The evidence of Larrikin, the copyright owner, was to the effect that taking into account percentages that were agreed in other instances of sampling, a fair remuneration for the licence to use the copyright in Kookaburra for the purpose of writing and exploiting Down Under negotiated on an arm’s length basis between willing parties would have been a royalty in the order of between 25% and 50% of the total income of Down Under. Reference was made to a number of examples where royalties in the range of 20 to 40% had been negotiated. However, following cross-examination, it became apparent that these supposed “comparables” involved factual circumstances significantly different to those in the present case. By contrast, the respondents pointed to examples of royalty arrangements involving a figure of 5% or less.

In calculating an appropriate royalty by considering a hypothetical bargain between the copyright owner and potential licensee, Jacobson J considered the musical significance of Kookaburra in Down Under, the thematic significance, the significance of certain performances of Men at Work front man Colin Hay in which he would sing the words of Kookaburra during Down Under and the visual association with Kookaburra as found in the Down Under music video.

Each of these considerations was found to point toward an appropriate royalty being at the lowest end of the scale. In relation to the musical significance of the part of Kookaburra reproduced in Down Under, the Court placed significant emphasis on the fact that the resemblance between the two was not identified for over twenty years and was only made apparent to Larrikin by a third party.

The Court concluded that:

Although the quotation from Kookaburra in the 1981 recording is, in my view, sufficient to constitute an infringement of copyright, other factors are to be taken into account in assessing the percentage interest payable in a hypothetical licensing bargain.

The most obvious factor is the difficulty in detecting the similarity between the flute riff and the bars from Kookaburra. A further strong indicator of a low percentage is to be found in a qualitative and quantitative consideration of Kookaburra’s contribution to Down Under, looked at a whole.

Accordingly, Jacobson J considered “the figures put forward by Larrikin to be excessive, overreaching and unrealistic” and found that a figure of 5% of the income paid by APRA and AMCOS was an appropriate calculation of damages.

While the two countries treat each other in the same way when it comes to cross-border court proceedings, this legislation will enable closer integration of the two civil justice systems.

Some important measures in the Bill include:

1. Simplifying the service requirement for civil court proceedings.  For instance the new legislation will enable a statement of claim filed in a court to be served on someone in New Zealand as of right and visa versa. A plaintiff will no longer be required to prove a connection between the proceedings and New Zealand, or to seek leave of the court.
2. The New Zealand Bill and its Australian equivalent will adopt a common give-way rule for deciding which country’s court should hear a dispute. The current problem of courts in New Zealand and Australian applying different tests to decide this issue leading to unnecessary expense and uncertainty will hopefully be ameliorated.
3. The Bill will expand the range of Australian court judgments that can be enforced in New Zealand, and simplify the process for enforcing them. Currently, only final money judgments from one country may be enforced in the other. This Bill extends this to include final non-money judgments, such as an injunction. The only ground for not enforcing an Australian judgment will be public policy.  However, it will continue the case that any challenge to the merits of a judgment will meed to be raised with the original court.
4. The Bill also introduces new measures to improve regulatory enforcement. New Zealand and Australia both have a strong mutual interest in the integrity of trans-Tasman markets and the effective enforcement of each other’s regulatory regimes. The bill will allow all Australian civil pecuniary penalties to be enforced in New Zealand, unless they are specifically excluded from the regime. The parallel legislation in Australia contains mirror provisions.
5. The Bill will also allow criminal fines to be enforced in the same way as a civil judgment debt is but only in respect of those regulatory regimes that affect the integrity, effectiveness, and efficiency of trans-Tasman markets.
6. Finally the Bill will simplify the conduct of court proceedings in various ways including through the use of technology.

These elements of “Kookaburra” were found in the flute riff of “Downunder” and were found three times in various forms in “Downunder”. It was conceded that there was a causal connection between the two works. The main issues were whether there was an objective similarity between the two works and whether what had been taken from “Kookaburra” was a substantial part of that work.

Jacobson J held that there was sufficient objective similarity between the bars of “Kookaburra” and the part where they are heard in “Downunder”. The melodies were the same. This was reinforced by the fact that Colin Hay, a former Men at Work member, admitted that the relevant portion of “Downunder” was “unmistakably” the melody of “Kookaburra”. Jacobson J considered that nothing turned on the change of key or the difference in rhythm between the two songs. Nor did the difference in harmony make the phrases from “Kookaburra” unrecognisable. Furthermore, Jacobson J did not consider that the separation of the two phrases from “Kookaburra” by the basic hook of “Downunder” prevented a finding of reproduction.

The respondents argued that, if “Kookaburra” and “Downunder” are such icons, and the similarities are so strong, why did it take so long for anyone to recognise the connection. The connection was exposed on the television music quiz program “Spicks and Specks”. The judge concluded that whilst “Spicks and Specks” showed that there are difficulties in the recognition of the “Kookaburra” in “Downunder”, a sensitised listener can detect the aural resemblance between the two works. One wonders whether the sensitised listener is the true audience when determining an infringement of musical copyright.

Nonetheless, supporting this finding was the fact that it was open to infer that the composer of “Downunder”’s flute riff, who was not called as a witness, deliberately reproduced a part of “Kookaburra” for the purpose of evoking an Australian flavour in the flute riff.

In relation to the question of whether a substantial part of “Kookaburra” was taken, Jacobson J considered that “Kookaburra” was not so simple or lacking in substantial originality that a note for note reproduction of the entire work was required to meet the “substantial part” test. He did, however, place great weight on the fact that one of the respondents, Colin Hay, performed the words of “Kookaburra” when performing “Downunder” from 2002 onwards, to show that a substantial part was taken. This seems strange when Jacobson J accepted Mr Hay’s evidence that he was not aware of the appropriation of the bars of “Kookaburra” until the mid 1990s. His Honour did, however, note that 50% of “Kookaburra” had been taken.

This litigation is not yet concluded. The monetary compensation to which Larrikin Music is entitled is still to be determined. Larrikin Music has claimed 40-60% of the income received, which the respondents claim grossly over-reaches its entitlement. That would be an enormous sum for two bars of music.

The evidence on infringement in this case showed that the BitTorrent protocol was being used by those accessing the internet through iiNet’s facilities to download the applicants’ films and television shows. The critical issue in this proceeding was whether iiNet, by failing to take any steps to stop the infringing conduct, authorised the copyright infringement of the iiNet users.

Justice Cowdroy found that iiNet had knowledge of infringements occurring, and did not act to stop them.  However, he decided that iiNet did not authorise the copyright infringement, and commented that the copyright infringements occurred directly as a result of the use of the BitTorrent system, not the use of the internet, and iiNet did not create and did not control the BitTorrent system.  Further, he found that iiNet did not have relevant power to prevent those infringements occurring and did not sanction, approve or countenance the copyright infringement.

His Honour also commented that the result of the proceeding would disappoint the members of the AFACT as the evidence established that copyright infringement was occurring on a large scale. However, he went further to state that this does not necessitate or compel a finding of authorisation, merely because it is felt that ‘something must be done’ to stop the infringements.

His Honour also commented that the proceeding attracted widespread interest both in Australia and abroad and that as far as he was aware, this trial, involving suit against an ISP claiming copyright infringement on its part due to alleged authorisation of the copyright infringement of its users, is the first trial of its kind in the world to proceed to hearing and judgment.

On appeal, Vawdrey challenged the finding of infringement on the basis that the instructions to modify its design did not provide the requisite causal connection between the copyright work and the Vawdrey design because those instructions conveyed the idea of that work, rather than the expression of that idea. Moore and Bennett JJ noted that:

In circumstances where the objective similarities between the Vawdrey Engineering Drawings and the Subsequent Krueger Drawings were sufficiently great (as was the case) and Vawdrey had the opportunity to gain access to the latter drawings (as was the case), Vawdrey bore the onus of establishing how they created the Vawdrey Engineering Drawings and that this had not occurred as a result of copying … Vawdrey elected to give a false account (on her Honour’s findings) of how the various Vawdrey drawings developed. It would have been open to them to have given an honest account which may have had a bearing on whether the same conclusion would be reached. But they did not.

Accordingly, the necessary causal connection was held to be present. Discussing the same issue, Lindgren J expressed a preference for the view that:

access to the copyright work, is but one way of proving causal link and need not be present if the causal link is established without it.

The fact that the causal link was made via instructions from Camerons to Vawdrey, rather than direct access to the work by Vawdrey was therefore not relevant.

Vawdrey also challenged the finding that the trailers themselves were an infringement of the copyright in the drawings produced by Krueger. This challenge was also dismissed, with Moore and Bennett JJ stating:

the infringing drawings, the Vawdrey Engineering Drawings, were, on the evidence, drawn to illustrate what the completed trailers would look like at least from one important perspective, namely looking at the side of the trailer from (what is readily apparent) ground level. If the Vawdrey Engineering Drawings were themselves infringing copies of the Subsequent Krueger Drawings with the requisite degree of resemblance, then it is not a large step to deduce that the completed trailers would likewise exhibit the requisite degree of resemblance to the perspective illustrated in the drawings… the fact that from other perspectives (for example from the rear or from above) it is probable there is no real resemblance to the original work does not deny the existence of sufficient resemblance to establish reproduction of the original work in a three-dimensional form.

Other grounds of appeal raised by Vawdrey including in relation to its defence of innocent infringement and a challenge to the causal connection between the infringement and the damage said to have been caused to Krueger were also unsuccessful.

In 2003, the question of ownership of the copyright in the software arose due to apparent copying of that software by former employees of the Intelmail business. At about that time there were also discussions between Dilanchian and Vardanian about the later being “bought out” of the Intelmail business, however no agreement was reached. By 2008, the relationship between Dilanchian and Vardanian had completely broken down, and the issue of ownership of copyright in the software again arose.

There were no written agreements in place dealing with ownership of copyright works produced by Vardanian. Intelmail asserted that either it was the beneficial owner of the copyright in the software or alternatively that it had an implied, irrevocable and royalty free licence. Vardanian conceded that an implied licence existed, but disputed the terms of that licence propounded by Intelmail. Regarding whether Intelmail was an owner or licensee, Moore J noted that:

If there is a lacuna in the contract and it is necessary to imply the grant of some right to fill the lacuna involving a choice between possible alternative rights, the choice should be of that right which does not exceed what is necessary in the circumstances. … if the need can be satisfied by the grant of licence or an assignment of the copyright, the implication will be of the grant of licence only.

There was no doubt that the ownership of any copyright in software developed by Vardanian while an employee of the Intelmail business was owned by that business. With regard to the software produced while Vardanian was employed by his own company, Controlmech, his Honour noted that:

it is unlikely that either Mr Dilanchian or Mr Vardanian would have agreed to an arrangement that imperilled the rights of either or would have put at risk the continued growth or at least prosperity of the business …It is improbable they would have agreed to an arrangement which would, over time, invest in Controlmech copyright in the software over which Mr Dilanchian would have no control other than as a licensee and deny it the opportunity to control the source software.”

Accordingly, Moore J concluded that for the reasonable and effective operation of the contract between Controlmech and Intelmail, it was necessary to imply a term that Intelmail would retain equitable ownership of copyright in the software.