Federal Court of Australia Boomerang Investments Pty Ltd v Padgett (Scope of Injunction) [2020] FCA 1413 File number: NSD 1738 of 2017 Judgment of: PERRAM J Date of judgment: 2 October 2020 Catchwords: COPYRIGHT – form of orders to give effect to Court's conclusions – whether injunction should extend to communication of musical work and specify copyright owner – whether flagrancy declaration under s 115(4) of Copyright Act 1968 (Cth) appropriate Legislation: Copyright Act 1968 (Cth) s 115(4) Cases cited: Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2016] FCAFC 22; 121 IPR 150 Boomerang Investments Pty Ltd v Padgett (Liability) [2020] FCA 535 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Number of paragraphs: 22 Date of hearing: 26 August 2020 Counsel for the Applicants: Mr M R Hall SC with Ms J M Beaumont Solicitor for the Applicants: Banki Haddock Fiora Counsel for the First and Second Respondents: Mr R Cobden SC with Mr W H Wu Solicitor for the First and Second Respondents: Gilbert + Tobin Counsel for the Third Respondent: Mr P Flynn SC Solicitor for the Third Respondent: Simpsons Solicitors Counsel for the Fourth Respondent: Mr C Dimitriadis SC with Ms E E Whitby Solicitor for the Fourth Respondent: HWL Ebsworth Lawyers REASONS FOR JUDGMENT NSD 1738 of 2017 BETWEEN: BOOMERANG INVESTMENTS PTY LIMITED ACN 009 670 919 First Applicant JOHANNES VAN DEN BERG Second Applicant ALEXSANDRA MILLER MALCOLM YOUNG Third Applicant AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LTD ACN 000 016 099 Fourth Applicant AUSTRALASIAN MECHANICAL COPYRIGHT OWNERS SOCIETY LTD Fifth Applicant AND: JOHN PADGETT First Respondent LORI MONAHAN Second Respondent KOBALT MUSIC PUBLISHING AUSTRALIA PTY LIMITED ACN 144 996 609 Third Respondent SOCIÉTÉ AIR FRANCE, SA Fourth Respondent PERRAM J: 1 The parties appeared before the Court on Wednesday 26 August 2020 to debate the form of orders necessary to give effect to the Court's conclusions on the issue of liability delivered on 24 April 2020: Boomerang Investments Pty Ltd v Padgett (Liability) [2020] FCA 535 ('the Trial Reasons'). During the course of the hearing a number of disputes about the form of the orders were resolved and I delivered brief oral reasons in relation to several of them. These are set out below. 2 There was a more substantive debate, however, as to the ambit of the appropriate injunctive relief against Air France in relation to its use of France. This debate extended formally to Glass Candy as well because they had authorised Air France to play France. Air France, supported in this regard by Glass Candy, therefore submitted that any injunction against it should be limited only to the infringement which it had been found to have committed. That infringement consisted solely in its having played France as the hold music for callers to its Australian toll-free number. In its written comments before the hearing Air France had suggested that no injunction should be granted but during the oral hearing it accepted that it should be restrained from continuing to play France as hold music but submitted that the injunction should go no wider. 3 The Applicants, on the other hand, submitted that the injunction should restrain Air France from communicating Love or a substantial part of Love (ie that part reproduced in France) to the public without the licence of the copyright owner and should not be limited to the hold music. In the present context, communicating France to the public would encompass playing it as the hold music on the toll-free number but also playing it on YouTube as part of the Air France commercial. In the latter case, however, the words 'without the licence of the copyright owner' have some bite because, as I explained in the Trial Reasons, YouTube has the benefit of a permission from the owner of the copyright in Love – APRA – to stream Love and therefore a substantial part of Love (ie the part reproduced in France). Consequently, the injunction, even as proposed by the Applicants (which include APRA) would not prevent Air France from playing France on its YouTube channel. Indeed, the injunction would not prevent the streaming of France from any platform which holds an APRA blanket licence. 4 In practical terms, therefore, the effect of the Applicants' proposed injunction will only be to restrain Air France from streaming France from platforms which do not hold an APRA licence. The injunction will also correspondingly prevent Glass Candy from authorising any such conduct. 5 The difference between the parties, therefore, may not appear very great. That appearance however may be deceptive. What the Applicants' proposed injunction does do is to catch further efforts by Air France to use France on services which do not hold an APRA licence or its YouTube channel (or other such channels) if the licensing arrangement with APRA is altered in the future such that 'infringing uses' of Love are no longer covered by the licence. That might happen in a variety of ways including the assignment of the right to communicate infringing copies of Love to some other party or maybe even by the partial revocation of the current APRA licence. 6 The Applicants submitted they were entitled to broader relief for three reasons: (a) it was clear that France continued to be played from a number of online locations including the YouTube channel for BETC and another entity within the same corporate group and also on Vimeo from the official French national tourism site; Atout France, (b) the Court had found that the copying by Air France had been flagrant; and (c) pointedly, Air France had not undertaken not to continue to use France. 7 I do not think (a) greatly assists the Applicants although, as will be seen, it has some minor relevance. By the time the matter was argued the evidence suggested that the streaming from Vimeo and YouTube had ceased. Even so, there was no direct evidence that Air France was responsible for these acts of streaming. If one makes the assumption that Air France owns the copyright in both the music to and the cinematographic film comprising the commercial then it may not require great mental athleticism to conclude that the streaming of the commercial from the BETC YouTube channel was probably happening with the permission of BETC's client, Air France. That line of reasoning would be consistent with the evidence that once the Applicants raised this point against Air France the streaming from BETC and Atout France ceased. However, this argument was not advanced and I do not think it would be appropriate in that circumstance to pursue that line of thought at least in the direct form the Applicants put it. 8 Important also is the fact, as Air France noted, that the licence between it and Glass Candy to use France had ended during this litigation (and as a result of it). Thus, at the moment Air France has no licence to play France from Glass Candy. From this, so Air France submitted, one could readily conclude that there was no real chance that Air France was going to continue to use France either as part of a YouTube offering or even as its hold music. 9 The Applicants say that this argument is blunted somewhat by the fact that the Court had concluded that the conduct of Air France had been flagrant and called in aid of that submission the Full Court's decision in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2016] FCAFC 22; 121 IPR 150 at [178]-[182]. There, it is certainly true, the Full Court did take into account the flagrancy of Mr Allam's conduct. Mr Allam had infringed Aristocrat's copyright in software for various poker machine games (including 'Queen of the Nile', 'Adonis' and 'Thor') by producing EPROMs with that software on it (and also falsely bearing Aristocrat's trade marks). Put colloquially Mr Allam was in the business of making counterfeit Aristocrat poker machines which included counterfeit compliance plates. Many of these knock offs found their way into the South American gaming machine market. 10 Mr Allam's industrial scale efforts had been uncovered after Aristocrat's lawyers successfully obtained Anton Pillar orders against several sets of premises where the counterfeits were found (including one near Sydney airport). At the same time, computers were found at some of those premises which appeared to contain software used for making counterfeit EPROMs. The trial judge had thought that Mr Allam's conduct had happened a long time ago and was unlikely to be repeated. The Full Court demurred. It noted the flagrancy of what Mr Allam had done and thought that his conduct should be enjoined. The Full Court said this: 178. In our respectful opinion, his Honour's discretion miscarried. The infringements of copyright in which Mr Allam was found to have engaged may have occurred long ago, but that cannot be determinative of the question whether to grant an injunction by way of final relief. With great respect to the primary judge, he appears to have overlooked some powerful reasons why injunctive relief should have been granted against Mr Allam. 179. First, the evidence established that Mr Allam engaged in copyright infringement of a flagrant kind and over a significant period of time. The infringements were also engaged in surreptitiously and for commercial gain. 180. Secondly, there was no evidence to suggest that Mr Allam had proffered any undertaking, even if only on a "without admissions" basis, to either the copyright owner or the Court. Instead, Mr Allam mounted a vigorous defence of the allegations made against him which involved him putting the copyright owner to proof of (inter alia) subsistence and ownership of copyright in the relevant game software. These are considerations relevant not only to costs but also to the question whether the requirements of justice are served by refusing injunctive relief on the basis that infringements of the kind which were proven at trial were unlikely to be repeated. 181. Thirdly, Mr Allam's defence of the case against him was in large part founded upon evidence that the primary judge found to be untruthful in significant respects. Indeed, Mr Allam's evidence was so seriously discredited, and his honesty as a witness so thoroughly impugned, there could be no reasonable basis for concluding that, in the absence of an injunction restraining him from doing so, there was anything less than a significant risk that Mr Allam would infringe the copyright owner's copyright at some time in the future. 11 I do not think that the position of Air France and Mr Allam is altogether or perhaps even very analogous. It is true that I did find that its conduct was flagrant but that was because I found the conduct of its advertising agency to have been flagrant and that Air France was responsible for its advertising agency. It is also true that I found M Caurret from BETC had deliberately appropriated Love and then given dishonest evidence about it in this Court. Even so, I hesitate to put M Caurret in quite the same basket as Mr Allam. But one does not need to go that far. Whatever one makes of M Caurret, he is not Air France and I do not think that Air France and Mr Allam are cut from the same cloth. I do not apprehend from Air France's use of BETC that it is an inveterate copyright infringer who, unless restrained, will continue Viking raids on the coastal fringes of disco. 12 It is against that background that one then needs to assess the weight of the Applicants' submission that it was relevant too that Air France had declined to undertake not to continue using France. This left open the possibility, as the Applicants pointed out, that Air France could re-engage with Glass Candy (by entering into a fresh licence agreement for France) and recommence the 'France is in the Air' campaign. At the moment, there is nothing that would stop it from doing so at least on the internet because the relevant streaming services will hold APRA licences (or international equivalents). What one is really debating is therefore whether Air France should be prevented from doing so if the Applicants are able to disrupt the APRA licence arrangements. 13 I do not think that one needs to ascribe to Air France improper motives such as those of Mr Allam to accept the Applicants' submissions about this. Air France expended time and money on the launch of this campaign. It is not presently legally prevented from running the commercials on the YouTube channel (other than by Glass Candy). There seems to be little downside from its perspective of playing the commercials and salvaging some value from what has otherwise been a somewhat disrupted campaign. The fact that until very recently the commercial had appeared on BETC's YouTube channel suggests that Air France does not mind that the commercials continue to exist. I do not think it would be difficult to obtain the permission of Glass Candy to recommence the campaign. It would be in the band's interests to do so and, no doubt, the band and the airline now know each other much better as a result of this litigation. 14 In those circumstances, whilst the matter is finely balanced I think there is a risk of repetition which, absent the licence of the copyright owner, ought to be restrained. The injunction will be in the form proposed by the Applicants. On 27 August 2020 I informed the parties of my decision and this decision was reflected in the orders entered on 28 August 2020. 15 During the hearing I also delivered brief reasons on a number of small discrete topics. These were as follows (revised from transcript): 16 The Applicants seek a declaration against Glass Candy and Air France that in effect, the respective conduct that was found against them was engaged in flagrantly, within the meaning of s 115(4)(b)(i) of the Copyright Act 1968 (Cth). This is opposed by both Glass Candy and Air France. Glass Candy submits and Air France agrees that the various factors set out in s 115(4)(b) are neither necessary nor sufficient conditions for the award of additional damages so that they should be viewed, as should any finding of flagrancy, as an intermediate step along the way to another legal conclusion. I accept that submission and its consequence that therefore it would be inappropriate to make a declaration as to flagrancy. 17 I also accept the submission of Air France that in circumstances where the damages claimed against it are not going to proceed because of the identity of the party which was successful, that the question of whether there should be additional damages is moot in the formal sense. Correspondingly a declaration along the way to such a conclusion is also moot and without legal utility. Accordingly for that reason I decline to make a declaration in relation to flagrancy. 18 There is a dispute between the Applicants and Glass Candy as to whether the injunction proposed in order 4 should refer to the reproduction happening without the licence of Boomerang or instead without the licence of 'the copyright owner'. The Applicants submit that because the injunction is forward looking and in the future the title may be transferred it would be more practical for the order to refer to 'the copyright owner'. Glass Candy submits that the title has already moved around quite a bit in relation to the reproduction right, which is presently owned by Boomerang, and that there was quite a lot of evidence about this at trial. In that circumstance it submits that it would be clearer and easier for all involved, if the order referred to Boomerang rather than 'the copyright owner'. 19 I accept the Applicants' submissions about this. One never knows what is going to happen in the future. It would be more useful if the order referred to 'the copyright owner' rather than Boomerang. 20 Glass Candy submits that the Court should not proceed to any assessment of the additional damages for various legal reasons, principally related to the word 'infringement' in s 115(4). Here the point and its variants is that the provision clearly requires in the assessment of additional damages a focus on the infringement which the court has found. 21 The conduct which the Court, in this case found to be flagrant was conduct which occurred in the United States when the song, Warm in the Winter, was first reduced to material form by Mr Padgett and Ms Monahan. Mr Cobden submits that those events are not the infringements which the court found against his clients, which were by contrast, related principally to the exercise of the communication right. 22 There may be some force in this submission and its allied submissions, however I do not think that they are suitable to be resolved on what is effectively a form of summary judgment application in relation to the additional damages case and it would be more appropriate for that matter to be resolved after, so the additional damages case can proceed. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram. Associate: Dated: 2 October 2020