EMI Music Records of Australia Pty Ltd v Colossal Records of Australia Pty Ltd

[1996] FCA 930

IN THE FEDERAL COURT OF AUSTRALIA                  )
  )
NEW SOUTH WALES DISTRICT REGISTRY                 )          NG 840 of 1996
  )
GENERAL DIVISION  )

EMI MUSIC RECORDS OF
  AUSTRALIA PTY LTD

Applicant

COLOSSAL RECORDS OF
  AUSTRALIA PTY LTD

Respondent

Coram:Whitlam J

Place:Sydney

Date:29 October 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. Upon the applicant by its counsel giving the usual undertaking as to damages, the respondent be restrained, by itself, its servants or its agents, until further order from:

(a)manufacturing, distributing, selling, advertising and supplying in Australia any compact disc or associated packaging containing thereon the words as the title of the compact disc "7 Days and One Week" in conjunction with the name of the artist being "DDE"; and

(b)representing, claiming, advertising or otherwise promoting that the compact disc "7 Days and One Week" is a compact disc of the sound recording which has sold successfully in Europe.

1. Costs of the interlocutory hearing be the applicant's costs in the cause.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA                  )
  )
NEW SOUTH WALES DISTRICT REGISTRY                 )          NG 840 of 1996
  )
GENERAL DIVISION  )

EMI MUSIC RECORDS OF
  AUSTRALIA PTY LTD

Applicant

COLOSSAL RECORDS OF
  AUSTRALIA PTY LTD

Respondent

Coram:           Whitlam J
Place:              Sydney

Date:29 October 1996

REASONS FOR JUDGMENT

The applicant seeks interlocutory orders:

"2.... restraining the respondent whether by itself, its servants and agents from manufacturing, distributing, selling, advertising and supplying in Australia any [compact disc ("CD")] and/or associated packaging containing thereon the words as the title of the CD "7 Days and One Week" either alone or in  conjunction with any of the following:

(a)the name of the artist being "DDE"; and/or

(b)the name of the recordings being "7 Days and One Week (Radio Edit)" and/or "7 Days and One Week (Club Mix)"; [and]

2A.... restraining the respondent whether by itself, its servants and agents from representing, claiming, advertising or otherwise

promoting that the CD "7 Days and One Week" is a compact disc of the Sound Recording which has sold successfully in Europe."

Without admissions, the respondent offers permanent undertakings not to:

"(a)     distribute, sell, advertise or supply in Australia the CD entitled "7 Days and One Week", ... unless there is prominently displayed across the front of the CD packaging a sticker bearing the words: "This is not the BBE recording" ...

(b)in relation to any future manufacture of CDs or other recordings containing either or both the tracks, "7 Days and One Week (Radio Edit)" or, "7 Days and One Week (Club Mix)", or any other track whose title includes the words, "7 Days and One Week" use the name "DDE", or any name containing the initials "DDE" or "BBE", or any similar initials

(c)represent, claim or advertise or otherwise promote that the CD "7 Days and One Week" is a compact disc of the sound recording featuring BBE which has sold successfully in Europe."

The applicant is the sub-licensee of EMI Records Limited ("the UK company"), which has the exclusive licence to manufacture, sell, distribute, market and promote in Australia a recording of a musical work entitled "Seven Days and One Week" by a group known as "B.B.E.".  I shall refer to this recording as "the B.B.E. version".  The UK company purchased the rights to this recording for the United Kingdom and Ireland in July 1996 from the copyright owner which trades under the name Triangle Records.  The rights for an extended territory (including Australia) were acquired on 16 September 1996 for a consideration that included a payment of 160,000 French francs by way of a non-refundable advance on account of royalties. 

On 4 September 1996 the UK company, which trades under the label "Positiva" released the B.B.E. version in the United Kingdom with a press release in the following terms:

"POSITIVA have signed BBE "SEVEN DAYS & ONE WEEK", perhaps the hottest track around at the moment.

Originally released on the French Triangle label back in March of this year, "Seven Days & One Week" has quickly become the most essential item in any self respecting European DJ's box and can legitimately claim to be the anthem in Ibiza this summer.

BBE consist of 24 year old French techno wunderkind Emmanuel Top (proprietor of Triangle and also Attack Records) and Italian production duo of Bruno Sanchioni and Bruno Quartier (hence BBE) whose past work includes the house classic "Age Of Love".

"Seven Days & One Week" is already number one in Spain and is currently at number 5 in the German pop chart." 

On 19 September 1996 the applicant ordered 3,000 copies of the B.B.E. version from the UK company and arranged to have 5,000 copies made in Australia.  The applicant issued a press release to record retailers on 26 September announcing the proposed release of the B.B.E. version on 4 October.  The imported copies arrived in Australia on 3 October and distribution commenced on 4 October.  By 16 October almost 5,000 copies had been sold.  The applicant paid $23,840 for the imported copies and $11,800 for the locally manufactured copies.  It has also spent $3,200 on marketing the B.B.E. version.  The dance music reports, published in the "Australian Music Report" newsletter dated 14 and 21 October, show the B.B.E. version to be extremely popular in both sales and "DJ reports based on club-play".

The respondent released a cover version of this work entitled "7 Days and One Week", using the figure "7" instead of the word "Seven".  This may be conveniently referred to as "the D.D.E. version".  Gabrielle Colombi, the respondent's "International artist and repertoire manager", deposed to the circumstances surrounding the production of this version.  She says that she first heard the B.B.E. version in early August 1996 when she was visiting Cologne in Germany and that she "was also aware that the B.B.E. version of the song had been fairly successful throughout Europe".  Ms Colombi's brother informed her in late August or early September 1996 of "a proposal by some local artists to record their own version".  She says that "the name of the Artist D.D.E." arises from the nickname of the producer, Don Steele, who is known as "Don Da Ethnic" on account of his Italian accent and "has adopted the acronym D.D.E." 

The artwork for the cover in the compact disc case of the B.B.E. version sold by the applicant is printed in the United Kingdom and was used by the UK company.  Ms Colombi says that she had not seen this artwork when she instructed Kellie Lafranchi, a graphic artist, to prepare the artwork for the cover used for the D.D.E. version.  She says that on 23 September the respondent applied for a compulsory licence under Div 6 of Pt III of the Copyright Act 1968. Ms Colombi explains that the "radio edit" and "club mix" tracks on both the B.B.E. and D.D.E. versions are different mixes of the same work which contain variations such as playing time to suit the requirements of the different occasions when the record is played. The D.D.E. version was released on 1 October.

The respondent's flyer released to record stores at the end of September announced: "7 Days and 1 Week - DDE Set to be the biggest dance track for '96.  7 Days and 1 Week
is sitting at the top of every European National Chart ...".  A subsequent advertisement by the respondent in "3D World" describes the D.D.E. version as a "massive track that is storming its way across Europe, straight from Ibiza to Australia".  The respondent has spent $8,400 in production costs and $2,294 on marketing.  It has sold approximately 1,760 of the 3,000 copies of the D.D.E. version that have been made.

The applicant's claims for contravention of s 52 of the Trade Practices Act and for passing off rest on the "look" of the cover for the case containing the D.D.E. version and on the name of its artist.  I see little point in laboriously describing for present purposes the appearance of the two covers.  The typefaces are different.  In particular, the name of the group "B.B.E." is fairly compressed whereas the initials of the alleged artist "D.D.E." are widely dispersed.  The D.D.E. version's cover does employ a series of seven panels, as does that of the B.B.E. version, but the proportions are quite different.  So, too, are the colours and the images in the panels.  To my eye, the covers look different enough.  However, the name of the artist is another matter.  It sounds almost the same and, in the circumstances that I have tried to describe fairly neutrally for present purposes, I am quite satisfied that there is a serious question to be tried in respect of the applicant's causes of action. 

The permanent undertakings offered by the respondent are also accompanied by a conventional undertaking to keep proper accounts.  The balance of convenience has to be assessed having regard to those undertakings.  However, in view of the phonemic features of the name D.D.E., I do not consider that affixing stickers to the covers of the discs will afford the applicant adequate protection until trial.  The applicant is entitled to an interlocutory injunction that restrains sales under the name D.D.E.  I think that the
appropriate costs order is that the costs of the interlocutory hearing should be the applicant's costs in the cause, but I will hear counsel on this question. 

I certify that this and the preceding 5 pages are a  true copy of the reasons for judgment herein of the Hon. Justice A.P. Whitlam

Associate: John Merity

Date: 29 October 1996

Counsel for the applicant: P. P. O'Loughlin

Solicitor for the applicant: Peter Maxwell Townsend

Counsel for the respondent:  A. H. Bowne

Solicitor for the respondent: Aroni Colman

Date of hearing:   25 October 1996