Aussie pop-rock act Men At Work has lost the first round of a legal battle over the copyright in its iconic 1980s hit "Down Under."

Sydney-based Larrikin Music Publishing launched compensation proceedings last year against Men at Work's Colin Hay and Ron Strykert, EMI Songs Australia Pty Ltd and EMI Music Publishing Australia Pty Ltd, claiming that the flute refrain in "Down Under" was lifted from the campfire anthem "Kookaburra."

Larrikin, a division of the U.K.'s Music Sales, had claimed to represent "Kookaburra," which was written in the 1930s by music teacher Marion Sinclair, a life-long supporter of the Girl Guide movement.

However, when the case reached the Federal Court in recent weeks, defendants argued that Sinclair gave the copyright to the Girl Guides Association of Victoria when she submitted the song to a competition.

Now the case has taken another twist. On Thursday Aug.30 Justice Peter Jacobson made a preliminary finding that Larrikin does own the copyright to the riff "Down Under" is alleged to have copied.

"I do not consider that the words in the [contract Ms Sinclair signed with the Girl Guides] are sufficient to disclose, on an objective consideration, an intention to effect an assignment of copyright," Jacobson told the court.

A copyright hearing will be held in the Federal Court on a later date to determine the outcome of the case.

Men At Work became members of an elite circle of artists when in 1982 they secured simultaneous No. 1 singles and albums in the U.S. and U.K. with "Down Under" and "Business As Usual," respectively. The song is also synonymous with Australia's successful bid to win the America's Cup yacht race the following year, and was performed at the closing ceremony of the Sydney 2000 Olympic Games.

Other defendants to the current litigation have included Sony, and societies APRA and AMCOS. However, confidential settlements have been reached with those parties.