Boomerang Investments Pty Ltd v Padgett (Liability)  FCA 535 (24 April 2020)
The Applicants owned various copyright rights in the musical and literary works in the song “Love is in the Air” (Love) originally composed by Vanda and Young in 1977 and published the same year by J Albert & Sons Pty Ltd (Alberts). The song was performed by John Paul Young and also featured in the soundtrack of the film Strictly Ballroom.
The Applicants alleged the respondents infringed their copyright through the duo of Padgett and Monahan (Glass Candy) releasing the song “Warm in the Winter” (Warm) in September 2011 (which was published in Australia by Kobalt Music Publishing Australia Pty Ltd) and making an adaptation of Warm called “France is in the Air” for Air France which was used as a soundtrack for part of its international marketing campaign of the same name.
The case was pleaded on the basis that infringement arose each time Warm was made available for streaming or downloading on various online music platforms and on two other websites connected with Glass Candy. For France, the case concerned streaming (but not downloading) of a short promotional video with France as the soundtrack viewed by Australians via Air France’s YouTube Channel and by making this song available as music on hold for listening by Australians contacting Air France by telephone. The Applicants did not allege that the initial recording of Warm was a breach of copyright. Perram J speculated that this might have been because this would have required proceedings to be commenced in the USA.
Perram J found infringement arising from Warm reproducing a substantial part of the musical works comprised in the music and the sound of the accompanying lyric ‘love is in the air’ from Love. However, Warm did not reproduce the longer musical couplet ‘love is in the air, everywhere I look around. Love is in the air, every sight and every sound’ in Love, or the literary work comprising the lyrics of Love.
The case against Glass Candy being responsible for, or authorising, the streaming or downloading of Warm from online music platforms failed because those platforms were authorised by the collecting societies , APRA and AMCOS to stream and make available for download Love as well as Warm. However, infringement arose from Glass Candy authorising downloads of Warm from the two other websites.
The case against Kobalt failed. Merely collecting Australian royalties from Warm was not sufficient to make it liable for secondary infringement and Kobalt was not the owner or licensee of the relevant rights.
In relation to France, infringement arose from publication of the melody and lyric ‘France is in the air’. However, the case against Air France in relation to the streaming of France as part of its video on YouTube failed because YouTube held an APRA licence to stream Love (and hence the substantial part of Love which was copied in France). The hold music was an infringement, but the only party entitled to sue Air France for that was APRA.
Vanda and the estate of Young claimed Glass Candy and Air France infringed their moral rights, but that claim was dismissed.
Glass Candy and the musical work in Love
In discussing the identification of copyright residing in the musical work in Love, Perram J concluded the sound of the sung words in the lyrics is part of the musical work (with the words constituting the lyrics being a separate literary work). Hence the words have two relevant functions, namely instructions on what sounds to sing as well as being bearers of meaning.
An audio file of the sung words ‘love’s in the air’ in Warm is here
Objective similarity depends upon the aural perception of the judge who stands in the shoes of the ordinary, reasonably experienced listener.
Perram J considered that ‘love’s in the air’ in Warm was objectively similar to the musical work comprising ‘love is in the air’ in the first two lines of each of the four verses in Love, but not to the first or second lines of the chorus.
Further, his Honour considered there was no objective similarity between ‘love’s in the air, whoa-oh, love’s in the air, yeah’ in Warm and the sung longer musical couplet in Love, namely ‘love is in the air, everywhere I look around. Love is in the air, every sight and every sound’.
Having found one instance of objective similarity, Perram J then went on to consider whether there was a causal connection between the respective parts which required an assessment of the evidence surrounding the composition of Warm. Glass Candy asserted they had never heard of Love until just before Warm’s commercial release in 2011. However, his Honour did not accept all of Padgett’s or Monahan’s evidence and concluded the sung lyric ‘love’s in the air’ in Warm was composed between May 2008 and August 2011. His Honour found that Glass Candy were aware of Love when they first created the vocal line in Warm. Of course, mere awareness does not give rise to conscious copying and the further evidence that Glass Candy were sampling other people’s songs did not take the copying issue any further. Nonetheless, Perram J considered it unlikely for the objective similarity to be coincidental and was satisfied, on the balance probabilities, that Glass Candy copied the vocal line from Love either deliberately or subconsciously. His Honour then explained why the evidence was consistent with drawing an inference that Glass Candy knowingly copied the sung lyric ‘love is in the air’ and accompanying music from Love.
Having found objective similarity and a causal connection, his Honour than had to consider whether the part taken in Warm constitutes a substantial part of Love and found in the affirmative. While quality and quantity of the taken part are relevant, it usually depends more on the quality and the importance of the part taken to the copyright work in Love. Perram J found the sung lyric ‘love is in the air’ in Love was original and, although short, it was an essential and substantial part of Love.
Perram J concluded that “in making the September 2011 Commercial Recording of Warm, Glass Candy infringed the copyright in the musical work Love by deliberately copying a substantial part of Love, the sung line ‘love is in the air’ and accompanying music, in their song Warm.” However, as discussed further below, Glass Candy was not sued for making that recording. Rather, they were sued for authorising the streaming and downloading of that recording.
The literary work in Love
Perram J then briefly considered copyright residing in the literary work comprising the lyrics of Love. His Honour did not accept that the line ‘love is in the air’ is sufficiently original such that it can be regarded as a substantial part of the lyrics of Love. Hence, by using the same line in Warm, Glass Candy did not take a substantial part of the literary work. They merely took a famous idiom which nobody owns. As a result, the infringement cased based on the literary work (lyrics) failed regarding Warm and the adaptation, France.
Air France and the musical work in Love
His Honour then turned to the musical work in France which was an adaption of Warm used in an Air France promotional video which included the substitution of ‘France is in the air’ for ‘love’s in the air’ where first occurring. The background to the development of France was discussed and an audio file provided in the judgment is here
The relevant part of France which was asserted to contain a substantial part of Love was the sung line ‘France is in the air’.
Perram J considered there was objective similarity in the respective sung lyrics. The substitution of the sung word ‘France’ for ‘love’ was of little importance.
Further, there was the requisite causal connection. Firstly, arising from Glass Candy copying the sung lyric from Love into Warm and then crafting ‘France is in the air’ from the sung lyric ‘love’s in the air’ in Warm. Secondly, his Honour found that Air France, independently of Glass Candy, took the sung lyric ‘love is in the air’ from Love and inserted it into France. There was sufficient evidence to find that Air France’s exclusive advertising agency commissioned the creation of France with the intention of exploiting Love by fashioning it from Warm. His Honour was not satisfied that the representative from the advertising agency was entirely truthful and drew the inference that he “deliberately and consciously used Warm because it contained the critical sung line ‘love is in the air’ to the same melody as in Love and that the subsequent production of France was simply a further step in this process of plagiarism.” Further, the knowledge of the advertising agency could be imputed to Air France. Perram J concluded that Air France, through its advertising agency, copied the sung lyric from Love into France. Air France was not an innocent infringer and the copying was flagrant.
Having found objective similarity and a causal connection, his Honour also found that the part taken in France constitutes a substantial part of Love. This conclusion, in the context of musical work infringement, was not altered by the meaning of one of the words being different.
Streaming and downloading
As previously noted, Glass Candy and Air France were not sued for making their respective initial recordings. Rather, they were sued for authorising the streaming and downloading of those recordings.
Perram J summarised the infringement case, at paragraph 270, as follows:
“The Applicants’ case on infringement of the copyright in the musical work against each of the Respondents turns on the submission that they have the right to stream and download Love over the internet and that the Respondents have, by streaming and permitting the downloading of Warm (or in streaming France on YouTube and using it as telephone hold music) infringed those rights. The infringement is alleged to arise because, first, Warm and France are alleged to contain a ‘substantial part’ of Love which was deliberately taken from it; secondly, the streaming or downloading of a ‘substantial part’ of Love is taken by s 14(1)(a) of the Copyright Act to be the streaming and downloading of Love itself; thirdly, the streaming and downloading of Love involves the exercise of rights comprised in the copyright in Love; and, finally, because the doing of an act comprised in a copyright without the permission of the owner of that right constitutes its infringement: s 36(1).”
Streaming of a literary or musical work from a streaming service involves its electronic transmission which falls within the exclusive right of the copyright owner “to communicate the work to the public” under s 31(1)(a)(iv) of the Copyright Act. The creation of a copy of that work by the subscriber falls within the exclusive right of the copyright owner “to reproduce the work in material form” under s31(1)(a)(i). Hence, the relevant rights in the song Love are subsets of the reproduction right and the communication right.
Ownership of copyright in the musical work in Love
The chain of title and licensing arrangements are briefly summarized below:
Vanda and Young were the composers and original owners of copyright in the musical and literary work comprising Love.
In 1972, Vanda and Young assigned the ‘Performing Rights’ in any future works they may compose to APRA. At that time, Performing Rights did not include the reproduction right, but did include some aspects of the communication right including the right to broadcast and transmit to subscribers ( then called a ‘diffusion service’) and there is High Court authority that the playing of telephone hold music involves the diffusion right.
In 1977, Vanda and Young assigned all their remaining copyright rights to Alberts which included future digital streaming rights. AMCOS came into existence in 1979 and shortly thereafter Alberts granted AMCOS a licence in relation to the reproduction right. There was a further 1986 Agreement where Alberts granted to AMCOS an exclusive licence which authorised various acts and which extended to a number of reproduction rights including the future right to make digital copies of Love. However, Alberts retained control over copying of Love for advertisements and films as well as control of licensing to record companies.
In 1992, Alberts assigned to APRA the Performing Rights in all of its works, but this could not extend to Love because such rights were previously assigned to APRA by Vanda and Young in 1972. Consequently, Alberts remained the owner of so much of the reproduction and communication rights as authorised digital downloading and streaming and those rights were not affected by the 1992 assignment to APRA.
In 2005, Alberts again assigned the Performing Rights to APRA which, due to 2001 amendments to the Copyright Act, then included the communication right authorising digital streaming. However, ownership of the reproduction right (including the right to make digital copies) still remained with Alberts.
In 2016, the music publishing business of Alberts was sold to BMG, but Alberts retained ownership of the back catalogue of songs written by Mr Vanda, the late Mr Young and the late Mr Stevie Wright. In August 2016, ownership of the copyright in this back catalogue, including Love, was assigned by Alberts to Boomerang, which was a company under the control of the Albert family. This was effective to assign the reproduction right (including the digital downloading right) but not the communication right (including the digital streaming right) which had previously been assigned to APRA in 2005.
These 2016 transactions did not affect the 1986 licence to AMCOS. However, Boomerang remained bound by the 1986 AMCOS licence only until 15 September 2016 when it granted a fresh exclusive licence to AMCOS which included the digital download right in Love. However, this fresh licence did not extend to the use of Love in advertisements or films.
Also, on 15 September 2016, Boomerang assigned to APRA the communication right (including the digital streaming right) in respect of the entire back catalogue including Love, but that right had previously been assigned to APRA by Alberts in 2005.
The end result was that APRA owned the digital streaming right and telephone hold music diffusion rights. Boomerang owned the digital downloading right subject to the 2016 exclusive licence to AMCOS.
Since Boomerang did not own the digital streaming right, its case on streaming of Warm and France necessarily failed. Boomerang also had no standing to sue for infringement arising from the telephone hold music of Air France. APRA owned these relevant rights and had title to sue, but due to the pleadings, this did not extend to damages and APRA’s claim for the digital streaming of Warm was limited to a declaration of contravention and an injunction.
Although Boomerang was the owner of the digital downloading right and had standing to sue for infringement of that right (before and after 2016), it had granted AMCOS an exclusive licence to authorise others (including streaming services and their subscribers) to make copies of Love. Hence Boomerang and AMCOS had standing to sue for the digital downloads of Warm. It was not contended that France was subject to digital download.
Boomerang argued that the AMCOS licensing arrangements did not extend to authorising the reproduction of other songs which would otherwise infringe the copyright in Love, but Perram J rejected this.
Digital streaming and downloading of Warm
His Honour concluded that Glass Candy, without authorisation from Boomerang or AMCOS, made Warm available for download via two websites (Big Cartel and IDIB) and this song was downloaded some 13 times over the relevant period 2011 to 2018 by Australians.
Warm was also made available for streaming and downloading via online music platforms including iTunes, Google Play, Spotify, Apple Music and YouTube. Perram J reviewed the relevant agreements for each of them. However, these online music platforms were licensed by APRA and AMCOS to provide digital streaming and downloading of Love. Further, since s14 of the Copyright Act provides that the doing of an act in relation to a work includes the doing of that act in relation to a substantial part of the work, it necessarily followed that these streaming services were licensed to make available a substantial part of Love for streaming or downloading. As Warm involved the copying of a substantial part of Love, the online music platforms could not be liable and the issue was whether Glass Candy could be made liable for authorising these platforms to stream and download Warm.
After reviewing the evidence, Perram J was prepared to find that Glass Candy authorised streaming and downloading only through the iTunes platform. However, there can be no liability for authorising an infringement under s 36(1) of the Copyright Act unless it is shown that it is connected to an actual act of infringement which has occurred. Since there was no infringement by iTunes due to the APRA and AMCOS licences, the Applicants’ case about streaming and downloading Warm necessarily failed.
The fundamental problem was that the Applicants chose to focus on the online music providers and attempted to sheet home to Glass Candy the consequences of their actions. His Honour observed that this made no sense because the Applicants had authorised those music providers to make Love (and, by necessary implication, a substantial part of it, including Warm) available to the public. The Applicants should have concentrated on identifying the correct acts of infringement which was when Glass Candy recorded Warm and communicated (uploaded) that recording to iTunes in September 2011, thereby authorising iTunes to make it available for streaming and downloading. His Honour observed that the location of the iTunes servers would then become relevant as to whether there were acts of infringement in Australia (but those servers were not in Australia).
Hence, the Applicants could prevail, and Boomerang could claim damages (bearing in mind Warm was downloaded only 13 times via the Big Cartel and IDIB websites which netted a mere $11.50 in revenue, but Boomerang might seek to assess damages on a foregone licence basis) and potentially additional damages arising from the copying of Love being deliberate.
Streaming of France from YouTube and hold music
The case against Air France for streaming its promotional video featuring France from YouTube failed because YouTube held an APRA licence. Perram J observed that he would have concluded that Air France also infringed the copyright by making the materials available on its YouTube channel. However, neither Air France nor Glass Candy may be secondarily liable for these acts of streaming where YouTube itself cannot be liable.
The use of France as hold music by Air France involved the communication of France to the public. Since Air France did not have an APRA licence it had no right to play France to the extent that it includes a reproduction of a substantial part of Love. Further, Glass Candy authorised those acts of infringement by Air France by licensing use of France. APRA was entitled to a declaration to that effect and an injunction, but cannot claim damages. Boomerang had no standing to sue for damages.
It was argued that France involved a material distortion of or material alteration to Love which was prejudicial to the honour or reputation of Mr Vanda and the estate of Mr Young.
However, Perram J noted that, under s 195AX of the Copyright Act, it is not an infringement of an author’s moral right in respect of a work to do something outside Australia and the relevant acts occurred in France, Canada and/or the USA. Hence this claim failed.
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