In February 2010, Justice Jacobs of the Federal Court held that the quotation of two out of four bars of the round ‘Kookaburra sits in the old gum tree’ in Men at Work’s song Down Under constituted the copying of a ‘substantial portion’ of Kookaburra and therefore an infringement of the copyright of its owner, Larrikin Music Publishing Pty Ltd: Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No 2)  FCA 29.
Through its lawyers, Larrikin argued for a payment of 40 to 60 per cent of the royalties earned by EMI Songs Australia Pty Ltd and others associated with Men at Work, but in the February judgment, Jacobs J indicated that such an award was unlikely to be made, because, while the two bars were a ‘substantial portion’ of Kookaburra, they were not a ‘substantial portion’ of Down Under.
On 6 July 2010, Jacobs J brought down his judgment as to the quantum of damages payable for the infringement: Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No 3)  FCA 698 This quantum is 5 per cent of the royalties paid in respect of the 1981 recording of Down Under (which contains the flute riff that quotes the two bars of Kookaburra) since 2002, because payments in respect of earlier royalties are barred by the Statute of Limitations, as well as 5 per cent of future royalties.
The process adopted by the Court in making this determination was one of attempting to reconstruct the contract that would have been made had Men at Work obtained the permission of the copyright owner. The 5 per cent figure was fixed for reasons including:
While the judgment on quantum returns some sanity to the Kookaburra / Down Under situation, the result as a whole appears to demonstrate that the modern law of copyright is not well equipped to deal with a situation involving an extremely short musical work (of which, however, Jacobs J had found in the February judgment that 25 per cent was not a ‘substantial portion’) that obtained quasi-folk status by being taught to, and sung by, just about every Australian school child in the 1950s, 1960s and 1970s, and can probably be sung, or even written out, from memory by just about any of those school children who attained to any degree of musical accomplishment. The message is: don’t quote something that everybody knows without obtaining copyright permission—especially if you intend to record it.
The February finding as to liability is subject to appeal. We await the outcome with interest.