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HG Alert: High Court Casts Doubt on Subsistence of Copyright in Compilations - Apr 2009

Since the decision of the Full Federal Court in Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 55 IPR 1, a compilation of factual information has been considered to ordinarily be an original literary work for copyright purposes if the compiler has undertaken substantial labour or incurred substantial expense in collecting the information recorded in the compilation (at para 409).
This “sweat of the brow” principle entitled Telstra in the Desktop Marketing Systems case to copyright protection in its telephone directory compilations. Interestingly, the High Court rejected an application to appeal that decision on 20 June 2003.

This meant that compilations such as telephone directories, television programming schedules, sporting fixtures, transport timetables and the like were considered to be protected by copyright so long as substantial labour and expense (which exceeds a minimum threshold) was expended in collecting the information, without the need for illustrating that creative skill, judgement, knowledge or intellectual effort was employed.

This had the practical effect of affording copyright protection to compilers of simple factual information (so long as the required labour or expense threshold was met), and therefore a monopoly of access to the advertising and other revenue which could be derived from the dissemination of compilations such as telephone directories, etc.

The High Court has this week cast doubt upon the “sweat of the brow” principle in its decision in IceTV Pty Limited & Anor v Nine Network Australia Pty Limited [2009] HCA 14, 22 April 2009, S415/2008. In this case, the High Court was not required to decide the issue of subsistence of copyright, as the parties had already acknowledged and proceeded with the litigation on the basis that copyright in the relevant material existed, and therefore its comments in this regard are obiter dicta.

Interestingly, the Court had granted leave to Telstra Corporation Limited and the Australian Digital Alliance Limited to appear in the proceedings. The Digital Alliance had asked the Court to consider the Full Federal Court’s decision in Desktop Marketing and, “to the contrary of Desktop Marketing, affirm that there must be some “creative spark” or exercise of “skill and judgement” before a work is sufficiently “original” for the subsistence of copyright” (at para 187).

For the reason stated above, the Court did not consider it appropriate to deal in any detail with the issue of originality of copyright, however, the Court did indicate very clearly that there is a “need to treat with some caution the emphasis in Desktop Marketing upon “labour and expense” per se” (at para 188).

Reference was made to the decision of the Supreme Court of the United States in Feist Publications Inc v Rural Telephone Service Co Inc 499 US 340 (1991) (the decision which referred to the “creative spark” test, and a decision which Desktop Marketing Systems sought to rely upon in the earlier Desktop Marketing v Telstra case), in which, the High Court stated, “it was recognised…that copyright in a factual compilation is necessarily “thin” because the standard for originality should not be such that copyright owners have a monopoly on facts or information. Ultimately the decision turned … on the view that “the primary objective of copyright is not to reward the labor of authors, but ‘to promote the Progress of Science and useful Arts’”(at para 46, quoting Feist (in turn quoting the Constitution of the United States of America)).

Accordingly, the decision has paved the way for argument that something more than “significant labour or expense” is required in order to attract copyright in a compilation of factual information, and that the creative exercise of skill or judgement, or the application of intellectual effort, may be required in the selection or arrangement of the relevant material (see further the discussion in the loose leaf service Lahore, Copyright and Designs, Volume 1 at para [10,115]). This will potentially have broad ramifications for access to advertising revenue in connection with the publication of various kinds of factual compilations, without the need for the payment of a licence to the compiler.