Re Wea International Inc and Wea Music Pty Ltd v Hanimex Corporation Ltd [1987] FCA 379 (26 October 1987)

FEDERAL COURT OF AUSTRALIA

Re: WEA INTERNATIONAL INC and WEA MUSIC PTY. LTD.
And: HANIMEX CORPORATION LTD.
No. 52 of 1986
Trade Practices - Copyright

COURT

IN THE FEDERAL COURT OF AUSTRLIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Gummow J.(1)

CATCHWORDS

Trade Practices - advertisement concerning cassettes - whether radio broadcast thereof constituted authorization of copyright infringement and was therefore misleading or deceptive - whether failure to include warning of possible breach of copyright within text of advertisement misleading or deceptive in all of the circumstances - whether a consequent breach of copyright would constitute a failure to take reasonable care for own interests - copyright material displayed warning against re-recording - failure to produce evidence of impact of advertisement upon relevant sector of public.

Copyright - whether advertisement purported to authorize the re-recording of material in respect of which the applicants held copyright - origins and concept of authorization examined - whether there may be an action for authorization without any completed act of primary infringement - whether in all of the circumstances there had been the necessary sanction, approval or countenance of copyright infringement for the purposes of the Copyright Act 1968.

Trade Practices Act 1974 ss. 52, 80, 86, 87 and 163A

Copyright Act 1905 ss. 13, 14 and 34

Copyright Act 1911 (U.K.) s. 1(2)

Copyright Act 1912

Copyright Act 1968 ss. 13, 85, 101 and 115

Copyright Act 1976 (U.S.) s. 106

Federal Court of Australia Act 1976 ss. 21 and 32

Bradford House Pty. Ltd. v Leroy Fashion Group Ltd. (1983) ATPR 40-387 followed

Rhone Poulenc Agrochimie S.A. v U.I.M. Chemical Services Pty. Ltd. (1986) 68 ALR 77 followed.

Collins Marrickville Pty. Ltd. v Henjo Investments Pty. Ltd. (1987) 72 ALR 601 referred to.

Nobile v The National Australia Bank Ltd. (1987) ATPR 40 - 787 referred to.

McWilliam's Wines Pty. Ltd. v McDonald's System of Australia Pty. Ltd. [1980] FCA 159; (1980) 33 ALR 394 referred to.

Taco Company of Australia Inc. v Taco Bell Pty. Ltd. [1982] FCA 136; (1982) 42 ALR 177 referred to.

Parkdale Custom Built Furniture Pty. Ltd. v Puxu Pty. Ltd. [1982] HCA 44; (1982) 149 CLR 191 followed.

Finn v Pugliese (1918) 18 SR (NSW) 530 considered.

Pacific Film Laboratories Pty. Ltd. v Federal Commissioner of Taxation(1970)121 CLR 154 referred to.

Copyright Owners Reproduction Society Limited v E.M.I. (Australia) Pty. Ltd.(1958) [1958] HCA 54; 100 CLR 597 referred to.

Sarpy v Holland (1908) 2 Ch. 198 referred to.

Morton - Norwich Products Inc. v Intercen Ltd. (1978) RPC 501 referred to.

Polaroid Corporation v Sole N Pty. Ltd. (1981) 1 NSWLR 491 referred to.

C. Evans and Sons Ltd. v Spritebrand Ltd. (1985) 1 WLR 317 referred to.

Kalamazoo (Aust) Pty. Ltd. v Compact Business Systems Pty. Ltd. (1985) 84 FLR 101 referred to.

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 referred to.

Performing Right Society Ltd. v Ciryl Theatrical Syndicate Ltd. (1924) 1 KB 1 considered.

Performing Rights Society Ltd. v Mitchell and Booker (Palais De Danse) Ltd. (1924) 1 KB 762 considered.

Ash v Hutchinson and Co. (Publishers) Ltd. (1936) 1 Ch. 489.

The University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1 followed.

Winstone v Wurlitzer Automatic Phonograph Company of Australia Pty. Ltd. referred to.

Amstrad Consumer Electronics PLC v The British Phonographic Industry Ltd (1986) FSR 159 considered.

Transatlantic Film Co. Ltd. v Albion Cinema Supplies Co. (1917-23) Macg CC 118 referred to.

Evans v E. Hulton and Co. Ltd. (1924) WN 130 referred to.

Falcon v Famous Players Film Co. (1926) 2 KB 474 referred to.

The Corporation of the City of Adelaide v The Australasian Performing Right Association Ltd. [1928] HCA 10; (1928) 40 CLR 481 referred to.

CBS Inc. v Ames Records and Tapes Ltd. (1982) Ch 91 referred to.

RCA Corporation v John Fairfax and Son Ltd. (1981) 1 NSWLR 251 followed.

Copyright Agency Ltd. v Haines (1982) 1 NSWLR 182 followed.

HEARING

SYDNEY
26:10:1987

Counsel and Solicitors for Applicant: Mr D.K. Catterns instructed by Messrs. Sly and Russell.

Counsel and Solicitors for Respondent: Mr J.W. Shaw Q.C. with Mr B. Hodgkinson instructed by Messrs. Anthony M. Davis & Co.

ORDER

The Application be dismissed.

The Applicants pay the costs of the Respondent.
Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

DECISION

The Facts

The first applicant is the owner, pursuant to the provisions of Part IV of the Copyright Act 1968 ("the 1968 Copyright Act"), of copyrights in certain sound recordings which embody performances by the well known artist "Madonna" of some nineteen songs. The second applicant is the exclusive licensee of the copyrights in those sound recordings. There are some twenty eight sound recordings involved, the artist, in respect of some of the songs, having recorded more than one version.

2. Nine of the sound recordings supply the tracks for an album issued under the title "Like a Virgin", and eight of the songs supply the tracks for another album issued under the title "First Album". By 31 January 1986, 167,898 copies of the "First Album" had been sold in Australia and 320,983 copies of the album "Like a Virgin" had been sold here. Smaller numbers had been sold of single sound recordings of various of the "Madonna" performances in question. These albums and single recordings were marketed by the second applicant. In the early months of 1986, sound recordings which embodied performances by "Madonna" were broadcast widely on radio stations in Australia and video tapes embodying performances by "Madonna" were shown extensively on television stations in Australia. There was no evidence that "Madonna" made sound recordings only under arrangements whereby copyright was vested in the first applicant.

3. Part IV of the 1968 Copyright Act comprises ss.84-113. Section 85 provides that copyright in relation to a sound recording is the exclusive right to do all or any of the following acts:

(a) to make a copy of the sound recording;

(b) to cause the recording to be heard in
public;

(c) to broadcast the recording.

Section 101 of the Copyright Act provides as follows:-

101 (1) Subject to this Act, a copyright
subsisting by virtue of this Part is
infringed by a person who, not being
the owner of the copyright, and without
the licence of the owner of the
copyright, does in Australia, or
authorizes the doing in Australia of,
any act comprised in the copyright.

... .

(3) Sub-section (1) applies in relation to
an act done in relation to a sound
recording whether the act is done by
directly or indirectly making use of a
record embodying the recording.

(4) Sub-section (1) section applies in
relation to an act done in relation to
a television broadcast or a sound
broadcast whether the act is done by
the reception of the broadcast by
making use of any article or thing in
which the visual images and sounds
comprised in the broadcast have been
embodied.

Section 13 is as follows:-

13 (1) A reference in this Act to an act
comprised in the copyright in a work or
other subject-matter shall be read as a
reference to any act that, under this
Act, the owner of the copyright has the
exclusive right to do.

(2) For the purposes of this Act, the
exclusive right to do an act in
relation to a work, an adaptation of a
work or any other subject-matter
includes the exclusive right to
authorize a person to do that act in
relation to that work, adaptation or
other subject-matter.

4. In the months of January and February 1986, the respondent caused certain advertisements to be published by means of radio broadcasts. The broadcasts were made on a number of occasions in this period over radio stations 2MMM-FM in Sydney, 3EON-FM in Melbourne and 5SA-FM in Adelaide. They have not been made since.

5. The respondent's advertisements came with two texts. An agreed text (with descriptive matter) of each advertisement is set out below.

First Advertisement

First Voice: (Miserable) Madonna's bent. And
Bowie's completely deformed. Springsteen's a
crumpled heap ... Boy George is covered in
horrible blisters ... (disappears under).
Second Voice: If you don't want your favourite
recordings ruined, use Fuji GTI Car Tapes. The
only tape that won't melt, warp, twist or bend -
even on the hottest dashboard.
First Voice: (Breaks down completely)... and
what's this horrible gooey blob. Oh no, it's
Paul McCartney.
Second Voice: Fuji. The world's most developed
audio tape.

Second Advertisement

First Voice: (Miserable) Maddona's bent. And
Bowie's completely deformed. Springteen's a
crumpled heap ... Boy George is covered in
horrible blisters ... (disappears under).
Second Voice: If you don't want your favourite
recordings ruined, use Fuji GTI Car Tapes. The
only tape that won't melt, warp, twist or bend -
even on the hottest dashboard.
First Voice: (Breaks down completely) ... and
what's this black, sticky mess ... Oh no, it's
the Pointer Sisters.
Second Voice: Fuji. The world's most developed
audio tape.

6. The evidence includes a sound recording of the second advertisement and the descriptive matter concerning the second advertisement which is set out above is accurate enough. The references to "Bowie", "Springsteen", "Boy George", "Paul McCartney" and "The Pointer Sisters" are to other recording artists. Sound recordings embodying performances by them were widely sold and broadcast in Australia in the relevant period. The applicants do not assert any interests to any copyrights in sound recordings embodying performances by these artists.

7. The respondent, by the medium of these advertisements, was seeking to encourage the sale of "Fuji GTI Car Tapes" and to emphasize the desirable quality of these tapes, particularly their durability even under hot conditions that may occur in a car driven on Australian roads. The tapes of the sound recordings embodying performances by "Madonna" which were marketed in Australia by the second applicant pursuant to its exclusive licence were not made with "Fuji GTI Car Tapes". The essence of the applicants' complaint is that the advertisements were directed to persons already owning cassettes containing sound recordings of performances by "Madonna" and encouraging (to use at this stage a neutral term) the listener to re-record the performances on "Fuji GTI Car Tapes" and to play this second tape in the listener's car.

8. It is common ground that, without the permission of the applicants, the making of such a record on "Fuji GTI Car Tapes" would, by reason of the provisions in the 1968 Copyright Act which I have set out, constitute an infringement of the copyright in any "Madonna" sound recording so reproduced. This is because the person making this record would have done in Australia an act comprised in the applicants' copyrights in the sound recordings, namely the exclusive right to make a record embodying the recordings: (1968 Copyright Act, s.85(a), s.101).

9. There is no evidence to show that there was any such duplication by persons who had heard the advertisements or either of them. This is an important lacuna in the applicants' case to which I will return. On cassettes marketed by the second applicant in Australia in January-February 1986 and previously, there had been statements drawing attention to copyright. The words in question were:

All rights of the manufacturer and
of the owner of the recorded works
reserved. Unauthorised public
performance broadcasting and
copying of this tape prohibited.

10. On the "slicks" (printed matter packaged and sold with the cassettes) were the words:

All rights reserved. Unauthorised
duplication is a violation of
applicable laws.

11. Warnings to the same effect appeared on records.

12. The applicants put their case as one of copyright infringement and contravention of s.52 of the Trade Practices Act 1974 ("the Trade Practices Act"). As regards copyright, it is alleged that by causing the advertisements to be broadcast, the respondent, not being the owner of any copyright in the sound recordings of performances by "Madonna", and without the licence of the first applicant, authorized the doing in Australia of an act comprised in the copyrights viz the making of a record embodying the recordings: 1968 Copyright Act, ss. 85(a), 101(1). The exclusive right to make records embodying the recordings question included the exclusive right to authorize a person to do that act in relation to those recordings (s.13(2)) and the respondent, by the conduct complained of, infringed that exclusive right.

13. The allegation of contravention of the Trade Practices Act is that the respondent, by causing the broadcasts of the advertisements to be made, engaged in trade or commerce in conduct that was misleading or deceptive, or likely to mislead or deceive, within the meaning of s.52 of that Act. The conduct had this quality, the applicants allege, because it did not draw to the attention of listeners that infringement of copyrights of the applicants would occur if a listener owning a cassette of sound recordings by "Madonna" were to record it on a "Fuji GTI Car Tape" without the permission of the applicants. The matter also was put somewhat differently by submitting that the advertisements encouraged listeners to believe or assume that there was no legal impediment to re-recording in this way these sound recordings of performances by "Madonna".

14. As I have mentioned, the conduct complained of occurred in January and February 1986 and has not been repeated. The jurisdiction of this Court was attracted, in respect of the claimed contravention of the Trade Practices Act, by s.86 of that statute; the complaint concerning copyright comprised an associated matter within the meaning of s.32 of the Federal Court of Australia Act 1976 ("the Federal Court Act"). Sections 114-125 of the 1968 Copyright Act contain detailed provisions as to the remedies available in actions for infringement of copyright, particularly where the action is bought by the owner and exclusive licensee, as in this case. The remedies available include that of injunction, but the applicants did not seriously press their claim for that relief in the circumstances of this case. The provisions of the Copyright Act that I have mentioned do not in terms identify the declaration as one of the available remedies. However, the terms of s.115(2) indicate that the remedies mentioned there are not listed exhaustively, and it was accepted by the parties that if relief were to be granted in respect of the copyright claim it would be by way of declaration under s.21 of the Federal Court Act.

15. In respect of the claim for contravention of s.52 of the Trade Practices Act, s.163A of that statute provides for the remedy of declaration. Section 80 as it now stands makes it plain that an injunction may be granted even though there is no present threat of contravention or further contravention. This is one of the significant contrasts between the statutory remedy of injunction under s.80 and the remedy of injunction in the inherent jurisdiction of courts of equity. However, again the applicants did not seriously press their claim for injunction and if a remedy were to be awarded for contravention of s.52, it also would be by way of a declaration.

The Trade Practices Claim

16. I turn first to consider the position under the Trade Practices Act.

17. The applicants contend that by failing to go on in the advertisements to state that the re-recording of sound recordings embodying performances by "Madonna" on "Fuji GTI Car Tapes" would, without the permission of the applicants, infringe their copyrights in the sound recordings, the respondent engaged in conduct that was misleading or deceptive or likely to mislead or deceive.

18. Circumstances may arise where a person is aware that his or her silence is conveying an erroneous impression to another and in such a case he or she may come under an obligation to speak out: Bradford House Pty. Ltd. v Leroy Fashion Group Ltd. (1983) ATPR 40-387 at 44,550, a decision of the Full Court. However, non-disclosure does not ordinarily constitute misleading or deceptive conduct which contravenes s.52 of the Trade Practices Act: Rhone-Poulenc Agrochimie S.A. v U.I.M. Chemical Services Pty. Ltd. (1986) 68 ALR 77 at 84-85, 98, 102-103; Collins Marrickville Pty. Ltd. v Henjo Investments Pty. Ltd. (1987) 72 ALR 601; Nobile v The National Australia Bank Limited (1987) ATPR 40-787.

19. The applicants accepted that the reasoning in Rhone-Poulenc (supra), was of central importance to the case. The product in question there did not, in the event, infringe the patent of the first appellant. The debate there as to failure to warn arose from the selling of the product without positively stating (a) it was unregistered under certain State laws and (b) the risks (however slight) of seizure and forfeiture under that legislation.

20. In the present case, I do not discern any relationship between the respondent and the addressees of advertisements for its product which would give rise to a particular obligation to make disclosure as asserted by the applicants or which would lead the Court to hold that a duty of disclosure should be held to arise (cf Rhone-Poulenc (supra) at 85,100). The present case is, indeed, a somewhat plainer one than that in Rhone-Poulenc. There, the element of unlawfulness concerned State laws, the enforcement of which lay with the State authorities; here the failure to disclose concerned conduct that would infringe the civil rights of the applicants themselves. The attitude of the applicants to enforcement of those civil rights thus is a matter of importance. However, it was submitted by the applicants in the present case that nothing of significance followed from the circumstance that if unauthorized copying by members of the public did take place it would be unlikely that the applicants would take steps to enforce their legal rights in respect of copyright infringement by those persons. I disagree.

21. The applicants submitted that, even if it was unlikely that the applicants would enforce their rights, persons encouraged by the advertisements of the respondent to purchase its product and use it to re-tape sound recordings in infringement of the applicants' copyrights, might not have wished to break the copyright law, had disclosure in the advertisements drawn their attention to the legal position. I find this proposition a speculative one, in the absence of evidence as to the habits and attitudes of the class of persons to whom the advertisements were addressed. It has been said on numerous occasions in this Court (notably in McWilliam's Wines Pty. Ltd. v McDonald's System of Australia Pty. Ltd. [1980] FCA 159; (1980) 33 ALR 394 at 399), that the effect of what one might call trade evidence in these cases is not decisive and that ultimately the issue is one for the Court, the ultimate question being whether what is complained of by the applicant amounts to conduct which is misleading or deceptive "against the background of all surrounding circumstances": Taco Company of Australia Inc. v Taco Bell Pty. Ltd. [1982] FCA 136; (1982) 42 ALR 177 at 202. Nevertheless, there are some cases, and this case is one in my view, where submissions to the Court have diminished force unless they are enlivened by evidence as to the circumstances in which the allegedly misleading or deceptive conduct is communicated to those said to be prejudiced by it and the relevant habits and attitudes of such persons. These materials then become part of the "surrounding circumstances".

22. Further, there is force in the submission for the respondent that in the case of the "Madonna" records and cassettes the warning notices to which I have referred sufficiently drew the legal rights of the applicants to the attention of persons about to re-record in breach of the copyright law. I accept that the respondent is not to be fixed with liability in respect of the acts or omissions of persons who, in all the circumstances of the case, failed to take reasonable care of their own interests: Parkdale Custom Built Furniture Pty. Ltd. v Puxu Pty. Ltd. [1982] HCA 44; (1982) 149 CLR 191 at 199. I accept that if listeners to the advertisements in question proceeded to make unauthorized copies of "Madonna" sound recordings without first reading the warning notices they would fail to take reasonable care of their own interests, including their concern (attributed to them by the applicants) not to infringe the copyright law.

23. The applicants also urged that this was a case not of advertisements for a product with various uses but rather of the urging by advertisement of a particular course of conduct which essentially involved invasion of the legal rights of the applicants and of failure to warn of that invasion. But, in truth, the product of the respondent was not susceptible only of what I might call an infringing use, certainly not only of a use infringing the copyrights of the applicants. Further, I accept the submission by the respondent that the thrust of the advertisements was the allegedly desirable physical properties of the respondent's product when compared with competing products and that the advertisements did not encourage in any direct or immediate sense the copying of sound recordings by the particular artists mentioned in the advertisements.

24. In all of these circumstances, I hold that the applicants have not made out their case for contravention of s.52 of the Trade Practices Act.

The Copyright Claim

25. Copyright in relation to a sound recording is the exclusive right, inter alia, to make a record embodying the recording and that exclusive right includes the exclusive right to authorize a person to make a record embodying the recording. These propositions follow from statutory provisions in the 1968 Copyright Act which I have earlier set out, namely ss. 13, 85 and 101. It should however be noted that the concept of authorization appears both directly and indirectly in the statutory description of infringement. That is to say, it appears in terms in the infringement section, s. 101(1) and it also appears indirectly therein because the expression in s.101(1) "any act comprised in the copyright" itself imports the concept of authorization through the operation of ss.13 and 85.

26. The question in the present case is whether, in the events that have happened, the respondent authorized a person to make a record embodying any one or more of the sound recordings in respect of which the applicants have copyright.

27. The concept of "authorization" has quite a lengthy history in Australian law.

28. The Parliament of the Commonwealth has power to make laws with respect to copyright (Constitution, s.51(xviii)). It first exercised that power by the enactment of the Copyright Act 1905 ("the 1905 Act"). The mischief with which that Act was designed to deal appears from the discussion of the subject in Scrutton "The Law of Copyright" 4th ed., Ch. VIII; Quick and Garran "The Annotated Constitution of the Australian Commonwealth" 2'189; and from the learned second reading speech by Senator Keating to the Senate on the Bill that became the 1905 Act (Hansard, Senate, 24 August 1905, pages 1425-1432).

29. The law in force in the Australian colonies as to copyright in published works had been a patchwork of Imperial and colonial legislation; see eg Finn v Pugliese (1918) 18 SR (NSW) 530. The subsistence of copyright in unpublished works was essentially a matter of common law: Pacific Film Laboratories Pty. Ltd. v Federal Commissioner of Taxation [1970] HCA 36; (1970) 121 CLR 154 at 166. The powers of each colonial legislature had extended to works first produced there (International Copyright Act 1886 (Imp)), sub-s. 8(4)). But, in respect of copyrights otherwise subsisting under Imperial law, the powers of the colonial legislatures were seen, in the light of the Colonial Laws Validity Act (1865)(Imp), as limited to enactments for registration and for imposition of penalties with a view to the more effective prevention of piracy. The result had been much variation between the laws in force in the various colonies and, by 1905, in the States. Senator Keating gave numerous and striking examples of this variation in his second reading speech.

30. The 1905 Act achieved the uniformity previously lacking between State laws. It dealt with literary, musical and dramatic works, published or performed (as the case might be) in Australia before or simultaneously with first publication elsewhere, and with artistic works made in Australia. It did not restrict the operation of Imperial laws enforced in Australia but, by dint of s.62, the 1905 Act provided for works protected under those laws to acquire, by registration, the additional protections against infringement given by the 1905 Act (see s.62 thereof).

31. The notion of infringement by "authorization", central to the present case, was introduced by ss. 13, 14 and 34 of the 1905 Act. These provided as follows:-

13. (1.) The copyright in a book means the
exclusive right to do, or authorize another
person to do, all or any of the following
things in respect of it:-

(a) To make copies of it:

(b) To abridge it:

(c) To translate it:

(d) In the case of a dramatic work, to
convert it into a novel or
other non-dramatic work:

(e) In the case of a novel or other
non-dramatic work, to convert
it into a dramatic work: and

(f) In the case of a musical work, to
make any new adaptation,
transposition, arrangement, or
setting of it, or of
any part of it, in any
notation.

(2.) Copyright shall subsist in every book,
whether the author is a British subject or
not, which has been printed from type set up
in Australia, or plates made therefrom, or
from plates or negatives made in Australia
in cases where type is not necessarily
used, and has, after the commencement of
this Act, been published in Australia,
before or simultaneously with its first
publication elsewhere.

14. (1.) The performing right in a dramatic or
musical work means the exclusive right to
perform it, or authorize its performance, in
public.

(2.)Performing right shall subsist in every
dramatic or musical work, whether the author
is a British subject or not, which has,
after the commencement of this Act, been
performed in public in Australia, before or
simultaneously with its first performance
in public elsewhere.

34. The copyright in an artistic work means the
exclusive right of the owner of the
copyright to reproduce or authorize another
person to reproduce the artistic work, or
any material part of it, in any manner,
form, or size, in any material, or by any
process, or for any purpose.

The expression "simultaneously" in these provisions meant within 14 days (s.5). The 1905 Act was repealed by s.4 of the Copyright Act 1912 ("the 1912 Act") which carried into operation in Australia the Copyright Act 1911 (U.K.)("the 1911 Act"): Copyright Owners Reproduction Society Limited v E.M.I. (Australia) Pty. Ltd. [1958] HCA 54; (1958) 100 CLR 597. Sub-section 1(2) of the 1911 Act retained the concept of authorization as a species of infringement. That Act has been treated, even in Australian decisions, as introducing it although, as I have indicated, that was not so. The provision in the 1911 Act was as follow:

1. (2) For the purposes of this Act,
'copyright' means the sole right to produce
or reproduce the work or any substantial
part thereof in any material form
whatsoever, to perform, or in the case of a
lecture to deliver, the work or any
substantial part thereof in public; if the
work is unpublished to publish the work or
any substantial part thereof; and shall
include the sole right, -

(a) to produce, reproduce, perform, or
publish any translation of the
work;

(b) in the case of a dramatic work, to
convert it into a novel or other
non-dramatic work;

(c) in the case of a novel or other
non-dramatic work, or of an
artistic work, to convert it into
a dramatic work, by way of
performance in public or
otherwise;

(d) in the case of a literary,
dramatic, or musical work, to make
any record, perforated roll,
cinematograph film, or other
contrivance by means of which the
work may be mechanically performed
or delivered,

and to authorize any such acts as aforesaid.

The introduction of the concept of "authorization" plainly was designed to meet perceived deficiencies in existing legislation. Thus, the lessee of a hotel who employed a band to play there did not "lawfully cause or permit an authorized performance (of certain musical works) knowing it to be unauthorized" within the meaning of s.3 of the Copyright (Musical Compositions) Act (1888)(Imp): Sarpy v Holland (1908) 2 Ch. 198 at 199. The word "cause" was deliberately discarded in favour of "authorize"; Winstone v Wurlitzer Automatic Phonograph Co. of Australia Pty. Ltd. (1946) VLR 338 at 344.

32. It should be added that infringement of copyright statutes for long has been considered tortious, so as to make applicable the common law principles as to liability of joint tortfeasors. However, those principles would not have provided an answer for plaintiffs in cases such as Sarpy v Holland (supra). This was because the circumstance that two or more persons assisted or concurred in or contributed to an act causing damage is not of itself sufficient to found joint liability; some common design is necessary: Morton-Norwich Products Inc. v Intercen Ltd. (1978) RPC 501 at 515-516. The position in the United States as regards liability at general law for common design to effect infringement of copyright created by federal law is unsettled: Nimmer on Copyright 2'12.04 (A) fn 4.

33. Where the infringer is a corporation questions frequently arise as to the degree of involvement on the part of directors necessary for them to be rendered personally liable. Those questions are not immediately answered by principles dealing with "authorization" or joint tortfeasance. Rather, recourse is to be had to the body of authority which explains the circumstances in which an officer of a corporation is personally liable for the torts of the corporation: Polaroid Corporation v Sole N Pty. Ltd.(1981) 1 NSWLR 491 at 498, C. Evans and Sons Ltd v Spritebrand Ltd. (1985) 1 WLR 317, Kalamazoo (Aust) Pty. Ltd. v Compact Business Systems Pty. Ltd. (1985) 84 FLR 101 at 127; cf Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661. The present is not such a case. Nor is there any issue as to vicarious liability of an employer for the torts of an employee.

34. The first question that arose with the introduction of "authorization" into the legislation was whether it added anything to the common law principles governing the liability of joint tortfeasors and, if it did so, whether it was conceptually distinct from those principles.

35. Scrutton L.J. expressed the view that the inclusion of the word "authorize" in s.1 of the 1911 Act was superfluous: Performing Rights Society Ltd. v Ciryl Theatrical Syndicate Ltd. (1924) 1 KB 1 at 12. So did McCardie J.: Performing Rights Society Ltd. v Mitchell and Booker (Palais De Danse) Ltd. (1924) 1 KB 762 at 773. But that was a view that did not prevail. It was clear after Ash v Hutchinson and Co. (Publishers) Ltd. (1936) 1 Ch. 489, that the 1911 Act gave, for example, the owner of copyright in a literary work both the sole right of reproducing it and the sole right of authorizing such reproduction and that those rights were separate and distinct so that infringement of each was a distinct tort. That the same was true of "authorization" in respect of the 1968 Act was accepted by the High Court in The University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1.

36. However, the circumstance that the concept of "authorization" in the legislation had its own independent operation from what one might call primary infringement, did not exclude the general law principles dealing with joint-tortfeasors from operation upon primary infringement.

37. Thus, in Ravenscroft v Herbert (1980) RPC 193 at 209-210, the plaintiff complained of publication by the second defendant of a manuscript of the first defendant which allegedly infringed copyright in the plaintiff's literary work. Brightman J. (as he then was) held that the first defendant was liable with the second defendant as a joint-tortfeasor, by reason of a common design between them for publication of the manuscript. See also Amstrad Consumer Electronics PLC v The British Phonographic Industry Ltd. (1986) FSR 159 at 210-213.

38. The question then arose as to what was meant by "authorization" on the footing that it was not mere surplusage and that it did not merely reproduce the common law principles as to joint-tortfeasance. Uninstructed by authority, one might have thought that the existence of the common law principles provided some support against an overly expansive view of what constituted authorization and in favour of a view which gave authorization a discrete area of operation readily distinguishable from joint tortfeasance.

39. In the United States, the federal law, The Copyright Act 1976, 17 USC s.106, confers upon the owner of copyright the exclusive rights to "do and to authorize" various acts. Use of the phrase "to authorize" was intended by the Congress to avoid any questions as to the liability of contributory infringers. For example, a person who lawfully acquired an authorized copy of a motion picture would be an infringer if he or she engaged in the business of renting it to others for purposes of unauthorized performance: The House Report on The Copyright Act of 1976, 2'61.

40. The doctrine of "contributory infringement" under earlier United States statutes had been subject of much discussion in the authorities. It appears to have been a gloss upon the words of the legislation, rather than an express provision. Hence the comments above in the House Report on the 1976 Act: Nimmer on Copyright 2'12.04(A). In Gershwin Publishing Corp. v Columbia Artists Management Inc. [1971] USCA2 378; (1971) 443 F 2d 1159 at 1162, the Court of Appeals for the Second Circuit, stated that "one who, with knowledge of the infringing activity induces, causes or materially contributes to the infringing conduct of another, may be held liable as a "contributory" infringer." Earlier, Holmes J. (in Kalem Co. v Harper Bros. [1911] USSC 131; (1911) 222 U.S. 55 at 63) had said that liability for "contributory" infringement proceeded on "principles recognised in every part of the law." He cited three authorities for that proposition, two of which dealt with contributory infringement of patents (cf Walker v Alemite Corp. [1933] HCA 39; (1933) 49 CLR 643 at 657-8) and one with aiding and abetting and criminal conspiracy (cf Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661).

41. In Sony Corporation of America v Universal City Studios [1984] USSC 14; (1984) 464 U.S. 417, whilst the Supreme Court referred to s.106 of the 1976 Act, which speaks of "authorization", it proceeded on the footing that s.106 imported the pre-existing doctrine of contributory infringement. In the District Court ((1979) 480 F Supp 429 at 457-8) it had been said that the lines between direct infringement, contributory infringement and vicarious liability were not clearly drawn. Of that observation, the majority of the Supreme Court said (464 U.S. at 435):

The lack of clarity in this area may, in part, be
attributable to the fact that an infringer is not
merely one who uses a work without authorization
by the copyright owner but also one who
authorizes the use of a copyrighted work without
actual authority from the copyright owner.

42. In the event, the Supreme Court in the Sony Case (by majority) held, inter alia, that (a) the reasoning of Holmes J. had been applied in cases where the "contributory" infringer "was in a position to control the use of copyrighted works by others and had authorized the use without permission from the copyright owner" (464 U.S. at 437), (b) "the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial non-infringing uses." (464 U.S. at 442), (c) the only contact between the appellant Sony and the users of its home video tape recorders was at the moment of sale, (d) the Sony machines were capable of commercially significant non-infringing uses, and (e) whilst there was evidence of taping on Sony machines by particular witnesses of particular films in which the respondent owned copyright, and whilst Sony's advertising was silent on the subject of possible copyright infringement by taping programmes off the air, there was no evidence that the witnesses had been influenced or encouraged by those advertisements. The conclusion was that there was no contributory infringement by Sony. The majority rejected any doctrine that the advertising and sale of equipment with "constructive knowledge" that customers might use it to make unauthorized copies of copyright material in a general sense amounted to infringement.

43. The result is to give to the concepts of "authorization" and "contributory infringement" an operation in the United States apparently no wider than currently given to "authorization" in the Australian and English cases, to which I turn.

44. The evolution of the meaning of "authorization" in the 1911 Act and the 1968 Act has pursued perhaps an even more tortuous course than the doctrine of contributory infringement in the United States. One view of the 1911 Act was that the expression "to authorize" described a situation where the defendant purported to confer on a third party, for example as an agent or licensee, a right or authority to perform activity which in truth would be, if carried out, an infringement of the plaintiff's copyright: Transatlantic Film Co. Ltd. v Albion Cinema Supplies Co. (1917-23) Macg. C.C. 118 at 121, Finn v Pugliese (1918) 18 SR NSW 530 at 541, Evans v E. Hulton and Co. Ltd. (1924) WN 130 at 131, Falcon v Famous Players Film Co. (1926) 2 KB 474 at 499. This would have given to "authorization" a conceptually distinct field of operation from that of principles of joint tortfeasance.

45. Further, such an interpretation might be thought to draw strength from the expanded references to "authorization" in the 1968 Act. As I have indicated, the term appears not only in the provisions dealing with primary infringement of copyright in works (s.36) and in subject matter other than works (s.101) but also in s.13 which speaks of "the exclusive right to authorize a person...". It might be thought that authorization was a statutory tort catching those who purport to have power or authority to license the activity of the primary infringer and that it was concerned with appropriation of the right of the copyright owner to license the acts comprised in his or her copyright.

46. Certainly the concept of "authorization" applies to such a situation. An illustration is provided by Finn v Pugliese (1918) 18 SR (NSW) 530 at 541, where the defendant was fixed with liability for authorization for having directly and expressly agreed with another party to produce for him a film from a screen play which infringed the plaintiff's copyright in a novel.

47. But the course of authority has shown that the concept of "authorization" is not so confined. In The University of New South Wales v Moorhouse (supra), a case concerning the 1968 Act, the High Court, following The Corporation of the City of Adelaide v The Australasian Performing Right Association Ltd. [1928] HCA 10; (1928) 40 CLR 481 at 489, accepted that the word "authorized" as used in s.36 of the 1968 Act had the meaning of "sanction, approve, countenance". This meant that express or formal permission or active conduct indicating approval was not essential to constitute an authorization. That view has not always been accepted in England in recent times. In Amstrad Consumer Electronics PLC v The British Phonographic Industry Ltd. (1986) FSR 159 at 207, Lawton L.J., speaking of the current United Kingdom legislation (Copyright Act,1956), said that the concept of granting or purporting to grant to a third person the right to do the act complained of came much nearer to the meaning of the word "authorize" than the synonyms approved by the High Court of Australia in The University of New South Wales v Moorhouse (supra). Be that as it may, the position in Australia with respect to the 1968 Act is presently settled by Moorhouse's Case.

48. The question has then arisen, as in the United States of what degree of connection or control is necessary between the alleged authorizer and the primary infringer, particularly where the primary infringer has used equipment made available or supplied by the alleged authorizer or that party has provided equipment used in conjunction with other equipment to effect the primary infringement. Thus, in Moorhouse's Case the controversy surrounded the use of photo-copying machines made available in the university library, and in CBS Inc. v Ames Records and Tapes Ltd. (1982) Ch. 91, the defendant had set up a "library" for the lending of records for a fee to members of the public who allegedly used the records to make unauthorized copies on "home-taping" equipment. In the latter case the defendant was not liable for "authorization"; the result no doubt would have been different if the re-taping had taken place on the defendant's premises with a machine made available by him: RCA Records v All-Fast Systems Inc. (1984) 594 F Supp. 335.

49. It is not necessary in this case to express any general views as to what necessary element of connection or control must exist for there to be an authorization of infringement. This case primarily concerns an allied but distinct question.

50. As I have indicated, in this case the applicants have not shown any direct connection or control between the respondent and any unauthorized reproduction of the sound recordings in respect of which the applicants hold copyrights; further, it has not even been shown that there has been any unauthorized reproduction by any particular person of any of the sound recordings in which the applicants hold copyright. Can it be said that in those circumstances there has been any "authorization" by the respondent? The chain of authority on this question starts in the years immediately following the commencement of the 1911 Act.

51. Of the 1911 Act, the editor of the 5th (1915) edition of Copinger on Copyright, observed (p.136):-

It would also seem that the new Act has enlarged
the protection accorded to the owner of a
copyright by thus making it part of his monopoly
to "authorise" any of the acts referred to in
sub-sect. (2) of sect.1, and that a person may be
liable to an action for infringement of copyright
if he has, without the consent of the owner of
the copyright, "authorised" any of those acts,
although the authorised act has not been
completed. Under the old law a person was only
liable if he "caused" a work to be performed or
printed, and in the case of Russell v Briant
[1849] EngR 1167; (1849) 8 C.B. 836 at 848; [1849] EngR 1167; 137 ER 737 (a case
under the 1833 Act) Wilde, C.J., says, "No one
can be considered as an offender against the
provisions of the Act so as to subject himself to
an action of this nature, unless by himself or
his agent he actually takes part in a
representation which is a violation of
copyright." Again, in the case of Karno v Pathe
Freres (1909) 100 LT 260, it was held that a
person who sold cinematograph films, knowing that
the purchasers intended to exhibit them publicly,
had not "caused to be represented" the
plaintiff's sketch from which the films were
taken. But, under the new Act, where the
defendant had announced, by means of posters and
handbills, their intention to exhibit a
cinematograph film in which the plaintiffs had
the copyright, at certain theatres, the
defendants had authorised "a performance of the
film" within the meaning of sect.2(1) of the Act
and were consequently liable in damages (Fenning
Film Service v Wolverhampton, Walsall and
District Cinemas Ltd. (1914) 3 KB 1171).

52. However, in Performing Right Society Ltd. v Mitchell and Booker (Palais De Danse)Ltd. (1924) 1 KB 762 at 773, McCardie J. plainly regarded the Fenning Film Service Case as wrongly decided, a view evidently shared by the current editors of Copinger (see the 12th edition, para. 509).

53. In RCA Corporation v John Fairfax & Son Ltd. (1981) 1 NSWLR 251, Kearney J. held that an infringement of copyright under s.101 of the 1968 Act, constituted by authorization, was not complete unless there was in fact an act of infringement of copyright of the kind allegedly authorized. His Honour's reasoning appears at pages 256-258 of the report. This passage was set out with evident approval by Whitford J. in his judgment at first instance in Amstrad Consumer Electronics PLC v The British Phonographic Industry Ltd. (1986) FSR 159 at 187-189, although, as his Lordship pointed out, the case for him was one where there was evidence of commission of primary infringements.

54. The decision of Kearney J. upon this point was followed by McLelland J. in Copyright Agency Ltd. v Haines (1982) 1 NSWLR 182 at 191. On appeal to the Full Court of this Court the question of the meaning of "authorization" was left open and the decision was affirmed on other grounds, (1982) 64 FLR 184 at 196. The decision of McLelland J. also is authority for the proposition that whilst the cause of action for authorization of infringement is not complete without the final event that I have described, the Court may nevertheless in an appropriate case enjoin a defendant in respect of authorization where the commission of the primary infringement is apprehended quia timet.

55. The present is, as I have indicated, not a case where there is any ground for quia timet injunctive relief. It is rather a case in which all that the applicants can show, to put their case at the highest, is the taking by the respondent of steps towards commission of the wrong of authorization without the final integer of primary infringement, the necessity of which was emphasized in the decisions of the New South Wales Supreme Court to which I have referred. Those decisions are, in my respectful view, correct and I follow them.

56. They rest upon the view that, in the setting of the present case, the statutory description of authorizing a person to make a record embodying a sound recording in which the applicants have copyright, is not satisfied until such a person has acted upon the authority purportedly conferred. The contrary view would produce a situation where, as McCardie J. pointed out in Performing Rights Society Ltd. v Mitchell and Booker (Palais De Danse) Ltd. (1924) 1 KB 762 at 773, a defendant would be liable in damages for authorizing a performance or other primary infringement which in fact never took place.

57. I should add that, in any event, I accept the submissions of the respondent that the applicants' case fails for an additional reason. The respondent submits that particularly when the advertisements in question are listened to rather than their text read, the general impression is one of promotion of the virtues of the physical properties of the respondent's product in comparison with the properties of other products. I agree. As Kearney J. observed in respect of the printed material, the subject of the complaint in RCA Corporation v John Fairfax & Sons Ltd. (1981) 1 NSWLR 251 at 260, these are matters essentially of first impression. In my view, the substance of the colourful and somewhat exaggerated language of the advertisements is not an invitation or incitement to or approval of the reproduction of sound recordings by "Madonna" for which copyrights are held by the applicants. Accordingly, the applicants have not established the necessary first step in the case for "authorization". There has not been the necessary sanction approval or countenance of copyright infringement in the sense of the authorities.

58. It follows that the proceedings must be dismissed and that the applicants should pay the costs of the respondent.