On 18 December 2006, the Full Federal Court delivered its decision in Cooper v Universal Music Australia Pty Ltd [2006] FCAFC 187 (Cooper). The Full Federal Court’s decision provides valuable guidance as to what amounts to ‘authorising’ an infringement of copyright in the context of websites. It illustrates how not only website operators can be liable for authorising copyright infringement via their websites, but internet service providers can also be liable for authorising infringement of copyright on websites they host.
The facts
Stephen Cooper owned the domain name ‘mp3s4free.net’ and operated a website under this domain name (mp3s4free website). The website contained hyperlinks to music files on other websites not owned or operated by Mr Cooper. When a person clicked on one of these music file hyperlinks, the music files (stored mostly as MP3 files on the other websites) were transmitted directly to the person’s computer from the other website.
E-Talk, an internet service provider, hosted the mp3s4free website (together with another company, Com-Cen, who did not appeal the trial Judge’s decision). Liam Bal was a director of E-Talk. Chris Takoushis, a Com-Cen employee, was Mr Cooper’s primary contact at E-Talk.
A number of record companies, who owned the copyright in the music file sound recordings started proceedings against Mr Cooper, E-Talk, Com-Cen, Mr Bal and Mr Takoushis, alleging copyright infringement. The trial judge found that Mr Cooper, E-Talk, Com-Cen, Mr Bal and Mr Takoushis had infringed copyright in the sound recordings in the music files. On appeal to the Full Federal Court, Mr Cooper, E-Talk, Mr Bal and Mr Takoushis challenged the trial judge’s finding that they had infringed copyright in the sound recordings by authorising the making of copies, and authorising the communication by operators of remote websites to the public, of those sound recordings.
The decision
The Full Federal Court’s decision addressed two main issues:
- what amounts to authorisation of copyright infringement in a sound recording, and
- the extent of protection of the carrier exclusion in section 112E of the Copyright Act.
What amounts to authorisation of infringement of copyright in a sound recording?
The Copyright Act provides that copyright in a sound recording will be infringed by a person who, not being the copyright owner, and without the licence of the copyright owner, authorises the making of a copy of a sound recording in Australia or the communication of a sound recording to the public in Australia. Communication of a sound recording to the public means making the sound recording available online or electronically transmitting the sound recording.
The Copyright Act lists the following three factors as being relevant to consider when determining whether a person has authorised the infringement of copyright in a sound recording:
- the extent (if any) of the person’s power to prevent the copyright infringement
- the nature of any relationship existing between the person and the person who infringed copyright, and
- whether the person took any other reasonable steps to prevent or avoid the copyright infringement, including whether the person complied with any relevant codes of practice.
The Full Federal Court considered the application of these three factors in the context of the mp3s4free website. The court considered that these three factors pointed to the conclusion that Mr Cooper, E-Talk and Mr Bal had authorised infringement of copyright.
The court gave the following reasons for reaching this conclusion:
Mr Cooper
- Mr Cooper had the power to prevent the infringement of copyright, as it was within his power not to make available to the public a website designed to facilitate the downloading of music files. In other words, Mr Cooper chose to provide the mp3s4free website which invited internet users to download music files from remote websites by clicking on hyperlinks on the mp3s4free website. Mr Cooper had also structured the mp3s4free website so that hyperlinks could be automatically added to the mp3s4free website. It was not relevant that Mr Cooper, once he had established the website, did not have the power to prevent internet users from using the mp3s4free website to access remote websites for the purpose of copying music files.
- Mr Cooper did have a relationship with those who downloaded music files via his website. The court referred to two aspects of this relationship: firstly, the fact that users were attracted to his website because of its user-friendly nature; and secondly, Mr Cooper gained financially from internet users visiting his website through sponsorships and advertisements on the website. The court also considered that Mr Cooper had a relationship with the remote website operators through the facility he had created which allowed the remote website operators to put links on the mp3s4free website.
- Mr Cooper had not taken any reasonable steps to prevent the copyright infringement. The disclaimers on the mp3s4free website misstated the law, and in any case the purpose of the disclaimers was purely cosmetic.
- The court also considered that the name of the website, ‘mp3s4free’ supported the conclusion that Mr Cooper had authorised the infringement of copyright.
- In affirming the trial judge’s decision that Mr Cooper had authorised copyright infringement, the Full Federal Court considered previous cases on authorisation of copyright infringement, including the High Court decision in University of New South Wales v Moorhouse (1975) 133 CLR 1 (Moorhouse). In that case, the High Court stated that the word ‘authorise’ meant to ‘sanction’, ‘approve’ or ‘countenance’. The Full Federal Court considered the Moorhouse case to be analogous. The Moorhouse case concerned the infringement of copyright in publications by making photocopies in a university library. In Moorhouse, Justice Gibbs of the High Court stated that a person who has under their control the means by which an infringement of copyright could be committed (such as a photocopying machine) and who made it available to other persons, knowing, or having reason to suspect, that it is likely to be used to infringe copyright, and omitting to take reasonable steps to limit its use for lawful purposes, would authorise any infringement from that use. Analogously with Moorhouse, Mr Cooper had countenanced the specific infringing downloading and copying that occurred as a direct consequence of operating the mp3s4free website with the music file hyperlinks.
E-Talk and Mr Bal
E-Talk and Mr Bal had the power to prevent the copyright infringement, and could have taken reasonable steps to prevent the copyright infringement, as they had the power to withdraw the hosting of the mp3s4free website. E-Talk did not take any further steps to prevent the copyright infringement after Mr Cooper did not comply with E-Talk’s request to remove the mp3s4free website, even though E-Talk, through Mr Bal, knew of the copyright issues associated with the mp3s4free website.
The court, on the other hand, considered that Mr Takoushis had not authorised infringement of copyright. Mr Takoushis, as a mere employee of E-Talk, did not have the power to prevent the copyright infringement, and had no reasonable steps open to him personally to prevent the copyright infringement.
In addition to considering the application of three factors listed above to the present case, the Full Federal Court emphasised that the Copyright Act prohibited the authorisation of acts in Australia constituting copyright infringement, regardless of whether the authorisation was given within or outside of Australia.
The extent of protection of the carrier exclusion
Mr Cooper, E-Talk, Mr Bal and Mr Takoushis also claimed that they fell within the protection of section 112E of the Copyright Act. Section 112E limits liability for authorisation of copyright infringement. In summary, section 112E provides that a person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audiovisual item merely because another person uses the facilities so provided to infringe copyright.
The Federal Court considered that Mr Cooper could be said to have done more than just provide facilities that were used to infringe copyright. Rather, he had created a website which invited internet users to use his website in such a way which would infringe copyright.
The Federal Court also found that E-Talk and Mr Bal could not rely on the protection afforded by section 112E. This is because E-Talk and Mr Bal did not merely facilitate the connection of the mp3s4free website to the internet, without any knowledge of the operation of the website, beyond knowledge of its mere existence. E-Talk and Mr Bal were aware of the high level of usage of the mp3s4free website and of the copyright problems arising from this usage. Mr Cooper received free web-hosting from E-Talk and Mr Bal, and in return the mp3s4free website displayed E-Talk’s ‘Com-Cen’ logo and a hyperlink to E-Talk’s ‘Com-Cen’ website. Further, E-Talk and Mr Bal did not take any steps to prevent the acts of infringement which took place via the mp3s4free website.
Conclusion
Website operators should think carefully about the purpose of their website, the links they provide on their website to other websites and whether their website could be used to unlawfully copy copyright materials. Similarly, internet service providers need to consider their relationship with, and knowledge of, the websites they host.
Cooper is, however, an extreme case in which it appears the sole purpose of the mp3s4free website was one which would result in the website being used to infringe copyright. The Full Court drew a distinction between general purpose search engines such as Google and the mp3s4free website. The court noted that, although the question of whether general purpose search engine activities in Australia infringed copyright is untested, the mp3s4free website (unlike a general purpose search engine) was designed to facilitate the infringing downloading of music files.
An application has been filed with the High Court of Australia seeking special leave to appeal the Full Federal Court’s decision.
This article was written by Sue Gilchrist, Partner and Helen Macpherson, Senior Associate, Sydney.
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