice in the industry including expert evidence of factors which may guide the court in the determination of the applicable rate. Evidence of that type will be general and hypothetical and it will be a matter for the court to determine the weight to be given to it. Fifth, where (as in the present case) some form of royalty or profit share is appropriate, the basis for the assessment is a transaction between a willing licensor and a willing licensee. The assessment has to be made upon all the relevant evidence which may include evidence of rates agreed in other similar or “comparable transactions”. Sixth, the process is one of judicial estimation. Mathematical precision is not attainable. It would appear that if the court is to err, it should do so on the side of generosity to an applicant.

Holding that there had been a continuing misrepresentation as to the copyright ownership of the song to APRA and AMCOS he cautioned against using other samples in songs and their respective royalty licence rates as guidelines in cases such as these at [179] – [181]:

The evidence of “comparable” samples is to be approached with caution. Each sample is different and the factors which informed the outcome of the negotiations in the various samples referred to in the evidence are not fully available. The process is quite different from that which underlies the well established principle applicable to the assessment of the value of land or items of property. There, the basis of the value is the price that a willing purchaser would pay to a willing but not anxious vendor and is determined upon the footing that there are articles of the same kind which are the subject of frequent sale and purchase: Spencer v Commonwealth (1907) 5 CLR 418 at 431, 441. Nevertheless, insofar as the “comparables” adduced in evidence can be given weight as indicators of the outcome of the hypothetical bargain, they point to a low percentage figure.

Overall Jacobson held that the 2 bars of ‘Kookaburra Sits in the Old Gum Tree’ were a substantial part of that song, however in determining damages, the question was predominantly based on what qualitative contribution had been made by that song to 'Downunder’. ‘Downunder’ was not heavily reliant on the sample as part of its song with Jacobson referring to a range of other musical elements and qualities which gave the song its wider popularity. Here he held at [216] to [220]:

Although the quotation from Kookaburra in the 1981 recording is, in my view, sufficient to constitute an infringement of copyright, other factors are to be taken into account in assessing the percentage interest payable in a hypothetical licensing bargain. The most obvious factor is the difficulty in detecting the similarity between the flute riff and the bars from Kookaburra. A further strong indicator of a low percentage is to be found in a qualitative and quantitative consideration of Kookaburra’s contribution to Down Under, looked at a whole. The qualitative and quantitative comparison which I am required to undertake in this part of the case is different from that which was the subject of the February Reasons. There, the enquiry was limited to the bars of Kookaburra that are reproduced in the flute riff. Here, the comparison involves a weighing of the significance of the bars of Kookaburra to the overall musical qualities of Down Under. Whilst it is true that the commercial success of Down Under in 2002 may have given the copyright owner of Kookaburra an opportunity to capitalise upon its statutory monopoly, that is outweighed by the other factors to which I have referred. The process of determining the percentage figure to be paid is one of judicial estimation. Taking the most generous approach that is open to me having regard to the figures put to me by the parties, I estimate the figure at 5%...

Further Reading
Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2010] FCA 29 (4 February 2010) <http://www.austlii.edu.au/au/cases/cth/FCA/2010/29.html > at 6 July 2010

Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited (No 2) [2010] FCA 698 (6 July 2010) <http://www.austlii.edu.au/au/cases/cth/FCA/2010/698.html > at 6 July 2010)

Wikipedia, Kookaburra with Food (Image) (last updated 23 June 2010) <http://en.wikipedia.org/wiki/Kookaburra> at 6 July 2010
(11.30am): According to ABC Youth Radio Station, Triple J, the copyright owners of the Australian band Men at Work's song 'Downunder' have been held liable for copyright infringement of the song 'Kookaburra Sits in the Old Gum Tree' and have been ordered to pay 5% of royalties backdated to 2002. As soon as the judgement has been published online I will write more about this decision and any obiter dictum with respect to sampling under Australian copyright law.

Further Reading
OpenContentAustraliaResearchReview, Recent Developments (6 August 2009) <http://ocarr.blogspot.com/2009/08/recent-developments.html> at 6 July 2010

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