The Federal Court has today determined the damages payable as a result of the earlier finding (reported here) that the flute riff in the Men at Work song Down Under infringed copyright in the musical round known as Kookaburra.
Interestingly, the decision of Jacobson J in Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited (No 2)  FCA 698 was not a determination of damages for copyright infringement but rather damages under the Trade Practices Act 1974 (Cth) for misrepresentations made to collecting societies, the Australasian Performing Right Association and the Australasian Mechanical Copyright Owners Society. Accordingly, the question for determination was the percentage interest, and any other entitlement that Larrikin may have, to APRA and AMCOS income in relation to the exploitation of Down Under.
The evidence of Larrikin, the copyright owner, was to the effect that taking into account percentages that were agreed in other instances of sampling, a fair remuneration for the licence to use the copyright in Kookaburra for the purpose of writing and exploiting Down Under negotiated on an arm’s length basis between willing parties would have been a royalty in the order of between 25% and 50% of the total income of Down Under. Reference was made to a number of examples where royalties in the range of 20 to 40% had been negotiated. However, following cross-examination, it became apparent that these supposed “comparables” involved factual circumstances significantly different to those in the present case. By contrast, the respondents pointed to examples of royalty arrangements involving a figure of 5% or less.
In calculating an appropriate royalty by considering a hypothetical bargain between the copyright owner and potential licensee, Jacobson J considered the musical significance of Kookaburra in Down Under, the thematic significance, the significance of certain performances of Men at Work front man Colin Hay in which he would sing the words of Kookaburra during Down Under and the visual association with Kookaburra as found in the Down Under music video.
Each of these considerations was found to point toward an appropriate royalty being at the lowest end of the scale. In relation to the musical significance of the part of Kookaburra reproduced in Down Under, the Court placed significant emphasis on the fact that the resemblance between the two was not identified for over twenty years and was only made apparent to Larrikin by a third party.
The Court concluded that:
Although the quotation from Kookaburra in the 1981 recording is, in my view, sufficient to constitute an infringement of copyright, other factors are to be taken into account in assessing the percentage interest payable in a hypothetical licensing bargain.
The most obvious factor is the difficulty in detecting the similarity between the flute riff and the bars from Kookaburra. A further strong indicator of a low percentage is to be found in a qualitative and quantitative consideration of Kookaburra’s contribution to Down Under, looked at a whole.
Accordingly, Jacobson J considered “the figures put forward by Larrikin to be excessive, overreaching and unrealistic” and found that a figure of 5% of the income paid by APRA and AMCOS was an appropriate calculation of damages.