Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd

[2003] HCATrans 752

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M85 of 2002

B e t w e e n -

DESKTOP MARKETING SYSTEMS PTY LTD

Applicant

and

TELSTRA CORPORATION LIMITED

Respondent

Application for special leave to appeal

HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 20 JUNE 2003, AT 12.44 PM

Copyright in the High Court of Australia

MR R.C. MACAW, QC:   May it please the Court, I appear with my learned friend, MR G.C. McGOWAN, for the applicant.  (instructed by Abbott, Stillman & Wilson) 

MR J.M. EMMERSON, QC:   If the Court pleases, I appear with my learned friends, MR A.J. RYAN and MR W.A. ROTHNIE, for the respondent.  (instructed by Mallesons Stephen Jaques) 

HAYNE J:   Yes, Mr Macaw. 

MR MACAW:   If your Honours please, the error of the decisions below may be seen from the fact that what they end up doing is providing copyright protection to the information the subject of the directories, as opposed to any form of arrangement or presentation or any element of selection – the normal things that might be taken in a copyright case to be the product of some sort of intellectual effort, such as to provide, historically, the foundation for protection. 

If one looks to the Court book at page 44, one will see the form of the entries, at least in the Yellow Pages, compared with the form of the product printed from the applicant’s disk.  Two examples are given on that page.  One can see that the information of the individual entries may be said to be the same.  One can see that the form of arrangement is not, and these are individual entries.  One is concerned, of course, with the case of the telephone listings with something other than individual entries. 

If one looks to the whole of the arrangement of the alleged copyright work and one compares the product of the natural condition of the CD‑ROM, one will see still further difficulties indicated, still further differences.  In the case of the White Pages listings, for example, one will not have the information at the front of the book; one will not have the business listings, which are included in the White Pages; one will not have the ‑ ‑ ‑

HAYNE J:   That is time‑related, is it not?  At the times with which ‑ ‑ ‑

MR MACAW:   Yes, that is true, your Honour. 

HAYNE J:    ‑ ‑ ‑ this action was concerned, there was not that segregation, was there? 

MR MACAW:   That is right, your Honour. 

HAYNE J:   Now, I understand you to say “Look at the result – that must be wrong”, but where is the error in principle?  What is the principle that has been misapplied or misstated? 

MR MACAW:   The error, your Honour, arises despite the recognition of the trial judge – and, implicitly, of the Appeal Court – that it is trite that there cannot be protection by way of copyright in facts.  The error arises from the application of what is called the industrious collection test, that is to say, you need no more than to have expended labour or cost in order to produce something of value which deserves protection, as opposed to having some sort of intellectual effort involved. 

HAYNE J:   Does your appeal, if you were to be granted leave, depend upon qualifying or departing from that principle about industrious collection? 

MR MACAW:   I am sorry, I am not sure that I follow your Honour’s point. 

CALLINAN J:   You want to take it head on, do you not?  You want to say industrious collection is totally erroneous. 

MR MACAW:   We say it is the wrong test.  You need more than industrious collection.  That is the point.  What his Honour Justice Finkelstein said, for example, at paragraph 93 was, “There is no element of creativity here.  There is merely industrious collection, but I feel constrained to find that that is sufficient”, and, notwithstanding, it seems that the same judge acknowledged it to be trite law that copyright is not a vehicle for protecting the information that underlies a work, the data that lies within it. 

It is something like the same error of approach which caused some of the English courts to say, in substance what is worth copying must be worth protecting, ie, identify something of value and then say this must be an appropriate vehicle for protection because there is labour and expense incurred in its production.  In the Victorian Racing Case, that proposition was laid to rest as an appropriate foundation for relief, just as it was in the Moorgate Tobacco decision which found that there was no discrete tort of unfair competition. 

What happened in the Victorian Racing Case was that, as your Honours might recall, a list of horses and allocated barrier positions and jockeys was placed upon the scoreboard, a broadcaster from outside broadcast the same information.  His Honour Justice Dixon in particular, but also Chief Justice Latham, dealt with the point and found that there was, of course, nothing in the information which warranted protection.  You had to find a head, not surprisingly, of claim by which to assert some interest in that information. 

Copyright was not the right head, and nor were there any others.  Copyright was not the right head because, although the list no doubt could be said to have originated in the person who made the list and put it on the board, nevertheless there was not anything which was sufficiently creative or the subject of intellectual effort, it merely being the product of placing, presumably in barrier order, the names of the horses and the allocated positions and the jockeys that had been attributed to those horses. 

The same approach is taken in the John Fairfax Case, where your Honours might recall there were death notices put forward to the newspaper for publication, there was some editing of the notices and they were formatted in a way which would fit within the newspaper, put in a particular order.  The court decided that the only available protection could be in the form of arrangement.  One could not have protection in the underlying information the subject of the compilation which the case involved.  Likewise, we would say, in the Data Access Case, the same point of principle is made. 

HAYNE J:   Now, you said that the primary judge considered himself bound to arrive at the conclusion he did.  Was his Honour right or wrong in so concluding that he was bound to reach the result? 

MR MACAW:   He would be wrong if he expressed it like that.  I am not sure if I have accurately expressed the way he put the matter.  He felt compelled, in view of the history of the development of authorities, especially in the United Kingdom, to conclude in the way that he did.  But it is acknowledged ‑ ‑ ‑

HAYNE J:   So you do not say that at his level he misapplied authority and principle as revealed in the decided cases? 

MR MACAW:   Yes, we would say that, but what he said was, as a judge of first instance, at least, in the Federal Court, he did not feel entitled to depart from what he thought was the course of authority in the United Kingdom, in particular.  I think it is accepted, your Honours, that there is no decision of this Court which would bind the result which was obtained.  On the contrary, we would say that the decisions of this Court, the two that were particularly referred to, Victorian Racing and Data Access, would plainly have produced an opposite result. 

Can I just remind the Court of the relevant part of the Data Access Case.  There were questions, of course, whether reserved words could constitute computer programs or whether a combination of them could constitute a computer program, but a separate question was raised about whether the collocation of reserved words, put in alphabetical order in a table, warranted copyright protection as a literary work by way of a compilation under paragraph (a) of the definition of “literary work”, that is, an ordinary compilation. 

The Court pointed out that the reserved words themselves in many, but not all, cases were suggestive of their operational function.  The most obvious of them were words like “enter”.  It also pointed out that, even regarded in combination, the total of the effort involved in devising those words must have been slight and, as a matter of compilation, they were placed in alphabetical order.  None of that was likely, it said, to give the character of a literary work, and we would say that it is apparent that the reason is that there was no input of a kind that could be described as involving intellectual effort.  It also said, in any event, the repetition of the words in other than the alphabetical order of the table would not involve an infringement.  So, again, it recognises that the only legitimate scope for protection where there is a compilation of this kind is in the form of arrangement or presentation. 

There is a proposition which is relied upon by our learned friends and which was raised in particular in the Full Court below that the data in the CD‑ROM, at least in the case of one product, can be manipulated by the user so as to print out material in something which would approximate the form of the listings in the Telstra directories.  It is said, for example, that although the default or natural condition of the material is to list alphabetically by postcode, it would be possible to list alphabetically by a whole region, such as Melbourne metropolitan region. 

In our submission, that is to slide from the question of direct infringement, which was the only subject of the decision below, to the separate question, which was not dealt with below, of authorisation.  One would have to show, to make Desktop liable for some such activity, that that activity occurred and that Desktop authorised it, and one might think that it is a highly unlikely thing to occur that somebody would in fact wish to reproduce the White Pages.  The whole function of having this in electronic form is that one can use the data fields to search.  One can use it not only for direct marketing purposes but for investigative purposes, for example.  The idea that anybody using the product would seek to reproduce the listings in the directories in the form and arrangement in which they occur can be put to one side as inherently quite improbable. 

The industrious collection cases, we would say, involve this rather perverse and paradoxical result.  As Data Access said, when you come to the question of identifying what is a substantial part of the work, in order to see whether infringement occurs, because infringement requires that there should be reproduction of at least a substantial part of the work, you look to see what is the original aspect of the work.  If you identify the foundation of copyright by reference to mere industrious collection, you get a broader protection, it would seem, than if you had the traditional foundation of some element of creativity or intellectual effort.  That applies within compilations and it applies between compilations and ordinary or traditional literary works, and that is itself an indication, we would submit, why an error of principle was involved in this case. 

HAYNE J:   The written argument, I understand, of course was prepared before you came into the case.  The answer made to it seemed to treat the question as being “Should Feist be brought into Australian law or not?”  Do you say that is an accurate statement of the question now presented? 

MR MACAW:   In substance, yes, because what Feist did was to identify the vice of the industrial collection test as being that it effectively erodes the principle that no one can have copyright in facts.  One sees that passage in particular at page 197 of the application book at paragraph 418.  The “sweat of the brow” courts had: 

“eschewed the most fundamental axiom of copyright law – that no one may copyright facts or ideas.” 

Your Honours might recall that a rather more extensive quotation from the judgment of Justice O’Connor is set out, amongst other places, at application book 124 at paragraph 199.  So it is the same point, effectively to say that the question is whether Feist should be applied is to say that the Court should adopt the principle which has been adopted in Feist and for the same reasons. 

HAYNE J:   Now, the Full Court dealt with Feist in part by saying it is affected by peculiarly US considerations. 

MR MACAW:   Justice Sackville was a bit more inclined to adopt that position.  Justice Lindgren identified the factors which arose on the form of the legislation and identified the constitutional head of power as being factors which may have influenced the way in which the decision was made, but pointed out, accurately, that the decision was said to reflect no more than the position of the law as it had always stood.  The decision he correctly identified was one which was based upon principle, and those factors which might serve to give it some special standing he correctly indicated should not be regarded as putting it into some special category. 

HAYNE J:   Has the Feist approach been squarely raised and rejected in the United Kingdom?

MR MACAW:   I hesitate to say no without qualification, but I think not. 

HAYNE J:   My understanding – correct me if I am wrong - on your submission is that the generally accepted view in the UK is that Feist does not represent the law in the UK.  Is that right? 

MR MACAW:   I think that probably is a fair statement, your Honour, in light of the number of cases in the UK which have adopted this approach ultimately based upon what is valuable; what is worth copying is worth protecting. 

HAYNE J:   It is now getting affected or is affected by European Community directives about databanks and the like. 

MR MACAW:   Yes, indeed.  There are two other aspects perhaps, which takes us back to what was said in Victoria Park about not being able to protect the information itself.  Justice Lindgren recognised, obviously enough, that the practical effect of this decision would be to protect the underlying information and he identified, as a means perhaps of resolution of this difficulty, that what you would protect was the interest which he said was protected in this kind of case, which is to say the value, in effect, of the work which had been produced.  I should identify the passage perhaps, in case the Court had not looked at it.  This is at application book 132 in paragraph 223: 

Be this as it may, as was seen earlier, form was not important in the attraction of copyright protection in the present case.  The use of the well‑known alphabetical arrangement was predictable, indeed inevitable.  Comparatively, little work went into the alphabetisation of the entries (as opposed to the considerable labour involved in gathering and checking the data) . . . As will appear below, in my opinion, at least in the case of a factual compilation intended to be a work of utility, infringement must be tested by reference to the interest which copyright is intended to protect in the particular case.  In the present case, that interest was the labour and expense of gathering together in the one place the details of all the members of a given universe – all the telephone subscribers in a region. 

He afterwards identified – perhaps as a separate but related point ‑ that one of the benefits which was taken was the certification by Telstra of a whole of universe listing.

Now, in our submission, that approach demonstrates the difficulty which arises in this case where you go to an industrious collection test, because you move away from the words of the statute which require that the work should be reproduced – or a substantial part of it should be

reproduced – and instead you concentrate on the work that was done and the generation of the work.  The infringement sections, of course, refer to the thing, not the activity that was engaged in in production of the thing. 

HAYNE J:   Yes, thank you. 

MR MACAW:   I see that the red light is there, your Honour ‑ ‑ ‑

HAYNE J:   Yes, thank you, Mr Macaw. 

MR MACAW:    ‑ ‑ ‑ I shall not, I think, do more than to say that these are obviously matters of significant public interest ‑ ‑ ‑

HAYNE J:   Yes, we understand. 

MR MACAW:    ‑ ‑ ‑ and the subject of lively debate.  There is an element of utility involved in the public interest.  These are products ‑ ‑ ‑

HAYNE J:   Your time has gone, Mr Macaw, thank you. 

MR MACAW:   If your Honour please. 

HAYNE J:   Yes, Dr Emmerson. 

MR EMMERSON:   If the Court pleases, my learned friend in presenting what he said was a fallacy in the approach taken by the courts below did not, in our submission, identify anything which was not in accordance with fully established law in this country.  Rather, he proceeded by way of saying, “Well, look, the result is a result which should be rejected out of hand”.  Now, there are two aspects to this.  What is the established law in this country?  The statute says that copyright subsists in an original literary work, and by definition “literary work” includes a compilation. 

So the question that arises in deciding whether these directories are copyright is:  what is the work done by the word “original”?  It is our submission that that has been settled in Australia for a great many years, being most recently stated by this Court in the Data Access Case, to which my learned friend ‑ ‑ ‑

HAYNE J:   Yes, where in Data Access do you say it is stated? 

MR EMMERSON:   At paragraph 22, the majority ‑ ‑ ‑

HAYNE J:   And ultimately is rooted back to Sands & McDougall. 

MR EMMERSON:   Exactly. 

HAYNE J:   Another directory case. 

MR EMMERSON:   Yes, not a telephone directory case ‑ ‑ ‑

HAYNE J:   No. 

MR EMMERSON:    ‑ ‑ ‑ but another compilation case. 

HAYNE J:   If you could identify for me, please, those cases which you say represent the establishment of this proposition for which you contend.  Simply state the cases without taking us to them.  You start with Sands & McDougall; where do you go from there? 

MR EMMERSON:   We start with Sands & McDougall.  We go to, in order, Victoria Park – also relied upon by our learned friend – the passage of Sir Owen Dixon in which he states this point.  It was stated again by the then Chief Justice, Sir Harry Gibbs, in Computer Edge v Apple Computer, and it is stated in the passage to which I referred the Court in Data Access. 

HAYNE J:   I think we need not trouble you further, Dr Emmerson. 

MR EMMERSON:   If the Court pleases. 

HAYNE J:   Mr Macaw, is there anything you would wish to add? 

MR MACAW:   The requirements of originality which have been stated in the cases my learned friend has just referred to, of a requirement that it should originate in the author and that it should not be a copy of other work, are two requirements.  Origination cannot be doubted in this case.  The question is what the content of the requirement is that it should not be a copy of other material.  That is where one comes to the point of compilations.  How can something which does not involve intellectual effort be other than a copy of other material? 

That, in substance, is where the courts have gone wrong in saying that mere industrious collection will suffice.  There is nothing by way of intellectual effort to distinguish the material in the compilation of such a case from the underlying information.  That is the error that the US Supreme Court identified and corrected and it is the error which has been fallen into here. 

HAYNE J:   Thank you, Mr Macaw. 

We are of the view that an appeal would enjoy insufficient prospects of success to warrant a grant of special leave in this matter.  Accordingly, special leave is refused with costs.

AT 1.11 PM THE MATTER WAS CONCLUDED