Copyright - Telstra Corporation Limited v Desktop Marketing Systems Pty Ltd on appeal in the Federal Court

by Chad de Souza

The decision of the appeal court - with Chief Justice Black and Justices Lindgren and Sackville sitting - is significant in that it builds upon the reasoning of Justice Finkelstein and clearly establishes that compilations of data can attract the protection of copyright as a literary work, on the basis of 'industrious collection' and that (in a departure from the law of copyright as developed in the United States) 'sweat of the brow' (or the expenditure of effort and expense) may be enough to satisfy the requirements of originality in Australia. The court observed, however, that the development in Europe of a separate database right, as well as the divergence of copyright law in the US and Canada, are issues that would be considered in any High Court appeal. The unsuccessful appellants have indeed sought leave to the High Court.

In the meantime, the decision will mean that, in the absence of a separate Australian database right, databases and other compilations of information will be able to rely on copyright to prevent reproduction, provided they meet the minimum threshold of requiring sufficient skill and labour.

Summary of facts

The appellant in the decision, Desktop Marketing Systems Pty Ltd (DMS), had produced three CD-ROMS that used data originally published by Telstra in the White Pages and Yellow Pages.

The first item, the 'Phone Directory', contained an alphabetical listing within post codes of every telephone subscriber in Australia. The second item, the 'Phone Disk', contained the same data but with more sophisticated searching options, including obtaining a name and address from a known telephone number.

The third item, the 'Marketing Pro', contained subscriber information divided into industries (as in the Yellow Pages) but further divided according to standard industrial classification codes used in Australia and other countries. The CD-ROM contained more information than the Yellow Pages where it is available for an entry; for instance, the number of employees for an entity and its Ausdoc DX number. Marketing Pro also allowed up to 27 different ways of searching for an entry.

The information used in all the above items was produced by Dependable Database Data, which manually key-punched the entire Yellow and White Pages into a database which was sold to DMS.

Copyright and compilations

In delivering its decision, the court's members focused on different aspects: Justice Lindgren provided a detailed examination of the development of copyright law in Australia and Justice Sackville focused on the expense and labour undertaken by Telstra in producing the directories.

The court conducted a comprehensive review of the development of copyright law in the United Kingdom and Australia, focusing on decisions that dealt with compilations and similar works. Moreover the court examined the position both prior to and after the passing of the Copyright Act 1911 (UK). Justice Lindgren's conclusions in relation to the subsistence of copyright in compilations of factual information in Australia include that:

(a) The concept of originality is correlative with that of authorship.

(b) Authorship (likewise originality) does not require novelty, inventiveness or creativity, whether of thought or expression, or any form of literary merit.

(c) The compilation must be of 'intelligible information' and not a totally random collection and listing of unrelated pieces of factual information.

(d) The test of originality must be applied to the whole work and not to individual parts.

(e) The test of originality is whether the work was not copied from another work, and that it originated from the putative author.

(f) The test is one of fact and degree as to the extent of the putative author's contribution to the making of the work in question.

(g) Where there is only one way of expressing and arranging a factual compilation, the compilation may still attract copyright protection.

(h) There is no principle that the labour and expense of collecting, verifying, recording and assembling of data to be compiled are irrelevant to, or are incapable of, themselves establishing originality.

In his analysis of the law, Justice Sackville also added the following observations:

(a) In order for copyright to subsist in a factual compilation on the basis of the labour or expense required to collect the information, the compiler must show that the labour or expense exceeds a minimum threshold. The question is a matter of fact and degree.

(b) The labour or expense required to collect the information can be taken into account, regardless of whether the labour or expense was directly related to the preparation of the compilation in material form, provided it was for the purpose of producing the compilation.

(c) Copyright will be infringed only where the alleged infringer takes a substantial part of the copyright work again this is an issue of fact and degree.

The court further considered the application of the US decision, Feist Publications Inc v Rural Telephone Service Co Inc, and the subsequent development of copyright law in the US in relation to compilations. The Feist decision involved, as in the current matter, the issue of originality in telephone directories. The court in that instance decided that, in addition to the mere collection of data, there was a further requirement of a 'creative spark' of minimum creativity in creating the work. The court held that this was not the position in the Anglo-Australian context.

Application to Telstra's directories

The court noted that creation by Telstra of the directory of subscribers involved:

(a) information being entered into a database (Axis) initially at the time of subscription to the telephone line;

(b) this information being transferred to an additional database (Condor);

(c) the Condor information being verified and, where errors were detected, manually checked and corrected;

(d) the Condor information being transferred to a typesetting and graphics compilation system;

(e) manual checking of proof pages for errors and silent numbers; and

(f) manual correction of errors and re-alphabetisation.

The Yellow Pages involved more work in arranging the entries according to the appropriate headings, and in Telstra sale staff soliciting orders for advertisements (in addition to the standard entry). The court was prepared to hold (as was Justice Finkelstein at first instance) that Telstra had exercised enough skill and labour to satisfy the requirements of originality.

The court, however, did not articulate any formulations for either finding that sufficient expense and labour had been expended to acquire originality, or what would constitute such a minimum threshold.

The court found that, even though DMS's directories had not visually resembled the Telstra directories, its use of the names and telephone numbers of subscribers allowed it to 'take the benefit' of Telstra's 'whole of universe certification' and labour and concluded that there had been a material reproduction of the directories and headings.


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