In 2007 (or maybe 2008, sources differ here), the Australian music game show Spicks and Specks asked its contestants to name the popular children's song that can be heard inside the all-time great 1981 Aussie anthem "Down Under" by Men at Work. None of the contestants identified the correct answer - "Kookaburra Sits in the Old Gum Tree." (As a flavor - or flavour, I guess - of the show, here's Colin Hay of Men at Work on the show in 2008. He performs "Down Under" at the end.)
"Kookaburra Sits in the Old Gum Tree" was written in the 1920s by Marion Sinclair, an Australian music teacher who worked with the "Girls Guides," a Girl Scout-ish group in Australia. In 1934, Sinclair entered the song in a contest to benefit the Girls Guides, and the publishing revenue from the sheet music was used to help build Britannia Park, a campground for Girls Guides that is still around. "Kookaburra" is a quintessentially Australian song, and has been sung for 75+ years around campfires, in school choirs, and on playgrounds. (You probably are singing it in your head right now.)
Sinclair died in 1988, and so the song is still well within copyright protected status - under Australian copyright law, copyright in a song lasts for the life of the creator plus 70 years (before 2006, plus 50). While most people assumed that the Girls Guides owned the copyright to the song - the story of the 1934 contest is apparently quite well-known in Australia - it was in fact held by Larrikin Records, home to such great artists as the Rank Strangers bluegrass band (second record only!) and the Flying Emus' debut record.
Following the broadcast of Spicks and Specks, Larrikin saw dollar signs. It filed a lawsuit for copyright infringement, contending that part of the flute melody on the song - improvised by the late Greg Ham - was ripped off. Here is an NPR story that ran contemporaneous with the filing of the lawsuit. Larrikin sought between 40 and 60 percent of all royalties on the song, from day 1 of its release.
The offending part was recorded in 1981 and is all of two bars - TWO BARS!! - but the test for infringement looks at the proportion of the original song that is used, and "Kookaburra" is only a four bar song. After deciding the issue of copyright ownership in Larrikin's favor, the Court in Australia amazingly found that the band was liable for infringement. The band appealed, but the Court of Appeals affirmed the decision and the high court declined to hear the matter. Here's a great write-up from an Australian law firm that gives a succinct overview of the case and its finding.
The silver lining for Men at Work - if it may be called that - is that the court awarded modest damages to Larrikin. Instead of the 40-60% from day one sought by the plaintiff, the court found that damages were recoverable only from 6 years prior to the suit and forward (so, for 2002 onward), and found that 5% was a fair number. The 5% was determined based on the wholly-hypothetical licensing arrangement that the Court thought the parties would have entered into if they had talked in 1981.
BONUS FACT: Despite its age and ubiquity, the song "Happy Birthday to You" is still under copyright protection, having been registered in 1935. The song is now owned by Warner/Chappell Music (part of the big giant Time Warner conglomerate), and allegedly accounts for $2 million in licensing fees each year. But earlier this summer, a crop of class action lawsuits - with lead plaintiffs who are filmmakers who were shaken down for a licensing fee for use of the song in their work - were filed in federal courts in New York and San Francisco, claiming that the copyright is invalid. The outcome of that case is as of yet unknown.