Rights when automation plays a major role in creation

In its unanimous decision in Telstra Corporation Ltd v Phone Directories Company Pty Ltd ([2010] FCAFC 149) the Full Federal Court found that no copyright subsisted under the Copyright Act 1968 in the White Pages and Yellow Pages directories published by Sensis Pty Ltd, a wholly owned subsidiary of Telstra. 

The White Pages and Yellow Pages list the names, addresses, telephone numbers and other information of residential and business customers in a particular geographic region.

Since October 2003 the majority of the listing information has been entered into a database automatically, with only about 15% of information entered manually. The computer system automatically checks to ensure the completeness and accuracy of the information, and that it complies with rules prescribing the font, colour scheme and word spacing, and prohibiting certain words or phrases. Data from one year acts as a template for the following year. Further programs compare and update the data for the new edition and ensure that the information is correct, properly ordered and formatted before publishing. Some manual checks are undertaken to look for errors. The computer system comprises a number of programs, few of which were created by Telstra or Sensis employees. 

Full Federal Court decision 
To succeed in the appeal, Telstra needed to establish that copyright subsisted in the directories. According to the Copyright Act 1968, copyright can subsist in a compilation and the author of a literary work is the owner of the copyright in the work. A work is made when it is first reduced to a material form, whether that is in writing or some other material form such as a computer file. Under Australian law, in relation to original works, an author must be a human.

The court reduced the directory production process into three main phases:

  • The maintenance, updating and editing of a database containing customer details (the collection phase).
  • The extraction from that database of information for each directory and the conversion of that information into an electronic form which was substantially the form of the ensuing directory (the extraction phase).
  • The typesetting of that form and the physical production of the directories (the production phase).

The court considered that although there was substantial effort, including intellectual effort by many employees in the collection phase, their efforts had no influence on the actual material form of the work. Therefore, they were not authors of the work. In relation to the extraction phase, the court agreed with the primary judge and held that this phase was when the work was first reduced to its material form (the galley file); it was ostensibly dictated by computer programs and any human involvement merely ensured that the rules of the extraction phase programs were observed.

Therefore, the directories did not have an author and copyright could not subsist in them. 

Telstra has a lucrative business producing phone directories, so it is unsurprising that it has filed for special leave to appeal to the High Court. Had Telstra created the software that generates the material form of the work, perhaps it would have a stronger argument that it authored the material form of the directories.

Whether copyright protection should be afforded for data that is merely collated and published with little direct human ‘intellectual’ input on the presentation of the information is a debate that is about to heat up.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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