Damien Carrick: Hello, welcome to the Law Report.

Today, the ongoing courtroom war between copyright holders and those who believe everyone should be able to download anything they want for free.

The music industry has scored some wins, but TV and music producers are not faring well. They're losing their legal battles against both other media organisations that re-use their content, and also against organisations that enable consumers to illegally download.

Reporter Andrew Dodd prepared this story.

David: I have this website bookmarked so pretty much just go to nzbmatrix.com, brings up the log-in page, I enter in my user name, which is what I'm actually doing right now. The first thing that comes up is basically the movies that have been uploaded within the last four hours, and at the moment I can easily see for example, Iron Man 2, German version, 5.84 gig, I don't want it, but there is The Lincoln Lawyer which I wouldn't actually mind, for 8 gig. I mean I'm going to see that movie, so I may not necessarily actually download it.

Andrew Dodd: This is David. I'm not going to give you his full name because he's breaching copyright. David regularly downloads movies and TV programs from the internet. He's part of a seemingly unstoppable world-wide movement that's creating headaches for film, TV and music companies.

David: A lot of my stuff I like to watch is basically what I call Chinatown, or Hong Kong videos, which is very hard and very rare to find in Australia. There have been other companies out there who used to actually be able to do it. A lot of them have folded up over the years. I refuse to go through a particular company called Madman Entertainment because their prices are outrageous. I don't believe in purchasing off e-Bay because I've been burned in the past, I don't believe I should have to go offshore to actually be able to buy these DVDs, or these Blu Rays. It's for my own personal enjoyment, it's for nobody else, I'll download it, 7 gig compared to basically in some cases nearly $80 and that's including delivery.

Andrew Dodd: Is what you're doing illegal?

David: Yes, it is. No matter what people actually say, I'm infringing on copyright. I'm not proud of it, I understand that it actually does impact the industry, but at the same token [sic] what has the movie industry or what has each production company actually done for that sole person? In my case, somebody who's an avid Star Wars fan, I own literally 12 different copies. It's basically four copies of the same three movies. Why should I actually have to go out in September when George Lucas releases it and get the Blu Ray version of Star Wars episode 1 through to 6. I already own them, I just want a slightly better quality than what I currently actually have. I've paid George Lucas the money to actually own those videos, why should I go out and do it again? What's in it for me?

Andrew Dodd: And it's not just films and TV programs that are being downloaded. The illegal copying of music is also a massive problem.

Trying to stop it is the job of Sabiene Heindl, the general manager of the Music Industry Piracy Investigations, the copyright watchdog for the Australian music industry.

Sabiene Heindl: Well the recent statistics that we've got suggest that about 95% of music downloaded on the internet is illegal, so that's a pretty staggering figure. In terms of specific Australian stats, some research done by CCi Digital Futures last year found that 30% of Australians engage in illegal downloading of contact through BitTorrent networks. So it's an incredibly significant problem and a very big challenge for artists and songwriters.

Andrew Dodd: It's time you gave up, isn't it?

Sabiene Heindl: I don't think so. I mean I think there are some positive indications. It certainly is a challenge but there are ways to tackle it, and perhaps it's looking at it like drink-driving or the environmental movement. It's small steps, but really moving people's consciousness on these issues.

Andrew Dodd: The music industry has actually notched up some significant wins against illegal downloaders. The best known of these is the Kazaa case, when the Federal Court ordered the Australian-based internet company to close down its operations. It was a huge win for music producers.

Sabiene Heindl: Well at the time, which was 2004, Kazaa were the largest illegal file sharing network in the world. They were based here in Australia and in effect they were allowing people to download software, which facilitated millions of people around the world uploading and downloading illegal copies of predominantly music files.

Andrew Dodd: So this was a peer to peer system?

Sabiene Heindl: It was a peer to peer system.

Andrew Dodd: Legal action began in Australia in February 2004; who brought that action, what were they trying to achieve?

Sabiene Heindl: The action was brought by a number of record labels here in Australia, and in effect it was trying to achieve a number of things. First of all, obviously shutting down this very significant illegal operation, but also from a legal perspective, really trying to reinforce that while the copyright act may have come into play in 1968, the reality was it still absolutely applied in the digital environment. And so the internet was not a wild west, where people could get away with anything, the same sort of laws that applied in the physical world also applied in the digital world.

Andrew Dodd: What were the issues at stake in the case? I know that authorisation was a major question. In other words, the extent to which Kazaa authorised people using its system to download illegal copyrighted materials?

Sabiene Heindl: Yes, that's right. So the basic tenor of the case was to establish that Kazaa, as an organisation, was authorising the activity of users that were uploading and downloading content illegally, and we were successful in establishing that.

Andrew Dodd: And how so? What did you have to prove, to prove that they were authorising?

Sabiene Heindl: Well first of all we have to prove primary infringement. So we had to prove that there were people sitting at their computers, using this software, to both upload and download music illegally. We also had to prove that Kazaa were aware of what was going on, and had the means to stop people from engaging in that activity.

Andrew Dodd: And what did the court rule?

Sabiene Heindl: Justice Wilcox handed down his decision in September of 2005. It was a landmark copyright judgment, not only here in Australia but worldwide, and he found that the Kazaa operators were guilty of authorising copyright infringement of their users and made orders to cease copyright infringement against not only Kazaa but also a number of directors who were involved in the company.

Andrew Dodd: I think he gave them two months to smarten up their act or close down.

Sabiene Heindl: That's right, he did indeed. But by July 2006 there was a settlement negotiation agreed. Kazaa agreed to pay about $150 million in damages. It agreed to change its operations to filter illegal content and pretty much to try and engage in the legal distribution of music.

Andrew Dodd: Sabiene Heindl, the general manager of MIPI, the Music Industry Piracy Investigations.

In the end, the case cost Kazaa $150 million, and the company was forced to become legitimate. So what is copyright, and why are copyright holders fighting so hard to protect it?

Jock Given is a professor of media and communications at Swinburne University, and teaches copyright law.

Jock Given: Copyright is a set of rights that get given to you by law. So it's not like rights to property, which we can think of as somehow attaching to possession; we can understand what it means to own something that is physical property. Copyright is an intangible right that doesn't exist if we don't have laws passed by parliaments that create it. What the laws in Australia and most other countries do, is say that people who create certain kinds of things: literary works, musical works, sound recordings, films, get certain rights exclusively to do things with what they create. The most important among those are the rights to copy it, to reproduce it, the rights to distribute it, communicate it to the public.

By being given those rights, the right to control those sorts of things, that gives you the ability to then negotiate with people, and maybe charge money, to allow other people to acquire all of those rights to do things with the stuff that you create.

Andrew Dodd: What doesn't copyright protect?

Jock Given: It doesn't protect trivial things. So for example, individual words, or sometimes very small expressions which might not amount to a literary work; it doesn't protect things that aren't original; it doesn't protect ideas. So a good example of that would be if I have an idea to make a TV show about the Bali bombings, for example, I'd like to write a drama about that. That's not something that is protected by copyright. It might become something that's protected by copyright if I give expression to that. I write it down, I start to flesh it out, I do a treatment, I write a script for it, that starts to become something that is a literary work, a dramatic work, that can be protected by copyright. But the raw idea, make a TV show about the Bali bombings, is a mere idea and is not something that I can then sue another person who chooses to make a show about the Bali bombings themselves.

[The Games excerpt]:

Andrew Dodd: You may recognise this. It's The Games, a satirical program on ABC-TV in the lead-up to the Sydney Olympics. Well it's become topical again because a year out from the London Olympics, the BBC is airing a program called 2012, and it appears to be quite similar.

So has the BBC breached the copyright of the producers of The Games?

One of the writers of the Australian version of The Games is broadcaster and lawyer, Ross Stevenson.

Ross Stevenson: Yes, we do feel aggrieved. We've met with some people from London. We had a chat with them about a co-production, writing it ourselves, doing it for them, you know, The Games based in London, and next thing we know, up pops a program about a mocumentary on the preparations for the Olympic Games in London called 2012, yes, we're aggrieved.

Andrew Dodd: Is it similar to The Games?

Ross Stevenson: I haven't looked at it, that's how aggrieved I am, and I understand that it's very, very similar, strikingly similar, in terms of its set-up, about the way that their organisation works as such, and they haven't used our scripts, or anything as obvious as that, but it is strikingly similar.

Andrew Dodd: So how do you think they've infringed your copyright?

Ross Stevenson: Well, I don't know that they have. I'm not a copyright lawyer and we put ourselves in the hands of experts. I'm now learning about what ownership you can have of the format, what people can do that can infringe your rights in a way that means that lawyers can act on your behalf, but we're currently taking some advice, we've got no shortage of people who've actually -- both here and there -- who've volunteered to assist us, but I guess at the end of the day we just have to cast our fortunes on the judicial breeze, and see what comes of it.

Jock Given: The whole terrain of program formats is an incredibly controversial one. Shows where formats trade around the world, people pay lots of money for the right to make a certain show in Australia that has already succeeded overseas. They would like to be able to charge people amounts of money to make overseas versions of shows that have been successful in Australia. The question for them is always what is it it that the person who thinks they created that work in the first place has to trade? Have they actually got something which amounts to a work which is then going to be copied, a substantial part of it might be copied, or is what they've got just an idea? And that's very important for people when they think about making work themselves that draws on other works that are already out there. For example, you want to make a biopic of something where someone has already made another biopic or there are three biographies out there, or even more if there's only one biography. Is it possible for you to make a biopic about someone without essentially reproducing a substantial part of the literary biography that has already been written? Those are the choices that film and television lawyers are agonising about every day.

Andrew Dodd: OK, so you've used one the key words there, this term 'substantial part'. What is relevant about this idea of substantiality when it comes to copyright? Why is that a factor?

Jock Given: It's crucial because the law says that you're only infringing someone's copyright if you reproduce a substantial part of the original work. So if you reproduce less than a substantial part, you don't need anyone's permission. That's OK, copyright doesn't protect that . The difficult thing is, what a substantial part is, is a qualitative assessment, it's not a quantitative assessment.

Andrew Dodd: Swinburne University media academic, Jock Given.

This issue of what constitutes a substantial part of a copyrighted work was played out in a court case involving a TV program, The Pane/. You may recall it was aired on Channel Ten, but about ten years ago, Ten was sued by Channel Nine, because the Nine Network got sick of the way The Panel was rebroadcasting material that belonged to Nine.

The executive producer of The Panel was Michael Hirsh.

Michael Hirsh: On an average show, have something like 20 to 30 pieces of footage per show, running average between 5 seconds and maybe 12 or 15 seconds. They took us to court after being on air for two years, and they used 20 bits of footage for their case. Those 20 pieces they used were quite clever, in the regard that they used bits that I would call lower hanging fruit, they knew they could actually maybe knock us out on. The process was that we basically just fought element of each piece and fought on the various battles that we could, which was using the Copyright Act as it stood to fight. Subsequently, since the case, there has been some amendments to the Copyright Act, which has accepted the sense of parody and satire, which we go 'three cheers.'

Andrew Dodd: As we've heard, The Panel case was fought over 20 short video clips which the program lifted from Channel Nine. Here's one of them.

[The Panel excerpt]

Jock Given: One of the best ones was a clip that had come from Channel Nine's footage that Ten used when McGrath got up amidst all of the applause as the best cricketer of the year, walked to the front table, and lots of people stood up to shake his hand, and as he walked past the prime minister, John Howard, his glance moved away, and so you had a very funny shot of the prime minister standing up to attempt to shake Glen McGrath's hand, and he effectively looked away from him. It was a tiny little clip, a very small part of the overall broadcast, but that was regarded as a substantial part because it was such a significant part of it. Even more importantly, it was regarded as something that couldn't be simply justified as reporting of news, or criticism and review or any of the other fair dealing exceptions that could be used. So it was quite significant in thinking if you want to do something which everyone thought was funny, very memorable little moment, but in the terms of copyright law as interpreted by the courts, some very, very fine judgments needed to be made about whether he was breaking the law or not.

Andrew Dodd: At the time of The Panel case, there were three fair-dealing defences, and another one came about as a result of The Panel case. So what were the fair-dealing defences before and how have they grown since?

Jock Given: What the law says in Australia is if you're using a substantial part of someone else's material, in which they hold copyright, it's OK, if what you are doing is fair dealing. Fair dealing is not an open-ended thing, it's not just whatever is fair, it's fair dealing for particular purposes. Fair dealing for the purposes of research and study, fair-dealing for the purposes of the reporting of news, or fair-dealing for the purposes of criticism or review.

After that case, influenced by it and international developments I think. a further form of fair-dealing was introduced: fair-dealing for the purposes of parody or satire. To date we haven't got any cases about that in Australia, but there's no question that satirical shows like for example The Chaser, which has come on air since that was passed, would feel that I think they were making extensive use of that defence now to justify very similar kind of TV production to what was done in The Panel: taking footage from other networks, commenting on it, making satirical comments on it, material that you might have been able to justify at the time of The Panel case, either because you weren't using a substantial part of the material, or because you've had one of the existing fair-dealing defences, but with the parody and satire defence, I think it's made it you can do that kind of thing with a lot of confidence that it's going to be OK.

Andrew Dodd: Swinburne University media academic, Jock Given.

Today we're looking at copyright, an ever-changing area of the law in which the music industry has had some substantial wins, but TV and movie producers are not having much luck stopping other networks re-using their material or consumers illegally downloading it.

A good example of this is the recent iiNet case involving a host of movie companies which joined together to sue the internet service provider. Because they argued it was turning a blind eye to systematic illegal downloading of movies. Here's Sabiene Heindl of the Music Industry Piracy Investigations, or MIPI.

Sabiene Heindl: Well the IiNetcase is an interesting one because of course the film industry in Australia has turned its attention to internet service providers, and the allegations in that case was that iiNet was aware of copyright infringement occurring on its networks: they were illegal uploading and downloading of Australian television and film, and that despite being on notice of those activities, did nothing to try and stop its subscribers engaging in those.

We've had a recent decision of the Full Federal Court. It was handed down in February of this year and while it's true to say strictly speaking IiNet won that appeal, the reality is there's a lot of comfort there for copyright owners and creative industries because there was a clear indication by the court that an internet service provider, in certain circumstances, could be liable for the activity of its subscribers when it was put on notice.

Andrew Dodd: It has been suggested that in that case the internet service provider, iiNet effectively won that case on a technicality.

Sabiene Heindl: Well I think when one reads the judgment, and it's a pretty hefty read, the reality is that some discussion is about the form of the notices and perhaps they weren't specific enough. I suspect, however, that would be relatively easy to remedy by a copyright owner, and so yes, absolutely, the judgment makes it clear that if the right sort of notices are sent in the right sort of circumstances, then an internet service provider would have to sit up and take notice, and take certain steps to limit subscribers' activity.

Andrew Dodd: So there's a case where the film industry have not been successful. They'll presumably appeal this, they'll go further, so all eyes now on the High Court to see what happens.

Sabiene Heindl: Absolutely. They have put in an application for special leave to the High Court and we understand that will be heard in August of this year.

[Song: 'Downunder' excerpt]

Andrew Dodd: This is of course the song 'Downunder' by the group Men At Work. It became the subject of a copyright case after a question was asked on the ABC-TV program, Spicks and Specks. The question was, 'What well-known Australian song is contained within the song "Downunder"?' The answer was this song.

[Song: Kookaburra' excerpt]

Andrew Dodd: 'Kookaburra sits in the old gum tree' was originally written for the Girl Guides movement back in 1934. Despite this, the company that had acquired the rights to 'Kookaburra' successfully claimed that Men at Work had taken two bars from the song to create the flute riff in 'Downunder'. After losing the case, the lead singer of Men At Work, Colin Hay, was less than impressed.

Colin Hay: I'll go to my grave knowing that 'Downunder' is an original piece of work. When I wrote that song with Ron, we took nothing from anybody, and it was one of those -- it was a musical accident that happened.

Andrew Dodd: Although Men At Work lost the case, Swinburne University's Jock Given says there are some major misconceptions about the 'Kookaburra' case. He says the court ruling was not draconian, in fact it's a pretty good example of the copyright laws working as they should.

Jock Given: It was a wonderful story, and it's a great example of copyright law at work. But I think the case has been represented to say things that it didn't really say. What I think happened, the court did find ultimately there had been copyright infringement, damages have to flow, to the people who now hold rights in the old 'Kookaburra sits in the Old Gum Tree' song. But what the court found was that there had been deliberate copying of a small section of a very small song. 'Kookaburra sits in the Old Gum Tree' is eight bars, two bars of it were used in the flute riff at the start of the Men At Work song, 'Downunder'. If you believe copyright should exist at all, you have to believe it's possible to infringe it. This is about as clear a case as you could possibly get, when you read the facts of what actually happened in the recording studio.

The judge looked it and said, 'Is this a substantial part of the song?' It's a qualitative judgment, it doesn't matter that it's two bars of eight bars. Interesting, but that's not what ultimately decides it. But he decided it was a substantial part, and I think it's difficult to argue with that conclusion.

What the judge said was yes, this is infringement, but the damages that were awarded are only going to be 5% of the revenues from the song, and not from back in 1980 because the action was statute-barred beyond six years, but 5% from 2002 which was six years before the action started. So the real outcome is actually relatively small, but it is a great example I think of a case which forces people to confront their own views on whether they think copyright infringement can ever really occur, and what should happen as a result of it if you believe it has occurred.

Andrew Dodd: Bringing an action against Men At Work was relatively simple. But policing copyright law on the internet is really hard, especially when the people doing the copying are using increasingly sophisticated methods. Here's David, our illegal downloader.

David: Programs like YouTorrent are what we call peer-to-peer because it has to actually access people, multiple people's different computers. The main one I use is there to actually protect my IP address.

Andrew Dodd: So what do you say to the regulators who are trying to keep up with people like you constantly looking to the new system and the new way of downloading stuff. Are they ever going to catch you?

David: In time, they will. I mean we all make mistakes. It's like one little slip and I can easily get done. Let's see, I'm now sending on close to about 8 terabyte worth of illegal content. I'm not proud of it, but if the Australian dollar is at the best it's been in the last 20-odd years, pricing hasn't actually dropped on all the external media that's actually out there, but what about online streaming? Being an Australian, I actually have to use a US company for all my online streaming, and half the content I can't watch because I'm not a US citizen.

Andrew Dodd: So you have to go about it another way to get this material?

David: Certainly do.

Andrew Dodd: And that way is?

David: [Laughs] OK, I can dial in to a different terminal that will actually give me an IP address of an American citizen, and in that way I can then watch for instance, Hawaii-Five-O in real time. Or ten seconds after it's actually aired in the US in real time. Or I can easily wait two hours and just download it and have it there on my collection, which is what I normally do.

Andrew Dodd: That's David.

With the illegal downloading so widespread, Sabiene Heindl from the Music Industry Piracy Investigations says the challenge is to convince the illegal downloading companies to become legitimate.

Sabiene Heindl: Well the focus of our activity at the moment is really to try and work in partnership with internet service providers. So really, in recognition of cases like iiNet, and it's really about now looking at partnerships, both commercial and otherwise, where of course internet service providers are increasingly becoming providers of legitimate content. Therefore from our perspective, we think it's in their interests to encourage people, their subscribers, to migrate to legitimate consumption of music and other content. There's been a number of territories around the world where laws have been put into place, sometimes in a voluntary manner, sometimes they've been legislated like in New Zealand a couple of weeks ago, that encourage content owners and ISPs to work together in partnership to try and encourage that migration of people that are doing the wrong thing, illegally downloading music or film, and encouraging them to do the right thing. So that they're consuming the music, which is great news, but in a way that supports artists and songwriters.

Damien Carrick: Sabiene Heindl, from Music Industry Pirate Investigations, or MIPI for short, ending that report by journalist and Swinburne academic, Andrew Dodd.

That's the Law Report for this week. I'm Damien Carrick, thanks to producer Erica Vowles and technical producer, Brendan O'Neill.