02 September 2005
Key Points:
The setting up of a website which gives users easy access to copyright material for the purpose of copying by them, whilst playing no part in the copying and even warning users not to infringe copyright, can amount to "authorisation" of the copyright infringement which inevitably follows, even if no single act of actual copyright infringement is proved. In the first real test of the amendments to the Copyright Act 1968 made by the Copyright Amendment (Digital Agenda) Act 2000, none of the new provisions were determinative, the decision being based upon law dating back to 1975.
On 14 July 2005, Justice Tamberlin J handed judgment in Universal Music Australia Pty Ltd v Cooper FCA [2005] 972, which included the first detailed judicial consideration of Australian sound recording copyright in the digital environment and the provisions of the Copyright Amendment (Digital Agenda) Act 2000 (Cth) infringement provisions.
Background
The proceedings were brought by the major recording companies against Mr Stephen Cooper, the owner and operator of the MP3s4FREE website. Cooper derived revenue through advertising arrangements in relation to the website.
In addition, claims were made against the Internet Service Providers E-Talk Communications PtyLtd and Com-Cen PtyLtd (referred to together as "E-Talk/Com-Cen") which hosted the website, without charge to Cooper in return for an advertising and traffic sharing arrangement, as well as the principal and an employee of those companies, Messrs Bal and Takoushis.
Contrary to what the domain name might suggest, the website did not itself offer MP3 digital music files for download without charge. In fact, the website included hyperlinks either to MP3 digital music files from another (unrelated) source, or websites that included such files. If a user clicked on the hyperlink the music files were downloaded directly from the remote website on which they were stored to the computer of the internet user who had accessed the Cooper website. The hyperlinks were automatically added to the website by third parties using a CGI-BIN script without the intervention of Cooper. However, there was evidence of alternative software that would have enabled a third party to add a hyperlink to a website but which required the consent or approval of the website operator before such hyperlinks were added.
The home page of Cooper's website contained statements concerning the availability of free songs and albums on the website and numerous references to MP3 files and downloads, but at the bottom of each page of the website there were hyperlinks to the website's"Privacy Policy", "Terms and Conditions" and "Disclaimer".
The website's "Terms and Conditions" contained the following statement:
"Sites Linked from the Website: Links to third-party websites from the Website are not necessarily under MP3s4FREE's control … and MP3s4FREE does not intend any such links to third-party websites to imply MP3s4FREE's sponsorship or endorsement thereof."
The "Disclaimer" included the following:
"… When you download a song, you take full responsibility for doing so. None of the files on this site are stored on our servers. We are just providing links to remote files.
And the Privacy Policy included the following:
Disclaimer: … This site only provides links to the according sites and no songs are located on our servers … We are not responsible for any damage caused by downloading these files, or any content posted on this website or linked websites."
The nature of the claims made
The applicants alleged that by means of or in the course of operating the website:
"Communication to the public"
Neither Cooper nor E-Talk/Com-Cen were found to have communicated sound recordings to the public.
The exclusive rights of the owner of copyright in a sound recording pursuant to s85(1) include the right "to communicate the recording to the public". "Communicate" is defined in s10(1) of the Act as including "to make available on-line or electronically transmit … a work or other subject matter." The applicants relied on both of the limbs of the definition of "communicate", namely, "to make available on-line" and "to electronically transmit the subject matter." The phrase "to make available online" is not defined in the Act. These rights and their definition were introduced by the Digital Agenda Amendment, which further provided a new section 22(6) which might have been intended to clear up this sort of issue:
"(6) For the purposes of this Act, a communication other than a broadcast it taken to have been made by the person responsible for determining the content of the communication."
Again, however, the legislation offers no explanation of what "determining the content" might mean.
Whether this applied to Cooper, when there were no sound recordings located on the website and, in the end, it was the user visiting the website who decided what he or she would download, was an issue which had not previously been considered by the Australian courts.
Justice Tamberlin was persuaded by the fact that:
While the request that triggers the downloading is made from the Cooper website, it is the remote website which makes the music file available and not the Cooper website. Consequently, it was the remote websites that had made available online the relevant sound recordings to the public.
In respect of the cryptic section 22(6), he further found that Cooper was not the person responsible for determining the content of the communication, rather it was the operators of the remote websites as they ultimately determined what was downloadable and downloaded to the end user.
Infringement by offering for sale or exhibiting an article in public
The applicants submitted that Cooper had both sold or exposed for sale and exhibited by way of trade the music files on his website.
The Judge accepted that the operation of the website occurred within a trading or commercial context primarily through the hyperlinks on the website, and the high traffic of internet users which was generated by these hyperlinks, to procure such sponsorship. However, he found that section103 had no application in the case because
In substance, what was being offered thought the hyperlinks was a trigger mechanism for the activation of the free transmission of a packet of electronic data from the remote website to the user'swebsite. This does not fall within section 103.
Authorisation of copyright infringement
Section 101(1) of the Act provides that copyright is infringed by a person who, not being the owner of the copyright, authorises the doing in Australia of any act that infringes the copyright.
The law on authorisation prior to the Digital Agenda Amendment was expressed in University of New South Wales v Moorhouse (1975) 133 CLR 1. In that case, the High Court held that the University of New South Wales had authorised the making of infringing copies of a substantial part of a book by making available to students both the book (in its library) with photocopier in close proximity, with no restrictions on its use. In that case, it was confirmed that the word "authorize" in this sense has the meaning of ‘sanction, approve, countenance' or ‘permit'.
Since that decision, it has been generally accepted that a "person cannot be said to authorize an infringement of copyright unless he has some power to prevent it." The majority of the Court in Moorhouse stated that knowledge was not relevant where a general permission or invitation existed to perform the acts of infringement, however, it could become important if "… the invitation were qualified in such a way as to make it clear that the invitation did not extend to the doing of acts comprised in copyright and if nevertheless it were known that the qualification to the invitation was being ignored and yet the University allowed that state of things to continue."
Subsection 101(1A) was introduced into the Act by the Digital Agenda Amendment. This provision states that in deciding whether a person has authorised the doing in Australia of any act comprised in the copyright, the matters that must be taken into account by the Court include:
(a) the extent (if any) of the person'spower to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
These factors are not exhaustive and do not prevent the Court from taking into account other factors, such as the respondent's knowledge of the nature of the copyright infringement.
In the recent case of Australasian Performing Right Assn Ltd v Metro on George Pty Ltd (2004) 61 IPR 575 at [18], Justice Bennett agreed that mere facilitation of infringing conduct and knowledge that there is a likelihood that there will be infringing use are insufficient to constitute authorisation. The element of control will be necessary to constitute authorisation to infringe copyright.
The question that remained open was the degree of connection or control that is necessary between the alleged authoriser and the primary infringer. In this case, it was accepted that Cooper could not control whether any particular sound recording remained on the internet or on a remote website.
However, Justice Tamberlin took the view that the question here was whether or not Cooper had sufficient control "of his own website to take steps to prevent the infringement". He held that Cooper clearly had sufficient control regarding both the user accessing his website and the remote operator placing hyperlinks on the website. Further, the website was designed to, and did, facilitate and enable this infringing downloading.
Cooper "could have prevented the infringements by removing the hyperlinks from his website or by structuring the website in such a way that the operators of the remote websites from which MP3 files were downloaded could not automatically add hyperlinks to the website without some supervision or control by Cooper."
Accordingly, Justice Tamberlin found that Cooper had authorised the infringement of copyright in the sound recordings, both by the internet users who downloaded the recordings and the operators of the remote websites.
The disclaimers referred to above were found to be ineffective. In his view, they did not amount to reasonable steps to prevent or avoid the doing of the act not in the terms of section 101(1A)(c) of the Act. They merely highlighted Cooper's failure to take reasonable steps given that they indicated Cooper'sknowledge of the likelihood that at least some of the MP3sto which the website provided hyperlinks constituted infringing copies of copyright sound recordings. Cooper failed to take any steps to ascertain the legality of the MP3sto which the hyperlinks related or the identity of the persons submitting the MP3s. His failure to do so in the circumstances gave rise to an inference that he permitted such conduct.
The Court also found that Bal and Takoushis were either aware of the contents of Cooper's website or that they failed to take any steps to inform themselves as to the true nature the website, notwithstanding that they must have been interested in and were certainly aware of the traffic it was generating. As a consequence, they and E-Talk/Com-Cen were found liable as having participated in Cooper's infringing conduct and liable to the same degree.
Joint tortfeasors with the internet users?
The Court rejected the applicants' proposition that Cooper and the other respondents were engaged as joint tortfeasors with the internet users who were making unlawful copies of the applicants' sound recordings by downloading them. The Court found to be unconvincing the notion that there was some form of common design between the respondents and the unknown numbers of internet users who visited Cooper's website.
Section 112E defence
One of the Digital Agenda Amendment provisions, section 112E, provides a defence in certain circumstances to infringement by authorisation. In particular, it provides that a person, including a carrier or carriage service provider, who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audio-visual item "merely" because another person uses the facilities so provided to do something the right to do which is included in the copyright.
Cooper and E-Talk/Com-Cen sought to rely on this defence. Their ability to do so turned on the word "merely". The Court found that the defence had no application in the present case because the circumstances indicate that Cooper and E-Talk/Com-Con had been far more involved than just providing the facility that has been used to make the communication.
Comment
It is ironic that the judge in this case found none of the amendments made to the Copyright Act by the Digital Agenda Amendment to be useful. Rather it was the doctrine of "authorization" established by University of New South Wales v Moorhouse which was the basis of the Court's decision in this instance.
