CATCHWORODS TRADE PRACTICES ~ sound recordings ~ copyright - prima facie case of infringement ~ interlocutory relief - Anton Piller order - jurisdiction - Trade Practices Act 1974 - Copyright Act 1968. Trade Practices Act 1974, s.52 Copyright Act 1968, ss.102, 115, 116, 119. Calsil Limited v. Ferald Pty. Limited (unreported Judgment of Toohey J. of 12 July 1985) Polvgram Records Pty. Ltd. and Ors. v. Monash Records (Australia) Pty. Ltd. and Anorc. Qld. G127 of 1985 SPENDER J. BRISBANE 17 December 1985 IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G127 of 1985 GENERAL DIVISION BETWEEN : POLYGRAM RECORDS PTY. LTD. First Applicant AND: WEA RECORDS PTY. LTD. Second Applicant AND: RCA LTD. Third Applicant AND: MONASH RECORDS (AUSTRALIA) PTY. LTD. First Respondent AND: MONASH RECORDS (MELBOURNE) PTY. LTD. Second Respondent MINUTE OF ORDER JUDGE MAKING ORDER: SPENDER J. DATE OF ORDER: 17 DECEMBER 1985 WHERE MADE: BRISBANE THE COURT ORDERS THAT: Upon the Applicants by their Counsel undertaking (except for the purposes of proceedings for perjury or contempt of Court) that they will not profer to the Police for the purpose of any criminal prosecution of the Respondents any document or thing which is the subject of this Order or any information obtained from the performance of this Order or from any answers by the Respondents given pursuant to the Orders. AND UPON the Plaintiffs by their Counsel giving the usual undertaking as to damages The Court orders that: 1. Until 4 o'clock in the afternoon on the twenty third day of December 1985 or earlier order the Respondents, whether by themselves, their servants or agents or otherwise, be restrained from engaging in the following conduct, namely: (a) Engaging in trade or commerce, in conduct which is misleading or deceptive, or is likely to mislead or deceive, by distributing or selling sound recordings the subject of exclusive licences in Australia in favour of the Applicants as if the same could be lawfully sold or distributed by the Respondents to members of the public to hold and retain such sound recordings against the Applicants. (bd) From infringing the applicants' copyright in the sound recordings:- "Songs to Learn and Sing" - Echo and the Bunnymen "Phantasmagoria" - Damned "The Head on the Door" - The Cure "In Square Circle" - Stevie Wonder "Single Life" - Cameo "Moving Pictures" - Rush "Emergency" - Kool and the Gang "No Frec Lunch" - Green on Red "Easy Pieces" - Lloyd Cole and the Commotions "Power Windows" - Rush "Believe You Me" - Blancmange "Hundreds & Thousands" - Bronski Beat "Don't Stand Me Down" - Dexys Midnight Runners ("the Albums") (i) By importing into Australia for the purpose of selling or by way of trade offering or exposing Tor sale copies of the albums which if made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants; (ii) And selling or by way of trade offering or exposing for sale imported copies of the Albums which if made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants. (c) From infringing the Applicants' copyright in the sound recordings manufactured, distributed or sold under the labels referred to in the Schedule hereto. (d) From infringing the Applicants' copyright in any sound recording of which the Applicants are the exclusive licencees within the meaning of the Copyright Act 1968 ("the Recordings") by (i) Importing into Australia for the purpose of selling, or by way of grade offering or exposing for sale copies of the recordings which if made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants; (in) And selling or by way of trade offering or exposing for sale imported copies of the recordings which if made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants. Pending the further hearing of this matter, the Respondents whether by themselves their servants or agents or otherwise shall permit such persons not exceeding five (5) members, employees or agents of the Plaintiff's Solicitors, Morris Fletcher & Cross to enter each of the premises owned or occupied whether under lease or licence situated at the following addresses and known by the following names:- "Monash Records" - 203 Balaclava Road, North Caulfield; "Gaslight" - 85 Bourke Street, Melbourne; "Collectors Corner" - 323 Swanston Street, Melbourne; "Monash University Records Store" - Wellington Road, Clayton; "Melbourne University Records Store" - Royal Parade, Parkville; "LaTrobe University Records Store" - Bundoora; and at any time between 9 a.m. and 5 p.m. on 18th, 19th, and 20 December 1985: (a) and to search for copies of any sound recordings referred to in Order 1 hereof; (b) to carry out a count and identification of all copies of any sound recordings referred to in Order 1 hereof and to seize and retain all such copies of the said sound recordings pending the further hearing of this matter by this Honourable Court or earlier Order. The Respondents or either of them forthwith upon the service of this Order deliver up to the Solicitors for the Applicants all copies of each of the sound recordings referred to in Order 1 hereof which are in the possession power or control of the Respondents or either of them. 4. 6. 7. Service on both Respondents shall be effected as follows: (a) Of the Application order and documents read in this Application (except for the confidential exclusive licence agreements and copies of the sound recordings) by leaving copies thereof at each of "Monash Records", 203. Balaclava Road, Caulfield and the registered offices of the Respondents; and (b) By leaving copies of the order at each of the addresses referred to in paragraph 2 hereof. The exhibits consisting of sound recordings and confidential licence agreements be retained by the Applicant's solicitors and kept available for inspection by the Respondent's solicitors upon written request during ordinary business hours. The Respondents within two (2) days of the making of the Order, make file and serve an Affidavit setting out the following information. (a) The number of copies of each of the sound recordings set out in Order 1 hereof in the possession, power or control of the Respondents at the date of this Order; (b) The number of copies of the sound recordings referred to in Order 1 hereof sold by the Respondents prior to the date of service of this Order; (c) The name and address of the supplier or suppliers to the Respondents of the sound recordings referred to in this Order and the number of each of the _ sound recordings supplied to the Respondents and the number of each of the sound recordings imparted by the Respondents. The Application be adjourned until 2.15 pm on Monday the twenty third of December 1985. The costs of the Application be reserved. Asylum Atco Atlantic/America Atlantic Buddah Delphine Records Duck Records Electra Electra-Musician Esparanza Finnadar Full Moon/Asylum Full Moon/Warner Swansong Warner Bros Viz RCA Victor Red Seal International Gold Seal SCHEDULE WL.E.A. LABELS Hansa Korova Little David MCA Midi Midnight Modern Nomesuch Qwest Real Records Reprise Riva Sire Time Coast Communications R.C,.A. LABELS Pure Gold Starcall Victrola Vik Motown Gordy Tamla Wheatley Polar Powderworks LABELS TO WHICH POLYGRAM HAS EXCLUSIVE RIGHTS 21 RECORDS BLUE THUMS ARKIV ARKIVE OF FOLK & JAZZ CALEDONIA ARGO CAPRICORN ARGO SPOKEN WORD CARRERE ASTOR CASABLANCA ASTORGRAPH CENTRE RECORDS ASTOR AUSTRALIA COLPIX AUTOBAHN CRASHED CREAM BARCLAY CURB BBC BBC ARTIUM DAWN BIOGRAPH DECCA BLUE PRINT DERAN DEUTSCHE GRAMMOPHON DURECO EASTWIND ECLIPSE EDDITIONS EG FADER FESTIVO FIVE PLATTERS FISHER LYONS FONTANA FOOL CIRCLE FRANCIS DREYFUSS MUSIC GAFF MASTERS GOLDEN HOUR GOLDMOUNTAIN GRANIOSO GRAPEFRUIT GUINEA HAWORTH HIGH HICKORY IMPULSE JUBILEE KUDU LIVING BAROQUE L'OISEAU LYRE LONDON FORBIDDEN FRUIT KITCHENWARE. PHILLY WORLD LONDON STREETWISE MERCURY MERCURY-EMARCY MERCURY GOLDEN IMPORTS METROMONE, NAIVE RECORDS NATURAL RESOURCES OASIS ORIGINAL PENDULUM PHILIPS PHILIPS CLASSICS PHILIPS INTERNATIONAL SERIES POLYDOR POLYDOR-KALOB NOTE: POLYGRAM POLYSTAR PRODIGAL QUO ENTERPRISES RED BULLET RESONANCE RIALTO RIVA RECORDS ROCKET ROSTAR RSO SABAN SEQUENZA SERRICK SHELTON SIGNATURE SJATO SUN BAZAAR LABEL SONET SONGBIRD START Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. STARWAVE SUGARSCOOP TELDEC (DECCA PRODUCT ONLY) TELSTAR T. HAYDEN THIS RECORD THRESHOLD TOTAL EXPERIENCE TRACK TRADITIONAL TIR PRODUCTIONS TURBO MUSIC UNIVERSO VERTIGO VERVE VOCALLION WATERHOUSE WAYWARD WHITE RABBIT IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G127 of 1985 GENERAL DIVISION ) BETWEEN : POLYGRAM RECORDS PLY. LTD. First Applicant AND: WEA RECORDS PTY. LTD. Second Applicant AND: RCA LTD. Third Applicant AND: MONASH RECORDS (AUSTRALIA) PTY. LTD. First Respondent AND: MONASH RECORDS (MELBOURNE) PTY. LTD. Second Respondent SPENDER J. 17 December 1985 EX TEMPORE REASONS FOR JUDGMENT This is an application in chambers for interim interlocutory relief and for the making of an Anton Piller order. The application raises two matters of some importance and of some novelty. Nothwithstanding the shortness of time and notwithstanding that I feel it necessary to didpose of the matter straightaway, I should express some reasons for adopting the course I have and in making the orders I do. The material before me shows that the applicants are the exclusive licensees in Australia of copyright ina large number of sound recordings under various labels. The respondents sell, both by wholesale and retail, records which the material very strongly indicates are infringing copies of the sound recordings in which the applicants have copyright. As a consequence very substantial damage can be suffered by members of the public who purchase such records. I am persuaded that the circumstances disclosed by the material require the issue of what 1s termed an Anton Piller order. Section 102 of the Copyright Act 1968 provides: "A copyright subsisting by virtue of this Part 1s infringed by a person who, without the licence of the owner of the copyright, imports an article into Australia for the purpose of - (a) selling, letting for hire, or by way of trade offering or exposing for sale or hire, the article; (b) distributing the article - (1) for the purpose of trade; or (112) for any other purpose to an extent that will affect prejudicially the owner of the copyright; or (c) by way of trade exhibiting the article in public, where, to his knowledge, the making of the article would, if the article had been made in Australia by the importer, have constituted an infringement of the copyright." Section 115(1) of the Copyright Act provides: "Subject to this Act, the owner of a copyright may bring an action for an infringement of the copyright." Section 116(1) provides: "Subject to this Act, the owner of the copyright in a work or other subject-matter is entitled in respect of any infringing copy, or of any plate used or intended to be used for making infringing copies, to the rights and remedies, by way of an action for conversion or detention, to which he would be entitled 1f he were the owner of the copy or plate and had been the owner of the copy or plate since the time when 1t was made." Section 119(a) and 119(b) provides: "Subject to the succeeding sections of this Division - (a) except against the owner of the copyright, the exclusive licensee has the same rights of action as he would have, and is entitled to the same remedies as he would be entitlted to, by virtue of section 115 if the Licence had been an assignment, and those rights and remedies are concurrent with the rights and remedies of the owner of the copyright under that section; (b) except against the owner of the copyright, the exclusive licensee has the same rights of action as he would have, and 1s entitled to the same remedies as he would be entitled to, by virtue of section 116 if the licence had been an assignment." An examination of these provisions indicates that a large number of sound recordings sold both by wholesale and retail by the respondent companies, or one or other of them, are infringing copies. The purchasers of these records would be liable by way of an action for conversion or detinue to forfeit them, pursuant to s.116(1). The prima facie infringment then of the intellectual property rights of the applicants has serious consequences not only for the applicants but for the purchasers of those items from the respondents. The application raises two important matters: first, the jurisdiction of this Court to make the orders sought by the application; and secondly, the question of whether I have jursidiction to grant and if so, whether it is appropriate to grant, an Anton Piller order. So far as the first matter 1s concerned, this court does not have original jurisdiction in copyright matters. However, the consideration that purchasers of infringing copies are liable to forfeit those copies at the suit of the applicants, in my opinion, leads to the conclusion that the respondents' offering those items for sale 1s conduct which infringes s.52 of the Trade Practices Act 1974. The consuming public would be led toa belief that they were acquiring title to the records which they purchased from the respondents, when the material shows that they would acquire no such title. This deception 1s widespread and in my view 1s caught by the provisions of s.52 of the Trade Practices Act. That being so, this court 1s properly seized of the matter and its accrued jurisdiction in respect of matters which are strictly under the Copyright Act 1s enlivened. As to the making of an Anton Piller order, it ius sufficient to say that I have considered what Ormrod L.dJ. in Anton Piller K.G. v. Manufacturing Processes Ltd (1976) 1 Ch. 55 said at page 62: "There are three essential pre-conditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facile case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made." The material shows that at one or other of the outlets of the respondents, the following sound recordings have recently been available, and in respect of which the evidence strongly undicates those sound recordings infringe the copyright of the applicants: "Songs to Learn and Sing" - Echo and the Bunnymen ""Phantasmagoria"" - Damned "The Head on the Door" - The Cure "In Square Circle" - Stevie Wonder "Single Life" - Cameo "Moving Pictures" - Rush "Emergency" ~ Kool and the Gang "No Free Lunch" - Green on Red "Easy Pieces" - Lloyd Cole and the Commotions "Power Windows" - Rush "Believe You Me" - Blancmange "Hundreds & Thousands" ~ Bronski Beat "Don't Stand Me Down" - Dexys Midnight Runners In regard to the making of the Anton Piller order sought, Stephen J. in Simsek v. The Minister for Immigration and Ethnic Affairs (1981-82) 40 A.L.R. 61 at p.65, after referring to instances of the inherent power of the courts to ensure that justice may be done between parties, said: "However, such inherent power is not to be exercised as of course - see especially per Ormrod L.d. in Anton Piller (£19763 Ch. at 62). That jurisdiction provides no general substitute where application for injunctive relief would be the normal course nor should it be used to circumvent the safeguard which the requirement that a prima facie case be made out provides in ensuring that the potent weapon of interlocutory injunctive relief is not misused." Reference in this regard can profitably be made to an article "Protection of Intellectual Property Rights: Anton Piller Orders" (1983) 46 M.L.R. 257. So far as the Federal Court 1S concerned, Toohey Jd. recently in Calsil Limited v. Ferald Pty. Limited (unreported, 12 July 1985) considered the question of the jurisdiction to make an Anton Piller order. He concluded that there was jurisdiction in this Court to make such an order, referring to s.23 of the Federal Court of Australia Act 1976 and approving the reasoning of Ellicott J. in Hiero Pty. Ltd. v. Somers (1983) 68 FLR 171 where his Honour held that the Federal Court had jurisdiction to grant Mareva injunctions. A consideration of the nature and the purpose of the order and of the jurisdiction of this Court leaves me in no doubt that the Federal Court has, in the appropriate case, the power to make an Anton Piller order. Further, I am satisfied that the factual circumstances disclosed on the material in this application are such as to require the making of such an order. I am fully conscious of the nature of that order and the fact that it 1s oniy in circumstances of emergency that it ought properly to he ordered. However, this 1s, in my view, sucha case. I order: Upon the Applicants by their Counsel undertaking (except for the purposes of proceedings for perjury or contempt of Court) that they will not profer toa the Police for the purpose of any criminal prosecution of the Respondents any document or thing which 1s the subject of this Order or any information obtained from the performance of this Order or from any answers by the Respondents given pursuant to the Orders. AND UPON the Plaintiffs by their Counsel giving the usual undertaking as to damages The Court orders that: 1. Until 4 o'clock in the afternoon on the twenty third day of December 1985 or earlier order the Respondents, whether by themselves, their servants or agents or otherwise, he " restrained from engaging in the following conduct, namely: (a) Engaging in trade or commerce, in conduct which is misleading or deceptive, or is likely to mislead or deceive, by distributing or selling sound recordings the subject of exclusive licences in Australia in (b) favour of the Applicants as if the same could he lawfully sold or distributed by the Respondents to members of the public to hold and retain such sound recordings against the Applicants. From infringing the applicants' copyright 1n the sound recordings:- "Songs to Learn and Sing" - Echo and the Bunnymen "Phantasmagoria"" - Damned "The Head on the Door" - The Cure "In Square Circle" - Stevie Wonder "Single Life" - Cameo "Moving Pictures" - Rush "Emergency"" - Kool and the Gang "No Free Lunch" - Green on Red "Fasy Pieces" - Lloyd Cole and the Commotions "Power Windows" - Rush "Believe You Me" - Blancmange "Hundreds & Thousands" - Bronski Beat "Don't Stand Me Down" - Dexys Midnight Runners ("the Albums") (1) By importing into Australia for the purpose of selling or by way of trade offering or exposing for sale copies of the albums which if made in Australia by the importer would have infringed (c) (d) the Applicants' copyright without the licence of the Applicants; (ii) And selling or by way of trade offering or exposing for sale imported copies of the Albums which if made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants. From infringing the Applicants' copyright in the sound recordings manufactured, distributed or sold under the labels referred to in the Schedule hereto. From infringing the Applicants' copyright in any sound recording of which the Applicants are the exclusive licencees within the meaning of the Copyright Act 1968 ("the Recordings") by (1) Importing into Australia for the purpose of selling, or by way of grade offering or exposing for sale copies of the recordings which 1f made in Australia by the importer would have infringed the Applicants' copyright without the licence of the Applicants; (11) And selling or by way of trade offering or exposing for sale imported copies of the recordings which 1f made in Australia by the importer would have infringed the Applicants' 10. copyright without the licence of the Applicants, Pending the further hearing of this matter, the Respondents whether by themselves their servants or agents or otherwise shall permit such persons not exceeding five (5) members, employees or agents of the Plaintiff's Solicitors, Morris Fletcher & Cross to enter each of the premises owned or occupied whether under lease or licence situated at the following addresses and known by the following names:- "Monash Records" - 203 Balaclava Road, North Caulfield; "Gaslight" ~- 85 Bourke Street, Melbourne; "Collectors Corner" - 323 Swanston Street, Melbourne; "Monash University Records Store" - Wellington Road, Clayton; "Melbourne University Records Store" - Royal Parade, Parkville; "LaTrobe University Records Store" - Bundoora; and at any time between 9 a.m. and 5 p.m. on 18th, 19th, and 20 December 1985: (a) and to search for copies of any sound recordings referred to in Order 1 hereof; (b) to carry out a count and identification of all copies of any sound recordings referred to in Order 1 hereof and to seize and retain all such copies of the said sound recordings pending the further hearing of this matter by this Honourable Court or earlier Order. 1l. The Respondents or either of them forthwith upon the service of this Order deliver up to the Solicitors for the Applicants all copies of each of the sound recordings referred to in Order 1 hereof which are in the possession power or control of the Respondents or either of them. Service on both Respondents shall be effected as follows: (a) Of the Application order and documents read in this Application (except for the confidential exclusive licence agreements and copies of the sound recordings) by leaving copies thereof at each of "Monash Records", 203 Balaclava Road, Caulfield and the registered offices of the Respondents; and (b) By leaving copies of the order at each cf the addresses referred to in paragraph 2 hereof. The exhibits consisting of sound recordings and confidential licence agreements be retained by the Applicant's solicitors and kept available for inspection by the Respondent's solicitors upon written request during ordinary business hours. The Respondents within two (2) days of the making of the Order, make file and serve an Affidavit setting out the following information. {a) (b) (c) The 12. The number of copies of each of the sound recordings set out in Order 1 hereof in the possession, power or control of the Respondents at the date of this Order; The number of copies of the sound recordings referred to in Order 1 hereof sold by the Respondents prior to the date of service of this Order; The name and address of the supplier or suppliers to the Respondents of the sound recordings referred to in this Order and the number of each of the sound recordings supplied to the Respondents and the number of each of the sound recordings imparted by the Respondents. Application be adjourned until 2.15 pm on Monday the twenty third of December 1985. The costs of the Application he reserved. Asylum Atco Atlantic/America Atlantic Buddah Delphine Records Duck Records Electra Blectra-Musician Esparanza Finnadar Full Moon/Asylum Full Moon/Warner Swansong Warner Bros Viz RCA Victor Red Seal International Gold Seal 13. SCHEDULE W.E.A, LABELS Hansa Korova Little David MCA Midi Midnight Modern Nomesuch Qwest Real Records Reprise Riva Sire Time Coast Communications R.C.A. TL ABELS Pure Gold Starcall Victrola Vik Motown Gordy Tamla Wheatley Polar Powderworks LABELS TO WHICH POLYGRAM HAS EXCLUSIVE RIGHTS 14, 21 RECORDS ARKIV ARKIVE OF FOLK & JAZZ ARGO ARGO SPOKEN WORD ASTOR ASTORGRAPH ASTOR AUSTRALIA AUTOBAHN BARCLAY BBC BBC ARTIUM BIOGRAPH BLUE PRINT BLUE THUMS CALEDONIA CAPRICORN CARRERE CASABLANCA CENTRE RECORDS COLPIX CRASHED CREAM CURB DAWN DECCA DERAN DEUTSCHE GRAMMOPHON DURECO EASTWIND ECLIPSE EDDITIONS EG FADER FESTIVO FIVE PLATTERS FISHER LYONS FONTANA FOOL CIRCLE FRANCIS DREYFUSS MUSIC GAFF MASTERS GOLDEN HOUR GOLDMOUNTAIN GRANIOSO GRAPEFRUIT GUINEA HAWORTH HIGH HICKORY IMPULSE JUBILEE 15. KUDU LIVING BAROQUE L'OISEAU LYRE LONDON FORBIDDEN FRUIT KITCHENWARE PHILLY WORLD LONDON STREETWISE MERCURY MERCURY-EMARCY MERCURY GOLDEN IMPORTS METROMONE NAIVE RECORDS NATURAL RESOURCES OASIS ORIGINAL PENDULUM PHILIPS PHILIPS CLASSICS PHILIPS INTERNATIONAL SERIES POLYDOR POLYDOR-KALOB POLYGRAM POLYSTAR PRODIGAL QUO ENTERPRISES RED BULLET RESONANCE RIALTO RIVA RECORDS ROCKET ROSTAR RSO SABAN SEQUENZA SERRICK SHELTON SIGNATURE SJATO SUN BAZAAR LABEL SONET SONGBIRD START 16. Dated i7-1a 9s STARWAVE SUGARSCOOP TELDEC (DECCA PRODUCT ONLY) TELSTAR T. HAYDEN THIS RECORD THRESHOLD TOTAL EXPERIENCE TRACK TRADITIONAL TTR PRODUCTIONS TURBO MUSIC UNIVERSO VERTIGO VERVE VOCALLION WATERHOUSE WAYWARD WHITE RABBIT I certity that this ancl the (SS preceding pages areatrut copy of the reasons €or Judgment herein of His Honour Mr Justice Spender Associate Cefn —