Infringement of copyright is not kara-OK

A Sydney karaoke lounge is singing the blues after Federal Magistrate Raphael ordered on 11 February 2010 that it pay additional damages for infringing copyright in certain song films. 

Top Plus Pty Ltd held an exclusive licence for the copyright in certain song films which were used (under a sub-licence) in K Square Pty Ltd’s karaoke lounge.

Top Plus increased its sub-licence fees at the time the sub-licence was to be renewed. K Square continued to use the films during the negotiation period (despite the previous sub-licence period having lapsed).  Negotiations broke down and the sub-licence was not renewed.

K Square then indicated to Top Plus that the infringing material had been removed.  However, some of that material, as well as additional material for which Top Plus held an exclusive licence, made its way back into K Square’s servers and continued to be used. 

It was found, by consent, that copyright had been infringed.

Federal Magistrate Raphael considered the question of whether Top Plus should be awarded additional damages. 

Top Plus was awarded additional damages under s 115(4) of the Copyright Act 1968 because:

  • K Square was “flagrant” following the break down of negotiations (it knowingly breached copyright by continuing to use the song films after the licence had expired, it claimed that it had taken down the infringing material when it had not, and it persisted in challenging Top Plus’s status as exclusive licensee).
  • There was a need to deter K Square and other karaoke lounges from infringing copyright in such a way.
  • K Square’s conduct after being notified of the breaches was “far from accommodating”.
  • Potentially, K Square gained a pecuniary advantage in excess of the damages it would otherwise have to pay.

The value of the damages to be awarded (taking into account “additional” damages) is yet to be determined. 

In the same proceedings, K Square successfully cross-claimed against Top Plus for unconscionability under the Trade Practices Act 1974 for Top Plus’s conduct in the attempted sub-licence renewal. The damages awarded to K Square are also yet to be determined.

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