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Telstra loses as copyright blowback continues

Yet another Australian copyright decision, this one handed down on 10 February, has gone against the pro-copyright owner trend of recent decades.

Telstra and Sensis have lost in the Federal Court of Australia before Justice Michelle Gordon in seeking to protect claimed copyright in White Pages and Yellow Pages.

The defendants were Phone Directories Company Pty Ltd, its directors and others. The company has been competing against Telstra/Sensis since the mid-1990s. Cleverly, at least initially the business of Phone Directories Company Pty Ltd produced directories for regional areas, places where Telstra was not active or not greatly active.
I gave that phone directory company (based in Queensland) serious written legal advice in the mid-1990s. Today it won its defence against Telstra's case, both represented by their current large law firms.
 
The decision is a surprise because it went the other way to what is known as the Desktop Marketing case. That case began in 1999 and finally reached a conclusion in 2002. There too Telstra and its allies were the plaintiffs, ie those who started the fight. In that case Desktop Marketing Systems was a CD-ROM phone directory company based in Melbourne. It lost and subsequently went into liquidation.
 
My personal interest is that I spoke in the late 1990s a few times with the CEO of Desktop Marketing when he was hunting for legal advisers as Telstra was mounting its attack. I was not hopeful about his prospects.
 
The telephone directory case today is reported here: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44.

Why did Telstra lose this case?

In my first scan reading three paragraphs of the 347 paragraph decision stood out. I've reproduced those paragraphs 44, 45 and 340 below, followed by brief observations.
 
"III APPLICANTS’ APPROACH TO THE QUESTION OF SUBSISTENCE REJECTED
...
 
44. Whether the Applicants [ie Telstra Corporation Ltd and Sensis Pty Ltd] could claim ownership in the intellectual property of the Works was an issue that arose throughout the course of the hearing. Copyright in a literary work made by an employee is ordinarily owned by the employer: s 35(6) of the Copyright Act. The Applicants had three responses. First, they submitted that any question of ownership was not relevant to the question of subsistence. Secondly, the Applicants submitted the question itself was “at the margins” as the evidence established that where there was any “gap” in ownership (such as where contractors who were not employees of Sensis were engaged to work on the production of the Works), that “gap” was of a relatively minor consequence. Finally, the Applicants submitted that if a person or entity other than one of the Applicants had contributed to one or more of the Works, then that person was simply a co-owner (regardless of whether that person or entity was capable of being identified) and, as a co-owner, the Applicants were entitled to move to protect the copyright without the consent of the other co-owner.
 
45. These submissions should be rejected. It would be absurd to assume that I am bound only to determine whether copyright subsists in the Works whilst ignoring any question of ownership. Copyright is a form of property created by statute for the benefit of the author or authors who, in the absence of some other arrangement, is the owner or are the owners of the work. Whether or not the Applicants are owners of the copyright (if any) in the Works is a matter to be determined by the evidence. The Applicants’ evidence on this issue comprised in excess of 91 affidavits. Simply accepting the Applicants’ assertion that their evidence demonstrates ownership of intellectual property and that the issue is “at the margins” is unhelpful. As I have said earlier, I am bound to determine the matter in accordance with the evidence presented. It is not a matter that can be ignored or be the subject of presumptions."
 
executive_fight_iStock[LIGHTBULB TAKE - It seems Justice Gordon is making what we might term a "classical" reading of copyright, ie before digital media was put under the legal umbrella of copyright law where it has since fit, sometimes uncomfortably, hence leading to a run towards patent coverage by those who can afford it. Justice Gordon is looking for the classical dots to be joined. She sees directory data compiled by by armies of Telstra/Sensis employees and contractors and she wants their names in evidence, she wants to see such creators assigning their copyright to Telstra, she wants more in those 91 affidavits than she finds. It seems Telstra did not have or did not include such a granular level of evidence.
 
Elsewhere in his judgement Justice Gordon drills down into the area which has indeed troubled copyright lawyers for more than two decades, the question of copyright in databases. Very broadly and simply stated, not every lawyer can see an easy or convincing analogy between traditional works of copyright versus WHAT forms a database and WHO forms it. Putting that another way, what forms a phone directory database and who writes it is not necessarily what the copyright law created for authors of recorded music was designed to protect. Moreover, Justice Gordon is recognising the change in law signalled by the High Court in IceTV Pty Limited v Nine Network Australia Pty Limited [2009] HCA 14; (2009) 254 ALR 386.
 
More broadly, Justice Gordon's decision puts Australian copyright law for telepone directories (and maybe other similar databases) in line with the U.S. position reached in the 1990s in the Feist decision made by none other than the US Supreme Court.  Justice Gordon made no reference to that case. She does, however, quote in paragraph 29 the eminent UK copyright academic, Professor Cornish, on the reason for being of the Database Directive in the EU. In short, EU lawyers/parliaments thought they needed it as relational databases in their view did not neatly fit into classical notions about copyright subjectmatter and authorship. The Directive supports what lawyers call a "Sui generis right", in effect a right given for a specific species of property, here being relational databases.]

"ORIGINALITY

340. None of the Works were original. None of the people said to be authors of the Works exercised “independent intellectual effort” or “sufficient effort of a literary nature” in creating the Works. Further, if necessary, the creation of the Works did not involve some “creative spark” or the exercise of the requisite “skill and judgment”. I accept that production of the directories is a large enterprise populated by many contributors (ignoring for the moment the determinative difficulties with authorship outlined above). Many of the witnesses gave evidence that was direct and appropriate, and I accept that they work hard in their respective capacities."

[LIGHTBULB TAKE - Justice Gordon again taking a classical approach, and that is not a criticism.]
 
 
Finally, like all major court decision many more readings are necessarily to test the above and draw further from the decision, which on our bet is likely to be appealed.

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