Network Ten Pty Ltd v TCN Channel Nine Pty Ltd

[2005] HCATrans 842

[2005] HCATrans 842

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S310 of 2005

B e t w e e n -

NETWORK TEN PTY LIMITED

Applicant

and

TCN CHANNEL NINE PTY LIMITED

First Respondent

QUEENSLAND TELEVISION LIMITED

Second Respondent

GENERAL TELEVISION CORPORATION PTY LIMITED

Third Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 OCTOBER 2005, AT 10.01 AM

Copyright in the High Court of Australia

__________________

MR J.M. IRELAND, QC:   If the Court pleases, I appear with my learned friends, MR R. COBDEN, SC and MR C. DIMITRIADIS, for the applicant.  (instructed by Blake Dawson Waldron).

MR A.J.L. BANNON, SC:   If the Court pleases, I appear with MR D.T. KELL for the respondent.  (instructed by Gilbert & Tobin)

McHUGH J:   Yes, Mr Ireland.

MR IRELAND:   Your Honours, this is the second occasion upon which these proceedings have been brought to the High Court.

McHUGH J:   Yes, we are familiar with it, Mr Ireland.

MR IRELAND:   On 11 March this Court gave judgment and by a majority set aside orders of the Full Federal Court which erroneously proceeded upon the basis that every image of a television broadcast enjoyed copyright protection under the Copyright Act 1968. The matter was remitted to the Federal Court for further determination which necessarily then arose as to the application of section 14 of that Act. In the earlier appeal the Court did not determine the principles upon which section 14 of the Act should be applied nor could the Court have done that in the way in which the Federal Court had managed the matter. Yesterday your Honours gave judgment in Stevens v Sony.  Four members of the Court in the joint judgment commented on the notorious difficulty which attends:

questions of what amounts to the taking of a substantial part of a work or other subject-matter –

paragraph 91 of the judgment.  In relation to all copyrights subsisting under Part IV of the Act, the matter is completely undetermined in this Court.

KIRBY J:   That might be because it cannot be determined any more than the statutory words.  It is a matter of fact and degree.  It is just a matter of fact and degree and that is what the judges in the majority in the Full Court said.

McHUGH J:   That is what copyright lawyers have to learn, just as income tax lawyers have to learn.  They think every question under a statute is a question of law.  It is not, it is a question of fact.  It is a question of applying the statutory formula to the facts of the case. 

KIRBY J:   This is hubris on your part, Mr Ireland, coming along here thinking this is ‑ ‑ ‑

MR IRELAND:   That is very uncharacteristic, your Honour, both in your Honour’s unkindness and in what has been said. 

KIRBY J:   The authorities keep saying over and over again fact and degree, fact and degree.  What can we say?

MR IRELAND:   The difficulty with that approach is that Justice Conti acquitted us of all acts of infringement, being the trial judge charged with the task of finding the facts.  The reason we have been affected by the result of the Full Federal Court is that the majority in that court, consisting of Justices Finkelstein and Sundberg, have set aside Justice Conti’s conclusions based upon a new and racy approach to the legal test to be applied.  May I refer your Honours, perhaps a little sooner than I anticipated in this regard, to the core of the majority reasoning which appears at 278 and 279 of the application book.  By way of background, Justice Conti at trial had said in judging the question of whether or not a particular excerpt of a television program was substantial in the statutory sense which section 14 requires, had said that questions of economic harm as a result of the use made of the program were relevant.  At the top of page 278 Justice Finkelstein notes that and then his Honours says in paragraph 27 which commences at line 17:

It is now clear that the starting point for any enquiry into substantiality is not, as the judge would have it, “primarily quantitative”.  Nor is the principal enquiry whether harm has been caused . . . The first thing that must be done is to look at the part taken, compare it with the copyright work and ask whether it is possible to conclude from that comparison whether that part is a “substantial part” . . . The question –

that is the question of substantiality –

will often boil down to one of the following (dependent on the type of programme).

And then his Honour sets out a series of questions.  These are catchphrases that his Honour has derived from some American cases, by and large.  The American cases were not referred to in argument and what his Honour has done is to pick out these catchphrases, whether the amount taken amounts to:

“essentially the heart’” of the copyrighted work”? . . . Is what has been taken “at least an important ingredient” . . . Are the excerpts “highlights” from the programme? . . . Are the excerpts central to the programme . . . Does the portion used “constitute the ‘heart’ – the most valuable and pertinent portion – of the copyright material?

And then the reasoning, in our respectful submission, takes a dramatic turn in paragraph 28.  His Honour says:

If what has been taken does not meet any of those descriptions that will often be the end of the enquiry.  There will, however, be borderline cases where an enquiry based on a visual comparison will not yield a result.

So his Honour is positing a test whereby the Federal Court is stating in its majority decision to the trial courts of this land that one applies a series of what I have called catchphrases which may or may not yield the result in a particular case.

McHUGH J:   But they are factual descriptions.  They are factual reasoning.  Even if this was a unanimous judgment of the Full Court and these statements were contained in it, they would be binding on nobody.  The most junior judge in the nation would be entitled to disregard them.  They are questions of fact, that is all they are.  They stand for nothing.  The only legal test is substantiality.  That is the lesson and practitioners should read once again what Chief Justice Barwick said about these questions in a case called Conkey 51 ALJR where he criticises this attempt to elevate this sort of reasoning into questions of law.  They are reasoning on facts.  They are entitled to respect but they bind nobody.

MR IRELAND:   Your Honour, the outcome in this case - and I will not trouble your Honour with the detail of it in light of what has just been said - was that the judge, looking at the facts, found that we had infringed none of the 20 programs by taking snippets, as they were in temporal terms, from any of them.  The majority judges in the Full Federal Court, when they finally came to deal with the matter after the second tranche of the hearing, held that in six cases of the 20 there was infringement because a substantial part had been taken.  The minority judge, his Honour the late Justice Hely, took a different conclusion.  So you have here three sets of judges, Justice Conti, the majority constituted by Justices Finkelstein and Sundberg and Justice Hely, all taking a completely different view of what your Honour says is an unguided factual question.

KIRBY J:   They have used different synonyms and expressions to try and explain how their mind is operating and how they are applying the statutory words.

MR IRELAND:   No, your Honour, that is not what the majority is doing here.  The majority is saying it is a two-tier test.  These catchphrases are identified and they may deal with most of the cases.  And then it goes on – could I just refer your Honours quickly to page 279 within paragraph 28 of the judgment of Justice Finkelstein.  His Honour then diverts to talk about two Andy Warhol films, neither of which merited a place in the argument.  This is obviously the result of his Honour’s own cinematic enthusiasm or other research. 

KIRBY J:   I think Justice Sundberg commented that ‑ ‑ ‑

MR IRELAND:   In any event, he said that there were two intensive, tedious films produced by Andy Warhol, one called “Sleep” which was a six-hour film taken of a stationary man sleeping, the other called “Empire” which was a lengthy film from a:

single shot from late dusk to early morning of the Empire State Building taken from the 44^th floor of the Time‑Life Building.

It was described as “the most profoundly mute motion picture ever filmed”.  What his Honour says, apparently having had a look at those films without the benefit of any argument is:

no amount of visual comparison would enable a tribunal to determine whether that part is a substantial part of the film. 

He says it would then be necessary to consider factors beyond, so what his Honour is saying is in some kinds of cases, which his Honour has identified privately, these catchphrases that have been used as taking out most of the cases cannot work and that is because ‑ ‑ ‑

KIRBY J:   That might be correct and then you go back, as you always should, to the terms of the Act.  Lawyers do not like statutes.  We have found that over and over again. 

MR IRELAND:   We work with them every day, your Honour.

KIRBY J:   The Bar table hates statutes; they love the words of the judges.  We understand this affection but ultimately the duty is to the statute. 

MR IRELAND:   Your Honour, can I say something about broadcast copyright which needs to be emphasised.  In the case of copyright in Part III works which is typically literary musical works, dramatic works, you do not get a copyright unless there is originality.  In other words, you sit down and you do something original and copyright protection arises.  In the case of Part IV works, of which the television broadcast copyright is one alike with cinematograph films, sound recordings and what is called the published edition copyright, in none of those cases does the copyright need to be one based upon originality.  So that the test pattern in a television broadcast, the SBS test pattern overnight – I think it is still there with this rather odd‑looking map and music – is as much copyright protected as is the most intricate and expensive studio production or the most exciting sports match with dozens of cameras taking from critical angles to get the key catch.  So the television broadcast copyright that we are dealing with has to extend to both these types of cases.  It also has to extend to a case where a film which itself is out of copyright is rebroadcast.  So you have “Gone With the Wind” which is out of film copyright, the mere fact that one of these television stations runs it at 2 or 3 in the morning, or probably earlier in the day, having regard to its current resurgence in popularity, although the people that created the dramatic events in the thing have no enduring copying protection because that copyright has expired, nevertheless, the mere fact that one of these channels runs the thing gives rise to this broadcast copyright which is a thin copyright obviously in that context.  It cannot be the dramatic sequences which are protected because those are the work of the filmmaker.  So this Part IV copyright, and quintessentially the broadcast copyright, is one which has to be judged on the issue of substantiality.  This Court was divided.  We have at least one representative from each of the views in the first hearing ‑ ‑ ‑

KIRBY J:   We thought we would be very fair to you.

MR IRELAND:   Yes, as to whether or not every single image of television transmission constituted a broadcast.  This Court held by majority, and I proceed upon this basis today, that it was the program as a whole that enjoyed the television broadcast copyright.  That meant section 14 had to then come into play when snippets of the television broadcast were taken.

KIRBY J:   But there is nothing in the majority view in the Full Court that undermines that holding.

MR IRELAND:   No, they proceed upon that basis.

KIRBY J:   Exactly.

MR IRELAND:   But then the question becomes:  how do you apply section 14 to this special copyright?  As I have sought to say, the core of all of the reasoning is on those two pages, 278 and 279, but I want to add to it one reference if I may.  At the end of the day when Justice Finkelstein deals with the examples in which my client’s taking of these excerpts did not offend on the test of substantiality, he says over at 281, if your Honours will turn the page, within paragraph 38, giving reasons why the remaining extracts did not constitute an infringement, his Honour says at line 28:

I have found that these extracts have not infringed Nine’s copyright because the extracts were insignificant (de minimis is another description) in the context of Nine’s programme (or, if it be relevant, the segment of the programme from which they were taken).  Moreover, as the judge pointed out, the taking of these extracts caused absolutely no injury to Nine’s interests.

His Honour is then giving, as part of the decisive reasoning for the cases in which he acquits my client of copyright infringement, the very matters that his Honour has already disciplined Justice Conti for taking into account in paragraph 26, namely the harmful effect or otherwise and the commercial context of the taking. 

So all of this just does not hang together.  It is patently inconsistent, first, because his Honour says that there will be a routine number of cases where the catchphrases can be applied and then his Honour is saying, completely inconsistently, in paragraph 26 and in paragraph 38 that these other factors, which have been criticised, I say, in the hands of Justice Conti, somehow are taken into account but only, it seems, in a case where one is coming to a conclusion against infringement.  So our respectful submission is that all of this is poor guidance from the Federal Court in whose hands this Court trusts the statement of principle routinely. 

It is only in an extraordinary case, as has been said this morning, that the Court has time to look at questions like this.  There can be no doubt that this case is a proper and significant vehicle for this question.  It is the only case which has been decided on television broadcast copyright in the whole of the common law world.  Much of what Justice Finkelstein has said is, we would say, irreverently drawn upon United States cases which are not even based on the television broadcast copyright at all; none exists in that country.  It is a tangled and, we would say, erroneous approach to the matter which this Court ought to sort out.

McHUGH J:   Thank you, Mr Ireland.  Yes, Mr Bannon.

KIRBY J:   Mr Bannon, I am inclined to the views that you have put forward in your written submissions, but just let me see whether you can talk me into granting special leave.  Is there a danger if this judgment stands that some of these American expressions in paragraph 27, for example, of Justice Finkelstein’s reasons will get the standard of holy writ and that instead of the statute these American endeavours to explain the idea in our statute will become elevated into so-called legal tests?  This is a bit of a worry if this would be the result of what Justice Finkelstein has done.

MR BANNON:   It will not be the result because, as we have pointed out in our written submission, if you tease out the actual English sentences used and ignore the fact there is a reference to a US case, they are all exactly the same sorts of useful evidentiary touchstones which English cases in memoriam have used in assessing the factual question:  is it a substantial part?  The question reiterated time and again by lower courts and by this Court is:  is it an important part, is it an essential part, is it a part of significance?  Each of those statements simply exposed Justice Finkelstein’s process of reasoning in terms of his attempts to assess that question in each case.  But ultimately the decision is an application of the statutory test of a substantial part to the particular circumstances, and that appears from 280 and 281. 

Really, one has to ask what is being sought to be appealed against.  It is against those findings by the majority which found that, for example, an excerpt of the Prime Minister singing “Happy Birthday” on midday television was an important part of that segment.  They do not say that is wrong.  There is no reason given as to why anyone would not come to the view that that was an important part.  What they really ask is that the Court consider this question.  It is not a special leave question as framed; it is framed as an advisory opinion.  It says if one looks at the framing of the question it falls foul of all the sorts of problems which your Honour Justice McHugh identified in the Skaf special leave transcript.  It is just simply saying, “What’s an advisory opinion?  What are the circumstances in which this sort of copyright might be infringed?” 

To refer back to Justice Conti’s judgment is completely inappropriate.  Nobody sought to defend Justice Conti’s judgment in the sense of the way in which his Honour approached the matter after the House of Lords decision in Marks & Spencer.  My learned friend’s own submissions say at 311, paragraph 14 of their submissions that his Honour took a “primarily quantitative” approach and that was while the English Court of Appeal decision was still on foot.  So that is why it was a completely open question before this Full Court on substantial part.  The majority, both the judgment of Justice Finkelstein and the approach of Justice Hely, simply implies that the statute just is an important part. 

There is no legal or intellectual difficulty in answering that question.  Any viewer will offer readily an opinion.  The minds might differ but it is ultimately a factual question and simply no issue of principle arises and copyright lawyers will not be misled by the judgment or by the refusal of special leave in this case.

McHUGH J:   We need not hear you any further on that.  Anything you want to say in reply to that, Mr Ireland?

MR IRELAND:   No, your Honour.

McHUGH J:   The issue which the applicant seeks to bring into this Court is one of fact and degree.  It is not one of law as such, although self‑evidently the Court is applying the Copyright Act 1968 (Cth). The courts, including the Federal Court, must apply the statute. They must be careful against turning factual synonyms into legal tests. The synonyms or descriptions used by Justice Finkelstein are factual synonyms. In other cases they will no doubt be entitled to respect but they do not bind as a matter of law.

We are not convinced that the applicant enjoys reasonable prospects of success to warrant the grant of special leave to appeal.  Accordingly, special leave is refused with costs.

AT 10.22 AM THE MATTER WAS CONCLUDED