FEDERAL COURT OF AUSTRALIA

COPYRIGHT - assessment of damages - conversion damages - mixture of infringing and non-infringing matter - apportionment - whether conversion damages should be awarded on the value of the composite whole - whether interest should be awarded on conversion damages

COPYRIGHT - assessment of damages - additional damages - whether the award of additional damages is dependent upon relief being otherwise granted under s 115 - whether matters complained of are relevant to additional damages

Copyright Act 1968: ss 115, 116

GOLDEN EDITIONS PTY LIMITED trading as HUGHES LEISURE GROUP v POLYGRAM PTY LIMITED, ISLAND RECORDS LIMITED

NG 629 of 1993

LOCKHART J

SYDNEY

30 JULY 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.         The respondents bring in short minutes of order on a date to be fixed to give effect to the Court’s reasons for judgment.

Note:               Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

This is a claim for damages by Polygram Pty Limited (Polygram) and Island Records Limited (Island) against Golden Editions Pty Limited trading as Hughes Leisure Group (Golden Editions) for an infringement of the copyright of Polygram and Island in certain sound recordings of the artist Bob Marley.  Island Records is the owner of the copyright in each of the relevant recordings and Polygram is the exclusive licensee for Australia of such copyright.

Golden Editions admitted the infringement, but claimed that it was not liable to pay damages.

This matter is related to another matter, NG37 of 1993, between basically the same parties (though there are additional parties in No 37 of 1993), and the issues are substantially the same.  One difference between the two cases is that in the present case the apportionment of conversion damages has more monetary significance.  (It is necessary to read my judgment in matter No 37 of 1993 where I deal with the question of apportionment fully and will not deal with it here).  The infringing compact discs and cassettes are sold in packs of four, three and one compact disc or cassette, as the case may be.

Conversion damages should be awarded to Polygram and Island and interest on those damages should be calculated in the manner discussed in NG 37 of 1993.

For reasons which I gave in my other judgment, in my opinion where the conversion comprises matter that is protected by copyright mixed with non-infringing matter, the copyright owner is only entitled to the damages that represent the value of the copyright material taken, unless the case is one where the article as a whole cannot be severed into the infringing and non-infringing components.  That is not this case.

Accordingly, the proper method of apportioning conversion damages in this case is illustrated by an example.  Catalogue number MBCD4009 is a pack which contains four compact discs; but the copyright of Polygram and Island records subsists only with respect to some of the tracks on disc number 2.  The apportionment should be on the basis of one-quarter (i.e. one disc) of the total wholesale price (including sales tax).

The case for additional damages under s 115(4) is stronger in this case than it is in matter No 37 of 1993, primarily because the documents marked for identification 5 in this matter (being documents marked for identification 8 in No 37 of 1993) are in my opinion admissible in the present case because they relate to the Bob Marley recordings.  The document that was marked for identification 9 in matter No 37 of 1993, namely, a copy of the affidavit of Ms K A Haddock sworn 17 August 1993 was read in this matter, and thus it was not tendered because it is part of the evidence in the case.

The evidence, including Ms Haddock’s affidavit and MFI 5, establishes that the alleged licence agreement of 12 July 1990 from the Wittington Entertainment Group Limited to Hughes Leisure Group was fabricated.  But the evidence does not suggest that any benefit was derived from that document or its fabrication by Golden Editions.  Nor does it establish that Polygram and Island Records have been deprived of any benefit by reason of that fabrication.  It is true that the effect of the fabrication of the document was to put Polygram and Island Records to proof of its claim of title to the relevant copyright, but that is a matter which is relevant to costs, rather than additional damages under s 115(4).

I have taken into account the written submissions of the parties on the question of additional damages under s 115(4) and need not repeat them.  I also have taken into account the reprehensible conduct of Golden Editions and Mr Hughes when instructions were given to their solicitors to inform the solicitors for Polygram and Island Records that Golden Editions held the licence in respect of the recordings to which reference was made earlier, when the document itself was a fabrication. 

I should add that there is no suggestion that the solicitors for Golden Edition had any knowledge that the document had been fabricated. 

The fact that Mr Hughes caused the alleged licence to be fabricated for reward which was paid to others reflects adversely on the conduct of Golden Editions and Mr Hughes, but this is not a ground for an award of additional damages; but it may be relevant on costs.  Also Golden Editions wilfully breached the undertaking given by it to the solicitors for Polygram and Island not to distribute the relevant recordings.  Again, the relevance of this may be essentially with respect to costs.

In all the circumstances it is not appropriate to award additional damages under s 115(4). 

These are the matters which cause differences essentially of fact between the two cases, 37 of 1993 and this case 629 of 1993.

I will make no orders today; but direct Polygram and Island to bring in short minutes of order on a date to be fixed to give effect to my reasons for judgment.  On the same day I will give directions for the purpose of dealing with costs.

Associate:

Dated:              30 July 1997