Telstra Corporation Ltd v Phone Directories Compay Pty Ltd

2010 FCA 44
264 ALR 617

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(Judgment by: Gordon J)

Between: Telstra Corporation Ltd & Anor
and: Phone Directories Compay Pty Ltd & Ors

Court:

Judge:
Gordon J

Subject References:
INTELLECTUAL PROPERTY
whether copyright subsists in White Pages and Yellow Pages directories as original literary works
central concepts under the Copyright Act 1968 (Cth)
centrality of authorship
whether the contributions to the directories involved the necessary independent intellectual effort or sufficient effort of a literary nature
author
independent intellectual effort
original
sufficient effort of a literary nature

Legislative References:
Copyright Act 1968 (Cth) - The Act
US Free Trade Agreement Implementation Act 2004 (Cth) - The Act

Case References:
Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd - (1999) 46 IPR 339
Autodesk Inc v Dyason - (1992) 173 CLR 330
Cala Homes (South) Ltd v Alfred McAlpine Homes East Ltd (No. 1) - [1995] FSR 818
Data Access Corporation v Powerflex Services Pty Ltd - (1999) 202 CLR 1
Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd - (2002) 119 FCR 491
Football League Ltd v Littlewoods Pools Ltd - [1959] Ch 637
IceTV Pty Limited v Nine Network Australia Pty Limited - (2009) 254 ALR 386
Interlego AG v Croner Trading Pty Ltd - (1992) 39 FCR 348
Hollinrake v Truswell - [1894] 3 Ch 420
Ladbroke (Football) Ltd v William Hill (Football) Ltd - [1964] 1 WLR 273
Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited - [2010] FCA 29
Levy v Rutley - (1871) LR 6 CP 523
Liftronic Pty Ltd v Unver - (2001) 179 ALR 321
Macmillan and Co Ltd v Cooper - (1923) 1B IPR 204
Metwally v University of Wollongong - (1985) 60 ALR 68
Microsoft Corporation v DHD Distribution Pty Ltd (t/as Austin Computers) - (1999) 45 IPR 459
Microsoft Corporation v PC Club Australia Pty Ltd - (2005) 148 FCR 310
Milwell Pty Ltd v Olympic Amusements Pty Ltd - (1999) 85 FCR 436
Prior v Lansdowne Press Pty Ltd - (1975) 12 ALR 685
Robinson v Sands & McDougall Pty Ltd - (1916) 22 CLR 124
Sands & McDougall Pty Ltd v Robinson - (1917) 23 CLR 49
Sawkins v Hyperion Records Ltd - (2005) 64 IPR 627
Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd - (2001) 51 IPR 257
University of London Press Ltd v University Tutorial Press Ltd - [1916] 2 Ch 601
Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd - (2009) 83 IPR 1
Victoria v Pacific Technologies (Australia) Pty Ltd (No 2) - (2009) 177 FCR 61
Victoria Park Racing and Recreation Grounds Co Ltd v Taylor - (1937) 58 CLR 479
Waterlow Publishers v Rose - (1989) 17 IPR 493
William Hill (Football) Ltd v Ladbroke (Football) Ltd - [1980] RPC 539

Other References:
Davison, The Legal Protection of Databases, (2003)
Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, (3rd ed, 2000)

Hearing date: 21-23, 26 and 29 October 2009
Judgment date: 8 February 2010

Melbourne

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Judgment by:
Gordon J

REASONS FOR JUDGMENT

I INTRODUCTION

1 The question for determination is whether copyright subsists in the White Pages ( WPDs ) and Yellow Pages ( YPDs ) directories published by the applicants, Telstra Corporation Limited (ACN   051   775   556) ( Telstra ) and Sensis Pty Ltd (ACN   007   423   912) ( Sensis ) (collectively, the Applicants ). These proceedings, commenced on 5   April 2007, concern the WPDs listed in Annexure   A and the YPDs listed in Annexure   B (collectively, the Works ). The first date of publication of each directory is listed in the Annexures. Publication dates range from 2000 to 2009.

2 Many thought that the issue in these proceedings - whether the WPDs and YPDs published by the Applicants satisfy the requirements of the Copyright Act 1968 (Cth) (the Copyright Act ) to attract the statutory monopoly granted by that Act - might have been resolved by the decision of the High Court in IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 254 ALR 386 ( IceTV ). It seems they were mistaken. The Respondents say it was. The Applicants say it was not.

3 Although a number of the WPDs and YPDs for particular regions published by the Applicants are bound together (the co-bound volumes), the Applicants contend that each WPD and each YPD is a separate work. In fact, the Applicants contend that the elements or components of the directories that satisfy the requirements of the Copyright Act as "original literary works" are the listings, enhancement of listings and arrangement of listings (in the case of WPDs) and the listings, headings, enhancement of listings and arrangement of listings under headings (in the case of YPDs). Having abandoned its claim with respect to the Headings Book (the list of headings under which entries in the YPDs are entered), Senior Counsel for the Applicants described the claim in the following terms:

In the case of the White Pages directories the compilation involves the expression, including the content, form and arrangement of information in individual listings, and the overall arrangement of individual listings into the whole. Insofar as the Yellow Pages directories are concerned, the same observation is apt, but in addition there is the element that arrangement occurs under headings and includes therefore cross-references ...

No broader claim was made.

4 On 16   June 2009, I directed that the question of whether copyright subsists in the Works be determined as a preliminary question. The Applicants filed 91 affidavits in relation to that issue alone.

5 For the reasons that follow, copyright does not subsist in any Work. None is an original literary work. By way of summary:

1. among the many contributors to each Work, the Applicants have not and cannot identify who provided the necessary authorial contribution to each Work. The Applicants concede there are numerous non-identified persons who "contributed" to each Work (including third party sources);

2. even if the human or humans who "contributed" to each Work were capable of being identified (and they are not), much of the contribution to each Work:

2.1 was not "independent intellectual effort" ( IceTV 254 ALR 386 at [33]) and further or alternatively, "sufficient effort of a literary nature" ( IceTV 254 ALR 386 at [99]) for those who made a contribution to be considered an author of the Work within the meaning of the Copyright Act;

2.2 further or alternatively, was anterior to the Work first taking its "material form" ( IceTV 254 ALR 386 at [102]);

2.3 was not the result of human authorship but was computer generated;

3. the Works cannot be considered as "original works" because the creation of each Work did not involve "independent intellectual effort" ( IceTV 254 ALR 386 at [33]) and / or the exercise of "sufficient effort of a literary nature": IceTV 254 ALR 386 at [99]; see also IceTV 254 ALR 386 at [187]-[188].

II THE COPYRIGHT ACT - THE PROPER STARTING POINT

6 Throughout these reasons for decision, reference is made to the provisions of the Copyright Act in force over the period in dispute - 2000 to 2009. It should be noted that in 2005 the Copyright Act was amended by the US Free Trade Agreement Implementation Act 2004 (Cth) (the US Free Trade Act ). Pursuant to Sch   9 Pt   10 item   186 of the US Free Trade Act, the definition of "material form" was substituted to no longer require a work or adaptation of a work to be capable of reproduction in order to have copyright protection: see the Explanatory Memorandum to the US Free Trade Agreement Implementation Bill 2004 at para   [668]. Nothing in this case turns on that amendment.

A. THE COPYRIGHT ACT IN CONTEXT

7 As the reasons of the High Court in IceTV 254 ALR 386 demonstrate, it is necessary to begin the enquiry into the issues about subsistence (and ownership) of copyright at the proper starting point - the Copyright Act.

8 Several fundamental propositions are provided for by the Copyright Act and, in particular, Pt   III of the Act. First, as s   8 of the Copyright Act relevantly provides, "copyright does not subsist otherwise than by virtue of [the Copyright] Act". Copyright is a form of statutory monopoly: IceTV 254 ALR 386 at [11], [15], [22], [28] and [65]-[71].

9 Secondly, a balance is struck between monopoly (on the one hand) and promotion (and protection) of originality in new works (on the other hand): IceTV 254 ALR 386 at [24]-[26] and [71].

10 Thirdly, that balance is struck by statutory language that (a) is not precise ( IceTV 254 ALR 386 at [68]-[69]) and (b)   has permitted (if not encouraged) resort to metaphors and rhetoric ( IceTV 254 ALR 386 at [31] and [69]-[70]). Metaphor and rhetoric do not provide a proper starting point. They are no more than attempts at descriptions of result. Such approaches find no support in the Copyright Act.

B. CENTRAL CONCEPTS IN THE COPYRIGHT ACT

11 Next, a number of central concepts in the Copyright Act, and how they interrelate, need to be examined.

12 Those concepts are "literary work", "original" and "author". Part   III of the Copyright Act (ss   31 to 83) deals with "Copyright in Original Literary, Dramatic, Musical and Artistic Works". Division   1 of Pt   III is concerned with the nature, duration and ownership of copyright in these works.

13 Section   32(1) provides that, subject to the Copyright Act:

copyright subsists in an original literary ... work that is unpublished and of which the author :

(a)

was a qualified person at the time when work was made; ...

(Emphasis added).

A "qualified person" means an Australian citizen or a person resident in Australia: s   32(4).

14 Section   32(2) provides that, subject to the Copyright Act:

[w]here an original literary ... work has been published:

(a)

copyright subsists in the work; or

...

if, but only if:

(c)

the first publication of the work took place in Australia;

(d)

the author of the work was a qualified person at the time when the work was first published; or ...

(Emphasis added).

15 A reference to "an author of a work", in relation to a work of joint authorship, is a reference to all authors of the work: s   78. The references in s   32 of the Copyright Act to "the author of the work" in relation to a work of joint authorship are to be read as references to any one or more of the authors of the work: s   79. Copyright subsists in a work until the end of 70   years after the end of the calendar year in which the author of the work died: s   33(2).

16 "Literary work" is defined in s   10(1) to include:

(a)

a table, or compilation, expressed in words, figures or symbols; and

(b)

a computer program or compilation of computer programs.

17 Subject to s   35(6), the author of a literary work is the owner of any copyright subsisting in the work: s   35(2). Section   35(6) provides that where a literary work is made by the author pursuant to the terms of his or her employment by another person under a contract of service, that other person is the owner of the copyright subsisting in the work.

18 The nature of a copyright right is defined in s   31 as the exclusive right "in relation to a work" (including a literary work) to do all or any of the following acts:

(i)

to reproduce the work in a material form;

(ii)

to publish the work;

(iii)

...

(iv)

to communicate the work to the public;

(v)

...

(vi)

to make an adaptation of the work; ...

19 The expression "material form" in relation to a work is defined in s   10(1) to include (cf [6] above):

any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced).

20 The centrality of authorship is self evident.

1.

The "theoretical underpinnings" of the Copyright Act strike a balance between rewarding authors of original literary works against policy considerations concerning "the public interest in maintaining a robust public domain in which further works are produced": IceTV 254 ALR 386 at [24] and [71]. The genesis of copyright legislation in England was to protect the rights of authors of work from the reproduction of their work without their consent: see IceTV 254 ALR 386 at [25].

2.

The Copyright Act fixes on the author: ss   32, 33, 35 and 127 of the Copyright Act; IceTV 254 ALR 386 at [22]-[25] and [96]-[97] and Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd (2009) 83 IPR 1 at [147] per Lindgren   J.

3.

The author is the person or persons who bring the work into existence in its material form: s   10(1), 31 and 32 of the Copyright Act and IceTV 254 ALR 386 at [26], [33] and [98]-[99]. To be considered as an author of a literary work the person or persons must have exercised "independent intellectual effort" ( IceTV 254 ALR 386 at [33] and [48]) and / or "sufficient effort of a literary nature" ( IceTV 254 ALR 386 at [99]).

4.

The Copyright Act provides for the possibility of joint authors: s   10(1) of the Copyright Act and IceTV 254 ALR 386 at [23] and [100]. A "work of joint authorship" requires that the literary work in question "has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors": s   10(1) of the Copyright Act; see also Levy v Rutley (1871) LR 6 CP 523 at 529 per Keating   J; Cala Homes (South) Ltd v Alfred McAlpine Homes East Ltd (No. 1 ) [1995] FSR 818 at 835-836 per Laddie   J; Prior v Lansdowne Press Pty Ltd (1975) 12 ALR 685 at 688 per Gowans   J.

5.

The Copyright Act also provides for compilations - the bringing into existence of a literary work which gathers and organises material from various sources: IceTV 254 ALR 386 at [72], quoting William Hill (Football) Ltd v Ladbroke (Football) Ltd [1980] RPC 539 at 550 per Diplock   LJ. The fact a work is a compilation will itself inform the issues of authorship to be considered: IceTV 254 ALR 386 at [99]. The author or authors will be those who gather or organise the collection of material and who select, order and arrange its fixation in material form: ss   10(1), 31 and 32 of the Copyright Act and of IceTV 254 ALR 386 at [73]-[74] and [99]. However, it is a question of fact and degree which one or more of them will have expended "sufficient effort of a literary nature" to be considered an author under the Copyright Act: IceTV 254 ALR 386 at [99].

6.

Original works emanate from authors: ss   32, 33 and 35 of the Copyright Act and IceTV 254 ALR 386 at [22], [24], [33], [48] and [96]. Authorship and originality are correlatives: IceTV 254 ALR 386 at [33], [34], [47]-[49], [52] and [54]. In that context, as mentioned in [20(3)] above, "originality" under the Copyright Act "means that the creation (ie the production) of the work required some independent intellectual effort" and / or the exercise of "sufficient effort of a literary nature": IceTV 254 ALR 386 at [33], [47]-[48] and [99]; see also at [187]-[188] and discussion of the need for some "creative spark" and exercise of "skill and judgment". The phrases adopted are different. However, each phrase confirms that for a work to be sufficiently original for the subsistence of copyright, "substantial labour" and / or "substantial expense" is not alone sufficient. More is required. What that more is will, of course, vary from case to case but must involve "originality" by an identified author in an identified work. Where the expression of the work is dictated by the nature of the information the subject of expression without such effort, it will go against a finding of originality: IceTV 254 ALR 386 at [42] and [170].

7.

The Copyright Act does not protect facts, ideas or information contained in a work, to ensure a balance is struck between the interests of authors and those in society: IceTV 254 ALR 386 at [28] and the cases cited therein. The Copyright Act does not provide protection for skill and labour alone: IceTV 254 ALR 386 at [49], [52], [54] and [131].

8.

The Copyright Act protects the particular form of expression of the information: IceTV 254 ALR 386 at [26], [28], [40], [70], [102] and [160]; Hollinrake v Truswell [1894] 3 Ch 420 at 424 per Lord Herschell LC; Victoria v Pacific Technologies (Australia) Pty Ltd (No 2 ) (2009) 177 FCR 61 at [17] per Emmett   J; see also Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2010] FCA 29 at [40], [41] and [212]. Copyright is not given to reward work distinct from the production of a particular form of expression: IceTV 254 ALR 386 at [28] and [31]. Accordingly, it is "unhelpful to refer to the 'commercial value' of the information, because that directs attention to the information itself rather than to the particular form of expression": IceTV 254 ALR 386 at [31] and [166].

9.

As compilations often contain facts and information, it is necessary to focus on the nature of the skill and labour required to create the work and ask whether it is directed to the originality of the particular form of expression : IceTV 254 ALR 386 at [31], [33], [47]-[48], [52] and [54].

10.

"Fixation" or identification of the original work is essential: ss   8 and 31-35 of the Copyright Act and IceTV 254 ALR 386 at [15], [24]-[28] and [102]-[105]. Copyright does not subsist in a work unless and until the work takes a material form: IceTV 254 ALR 386 at [26] and [103].

21 As explained above (see [20(6)]), originality is closely tied to authorship. It requires that works originate with an author and that "the creation (that is the production) of the work [involve] some independent intellectual effort, but neither literary merit nor novelty or inventiveness as required in patent law": IceTV 254 ALR 386 at [33] and [48]. This view is consistent with a long line of authority: see University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608-609 per Peterson   J; Robinson v Sands & McDougall Pty Ltd (1916) 22 CLR 124 at 132-133 per Barton   J; Sands & McDougall Pty Ltd v Robinson (1917) 23 CLR 49 at 52 per Isaacs   J; Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 at 511 per Dixon   J; Football League Ltd v Littlewoods Pools Ltd [1959] Ch 637 at 651 per Upjohn   J; Autodesk Inc v Dyason (1992) 173 CLR 330 at 347 per Dawson   J; Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 379 per Gummow   J; Data Access Corporation v Powerflex Services Pty Ltd (1999) 202 CLR 1 at [22], [95] and [122] per Gleeson CJ, McHugh, Gummow and Hayne   JJ; Sawkins v Hyperion Records Ltd (2005) 64 IPR 627 at [31] per Mummery   LJ; Victoria v Pacific Technologies (Australia) Pty Ltd (No 2 ) (2009) 177 FCR 61 at [18] per Emmett   J.

22 Moreover, at [47] and [48] of IceTV 254 ALR 386, French   CJ, Crennan and Kiefel   JJ stated:

[47] Much has been written about differing standards of originality in the context of the degree or kind of "skill and labour" said to be required before a work can be considered an "original" work in which copyright will subsist. "Industrious collection" or "sweat of the brow", on the one hand, and "creativity", on the other, have been treated as antinomies in some sort of mutually exclusive relationship in the mental processes of an author or joint authors. They are, however, kindred aspects of a mental process which produces an object, a literary work, a particular form of expression which copyright protects. A complex compilation or a narrative history will almost certainly require considerable skill and labour, which involve both "industrious collection" and "creativity", in the sense of requiring original productive thought to produce the expression, including selection and arrangement, of the material.

[48] It may be that too much has been made, in the context of subsistence, of the kind of skill and labour which must be expended by an author for a work to be an "original" work. The requirement of the Act is only that the work originates with an author or joint authors from some independent intellectual effort . ...

(Emphasis added, citations omitted).

23 Similar warnings were contained in the joint judgment of Gummow, Hayne and Heydon   JJ at [187] and [188]:

[187] ... This concerns the submission by the Digital Alliance that this Court consider the Full Court's decision in Desktop Marketing and, to the contrary of Desktop Marketing , affirm that there must be some "creative spark" or exercise of "skill and judgment" before a work is sufficiently "original" for the subsistence of copyright.

[188] It is by no means apparent that the law even before the 1911 Act was to any different effect to that for which the Digital Alliance contends. It may be that the reasoning in Desktop Marketing with respect to compilations is out of line with the understanding of copyright law over many years. These reasons explain the need to treat with some caution the emphasis in Desktop Marketing upon "labour and expense" per se and upon misappropriation. However, in the light of the admission of Ice that the Weekly Schedule was an original literary work, this is not an appropriate occasion to take any further the subject of originality in copyright works.

(Citations omitted).

24 As these passages make clear, care must be taken not to extend the notion of originality beyond that which the Copyright Act was and is intended to protect.

25 During the hearing, the Respondents often submitted that a particular alleged contribution to the Works was too "remote". I do not consider that approaching the question of subsistence of copyright is assisted by seeking to classify the contribution as "remote" or "too remote". How would you assess it - by activity, by time spent, temporally to the ultimate production of each Work? The extent to which individual authors contribute to a work is a matter of fact, and attempting to craft legal rules applicable to that factual inquiry is something to be approached with caution: see Macmillan and Co Ltd v Cooper (1923) 1B IPR 204 at 212-3 per Lord Atkinson; Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339 at [38] per Finkelstein   J.

26 The central question is whether the alleged contribution involved independent intellectual effort and / or sufficient effort of a literary nature (see [20(3)] and [20(6)]) and whether the skill and labour required for the creation of the work was directed to the originality of the particular form of expression (see [20(8) and (9)]). Again, this is a factual matter to be determined on the circumstances of the particular case: see Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 289-290 per Lord Devlin; Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 at [21]-[24]; see also Data Access Corporation v Powerflex Service Pty Ltd (1999) 202 CLR 1 at [123] per Gleeson   CJ, McHugh, Gummow and Hayne   JJ.

27 Finally, particular challenges are created by the use of information technology, and particularly databases, in the creation of compilations which may or may not be protected as literary works. As noted above at [20(10)], the identification of the work in question is pivotal. At [151]-[152] of IceTV 254 ALR 386, Gummow, Hayne and Heydon   JJ discussed, without conclusively determining, some of the considerations involved where the work in question is an electronic database, based on the observations of Professor Davison in his work The Legal Protection of Databases (2003). What guidance was offered can be summarised as follows:

1.

Creating and updating an electronic database requires decisions to be made regarding the construction of the database, as human thought contributes to the scheme for the database and the conception of how the material would look to the external user; and

2.

A claim of authorship over a database is based upon the consideration of the possible outcomes of input into the database. The choice of software used in the database determines the operation of the database and the data included.

In other words, a claim of authorship in a database may arise where a person (an author) determines how a database will function and be expressed. The independent intellectual effort expended in making those determinations might go to the originality of the particular form of expression of the work (namely, the database).

28 Therefore, completion of the following steps will assist in determining whether copyright subsists in a given work:

1.

Identify the work in suit: see [20(10)] and [27] above.

2.

Identify the author or authors of the work: see [20(1)-(6)], [21] and [25] above. (In certain circumstances a work can be the subject of a presumption of authorship: s   127 of the Copyright Act).

3.

Determine when the first publication of the work occurred: see [20(10)] above and s   32(2)(c) of the Copyright Act.

4.

Identify how the work is original: see [20(6)-(9)], [21]-[24] and [26] above.

C. INTERNATIONAL RESPONSE TO COPYRIGHT PROTECTION OF RELATIONAL DATABASES

29 The Works in issue are the product of what is known as a "relational database". Internationally, courts and legislatures have recognised that these kinds of works are not often capable of copyright protection consistently with the principles earlier identified. As a result, other jurisdictions have developed specific legal protections to deal with them. In IceTV 254 ALR 386 at [135]-[138], Gummow, Hayne and Heydon   JJ described the specific legal protections adopted by the European Union as follows:

[135] In 1996 the Directive of the European Parliament and of the Council on the Legal Protection of Databases (the Directive) was adopted by the European Union (EU). It is significant for the issues on the present appeal that the Australian legislation has no counterpart.

[136] Of the genesis of the Directive, Professor Cornish has written:

At once excited and alarmed by the capacity of digitization to store massive files of information and of the internet to deliver it in individually requested packages, the publishing industry, and, by its side, music and films, secured a Database Directive from the EU.

Whilst "traditional copyright" respecting compilations was carefully confined and fixed upon the effort that went into the selection and arrangement in a compilation, the new right was "accorded directly to the investor in a database".

[137] The Directive defines "database" to mean "a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means". Chapter III of the Directive relevantly provides for the implementation of a "sui generis" right for the "maker" of a database who shows there has been a "substantial investment" in either the obtaining, verification or presentation of the contents of the database and for that right to extend to prevention of the extraction and/or re-utilisation of the whole or of a substantial part of the database, subject to certain exceptions and lawful uses.

[138] The Directive also provides in Ch   II for Member States to afford protection to databases which, "by reason of the selection or arrangement of their contents, constitute the author's own intellectual creation" (emphasis added). However, the position of "the author" in Ch   II may be contrasted with that of "the maker" in Ch   III. In explanation of the latter, recital   39 states:

Whereas, in addition to aiming to protect the copyright in the original selection or arrangement of the contents of a database, this Directive seeks to safeguard the position of makers of databases against misappropriation of the results of the financial and professional investment made in obtaining and collection [of] the contents by protecting the whole or substantial parts of a database against certain acts by a user or competitor.

(Footnotes omitted).

30 As the High Court observes, there is no counterpart in Australian law. It is not open to me to ignore the express words of the Copyright Act to expand protection consistent with that set out in the Directive as summarised by the High Court. That is a matter for Parliament and, in my view, a matter which they should address without delay. III APPLICANTS' APPROACH TO THE QUESTION OF SUBSISTENCE REJECTED

31 The Applicants adopted a different approach to resolving the question of subsistence of copyright in the Works.

32 The Applicants started with, and indeed seemed ultimately to travel no further than, the proposition that once you have identified the work (and established its first publication in Australia), all that is required for subsistence of copyright is to identify some intellectual effort in the ultimate creation of the works without the need to identify the author or authors of the work. As the Applicants' counsel submitted, "one is concerned with the activities which have been performed, not the precise identity of the persons who have performed them ...".

33 The Applicants' approach was summarised in their written submissions in the following terms:

[265] ... [C]opyright subsists in each Work, if the Work is an original work, because the first publication of the work took place in Australia: section   32(2)(a) & (c) [of the Copyright Act].

[266] Each Work is an original literary work because, as earlier submitted, some intellectual effort is shown to have been applied by persons who contributed to the creation (production) of the Work.

[267] It makes no sense to say, in those circumstances, that copyright does not subsist unless one can identify all of the authors.

[268] "Authorship" and "Original Works" are correlatives. But all that is necessary is to show sufficient contribution for originality. Plainly, that may be done without identifying the name of every author.

(Footnotes omitted).

34 I reject the Applicants' approach to the question of subsistence.

35 As noted above, authorship is central to the determination of whether copyright subsists. To suggest that copyright does not require the identification of authors where a work is sufficiently original (howsoever that question of originality is to be answered) puts the cart before the horse. It ignores the fact that it is the original work of an author or authors who contribute to the particular form of expression of the work and reduce the work to a material form that is the act giving rise to the statutory protection of copyright. The Applicants' approach appears to relegate the role of an author or authors in determining subsistence of copyright to some minor variable, useful only in "[showing] that an author is a qualified person" where the work is unpublished, establishing "the duration of exclusive rights comprised in the copyright" of "old works" "where competing claims of ownership are made" or where "doubt exists as to the identity of the work". Such a contention is surprising and untenable. It is contrary to the express words of the Copyright Act and the copyright regime described by all judges of the High Court in IceTV 254 ALR 386. As a result, the way in which the Applicants' shaped their overall case was unfortunately misdirected and cannot be supported.

36 The Applicants' submissions also referred to ss   128 and 129 of the Copyright Act (albeit at [269]-[280] of their written submissions). After the paragraphs extracted above under the heading "Authorship and Identification", the written submissions continued:

[269] The following statement in [Laddie, Prescott, Vitoria, The Modern Law of Copyright and Designs (Third Edition, 2000), at 118] supports these propositions:

"The definition of a literary work includes a compilation, and the author of such a work is the person who gathers or organises the collection of material and who selects, orders and arranges it . However, it is possible that there might be no identifiable author, in which case the statutory presumptions may have to be relied upon."

[270] Section 129 deals with the case where the publication of a literary work is anonymous. A publication is anonymous where the author is not identified. The effect of the section is that if it is not established that the identity of the unidentified author is generally known or can be ascertained by reasonable enquiry the work is presumed to be an original work.

[271] Section   129 shows that the inability to identify the authors of a literary work does not mean that copyright does not subsist. On the contrary it is presumed to subsist.

[272] Section   128 also contemplates that copyright may subsist in a literary work which has no identifiable author [ Waterlow Publishers Ltd v Rose (1989) 17 IPR 493, 503]. Were it otherwise, no presumption could arise.

[273] There may be a need to identify authors in the following cases:

(a)

where the work is an unpublished work and it is necessary to show that an author is a qualified person [For example, see Gummow   J et al at [101] in IceTV 254 ALR 386];

(b)

where (in the case of old works) a question arises concerning the duration of the exclusive rights comprised in the copyright; and

(c)

where competing claims of ownership are made.

[274] None of these issues are relevant here.

[275] IceTV shows that identification of the authors may also be required if doubt exists as to the identity of the work in which copyright is said to subsist. Again, that point is not relevant here.

Section 128 of the Copyright Act

[276] The applicants also rely upon section   128 of the Copyright Act which provides that:

" Where, in an action brought by virtue of this part in relation to a literary, dramatic, musical or artistic work , ( no name purporting to be that of the author ... appeared on copies of the work as published) but it is established :

(a)

that the work was first published in Australia and was so published during the period 70 years that ended immediately before the commencement of the calendar year in which the action was bought ; and

(b)

that a name purporting to be that of the publisher appeared on copies of the work as first published ;

then, unless the contrary is established, copyright shall be presumed to subsist in the work and the person whose name so appeared shall be presumed to have been the owner of that copyright at the time of the publication ."

[277] The presumption operates in the present case [For example, see Waterlow Publishers Ltd v Rose (1989) 17 IPR 493, 503: "... a compilation perhaps represents the most obvious case in which commonly, no name of an author appears on copies of a published literary work. It seems to me possible that, in enacting s   20(4), the legislature contemplated that, inter alia, specifically in the case of compilations, cases might arise where there was no identifiable author, but copyright might none the less subsist in the relevant literary work."]

The Works were first published in Australia in the relevant period and each of the Works bore a notation "( c) Telstra Corporation Limited " on each page and a notation " this directory is produced by Sensis Pty Ltd for Telstra Corporation Limited " in the terms and conditions of use found in each directory and the statement that " this publication is copyright ...". No name purporting to be that of an author appeared on the Works as published.

[278] In Microsoft Corporation v DHD Distribution Pty Ltd (1999) 45 IPR 459 Lehane   J considered the provision and adopted the definition " published " found in the Macquarie Dictionary, which reads:

"... to issue or cause to be issued in copies made by printing or other processes for sale or distribution to the public as a book, periodical, map, piece of music engraving or the like ".

[279] Conti J adopted the same meaning in Microsoft Corporation & Ors v PC Club Australia Pty Ltd & Ors (2005) 67 IPR 262.

[280] The applicants contend that the abovementioned notations identify the first applicant as the person who caused to be issued copies of the directories. It follows that the respondents bear the onus of disproving subsistence and ownership of copyright in the present case. Given that the presumption arises where the author is not identified in a work as published, the Respondent cannot disprove subsistence by pointing to the lack of identification of all authors.

(Footnotes in brackets).

37 In my view, the Applicants' reliance upon ss   128 and 129 is misplaced. Each section reinforces the importance of identifying the author or authors of the work in suit. In understanding the operation of the presumptions it is important to note the distinction between identifying an author or authors of the original work and the identity of the author or authors of the original work. Lest it be overstated, the Copyright Act fixes on the author or authors: see   [20(2)] above. If an author or authors (within the meaning of the Copyright Act) cannot be identified at all , in contradistinction to a situation where the author's or authors' exact identity cannot be identified, copyright cannot subsist. On a reading of ss   128 and 129, it is the latter situation to which the Copyright Act is directed. If the Applicants' submissions were accepted, these sections would be wholly or substantially otiose. Accordingly, the presumptions do not apply in this case and are irrelevant.

38 However, whether or not the presumptions apply, there are other reasons to reject the Applicants' reliance upon them. Firstly, the Applicants' construction of ss 128 and 129 does not reflect the balance struck by the Copyright Act between monopoly (on the one hand) and promotion (and protection) of originality in new works (on the other hand) (see   [9] above).

39 Secondly, the passage cited from Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs (3rd ed, 2000) 118 ( Laddie ) does not support the Applicants' contentions. At its highest, Laddie suggests it may be necessary in particular instances to rely upon the statutory presumptions. In the present case, the presumptions have little or no role to play where the question of subsistence of copyright in each of the Works is the issue between the parties and has been the subject of extensive evidence (91 affidavits from the Applicants and two affidavits from the Respondents).

40 Thirdly, the presumption provided for by s   128 of the Copyright Act does not advance the Applicants' submissions. All but one of the Works was tendered in evidence (that one work being the 2004 / 2005 YPD for the Mackay and Whitsundays district). Each of the Works tendered in evidence bore a notation "©   Telstra Corporation Limited " or "© Telstra " on almost every page containing listing information, a notation " this directory is produced by Sensis Pty Ltd [ or, as appropriate , " Pacific Access Pty Ltd "] for Telstra Corporation Limited " in the terms and conditions of use found in each directory and the statement that "[ t]his publication is copyright ..." (noting that across the co-bound volumes in evidence, there was some variation in the wording depending upon whether the terms and conditions were referring to the YPD and WPD together or separately). No name purporting to be that of an author appeared on the Works as published and the evidence disclosed that each of the Works was first published in Australia in the relevant period.

41 Moreover, the Applicants seem to ignore a number of important facts and matters. It was they who filed the evidence on the question of subsistence. That was their choice. They are bound by their decision: Metwally v University of Wollongong (1985) 60 ALR 68 at 71; Liftronic Pty Ltd v Unver (2001) 179 ALR 321 at [44] per McHugh J. In my view, that evidence rebuts the presumption that copyright exists in the Works for the reasons identified earlier: see   [11] to [28]. That the Applicants chose to go into evidence and not rely on the presumption is not surprising - the alternative was for the Respondents to have sought to rebut the presumption which necessarily would have entailed complex case management orders requiring the Applicants to disclose the materials to enable the Respondents to seek to rebut the presumption. Put simply, the Applicants' submission falls between two stools - it seeks to rely upon evidence to establish the subsistence of copyright to a point and then when it gets too difficult (legally or factually) they resort to the presumptions.

42 Finally, s   129 deals with two specific situations - where the author has died and where the author is anonymous or pseudonymous. Neither situation is present here. Put another way, the pre-conditions to the operation of the section have not been satisfied by the Applicants. Further, s 129 itself only gives rise to a presumption of originality and the location of first publication, not to the identity of the author or authors, or of subsistence of copyright in the work: cf s   128 of the Copyright Act. For that reason the provision has no relevance and may be put to one side.

43 The cases referred to by the Applicants in relation to the statutory presumptions add little. Waterlow Publishers v Rose (1989) 17 IPR 493 involved a dispute about who the relevant author of a particular section of a compilation was where there existed two alternatives. Slade   LJ (at 503) found that the author could be identified as Waterlow Publishers, either as an independent author or co-author, or alternatively a statutory presumption in similar terms to s   128 applied. The presumption was not decisive in the dispute and it was not argued in that case that an author could not be identified at all. In Microsoft Corporation v DHD Distribution Pty Ltd (t/as Austin Computers ) (1999) 45 IPR 459 at [1], the applicants only offered evidence to prove the preconditions in s 128 of the Copyright Act. Further, the respondents did not offer any evidence or submissions in opposition to the applicant's reliance on the presumption. In Microsoft Corporation v PC Club Australia Pty Ltd (2005) 148 FCR 310, the applicants did not lead evidence of authorship or originality, but (as in Microsoft Corporation v DHD Distribution Pty Ltd (t/as Austin Computers ) (1999) 45 IPR 459) only offered evidence to prove the preconditions in s   128 (see at [61]). Further, the respondents argued in order to attempt to rebut the presumption that the only person with the right to create the computer program the subject of the copyright dispute was a related company of the applicant's based in the USA (see at [7] and [38]). Accordingly, none of the cases referred to dealt with a situation where the very fact of authorship, as a central concept necessary to establish according to the Copyright Act, is in dispute. In any event, each case must be read in light of IceTV 254 ALR 386 and the principles referred to at [20] above.

44 Whether the Applicants could claim ownership in the intellectual property of the Works was an issue that arose throughout the course of the hearing. Copyright in a literary work made by an employee is ordinarily owned by the employer: s   35(6) of the Copyright Act. The Applicants had three responses. First, they submitted that any question of ownership was not relevant to the question of subsistence. Secondly, the Applicants submitted the question itself was "at the margins" as the evidence established that where there was any "gap" in ownership (such as where contractors who were not employees of Sensis were engaged to work on the production of the Works), that "gap" was of a relatively minor consequence. Finally, the Applicants submitted that if a person or entity other than one of the Applicants had contributed to one or more of the Works, then that person was simply a co-owner (regardless of whether that person or entity was capable of being identified) and, as a co-owner, the Applicants were entitled to move to protect the copyright without the consent of the other co-owner.

45 These submissions should be rejected. It would be absurd to assume that I am bound only to determine whether copyright subsists in the Works whilst ignoring any question of ownership. Copyright is a form of property created by statute for the benefit of the author or authors who, in the absence of some other arrangement, is the owner or are the owners of the work. Whether or not the Applicants are owners of the copyright (if any) in the Works is a matter to be determined by the evidence. The Applicants' evidence on this issue comprised in excess of 91 affidavits. Simply accepting the Applicants' assertion that their evidence demonstrates ownership of intellectual property and that the issue is "at the margins" is unhelpful. As I have said earlier, I am bound to determine the matter in accordance with the evidence presented. It is not a matter that can be ignored or be the subject of presumptions.

IV THE APPLICATION OF DESKTOP MARKETING

46 Before turning to the facts, mention must be made of the decision of the Full Court of the Federal Court in Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491 ( Desktop Marketing ). In that decision, copyright was found to subsist in certain editions of WPDs and YPDs. The Applicants submitted that the resolution of the present case remains governed by the outcome in Desktop Marketing 119 FCR 491 and that the High Court's comments on copyright subsistence in IceTV 254 ALR 386 should be regarded as obiter dicta . I reject that contention. Firstly, IceTV 254 ALR 386 is binding authority on the proper interpretation of the Copyright Act. The reasoning of both plurality judgments establishes principles of law beyond copyright infringement. Secondly, the High Court directly warned of the need to treat Desktop Marketing 119 FCR 491 with particular care: see IceTV 254 ALR 386 at [52], [134], [157] and [188]. Thirdly, Desktop Marketing 119 FCR 491 did not deal directly with the issue of authorship. Rather, all issues in respect of copyright had been conceded other than that of originality. In fact, Finkelstein   J (at first instance) questioned the assumptions the parties had made about authorship: Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd (2001) 51 IPR 257 at [4]. Finally, the facts of this case are significantly different. The WPDs and YPDs in question are different. Moreover, the Genesis Computer System which stored the relational database and which was used in the production of some of the WPDs and YPDs in issue in these proceedings (after September 2001 in the case of YPDs and late 2003 in the case of WPDs) was not in use in Desktop Marketing 119 FCR 491. (The Genesis Computer System is considered in detail at [60]ff below).

V FACTS

47 The application of the principles identified earlier takes place within a factual matrix that does not lend itself to easy answers. It is that factual matrix to which I now turn.

48 Telstra is a telecommunications carrier which connects subscribers to its fixed line and mobile telephony networks for a fee. Like other carriers such as Optus, Vodafone and AAPT, Telstra collects and maintains subscriber information. Sensis, Telstra's wholly owned subsidiary, operates a business of publishing telephone directories (the directories business ). The directories business is the core of Sensis' business.

49 Each year Sensis publishes WPDs (residential and business) and YPDs (classified) across Australia. In 2007, Sensis published 55 WPDs and 86 YPDs covering the whole of Australia. The directories were published in metropolitan, regional and local areas. Of the regional directories, 46 were co-bound: see   [3] above. Directories for 11 of those defined geographical areas are at issue in these proceedings, and date back to 2000: see Annexures   A and B. Sensis produces a directory for each region every year, identifiable by a particular "issue" number. Sensis aims to deliver a WPD and YPD to every Australian home and business.

50 Each WPD and YPD lists the names, addresses, telephone numbers and other information in relation to residential and / or business customers for a particular geographic area. Telstra's WPDs contain residential and business listings. Revenue is derived by persuading customers (primarily business customers) to upgrade their free entry ( FE ) with more complex information or other enhancements for a fee.

51 In the case of the YPDs, revenue is derived by persuading business customers to upgrade their FE with more complex information or other enhancements for a fee. Business customers in the YPDs can also advertise under multiple headings. Business customers are entitled to one FE but must pay for any additional standard entries under different headings.

52 In the 2006 financial year, the YPDs and WPDs generated more than 80 per cent of Sensis' profits. This translated to revenue of more than $1   billion from YPDs and almost $300   million from WPDs. The vast majority of Sensis' revenue derived from the directories business comes from the YPDs.

53 The method by which information appears in a particular directory depends on whether the entry:

1.

is to appear in a WPD or a YPD;

2.

is a new listing for a particular directory ( new listing ), or a listing which has appeared in a previous issue of that directory ( existing listing ); or

3.

is a complimentary FE or a paid additional or enhanced entry.

54 The "system" by which each type of listing is included in a WPD or a YPD is described below under the following headings:

A. OVERVIEW

55 The following description is "system" based for a number of reasons. First, the Applicants' evidence was prepared and filed on that basis. Specific (and, the Respondents submitted, incomplete) evidence was filed in relation to only two co-bound volumes - Cairns for 2008 / 2009 and Kempsey / Port Macquarie for 2009 (the Sample Directories ). However, the Applicants alleged that the "contributions of individuals ... [was] consistent across the directories, and also over a considerable period of time".

56 Secondly, the evidence disclosed that much of the system was automated. The production of the WPD and YPD is undertaken by members of a division within Sensis known as the Directory Solutions group. In general terms, the production of a WPD and a YPD involves the following steps:

1.

For each directory, customer information is obtained from various sources, including service orders received from telecommunications carriers such as Optus, Vodafone, AAPT, the customer's previous WPD or YPD listing, personnel spotting potential new customers and direct contact from the customer. It will be necessary to consider these sources separately in further detail below.

2.

From no later than October   2003, the listing information has been entered into a database on a computer system known as the Genesis computer system (the Genesis Computer System ). (The computer systems that predated the development of, and what were the precursors to, the Genesis Computer System are described in further detail below: see [61] to [71]).

3.

In many cases, the listing information is entered automatically by the Genesis Computer System. In other cases, some of the listing information is manually entered into the database. Mr   Beardshaw, employed as an External Interfaces Analyst by Sensis, gave affidavit evidence that of the approximately 12   million services orders received annually, 15 per cent (or 1.8   million) require some manual processing. Such numbers should be understood in their context - even certain types of manual listings can be processed in their hundreds each day. (There was a persistent lack of clarity as to the meaning and weight of statistics throughout the evidence in this matter. For example, various statistics were provided as to the number of amendments made to listing data, but many of these amendments would not flow through to the actual directories themselves (they may involve changes to "paperwork"). This results in confusion as to the conclusions to be drawn from such figures). A separate record is created for each directory in which the listing is to appear.

4.

As the listing information is entered into the database, automatic checks are conducted by the Genesis Computer System to ensure that the information is complete, accurate, and in a form which complies with what are known as collectively the Rules (see [88] below). The development of this and associated computer systems and their significance is explained in more detail in Part   B below. The Rules and their significance is explained in more detail in Part   C below.

5.

There are separate rules for the WPDs and YPDs. The Rules govern the content and presentation of listings. If the listing includes a display advertisement, the advertisement is created in a separate database and checked for accuracy and compliance with the Rules. Again, as far as this is relevant to the matters in dispute, it is the subject of further discussion in Part   C below.

6.

The WPDs and the YPDs are produced on a rolling schedule throughout the year. The production of a new issue of a WPD or YPD begins when the listing information which appeared in the previous issue of that directory is carried over and converted into listing information for the next issue of the directory. This process is known as "rollover". The rollover process creates a "template", or the "starting point", for the next issue of the directory. The Respondents provided evidence that detailed, through a selection of examples, that a significant proportion of listings in the WPD and the YPD are repeated each year. It was the evidence of the Applicants' witnesses that "a significant part of [the Sample Directories] would be constituted by data which is repeated from the previous year".

7.

The rollover process is automated. It involves running two computer programs (known as "batch applications") over the Genesis database which causes the Genesis Computer System to create a new record relating to the upcoming directory for every listing which appeared in the previous issue of the directory. The new record contains the listing details which were used to produce the customer's previous listing together with updated information for that customer such as new advertising rates (for paid listings) or an updated heading (for a YPD listing).

8.

Prior to publication of a particular directory, further checks are carried out to identify any errors in the content or appearance of the listing which will appear in the directory. These checks are conducted by the Genesis Computer System using electronic searches and any corrections required are made manually.

9.

The publication of the directory involves the extraction of the listing information stored in the Genesis Computer System database for that directory, and the presentation and arrangement of that information in accordance with specifications programmed into the Genesis Computer System and designed to give effect to the requirements of the Rules.

10.

Once the listings have been extracted and arranged in the format in which they are to appear by the Genesis Computer System, they are combined with the other elements of the directory and arranged on pages which are typeset and paginated.

11.

The completed directory is then printed and distributed.

Different personnel are responsible for each of the above activities, depending on the type of listing and the directory in which it is to appear. Moreover, some of these activities are conducted by contractors who are not employees of Sensis. Their significance is explained in Part   D below.

57 These activities have remained essentially unchanged since the introduction of the Genesis Computer System in October   2003. Prior to the introduction of the Genesis Computer System, the same activities were undertaken but separate computer systems were utilised for the production of the WPDs and YPDs.

58 To the extent there are differences in the systems, the evidence disclosed that the Genesis Computer System has streamlined some processes which previously could only be undertaken manually.

59 Much of the process outlined in [56] above is discussed in more detail in Parts E and F below. The description of the facts in those sections is primarily drawn from a summary prepared by the Applicants. The Respondents reviewed the summary and identified areas of disagreement due to alleged omissions and inaccuracies. However, there are certain factual aspects to the issues in dispute that require separate and more specific analysis. These areas are the development of the relevant computer systems (Part   B), the significance of the Rules (Part   C) and the identity of certain authors (Part   D).

B. THE DEVELOPMENT OF THE COMPUTER SYSTEMS

60 As described earlier (see [56(2)]-[56(4)] above), integral in the creation of each Work since 2001 / 2003 was the Genesis Computer System. The Genesis Computer System "sits at the centre of most of Sensis' directory-related operations" and interacts with a number of other systems used in the production of the WPD and the YPD. Given the significance the Genesis Computer System and the other supporting systems have in creating the Works, they require separate analysis.

1. PRIOR TO 2001 AND 2003

61 Prior to 2003, the CONDOR computer system was used in the production of the WPD and prior to 2001, a separate computer system, the Integrated Directory System ( IDS ), was used in the production of the YPD.

(a) WPD

62 Before the mid 1980s, Telstra's predecessor (Telecom) had two different systems for managing the data and publishing the WPD. One system, designed by Telstra's own information technology group, the National Directory Services ( NDS ), was used in New South Wales. Another system was used for the other States. The second system involved the extensive use of a manual card system to maintain customer listing data.

63 In 1984, the NDS established a directory development group to draft the specification for a "national, computerised system for the publication of the WPD". In   1986, a US-based company called Amdocs Inc ( Amdocs ) commenced work to supply the system. Eventually Amdocs supplied the NDS with the CONDOR system to meet its objective.

64 The CONDOR system was based on Amdocs own proprietary software (named ADS/SALES II) for the publication of classified business directories. The software was then customised by Amdocs to suit the Australian environment and the requirements of alphabetical directories. Amdocs also developed a suite of programs to convert data from the existing compilation systems. In general terms, CONDOR replaced systems which were based on handwriting information on to directory cards and paper service orders with a system where editors were able to key new listings and changes directly into the computer database.

65 The first books produced using CONDOR were the Hobart and Burnie directories published in July 1987. By   June 1989, each directory nationally had been published once. Over the subsequent years, development of CONDOR continued. Amdocs carried out the coding and programming.

66 Telstra was granted "a perpetual, non-exclusive, non-assignable and non-transferable licence to use the ADS/SALES II System ... in the production of the [WPD]". Unsurprisingly, all proprietary rights in the ADS/SALES II System remain vested in Amdocs. However, "separately defined modules developed by [Amdocs] for [Telstra]" or modules previously designed by Telstra were, or remained, Telstra's property. The Applicants did not identify which module or modules of the CONDOR system remained or became the property of Telstra. As a result, the Applicants did not identify the function or functions performed by the modules owned by Telstra and the balance of the computer system owned by Amdocs.

(b) YPD

67 Between late 1988 and early   1989, Telstra employed two main contractors to perform the sales and marketing function and two main contractors to compile the YPD. Each contractor owned and operated its own system.

68 Around this time Telstra decided to take over operations and control of the YPD.

69 In late 1989, Amdocs was engaged by Telstra to provide the IDS. Telstra's evidence was that:

In its initial operational form, ... IDS retained about 70 per cent of Amdocs' basic system and 30 per cent was rebuilt. As with CONDOR, Amdocs retained ownership of the intellectual property rights to its basic system and Telstra [owned] the rights to the enhancements.

70 IDS commenced operational use in January   1993 and was continuously developed.

71 With effect from 1 July 1997, Telstra outsourced its WPD business to Pacific Access Pty Ltd ( Pacific Access ), the predecessor of Sensis (Pacific Access changed its name to Sensis in August 2002). The aim of Telstra's outsourcing its WPD business was to integrate the data that supports the WPD and the YPD.

2. GENESIS COMPUTER SYSTEM

72 In 1997, Pacific Access "began to explore options" to replace the CONDOR system (used in the production of WPD) and the IDS (used in the production of YPD) with a single, integrated directory production system. The eventual implementation of the Genesis Computer System took more than five years and cost in excess of $300   million.

73 Amdocs was approached to tender for the replacement of CONDOR and IDS. Amdocs offered a new system known as "NewGen" ( NewGen ). This system "provided by Amdocs" was approved by the Telstra board to replace the existing systems.

74 NewGen underwent what was then described as an "extensive period of development in order to customise the 'generic' directory production system created by Amdocs to meet the specific needs of Sensis' [WPDs] and [YPDs]". To reflect the changes in the system with the integration of WPD and YPD data, the system was eventually renamed "Genesis". Due to delays in the implementation of the project, the Genesis Computer System was implemented in two phases - in   2001 for YPDs and 2003 for WPDs.

75 The implementation of, and support for, the Genesis Computer System, including the modifications referred to earlier, was governed by an IT Services Provision Agreement between Pacific Access (as agent for Telstra) and Amdocs signed on 17 May 1998 (the First IT Agreement ). Due to delays in the implementation of the project and the decision to split it into two phases (for the YPD and then the WPD), this agreement was re-negotiated in 2002 (the Second IT Agreement ) (collectively, the IT Agreements ).

76 The IT Agreements were provided to the Court on a confidential basis. Although there were differences between the IT Agreements, those clauses relating to the intellectual property regime established under the IT Agreements were relevantly similar.

77 As acknowledged by the Applicants, the intellectual property in the Genesis Computer System is divided between Amdocs and their "Customer" (defined in the IT Agreements as Telstra through its agent Pacific Access). The IT Agreements established that the original software provided by Amdocs remained Amdocs' intellectual property, whereas Telstra would own or be assigned the intellectual property of software modifications made at their request. Where one party had the benefit of the intellectual property of a certain aspect of the system, its use by the other was governed through the grant of a licence on conditions.

78 As with its predecessors (see [61] to [71] above), which parts of the Genesis Computer System remained or became the property of Telstra were not identified. As a result, the Applicants did not identify the function or functions performed by those parts owned by Telstra and the balance owned by Amdocs.

79 There are however two further difficulties. The Applicants' evidence described the process by which modifications were made to the Genesis Computer System throughout its development. That evidence disclosed that only some , not all, of the software modifications made throughout the development process were recorded and identifiable. Ms Dawes, a Manager of Print Content and Conversion at Sensis, stated that "the development process for the Genesis [Computer] [S]ystem involved reviewing the functional specifications prepared by Amdocs for its generic system, identifying gaps in those specifications, and then requesting changes in order to fill those gaps ... ". However, Ms Dawes further stated that "... it appears that not all changes requested by Sensis were identified [and] ... [a]ccordingly, I am not able to identify with precision which aspects of the system were implemented at the request of Sensis".

80 The same problems exist in relation to the Genesis database. "Customer Data" and "Customer Database" were defined terms in the IT Agreements. The IT Agreements provided, in essence, that any databases established (and the information contained in those databases) by or on behalf of Telstra (again, through its agent Pacific Access) were the intellectual property of Telstra. However, even then, the IT Agreements further provided that the "generic databases" used by Amdocs remained their intellectual property.

81 As is apparent, an undefined but not insignificant proportion of the Genesis Computer System was not the intellectual property of the Applicants. The Genesis Computer System was an amalgamation of original software and modifications with the intellectual property divisible between Amdocs and Telstra, with the grant of licences to Telstra (through its agent) governing the use of those aspects of the system that were not their intellectual property. Further, determining who had the benefit of the intellectual property of some aspects of the system is uncertain. Modifications were made at the request of the Applicants but not all those modifications were recorded. Which entity or entities can correctly be said to have the benefit of the intellectual property of those unidentified modifications is a difficult, if not impossible, task. Although I accept that significant modifications were made to the Genesis Computer System at the request of one or more of the Applicants, the evidence does not support the conclusion that the intellectual property in the whole or any specific part of the Genesis Computer System belongs to one or more of the Applicants.

3. SUPPORTING SYSTEMS

82 As noted earlier, there are other non-Genesis computer systems that are used in the production of the Works. One system is the "Straight Through Processing" ( STP ) function. STP was described as "a function built into a computer system by Sensis called "Workflow Imaging and Integration" ... designed to act as a bridge between the computer system used by [YPD] Account Executives, known as Siebel, and the computer system which holds customer listing information, Genesis". STP's function is to check "every contract that is submitted to identify whether it is potentially eligible for STP (because it involves no change to the listing or other advertising for the customer)".

83 The Applicants submitted that "Sensis personnel were directly responsible for the design of computer programs which interact with the Genesis system to achieve certain functions...". The evidence did not support that assertion. For example, Mr   Breitenbach, employed by Sensis as an Application Support Manager since 2007, gave evidence that he managed Sensis' relationships with various IT vendors, including Aipex, that "Aipex [had] developed for Sensis the computer application that runs STP" and "[r]epresentatives of Sensis and Aipex worked together on implementing STP until about October 2006, when the functionality was released in its final form".

84 Beyond the general statement that Sensis and Aipex "worked together", Sensis' role in designing the functionality is unclear. The evidence did not establish that Sensis personnel were "directly responsible for the design of [the] computer program". However, even assuming in favour of the Applicants that Sensis extensively directed the modifications required to implement STP, the evidence did not disclose whether the resulting software was the subject of an intellectual property regime established by agreement between Aipex and Sensis and if so, the terms of that agreement.

85 Another software tool used in the production of the Works was the "Book Close" reports developed by employees of Quantum IT (described as a small information technology consultancy company) from June 2001. Although some reporting tools already existed in the Genesis Computer System, they were the subject of enhancement and new reports were developed (the Book Close reports are discussed further at [248] and [309] below). Again, the description of the development of the Book Close reports poses more questions than it answers. Although one of the individuals responsible for the development of the software eventually became a Sensis employee, the initial development of the program was conducted by Quantum IT in response to the business requirements and directions of Sensis. Again, whether the resulting software was the subject of an intellectual property regime established by agreement between Quantum IT and Sensis and if so, the terms of that agreement were not disclosed.

86 The Applicants, in purchasing and implementing the suite of computer systems used in the production of the Works, often prescribed rigorous requirements and were active in ensuring that the software produced met those requirements. On at least one occasion (with regard to software referred to as the Error Maintenance System), employees of the Applicants designed and implemented software without the assistance of external parties. However, not every aspect of the supporting systems were created in that manner.

4. CONCLUSIONS

87 The various computer systems (including the Genesis Computer System), were the result of the work of various entities over a number of years. Although the Applicants, as the ultimate purchaser of such systems, were often responsible for prescribing and overseeing implementation of the requirements, only in a few cases was the software designed and created by the Applicants' employees. Although the computer systems were not relied upon as an independent copyright work in this proceeding, the Applicants did rely upon the intellectual effort of Sensis employees in customising the programs. On the evidence before the Court, it is not possible to determine who created and had the benefit of the whole or any part of the various computer systems (including the Genesis Computer System) at any particular time.

C. THE RULES

1. INTRODUCTION

88 An essential part of the Applicants' case was the development and implementation of the Rules which were described by the Applicants as:

[R]ules and policies ... which govern the content and presentation of listings, the objectives of which include accuracy, uniformity of content and presentation, conformity with Federal and State laws and ethical standards of advertising, and provision of consistent, equal and fair treatment to customers.

The Rules were in fact comprised of three parts - the YPD Advertising Rules (the YPD Advertising Rules ), the WPD Entry Policy and Rules (the WPD Rules ) and Sensis' Product Standards (the Product Standards ) (collectively, the Rules ).

89 On the first morning of the hearing, Senior Counsel opened the Applicants' case by stating:

... [W]e would say of that set of rules [the WPD Rules] that it's a complex set of rules that governs the expression of the material compiled in the White Pages listings, including the selection and arrangement of that material. The rules allow for material to be entered in certain circumstances and prohibit entry in other circumstances. A judgment has to be made by somebody in Sensis about whether those criteria have been satisfied.

There is an exercise therefore of judgment and discretion in selecting the material for inclusion. There is also, we would say, an element of intellectual effort involved in understanding and applying the rules. The understanding and application involves the Sensis representative, who is trained for this purpose, being able to explain to the customer what is available in the way of material for entry and the way in which it will appear if entered and it involves the exercise of intellectual effort on the part of the representative in ensuring that material, which has been entered, complies with the rules.

2. WHAT ARE THE RULES?

90 At their most basic level, the Rules are a set of prescriptive guidelines that control, dictate, restrict and / or prohibit the content and presentation of listings in the WPD and YPD. They regulate the font used. They regulate the proper abbreviations of words. They regulate the colour schemes applied. They regulate the spacing between words and individual entries. They regulate the acceptability or otherwise of the use of particular words or phrases. It is unclear who created the Rules. But it is clear that everyone is bound by them.

91 The Rules are directly or indirectly automated. They are directly automated in the sense that the Rules are programmed into the Genesis Computer System (or supporting systems) so that the information entered into those systems is in a form which complies with the Rules. This commonly arises in three broad situations. First, when Sensis' workers enter information into the Genesis database, the Rules, as applied by the Genesis Computer System and supporting systems, provide limited choice to those workers regarding the content, format and features of the presentation of that information. In the vast majority of cases, workers are unable to go outside the bounds of those choices as the system through which they enter this information does not allow them to. While the information may be manually entered, it could not be said that this was not an automated function. Secondly, the Rules, as applied by the Genesis Computer System (or supporting systems), check the information entered to ensure it conforms with the Rules. Thirdly, the Rules, again as applied by the Genesis Computer System (or supporting systems), designate and influence the format and arrangement of the information entered as it finally appears in the WPD and YPD.

92 The Rules are also indirectly automated. There are, in certain circumstances, instances of human intervention in the application of the Rules. For example, an Artist may prepare and update graphic advertisements in the WPD and YPD and an Editor is responsible for ensuring that those advertisements comply with the Rules (see [143]-[144] below). The Paginator paginates and typesets the directories, often to ensure the pages of the directories, which have been first created by the Genesis Computer System, comply with the Rules (see [157]-[161] below). The overarching process is designed to ensure that decisions that violate the Rules are as rare as possible. In the vast majority of cases, any human intervention is directed to ensuring the content and presentation of listings complies with the Rules.

3. THE PARTS OF THE RULES

93 As stated at [88] above, there are three parts of what generally are considered the Rules:

1.

the WPD Rules which control, dictate, restrict and / or prohibit the content and presentation of entries in the WPD. For example, in relation to the placement of names, the WPD Rules govern government and business listings, what font listings can and should appear in, rules surrounding the listing of mobile phones, 18   services, 13   services and others, and rules regulating the use of "Mc" and "Mac", "Mt" and "Mount", and "St" and "Saint", among many other things;

2.

the YPD Advertising Rules which are similar to the WPD Rules but they also control, dictate, restrict and / or prohibit the content and presentation of advertisements, for example the position priority of display advertisements; and

3.

the Product Standards which control, dictate, restrict and / or prohibit certain sensitive material, particularly regarding advertisements, such as the acceptability or otherwise of the use of certain words or phrases in, for example, adult advertising, abortion / pregnancy termination / family planning services and party plan selling.

94 It is appropriate to now detail the content and operation of each part of the Rules.

(a) The WPD Rules

95 I begin with a version of the WPD Rules from August 2007, which is as they applied to the Sample Directories (noting that there was a revised edition in November 2007). Listings in the WPD can be divided into FE and those that include additional features that incur a charge (including subsequent appearances of a given number). Each customer of a carrier will be listed in the WPD that covers a given geographic area, except those with a silent number.

96 The WPD Rules govern two general areas - the sort of information that can appear in a given listing (and how it will appear), and the way that the information in the listing will then be sorted. The most fitting place to begin describing these Rules is the one that governs the sorting of the WPD - the alphabetic arrangement of listings. In short, listings in the WPD are sorted by customer name. This is called throughout the WPD Rules the "finding name". The finding name will be the name of the residential customer or, in the case of government and business listings, the sole trader, partnership, registered business name, company name or government department name.

97 The finding name has a "finding word". The finding word is usually the first word of the finding name (being the surname for residential entries) and determines where the listing will appear. The finding name also has a "subsequent word". This is the balance of the finding name (initials or given names for residential entries, and what remains of the business or government name in the other). The balance of the finding name determines where the listing will sit should there be other listings with the same finding word.

98 Listings are sorted by name and therefore apostrophes, commas, hyphens and the like are ignored. Business or government names that include a symbol are treated as if the symbol was a spelt out as a word. This sorting is automated. Certain symbols are not permitted in a finding name, and need to be assessed when requested. There are nine of them. They include question marks, exclamation marks and underscores.

99 Various other examples are illustrated in the WPD Rules. None are surprising, and as far as alphabetic sorting is concerned, are automatically sorted. This includes what to do when faced with the sorting of "Mt" and "Mount" (treat "Mt" as if it were spelt out), "Mc" and "Mac" (treat "Mc" as if it were spelt out) and names that include numbers (treat the numeral as if it were spelt out).

100 In examining these functions, one begins to see the difficulty in finding the independent intellectual effort or sufficient effort of a literary nature applied to the alphabetical arrangement of listings (particularly given that the WPD Rules themselves indicate that this is an "automatic" process).

101 The WPD Rules also describe the limits upon what can be done to a given listing by way of content and customisation. FEs have three components: the name, physical address and number of the listing. The address for FEs include the number, street name and suburb / town. Residential names in the FE can include either (1) a surname plus a maximum of three initials, or (2) a surname plus one given name, nickname or alias and two initials. Where two individuals wish to appear in a single listing, they may do so subject to the rules just outlined, under the one surname. There are some restrictions on names (including nicknames and aliases), including that they cannot offend, they cannot be likely to mislead or deceive or, interestingly, denote "royal patronage has been received". FEs can also include courtesy titles.

102 So far the WPD Rules have required and involved common-sense application that can only be considered to be routine. The next step is to look at the WPD Rules that govern certain areas of customisation that will incur a charge. There are various ways a listing can be customised - bold name or number, service instruction (describing a number as "after hours"), alphanumeric phone numbers (1300 DUCK), occupation ("landscaper"), colour enhancements (red, blue and green), business logos and others.

103 To take alphanumeric phone numbers as an example, the basic rule is that a listing must include the number created by the alphanumeric number (for example, 1300 DUCK will also need to include 1300   3825). There is a charge associated. The alphanumeric number can include additional letters, but the actual number must not include anything other than the actual digits. Business Logos are another example. Business logos may be used where the customer has an accompanying "Superbold" font name (meaning a bold, capitalised font approximately twice as large as normal, with a ruled line preceding and following the listing). The Superbold font name must be in black, red, blue or green (being the selection of shades available). The logo must be the registered or recognised logo, trademark or design of the business and the customer must be either the owner or the authorised user of the logo, trademark or design. The onus of proof rests with the customer. It must have a clear relationship with the finding name. A slogan may be included anywhere within the logo, provided it fits. A logo can be left justified, centered or right justified. The permissible space for a logo is 1.6cm by 4.1cm. It is to be placed 2mm below the black Superbold header, and 2mm above the Superbold name. There is limited room to manoeuvre within this particular Rule. The elements available are described and the customer chooses between them.

104 One example of the "discretionary" exercise of the WPD Rules that was referred to several times throughout the evidence was that of Suppressed Address Entries (an SA ) for government and business listings. Business and government customers can make use of an SA where "there is a security risk to that business or department". The WPD Rules then go on to provide the following examples:

•

Jewellers (working from home), Private Investigators, Security Firms, Computer suppliers working from home or businesses whose activities indicate that valuable equipment, stock or dangerous goods are on the premises,

•

Where there is a security risk to the personnel of the business. e.g. Escort Services,

•

Where there is a risk to the neighbours of the business caused by unsuccessful attempts to locate the premises. e.g. Escort Services - Social/Escort Agencies,

•

To discourage inappropriate behaviour which could result from awareness of particular activities or from the role the business plays in the community, or to the aid with the protection of customers at certain establishments including Refuges, Shelters, Pregnancy Termination Clinics, Support Agencies and Groups

105 The discretion is not unfettered or at large. The Rule in question establishes guiding principles and provides a number of practical examples.

(b) The YPD Advertising Rules

106 As one would expect, the YPD Advertising Rules are more extensive than the WPD Rules. Although there are display advertisements in the WPD, the WPD is predominately composed of listings arranged in alphabetical order, with occasional display advertisements "anchored" to alphabetical listings. Reflecting its commercial focus, the YPD has many display advertisements. The YPD Advertising Rules reflect this fact.

107 A distinction exists between "in-column listings" and "display advertisements". In-column listings are contained within the column arrangement of the YPD. They can be the subject of substantial customisation, though the YPD entitles every sole trader, partnership, registered business, registered company and certain non-business entities (for example, churches) to a first FE in the YPD with basic information. Display advertisements are larger, and can cut across columns. In-column listings are arranged alphabetically within headings. Headings are arranged alphabetically. The arrangement of display advertisements is not determined alphabetically. Their positioning reflects the underlying commercial rationale for advertising in the YPD. Display advertisements are positioned according to size within a heading. Largest first, smallest last. Where two advertisements are the same size, the date of purchase of the advertisements will determine position priority. The earlier the purchase, the earlier the position. If purchased on the same date, then they will be positioned alphabetically.

108 The YPD Advertising Rules contemplate other circumstances which may impact upon the positioning of a display advertisement. For example, display advertisement positioning can be affected where a customer increases or decreases the size of their advertisement, if a given YPD changes its geographic boundaries or when Sensis determines it is no longer going to make a particular display advertisement size available. Although there were some exceptions, the Rules to be applied reflect the pattern mentioned in [107] above. Positioning is generally impacted upon by changes to the advertisement sizing, and priority based on date of purchase tends to be impacted upon by changes to the location or size of the display advertisement to which it relates. If something occurs to change the directory (for example, changes to headings or the geographical area of coverage of a given YPD edition), there are usually opportunities to maintain position priority provided they are taken in the first relevant issue (subject in some cases to the discretion of Sensis). Where a company is subject to liquidation, a Deed of Company Arrangement or an individual trading under a business name or their own name is declared bankrupt, display advertisement positions are revoked.

109 The ability to customise the content of listings and advertisements under the YPD Advertising Rules is, as mentioned, broader than under the WPD Rules. The description of the rules relating to display advertisements is as follows: Description

An advertisement available in a variety of [predetermined] sizes consisting of:

•

The name of the business (mandatory)

•

Address details which must identify where the business is located (mandatory) - unless specific Address Suppression criteria is satisfactorily met

•

Telephone number (mandatory)

•

Border or other recognisable boundary (mandatory)

•

Copy matter (optional)

•

Graphic presentation (optional)

•

Colour printing (optional)

Note : Business Registration details must be made available on request.

Entry Criteria

Each Display Advertisement must be self-contained and not dependent on the content or page location of any other Display Advertisement placed by the business.

For shared and Collective Advertising, entry criteria must be satisfactorily met

- see also 'Entry Policy - Group, Shared and Collective Advertising'

Finding Names

- see also 'Entry Policy - Addresses'

Copy Matter

- see also 'Entry Policy - Copy Matter'

Addresses

- see also 'Entry Policy - Addresses'

Telephone Numbers

- see also 'Entry Policy - Telephone Numbers'

110 The YPD Advertising Rules then go on to detail the sizes of the display advertisements available and the constraints on the purchase of such advertisements. For example, a registered business name or company name may not have more than a single advertisement in one of the larger sizes, per heading. However, where a smaller advertisement is purchased, more than one can be placed under a single heading where they promote different brand names, product names or services. Display advertisements cannot look like a combination of other advertisements (for example, a full page display advertisement should not look like two, half-page advertisements).

111 There are also opportunities to expand upon the in-column listings. These include many of the options available to enhancements under the WPD Rules (use of bold, use of colours, use of logos), but with expanded options. One of the expanded options is a "directional entry". Directional entries are in-column advertisements with defined layouts, which include a "directional strip". A directional strip is a specially-formatted line providing geographic information about the business (for example, "all areas", "remote areas" or a given name of a suburb). The format of such an advertisement is prescribed, including the types of font to be used and the number of characters in the directional strip.

112 The YPD Advertising Rules also provide a number of specified steps when dealing with particular commercial arrangements (for example, franchises, branches and outlets, group advertising and shopping centres). Such steps are predictable, and usually balance the interests of Sensis as a commercial enterprise and providing directories without multiple, redundant listings and directories that are easily navigable. Take businesses that operate in shopping centres:

Where a customer operates a business within a shopping centre, their details may be included under the heading 'Shopping Centres'. This will be charged as a separate Extra Line of Information (ELI). The shopping centre details do not need to be repeated.

(c) The Product Standards

113 The Product Standards are instructions relating to the advertising of certain businesses. The Product Standards apply to the YPD as well as to other Sensis directory products such as YP Online, Citysearch and Sensis 1234 and Call Connect. They are not applicable to the WPD. The Product Standards set out a "guide to acceptable and unacceptable wording for advertisements under various 'sensitive' headings, and contain specific rules directed to legal compliance (such as laws that restrict advertising of prostitution services)".

114 A general statement of intention is set out in the introduction to the Product Standards. The introduction to the Product Standards issued in January 2009 for the 2009 / 2010 campaigns for the YPD stated that it was Sensis' "intention to prohibit the publication of advertisements containing works and / or illustrations that are vulgar, obscene, offensive or that suggest illegal activity" and to ensure that the directory products (including the YPD) do "not contain material which is likely to be ... unsuitable for or harmful to those under 18 years of age, or offensive to reasonable adults." It expresses the need to be cautious regarding illustrations, copy matter, trading names and photographs such that they are not sexually suggestive and that written consent has been provided where required. References to sex, sexuality and associated products and services must be tasteful and not used to promote sexual activity.

115 The Product Standards then go on to detail instructions with regard to businesses under the "sensitive" headings. It lists the headings that should be treated with particular caution. It detailed the following headings:

•

Adult Entertainment & Services

•

Adult Shops

•

Escort Agencies (Vic only)

•

Escort Services - Social (All except Vic & Qld)

•

Escort Services - Social & Agencies (Qld only)

•

Family Planning

•

Introduction Services - Social

•

Novelty Message Services

•

Party Plan Selling

•

Pregnancy Counselling & Related Services

•

Pregnancy Termination Services

•

Tantra

116 There are detailed instructions on how to manage artwork received for certain businesses under the sensitive headings (for example, prescribing the need to receive written consent from people depicted in images and proscribing the use of "Clip Art" or "Stock Art" in certain situations). The Product Standards provide instructions on which businesses are to be entered under which headings (for example, brothels under "Adult" and "Escort" headings in compliance with the Prostitution Compliance Policy which is an appendix to the Product Standards).

117 The majority of the Product Standards are composed of lists of words in alphabetical order for particular headings that identify which words are "acceptable" and which are "unacceptable" (these lists comprised 18 of the 26 pages of the Product Standards issued in January 2009, not including the appendices). As an example of the general structure of these pages, the Family Planning heading contains the following list of unacceptable words and phrases - "Abortion", "Legal Abortions", "Pregnancy Termination", "Pro Choice" and "Termination". You know they are unacceptable as there are two columns, "acceptable" and "unacceptable", and each "unacceptable" word or phrase has a mark in the "unacceptable" column. These lists require little effort to navigate or understand.

118 There are two items in the appendix. The first is the Prostitution Compliance Policy referred to at [116] above. That policy simply goes into further detail as to how a listing of a prostitution business is to be managed in the YPD. It notes certain differences in the laws of the different states (for example, in New South Wales the advertisement must not indicate that premises or a person are used or available for the purpose of prostitution). It refers to the need for written consent where artwork depicting a person is provided in the advertisement (as mentioned in [114] and [116] above), and places restrictions on the name of the business in the advertisement. It prescribes the headings to be used. The second item in the appendix is the artwork release form to be used in the situations just described.

4. CREATION OF THE RULES

119 Who created the Rules themselves is by no means clear. At the highest, the Rules are the product of successive work by unidentified individuals within Sensis.

120 Ms Galizia, Sensis' Senior Product Manager - Headings Rules & Standards from October 2008 until September 2009, gave evidence about the development of the Rules and their application during that period. Between 1995 and September 2007, Ms   Galizia held other positions but had no responsibility for the Rules. As a manager of Headings Rules & Standards, Ms   Galizia headed a team she considered "to be the 'custodians' of the [Rules] ... in the sense that [they] maintain, update and oversee the enforcement of the [Rules] throughout the business." The team also assisted in training Sensis staff in the application of the Rules and addressed specific inquiries related to the application of the Rules. However, it was not said that Ms   Galizia or anyone in her team created the Rules.

121 Ms Galizia did not write any Rules that impacted upon the Sample Directories. Even going beyond the Sample Directories, Ms   Galizia's influence on the Rules is limited by the amount of time she has been in her position (since October 2008) and the particular amendments required during that time. At best, Ms   Galizia oversaw only a small proportion of changes to what was generally referred to as the Rules. Ms   Galizia exhibited various versions of the YPD Advertising Rules to her affidavit. All versions were at least 100 pages long. Ms   Galizia provided three examples where changes had been made to a particular version of the YPD Advertising Rules that she oversaw. Who created the balance of the remaining Rules is something that was never established in evidence. Indeed, Ms   Galizia accepted in her affidavit that "the vast majority of the [R]ules in the [various versions exhibited] are mirrored in the most recent versions...".

122 The Rules represent the combined efforts of many individuals over a number of years - the cumulative effect of their efforts being what was referred to as the Rules. Although Ms   Galizia asserted that her "team" had not changed since 2000, she acknowledged that the team had a number of different managers, the position described as "ad-point coordinator" had changed and that an additional member described as a "rules specialist for print products" no longer worked at Sensis. The position prior to 2000 was not established in evidence. The evidence does not demonstrate when the Rules were first drafted, how they have been amended or who was responsible for such amendments.

5. HOW THE RULES ARE USED

123 Considerable effort was spent detailing the alleged manual implementation of the Rules to seek to demonstrate the sort of judgment and intellectual effort alleged by Senior Counsel for the Applicants: see [89] above. Neither the Applicants nor the Respondents sought to summarise the circumstances in which the Rules are manually applied (beyond selective examples). In order to understand how the Rules influence and ultimately control the nature of the Works, it is necessary to explore the Genesis Computer System and the way in which it manipulates the listings and advertising information to give expression to the WPD Rules and YPD Advertising Rules. That process, obviously, does include the use of human agents. However, their activities are inextricably linked to and ultimately governed by the computer systems used. Moreover, where there are instances of so-called "discretion", it is not a true discretion but one to be used in accordance with the Rules . This results in an automated, prescribed process that governs the ultimate production of the WPD and the YPD.

124 What follows is the highest the Applicants' evidence reached in attempting to explain how the Rules required manual implementation. Many of the entries within the WPD and YPD will not be altered from year to year, and many are service orders which require no human intervention whatsoever. Further, some who apply the Rules could not be said to be contributing to the work as a compilation expressed in words, symbols or figures: see s   10(1) of the Copyright Act. However, as is detailed below, even where manual intervention is involved to give form to the Rules, it is does not reach a level to assist the Applicants.

125 This will be demonstrated by the interplay of the computer systems (including but not limited to the Genesis Computer System and the reference tables) and Sensis workers involved in various stages of production.

126 The Genesis Computer System is comprised of a number of programs, relevantly including:

1.

Publisher's Online System ( POST ) - a graphical user interface used by Sensis workers to enter and update listing and other customer information in the Genesis database (see for example [135] below;

2.

Listing Maintenance - the application which governs the processing of listings data received from telecommunications carriers (known as "service orders") (see for example [135] below);

3.

Book Extract - the program which governs the sorting and collation of listings for inclusion in a particular WPD or YPD (see for example [149]-[156] below);

4.

Book Production - the program that governs the pagination and typesetting of the directory (see for example [157]-[161] below).

127 Sitting behind these applications are what was referred to as "reference tables". Many of the Rules applied by the Genesis Computer System rely on the reference tables and the information contained in them to determine whether a particular action is valid or invalid (relevantly, by reference to the Rules). The reference tables are stored in a central location known as the Reference Tables Management System ( RTMS ). The development of the tables themselves was undertaken by reference to the business rules contained in the WP Rules and YP Advertising Rules. The development of the tables has occurred over a number of years, with an unidentified portion of the more stable Rules having been represented in the tables for a considerable period of time (relevantly, prior to 2000).

128 Many hundreds of reference tables exist within the Genesis Computer System, but only a subset impact upon the listing information in the YPD and WPD.

(a) POST and Listing Maintenance

129 POST acts as the primary mechanism by which information is entered or keyed into the Genesis Computer System. Listing Maintenance is the program through which certain listings are automatically processed, for example, where no change is required to the listing of service orders. Automatic validity checks are undertaken by these computer applications, and should the information fall outside the expected range of information to go into a certain field (which is determined by the reference tables), that entry will not be accepted by the system. In the case of manual entries, POST will not allow a record to be finalised should certain fields be empty, limits the number of options from which someone can choose when entering information of a particular kind (for example, by using drop-down menus) and uses the reference tables to check the range of valid entries of a given type of information. In other words, the individual entering data is usually notified if something is incomplete or if it is invalid, which is determined by reference tables that are constructed to assist in the automated implementation of the Rules. The Applicants accepted that there is a large amount of computer-aided error correction.

130 Of significance also was the role of the Error Maintenance System. The Error Maintenance System is a program designed to search for errors on a daily basis in the listing information stored in the Genesis database (see [86] above). Although no definition of "errors" was provided, from the examples it is apparent that an error will often include a situation where the ultimate listing contravenes some aspect of the Rules. The Error Maintenance System operates by identifying errors, without any human involvement, that have been entered and assigning them to be corrected.

131 There are a number of different ways that information is received from a customer and can be entered into POST by personnel employed in various capacities (see for example, [205], [223] and [288] below). The evidence of two individuals, Ms   Speranza (a Senior Account Manager for Sensis responsible for selling advertising and updating listing details in the WPD) and Ms   Walsh (an Account Executive for Sensis responsible for selling advertising space and updating listing details in the YPD), is relevant to understand POST and how it controls the initial application of the Rules.

132 Ms   Speranza stated that in her role she had to "ensure that all listings and advertisements for which [she] was responsible [complied] with the [WPD Rules]. The [WPD Rules] prohibit misleading advertisements and ensure that the [WPD] are user-friendly for consumers". This extremely general statement as to the application of the WPD Rules was then followed with some examples demonstrating the process by which a customer was contacted and advertising was secured.

133 In selling advertising to a given customer, Ms   Speranza makes suggestions informed by background research regarding the customer's former advertising and general business. The suggestions are aimed at making an advertisement that is of benefit to the customer. Examples provided by Ms   Speranza included changing colours within the advertisement, increasing the number of directories (and thus regions) the advertisement is placed in or removing some enhancements (such as colour) in order to decrease advertising spend.

134 To "create" the advertisement, Ms   Speranza uses POST. She selects various options from drop-down menus, or inserts basic text into POST. Where work is required to be conducted by an Artist (such as where a business logo is to be inserted into the advertisement), Ms   Speranza creates a "gap" in the advertisement, requests a high resolution copy of the logo and forwards that material to the Artist.

135 One particular example, which demonstrated the significant level of automation, was described in the following terms:

[Having finished the call with the customer], I ... opened POST to make changes to [the customer's] listing details. In POST I changed the colours of [the customer's] business name and main telephone number. I also created a space for [the customer's] logo to be inserted. I did this by performing the following functions in POST:

(a)

from the Product List window, I navigated to the Item List window;

(b)

in the Item List window I selected the "Super Bold Red Type Header" Universal Directory Advertising Code ( UDAC ). I then navigated to the Change Item window;

(c)

in Change Item window, I selected "Super Bold Logo Full Colour with Yellow Background". This changed the colour behind the listing to yellow;

(d)

back in the Item List window I then selected the "Bold Red Additional Standard Type Entry" UDAC. I then navigated to the Change Item window; and

(e)

in the Change Item window, I selected "Bold Black Additional Standard Type Entry". This changed the colour of [the customer's] telephone number from red to black.

136 Individuals known as "Validators" will also check the details entered into POST (whether by a sales consultant or in the case of more complex listings, an Advertising Data Specialist ( ADS ) operator) to ensure compliance with the Rules. This involves a basic check of the information recorded in either written or oral contracts (that are voice-recorded). The Validator will correct the error if minor, but errors within the listing itself (such as a spelling error) are sent back to the sales consultant.

137 The way in which POST is used and the application of the Rules differs under the YPD. Ms Walsh gave evidence as to her role as a YPD Account Executive. Her evidence is significant in two respects.

138 First, Ms Walsh provided some examples of where businesses had attempted to place advertisements "prohibited by the [YPD Advertising Rules]". Presumably, this was to demonstrate the exercise of the sort of discretion or judgment submitted by the Applicants to be relevant. The examples included:

1.

Businesses attempting to list business names other than their registered business names - for example, names commencing with "AAA" - in order to obtain a listing priority;

2.

Businesses attempting to list an address other than the locality in which they are actually situated;

3.

Businesses wanting to list information relating to a variety of products or services in one advertisement, even though the headings restrict such categorisation; and

4.

Businesses wanting to promote a number of different businesses, owned by separate people, in the one advertisement.

139 Beyond these broad assertions, the evidence did not disclose how often Ms   Walsh encountered such examples or how they impacted upon the directories in suit. Moreover, I do not accept that such examples (as far as they are useful) demonstrate discretion or judgment. They are simple applications of uncomplicated Rules.

140 Secondly, and again returning to the significance of POST and the computer systems harnessed, Ms   Walsh did not "create" the advertisement herself. That step is taken elsewhere. The actual creation of the advertisement, as described by Ms   Walsh in her affidavit, required her to send the paper contract (including sketches made) to Brisbane, where they were checked by a Sales Contract Coordinator ( SCC ) and Contract Verification Specialist ( CVS ), verified and keyed into the Genesis database by an ADS and where the artwork was drawn by an Artist.

141 The difference between the affidavit and oral evidence of Ms   Walsh is stark. Under cross-examination, Ms   Walsh was demonstrably unclear as to the roles and types of work undertaken by others in the process, save for a sort of broad understanding that other people checked what she forwarded on and ensured it was entered as it needed to be into the Genesis database. She referred to the various demarcated positions mentioned in [140] as "sales clerks" and noted that "[Sensis] changed those names all the time". Moreover, Ms   Walsh admitted (as was inevitable) that she could not tell where a given advertisement was going to be placed within the YPD when discussing that issue with the customer. At best, Ms   Walsh's role required her to discuss the selling of advertising to customers, recording the eventual agreement and allowing others to perform all other steps to create the advertisement. Whether alone, or in combination with others, she was not an author.

142 These further steps necessary to create the advertisement require a number of other workers referred to in [140] above, who (as far as their role requires), create the advertisement using POST (and in the case of Artists and Editors - using graphic software such Multi Ad Creator and the Ad Production Database). Some of the roles of these various positions (the SCC, CVS, ADS and Artists) have been mentioned elsewhere. To explain briefly:

1.

SCC - a Sales Contract Coordinator who ensures that paper contracts submitted by Account Executives are internally consistent;

2.

CVS - a Contract Verification Specialist, who appears to have a similar, though slightly demarcated role to an SCC. The process by which they check contracts is more detailed (for example, where an SCC may check that an ABN has been supplied, a CVS will determine its accuracy);

3.

ADS - an Advertising Data Specialist who is responsible for entering YPD contract details into the Genesis database and administering the more complex WPD advertising contracts;

4.

Artist - responsible for preparing and updating graphic advertisements in the WPD and YPD; and

5.

Finally, of importance also is the Editor, who is responsible for verifying graphic advertisements prepared by Artists to ensure they reflect the requirements of a given contract and the WPD Rules and YPD Advertising Rules.

143 In terms of relevance to the Rules, the ADS, Artist and Editor should be noted.

144 Where an ADS receives a contract, they enter the details from the contract into the Genesis database using POST. This involves creating a new record for the customer or updating the customer's existing record with the customer's new listing and other advertising details. If there is no graphic advertisement to be created, the listing is marked as complete by the ADS operator and is ready to be printed in the directory. If there is a graphic advertisement to be created, an Artist will prepare the advertising in the Ad Production Database, based on the instructions provided in the copy sheet included with the contract. Once the Artist has completed the advertising, it is verified by an Editor to ensure it matches the contract details, the copy sheet and POST, and complies with the YPD Advertising Rules. Mr   Brincat, employed as the Victorian Operations Manager, Print and Online gave evidence of the process by which an Editor ensures that the work of Artists complies with the Rules:

This involves opening each component in the appropriate software program (for example, for graphic components, opening the component in the Photoshop program). The Editor then ensures that the Artist has complied with all the requirements relating to that type of component. For example, for graphic components, the Editor checks that the resolution and scaling of the image is correct.

145 Evidence was also led regarding the "Check the Checkers" team. This "team" comprises one individual based in Melbourne. Two more external consultants may be employed as required. For example, when the Melbourne and Sydney YPD are being produced, the aim of this team is to check 10   per cent of the YPD advertisements received from ADS operators and Editors. This 10 per cent is generated at random. On average, a member of the team checks 15 advertisements an hour. That translates into one advertisement every four minutes. Again, their effort is dictated and governed by the Rules. They do not correct errors themselves, but forward identified errors elsewhere.

146 The Rules are of limited assistance to the Applicants' contention that copyright subsists in the Works. Sales consultants apply prescribed, uncomplicated Rules that, in an undefined number of situations, will involve what is broadly asserted to be a "discretion" or "judgment". Moreover, the nature of changes made varies greatly and may have no impact upon listing details at all. The information received from the customer is entered into POST (either through an ADS or otherwise), which involves largely mechanical data entry from set drop-down menus, limited parameters or the use of basic instructions. The information is checked by multiple parties for compliance with the Rules. Artists and Editors create advertising in accordance with their instructions and the Rules. The Check the Checkers team, whose tasks are randomly computer generated and involves an unidentifiable portion of the directories in suit, apply the Rules which takes no longer than four minutes per advertisement.

147 In the end, the position is best summarised by the answers given by Ms   Purcell who was employed in a similar position to that of Ms   Walsh and who endorsed the description of that role as provided by Ms   Walsh:

Q:

So ultimately a decision to choose a particular heading, whilst it might be instructed by advice is a decision made by the customer ultimately, isn't it?

A:

It is definitely made. The customer has to sign and accept the heading, yes, but without my advice the customer probably would have pulled out of the book and we wouldn't have had him as a customer.

148 And the second:

Q:

Now, I appreciate you say you got the results in the advertising but your primary objective as a sales person is to seek to expand the sales spend that people make, is it not? That is your primary objective?

A:

My primary objective as a sales consultant for [Sensis] is to do that. My primary objective for me as a sales consultant is to increase the business and keep that business working and help that business achieve their goals as a business.

(b) Book Extract and Book Production

149 These two processes contribute to the creation of what was referred to as the "galley file", which contains all of the listings and in-column advertisements in the form and sequence in which they will appear in the printed directory (noting that this does not include display advertisements). Ms   Dawes, a manager in Print Content and Conversion at Sensis, stated that "it is ... at the Book Extract stage that the listings in a particular [WPD] or [YPD] assume the form in which they will ultimately appear in the printed directory". She admitted during cross examination that its organisation is "all automated".

150 These software routines, in conjunction with the reference tables, use the Rules to apply and determine the appearance and order of the information stored in the Genesis database. For example, a table described as a "Keyword Table" defines how characters and symbols are to be interpreted for the purposes of sorting. A specific instance includes the "$" symbol - the table contains information that, when associated with the Book Extract routine, will sort such an entry as "dollar" (see   [98] above).

151 Ms Dawes went further regarding the automated sorting process undertaken by Book Extract, and how it extracts listing information and other publishing information for a specific directory from the database and related reference tables. Her evidence was that the Book Extract routine performs four major steps:

1.

Heading Extract - this process searches the database and extracts all headings which have listings or advertisements under them in the designated directory, as well as their associated sub-headings and cross-references. It also includes notes headings. It is only used for the YPD;

2.

Listings and Advertising Extract - this process searches the database and extracts all listings and other advertising information which are to appear in the designated directory, applying the Rules to determine which components of each listing should be included and how they should appear;

3.

Sorting - this process sorts the extracted listings and headings information according to the Rules; and

4.

File generation and reporting - this process saves the extract into what is known as a CMP file and generates a report of all listings that failed to extract.

152 With respect to step 3 outlined in [151] above, the application of these Rules involves the software checking whether the listed elements appear in any of the relevant tables, and then managing the listing in accordance with the instructions contained within the table. In certain circumstances, the instruction contained in the listing record can override the sorting Rules contained in the tables. As is evident, the production of the galley file to this point has been almost entirely automated.

153 As mentioned elsewhere (see [254] and [317] below), the production of the galley file involves a number of "reports" that are run to identify errors or anomalies in listings and advertisements (including for example ensuring that display advertisements will appear in the correct position according to the Rules). After the galley file has been extracted (which involves entering various commands into a computer), further reports are run to ensure that the listings to be printed in the directory have been extracted correctly from the database and that they comply with the Rules. The error indications are largely automated. Mr   Cooper, a Publishing Co-ordinator employed by Sensis, gave evidence that there were no galley errors in the Port Macquarie WPD galley file, and only a small number for Cairns of a formatting description. Where the Genesis Computer System identifies issues, they are usually corrected manually in POST or at the source of the error.

154 It should be noted that under the CONDOR and IDS systems, Mr   Cooper stated that he would go "through the same process to produce the [B]ook [E]xtract" and produce the galley file. Mr Vormwald (who gave evidence directed at the YPD) gave similar evidence.

155 Some manual checks are undertaken, examples of which (for the WPD) include checking the beginning of each alphabetical section to ensure the correct alphabetical order exists and correcting "dependant word listings" (which include common pre-fixes such as "Le" and "Mc") using a checklist.

156 After the galley file has been built, "Late Change Requests" are managed. There was little evidence as to how many "Late Change Requests" were specifically actioned with respect to the Works. For example, Mr Vormwald, who worked as a Publishing Co-ordinator that contributed to the Cairns 2008 / 2009 YPD, gave evidence regarding a single instance, and then asserted that he actions 50-150 such requests per regional YPD. Again, software is used to ensure compliance with the Rules, and where Sensis workers are involved in this process, the software ensures uniform compliance with predetermined aspects of the Rules.

157 Once this process is undergone, the directories must be paginated and typeset. Mr Stewart, a Paginator, provided evidence of his experience in this role. The Paginator paginates and typesets the directories. Pagination refers to the process of determining the layout of the listings and advertisements that appear on each page of any given directory. Typesetting refers to the process whereby graphic advertisements stored in the Ad Production Database are incorporated into the paginated pages of a directory. The Paginator's role requires a number of steps before the tasks outlined above are completed. I do not propose to outline them all here. For present purposes, it is sufficient to note that much of the work involves the automated production of draft versions of sections of a given directory, sorted to comply with the Rules, then the manual checking and editing of this draft. In the words of Mr   Stewart (describing his role when paginating):

The system will assist me in paginating the book by starting me off. So I will tell the system where I want to start, so going through the process, I will tell it a start page. I will ask the system then to produce some pages for me and then I'll go in, into my online pagination system and manually change them or agree [with] them as we move through the book.

158 This pagination process relies heavily upon the RTMS system (see above at [127]) and upon a piece of software described as "Pagination Prod". Pagination Prod has a function that will "score" a given page out of 100 based on the compliance level with the Rules. Mr   Stewart attempts to edit each page to achieve a result as close to 100 as possible. In achieving that objective, Mr   Stewart must at times apply certain rules whilst violating others.

159 Mr Stewart's evidence was that where a 300 page directory is produced, 95   per cent of the pages will require some manual intervention to ensure compliance with the Rules. However this statistic (as far as such estimations are useful) and its weight in determining the issues in dispute, should be understood in its context. First,   Mr Stewart admitted that the creation of an index, which is an aspect of the paginating process, is only "very rarely" the subject of a manual change. Secondly,   Mr Stewart was asked the following question to elaborate upon the type of changes undergone during this process:

Q:

You ... introduce[ed] page breaks?

A:

Page breaks is one thing, yes. Positioning, filler.

Q:

So your function is essentially the formatting of the pages? I mean, the final formatting, not the layout but the final format to achieve pages?

A:

Yes.

160 This is further supported by his evidence that it takes only a half day for a standard WPD to be paginated (being some hundreds of pages long), and between one and a half to two and a half days for a standard YPD.

161 The typesetting process follows a similar pattern. Again the RTMS is used, in addition to an application called "QC Manager". Using this application, Mr Stewart either accepted a page that he was satisfied with, or noted it as an "Error File", at which point he would query the error with an Artist within the Print and Online Operations group. Occasionally, software errors result in missing pages. Mr Stewart again requests the page be created via the RTMS.

6. CONCLUSIONS

162 As the evidence shows, the person or persons who utilise the Rules and who, therefore, are submitted by the Applicants to be authors of the Works, do not exercise either "independent intellectual effort" or "sufficient effort of a literary nature" to be considered an author within the meaning of the Copyright Act.

163 First, it is the Rules that prescribe the particular form of expression of the Works, not any individual person alone or in collaboration with others. The Rules control the content of each Work. The various computer systems generate and control the choice of the content on the basis of the Rules and are responsible for ensuring the vast majority of their valid application. In some circumstances the Rules expressly prohibit certain content.

164 Secondly, even where there is any level of human "discretion", it must be exercised in accordance with the Rules. There is no independent effort, let alone such effort being intellectual. There is no effort, let alone sufficient effort, of a literary nature. I reject the Applicants' contention that there is judgment or discretion used in selecting the material for inclusion. The Rules prescribe, presume and prohibit the actions of the contributors. What choice there is, is the choice given by the Rules, not by any person or persons.

165 Thirdly, even if the judgment or discretion of the kind asserted by the Applicants was "independent intellectual effort", it is not relevant intellectual effort. I reject the Applicants' contention that the relevant intellectual effort involved is in understanding and applying the Rules. The "independent intellectual effort" required must be directed to the creation of the Work: IceTV 254 ALR 386 at [33]. Such skill and judgment, on the facts, is not directed to the creation of each Work but to the application of the Rules. Moreover, the "work" undertaken by many of the Sensis workers, is work directed (at least in part) to the maintenance and operation of the Genesis Computer System and associated computer systems (including the Genesis database) which is accessed or used for a multitude of applications.

166 Finally, even if it mattered, there is insufficient evidence about who created the Rules themselves. The Rules alone cannot be said to be an author for the purposes of the Copyright Act.

D. IDENTITY OF AUTHORS

167 The identity of the authors of the Works was not a task that the Applicants accepted they were required to undertake. Having regard to the relevant principles, I rejected that contention (see [7]-[45] above). In fact, the Applicants did seek to identify some of the authors of some of the Works.

1. SENSIS EMPLOYEES

168 A list of the "authors" of the Sample Directories was tendered in evidence. It had been compiled by the Applicants' solicitors. Several points should be made about that list. First, it was confined to the Sample Directories. Secondly, it stated that "[c]urrent team members have been identified where reasonable inquiries could not confirm the particular members of that team who contributed to the Sample Directories". Accordingly, it is not clear and highly unlikely that the listed "authors" actually contributed to the Sample Directories. Thirdly, the list was subject to the express caveat that "[t]he authors of the Sample Directories include but are not limited to the individuals identified". Finally, the list then goes on to state hundreds of names in various roles, the vast majority of whom did not give evidence in this proceeding.

169 Put simply, as noted earlier (see [5] above) the Applicants were unable to identify the authors of the Works (and for present purposes, ignoring that much of the Works are not the subject of human authorship). This is further exacerbated by the role that the contractors played, as outlined below.

2. CONTRACTORS

170 Contractors are engaged by Sensis at various stages in the production of directories to assist Sensis employees (see for example [194], [221], [228], [277], [290] and [294] below). The Applicants asserted that the significance of these contractors to the issues in dispute was marginal. That is incorrect.

171 First, the contractors, when engaged, will perform many of the same functions as employees and thus there appears to be no reason to class one as an author and not the other. This presents a grave problem for the Applicants given that a significant number of the contributors remain unidentified.

172 Secondly, the intellectual property in the work undertaken by the contractors must be the subject of assignment in order for Sensis to demonstrate the requisite ownership of copyright. The Applicants submitted at various stages throughout the trial that contractors are required to assign their intellectual property rights to Sensis. That is a matter of fact. Although a number of agreements were tendered in evidence demonstrating such assignments, there were significant gaps. Agreements detailing assignment of intellectual property rights were not provided for all contractors and there was no evidence of the contracting parties and the appropriate dates of assignment for all contractors.

173 As a result, many individuals who might be considered authors are unidentified and the ownership of the intellectual property in the work they performed has not been established.

E. PRODUCTION OF A PARTICULAR WPD

174 Having identified the use and significance of the computer systems and the Rules, I turn to consider the way in which an issue of a WPD is initiated and then created.

1. EXISTING LISTING

(a) Creating the initial listing record

175 The rollover process for the next issue of a WPD is initiated by personnel scheduling the relevant batch applications to be run via the RTMS in the Genesis Computer System. The rollover process is usually commenced as soon as the previous issue of the directory has been extracted from the Genesis database and is being readied for publication. The steps taken for the rollover are the same in relation to each WPD regardless of the geographic region that the WPD covers.

176 As set out above (see [56(7)]), the rollover process creates a template or first draft which is, in significant part, a repetition of substantial parts of the previous directory. As Mr   Pagnin, a Business Analyst employed by Sensis, said in evidence, the previous year's directory "constitute[s] the core of the [following] directory".

177 The first appearance of a telephone number in its local directory qualifies for a FE comprising the name, address, and telephone number of the customer in standard format. An existing FE listing for a customer is obtained from a customer's previous WPD listing and is included by reason of the rollover from the previous edition of the WPD.

178 The Applicants have not and cannot identify who provided the necessary authorial contribution for these entries rolled over from the previous edition. The Applicants concede numerous non identified persons or entities would have "contributed" to the prior entry (including third party telecommunications carriers such as Optus, Vodafone and AAPT).

179 The listings in the WPD in issue were not the result of human authorship but were predominantly computer generated (see Part C above). Moreover, none of the work done in contributing the existing FE listing for a residential customer to the Genesis database was "independent intellectual effort" and further or alternatively, "sufficient effort of a literary nature" if any effort of a literary nature ( IceTV 254 ALR 386 at [99]) is necessary to be considered an author of a Work within the meaning of the Copyright Act. Further or alternatively, the manner in which an existing FE listing for a residential customer is included in the next WPD was anterior to the WPD taking its "material form": IceTV 254 ALR 386 at [101]. Most entries in the WPD are free entries. FE business listings are treated in the same manner as FE residential listings but for the fact that there is an attempt to contact businesses to see if they want to spend money on advertising in the WPD.

(b) Obtaining updated listing information

180 As noted above (see [95] and [101]), under the Rules, the first appearance of a telephone number in its local directory qualifies for a FE comprising the name, address and telephone number of the customer in standard format. Second and subsequent appearances of the number in the directory, or the inclusion of additional information or features as part of the listing, incurs an additional charge. A listing with additional information or features is known as an "enhanced listing". An enhancement to a WPD listing can involve the inclusion of additional information (such as an email address, facsimile number, or logo), a change to the format of the listing (such as placing it in capitals, bold or using a colour highlight) or an additional listing altogether (such as a cross-reference). The various forms of enhancement are set out in the Rules.

181 A co-ordinated sales campaign, known as a "sales canvass", is conducted in the lead up to the production of a particular issue of the WPD. The sales canvass lasts 11 months. It begins in mid-July each year and concludes in mid-June the following year. During a sales canvass, a sales consultant attempts to contact every customer who has paid for an enhanced or additional listing in the previous issue of a WPD in order to update their listing details and ascertain their requirements for the forthcoming issue of directories. Sales consultants are not regionally based - they canvass WPDs from all regions across Australia.

182 There are four different WPD telesales teams or "channels" who work on a sales canvass - T1 Consultants, T2 Consultants, T3 Consultants and Account Managers. The different channels each deal with different customers depending on factors such as the type of customer (business, government or non-government association) and the level of the customer's advertising spend. The role of a WPD telesales consultant is the same in respect of any WPD, regardless of the geographic region that the directory covers. There are approximately 200 WPD telesales consultants, located in Sydney and Melbourne. Each sales consultant is expected to meet certain sales targets over a particular 12 month sales period.

183 T1 Consultants are responsible for contacting businesses which only have a FE listing. T2 Consultants deal with customers that spend a maximum of $1,500 to $2,000 per annum on advertising in the WPDs. T3 Consultants deal with customers that spend between $1,000 and $15,000 per annum on advertising in the WPDs. Account Managers (also known as T4 Consultants) deal with government and corporate customers that spend up to $150,000 per annum on advertising in the WPDs.

184 The T1, T2 and T3 Consultants and Account Managers are telesales consultants who contact customers over the telephone. They deal with all customers not assigned to an Account Executive. The T1 and T2 Consultants use "Dialler" to contact customers. "Dialler" is computer software consultants use to make telephone calls to existing or potential customers. The software is set in a different mode depending on the role. For T1 Consultants, the Dialler is set to "Predictive Mode" so that a call to a business is simply "dropped in" to a consultant's headset with the consultant only given information about the business through the Dialler at the point when the call is answered. For T2 Consultants, Dialler is operated in "Preview Mode" so that instead of the call directly "dropping in" to a consultant's headset, the consultant is given information about the particular business and the opportunity to quickly "research" the business before making the call. Both a T1 and a T2 Consultant would access the Genesis database through POST to confirm the customer's listing history and previous advertising (if any) with Sensis for as long as that customer has had a listing. The sales consultant would also engage in limited internet searches to obtain information about the business and if the business had a website, locate any additional contact details to augment or confirm the information in the Genesis database.

185 T3 Consultants and Account Managers do not use Dialler. Instead, at the beginning of each "sales canvass", each T3 Consultant and Account Manager is issued with an assignment list. The assignment list is allocated by the "Go To Market" team which takes into consideration the likely amount of money to be spent by a given customer, the desire to maintain continuity between a given consultant and a customer and the demonstrated skill level of a consultant determined from previous sales canvasses. Customers are also allocated in other ways, such as by the Lead Management team (see [239]-[240] below). Account Executives, known as "face to face" sales staff, contact customers in person. Account Executives tend to deal with large, high spend customers who advertise in multiple WPDs. There are approximately 25 WPD Account Executives nationwide.

186 As part of the sales canvass, an attempt is made to contact all business customers with a FE to update their listing details and enquire whether they wish to upgrade to an enhanced listing. The role of the sales consultant is to explain the various forms of permitted enhancement and to assist the customer to ascertain which form of listing or listings will best suit their needs. Residential customers are not contacted as part of the sales canvass.

187 When contacting a customer, the sales consultants apply a structured sales process known as the "Six Step Consultative Sales Process". The process involves reviewing the customer's existing listings and asking the customer a series of questions about the customer's business designed to identify the customer's advertising needs. This is referred to within Sensis as a "business needs analysis". The sales consultant then makes a recommendation to the customer about the form that their listing or listings should take in the next issue of the directory. An overview of how a WPD sales consultant conducts a business needs analysis is discussed at [133]-[135] above.

188 Where the listing is in the form of a display advertisement or a caption (a listing containing multiple items of information under a single name), the recommendation can include advising on the form of the caption (ie, the arrangement of the information within the listing) and what additional information should be included (such as a contact name, fax number, email address, slogan, opening hours or after hours contact information).

189 When the customer has made a decision about what form of listing to place in the forthcoming issue, the consultant records the relevant listing details and arranges for the listing records to be created or updated within the Genesis database. As part of this process, the sales consultant confirms whether the listing information stored in the database is correct or needs to be updated, and that the listings the customer wishes to place comply with the requirements of the Rules. As detailed in Part   C above, sales consultants apply both "content-driven" Rules and Rules dealing with the presentation and appearance of listings. In addition, each type of listing enhancement has a discrete set of entry and appearance criteria set out in the Rules.

190 It is difficult to draw any conclusions on the precise number of listings that require amendment from one year to the next. It will vary from canvass to canvass, sales consultant to sales consultant and directory to directory. Although one of the sales consultants estimated that 98 per cent of the customers he is responsible for make changes throughout the year, he only had 45 customers (who were larger clients). Another sales consultant (Ms O'Dea) estimated that she amends the listing details of approximately 60 per cent of the businesses she contacted as a T2 telesales consultant, while Ms Speranza estimated that she amends the listing details of approximately 30 per cent of the businesses she contacts as a T4 telesales consultant (Account Manager). Given the range of these anecdotal estimations, it is not possible to identify with any precision what percentage of the entries in any directory are new.

191 The evidence disclosed that during the sales canvass there were 16,992 changes made to the 6,471 business listings that appeared in the 2009 Port Macquarie WPD, and 33,404 changes made to the 12,669 business listings that appeared in the 2008 / 09 Cairns WPD. Mr   Gill, employed by Sensis as the manager of the Go To Market Team for the WPD, admitted during the course of cross examination that most of the entries in the WPD would be residential and that changes included any sort of change to the advertising type, which would include changes that do not find expression in the directory. He also indicated that there were 642 new listings for Cairns from the previous year, indicating that the balance of listings (less cancellations) were continued from the previous year. That figure dropped to 329 with respect to Port Macquarie.

192 Business Listings are different. Even where there is no change in the business customer's listings from one year to the next, the consultant is still required to confirm the listing details with the customer.

(c) Entering the updated information into the database

193 Which person actually updated the listing information in the Genesis database depends on the type of sales consultant responsible for dealing with the customer. Put simply, the person who contacts the business customer is not necessarily the data entry person.

194 If the customer's listing information has been obtained by an Account Executive, the Account Executive will record the changes that need to be made to the customer's listings in a memorandum and forward it to an ADS (see [142] above) in the Print and Online Operations group to update the Genesis database. There are approximately 94 ADS. Approximately 16 ADS are dedicated to WPD listings. Sensis also engages contractors in the Print and Online Operations group to assist during peak periods of the directory production cycle in August and December of each year. The Applicants alleged that these contractors are engaged through employment agencies that are required to ensure all of their temporary personnel assign their intellectual property to Telstra, However, such a submission is subject to the difficulties outlined in Part D(2) above. These staff are located in Sydney, Melbourne and Brisbane but are responsible for making changes in relation to all of the directories published by Sensis.

195 The process of updating an existing listing in the database involves calling up the customer's record in the database and changing the information which will be used to generate the listing in the forthcoming issue of the directory using POST.

196 Each customer record in the Genesis database contains a number of different sections, including sections for the customer's contact details, payment details and the directories in which the customer's listings appear. The Genesis database also retains historical information about the details the customer has had published in any previous directory.

197 The "Listing Details" part of the record contains the information which is used to generate the customer's listings. If the customer has more than one listing (for example, a WP listing and a YP listing, or two WP listings with different details), a separate record is stored in the database for each listing. A separate record is also stored for each issue of the directory in which that listing is to appear. An entry of a listing in a particular issue of a directory is known as an "item". The "item" describes the type of listing which will appear in the specific issue of the directory, using the information stored in the "Listing Details" part of the record (for example, whether it will appear in bold type or capitals). If a listing is to be placed under three different headings, there will be three "items" linked to the same listing. This is also known as the "UDAC" for the entry. As noted in [135] above, "UDAC" stands for "Universal Directory Advertising Code". There is a UDAC for every type of entry in the WPD and YPD, including a first entry or FE. An "item" is automatically generated for a first entry or FE.

198 The information which is held in the "Listing Details" section of the customer's record includes the customer's listed name (including any courtesy title), listed address (including the street number, street name, street type, locality name, state and postcode), listed telephone number (including area code, exchange prefix and line number, as well as the type of number, such as standard or mobile) and (for YPD listings) the initial heading under which the listing is to appear. It also includes any additional information which is to appear as part of the listing (such as an email address or other additional text).

199 To update the listing, the ADS calls up the item that will have been created for the forthcoming issue of the directory as part of the rollover process, and changes the details for the associated listing in accordance with the instructions obtained from the customer by the sales consultant, and the requirements of the Rules (see [140]-[144] above). As the ADS changes the information, it is automatically checked by the Genesis Computer System against reference tables stored in the RTMS containing all of the valid range of entries for that type of information. The Applicants accepted that there is a large amount of computer-aided error correction.

200 An example of a piece of listing information which is checked is the listed telephone number which is checked against a table containing all of the telephone exchange prefixes issued by the Australian Communications and Media Authority. If the number is not within the range of numbers contained within the table, it will be rejected.

201 Some of the tables involve the Genesis Computer System cross-checking against multiple items of information. For example, in addition to checking the validity of the locality name and postcode, the Genesis Computer System also checks whether the combination of locality and postcode entered for the listing are contained in a table of all of the localities that fall within each postcode. In addition (see [129] above), some of the information is entered by selecting from "drop-down" menus, rather than typing, to minimise the scope for error.

202 If, in the course of processing the changes to the listing, the ADS determines that the information is not complete or accurate, or does not comply with the requirements of the Rules, the ADS can raise a query with the sales consultant responsible for the customer. This causes the processing of the listing to be suspended. The POST interface will not allow the record to be finalised until all of the relevant information has been entered.

203 When the record is complete, the ADS selects the "View Listing" function on the Genesis Computer System to view the listing in the format in which it will appear in the printed directory and then finalises the record by "retiring" the listing. "Retiring" the listing completes the listing in the Genesis Computer System. All advertising must be "retired" before it can be extracted. At that stage, the system conducts further validity checks across all of the information entered by the ADS.

204 If the listing is a display advertisement (see [107] above), the entry is usually created in a separate database (known as the Ad Production Database - see also [142] above) by an "Artist" in the Print and Online Operations group and then checked for accuracy and compliance with the Rules by an "Editor" in the Print and Online Operations. There are approximately 55 Artists, of whom approximately four are dedicated to WPD advertisements. There are approximately 12 people in the role of Editor, including one dedicated to WPD advertising. The Editors are located in the same centres as ADS and, like them, are responsible for making changes in relation to all of the directories published by Sensis.

205 If the customer's listing information has been obtained by a telesales consultant then generally that consultant is responsible for entering the changes in the Genesis database using the POST interface (for a typical example of an interaction with POST, see [135] above). If the changes are more complex (for example, if they involve the creation of new display advertising), the consultant can record the changes in a memorandum and refer it to an ADS to enter the changes into the database.

(d) Checking the updated listing record after entry in the database

206 When a customer purchases an enhanced or additional WPD listing, the details of the listing are recorded in a contract between Sensis and the customer. Depending on the value of the advertising, the contract will be in writing or in the form of a voice recording stored on Sensis' systems.

207 After the listing information in the Genesis database has been updated by an ADS or telesales consultant, the listing record is checked against the details of the written contract or voice recording by a member of the Sales Validation Administration team. Members of this team are known as "Validators" (see also [136] above). The Validator checks that the listing details recorded in Genesis are consistent both with what the customer has requested and with the requirements of the Rules.

208 Periodic corrections are also made to the listing information held in the database by members of the Print Content and Conversion group if, for example, a telecommunications carrier notifies Sensis of a change in the form of its service order information.

209 In addition, since 2006 the Error Maintenance System has run a series of reports over the entire Genesis database on a daily basis to identify certain errors in the content or appearance of listings (for example, whether the listing has been amended in such a way that it will no longer print in the directory, or whether there is an error in the sequence of items making up the listing) (see also [86] above).

210 If the Error Maintenance System identifies an error with a new listing or a change to an existing listing, it sends an email to the person responsible for entering the listing notifying them of the error so that it can be corrected. If the system cannot identify an individual person responsible for the error, the error will be placed in a queue to be actioned by a dedicated team of ADS known as the Reports team ( Reports ADS ). Reports ADS have the same skills and perform the same role in updating the Genesis database as ADS responsible for handling requests for changes from sales staff.

(e) Other amendments to existing listings

211 In addition to changes made as a result of contact from a sales consultant during the course of a sales canvass, changes can also be made to an existing WPD listing as a result of the receipt of a service order from a telecommunications carrier or (in the case of a business listing) as a result of direct contact from the customer. These forms of amendment are discussed below.

2. NEW LISTING

212 During the sales canvass for a particular directory, in addition to updating the listing details of existing customers, listings for new customers are also added. Where a listing has not previously appeared in the WPD, information in relation to that listing can be derived from three sources:

1.

service orders received from telecommunications carriers;

2.

contact initiated by the customer; and

3.

sales leads.

(a) Service orders

213 A service order is a notification from a telecommunications carrier of a new telephone connection to the service of that carrier, a disconnection from the service of that carrier, or a change in the name, address or telephone number for an existing customer of that carrier. Carriers issue service orders to Sensis whenever there is a change in the contact details they hold for a customer, regardless of whether that change requires an update to the listing information held in the Genesis database. For example, the service order might relate to disconnection for a customer that is not published in the WPDs or YPDs, or a new connection to a different carrier with the same name, address and telephone number. Service orders are received by Sensis in relation to both residential and business customers.

214 Service orders are received from carriers each night in the form of large files containing a single line of information in relation to each customer. Each service order contains some or all of the customer's listing information, together with an instruction from the carrier about the reason for the service order, which is used by the Genesis Computer System to determine the type of action to be performed in relation to that information. A service order is notification that a particular person has connected or disconnected a telephone number at a particular address. However, the information received from the carrier is not necessarily the information which will appear in the printed directory.

215 As has been noted (see [126] and [129] above), the initial processing of service orders is performed by a computer program within the Genesis Computer System known as the Listing Maintenance application. The Listing Maintenance application is programmed to extract the information from the service order, check the validity of the information, and generate a standard form of record within the Genesis database, known as a Listing Maintenance Transaction. This record can then be used to update automatically the listing information in the database or as the basis for manual processing.

216 When a Listing Maintenance Transaction is created by the Listing Maintenance application the information contained within the service order is edited by the application of standard capitalisation and appearance rules, and the placement of a delimiter which separates the listed name into two components for sorting and collation purposes, in accordance with the requirements of the Rules.

217 The checks which are conducted by the Listing Maintenance application include confirming that all of the relevant fields have been included in the service order and that the information which has been included is valid. Validity checks are performed by comparing the information contained in the service order against reference tables containing lists of all the valid values for a particular field (for example, all of the localities recognised in Australia). These are the same tables used by POST to check listing information and were created to give effect to the requirements of the Rules (see [127] above).

218 Because of the volume of service orders received by Sensis, the Listing Maintenance application is also programmed to filter the information received via service orders in order to determine:

1.

which information can be inserted into the Genesis database automatically;

2.

which information must be processed manually; and

3.

which information does not require any change to the information already contained in the Genesis database, and so can be discarded.

219 The filtering is conducted in accordance with business rules contained in a decision table located in the RTMS. The only service orders that are eligible for automatic processing are those concerning residential listings. All service orders concerning business or government listings are routed for manual processing. Businesses are required to be manually handled because business customers might not register their telephone line under their trading name or might wish to have their listing included as part of a larger listing (such as a franchise), and because it is often not possible to classify a customer under a heading without speaking to the customer. If the system cannot process a service order (for example, because it is a complex listing with a large number of listing elements, or because it fails one of the validity checks referred to above), it is also routed for manual processing.

220 The automatic processing of residential listings is conducted by the Listing Maintenance application, which converts the Listing Maintenance Transaction into a listing record for an FE in the relevant WPD by creating a new record within the Genesis database. If the service order relates to an existing residential listing, the Listing Maintenance application is programmed to match the Listing Maintenance Transaction to the customer's listing record and to automatically update the record with the information in the Listing Maintenance Transaction. As is evident, much of the processing of residential entries is automated and requires next to no human intervention.

221 The manual processing of business listings and complex listings is conducted by members of the Customer Operations group. This group consists of approximately 60 permanent employees, based in Sydney, and from to time, contractors. Again, although the Applicants alleged that these contractors are engaged through employment agencies that are required to ensure all of their temporary personnel assign their intellectual property to Telstra, such a submission is subject to the difficulties outlined in Part D(2) above. The employees and the contractors are required to deal with service orders in relation to listing information that is to be published in any WPD (or YPD), irrespective of the geographic area encompassed by the directory.

222 When a service order is received by a Customer Operations Associate, the Associate will first attempt to contact the customer by telephone to ensure that the listing information derived from the service order is correct and accurately reflects the form that the customer wishes their listing to take. In the case of a business customer, the Customer Operations Associate will also contact the customer to ascertain the appropriate YPD heading under which to classify the customer's listing. Customer Operations Associates must contact (whether by phone or letter) 80 per cent of customers whose listing information is amended through the receipt of a service order.

223 The Customer Operations Associate will then create a new listing for the customer in the Genesis database. This involves creating a new customer record, with its associated listing information, using the POST interface. When the Customer Operations Associate requests the creation of a new customer record from a Listing Maintenance Transaction, POST sends an instruction to the database to copy the relevant information from the Listing Maintenance Transaction to the "Listing Details" part of the record.

224 The Customer Operations Associate must then review the listing details to ensure that they are accurate, comply with the customer's instructions and the relevant requirements of the Rules. If there are changes to be made to the listing information, those changes are automatically checked by the Genesis Computer System as they are entered against the same reference tables used by the Listing Maintenance application to check service order information. If there are no changes to be made to the listing information, the Customer Operations Associate creates a new "item" in relation to the listing by selecting the "WP Auto Scope" option. This enables the listing to appear as an FE in the next issue of the WPD to which the listed address relates.

225 Ms Jones, a Customer Operations Associate for Sensis, gave evidence as to her role. Her evidence was that she would process hundreds of entries in a given day, with different estimates as to the duration of certain types of listing. For example, entries described as "silent line" entries were expected to be completed at a rate of 40 listings an hour, "suppressed address" entries were 19 listings an hour, "business" entries were 20 listings an hour and "residential" entries were 60 listings an hour. As stated earlier (see [56(3)] above), Mr Beardshaw, employed as an External Interfaces Analyst by Sensis, gave evidence that of the approximately 12 million service orders received annual by Sensis, 15 per cent are required to be processed manually.

226 In addition to creating new FEs, Customer Operations Associates also deal with amendments to new and existing listings, and the removal of listings for disconnected customers, silent lines, and addresses which are suppressed in accordance with the requirements of the Rules.

227 As noted above, Customer Operations Associates are also responsible for amendments to complex listings. These are listings which consist of twenty lines or more (also known as "major listings"). It is Sensis policy to send a proof of all changes to the customer. For complex listings, it was alleged that this process can take days or even weeks. It is unclear how many such listings were relevant to the directories in suit.

(b) Customer contact

228 New WPD listings are also derived from customers contacting Sensis directly to request inclusion in the directory. Such requests are usually received by the Customer Care group within Sensis. Sensis maintains two Customer Care call centres, one located in Sydney and one located in Melbourne, to handle such requests and other queries from customers in relation to the WPDs (and YPDs). There are approximately 120 Customer Care staff employed in those call centres. About a quarter of the staff are contractors, making them subject to the same issues already canvassed in Part D(2).

229 The Customer Care consultants are required to deal with queries in relation to any directory, regardless of the geographic area the directory covers or whether the consultant is based in Sydney or Melbourne. Until March 2008, Sensis maintained separate teams within the Customer Care group in relation to queries concerning the WPDs and YPDs. Since March 2008, Customer Care staff have been trained to deal with queries in relation to both directories.

230 Where a customer telephones Sensis to request a new listing in the WPD, the consultant first determines whether the listing is a business listing or a residential listing. To avoid duplication with service orders, customers who contact Sensis in relation to a new residential listing are told to contact their telecommunications carrier, rather than Sensis, to arrange the listing to be added to the directory.

231 If the listing is a business listing, the Customer Care consultant will then enquire whether the customer wishes to purchase an enhanced or additional listing. If so, the Customer Care consultant will transfer the customer to a sales consultant to ascertain the customer's requirements and create the listing. If the customer only wishes to place an FE, the Customer Care consultant will create the listing themselves, after ascertaining that the listing has not already been generated by the Customer Operations group on receipt of a service order.

232 The process of creating a new WPD listing involves creating a new record for the customer, with its associated listing information, in the Genesis database using the POST interface. This requires the Customer Care consultant to request the POST interface to create a new customer record, and then to fill in the details of that record based on the information obtained from the customer and the requirements of the Rules. This involves the same basic steps as updating an existing listing (for an example of how a listing is updated in POST, see [135] above).

233 To enable the listing to appear as an FE in the next issue of the WPD to which the listing relates, the Customer Care consultant selects the "WP Auto Scope" option, which creates a new "item" in the relevant directory in relation to the listing. If the Customer Care consultant has been trained to handle both WPD and YPD queries, the consultant will also create an FE in the relevant YPD, after ascertaining the appropriate heading under which to classify the listing.

234 As with the information entered by an ADS, telesales consultant or Customer Operations Associate using the POST interface, the information entered by the Customer Care consultant is automatically checked by the Genesis Computer System against reference tables containing all of the valid range of entries for that type of information. When the record is complete, the Customer Care consultant finalises the record, after viewing the listing in the format in which it will appear in the printed directory (this is known as "retiring" the listing). The system then conducts further validity checks across all of the information entered by the consultant.

235 In addition to creating new FEs, Customer Care consultants are also responsible for handling requests to amend new or existing WPD listings (provided that the change is a simple one and does not involve any change to the advertising spend) and to cancel FEs (provided that the customer is not already assigned to a particular sales consultant).

236 Where a change involves an amendment to the customer's advertising spend, the Customer Care consultant will forward the query to a sales consultant. Cancellation of paid listings are referred to the customer's assigned sales consultant or to members of the Cancellation team (known within Sensis as Customer Relationship Consultants). The Cancellation team is a national team comprising approximately 15 employees responsible for handling requests by paid customers to cancel their advertising and remove their listings from the WPD (or YPD).

237 Part of the role of a Customer Care consultant is to determine what actions can be done by the consultant and what is best handled by another person within Sensis.

(c) Sales contact

238 As noted above (see [231]), where a customer contacts Sensis and requests to purchase an enhanced or additional listing in the WPD, the request will be transferred to a sales consultant to ascertain the customer's requirements and create the listing in the Genesis database.

239 New WPD listings are also occasionally sourced from sales leads identified by Sensis personnel. Sensis maintains a computer system known as the Lead Management Tool to enable such leads to be recorded and allocated among sales staff. Although the majority of the leads handled by the Lead Management Tool relate to prospective customers for the YPD, occasionally leads are also entered for prospective WPD customers.

240 Where a lead for a new customer is entered into the Lead Management Tool, Sensis personnel within a team known as the Lead Management team are responsible for verifying the information entered into the Lead Management Tool, creating a provisional customer record for the customer in the Genesis database (if one does not already exist), and allocating the customer to a sales consultant in accordance with the relevant allocation policies. There are currently 13 members of the Lead Management team, approximately half of whom are contractors (see Part D(2) above).

241 The provisional customer record is created using the POST interface based on the information submitted with the lead. It is effectively a "draft" record or "shell" for the customer which contains some or all of the customer's listing details but remains to be finalised by the sales staff to whom the lead is allocated. Provisional records are only created for customers who have not previously appeared in any WPD or YPD, and therefore do not exist in the Genesis database. These are known as "DNE" (Do Not Exist) customers.

242 Sales consultants allocated prospective new customers by the Customer Care group or the Lead Management Tool attempt to ascertain the customer's needs and advise the customer about the most appropriate form of listing in exactly the same manner as existing customers. Where there has been a provisional record created by the Lead Management team, the listing record will be updated in the same manner as a listing record for an existing customer. Where there is no existing listing record in the database, the listing record will be created in the same manner as a new listing record created by the Customer Care group.

(d) Checking the new listing after entry

243 Where they involve enhanced or additional listings, new listings are verified by the Sales Validation Administration team in the same manner as existing listings. The role of a Validator is the same in respect of any WPD, regardless of the geographic region it covers. In addition, all new listings are checked by the reports run by the Error Maintenance System on a daily basis.

3. PUBLICATION OF THE WPD

(a) Verification of listing information prior to publication

244 The end of the sales canvass for a particular issue of a WPD (or YPD) is referred to within Sensis as the "Public Close" date for that directory. Following the Public Close date, members of the Publishing team commence the process of preparing the directory for publication. The same process is followed for every directory.

245 There are 16 staff employed in the Publishing team, one of whom is a contractor (see Part D(2) above). Four are responsible for preparing the Government Index which appears at the front of each WPD, seven are responsible for preparing the galley file for each directory (including two dedicated to the production of the WPDs), and five are responsible for the pagination of the directory. The Publishing team is also known as the "Book Close" team and the process of extracting listing information from the Genesis database and preparing it for publication is also known as the "Book Close" process.

246 To enable the publishing process to commence, after the "Public Close" date for a directory, the Publishing team also nominates:

1.

a date by which all internal listing documentation in relation to that directory must be submitted by Sensis personnel (this is referred to as the "Internal Close" date); and

2.

a date by which all listing activity in relation to the directory must be completed (this is referred to as the "Last Listing Activity Date" or " LLAD ").

247 Between the Internal Close date and the LLAD, members of the Publishing team known as "Publishing Co-ordinators" run a number of automated reports to identify any errors in the listing information which will be used to produce the listings that will appear in the directory. These reports are designed to ensure that the listing information is accurate and that the listings will appear in the sequence and format required by the Rules.

248 The reports which are run by the Publishing Co-ordinators are also known as the Book Close reports (see [85] and [153] above). They include:

1.

Caption Arrangement Discrepancy Report and Numeric Dummy Header Report: these reports are designed to identify errors which would cause caption listings to appear incorrectly in the printed directory. A caption listing is a listing with more than one telephone number or an additional line of text.

2.

Doctor Report: this report contains a list of all listings for doctors in the directory. It is designed to identify those that have not been entered into the database in such a way to ensure they are ordered by the individual's surname, rather than the courtesy title "Dr".

3.

CSV / PLA Report: this report is designed to identify all listings which have been designated to be sorted out of alphabetical sequence, such as listings starting with a numeral or a symbol. For such listings, the Sensis worker creating the listing is required to specify how the listing is to be sorted in the "Place Listing As" (or "PLA") field of the listing record. The PLA field is an instruction to the system to override the automated sorting rules for that finding name. The CSV / PLA Report is used to ensure that the order of these listings complies with the requirements of the Rules.

4.

Invalid Bracing Report: This report is designed to identify errors which would cause braced listings to appear incorrectly in the printed directory. Braces are brackets which are used to group entries where there are more telephone numbers than listing lines or more listing lines than telephone numbers.

5.

Numerics Report: This report contains a list of all listings in a particular directory containing numerals in the listed name but that do not have an entry in the PLA field. It is used to ensure that these listings are sorted correctly and in accordance with the requirements of the Rules.

6.

Cross-Reference Report: This report contains a list of all listings in a particular directory that contain cross-references. It is used to ensure that these listings comply with the requirements of the Rules.

7.

Silent Line Axis / Genesis Comparison Report: This report is designed to identify silent lines which have inadvertently been marked for publication in the directory, so that these listings can be removed if appropriate.

249 Any errors identified by the Book Close reports are corrected by members of the Publishing team or are directed to the Print and Online Operations team.

250 In addition, staff of the Customer Operations group run the following additional error reports after the Public Close date for a particular directory:

1.

Courtesy Title in Finding Name Report: This report is designed to identify errors which would cause listings to be sorted by courtesy title, rather than finding name, contrary to the requirements of the Rules.

2.

Duplicate Business Number Report: This report identifies duplicate business listings in the directory.

3.

Too Many Initials Residential Report: This report identifies complimentary listings that have been inserted with more initials than are permitted under the Rules.

251 Any errors identified by these reports are corrected by members of the Customer Operations group.

(b) Extraction and presentation of listings

252 After the LLAD and the correction of any errors identified by the Book Close reports, the listing information for the directory in question is extracted from the Genesis database and automatically presented in the format and sequence in which it will appear in the printed directory. This process is known as "Book Extract": see [149] - [156] above. It is at Book Extract stage that the listing information stored in the Genesis database is automatically converted into a listing in the form in which it will ultimately appear in the printed directory.

253 The Book Extract process involves running a software routine over the Genesis database. This software routine creates an electronic file, known as the CMP file, containing all of the listings which are to appear in the designated directory collated in the order in which those listings are to appear in that directory. The CMP file is used to create an automatic electronic proof of the directory, known as the galley file. The galley file contains all of the listings and in-column advertisements in the format and sequence in which they will appear in the directory, but none of the display advertisements.

254 The Book Extract process involves two stages. First, the listing information for the nominated directory is automatically extracted from the database, in accordance with appearance and suppression rules that have been programmed into the Book Extract routine. These rules govern which components or elements of each listing should be included in the directory and how they should appear (ie, whether they should be abbreviated or appear in full), and are designed to give effect to the requirements of the Rules.

255 The application of these appearance and suppression rules depends on factors such as:

1.

whether the listing is to appear in its "local" directory (ie, the directory which relates to the listed address) or is to appear in a "foreign" directory;

2.

whether the listing is to appear in its own state or Numbering Plan area (this determines whether the area code or state is included in the listing); and

3.

whether the listing has been designated with an "Omit" indicator in the database (for example, because the listing is a caption listing or qualifies for the address to be "suppressed" in accordance with the requirements of the Rules).

256 Many of these determinations, in turn, depend on the application of reference tables. To apply the relevant appearance or suppression rule, the Book Extract routine has been programmed to check the listed information against the information in the table and present the listing accordingly, depending on the result (see [126]-[127] above). As Mr Peterson said "when we run the book extract, when we print the book, it looks at the table and sees how it should be presented. So it drags the information out of that table to do the presentation."

257 For example, there is a "Locality Appearance table" which contains a list of the "local" directory for every locality in Australia. Depending on whether or not the locality of the listing in question is local to the directory which is being extracted, the Book Extract routine will either include the name of the locality in full, print an abbreviated form of the locality, or omit the locality entirely (this occurs, for example, in capital cities where the locality is the same as the name of the directory). If the listing is to be abbreviated, the name of the abbreviated locality is taken from a table known as the Locality table, which contains a list of all recognised localities and their abbreviations.

258 After the listing elements have been extracted and their appearance determined, the Book Extract routine then sorts the listings according to sorting rules also designed to give effect to the requirements of the Rules. For example, a prefix is included as part of the first word of a listing even if it is separated from the second part of the name by a hyphen (this means that "De Groot" and "De-Bug" will usually be sorted in the same way), unless a Sensis staff member has elected to override the sorting rules by using the PLA field. As with appearance and suppression rules, the application of many of the sorting rules involves the software checking whether the listed elements appear in any of the relevant tables, and then dealing with the listing accordingly. Again, this process is almost entirely automated.

259 The Book Extract process is initiated by the Publishing Co-ordinators requesting the Book Extract routine to be run in relation to a particular directory via the RTMS. After the listings have been extracted and arranged in the CMP file, the Publishing Co-ordinators create the galley file by running a separate routine known as Book Production: see [157] - [161] above. The Book Production routine builds the galley file and arranges the contents of the Book Extract in columns within the galley file in preparation for typesetting and pagination. Every line in the galley file has a discrete number, made up of the Item ID for the particular entry in the directory and a number indicating its place in the galley file.

(c) Verification of listings after extraction

260 After the galley file has been created, Publishing Co-ordinators run further reports to ensure that the listings to be printed in the directory have been extracted correctly and that their appearance will comply with the requirements of the Rules. Where the Genesis Computer System identifies issues, they are corrected manually in the galley file by the Publishing team.

261 In addition to these automatic checks, Publishing Co-ordinators also conduct a series of manual checks, known as "alpha checks" on the galley file (see [155] above), including:

1.

checking the beginning of each alphabetical section to ensure that the listings in each section appear in the correct alphabetical order (for example, ensuring that a customer with the name "A Thompson" does not appear under the letter "A");

2.

checking that the galley file has been built correctly and that there are no listings that commence before the letter "A";

3.

checking that the listings beginning with courtesy titles such as "Mr" or "Ms" are sorted correctly (these titles cannot appear at the start of a listing unless it is a registered business name);

4.

checking that all dependent-word listings (ie, listings with prefixes such as surnames beginning with "Van" or "De La") are sorted correctly; and

5.

checking that no anomalous listings have been placed at the end of the "Z" section as a result of an incorrect PLA.

262 After the galley file has been built, Publishing Co-ordinators also action "Late Change Requests". These are requests from various groups within Sensis such as Customer Care, Customer Operations and Print and Online Operations to update customers' details after the LLAD. On average, Publishing Co-ordinators can make anywhere between zero and 25 late change requests in each regional WPD each year (being composed of some thousands of listings).

(d) Typesetting and pagination of the directory

263 Once the galley file is ready for pagination, the Publishing Co-ordinators release the galley file to members of the publishing team known as the "Paginators" (see also [157]-[160] above). The pagination process involves determining the layout of the listings and display advertisements that appear on each page of any given directory, in accordance with the requirements of the Rules. The typesetting process involves the automated incorporation of display advertisements from the Ad Production Database into the paginated pages of the directory, and the pages being converted into a final PDF format for publication. These processes are conducted separately for each WPD and YPD, even where they are co-bound into a single volume. The role of Paginators in respect of any WPD or YPD is the same regardless of the region that the directory covers.

264 Prior to the commencement of the pagination process, the initial structure of the directory is determined by members of the Publishing team, in consultation with members of the Marketing team. The Marketing team is responsible for the production of the Information Pages at the start of each directory, other than the Government Index, which is the responsibility of the Publishing team. The initial structure specifies the number of information pages the directory is to contain, the number of map pages, and the number of pages that the Marketing team wishes to include in the directory (such as advertisements used to promote Sensis' products and services).

265 The initial pagination of the directory is an automated process which involves running a software routine known as "Batch Pagination" via RTMS. The evidence of Mr Stewart regarding the time this process takes is analysed at [158]-[160] above.

266 After pagination, the final structure of the directory is determined by adding the number of pages of listings to the initial structure of the directory and determining how many pages in total the directory is to contain. For printing purposes, the number must be divisible by eight, so the number of pages is adjusted accordingly by reducing the number of information pages or increasing the overall number of pages with filler advertisements.

267 The final stage in the publication process is typesetting of the paginated pages. This involves bringing the display advertisements from the Ad Production Database into the paginated pages and converting the pages into the format in which they will be provided to the printers. This is also initiated by running a software routine, known as Typesetting Page Production, via RTMS.

268 The software routine places each display advertisement into its designated position on the page. The Paginators then manually check each page to confirm that all of the advertisements appear correctly. If there are any errors, they are corrected by an Artist within the Print and Online Operations group.

F. PRODUCTION OF A PARTICULAR YPD

1. EXISTING LISTING

(a) Creating the initial listing record

269 The production of the YPDs follows a similar cycle to that described above in relation to the WPDs.

270 Like the WPD, the production of a new issue of the YPD begins with the rollover process, in which the listing information from the previous issue of the directory is carried over and converted into listing information for the next issue of the directory.

271 However, the rollover process for the YPD is initiated slightly later in the directory production cycle than the rollover process for the WPD. Whereas the rollover process for the WPD is initiated by members of the publishing team as soon as the previous issue of the directory has been extracted, the rollover process for the YPD is initiated by a separate group within the Operations Department of Sensis known as the Canvass Planning group, after the previous issue of the directory has been sent to the printers.

272 The rollover process for the YPD does not commence until the pricing, products and headings for the forthcoming issue of the directory have been settled. Each year, there are usually additions or variations to the range of advertising options offered in the YPD, as well as to the headings. If a heading under which an existing customer has been classified has changed, then the new heading will be applied to the listing information in the rollover process. This involves updating the relevant tables within RTMS that are applied to the existing listing information to generate the new listing record.

273 The rollover process for the YPD is undertaken by the same batch applications that carry out the rollover process for the WPD. Members of the Canvass Planning group undertake the same steps to rollover the directory in relation to any YPD, regardless of the geographic region that the directory covers.

(b) Obtaining updated listing information

274 Like the WPD (see [181] above), listing records that are created during the rollover process for the YPD are updated during a co-ordinated process of customer contact by Sensis sales staff known as a sales canvass. The sales canvasses for the WPDs and YPDs are not aligned.

275 Under the Rules, each business or Sensis-approved non-business customer within the relevant YPD area is entitled to an FE comprising the trading name, address and telephone number of the customer in standard format, classified under an appropriate heading. A business may appear in a YPD without appearing in a WPD. Like the WPD, customers can also pay to place an enhanced or additional listing (including an additional listing under a different heading).

276 During the sales canvass for a YPD, Sensis sales staff attempt to contact every customer who appeared in the previous issue of the directory, in order to update their listing details and ascertain their requirements for the forthcoming issue of the directory. Each year all existing customers with paid listings must be contacted again so that a new contract can be obtained containing details of the listings to appear in the following year's directory. YPD sales staff also attempt to contact all customers with a complimentary listing to update their listing details and enquire whether they wish to upgrade to an enhanced listing. It is unclear how many attempts are successful.

277 Like WPD sales consultants, YPD sales consultants are divided into face to face Account Executives and telesales consultants. There are approximately 600 YPD Account Executives, who are responsible for selling enhanced or additional listings to medium to large customers, and approximately 300 YPD telesales consultants, who are responsible for selling to small to medium customers. Most Sensis sales staff are Sensis employees, though other sales staff are contracted to sell advertising in specific regional areas engaged by TSA Telco Group and Spectrum Sales (see Part D(2) above). Like the WPD telesales group, the YPD telesales group is divided into sub-groups, or "channels", who each deal with different customers depending on factors such as whether the customer is a new or existing customer, and the level of the customer's advertising spend. YPD Account Executives in regional areas tend to be responsible for a number of different directories, and re-locate to a new area at the conclusion of a sales canvass. The role of Account Executives and telesales consultants is the same in respect of any YPD, regardless of the geographic region that the directory covers.

278 The role of a YPD sales consultant is broadly the same as that of a WPD sales consultant. In particular, YPD sales consultants also apply the "Six Step Consultative Sales Process" to ascertain the customer's business needs and make recommendations to the customer about the form that their listing or listings should take in the next issue of the directory: see [187] above. This includes making recommendations about the customer's first entry listing, as well as any enhanced or additional listings.

279 However, in addition to ascertaining what form of listing or listings will best suit the customer's need, the role of the YPD consultant is also to assist the customer to place their listing under an appropriate heading. This requires the consultant to be aware of the range of headings that relate to the products and services provided by the customer (these are known as "allied headings") and to advise the customer. It is also a requirement of the Rules that the listing placed by the customer relate to the business activity described by the heading. Accordingly, the Account Executive attempts to ensure that the products and services described in the listing fall within the heading category under which the listing will appear.

280 YPD Account Executives also tend to have a greater role in the composition of display advertising, due to the fact that this form of listing is more common in the YPD than the WPD. Where customers decide to purchase a display advertisement or a listing containing additional advertising information, Account Executives can make recommendations. As Ms Purcell explained:

... this customer, all they thought they needed to have in an ad was a logo and a few bullet points and the name and address; that's it. That's what a lot of our customers think that they need to put in an ad. We're trained to - and a lot of time is spent training us in advertising - so we are trained to suggest they put a lot more information in than that because our research shows that the more information we put in an advert, the better it is for the consumer to choose the business.

281 Like the WPD, the precise number of YPD listings that require amendment from one year to the next varies from canvass to canvass, sales consultant to sales consultant and directory to directory. Ms Walsh (see [131] above) estimates that 75 per cent of the businesses assigned to her for the Cairns 2008 / 09 YPD would have made some sort of change to their advertising. Ms Purcell (see [147] above) states that this estimate would be true of all YPDs she has worked on. In oral evidence, Ms Purcell stated that "only a small percentage repeat. A lot of things change from one year to the next." Mr Fielding (another Account Executive employed by Sensis) estimates that 60 per cent of the businesses assigned to him for the Port Macquarie 2009 YPD would have made some sort of change, while Mr Burgess (also an Account Executive) places this figure at 90 per cent. Again, given the range of these anecdotal estimations, it is not possible to identify with any precision what percentage of the entries in any directory are new.

282 The statistics compiled by Mr Aloi (a Manager in the Go To Market team) suggest that during the sales canvass there were changes made to the details of between 4,673 and 7,272 of the 12,490 customers with listings in the 2008 / 2009 Cairns YPD, and between 3,608 and 5,362 of the 10,538 customers with listings in the 2009 Port Macquarie YPD. Mr Aloi did not know how many listings were in the directories. Approximately 6,000 customers were accepted to be FE for the Cairns directory, with a similar sort of proportion for Port Macquarie. He did not know how many paid entries were rolled over without amendment. Again, we are left in a position where it is unclear what percentage or proportion of listings are new and as the evidence has repeatedly demonstrated, many of the changes are likely to have been minor or largely automated.

283 If a listing does not require amendment from one directory to the next, the sales consultant is still required to check that the customer's listing details are correct and that they continue to comply with the requirements of the Rules.

(c) Entering the updated information into the database

284 As with WPD listing information, the way in which updated YPD information is entered into the Genesis database varies depending on the type of sales consultant responsible for dealing with the customer. In addition, where the information has been obtained by an Account Executive, there are different processes that apply depending on how the information obtained from the customer is submitted to the Print and Online Operations group for entry into the database.

285 When an Account Executive finalises a customer's requirements for the forthcoming issue of the YPD, the Account Executive records the customer's listing details in a written contract. For paid YPD customers, this contract is used as the basis for updating the customer's listing information in the Genesis database.

286 For all existing paid customers, Account Executives are provided with pre-prepared draft contracts in electronic form, which are downloaded to the laptop of the Account Executive at the start of the sales canvass. The listings and display advertisements which appear in these draft contracts are the same as that which appeared in the previous issue of the directory. The role of the Account Executive is to confirm whether the customer's listing details are correct and update the information in the contract with the customer's new requirements. This can be done either by making changes to the electronic form of the contract and having the customer sign it on the screen of the laptop, or by printing the contract and marking up the changes by hand.

287 Once the contract has been signed by the customer, it can be submitted to the Print and Online Operations group either in electronic form or in hard copy form. If the contract is submitted in electronic form, and there is a change to the customer's listings or other details, then the contract is allocated to an ADS to update the record in the database manually. This is done in the same way as for WPD listings.

288 If there is no change to the customer's listing details from the previous year, then the customer's record is automatically updated to retired / completed status in the Genesis database, and no further action is required. This is done by STP (see [82] above). As noted above, STP is a function built into a computer system used by Sensis to track contracts throughout the production cycle known as "Workflow Imaging and Integration". It is the only computer application used by Sensis that enables listing information contained in YP advertising contracts to be automatically updated. All other amendments to paid listings must be made manually by an ADS or other worker changing the listing details in POST. Between 3 and 4 per cent of the listings in the 2009 Port Macquarie YPD and 2008 / 09 Cairns YPD were finalised using STP.

289 If the contract is submitted in hard copy form (or has elements that are in hard copy), then there are a number of additional checks for accuracy and compliance with the Rules that the contract goes through before it is submitted to an ADS for entry into the database. This process has also been discussed at [140]-[144] above. First, the contract is checked by a SCC who works with the Account Executive. This includes checking whether the listing information is complete and internally consistent. There are approximately 38 SCCs nationally, located across 16 metropolitan and regional offices (although this role has only been in existence on a national basis since May 2007).

290 If the contract passes the SCC's quality check, it is forwarded to the Print and Online Operations group. There, it is received and checked by a CVS. The role of the CVS is to conduct a more detailed review of the information contained in the contract, and to ensure that the listing information contained in the contract is consistent, accurate and complies with the Rules. There are approximately 37 staff employed in this role nationally, located in the same centres as the other members of the Print and Online Operations group. Like the other members of the Print and Online Operations group, the CVS team includes employees and contractors (see Part D(2) above).

291 If the CVS determines that a proposed listing contained in a contract is inaccurate or does not comply with the Rules, the CVS can raise a query with the sales consultant responsible for the customer. The contract will not be provided to an ADS for entry of the listing information into the database until all outstanding queries have been resolved.

292 When a customer's listing information has been obtained by a telesales consultant, the consultant records the listing details in the form of a voice recording and enters the details into the Genesis database using the POST interface, just like a WPD telesales consultant.

(d) Checking the updated listing record after entry in the database

293 Because a YP contract is signed by the customer before the listing record is created in the Genesis database, there is no equivalent of the sales validation process for YPD listings.

294 However, in addition to the checks conducted on YPD contracts before the listing information is entered into the Genesis database, there is also a team of three Sensis personnel known as the "Check the Checkers" team who are responsible for reviewing a 10 per cent sample of the listing records for YPD customers created or updated by ADS and the display advertisements created or updated by Artists and checked by Editors (see [145] above). The team comprises one permanent employee and two contractors supplied by external recruitment agencies (see Part D(2) above). This team checks to ensure that the listing record created by the ADS or Artist accords with the customer's instructions and with the requirements of the Rules.

295 In addition, YPD listing information is checked on a daily basis by the reports run by the Error Maintenance System, in the same way as WPD listing information.

(e) Other amendments to existing listings

296 The listing information for existing YP listings can also be amended as a result of the receipt of a service order from a telecommunications carrier or direct contact from the customer. However, because Sensis attempts to contact all existing customers during the course of a sales canvass, in practice amendments to YP listings are primarily handled by sales staff and / or other staff within the Customer Care group.

297 If a YPD customer contacts Sensis to request a change to the listing information for an existing listing, then which Sensis staff member is actually responsible for updating the listing information in the Genesis database depends on how the customer contacts Sensis, the nature and complexity of the changes, and whether the customer has been assigned to a designated Sensis sales consultant.

298 If the customer contacts Sensis over the telephone, then the changes will be made by:

1.

the customer's sales consultant, if one has been assigned;

2.

staff of the Customer Care group, if no consultant has been assigned and the changes are relatively minor;

3.

staff of the Changes group, if no consultant has been assigned and the changes are more substantial (this group is described in more detail at [299] below); or

4.

staff of the Cancellations group, if no consultant has been assigned and the customer indicates a desire to cancel their advertising.

299 If the customer contacts Sensis by letter, facsimile or email, then the changes will be made by members of the Changes group. A national team of approximately 38 employees is responsible for making changes to YPD listing details in response to requests from customers. The team consists of approximately 27 Customer Changes Consultants (who perform a role similar to that of an ADS) seven Artists and Editors, management and support staff. Customer Changes Consultants update listing information in the Genesis database using the POST interface in the same way as ADS or Customer Care consultants, having regard to the requirements of the Rules. The role of a Customer Changes Consultant is the same in relation to any YPD regardless of the region that the directory covers.

2. NEW LISTING

(a) Obtaining new listing information and creating a new listing record

300 Listings for new YPD customers are obtained in the same manner as listings for new WPD customers. In particular, the listing information for new YPD listings can be sourced from:

1.

service orders received from telecommunications carriers;

2.

contact initiated by the customer; or

3.

sales leads.

301 In practice, however, sales leads have a greater significance for the YPD than they do for the WPD because there are many more paid customers in relation to the YPD and because there is greater scope for Sensis workers to "spot" prospective new customers for the YPD.

302 YPD telesales consultants can generate leads for other Sensis sales consultants, either by reviewing local media or online publications, or by referring prospective paying customers to other sales consultants, depending on the customer's likely advertising spend. There is also a dedicated team of "spotters" within Sensis. In addition, Account Executives can "spot" leads by physically identifying a new business (for example, by recognising a new sign) while they are out visiting customers.

303 Where a lead is generated for a customer that did not previously exist in the Genesis database, a provisional listing for the customer will be created by the Lead Management team in the same manner as described at [239] - [242] above in relation to a WPD listing. YPD sales consultants attempt to ascertain the customer's needs and advise the customer about the most appropriate form of listing in exactly the same manner as they do in relation to existing customers. Ms Walsh stated that there is often more advice required in the case of new customers "because they are new to business in some instances, so you actually become more of a counsel". If the sales consultant is a telesales consultant, the consultant will update the provisional listing in the Genesis database using the POST interface in the same way as they update an existing listing.

304 If the sales consultant is an Account Executive, the consultant will record the customer's listing information in the form of a written contract and provide that contract to members of the Print and Online Operations group to update the listing details in the database. However, all contracts for new customers are paper contracts submitted manually and checked by an SCC and CVS before being entered by an ADS because, as new customers, they did not exist on the Genesis database at the start of the sales canvass and so contracts for these customers will not have been pre-prepared in electronic form.

305 Where new listings are sourced via service orders or customer contact, the listing record will be created by a member of the Customer Operations group or Customer Care group in the same manner as a WPD listing record: see [213] - [237] above.

(b) Checking the new listing after entry

306 New YP listing records are checked after entry in the same manner as existing listing records (see [243] above).

3. PUBLICATION OF THE YPD

(a) Verification of listing information prior to publication

307 The publishing process for the YPD is similar to that for the WPD (see [244]-[251] above). Members of the Publishing team are responsible for the publication of both directories, although there are Publishing Co-ordinators who are dedicated to the production of the WPDs or YPDs respectively. The role of Publishing Co-ordinators in respect of any YPD is the same, regardless of the geographic region that the directory covers.

308 Like the WPDs, the YPDs are produced on a rolling schedule, with the publication process beginning after the "Public Close" date for a particular directory and the extraction of listing information into the galley file occurring after the LLAD.

309 Also like the WPD directories (see [248] above), a series of reports are run prior to the extraction of listing information to ensure that the listing information is accurate and will appear in the sequence and format required by the Rules. In the case of the YPDs, these reports are run after the LLAD but before Book Extract. Some of these reports are equivalent to reports run in relation to the WPD. Others have no equivalent in relation to the WPD:

1.

Delimiter Inconsistency Report: this report is designed to identify errors in the placement of a delimiter in the "finding name" for a listing which would cause it to appear in an incorrect sequence in the printed directory.

2.

DSP Report: this report is designed to identify errors in the positioning of display advertisements in the printed directory. These advertisements are the subject of separate positioning rules, depending on the size and date of placement of the advertisement.

3.

Brand Report: this report is designed to identify all listings in the relevant directory that have brand names within the listing (ie, where the name in the listing does not necessarily correspond to the name of the business). It is designed to ensure that these listings have been capitalised correctly and will appear in the correct sequence in the printed directory.

4.

Check No Print Report: this report is designed to identify errors in the designation of paid listings for publication. All listings that are to be published in the directory must be marked with a status of "Publish".

5.

Invalid Items Report: this report is designed to identify listings that are allocated under headings that no longer exist, and will therefore not appear in the printed directory.

6.

Graphic Items in Caption Report: this report is designed to identify errors in the appearance of listings containing graphic items (such as a logo).

7.

CSV Special Characters Report: this report contains a list of all listings that have inverted commas in the listed name but do not have a PLA. Without a PLA to override the sorting rules applied at Book Extract, these listings will not appear in the correct sequence in the directory.

8.

BTR / BTEN Report: this report is designed to identify bold type listings that have been incorrectly designated as a caption listing, which would cause them not to appear in the correct format in the printed directory.

310 Any errors identified by the Book Close reports are corrected by staff in the Print and Online Operations group.

(b) Extraction and presentation of listings

311 Like the WPDs, the extraction of the listing information for YPDs and the creation of the galley file is undertaken using the Book Extract routine: see [252] - [259] above.

312 The Book Extract process for the YPD involves the same two stages as occur in relation to the WPD. However, there are additional processes which occur at each stage, due to the presence of headings and the need to arrange display advertisements in accordance with separate positioning rules.

313 In addition to listing information, the Book Extract routine for YPDs also extracts all of the headings which have listings under them in the designated directory, as well as their associated sub-headings and cross-references.

314 It also extracts alternative headings that do not in fact have listings under them but are designed to have the appearance of headings (for example, there is a heading in every directory for "Police Emergency" which simply states "see inside front cover"). These are known as "Must Appear", "Notes" or "Fictitious" headings.

315 The headings are collated into a separate file known as the "Headings In Progress" file, which is combined with the CMP file at the Book Production stage to form the galley file.

316 During the sorting process, the Book Extract routine applies priority rules to the placement of display advertisements, in order to give effect to the requirements of the Rules. It also arranges each of the listings in alphabetical sequence under their various headings, applying Rules that are similar to those that apply to the WPD.

317 The galley file for a YPD is created by running the Book Production routine through RTMS in the same way as for a WPD: see [259] above.

(c) Verification of listings after extraction

318 After the galley file has been created, Publishing Co-ordinators run further reports to ensure that all of the listings and display advertisements which are to be printed in the directory have been extracted correctly and that their appearance will comply with the requirements of the Rules. If there are errors identified at this stage, they are either corrected by the publishing team or by members of the Print and Online Operations group.

319 The YPD Publishing Co-ordinators also conduct the same sorts of manual checks on the galley file as are undertaken by WPD Publishing Co-ordinators: see [261] above. These include checks on specific headings, checks on listings beginning with the letter "A" (to ensure that these listings are arranged in the correct sequence), and checks on sensitive headings.

320 After the galley file has been built, YPD Publishing Co-ordinators also action "Late Change Requests", just like WPD Publishing Co-ordinators: see [262] above. On average, Publishing Co-ordinators make between 50 and 150 late change requests in each regional YPD each year.

(d) Typesetting and pagination of the directory

321 The pagination and typesetting process for the YPD is similar to that followed for the WPD, although as noted above (see [263]) it is conducted separately for each directory, even where they are co-bound. The role of Paginators in respect of any YPD or WPD is the same, regardless of the geographic region that the directory covers.

322 To the extent there are differences in the process, they relate to:

1.

the fact that different Rules apply to the WPDs and YPDs; and

2.

the larger variety of display advertising available to YPD advertisers.

323 As mentioned at [160] above, a YPD generally takes longer to paginate than a WPD (between 1.5 to 2.5 days), due to the fact that the classified section of the directory contains more listings (and therefore more pages that require checking and / or repagination) and the Rules governing the positioning of display advertisements are more complex than those that apply to the alphabetical sequence of the directories.

324 The pagination for YPDs is usually conducted in increments to avoid the need to repaginate the entire directory in the event of an error.

325 The typesetting process is the same for both directories: see [267] - [268] above.

G. CHANGES IN THE WPD AND YPD PRODUCTION PROCESS OVER TIME

326 There has been no material change in the production process for the WPDs and YPDs since the introduction of the Genesis Computer System in October 2003:

1.

the rollover process has not changed, although the process of allocating customers to sales consultants has become less labour intensive as a result of the use of electronic contracts;

2.

the receipt and processing of service orders occurs in substantially the same way as that which applied even before the introduction of the Genesis Computer System, although the mechanisms for filtering service orders have become more sophisticated and enabled Sensis to choose how to filter service orders using tables, without requesting amendments that needed to be programmed into the software;

3.

the role of a sales consultant in obtaining and verifying customer information, and making recommendations about the form of listings is the same, although aspects of the process have become more streamlined and the range of advertising options available to the customer has increased;

4.

the checking of listing information before and after it is entered into the database is largely the same, although the titles of roles have changed and new roles to perform this function have been introduced;

5.

the entry and updating of listing information in the database has remained largely unchanged, although the names of the groups responsible for the entry of data have varied; and

6.

the publication process has remained relatively unchanged, although since the introduction of the Genesis Computer System it has become a fully electronic process and additional tools have been developed to enable members of the publishing team to identify errors in the content or appearance of listings in the directories. Mr Cooper indicated that under CONDOR and IDS, he would go through the same processes to produce the Book Extract and galley file, and that he considered the Genesis Computer System to be "no more or less automated" than the CONDOR / IDS system. Mr Vormwald gave evidence to similar effect.

327 Further, the same essential activities were undertaken prior to the implementation of the Genesis Computer System, albeit with separate computer systems. The principal difference between the Genesis Computer System and the system it replaced is that it stores listing information in relation to both WPD and YPD customers, enabling a single operation and format and operators of the system to have an integrated view of a Sensis customer.

328 To the extent there have been changes in the production process, they have primarily been directed toward removing labour-intensive elements of the process, making it more efficient and flexible, and eliminating the scope for human error.

329 The Rules which are applied by Sensis personnel throughout the production of the directories have also remained largely unchanged. The 1999 version of the Rules required substantially the same considerations to be applied to the entry, content and appearance of listings.

VI ANALYSIS

330 In light of the relevant principles (see [7]-[30] above), the conclusions previously stated (see [31]-[46], [87], [162]-[166], [169] and [171]-[173] above) and the production process of each of the Works (see [174]ff), it is now necessary to follow the steps outlined at [28] above.

1. IDENTITY OF THE WORK

331 The Works were identified: see [1] above. The alleged copyright was identified - the Applicants submitted that each Work was an "original literary work" comprised of the listings, enhancement of listings and arrangement of listings (in the case of the WPDs) and the listings, headings, enhancement of listings and arrangement of listings under headings (in the case of the YPDs) (see [3] above).

332 The Works did not include "any reference to the elements of the introductory pages, such as the Government index, prior to the listings part of the directories."

2. AUTHORSHIP

333 The issue is whether the Applicants, on the basis of joint authorship in the directories, have been able to identify the joint authors. This is essential for copyright to subsist in the Works. Manifestly, they have not. Evidence as to the identity of the so-called authors was approached in a number of ways. Firstly, the Applicants filed a list of "authors" of the Sample Directories. That list was deficient for the reasons outlined at Part D(1) above.

334 Secondly, although the Applicants tendered 91 affidavits from individuals who were said to be "authors" of one or more of the Works, the affidavits did not cover the range of people who would have made a contribution to the Works or cover the entire period the subject of the claim. Moreover, some of the 91 individuals had a limited (or non-existent) role in contributing to the Sample Directories and of those who did contribute, the nature of the contribution was certainly not of a nature to be described as "independent intellectual effort" or "sufficient effort of a literary nature".

335 Moreover, these affidavits made clear that there are substantial parts of the directories that do not have human authors (for example, many of the service order listings - see [129] above), are automated to the extent that human involvement is minor (for example, see the evidence of Ms Speranza at [135] and of the Publishing Co-ordinators at [153]), or have authors who cannot be ascertained (for example, much of the rollover component of the directories - see [175]-[176] above). There were many more examples.

336 Thirdly, there are many individuals who might be considered joint authors who were not Sensis employees, who were not identified and who were not joined as parties to the proceeding (see Part D above).

337 Finally, serious questions arise as to whether it is appropriate to refer to the gamut of individuals said to be authors of these Works as "joint authors". The evidence demonstrated time and again that many of the staff perform their function separately from and often oblivious to the function of others (see for example the discussion of the role of Validators at [136] above and the summary of the evidence of Ms Walsh at [141]). There is therefore a real question over whether there was the requisite level of collaboration between those workers to be considered joint authors: see s 10(1) of the Copyright Act. However, given the simple and undeniable fact that the Applicants have failed to prove the identity of the authors who contributed to the Works, it is unnecessary to consider this matter further.

338 Even if the authors of the Works could be identified with sufficient clarity and certainty (and they cannot), the people suggested to be the authors of the Works did not exercise "independent intellectual effort" and / or "sufficient effort of a literary nature". A majority of the creation process of the WPD and the YPD was heavily automated. Human intervention was regulated and controlled according to either the various computer systems in place including the Rules (see Part V Sections B and C above). Further, the contribution of the people suggested to be authors of the Works was anterior to the work taking its material form. Very few people had any part to play in the final presentation of the Works or the particular form of expression of the information . Those people, again, could not have been said to have exercised "independent intellectual effort" and / or "sufficient effort of a literary nature": see [20(3)] above.

3. FIRST PUBLICATION OF WORK

339 The Applicants submitted that the Works were first published in Australia. This submission was not the subject of argument and there are no reasons to doubt that the requirement in s 32(2)(c) of the Copyright Act has been met.

4. ORIGINALITY

340 None of the Works were original. None of the people said to be authors of the Works exercised "independent intellectual effort" or "sufficient effort of a literary nature" in creating the Works. Further, if necessary, the creation of the Works did not involve some "creative spark" or the exercise of the requisite "skill and judgment". I accept that production of the directories is a large enterprise populated by many contributors (ignoring for the moment the determinative difficulties with authorship outlined above). Many of the witnesses gave evidence that was direct and appropriate, and I accept that they work hard in their respective capacities.

341 However, these facts are not relevant to the Applicants' claim and, as explained at [20(6)] above, substantial labour and expense is not alone sufficient to establish originality. The evidence established that the "system" by which the directories are produced is designed to limit originality, not provide for it. Where it can be automated, it has been. Where it cannot, Sensis workers are required to act consistently with the Rules and all work is subject to a multiplicity of checks to ensure that consistency. The weight of the evidence demonstrated that the tasks performed by individuals applying the Rules were mechanical in nature and often were able to be completed in large numbers swiftly. The Rules are followed and applied. Moreover, the Rules themselves are not complicated. It would be hard to conceive of how many of the Rules could be otherwise constructed given that the purpose of the directories is to (a) enable someone to find a listing and (b) to allow customers to enhance their listing if so desired. Above all, the Rules are fashioned to allow for ease of reference and to make accommodations for customers who are willing to enhance their listings. The Rules reflect the underlying commercial context of the directories: see IceTV 254 ALR 386 at [51].

342 Consistent with that conclusion, the Applicants could not point to which work by a given individual was to be considered relevant in establishing originality. The work of many of these individuals that was said to constitute the relevant effort was ancillary to or divorced from the production of the directories in their material form, or was not directed to the directories in suit. For example, Ms Galizia was described as a "significant witness" by the Applicants. I reject that characterisation. Ms Galizia admitted that she made no direct contribution to the Sample Directories. Many of the Rules that she oversaw had been in place for a significant period of time prior to her starting in her role. What contribution to the Rules she made was limited. How she and her team oversaw the application of the Rules was vague and, again, it was by no means clear how that work contributed to the directories the subject of the claim. Ms Galizia was not alone in her predicament. Evidence of Account Executives, CVSs, ADSs, Programmers, Editors, Paginators and a host of other roles was amassed to provide evidence of originality by attrition.

343 It is not sufficient to demonstrate the subsistence of copyright by asserting that someone (and I do not accept that such a person has been found in this matter), who may in certain broad circumstances, in an unspecified number of relevant instances, have done an act that constitutes some unknown contribution to a work in question "no matter how unimpressive" will be enough to make good the Applicants' claim.

344 Authorship and originality are correlatives. The question of whether copyright subsists is concerned with the particular form of expression of the work. You must identify authors, and those authors must direct their contribution (assessed as either an "independent intellectual effort" of a "sufficient effort of a literary nature") to the particular form of expression of the work. Start with the work. Find its authors. They must have done something, howsoever defined, that can be considered original. The Applicants have failed to satisfy these conditions. Whether originality be the product of some "independent intellectual effort" and / or the exercise of "sufficient effort of a literary nature", or involve a "creative spark" or the exercise of "skill and judgment", it is not evident in the claim made by the Applicants.

VII THE PRE-GENESIS DIRECTORIES

345 The changes to the system by which the directories have been produced over the period of the claim are outlined at [326] to [329] above. The findings I have made at [333] to [344] relate to the period during which the Genesis Computer System has operated. However, as noted earlier, a number of the Works in suit pre-date the Genesis Computer System.

346 The position regarding the subsistence of copyright in the directories created prior to the introduction of the Genesis Computer System is no different. Much of the process was the same and all that the Genesis Computer System did was streamline that process (see [328] above). Ultimately, it must be recalled that the Applicants' evidence was directed in most part to the Sample Directories and the findings in these reasons for decision reflect that fact.

VIII CONCLUSION

347 For those reasons, I do not consider that copyright subsists in any of the WPDs listed in Annexure A or any of the YPDs listed in Annexure B. I will direct the parties to bring in a proposed minute of orders to give effect to these reasons for decision by 4:00pm on 12 February 2010.

ANNEXURE A - WPDs

The entries in bold are Sample Directories.

ANNEXURE B - YPDs

The entries in bold are Sample Directories.