JUDGMENT No. 673/82... CATCHWORDS COPYRIGHT - whether sound alike records and cassettes are copies of sound recordings by original artists - questions tried separately upon agreed statement of facts. Copyright Act 1968 (Cth), ss. 10, 85(a), 87(b), 89, 101, 110A, 110B. CBS RECORDS AUSTRALIA LIMITED & ORS. V. TELMAK TELEPRODUCTS (AUST) PTY LIMITED NSW G154 OF 1987. BOWEN C.J. 27 November 1987 SYDNEY. (eee eo ee oe er T a aye oo ene one soe enn ae IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: COURT: BOWEN, C.J. DATE: 27 November 1987 PLACE: SYDNEY. ) No. G154 of 1987 CBS RECORDS AUSTRALIA LIMITED First Applicant CBS PRODUCTIONS PTY LIMITED Second Applicant CBS (UK) LIMITED Third Applicant CBS INC. Fourth Applicant TELMAK TELEPRODUCTS (AUST) PTY LIMITED Respondent TELMAK TELEPRODUCTS (AUST) PTY LIMITED Cross—Claimant CBS RECORDS AUSTRALIA LIMITED First Cross-Respondent CBS PRODUCTIONS PTY LIMITED Second Cross—Respondent CBS (UK) LIMITED Third Cross~Respondent CBS INC. Fourth Cross-Respondent Vie Fr Ser apt cw oveme cg cir ages meepenanentgyngnenaminereeracaciene nian oo mre GENTS a gre MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The questions referred to this court pursuant to Order 29 rule 2(a) on 16 October 1987 be answered: 1. No. 2. No. 3. No. 4, No. 2. The applicants pay the costs of the respondent in this separate proceeding. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. ed tee eas D ween ener es wueges IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: COURT: BOWEN, C.J. DATE: 27 November 1987 ) ) No. G154 of 1987 CBS RECORDS AUSTRALIA LIMITED First Applicant CBS PRODUCTIONS PTY LIMITED Second Applicant CBS (UK) LIMITED Third Applicant CBS INC. Fourth Applicant TELMAK TELEPRODUCTS (AUST) PTY LIMITED Respondent TELMAK TELEPRODUCTS (AUST) PTY LIMITED Cross-Claimant CBS RECORDS AUSTRALIA LIMITED First Cross~Respondent CBS PRODUCTIONS PTY LIMITED Second Cross-Respondent CBS (UK) LIMITED Third Cross—Respondent cBs INC. Fourth Cross-Respondent quer annie, a ~ gee mie ee, a , oo REASONS FOR JUDGMENT I have previously heard an application for interlocutory relief in proceedings brought by CBS Records Australia Limited ("CBS Records"), CBS Productions Pty Limited ("CBS Productions"), CBS (UK) Limited ("CBS (UK)"), CBS Inc. against Telmak Teleproducts (Aust) Pty Limited ("Telmak"). The dispute between the parties concerned a compilation produced by Telmak entitled "Chart Sounds 16 Hit Songs "/1" in the form of a record and a cassette. One of several matters dealt with upon that interlocutory application was a claim for an injunction based upon the proposition that the sound recording "Chart Sounds 16 Hit Songs #41" infringed copyright in various sound recordings in which one or other of the CBS companies, who were applicants, had copyright. One of the issues between the parties was whether a "sound alike" (that is, a later sound recording by other performers which is an imitation of the original) was within the description of a copy of a sound recording which is referred to in s.10(3)(c) of the Copyright Act 1968. I expressed the provisional view that the sound alikes there in question did not breach copyright but did not express a concluded view. It appeared to me that the matter could be dealt with more adequately and fully at the hearing and that in the meantime the position of the applicants would be adequately protected by my ordering the respondent to keep an account of profits. (See CBS Records Australia Limited & Ors v. Telmak Teleproducts (Aust) Pty Limited (1987) 72 A.L.R. 270). ST ae ee en ee I cee wa 3. I now find the question before me again pursuant to an order made under Order 29 rule 2(a) of the Federal Court Rules that certain questions be tried separately on the basis of a statement of agreed facts. The questions are as follows: "LL. The agreed statement of facts for the purpose of determination Is the record CHART SOUNDS 16 HIT SONGS NO. 1 ("Chart Sounds") a copy of the sound recording EUROPE "The Final Countdown" within the meaning of Section 85(a) of the Copyright Act 1968? Is the record Chart Sounds a copy of the sound recording GREGORY ABBOTT "Shake You Down" within the meaning of Section 85(a) of the Copyright Act 1968? Is the record Chart Sounds a copy of the sound recording ORAN "JUICE" JONES "The Rain" within the meaning of Section 85(a) of the Copyright Act 1968? Is the record Chart Sounds a copy of the sound recording DEAD OR ALIVE "Something in My House" within the meaning of Section 85(a) of the Copyright Act 1968?" of the preliminary questions of law is as follows: "1.{a) Copyright subsists in the aggregate of sounds embodied in a master disc or tape ("the First Master") recording the singing of the lyrics of, the playing of the music of and the making of other sounds in relation to, a song entitled "The Final Countdown" by a group of musicians entitled "Europe". (b) The owner of the said copyright is CBS Inc. (c) The said aggregate of sounds was made in Sweden in 1985 and first published in Sweden in 1986. 2.(a) Copyright subsists in the aggregate of sounds embodied in a master disc or tape ("the Second Master") recording the singing of the lyrics of, the playing of the music of and the making ae oper sce ' - oe en np - (b) (c) 3.(a) (b) (c) 4.(a) (b) (c) 5. The (a) (b) (c) (d) 4. of other sounds in relation to, a song entitled "Shake You Down" by Gregory Abbott and certain musicians. The owner of the said copyright is CBS Inc. The said aggregate of sounds was made in the United States of America in 1986 and first published there in that year. Copyright subsists in the aggregate of sounds embodied in a master disc or tape ("the Third Master") recording the singing of the lyrics of, the playing of the music of and the making of other sounds in relation to, a _ song entitled "The Rain" by Oran "Juice" Jones and certain musicians. The owner of the said copyright is CBS Inc. The said aggregate of sounds was made in the United States of America in 1986 and first published there in that year. Copyright subsists in the aggregate of sounds embodied in a master disc or tape ("the Fourth Master") recording the singing of the lyrics of, the playing of the music of and the making of other sounds in relation to, a_ song entitled "Something in My House" by a group of musicians entitled "Dead or Alive". The owner of the said copyright is CBS UK. The said aggregate of sounds was made in the United Kingdom in 1986 and first published there in that year. record "Chart Sounds 16 Hit Songs -/1" includes: A track entitled "The Final Countdown" which has the lyrics and the music of the song "The Final Countdown" mentioned in paragraph 1. A track entitled "Shake You Down" which has the lyrics and the music of the song "Shake You Down" mentioned in paragraph 2. A track entitled "The Rain" which has the lyrics and the music of the song "The Rain" mentioned in paragraph 3. A track entitled "Something in My House" which has the lyrics and the music of the song "Something in My House" mentioned in paragraph 4. 5. The said tracks are hereinafter called "the Tracks". 6. Each of the Tracks was made by a person ("the Maker") other than CBS Inc. or CBS UK and without the licence of CBS Inc. or CBS UK. 7. The making of the Tracks did not constitute an infringement of copyright in the music or the lyrics of the songs bearing the title of each of the Tracks. 8. The Maker of the Tracks did not tape or use any other electrical or mechanical means to transfer the music, lyrics and sounds embodied in the First, Second, Third or Fourth Masters onto the master discs or tapes from which the Tracks were made, but by a process of vocal, musical and other imitation the Tracks respectively: (a) Reproduce a substantial number of the musical notes which are embodied in the First, Second, Third and Fourth Masters. (b) Reproduce the lyrics embodied in the First, Second, Third and Fourth Masters. (c) Consist of a substantial number of the sounds which are embodied in the First, Second, Third and Fourth Masters." I raised the question with the parties whether paragraph 8(c) in the statement of facts referred to the actual sounds embodied in the sound recordings in which copyright was said to exist. It was agreed that the statement of facts was not to be taken in that sense. It was stated by Counsel for the CBS company applicants (hereinafter referred to as "CBS") that paragraph 8(c) did not refer to facsimile sounds but referred to the production of similar vibrations in the air and in that sense the same sounds as embodied in the sound recordings in which copyright was claimed. a nee Se ere ao po royce 5 ' a ee eee pe ee sae mk te 6. Counsel for CBS referred me to a considerable amount of historical material in support of the proposition that the Copyright Act 1968 treated sound recordings in the same way as musical works. I was referred to a passage from the report of the Gorell Committee 1909 in the United Kingdom, to the Copyright Act 1911 and subsequent cases, to the Rome Convention of 1961 and the Phonograms Conventions in 1971, to the Copyright Act 1956 in the United Kingdom and the Gregory Report of 1952 which preceded it and to the Copyright Act 1968 and the Spicer Report which preceded that legislation. In addition, I was given copies of the second reading debate of the House of Representatives when the 1968 Bill was before that House. This material was informative. However, I did not obtain significant assistance from it in resolving the present question. Indeed, the second reading debate in the House of Representatives in 1968 made it reasonably apparent that no thought was given to whether the exclusive right of copying sound recordings conferred by the Bill would or would not extend to cover a sound alike. The Copyright Act 1968 was subsequently amended. In particular s.86 was amended in 1980 but this did not change the position presently under consideration. The provisions dealing with sound recordings in the Copyright Act 1968 are specific provisions which have to be interpreted having regard to the words used and the context in which they appear. I am not persuaded by the historical material placed before the Court that this necessarily involves sewer we reine 7. applying to those statutory provisions an interpretation which equates the protection afforded sound recordings with the protection afforded musical works. There are sufficient problems in the wording used in relation to sound recordings without introducing the additional complexity of trying to make these provisions accord with notions applicable to _ the copyright afforded to musical works. Section 101(1) of the Copyright Act 1968 provides that Part IV copyright is infringed by a person who (not being the owner or licensed by the owner of the copyright) does or authorizes the doing of any act comprised in the copyright. Section 89(1) provides that copyright subsists in a sound recording. Section 85(a) provides that copyright in relation to a sound recording is the exclusive right to make a copy of the sound recording. Section 10(3)(c) provides that a reference to a copy of a sound recording shall be read as a reference to a record embodying a sound recording or a substantial part of a sound recording being a record derived directly or indirectly from a record produced upon the making of a sound recording. This is the critical provision, interpretation of which is in issue in the present case. Section 10(1) defines "record" as a disc, tape, paper or other device in which sounds are embodied and further provides that "sound recording" means the aggregate of the sounds embodied in a record. It was these words which led me to the provisional view on the interlocutory proceeding that a sound alike was not a copy in which the aggregate of the sounds embodied in the original record was contained. The word 8. "embody" 1s defined in the Macquarie Dictionary p. 587 as "2. to give a concrete form to ...; 3. to collect into or include in a body; organise; incorporate" and is defined in the Shorter Oxford English Dictionary 3rd Ed. p. 644 as "2. To give a material or concrete character or form to ... 3. To unite into one body; to incorporate ...". It appears to me that the language of s.10(3)({c) of the Copyright Act 1968 when it refers to "a record embodying a sound recording or a substantial part of a sound recording" is referring to an actual embodiment of the very sounds on the original record however they may be copied. As I mentioned in my reasons for judgment in the interlocutory proceedings, ss. 110A and 110B inserted by the Copyright Amendment Act 1986 appear to proceed upon this basis. In those sections it is clear to my mind that if a sound recording held in a collection has, for example, been lost or stolen (see s.110B) the right given to make a copy, notwithstanding the existence of copyright, for the purpose of replacing that sound recording in the collection must refer to a copy of the actual sounds embodied in the original sound recording and not to something produced later by other performers by way of imitation of the original. It was argued by Counsel for CBS that ss.110A and 110B do not lead to a conclusion as to the meaning to be given to s.10(3){c), because they are simply dealing with particular situations which would be relevant only where it was desired to make a copy of the actual sounds embodied. This, so it was argued, does not conclude the case against his-proposition that Aeneas ce wae ms, Torys et 9. the words used in s.10(3)(c) are appropriate to cover a sound recording containing similar sounds produced later and by different performers who imitate the original. As stated, ss.110A and 110B were only inserted in the Act in 1986. But there is another section which was in the Copyright Act 1968 which seems to proceed on the same basis. I refer to s.87(b). This provides that copyright in relation to a television broadcast or sound broadcast is an exclusive right in the case of a sound broadcast to make a sound recording of the broadcast, or a copy of such a sound recording. Again, it appears to me that the section is speaking of the actual sounds broadcast being taken and not speaking of someone producing an imitation by the use of independent performers of broadcast sounds (see also s.10(1) definition of "infringing copy" paragraph (d)). The same might, of course, be said of s.87(b) as was said in relation to ss.110A and 1108, namely, that it is an exemption from the provisions dealing with infringement of copyright in sound recordings and the exception only needs to proceed so far as may be necessary. It was unnecessary for it to proceed so far as to deal with imitations. Nevertheless, it must be said that ss. 87(b), 110A and 110B form part of a context in which the provisions relating to sound recordings are now set. Reference was made by Counsel for CBS to the position in the United States of America. It was submitted that in the ee ee Gene ey ee nH +t - ar ee ey i 10. United States sound recordings were not protected in its Copyright Act 1909 and were protected only by State anti-piracy laws until 1972. The United States Code 1976 dealt with this matter. I was referred in particular to s.114(b) of the 1976 Code. It was argued that reference to imitation of sounds in paragraph (b) was based upon an assumption that unless special provision was made exempting sound alikes they would have been caught as infringements of copyright in the sound recordings. However, to follow this argument it is necessary to go to the terms of that legislation. The relevant portion of s.106 is as follows: "Subject to sections 107 through 118, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; Lil Reference should also be made to the definition in s.101 of "copies", of a "derivative work" and of "sound recordings". Then s.114(b), so far as material, provides: "(b) The exclusive right of the owner of copyright in a sound recording under clause (1) of section 106 is limited to the right to duplicate the sound recording in the form of phonorecords, or of copies of motion pictures and other audiovisual works, that directly or indirectly recapture the actual sounds fixed in the recording. The exclusive right of the owner of copyright in a sound recording under clause (2) of section 106 is limited to the right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality. The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the makin or uplication o another soun recording that consists entirely of an independent 1i. fixation of other sounds, even though such sounds imitate or Simulate those in the sopeete ted sound recording. ..." (emphasis supplied). In the light of the provisions relating to derivative works it seems reasonably plain why it was necessary, in s.114(b), to deal specifically with imitations, if the policy was to exclude them from copyright. I find myself unable to gain assistance from this American legislation in the interpretation of our different provisions. Reference was also made to Zeccola v. Universal City Studios Inc (1982) 46 A.L.R. 189 and Telmak Teleproducts (Aust) Pty Limited v. Bond International Pty Limited (1986) 66 A.L.R. 116 and 65 A.L.R. 319. These decisions were discussed in my reasons for judgment in the interlocutory proceedings. It was there noted that the decisions relating to copyright in films had arrived at a result consistent with my provisional view on sound recordings. It was submitted by Counsel for CBS that these decisions were not of value because the provisions of the Act dealing with films were different. It was said the views expressed in those cases were tentative and the history of copyright in films was very different. There is some substance in these arguments. Nevertheless the two subject matters do present a range of difficulties in relation to copyright which overlap to some extent. Finally, a reference was made by Counsel for CBS to the statement by Gibbs C.J. in Computer Edge Pty Limited v. tye ay a taps ow tae Se N woe — ~ oe Pa 12. Apple Computer Inc. (1986) 60 A.L.J.R. 313 at p.317. Gibbs C.J. there said: "The notion of reproduction involves two elements - that the infringing work sufficiently resembles the copyright work and that it was produced by the use of the copyright work." His Honour was, of course, not referring to sound recordings but to computer programmes which it was being claimed should be treated as "literary works". I do not think it is necessary to cite authority for the proposition that to imitate something may be one method of copying it. That is not the point. In the present case the question is whether, having regard to the terms of the statutory provisions including the definitions, the imitation sounds produced by different performers at a later point of time embody the sounds in the original sound recording in the sense used in the Act. Where there is no question of infringement of copyright in the music or the lyrics almost any faithful reproduction of them by different artists or producers of sound recordings will involve some coincidence between the sound recordings. It is true that in the agreed facts in paragraph 8 reference is made to sound recordings being made "by a process of vocal, musical and other imitation". This introduces the additional element of the copy being deliberately based upon the earlier production. Paragraph 8(c) would overlap paragraphs 8(a) and (b) and extend also to other idiosyncratic sounds in the earlier sound recording. In many cases both in popular Sa ne I ee per pte eee wou SL of wo maf we atone 13. music and in classical music the persons performing a work would have heard and perhaps been impressed by or retained in mind an earlier version in a sound recording. Whether the law in giving an exclusive right of embodying the aggregate of sounds in a sound recording intended to prevent the use of one version, mentally or in any other way, in the making by different performers of a later version, may be doubted. Whether the imitation is unconscious or deliberate, it is still "copying" in a colloquial sense. But in my opinion the words of s.10(3)(c) are inapt to cover the situation. If it were intended to extend the exclusive right to that area I believe it would need to be done by different words extending expressly to that situation. In the result I answer the questions as follows:- 1. No. 2. No. 3. No. 4. No. eee Ne me me et re een ere eer ee ren, wma + 4 x Pa -- wee _ oe wy eee 14. I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of His Honour the Chief Judge, Sir Nigel Bowen. ph Associate Dated: Q7 Ninem ler [987 Counsel for the Applicants: Solicitors for the Applicants: Counsel for the Respondent: Solicitors for the Respondent: Date of hearing: D.K. Catterns Allen Allen & Hemsley J.D. Heydon, QC Moray & Agnew 5 November 1987 oe oe ee ett