The Federal Court of Australia has awarded additional damages in the highest order against Clive Palmer (Palmer) for his copyright infringement of the 1985 Twisted Sister’s rock song ‘We’re Not Gonna Take It’ (the Song).

Justice Katzmann’s 533 paragraph judgment in Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434 makes not only for an entertaining read but demonstrates that Courts will not tolerate those who disregard the regime of copyright protection established under the Copyright Act 1968 (Cth) (the Act).

Background: Behind the UAP campaign

The impetus for this case was the 2019 Australian federal election. Palmer – seemingly inspired by the use of the Song in Donald Trump’s 2016 presidential campaign and Arnold Schwarzenegger’s 2003 gubernatorial campaign – sought to use a cover version of the Song for the United Australia Party’s (UAP’s) campaign.

In 2018, with the election approaching, Palmer instructed an agent to negotiate a licence with Universal Music Publishing Pty Ltd (UMP). UMP held the exclusive license to the Song in Australia on behalf of Songs of Universal, Inc. (together, Universal). Palmer sought a licence to use a ‘re-recorded version’ of the Song, including with possible lyric changes. Universal reverted with a request for further information, including ‘clear and precise creative details’ of UAP’s proposed cover version. Tentatively, Universal also gave a quote of $150,000 for a 12-month licence. This led to an impasse – Palmer baulked at the licence fee and refused to provide further details on the grounds that to do so would compromise ‘the integrity of the [UAP] campaign’. At this point, negotiations between the parties broke down.

In November 2018, Palmer authorised the creation and recording of the song ‘Aussies Not Gonna Cop It’, and its synchronisation with no less than 12 UAP campaign videos.

In December 2018, the UAP videos were broadcast across multiple media channels. The videos published on the internet received more than 17.5 million views on YouTube and Facebook alone.

After being alerted to the UAP campaign, Universal commenced copyright infringement proceedings against Palmer.

Copyright infringement

The substantive issue in this case was whether, by authorising the creation of ‘Aussies Not Gonna Cop It’, or its recording and video synchronisation, Palmer infringed Universal’s copyright in the Song.

Determining whether the copyright of a work has been infringed requires a comparison to be made of the respective works and involves:

• first, identifying the works in suit in which the copyright subsists;
• second, identifying in the allegedly infringing work the part which is alleged to have been taken, derived or copied from the copyright work; and
• third, deciding whether the part which is taken is a substantial part of the copyright work.[1]

The Court found threefold in favour of Universal. Specifically, the Court determined:

• The works in suit were the music (the musical work) and lyrics (the literary work) comprised in the Song. The subsistence of copyright in both works was not disputed.
• Palmer’s infringing works were derived, either directly or indirectly, from the Song’s musical work and literary work. The degree of objective similarity of the works, and the causal connection between them, was sufficient to establish that the former must be a reproduction or adaptation of the latter. In doing so, the Court also wholly rejected Palmer’s claim that he woke and wrote the lyrics on a piece of paper by his bedside one early morning in September 2018.
• For both the musical work and literary work, the copied chorus was a substantial part of the Song’s works – both quantitively and qualitatively – and was the Song’s most memorable feature.

With the infringement of Universal’s copyright in the works established, the Court considered Palmer’s defence.

Palmer’s defence

In the alternative, Palmer claimed that he did not infringe Universal’s copyright because the use of the Song’s works was ‘fair dealing for the purpose of parody or satire’ under section 41A of the Act. This section is relatively new, and its judicial consideration is limited, however, the Court had no difficulty finding that Palmer’s dealings in the copyright works were neither fair nor for the purpose of parody or satire.

In short, the Court found that Palmer infringed Universal’s copyright and did so without attracting the protection of section 41A.

Over the course of the judgment, the Court not only queried Palmer’s credibility, deemed his evidence as ‘disingenuous’ and found him a ‘most unimpressive witness’, but described his infringing conduct as, among other charged adjectives, ‘contemptuous’, ‘opportunistic’, and ‘high-handed’. This informed the remedies granted by the Court.

Relief

In a case with many remarkable aspects, the relief awarded by the Court was most significant.

Section 115 of the Copyright Act deals generally with remedies for infringement. Compensatory damages and, at the Court’s discretion, additional damages, are available under this section.

In this case, the Court awarded significant compensatory and additional damages. Palmer was ordered to pay Universal $1.5 million in total damages, comprised of $500,000 in compensatory damages and $1,000,000 of additional damages (as well as Universal’s costs). The latter is particularly remarkable; it is the second greatest award of additional damages under the Act ever handed down.

Compensatory damages

Section 115(2) permits a court to award compensatory damages. By their nature, the damages are not punitive. Rather, the award is intended to restore the copyright owner to the position it would have been in if the infringement had not occurred.

In its assessment of compensatory damages, the Court determined that Universal should not be limited to nominal damages and that damages can and should be calculated in accordance with ‘the user principle’.[2] This approach contemplates, among other factors, the notional licence fee that would have been charged for the infringing use. While the methodology for calculating damages by this principle is not immutable, the Court considered the following to determine the notional licence fee:

• the Song was a valuable commodity for Universal;
• the value to Palmer of the use of the copyright works was considerable;
• the copyright works had not previously been used in advertising in Australia;
• the works were used for political purposes by a controversial figure;
• the works were deployed in multiple advertisements and featured prominently in all of them;
• the advertisements were shown frequently throughout Australia and on a variety of platforms; and
• the campaign lasted for a period of about six months.[3]

Notwithstanding Universal’s initial quote to Palmer for a licence fee of $150,000, the Court assessed the notional licence fee and Universal’s section 115(2) damages at $500,000, after taking into account the factors listed above.

Additional damages

Beyond compensatory damages, the Court held this was a case which called for a substantial award of additional damages.

The award and quantification of additional damages under s 115(4) of the Act are highly discretionary.[4] Section 115(4) provides that, where a court is satisfied that it is proper to do so, having regard to certain matters, a court may award such additional damages as it considers appropriate in the circumstances. While courts must consider the factors stipulated in s 115(4), the factors are not cumulative.[5] A court need only be satisfied that one or more of these circumstances exist to enliven the discretion.[6] Generally, the award of additional damages under s 115(4):

• does not turn on the flagrancy of the infringement alone;[7]
• is not amenable to precise mathematical calculation and provides for damages where the loss is difficult to compensate and assess in the normal course;^[8]
• involves an element of penalty, should be proportionate to the infringer’s culpability, and entails future-looking considerations of specific and general deterrence;^[9]
• marks the Court’s disapproval or opprobrium of the infringing conduct,^[10] and should address ‘the seriousness, amongst other things, of the studied disregard of the regime of copyright protection established by the Copyright Act’;^[11]
• is not limited by compensatory damages and can encompass both aggravated and exemplary damages;^[12] and
• varies according to the means and circumstances of the individual infringer.

In its assessment of additional damages, the Court held that:[13]

• Palmer acted in flagrant disregard of Universal’s rights. His conduct was ‘high-handed’ and ‘contemptuous’. Palmer was aware that his use of the copyright works was unlawful and required a licence but knowingly proceeded as he was not prepared to agree to Universal’s terms.
• Palmer’s behaviour was contumelious. After being informed of his infringing conduct, Palmer launched public and private counterattacks on Universal with the apparent object of deterring it from enforcing its rights.
• The need for both punishment and deterrence was high in light of the false evidence given by Palmer (which included concocting a story to exculpate himself).
• Palmer intended to, and did, derive political benefit by his infringing conduct.
• Palmer’s unauthorised use of the Song was deeply upsetting to the original composer and songwriter, Mr Snider.
• Palmer taunted, mocked and derided Mr Snider, both before and during the proceeding, for the purpose of attracting publicity for himself and/or the UAP.
• Palmer’s deficiencies in discovery, including his failure to comply with his discovery obligations prior to the final hearing, was calculated. The Court inferred that it was an attempt to frustrate Universal’s efforts to ascertain the full scope of Palmer’s infringing conduct.

In determining the quantum of the award, the Court considered evidence disclosing that Palmer is a man of immense wealth, with a net worth of over $1 billion. The Court was cognisant that an amount which may be an effective sanction for an infringer with limited means may be ineffective as a sanction or deterrent for a wealthy infringer, such as Palmer.[14] Nevertheless, it was noted that Courts traditionally approach an award of damages with caution.[15]

Having regard to all relevant matters, the Court awarded Universal additional damages of $1,000,000.

Palmer was otherwise permanently injuncted from using the Song’s works and ordered to remove and deliver up to Universal any and all reproductions of the works.

Key takeaways

This case is a helpful exposition of the general principles and policy of copyright law. It demonstrates how copyright in music can be understood as a commercial asset – and the exclusive rights that a copyright owner enjoys in respect of that asset. Most significantly, the case demonstrates the robust relief available under Australia’s copyright regime in circumstances where these rights are flagrantly infringed.

The Court’s award of compensatory damages, and the significant quantum of additional damages, demonstrates that courts will not hesitate to impose significant penalties in copyright infringement suits. We are seeing this in cases involving flagrancy and the pursuit of benefit with disregard to the rights of the copyright owner. Would-be infringers should be on notice that Courts are increasingly willing to exercise their discretionary power to award additional damages – in substantial sums.

This trend can be seen in the recent case QAD Inc v Shepparton Partners Collective Operations Pty Ltd [2021] FCA 615 777, which also saw a significant award of additional damages for copyright infringement. Watch this space for our summary of that decision.

[1] Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 172 FCR 580 at [41] (Lindgren, Goldberg and Bennett JJ).

[2] Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 at 1416.

[3] Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434 at [469] – [477].

[4] Raben Footwear Pty Ltd v Polygram Records Inc (1997) 37 IPR 417; 145 ALR 1 (Raben); Facton Ltd v Rifai Fashions Pty Ltd (2012) 287 ALR 199 (Facton); Microsoft Corporation v Goodview Electronics Pty Ltd [2000] FCA 1852.

[5] Raben at 433; Microsoft Corp v Leonidas [2010] FMCA 986 at [8].

[6] Sullivan v FNH Investments Pty Ltd (2003) 57 IPR 63 at 74; [2003] FCA 323; Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq) (Aristocrat) (2007) 157 FCR 564; 71 IPR 437; [2007] FCAFC 40 at [41] per Black CJ and Jacobson J and [113] per Rares J.

[7] Aristocrat at [113] – [116].

[8] Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 5) (2017) 122 IPR 279; [2017] FCA 63.

[9] Facton; Urban Ventures Pty Ltd v Solitaire Homes Pty Ltd (2010) 90 IPR 289; [2010] FCA 1373 at [60] per Jagot J; Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 5) (2017) 122 IPR 279; [2017] FCA 63.

[10] Facton at [36].

[11] Corby v Allen & Unwin Pty Ltd (2013) 297 ALR 761; [2013] FCA 370.

[12] Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763; [2008] FCA 746 (Futuretronics) at [17].

[13] Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434 at [495] – [525].

[14] Ibid at [522].

[15] Polygram Pty Ltd v Golden Editions Pty Ltd (1997) 76 FCR 565 at 577.