Copyright in Databases and Compilations: The Telstra Telephone Directories Case

Does copyright subsist in a database or compilation under Australian law?

Telstra Corporation Limited & Anor v Phone Directories Company Pty Ltd &Ors [2010] FCA 44 (8 February 2010)

Overview

The February 2010 decision of the Federal Court in Telstra Corporation Limited & Anor v Phone Directories Company Pty Ltd & Ors [2010] FCA 44 (Telstra Directories Case) raises significant obstacles to any party seeking to establish copyright in databases compiled from factual information.

In the Telstra Directories Case, her Honour Justice Gordon was required to consider whether copyright subsisted in various telephone directories. Justice Gordon determined that the telephone directories were not original literary works in which copyright could subsist. In reaching this decision, Justice Gordon considered the issues of authorship and originality to be closely tied.

The Telstra Directories Case highlights the difficulties that owners of compilations and databases face in relying on copyright law to prevent misappropriation of their works. In light of Justice Gordon's decision, it is clear that not all compilations and databases will be protected by copyright, regardless of whether significant investment and labour has been involved in their creation. The decision has bee appealed.

Unlike other jurisdictions, Australia does not have a specific law which protects the rights in databases. This decision will give ammunition to those parties seeking Australian legislative change for the creation of a database right.

Background

Telstra and Sensis

Sensis Pty Ltd (Sensis) is a wholly owned subsidiary of Telstra Corporation Limited (Telstra). Sensis is the publisher of White and Yellow Pages telephone directories (the Directories). Sensis earns substantial revenues in persuading customers to update free entries in the Directories, for example, to display more information or otherwise enhance the listing. In the 2006 financial year, the revenue raised from the Yellow Pages directories was more than $1 billion, while the revenue raised from the White Pages directories was almost $300 million.

The Directories display notices on nearly every page stating that Telstra holds copyright.

Desktop Marketing Case

In 2002, the Full Federal Court determined in Desktop Marketing Systems Pty Ltd v Telstra Corporation Limited [2002] FCAFC 112 (Desktop Marketing Case) that copyright subsisted in various editions of the White and Yellow Pages. In this case, the issue of authorship of the directories in question was not considered because Desktop Marketing had conceded all issues except whether the directories were original works.

IceTV Case

In 2009, the High Court unanimously held in Nine Network Pty Limited v IceTV Pty Limited [2009] HCA 14 (IceTV Case) that IceTV had not infringed the Nine Network's copyright in television program schedules¹. This was because IceTV had not reproduced a substantial part of Nine's weekly television schedule in its subscription-based electronic program television guide. The decision consisted of two separate judgments as follows:

French CJ, Crennan and Kiefel JJ noted that copyright did not protect facts or information. When deciding whether IceTV had reproduced a substantial part of the television schedule, not only the quantity of the reproduction should be considered but also the quality. The time and title arrangement was obvious and lacked originality. Nine's employees had only used minimal skill or labour in expressing the time and title information
.
Gummow, Hayne and Heydon JJ found that IceTV had appropriated the "fruits of Nine's skill and labour". However, skill and labour on their own were not protected by the Copyright Act 1968 (Cth) (the Act) and issues such as authorship and creativity must also be considered.

Legislation

Section 32 of the Act states that copyright subsists in, among others, a published original literary work whose author is a qualified person at the time the work was made. Where the Act refers to "an author of a work" and the work is one of joint authorship, the reference is to all the authors of the work: section 78 of the Act.

Under section 10 of the Act, a literary work may include a compilation.

Under section 35(2) of the Act, the author of a literary work is the owner of any copyright subsisting in the work. However, pursuant to section 35(6) of the Act, where an author makes a literary work in the course of their employment, the employer will be the owner of any copyright subsisting in the work.

In accordance with section 31 of the Act, copyright is the exclusive right (among other things) to reproduce the work in a material form, to publish the work, and to communicate the work to the public.

Justice Gordon's Decision

Telstra and Sensis (collectively the Applicants) claimed that copyright subsisted in various White and Yellow Pages telephone directories (the Works). In particular, the Applicants contended that:

in respect of the relevant White Pages, the listings and the enhancement and arrangement of the listings; and
in respect of the relevant Yellow Pages, the listings, the enhancement of the listings and the arrangement of the listings under headings,

satisfied the requirements that each of the Works must be an original literary work.²

The Applicants also claimed that the Desktop Marketing Case, where copyright was found to subsist in various White and Yellow Pages directories, was applicable to the resolution of this case. Justice Gordon rejected this contention on a number of grounds, one of which was that the question of authorship had not arisen in the Desktop Marketing Case whereas, in this case, Phone Directories Company Pty Ltd and the other respondents (collectively PDC) did not concede this point.

Justice Gordon directed that the issue of whether copyright subsisted in the Works be determined first as a preliminary question. To support their contention that copyright subsisted in the Works, the Applicants filed 91 affidavits from individuals involved in the production of the Works.

In determining whether copyright subsisted in the Works, Justice Gordon considered the issues of authorship and originality to be closely tied.

Authorship

If copyright were to subsist in the Works, it was considered essential that the Applicants be able to identify the joint authors of the Directories.

The Applicants' 91 affidavits did not cover the entire range of people who would have contributed to the production of the Works. Of the 91 individuals, some did not contribute "independent intellectual effort" or "sufficient effort of a literary nature".³ From this evidence, it appeared that there are "substantial parts of the directories that do not have human authors" or authors which could be ascertained.⁴
"
Many who could be considered joint authors were contractors rather than Sensis employees and had not been identified.⁵ Furthermore, the Applicants failed to tender copyright assignments from all contributing contractors.⁶

Therefore, the Applicants failed to sufficiently establish the identity of all the authors.⁷

Even if the Applicants were able to identify the authors, the evidence of the 91 individuals indicated that they had not used "independent intellectual effort" or "sufficient effort of a literary nature", which is required for a work to be considered original and therefore able to be protected by copyright.⁸ Identified authors must be able to show that the contribution they made to the Works is original.⁹ The Applicants were unable to satisfy this requirement. The process of creating the Works was also "heavily automated". Any human contribution was "regulated and controlled":

according to the parameters of the computer systems utilised in the production of the Works; and
by "the Rules"¹⁰ which were a set of "prescriptive guidelines that control, dictate, restrict and/or prohibit the content and presentation" in the Works.¹¹

Originality

On the issue of originality, Justice Gordon determined that, given the lack of independent intellectual effort or sufficient effort of a literary nature, the Works were not original and therefore could not be protected by copyright.¹² Whilst the production of the Works required "substantial labour and expense", these alone "are not sufficient to establish originality".¹³ There was no '"creative spark" or exercise of the required level of "skill and judgment".¹⁴ Where the method of production could be automated, it was and, where it could not be, individuals were "required to act consistently with the Rules".¹⁵ All work was subject to multiple checks to ensure it was consistent. Much of the evidence illustrated that the tasks completed by individuals were of a mechanical nature.¹⁶

Therefore, in determining that each of the Works was not an original literary work, Justice Gordon concluded as follows:

"Authorship and originality are correlatives. The question of whether copyright subsists is concerned with the particular form of expression of the work. You must identify authors, and those authors must direct their contribution (assessed as either an "independent intellectual effort" of a "sufficient effort of a literary nature") to the particular form of expression of the work. Start with the work. Find its authors. They must have done something, howsoever defined, that can be considered original. The Applicants have failed to satisfy these conditions. Whether originality be the product of some "independent intellectual effort" and / or the exercise of "sufficient effort of a literary nature", or involve a "creative spark" or the exercise of "skill and judgment", it is not evident in the claim made by the Applicants."¹⁷

Conclusion

The decision in the Telstra Directories Case makes it more difficult for owners of compilations and databases to prove authorship and that the relevant database or compilation is an original work in which copyright subsists. The decision further reinforces the view of the High Court in the IceTV Case that copyright is not the appropriate means of protecting compilations or databases if they are not original works, regardless of the significant expense or labour involved.

Justice Gordon observed, in her decision, that other jurisdictions have dealt with the quandary digital databases pose for copyright law by creating other legal frameworks to protect the maker of the database and the investment they have made in the creation of the database, for example, the EU Database Directive.¹⁸ As noted by Justice Gordon, given there is no corresponding protection in Australian law, this is a matter the Commonwealth Parliament "should address without delay".¹⁹

Not surprisingly, the Applicants have recently appealed Justice Gordon's decision. The Full Federal Court's decision will be awaited with much anticipation.²⁰

The assistance of Cate Sendall, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated

¹ For a more detailed consideration of this case, see Addisons' Focus Paper no 100 athttp://www.addisonslawyers.com.au/focuspaper/100.
² Telstra Corporation Limited & Anor v Phone Directories Company Pty Ltd & Ors [2010] FCA 44 (8 February 2010) at 3.
³ Ibid, at 334.
⁴ Ibid, at 335.
⁵ Ibid, at 336.
⁶ Ibid, at 172
⁷ Ibid, at 337.
⁸ Ibid, at 338.
⁹ Ibid, at 344.
¹⁰ Ibid, at 338.
¹¹ Ibid, at 90.
¹² Ibid, at 340.
¹³ Ibid, at 341.
¹⁴ Ibid, at 340.
¹⁵ Ibid, at 341
¹⁶ Ibid, at 341.
¹⁷ Ibid, at 344.
¹⁸ Directive of the European Parliament and of the Council on the Legal Protection of Databases, 1996.
¹⁹ Telstra Corporation Limited & Anor v Phone Directories Company Pty Ltd & Ors [2010] FCA 44 (8 February 2010) at 30.
²⁰ For a consideration of the impact of Justice Gordon's decision on the Australian racing sector and whether copyright will subsist in race field information, please see Addisons' Focus Paper no 142 at http://www.addisonslawyers.com.au/focuspaper/142.

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