Section 132AD [see Appendix at page 329] contains offences for making an infringing copy for commerce. There are three offences for making an infringing copy commercially, which are tiered according to culpability. All of the offences contain the infringing copy and subsistence elements
407 See generally: Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984; Nine Network Australia Pty Ltd v Australian Broadcasting Corp [1999] FCA 1864; TCN Channel Nine v Network Ten (2001) 108 FCR 235
common to this Subdivision. In most of the other Subdivision 5 offences, the infringing copy element is a circumstance element, but here it a result element. The offence is not concerned with dealings with infringing copies, but rather bringing them into existence. At present, this difference has no effect on the indictable offence since the fault elements for both results of conduct and circumstances in which conduct occurs is recklessness.408
[4.2.1] Indictable Offence
The indictable offence is housed in s 132AD(1) and consists of three physical elements:
(1) making an article;409
(2) the article is an infringing copy;410 and
(3) copyright subsists when the article is made.411
The fault element for the first physical element is specified as being an intention to do one of three things:
(1) sell the article;412
(2) let the article for hire;413 or
(3) obtain a commercial advantage or profit.414
The fault element for the other physical elements (“the common physical elements”) is recklessness, since the absence of a specified fault element means s 5.6 of the Criminal Code Act 1995 (Cth) applies.
[4.2.2] Summary Offence
The summary offence in s 132AD(3) differs from the indictable offence only by lowering the culpability of the fault elements of the two common physical elements from recklessness to negligence. Both the physical and fault elements of the first element of the offence remains identical to the indictable offence.
408 Criminal Code Act 1995 (Cth) sch 1 s 5.6 (2)
409 Copyright Act 1968 (Cth) s 132AD(1) (a)
410 Copyright Act 1968 (Cth) s 132AD(1) (b)
411 Copyright Act 1968 (Cth) s 132AD(1) (c)
412 Copyright Act 1968 (Cth) s 132AD(1) (a) (i)
413 Copyright Act 1968 (Cth) s 132AD(1) (a) (ii)
414 Copyright Act 1968 (Cth) s 132AD(1) (a) (iii)
[4.2.3] Strict Liability Offence
By definition the strict liability offence in s 132AD(5) removes the requirement of corresponding fault elements for both of the standard physical elements. The first physical element differs slightly from both the indictable offence and the summary offence. In those offences, the physical element is written simply – “a person makes an article”. The fault element in those offences is more elaborate, requiring the intention of one of three things: selling it, letting it for hire, or obtaining a commercial advantage or profit. These are discussed below at paragraphs [4.2.4.], [4.2.5] and [4.2.6]. Here the strict liability offence prohibits the making of an article “in preparation for, or in the course of” any of the same three things.
It is difficult to imagine how evidence could differ between proving that an article was made “in preparation for” and not “with the intention of” doing any of the three proscribed acts. The offence is not one of preparing to make the copy. The preparation is for the doing of one of the other three things, and implies they have not commenced. When someone has explicitly made preparations to sell, hire or obtain commercial advantage or profit by copying an article, an intention to do any of these three acts would surely exist in the mind of the person. In regard to offences where selling, hiring out or obtaining a commercial advantage or profit have not yet occurred, and exist only in the mind of the defendant, it is likely that 132AD(5) will be only used where evidence cannot support the corresponding fault elements of either the common elements for the indictable or summary offence.
However s 132AD(5) also contemplates making a copy “in the course of” selling, hiring or obtaining a commercial advantage or profit. This phrase is not a term of art, and it simply means “during” or “in the process of”. Making a copy during or in the process of selling or hiring the same article would appear to be difficult to achieve, unless either transaction is taken to have started by taking a customer’s order. Obtaining a commercial advantage might be easier to make out due to the potential scope of the element, for example making an infringing copy for free in order to attract other business custom.
[4.2.4] “selling”
In the absence of express statutory extension or necessary implication,415 the meaning of the word
“sell” is confined to an exchange of commodities for money.416 French J in Sun World Inc v Registrar, Plant Variety Rights417 stated that:
415 Sun World Inc v Registrar, Plant Variety Rights (1997) 148 ALR 447, 458 per French J
“There is considerable authority for the proposition that the ordinary meaning of the word
“sale” in a variety of statutory and common law settings is an exchange of commodities for money”418
No such express extension appears in the Copyright Act 1968 (Cth) nor would it appear that it is necessary to extend its meaning to facilitate the operation of the section. It is fairly clear that the word “selling” in s 132AD, and its related grammatical forms,419 should be restricted to transactions that use money. Transactions involving any other medium of exchange or barter, such as exchanging other infringing articles,420 would not meet this definition. The other intended acts in ss 132AD(1)(a), (3)(a) and (5)(a) are not restricted by this strict interpretation, so it may be possible that an exchange for something other than for money could constitute an offence under one of those subsections.
Having restricted the meaning of “selling” to exchanges in consideration for money, no guidance is given from the case law previously referenced about the limits of the definition of “money”. In Moss v Hancock421 Darling J adopted the following definition:
“that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it and without the intention of the person who receives it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities.”422
Within the Commonwealth of Australia, the Australian dollar would certainly meet this definition.
However, it would be stretching the definition to suggest that the US dollar “passes freely [...]
throughout the community” in Australia, though it might be accepted as payment. However, it would be absurd if the meaning of “money” was restricted to the Australian dollar, since all that would be necessary to escape conviction would be to agree to carry out the transaction in another currency. Also, given the global nature of infringement in the digital age, it would be unremarkable if an online transaction took place using currencies other than the Australian dollar.
416 See: J & P Coates v Commissioners of Inland Revenue [1897] 1 QB 778; Simpson v Connolly [1953] 1 WLR 911; Robshaw Brothers Ltd v Mayer [1957] Ch 125.
417 Sun World Inc v Registrar, Plant Variety Rights (1997) 148 ALR 447
418 Sun World Inc v Registrar, Plant Variety Rights (1997) 148 ALR 447, 458
419 Acts Interpretation Act 1901 (Cth) s 18A
420 Irvine v Hanna-Rivero (1991) 23 IPR 295
421 Moss v Hancock [1899] 2 QB 111
422 Moss v Hancock [1899] 2 QB 111, 116
Since it is not an actual exchange for money that is required by s 132(1)(a)(i), rather an intention to sell, questions over the currency of exchange are unlikely to be raised unless there is evidence of pre-existing arrangement for a transaction in an usual medium of exchange. Evidence of an intention to sell is far more likely to be drawn through inference, such as a large scale production of the same article.
[4.2.5] “letting for hire”
The phrase “letting for hire” has been judicially considered in the context of transportation licensing.423 In the English case of Corner v Clayton424 a private pilot had agreed to fly a third party from Durkeswell Flying Club in Exeter to Jersey airport. The third party had agreed to cover the cost of the hire of the aircraft from the flying club. The pilot was subsequently charged with flying an aircraft for the purposes of public transport without holding the appropriate licence. It was contended that the pilot had flown the aircraft for hire and therefore engaged in public transportation. The court held that “hire” meant “engaging the services of a person or the use of a chattel for payment” and that it was immaterial whether or not there is a profit element in the hiring charge. In Murphy v Forsythe; ex parte Murphy,425 this definition was approved and adopted.
There is no authority which would either support or oppose a contention that a payment for hire would have to take the form of money as it would for a sale. This may mean that an arrangement between two or more parties to temporarily exchange infringing articles could possibly meet the definition of a let for hire. Given the ease with which digital copies can now be exchanged and copied over the internet, it would seem more likely that infringing articles will be let for hire by businesses to customers for monetary payment.426
[4.2.6] “obtain a commercial advantage”
The precise meaning of the words “commercial advantage” has received little judicial consideration in Australia. The use of these words in relation to the law of copyright originates in the 1976 revision of US copyright law.427 They were subsequently incorporated into Australian copyright law in the Copyright Legislation Amendment Act 2004 (Cth) 428 implementing Articles 17-26 of the Australia-US Free Trade Agreement.429 At no stage in this journey are the words given meaning in an explanatory
423 See: Murphy v Forsythe; ex parte Murphy [1980] Qd R 65; Corner v Clayton [1976] 3 All ER 212
424 Corner v Clayton [1976] 3 All ER 212
425 Murphy v Forsythe; ex parte Murphy [1980] Qd R 65
426 See: Pontello v Giannostis (1989) 16 IPR 174
427 An Act for the General Revision of Copyright Law 1976, Pub L No 94-553, 90 Stat 2541, §506
428 Copyright Legislation Amendment Act 2004 (Cth) s 17
429 Australia-US Free Trade Agreement, opened for signature 18 May 2004, [2005] ATS 1, art 17-26
memorandum. This is troubling because “commercial advantage” could be easily construed by its ordinary meaning to include many incidental infringements with a very low impact on the commercial interests of rights holders.
For example, if D owns a barber shop, obtains a background music licence from the Australasian Performing Right Association and buys a CD to play in his shop, this would almost certainly be characterised as a “commercial advantage” in the ordinary sense. The background music is being played to create a pleasant atmosphere which he hopes is attractive to potential customers. Since the “commercial advantage” is not qualified, it would be reasonable to assume that it is not limited to advantages over competitors, but would include improvements to D’s chances of attracting and retaining custom. If D were to copy the CD for the purposes of playing in his shop so he can use the original as a backup, he will have enlivened the “making a copy” element of any of the three offences in s 132AD, despite having paid for the original CD and a performance license.
[4.2.7] “profit”
The meaning of the word “profit” is not defined for the purposes of the Copyright Act 1968 (Cth), but as discussed above at paragraph [2.1], in Division 5 it does not include any advantage, benefit, or gain received by a person that results from, or is associated with, the person’s private or domestic use of any copyright material.
The most obvious way to make a profit would be to sell an infringing copy for more money than it cost to produce. However, this conduct would of course fall under the definition of “selling”, so it should be assumed that “obtaining a profit” addresses a broader range of conduct that results in a benefit or gain by the person making the copy. An example would be making a copy for a reward or gain where both the original copy and the materials used to make the copy, such as a blank CD or DVD, are provided by a third person. If such a transaction occurs between members of a domestic circle, it is unlikely that this would enliven the offence, but this would depend on extending “private and domestic use” to private and domestic acts of infringement.