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Focus: Database copyright in turmoil – Judge points to Canberra

11 February 2010

In brief: A single judge of the Federal Court has held that copyright does not subsist in the White Pages and the Yellow Pages. Partner Jackie O'Brien and Lawyer Gary Lo report on a decision that has important ramifications for the copyright in compilations of factual information.

• Compilations as literary works
• The High Court's judgment in IceTV
• The present case
• The decision
• The evidence on the authors of the Directories
• Analysis
• Conclusion

Compilations as literary works

Telephone directories, television guides, public transport timetables and other works consisting of compiled factual information are categorised under the Copyright Act 1969 (Cth) (the Act) as 'compilations'. A compilation may enjoy copyright protection under the Act as a 'literary work', but in order to do so, it must satisfy certain requirements, one of which is that the compilation be 'original'.

Whether compilations of factual data that have little or no creativity in their expression qualify as 'original literary works' has been a vexed question that has met with inconsistent responses internationally. In the United States, the courts have ruled that compilations must have a 'modicum of creativity' in order to be protected. The idea that the significant expenditure of labour in compiling the information is enough to warrant copyright protection has been rejected. In the UK, the opposite holds true – the courts look at the 'sweat of the brow' expended in the production of the compilation in establishing whether the requisite originality is present. The European Union, in recognition of the fact that compilations may not qualify for copyright protection in the domestic laws of its member states, has issued a directive protecting non-original databases.

Up until recently, Australian courts had closely followed the UK line of reasoning. The leading Australian cases held that originality could be found in the labour and expense of collecting, verifying, recording and assembling factual data.

The High Court's judgment in IceTV

In a watershed judgment handed down in April last year, the High Court effectively scaled back the protection that Australian copyright law provided to compilations.¹

The IceTV case concerned the copyright in the time and title information in Channel Nine's television programme guides. The court was unanimous in the view that the compilation lacked the requisite originality to be afforded copyright protection as there were so few ways to express that information. The chronological arrangement of times at which programs are to be broadcast was 'obvious and prosaic'. Did this mean that a 'creative spark' was required for a compilation to be considered original? The court did not say so expressly, but it would seem that mere 'industrious collection' in compiling data was no longer sufficient.

For Justices Gummow, Hayne and Heydon, a key gap in Nine's case was the failure to identify the authors of the compilations. Their Honours held that:

To proceed without identifying the work in suit and without informing the enquiry by identifying the author and the relevant time of making or first publication, may cause the formulation of the issues presented to the court to go awry.2

The present case

In 2007, Telstra and Sensis launched proceedings in the Federal Court against Phone Directories Company and Australian Local Directories, claiming amongst other things that the telephone directories published by those companies infringed the copyright in the published editions of the White Pages and Yellow Pages (the Directories).

At that time, the issue of whether copyright subsisted in the Directories was generally considered to be well settled. In a landmark case heard by the Full Court of the Federal Court in 2002, Telstra had successfully argued that Desktop Marketing Systems Pty Ltd, a producer of CD-ROM telephone directories, infringed Telstra's copyright in the Directories.³ The Full Court had ruled that the Directories possessed the requisite level of originality to enjoy copyright protection, and this case was considered to be the leading authority on the area of copyright in compilations. Importantly, Desktop Marketing had argued the case on the basis that the exercise of substantial labour did not amount to originality; it had not made any submissions that Telstra had not employed substantial labour in the production of the Directories. The evidence that Telstra filed on the labour involved in the creation of the Directories went unchallenged.

In the present case⁴, Telstra and Sensis argued that once the relevant work is identified, all that is required to prove the subsistence of copyright is to identify some intellectual effort in the ultimate creation of the works, and that there was no need to identify the author (or authors) of the work. They placed reliance on sections 128 and 129 of the Act, which provide that certain presumptions can be relied upon in relation to copyright subsistence, including that where a work is published anonymously or pseudonymously and the identity of the author is not generally known, the work can be presumed to be an original work. Telstra and Sensis argued that these presumptions meant that it was not necessary to identify the name of every author of a work.

The decision

The question of whether copyright subsisted in the Directories at all was tried as a preliminary question. Justice Gordon held that copyright did not subsist in the Directories because:

• Telstra and Sensis failed to identify the authors of the Directories;
• even if the people who contributed to the Directories were capable of identification, the contribution of such people:
  • did not possess the 'independent intellectual effort' or 'sufficient effort of a literary nature' for those who made the contribution to be considered authors of the Directories;
  • would have occurred prior to the Directories first taking material form; and
  • was not the result of human authorship, but rather, was computer generated.
• the works were not 'original works' as they did not involve 'independent intellectual effort' or the exercise of 'sufficient effort of a literary nature'.

The issue of authorship was of central importance to Justice Gordon. Her Honour rejected the submission from Telstra and Sensis that there was no need to identify the authors of the work and held that their reliance on the presumptions in ss 128 and 129 of the Act was misplaced. For Justice Gordon, there was an important distinction between identifying an author (or authors) of a work and determining the identity of the authors of a work. Where no author can be identified at all (as opposed to the exact identity of an author), copyright cannot subsist. On one view, this is a fine distinction to make, but for Justice Gordon it was key.

The evidence on the authors of the Directories

Telstra and Sensis had gone to significant lengths to put on evidence on the authors of the Directories by filing 91 affidavits on the issue. Justice Gordon examined this evidence and found it lacking in the following respects:

• the process of creating the Directories was primarily automated, involving a computer system named the Genesis Computer System and supporting software. Telstra and Sensis failed to identify the parts of these programs that it had created;
• the expression of the material compiled in the Directories was governed by a set of rules (the Rules). The Rules covered matters such as the font used in the Directories and 'unacceptable' words that could not be included in the Directories. Telstra and Sensis had failed to identify the creator of the Rules; and
• the Rules were programmed into the Genesis Computer System, and thereby operated automatically. To the extent that any people were involved in the manual application of the Rules, they had no discretion to depart from the Rules. As such, these people did not exercise any 'independent intellectual effort' or 'sufficient effort of a literary nature'.

Analysis

On one view, the approach adopted by Justice Gordon is not surprising in light of the High Court's emphasis on the importance of establishing authorship in the IceTV case and the court's rejection of the concept that mere industrious effort in collecting data will satisfy the requirement of originality. Justice Gordon has, however, arguably taken the High Court's comments on establishing authorship to its extreme, requiring evidence on each and every contribution made by humans that resulted in the Directories, from the creator (or creators) of the formatting rules governing the Directories to the developers of the software used in the production of the Directories. Clearly, there would be significant practical hurdles with producing such evidence for compilations that were developed using a large pool of resources, and where such developments occurred over a long period of time, as was the case here.

Even if it were possible to provide such evidence, Justice Gordon's judgment suggests that a compilation will not have 'authors' for the purposes of the Act if the contribution made by humans to the 'material form' of the compilation did not involve some level of 'intellectual effort' or 'effort of a literary nature'. Some 'creative spark' is required, and such creativity cannot be found in an automated process.

This case is a major setback for producers of compilations of factual data. There are, of course, good policy reasons why such compilations should be afforded copyright protection. The development of these compilations often requires an enormous commitment of resources, and if the result can be copied by anyone without liability there would be no business case for investing in the creation of such compilations.

This is an issue acknowledged by Justice Gordon in her judgment. Her Honour's view is that the protection of non-original databases is a matter for Parliament, and it is one that they should address 'without delay'.

Conclusion

This case continues the shift away from the protection of factual compilations that started with IceTV. However, as it is a first instance decision, this case does not bind any other court (though it may be considered persuasive), and it is subject to appeal by Telstra and Sensis. The Full Court's decision in Desktop was not overruled by the High Court in IceTV and is therefore still authoritative. That said, the High Court did warn that the Desktop case should be treated with care. Certainly, the principles expressed in Desktop do not sit well with IceTV.

This is very much a case of 'watch this space'. Until Desktop is expressly overruled, stakeholders should treat copyright in compilations with caution. The authorities indicate a shift away from copyright protection of factual compilations, but the game is not over yet.

Footnotes

1. IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 254 ALR 386.
2. Ibid. at [105].
3. Desktop Marketing Systems Pty Ltd v Telstra Corp Ltd (2002) 192 ALR 433.
4. Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44.

For further information, please contact:

• Tim GolderPartner, Melbourne
  Ph: +61 3 9613 8925
  Tim.Golder@aar.com.au
• Peter JamesPartner, Brisbane
  Ph: +61 7 3334 3360
  Peter.James@aar.com.au