Top Plus Pty Ltd v Yi Star Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Top Plus Pty Ltd v Yi Star Pty Ltd [2023] FedCFamC2G 189

File number(s): BRG 1005 of 2019
Judgment of: JUDGE BAIRD
Date of judgment: 23 March 2023
Catchwords: COPYRIGHT – Infringement of copyright in protected cinematograph films being karaoke music videos (KMV Films) – where played in karaoke venue operated by respondents without licence from the applicants – proceeding brought by copyright owner and exclusive licensee – subsistence, ownership, and exclusive licence of KMV Films put in issue – subsistence of copyright established – second applicant’s ownership of copyright established – first applicant’s exclusive rights established – first and third respondents admit limited acts of use of 10 of the KMV Films – infringement of copyright in 10 KMV Films established – authorisation of first and third respondents established – proceeding not limited to 10 examples – defence of innocent infringement under s 115(3) of the Copyright Act 1968 (Cth) not made out – declaration of infringement – permanent injunction – damages under s 115(2) of the Copyright Act – additional damages under s 115(4) of the Copyright Act
Legislation:

Copyright (International Protection) Regulations 1969 (Cth) reg 4

Copyright Act 1968 (Cth) ss 10, 36, 90, 93, 98, 101, 115, 116, 131

Evidence Act 1995 (Cth) ss136, 141

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 r 15.02

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 141, 190, 191, 211

Federal Circuit Court of Australia Act 1999 (Cth) s76

Federal Circuit Court Rules 2001 (Cth) r 15.03
Cases cited:

Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq) (2007) 157 FCR 564; [2007] FCAFC 40

Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (2016) 329 ALR 22; (2016) 121 IPR 150; [2016] FCAFC 22

Australasian Centre for Corporate Responsibility v Commonwealth Bank of Australia (2016) 248 FCR 280; (2016) 337 ALR 558

Australasian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 59

Australasian Performing Rights Association v Escape Bar & Night Club [2017] FCCA 2690

Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) (2011) 195 FCR 1; [2011] FCA 352

Autodesk Pty Ltd v Cheung (1990) 17 IPR 69

Bailey v Namol Pty Ltd (1994) 53 FCR 102; (1994) 30 IPR 147; [1994] FCA 140

Brambles Ltd v Wail (2002) 5 VR 169; [2002] VSCA 150

Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2022] FCAFC 112

Chong v Ha (No. 2) [2018] FCCA 320

Dallas Buyers Club LLC v iiNet Ltd (No 4) (2015) 327 ALR 670; (2015) 112 IPR 1; [2015] FCA 317

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1976] 2 All ER 173; (1976) RPC 197

Halal Certification Authority Pty Ltd v Scadilone Pty Ltd (2014) 107…

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Details
Case
[2023] FedCFamC2G 189
Decision Date

CaseChat Overview and Summary

In the case of Top Plus Pty Ltd v Yi Star Pty Ltd, the applicants, who are the copyright owner and exclusive licensee of karaoke music videos (KMV Films), initiated legal proceedings against the respondents for copyright infringement. The applicants alleged that the respondents had operated a karaoke venue in which the KMV Films were played without obtaining a licence from the applicants. The dispute involved the subsistence, ownership, and exclusive licence of the KMV Films, as well as the infringement of copyright in those films.

The central legal issues addressed by the court were whether the applicants had established the subsistence, ownership, and exclusive licence of the KMV Films, and if so, whether the respondents had infringed on these rights. The court also considered whether the respondents had authorised the infringement and if the defence of innocent infringement was applicable. Furthermore, the court examined the appropriate measure for calculating damages under the Copyright Act 1968 (Cth).

The court determined that the applicants had successfully established the subsistence, ownership, and exclusive licence of the KMV Films. The respondents admitted to limited acts of use of 10 of the KMV Films, which led to the conclusion that the respondents had indeed infringed the applicants' copyright in those films. Additionally, the court found that the respondents had authorised the infringement, and the defence of innocent infringement was not applicable. Consequently, the court granted a declaration of infringement, a permanent injunction, and damages under section 115(2) of the Copyright Act, along with additional damages under section 115(4) of the Act. The court found that the appropriate measure for calculating damages was based on the applicants' annual licence fees.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

For the following reasons, I reject the respondents’ submission. In none of the above mentioned materials and events have the applicants confined their Claim or the scope of the relief they seek to the Infringement Examples. The transcript of the directions hearing conducted by telephone on 11 November 2020 (mischaracterised by the respondents as the hearing of their application in a case), makes clear to the contrary. On that occasion Mr Tsang, counsel for the applicants and I had the following initial exchange (emphasis added):HER HONOUR: Thank you. Now, I see there has been quite a lot of material filed recently, and I have warring applications and the like. Everyone gets so optimistic at this time of year. Mr Tsang, can I hear from you, please.MR TSANG: Yes, your Honour. Where the proceeding is at currently is that the applicant has filed and served its evidence in chief. That occurred last week, and it’s no more than four affidavits. And I just note, at this stage, that the case that the applicants seek to make on their evidence is confined. It is limited, on the infringement evidence, to 10 sample karaoke music videos. Out of the over 6000 that are in our catalogue, we seek to prove infringements by reference to 10 examples. As far as we’re concerned, the next step for the orderly conduct of the proceeding, or preparation for it for the hearing, is for the respondents to put on their evidence in answer. …The Court and both counsel (Mr Choy for the respondents) returned to the matter a short time later during the direction hearing (emphasis added):HER HONOUR: Given the evidence that has now been put forward, have you - - -MR CHOY: I seek to address your Honour on the evidence that has been filed.HER HONOUR: No, because I haven’t read it. What I want you to ..... - - - MR CHOY: Well - - - HER HONOUR: - - - is whether the particulars need to be recast, given the evidence that is now relied on in Mr Tsang’s case that there’s more limited claims in relation to – well, I think, as I understand Mr Tsang, the applicants exemplify the copyright, and they’re going to probably claim infringement claims in relation to a more limited number of works.MR CHOY: Your Honour, that’s as I also understand the position. And could I just add that today is the first time the respondents have been notified that the applicant seeks only to confine its case to infringement of 10 songs. That is inconsistent with the pleadings, which have been amended twice, and that has been inconsistent with all the correspondence provided to us today [sic, to date]. I am learning of this for the first time as is your Honour today.HER HONOUR: Okay.MR TSANG: Your Honour, what I said is we seek to pursue the infringement - - - HER HONOUR: What I’m not clear is whether what is being said by Mr Tsang is that they’re – as it quite – is not unusual in music and film infringements [proceedings] is that the infringements are exemplified by a limited number of subject matter, and then the applicants seek a catalogue order. I’m not clear on that matter, and I would be perhaps jumping the gun to understand Mr Tsang as saying that his client is now seeking to establish copyright ownership infringement and damages by reference to 10 instances only.MR TSANG: Your Honour, the confinement of our case relates to proof of infringement. The applicants rely on their entire catalogue. They seek to persuade your Honour that the licence fees that should have been paid for the right to use the entire catalogue were triggered, you know, by even one of these infringements in the relevant years. It’s a package deal, your Honour - - - HER HONOUR: Yes.MR TSANG: - - - if I can put it that way. So we rely on the entire catalogue for ownership and assistance [sic, subsistence]. We rely on it for infringement, but we seek to prove the infringement by reference to only 10 case[s].The respondents’ application in a case for particulars was stood over and subsequently dismissed by consent.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Both parties urged me to put these 3 licences to the side, as evidencing a settlement, and not a freely‑entered into royalty or ‘reasonable licence fee’ situation. (d) Consideration I am satisfied on the evidence that Top Plus, is, and was at all relevant times, in the business of licensing the copyright in the KMV Films to karaoke venues; and had a normal and established licensing regime that it published and distributed to karaoke venues evidenced by the Information Kits, and licence application forms. I am also satisfied by the Game Republic licence, and Mr Chan’s evidence that Top Plus had entered into between 15‑30 licences over time; that the licence fee structure and amounts evidenced are not simply ‘any fancy sum’ (c.f. Sargent J quoted by Lord Wilberforce in General Tire, see above at [340]). I am also satisfied on the evidence that Top Plus licensed its rights in the KMV Films on a per room basis at an annual fee, or, where the period of operation of the licensee commenced during a calendar year, on a monthly basis. Whilst Top Plus did discount its fee, that discount was given in instances of payment considerably in advance (annual, six monthly, or quarterly). Those are not the circumstances that apply to this case. In the circumstances of this case, I am satisfied that compensatory damages under s 115(2) of the Copyright Act should be awarded on the basis of Top Plus’ annual licence fees as set out in the above table. By the Infringement Examples Top Plus has established infringement of its exclusive rights. It lost its licence fees for the KMV Films for the Infringement Period, for the number of rooms I have found Yi Star made available in that Period. I reject the respondents submission that Yi Star would not have paid the Top Plus licence fee, and that the UML catalogue licence fee is not the appropriate measure. The evidence establishes that Yi Star and Mr Cui were prepared to, and did, enter into arrangements to use KMVs on an exceedingly broad ‘repertoire’ or ‘catalogue’ basis with Thunderstone/Mr Zhao in China by reference only to the number of access points, and again for the whole catalogue by reference to licensed venue size (number of customers) with the OneMusic licence. That is, in their dealings with Mr Zhao and with APRA Yi Star and Mr Cui accepted catalogue and venue size licences as the bases for Yi Star’s commercial activities. This is not a case of a once only, inadvertent, use of a single KMV Film. Mr Cui’s offer, in exchanges with Mr Lam in January‑February 2019 to pay $3000 was made in the context of threats to sue and countersue. In those circumstances it is not a useful guide. Whilst I consider that the lost licence fee approach is appropriate in the present case, for the above reasons I am also satisfied on the evidence that the reasonable licence fee approach under the user principle discussed in Winnebago and Universal leads to the same result. (e) Quantum of lost licence fee Accordingly I calculate s 115(2) Copyright Act damages for the period of infringement by reference to the licence fees quoted, the months and number of available rooms on a GST inclusive basis as follows: