MacMurdo, Walker --- "Facing the facts: an analysis of originality for the purposes of copyright subsistence in compilations of facts" [2012] NZLawStuJl 7; (2012) 2 NZLSJ 815

Last Updated: 27 May 2014

FACING THE FACTS:

AN ANALYSIS OF ORIGINALITY FOR

THE PURPOSES OF COPYRIGHT SUBSISTENCE IN COMPILATIONS OF FACTS

WALKER MACMURDO^*

Introduction

The Copyright Act 1994 requires works to be original for copyright to subsist in them. ¹ However, the statute does not wholly define “originality”, and two approaches have developed in the common law to defining it. The first is the “sweat of the brow” test, which developed over the course of the 20th century in England. The second is the authorship test, which was developed recently by the High Court of Australia. These two approaches have important consequences for subsistence of copyright in compilations of factual information such as phone directories and maps. The New Zealand Court of Appeal has recently heard the appeal of YPG IP v Yellowbook.com.au, a case which will be considering which approach to originality to apply in New Zealand.²

This article analyses the approaches courts and legislators have taken to the concept of originality for the purpose of copyright subsistence in compilations of facts in New Zealand and internationally. Part A describes the regime for copyright subsistence established by the Copyright Act 1994. This article then discusses the interpretation of originality under the “sweat of the brow” test. It examines how it has been applied in general New Zealand by the Supreme Court in Henkel v Holdfast New Zealand³ and particularly to compilations of facts by the

^* LLB/BA(Hons) (Major in Philosophy) (in progress). The author wishes to thank Maeve Payne-Harker for supporting him while writing this article.

^{1 Copyright Act 1994, s 14(1).}

² YPG IP Ltd v Yellowbook.com.au Pty Ltd HC Auckland CIV 2007-404-2839,

31 May 2010. Similar proceedings have commenced in Finda Ltd v Image Marketing Group Ltd HC Auckland CIV-2009-404-7658, 14 December 2009 but have not developed past the initial stages of litigation.

^{3 Henkel KgaA v Holdfast New Zealand Ltd [2006] NZSC 102, [2007] 1 NZLR}

577.

Court of Appeal in University of Waikato v Benchmarking Services Ltd.⁴ Part B describes the authorship test for copyright subsistence as developed by the High Court of Australia in IceTV v Nine Network⁵ and applied to compilations of facts in Telstra v Phone Directories Company⁶. Part C, discusses the outcomes of the different approaches the Court of Appeal could take in the appeal of YPG IP v Yellowbook.com.au. This article then discuss whether the authorship test could be applied in New Zealand and which approach to originality ought to be applied in New Zealand.

A. Originality, Compilations and Copyright in New Zealand

1. The Copyright Act 1994

The Copyright Act 1994 (Copyright Act) creates a property right that subsists in creative works. For copyright to subsist in a work it must be original⁷ and fall under one of the descriptions of works in s 14(1) of the Act.⁸ It must not be a copy of another work or infringe copyright in another work.⁹ The work must exist in a physical, material form, such as in writing.¹⁰ If copyright subsists in a work, it may be enforced if it is breached by someone who does an act restricted by copyright without the copyright owner’s license. The breach must be with regard to the work as a whole or a substantial part of the work.¹¹ The most relevant form of infringement for the purpose of this opinion is copying without a licence.¹² The rights owner may seek remedies for the harm caused by the breach.¹³

Section 2 of the Copyright Act establishes that a literary work includes

⁴ University of Waikato v Benchmarking Services Ltd [2004] NZCA 90.

⁵ IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14, [2009] 239

CLR 458.

6. Telstra Corporation Ltd v Phone Directories Company Pty Ltd [2010] FCAFC 149, [2011] ALR 725.

^{7 Copyright Act 1994, s 14(1).}

⁸ Section 14(1)(a)–(e).

⁹ Section 14(2).

¹⁰ Section 15(1).

¹¹ Section 29(2). See pt 2 for a full list of restricted acts.

¹² Section 30.

¹³ Part 6.

“a table or compilation”.¹⁴ “Compilation” is defined as including “a compilation of data other than works or parts of works”. ¹⁵

Compilations of facts are compilations of information such as phone numbers, time tables or addresses.

2. The concept of originality in copyright law and the sweat of the brow test of originality

Although s 14(1) Copyright Act establishes that a work must be “original” for copyright to subsist in it, what this means is not sufficiently defined in the statute. ¹⁶ The only guidance provided is s 14(2), which establishes that a work is not original if it is a copy of another work or if it infringes copyright in another work.¹⁷

Common law has elucidated the standard. Up until recently the “sweat of the brow” test of originality has been used in England, Australia and New Zealand to determine whether a work is original. If a sufficient amount of skill and labour has been invested in a work, it will be an original work.¹⁸ The “sweat of the brow” test considers the underlying rationale of copyright law being to protect the skill and labour, and thereby the monetary investment, put into creating the work.¹⁹

Copyright protects the expression of an idea in a creative work, but it cannot protect an idea in itself.²⁰ Laddie J explained this concept in IPC Media Ltd v Highbury Leisure Publishing Ltd:²¹

The law of copyright has never gone as far as to protect general themes, styles or ideas. Monet, like those before him, acquired no right to prevent others from painting flowers or even water lilies or, to take an example referred to by Mr Howe, Georges Seurat would not have obtained, through copyright, the right to prevent others from

¹⁴ Section 2.

¹⁵ Section 2(c).

¹⁶ Section 14(1).

¹⁷ Section 14(2).

¹⁸ Kevin Garnett, Gillian Davies and Gwilym Harbottle Copinger and Skone

James on Copyright (16th ed, Sweet & Maxwell, London, 2011) at [3-129].

¹⁹ Henkel KgaA v Holdfast New Zealand Ltd, above n 3, at [41].

²⁰ Garnett, Davies and Harbottle, above n 18, at [3-18].

²¹ IPC Media Ltd v Highbury Leisure Publishing Ltd [2004] EWHC 2985, [2005] FSR 20 at [14].

painting in a pointillist style. Even someone who is inspired by Monet to paint water lilies or by Seurat to paint using coloured dots would not infringe copyright. Such general concepts are not put out of bounds to others by the law of copyright.

The purpose of copyright is to prevent the unauthorised copying of the material forms of certain types of creative works resulting from skill and labour.²² However, it does not protect the facts, ideas or thoughts expressed in the work. The test for originality is not concerned with the originality of the ideas contained in a work itself, but whether the expression of the idea in that work is original.²³ The “sweat of the brow” test therefore does not impose an objective standard of novelty, utility, artistic merit or quality.²⁴ As long as a sufficient level of skill and labour went into producing a work, it will be afforded copyright protection.²⁵

A work must be original in the sense that it originated from the labour of its author.²⁶ The author of a work must imbue more than a negligible amount of skill and labour into the work to make it theirs.²⁷ There is no specific quantum of labour and skill required for originality; this is a question of fact and degree to be determined on the merits of each case.²⁸ Ricketson described this test as “inevitably involving a mixture of both mental and physical operations on the part of the author: decisions, on the one hand, as to how the idea or subject of the work is to be expressed, and the execution of those decisions, on the other.”²⁹

The level of skill and labour put into the work as a whole is to be taken into account when determining originality.³⁰ A distinction is not to be made between the skill and labour put into compiling and organising

²² Garnett, Davies and Harbottle, above n 18, at [3-129].

²³ At [3-129].

²⁴ At [3-129].

²⁵ At [3-129].

²⁶ At [3-130].

²⁷ G. A. Cramp & Sons Ltd v Smythson Ltd [1944] AC 329 at [337]–[338].

²⁸ Garnett, Davies and Harbottle, above n 18, at [130].

²⁹ Staniforth Ricketson and Christopher Creswell The Law of Intellectual Property: Copyright, Designs & Confidential Information (looseleaf ed, Lawbook Co, Sydney, 2002) at [7.60].

^{30 Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 (HL) at}

[469]–[470].

the information in the work and the skill and labour put into presenting the material form of the work. ³¹ The House of Lords in Ladbroke (Football) Ltd v William Hill (Football) Ltd held that skill and labour should not be considered separately for two reasons. ³² First, the purpose for accumulating the information is to reduce it to material form for the use in the copyrighted material.³³ Secondly, drawing a line between the skill and labour put into collecting and organising information and the skill and labour put into the presentation of that material will very often be difficult.³⁴ Very often only minimal effort will be put into setting those ideas down on paper.³⁵

The practical consequence of the “sweat of the brow” test is that as long as a modicum of effort has been put into creating a work, either by way of collection and arrangement of material or by way of intellectual effort, copyright will subsist in the work. This makes the “sweat of the brow” test very wide, only excluding extreme cases where skill and labour are negligible.³⁶

3. Originality and compilations of facts

In cases involving compilations of facts, the requirement of originality is usually satisfied by the skill and labour exercised in collecting, ordering and summarising the facts rather than the skill and labour in the arrangement of the material form of the work.³⁷ Ricketson notes that in these cases it is difficult to distinguish the authors’ ideas from the data itself because the material form of the work is often dictated by the nature of the facts.³⁸

This is not a problem. The “sweat of the brow” test does not simply

³¹ At [469]–[470].

³² At [469]–[470].

³³ At [469]–[470].

³⁴ At [469]–[470].

³⁵ At [469]–[470].

³⁶ See G A Cramp & Sons Ltd v Smythson Ltd, above n 27, for an example. The House of Lords found that merely arranging conversion tables in a diary was not a sufficient amount of labour to make the diary original for the purpose of copyright subsistence.

^{37 Ricketson and Creswell, above n 29, at [7.60].}

³⁸ At [7.60].

protect the skill and labour of the author in presenting the factual information.³⁹ Rather, the value of many compilations of facts is that someone has spent time, money and effort in compiling the raw data that is the basis of the compilation.⁴⁰ The law protects the skill and effort put into that work because it is valuable to incentivize publication of compilations such as phone directories. In applying the “sweat of the brow” test, common law courts have had little problem with affording copyright protection to compilations of facts.⁴¹

4. Application of the sweat of the brow test in New Zealand

The “sweat of the brow” test has recently been discussed by the New Zealand Supreme Court. In Henkel v Holdfast New Zealand, Henkel, a German adhesives manufacturer, sued Holdfast, a New Zealand adhesives manufacturer, for infringing copyright in the packaging of one of their products. They alleged that Holdfast substantially copied the design they used for that packaging.⁴² Henkel’s claim failed on an evidentiary issue and the Supreme Court held that their appeal had to be dismissed. ⁴³ However, in obiter dictum Tipping J decided to summarize the substantial law which would have been used to determine the case had it been correctly pleaded.⁴⁴

Tipping J affirmed the requirements of the “sweat of the brow” test discussed above.⁴⁵ He noted that a work must originate from its author for copyright to subsist in it and it must be the product of more than minimal skill and labour. ⁴⁶ He also noted that there need not be

³⁹ Garnett, Davies and Harbottle, above n 18, at [7-47].

⁴⁰ At [7-47].

⁴¹ At [3-147]. The authors note that several types of compilations of facts have been protected by various courts, including trade directories (Morris v Ashbee [1868] UKLawRpEq 183; (1868) LR 7 Eq 34), telephone directories (Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd [2001] FCA 612; (2001) 51 IPR 257) and television programme guides (Independent Television Productions Ltd v Time Out Ltd [1984] FSR 64).

^{42 Henkel KgaA v Holdfast New Zealand Ltd, above n 3, at [1]–[2].}

⁴³ At [4]–[6]. Henkel’s argument for infringement was not available to them because of the manner in which they pleaded their case in the High Court.

⁴⁴ At [33].

⁴⁵ At [35]–[37].

⁴⁶ At [35]–[37].

anything novel in a work for copyright to subsist in it. ⁴⁷ In cases involving arrangement of a number of features which are not original in themselves, the work’s originality can lie in the manner in which those features have been arranged. ⁴⁸ He established that the purpose of copyright is to “recognize and protect the skill and labour of the author of the copyright work”.⁴⁹ This affirms the underlying rationale of the “sweat of the brow” test as discussed above; being the protection of the skill and labour invested in a work.

In regard to infringement, the greater the originality of a work the wider the scope of protection copyright will afford that work.⁵⁰ By this, his Honour means that a work that has a minimal level of creativity will not be breached by similar works that deviate from it. Substantial reproduction will only occur when the work is entirely or almost entirely copied. On the other hand, where a large amount of skill and labour has been put into crafting a work, other works will have to be substantially different to avoid infringement.

5. Does copyright subsist in compilations of facts in New

Zealand?

The New Zealand Court of Appeal considered whether compilations of facts are original for the purpose of copyright subsistence in University of Waikato v Benchmarking Services Ltd.⁵¹ The University of Waikato had published the results of an annual survey which compiled financial information about New Zealand businesses. They made it available to businesses as a tool to compare their performance against industry standards.⁵² Benchmarking had published a brochure which contained information copied from the survey. ⁵³ The University of Waikato argued that copyright subsisted in the survey results, and that Benchmarking had breached it by reproducing substantial parts of the

⁴⁷ At [35]–[37].

⁴⁸ At [40].

⁴⁹ At [41].

⁵⁰ At [38].

⁵¹ University of Waikato v Benchmarking Services Ltd, above n 4.

⁵² At [2].

⁵³ At [6].

results.⁵⁴

The relevant issue on appeal was whether the University of Waikato’s surveys were original works for the purpose of s 14(1) of the Copyright Act. Randerson J stated that it has been “well established” that copyright can subsist in “publications such as dictionaries, directories, maps, or in the mere preparation of lists” (compilations of facts).⁵⁵

Determining copyright subsistence is a matter of whether “sufficient time, skill, labour, or judgment has been expended in producing the work”.⁵⁶ The publisher cannot claim copyright to the information in the compilation if they are not the author of the facts in the compilation.⁵⁷

^{The compiler cannot claim copyright the raw information in the}

compilation either.⁵⁸ Rather, if copyright subsists in the work it subsists in the compilation as a whole:⁵⁹

It must be shown that a sufficient degree of labour, skill, and judgment is involved in preparing the compilation. That may arise, for example, through the manner in which the information is selected for inclusion in the publication, the format or presentation of the data or, relevantly to the present case, the selection and calculation of the relevant ratios, percentiles, averages, and other details.

Randerson J thereby explicitly approved the “sweat of the brow” test. The Court found that copyright subsisted in the survey as the arrangement and presentation of the information was done with a sufficient amount of skill and labour.⁶⁰ The respondent had infringed the University of Waikato’s copyright by copying their arrangement of

⁵⁴ At [10]–[11].

⁵⁵ At [35].

⁵⁶ At [27].

⁵⁷ At [36]. This point is difficult to understand. His Honour may be referring to copyright in compilations of non-factual works such as collections of short stories. I cannot conceptualize how someone could be an author of a fact. For example, it does not seem to make sense to say “X is the author of the fact that Mount Everest is the tallest mountain in the world”.

⁵⁸ At [36].

⁵⁹ At [36].

⁶⁰ At [42]–[44].

the information.⁶¹

6. Challenges to the current approach: YP G I P v

Ye l l o w b o o k . Co m. A u and Te l s t r a v P h o n e D i r e c t o r i e s Co mp a n y

The Court of Appeal has heard and will soon release their judgment on the appeal of the High Court proceedings of YPG IP Ltd v Yellowbook.Com.Au Pty Ltd, which will revisit the status of copyright in compilations of facts.⁶² YPG IP owns the rights to the “Yellow Pages” phone directory in New Zealand. ⁶³ The defendant owns two New Zealand-based websites that provide online business directories.⁶⁴ YPG IP alleges that the defendant infringed their copyright by substantially copying parts of their directories.⁶⁵ The defendant argues that copyright does not subsist in the phone directories as they are not original works, because skill and labour was not exercised in creating them.⁶⁶

Last year, the Federal Court of Australia decided Telstra Corporation Ltd v Phone Directories Company Pty Ltd. The Court held that copyright cannot subsist in works without an identifiable author, or where the material form of a work is not sufficiently original.⁶⁷ This decision was based on the reasoning in the High Court of Australia’s decision in IceTV v Nine Network, which established a new underlying conception of originality that placed emphasis on the role of the author and the importance of the material form of a work.⁶⁸

Many compilations are organised by computer programs and teams of employees, not necessarily created by an identifiable author. Further,

⁶¹ At [65]–[67].

⁶² YPG IP Ltd v Yellowbook.com.au Pty Ltd, above n 2. There has not been any substantial discussion of copyright law in the High Court in this case. All proceedings so far have dealt with technical issues. See YPG IP Ltd v Yellowbook.com.au Pty Ltd HC Auckland CIV-2007-404-002839, Jun 29,

2007; YPG IP Ltd v Yellowbook.com.au Pty Ltd (2008) 8 NZBLC 102l; YPG IP Ltd v Yellowbook.com.au Pty Ltd HC Auckland CIV-2007-404-002839, Jun 13,

^2008.

⁶³ At [1].

⁶⁴ At [1].

⁶⁵ At [2].

⁶⁶ At [2].

⁶⁷ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6.

⁶⁸ IceTV Pty Ltd v Nine Network Australia Pty Ltd, above n 5.

the skill and labour put into certain types of compilations often subsists entirely in the preparatory stages of the work, with very little original effort put into the material form of the work.⁶⁹ If this approach is applied in New Zealand, the Court of Appeal may hold that no copyright subsists in YPG IP’s phone directories.

B. The Authorship Test of Originality in Copyright Works

1. Ic e T V v N i n e N e t w o rk : authorship and originality

The High Court of Australia reviewed the test for infringement of copyright in IceTV v Nine Network Australia. Nine Network acquired, selected and scheduled programmes to be broadcasted on their free-to- air television channel. ⁷⁰ They used a database on their computer network to schedule their programmes and would then supply third parties with a weekly schedule of these programmes.⁷¹ The schedule included airing times, dates, titles and other information including summaries of the programmes.⁷² IceTV provided an online television programme guide available via subscription that displayed the airing time, date and titles of programmes to be broadcasted on free-to-air television stations.⁷³ In preparing these guides, IceTV would predict which programmes would air based on Nine Network’s schedule from the previous week. ⁷⁴ Nine Network alleged that IceTV infringed copyright in their programme guides by reproducing a substantial part of them.⁷⁵ IceTV accepted that copyright subsisted in the guides but denied infringement.⁷⁶ They argued that the time, date and programme title information was not a substantial part of the originality of Nine Network’s guides and therefore would not infringe copyright if copied.⁷⁷ The issue facing the High Court was whether IceTV had infringed copyright in the programme guides by copying the time, date

⁶⁹ Ricketson and Creswell, above n 29, at [7.60].

⁷⁰ IceTV Pty Ltd v Nine Network Australia Pty Ltd, above n 5, at [458]–[459].

⁷¹ At [458]–[459].

⁷² At [458]–[459].

⁷³ At [458]–[459].

⁷⁴ At [458]–[459].

⁷⁵ At [458]–[459].

⁷⁶ At [458]–[459].

⁷⁷ At [458]–[459].

and title information.⁷⁸

There are two joint judgments from the High Court. The first judgment, delivered by French CJ, Crennan and Kiefel JJ established that for copyright to subsist in a work it must originate from an author and not be a copy of another work.⁷⁹ Copyright subsisted in Nine Network’s programme guides as they are original collocations of factual information (the titles of the programmes and the time and date they were playing) and creative material (the programme summaries and other information). ⁸⁰ Where there is an allegation of copyright infringement by the reproduction of a substantial part of a work, it must be determined which part of the work has been reproduced.⁸¹ The quality of that part must then be assessed with regard to the originality of the work as a whole.⁸² If the part of the work which had been copied substantially contributed to the originality of the work as a whole in a qualitative sense, infringement will have occurred. If it does not, there will not be infringement of copyright.

The Court held that the originality of the weekly schedule was contained in the selection and presentation of the time, date and title information and the programme summaries. However, the expression of the time, date and title information was not a substantial part of the work as a whole in the qualitative sense.⁸³ This is because its expression was dictated by its factual nature and it was not a “form of expression which requires particular mental effort or exertion”.⁸⁴ The form of a work will be dictated by its factual nature when the expression of the work is limited by the nature of the facts which are presented in the work. Although selection and arrangement of factual information may confer originality in some cases, in this case the arrangement of the factual information was “obvious and prosaic, and plainly lack[ing] the requisite originality”.⁸⁵

⁷⁸ At [458]–[459].

⁷⁹ Ricketson and Creswell, above n 29, at [7.98].

⁸⁰ At [7.98].

⁸¹ IceTV Pty Ltd v Nine Network Australia Pty Ltd, above n 5, at [37].

⁸² At [38].

⁸³ At [42].

⁸⁴ At [42].

⁸⁵ At [43].

The second judgment was delivered by Gummow, Hayne and Heydon JJ and comes to similar conclusions. Their Honours held that the first inquiry in any case of copyright infringement was to identify the authors of the work, as the source of copyright is the work of the author.⁸⁶ The issue of authorship is paramount; the Court held that the “essential source of original works” is the activities of authors.⁸⁷ Their Honours noted that key provisions of the Copyright Act 1968 contained reference to authorship as a central aspect of copyright subsistence.⁸⁸ In cases dealing with compilations, the authors will be those who “gather or organise the collection of material and who select, order or arrange its fixation in material form”.⁸⁹

The question of whether a substantial part of a work was copied should not be assessed in the light of the “interest protected by the copyright”.⁹⁰ Rather, determining whether copyright has been breached should be a matter of whether the part copied was a substantial part of the work.⁹¹ The part of the programme copied by IceTV was not a substantial part of the work because little skill and effort had been put into actually arranging the information; all of the actual labour had been done in the preliminary stages of selecting the programmes to be aired.⁹²

Essentially, their Honours stated that the skill and labour put into compiling the information for the work has no bearing on whether that information contributes a substantial amount of originality to the work as it has been expressed. Rather, if a substantial part of the originality of the work in its material form has been copied, copyright will be infringed. In this case, the factual information copied did not comprise a substantial part of the originality of the work because its arrangement was obvious and dictated by the nature of the information.

2. Te l s t r a v P h o n e D i re c t o ri e s : Authorship and compilations of

⁸⁶ At [93].

⁸⁷ At [94].

⁸⁸ At [97]. The Copyright Act 1968 is the Australian equivalent of the New

Zealand Copyright Act 1994.

⁸⁹ At [99].

⁹⁰ At [155]–[157].

⁹¹ At [155]–[157].

⁹² At [165]–[170].

facts after Ic e T V v N i n e N e t w o rk

IceTV v Nine Network did not directly challenge the “sweat of the brow” test as the basis of copyright subsistence in compilations of facts. This issue was addressed by the Federal Court of Australia the next year in Telstra v Phone Directories Company.⁹³ Telstra published the white and yellow pages telephone directories through a subsidiary company. ⁹⁴

Employees collected the information for the directories. They were organised and published through the use of a computer programme called the Genesis computer system.⁹⁵ Telstra brought proceedings for copyright infringement against Phone Directories Company and others, arguing they had infringed copyright by reproducing a substantial part of their directories. ⁹⁶ The Court faced two issues. First, can the originality in a work be present in the preliminary stages of collecting information, or must the originality be present in the material form of the work?⁹⁷ Secondly, if originality must be present in the directories, did they have identifiable authors?⁹⁸

The Full Federal Court found that in the light of the reasoning in IceTV, a court can only take the originality (and thereby skill and labour) present in the material form of the work into account when determining whether copyright subsists in a work.⁹⁹ Skill and labour present in the preliminary stages of production of the work are not relevant for determining the originality of the work in its material form.¹⁰⁰ This is because copyright protects the expression of the work in its material form, not the ideas that prefigure that expression.¹⁰¹ Skill and labour may go into the preparatory stages of a work, but copyright does not protect skill and labour. ¹⁰² The work which goes into preparation is only relevant to the extent that it shows that the work has

⁹³ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6.

⁹⁴ At [20].

⁹⁵ At [22].

⁹⁶ At [2].

⁹⁷ At [101].

⁹⁸ At [101].

⁹⁹ At [102].

¹⁰⁰ At [104].

¹⁰¹ At [104].

¹⁰² At [104].

not been copied.¹⁰³

Further, Telstra had failed to identify an author for their directories.¹⁰⁴

The court noted that people were identifiably involved in the preliminary stage of collecting and processing the information for the directories, but no author was identifiable for the creation of the material form of the work. ¹⁰⁵ Rather, the computer system was responsible for the arrangement and organisation of the material form.¹⁰⁶ Although people were responsible for the operation of the software, their control was over the “process of automation and they did not shape or direct the material form themselves”.¹⁰⁷

Perram J notes that this decision is contrary to the Federal Court of Australia’s decision in Desktop Marketing Systems v Telstra Corporation,¹⁰⁸ where it was held that the “sweat of the brow” test is the basis for determining copyright subsistence in compilations of facts.¹⁰⁹ However, the High Court of Australia’s decision in IceTV is fundamentally opposed to this test.¹¹⁰ This is because one consequence of the “sweat of the brow” test is that it is possible to have copyright subsist in a work without an author of the material form of the work being identified as long as skill and labour was put into the preparatory stages of the compilation.¹¹¹ This conclusion was “contrary to the apparent thrust of the balance of their Honours’ reasons.”¹¹² Perram J stated: ¹¹³

Any role for skill and labour in the process of collection which extends beyond that is inconsistent with the emphasis given in IceTV to the reduction of a work into a material form. It follows that, beyond showing that the directories were original in the sense of not having being copied, the activities in the collection phase are not relevant to assessing whether those who reduced the directories to

¹⁰³ At [104].

¹⁰⁴ At [119].

¹⁰⁵ At [119].

¹⁰⁶ At [119].

¹⁰⁷ At [119].

¹⁰⁸ Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd [2001] FCA 612.

¹⁰⁹ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6, at [108].

¹¹⁰ At [108].

¹¹¹ At [108].

¹¹² At [109].

¹¹³ At [111].

material form did so with sufficient independent intellectual or literary effort. To the extent that Desktop Marketing requires a contrary conclusion it should be overruled.

The court overruled the “sweat of the brow” test traditionally used up until this point to determine subsistence of copyright in compilations. Under the “Authorship” test created by this case and the IceTV decision, for copyright to subsist in a work an author must be identifiable and they must have exercised skill and labour in creating the material form of the work so to make it original. It is possible for there to be originality in the material form of a compilation of facts, but it must be evidenced and independent skill and labour must be demonstrated.¹¹⁴ In the case of compilations of facts there will not be sufficient skill or labour if the material form is dictated by the nature of the factual information being printed. ¹¹⁵ Telstra has appealed this decision and it is currently being heard by the High Court of Australia.

3. The practical consequences of the authorship test

Copyright will not subsist in two types of works. The first is compilations of facts whose material form is dictated by the nature of their facts. In these cases, the work does not reach a sufficient level of originality because the only labour the author will have performed will be the menial labour of arranging factual information as dictated by its form. The second type of work is those without an identifiable author. These are works whose material form is brought into existence solely by an automated process. Given that copyright protects the expression of an author, works that lack an author cannot be protected. Therefore, the major difference between the authorship test and the “sweat of the brow” test is that under the authorship test, copyright will not subsist in works whose originality and identifiable authorship exists entirely in preparatory stages of publication. So far, the only compilation that has been found to fail the authorship test has been phone directories in the

¹¹⁴ At [111]. One example of this was in Ladbroke (Football) Ltd v William Hill (Football) Ltd, above n 30, at 473–474. It was held that copyright subsisted in a betting coupon because of the skill and labour that went into arranging the factual information on the material form of the coupon in a manner that made the bets offered attractive to clients.

^{115 At [111].}

Telstra v Phone Directories Company decision.¹¹⁶

The issue facing the Court of Appeal in YPG IP is whether to apply the authorship test for originality as per Telstra v Phone Directories Company or the “sweat of the brow” test as per University of Waikato v Benchmarking Services Ltd. The approach they will take will have a material outcome on the case given the factual similarities between YPG IP and Telstra v Phone Directories Company.

C. Applying the Sweat of the Brow and Authorship Tests to YP G IP v Y e l l o w b o o k . c o m . a u

1. Is the adoption of the authorship test in New Zealand possible?

The Court of Appeal may not apply the authorship test if the statutory requirements for copyright subsistence in New Zealand are radically different from those in Australia. Section 32 of the Australian Copyright Act 1968 establishes:¹¹⁷

32 Original works in which copyright subsists

(1) Subject to this Act, copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author:

(a) was a qualified person at the time when the work was made;

or

(b) if the making of the work extended over a period—was a qualified person for a substantial part of that period.

(2) Subject to this Act, where an original literary, dramatic, musical or artistic work has been published:

(a) copyright subsists in the work; or

(b) if copyright in the work subsisted immediately before its first publication—copyright continues to subsist in the work; if, but only if:

¹¹⁶ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6.

¹¹⁷ Copyright Act 1968 (Aus), s 32.

(c) the first publication of the work took place in Australia;

(d) the author of the work was a qualified person at the time when the work was first published; or

(e) the author died before that time but was a qualified person immediately before his or her death.

...

(4) In this section, qualified person means an Australian citizen or a person resident in Australia.

Both statutes require originality in the works in question and both statutes apply to literary works, and thereby compilations. ¹¹⁸ The primary differences are organisational. The Australian test for subsistence is encapsulated mostly in s 32 of the Australian act and the New Zealand position is mostly described in ss 14 to 20.¹¹⁹

It is submitted that the requirements for copyright subsistence in New Zealand are functionally the same as the requirements for copyright subsistence in Australia. There is nothing in the New Zealand act that suggests that the requirement of authorship under the Telstra v Phone Directories Company test ought not to apply in New Zealand, or that authorship is less important to copyright subsistence in New Zealand than it is in Australia.¹²⁰

2. Is He n k e l v Ho l d f a s t Ne w Z e a l and consistent with the authorship test?

As Henkel v Holdfast New Zealand is the most recent discussion of “[t]he essence of a copyright claim” in New Zealand, Tipping J’s obiter dictum opinion will be extremely persuasive in the YPG IP decision.¹²¹

His discussion of originality rests on the “sweat of the brow” test. His

¹¹⁸ Section 10. The Australian statute defines a literary work as including a compilation. Compare to Copyright Act 1994, s 14(1).

¹¹⁹ Section32. Compare to Copyright Act 1994, ss 14–20.

¹²⁰ In fact, s 18’s heading (“Qualification by reference to author”) states the requisite nature of authorship for copyright subsistence. Copyright Act

^{1994, s 18.}

¹²¹ Henkel KgaA v Holdfast New Zealand Ltd, above n 3, at [34].

Honour does not mention distinguishing the skill and labour used in the preparatory stage of a work from that in its material form. Rather, he quotes¹²² the High Court in Bonz Group v Cooke, which stated “...the correct approach is first to determine whether the plaintiff’s work as a whole is original and protected by copyright”.¹²³ Tipping J does not consider applying a test for copyright subsistence other than the “sweat of the brow” test, such as that established by the United States Supreme Court in Feist Publications Inc v Rural Telephone Service Co Inc.¹²⁴ It is submitted that the Federal Court of Australia’s emphasis on originality and authorship in the material form of the work is not compatible with Henkel v Holdfast New Zealand, given their emphasis on the importance of the work as a whole.

However, in “Originality, authorship, and copyright in compilations”, Toby Futter gives three reasons why the authorship test could apply in New Zealand.¹²⁵ First, the existing New Zealand authority does not consider the issue of copyright in compilation at length.¹²⁶ Futter notes that the Supreme Court in Henkel v Holdfast New Zealand is limited in scope as it did not turn on the issue of authorship and involved a graphic work rather than a “data compilation” (compilation of facts).¹²⁷

Earlier case law such as in University of Waikato v Benchmarking Services Ltd

asserts the “sweat of the brow” test without discussing it in detail.¹²⁸

Secondly, Futter recognizes the similarity between the copyright regimes in the Copyright Act 1994 and the Copyright Act 1968.¹²⁹

Thirdly, Henkel v Holdfast New Zealand establishes that once copyright subsistence is established, the greater the originality in the works, the greater the protection copyright affords and vice versa.¹³⁰ Futter argues

¹²² At [40].

¹²³ Bonz Group (Pty) Ltd v Cooke [1994] NZHC 1004; [1994] 3 NZLR 216 (HC) at 219–220 (emphasis added).

¹²⁴ Feist Publications Inc v Rural Telephone Service Co Inc [1991] USSC 50; 499 US 340. This case established a test for copyright subsistence in the United States very similar to the Authorship test.

^{125 Toby Futter “Originality, authorship and copyright in compilations”}

NZLawyer (New Zealand, 28 January, 2011) at 22–23.

¹²⁶ At 23.

¹²⁷ At 23.

¹²⁸ At 23.

¹²⁹ At 23.

¹³⁰ Henkel KgaA v Holdfast New Zealand Ltd, above n 3, at [38].

that this may be evidence that the Supreme Court has already affirmed authorship and originality as an important part of the copyright infringement process, even if it is not part of the subsistence process.¹³¹

3. What are the possible outcomes of Y PG I P v

Ye l l o w b o o k . Co . A u ?

The Court of Appeal may decide the YPG IP in the light of the Supreme Court’s reasoning in Henkel v Holdfast New Zealand. If they do, the decision will likely be determined on the factual consideration of whether YPG IP can identify sufficient skill and labour in the preparatory stage of compiling the information for use in their phone directories. Given the highlighted importance of authorship in the recent Australian decisions, they will likely also have to identify an author or authors of the directories to satisfy s 18 of Copyright Act.¹³²

If they can identify an author, the Court of Appeal will likely find that copyright will subsist in the phone directories given the skill and labour put into collecting the information for publication.

If this approach is taken, one issue that could arise is whether authorship needs to be identified in the material form of the work.¹³³

The Court of Appeal could attempt to apply a hybrid approach of the Authorship and “sweat of the brow” test by stating that YPG IP may rely on skill and labour in the preparatory stages of the work, but they must identify an author in the material form of their directory for copyright subsistence. Although possible, it is submitted that it would be difficult to devise a principled basis such a finding. The focus on the material form in the authorship test is based on the conception that copyright law solely protects the material form of works. The “sweat of the brow” test is based on the conception that copyright law protects the investment made in a work. Trying to force the requirements of the authorship test into the “sweat of the brow” test would therefore be arbitrary without the principled rationale to justify it.

If the Court of Appeal decides to apply the authorship test, YPG IP

will have to identify an author for the material form of their phone

¹³¹ Futter, above n 125, at 23.

¹³² Copyright Act 1994, s 18(1).

¹³³ As required by the authorship test.

directories and establish that originality exists in their material form. The decision will therefore depend on the factual consideration of whether these elements can be identified. The factual similarities between this case and Telstra v Phone Directories Company suggest that YPG IP will likely fail to satisfy the authorship test for originality if it is applied.

4. Which approach should be applied in New Zealand?

The test for originality which ought to be applied in New Zealand must be one which balances two competing interests. The first is protecting the investments by prospective businesspeople from unfair appropriation by others. The second is ensuring that the public has fair access to useful works such as phone directories. The “sweat of the brow” test rewards those who invest the time and money into publishing “unoriginal” compilations of facts such as phonebooks. It is important to recognize that the process of compiling the information for these works requires enormous financial investment. To some extent the law ought to protect those who make investments into works like this from having their work appropriated by those who have not put the time, money and labour into the collection process. With these works, this is where most of the relevant work has been done.

The problem with this approach is that it is that it gives the rights owner exclusive copyright over a work which can only be practically expressed in one way. Phone directories can only usefully be arranged in a manner that organises phone numbers alphabetically by the name of the person or business that is assigned to that number. What the copyright owner of this work ends up with is an exclusive right to reproduce the expression of the factual information in the only way anyone would want to have it. The court in Telstra v Phone Directories Company found this result far too similar to giving someone copyright over the raw facts contained in the directory.¹³⁴ The authorship test remedies this problem by requiring the rights owner to identify originality in the material form of the work. Unfortunately, it does so to the detriment of those who expend time and money in making these works.

¹³⁴ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6, at [104].

It is submitted that the interest ensuring that the public has fair access to useful works weighs more heavily on which approach should be taken than the rights of businesspeople. Compilations of facts such as phone directories are practical and functionally useful works. Access to them ought not to be put solely into the hands of the party with the most resources to publish them first. This is because the limited way in which the facts contained in these works can be expressed gives the rights owner an effective monopoly over the facts. Therefore, it is submitted that the authorship test, which provides better public access to compilations of facts while still upholding strict standards of copyright subsistence, is the preferable test and ought to be applied in New Zealand.

Conclusion

The Copyright Act 1994 establishes a regime of copyright subsistence for original works. The concept of originality has traditionally been interpreted by New Zealand courts through the “sweat of the brow” test. This test is currently endorsed generally by the Supreme Court in Henkel v Holdfast New Zealand ¹³⁵ and particularly with regards to compilations of facts by the Court of Appeal in University of Waikato v Benchmarking Services Ltd.¹³⁶ This requires the work’s author to expend more than a minimal amount of skill and labour in either the material form of the work or in preparing the material form of the work.¹³⁷ The underlying rationale of the “sweat of the brow” test is that the role of copyright is to protect the skill and labour that the author invests into their work so as to encourage the production of new works.¹³⁸ This test thereby protects the skill and labour put into collecting and compiling the information for compilations of facts, even though the level of originality in the material form of these works can be low or even negligible.

The Federal Court of Australia has recently decided Telstra v Phone

Directories Company which applied the authorship test for originality.¹³⁹

This test has two requirements for copyright subsistence: that there

¹³⁵ Henkel KgaA v Holdfast New Zealand Ltd, above n 3.

¹³⁶ University of Waikato v Benchmarking Services Ltd, above n 4.

¹³⁷ G. A. Cramp & Sons Ltd v Smythson Ltd, above n 27.

¹³⁸ Henkel KgaA v Holdfast New Zealand Ltd, above n 3.

¹³⁹ Telstra Corporation Ltd v Phone Directories Company Pty Ltd, above n 6.

must be an identifiable author for the material form of a work, and that there must be sufficient originality imparted by the author into the material form of the work.¹⁴⁰ The underlying rationale for this test is that the purpose of copyright law is to protect the expression of the author in the material form of the work.¹⁴¹ This test does not grant copyright subsistence to compilations of facts whose form is dictated by the nature of their facts because the author will not have imparted any original skill and labour into these works.

The Court of Appeal currently faces the decision of which of these approaches to apply in the appeal of YPG IP v Yellowbook.com.au. If the Court applies the approach taken in Henkel v Holdfast New Zealand the decision will likely be determined on the factual consideration of whether YPG IP can identify an author for their work. If the Court applies the authorship test, YPG IP will have to prove authorship and originality in the material form of their directories. It is submitted that the Court ought to apply the authorship test because it better protects the public interest in having access to useful works such as phone directories. Hopefully the Court of Appeal decision will shed light on the development and application of the concept of originality in New Zealand.

¹⁴⁰ At [102]–[104], [119].

¹⁴¹ At [102]–[104], [119].