|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Judicial Scholarship |
| Search: | | | |
|
|||
"The Jurisdiction of the Copyright Tribunal of
Australia: the 2006 Amendments"
2007 Justice Kevin Lindgren |
|
The Copyright Amendment Act 2006 (Cth) (No 158, 2006) (“the Amending Act”) was assented to on 11 December 2006. Amendments that the Amending Act made to the Copyright Act 1968 (Cth) (“the Act”) relating to the Copyright Tribunal of Australia are found in Schedules 10 and 11 to the Amending Act. Those two schedules commenced on 11 December 2006, Schedule 11 immediately after Schedule 10: see s 2 of the Amending Act.
The purpose of this paper is to consider those amendments.
1. BACKGROUND
On 20 April 1999, the Attorney-General requested the Copyright Law Review Committee (CLRC) to inquire into the need for changes to the jurisdiction and procedures of the Copyright Tribunal, and to report by 30 April 2000.
In June 1999 the CLRC published an issues paper inviting submissions, of which it received twenty. It had meetings with experts, and in September 1999 held a half-day forum attended by interested parties.
The CLRC released a draft report in February 2000 and received fifteen submissions.
It presented its Final Report, Jurisdiction and Procedures of the Copyright Tribunal (“the CLRC Report”), to the Attorney-General on 21 April 2000.
Another committee, the Intellectual Property and Competition Review Committee chaired by Mr Henry Ergas (“the IPCRC”), under terms of reference given to it by the Attorney-General and the Treasurer, reviewed intellectual property legislation, including the Act, under the Competition Principles Agreement. It presented its final report to Ministers in September 2000 (“the IPCRC Report”). Recommendation 9 of the IPCRC Report addressed matters relating to copyright collecting societies, Australian Competition and Consumer Commission (“ACCC”) guidelines, and alternative forms of resolving disputes between collecting societies and their members.
In August 2001, the Government tabled its response to the IPCRC Report. The Government accepted the Report’s recommendations in part. In particular, it agreed:
The Government developed its response to the CLRC Report during 2004, but other priorities caused those reforms to be deferred.
During preparation of the legislation that led to the passing of the Amending Act, consultations were held with the Tribunal, the Civil Justice Division of the Attorney-General’s Department, and the ACCC.
Exposure Drafts of the Tribunal aspects of the Bill for the Amending Act and explanatory material were placed on the Attorney-General’s Department’s website for public comment on 11 October 2006, and were publicised in Issue 42 of the Attorney-General’s Department’s e-News on Copyright of the same date.
2. THE TRIBUNAL AND TWO FORMS OF LICENSING – AN OUTLINE OF THE RÉGIME PRIOR TO THE AMENDING ACT
In this section I summarise the Act’s provisions governing the two forms of licensing in respect of which the Tribunal has jurisdiction, generally speaking leaving the amendments to be dealt with in sections 3 and 4 below.
There are two forms of licensing for present purposes: statutory and voluntary. Statutory licences (or statutory exclusions from infringement) are created by the Act when specified conditions are satisfied. Other licences are voluntary. At least in principle, voluntary licences are the result of negotiation between a copyright owner or its representative, such as a collecting society, and the intending licensee. In practice, however, the collecting societies offer licences on the terms of standard printed forms.
Licence schemes may be “referred” to the Tribunal (ss 154–156); otherwise, the Tribunal’s jurisdiction is invoked by an “application” (including under s 157(1) and (2) in cases to which a licence scheme applies).
2.1 Voluntary licences
Many of the Act’s provisions relevant to voluntary licences depend on the notion of a “licence scheme” (exceptionally, sub ss 157(3) and (4) do not). A “licence scheme” is defined in s 136 of the Act as follows:
licence scheme means a scheme (including anything in the nature of a scheme, whether called a scheme or tariff or called by any other name) formulated by a licensor or licensors and setting out the classes of cases in which the licensor or each of the licensors is willing, or the persons on whose behalf the licensor or each of the licensors acts are willing, to grant licences and the charges (if any) subject to payment of which, and the conditions subject to which, licences would be granted in those classes of cases.
Prior to the Amending Act, s 136 of the Act defined “licensor” in relation to literary, dramatic and musical works and sound recordings. Generally speaking, the licensor was the owner or prospective owner of the copyright or any “body of persons” acting as agent for the owner or prospective owner in relation to the negotiation or granting of licences.
According to my understanding, most licence schemes have been administered by the collecting societies. There are six Australian collecting societies: Australasian Performing Right Association Ltd (“APRA”); Australasian Mechanical Copyright Owners Society Limited (“AMCOS”); Copyright Agency Ltd (“CAL”); Phonographic Performance Co of Australia Ltd (“PPCA”); Audio-Visual Copyright Society Ltd (trading as “Screenrights”) and Vi$copy Ltd. For a review of the collecting societies, see Shane Simpson, Review of Australian Copyright Collecting Societies: A Report to the Minister for Communication and the Arts and the Minister for Justice (1995), and for briefer outlines, the CLRC Report Ch4, and Lindgren, “The interface between intellectual property and antitrust: Some current issues in Australia” (2005) 16(2) AIPJ 76 at 83-84, republished at (2005) 13(3) TPLJ at 138-139. As will be noted at 4.1 below, as a result of the Amending Act’s amendment of the definition of “licensor”, it will be only schemes administered by collecting societies with which the licence scheme provisions of the Act will be concerned.
The licences granted under licence schemes are often referred to as “blanket licences”. They cover all the works in the particular collecting society’s repertoire. A blanket licence may go beyond the would-be user’s needs, but the collecting societies do not grant licences in respect of individual works. If, for example, a hotel or fitness centre wishes to be able to play recorded music, it will find that the only licence on offer from APRA is a licence to play all and any of the music in APRA’s repertoire. The CLRC Report described (at 28) blanket licences as “standard licences for a particular industry or other collectively identifiable group which require the payment of a standard fee regardless of the level of use”.
Sections 154–156 contain provisions for reference to the Tribunal by a licensor and by would-be licensees and organisations representing them, of existing and proposed licence schemes. The Tribunal is given jurisdiction to confirm or vary a licence scheme or proposed licence scheme. As will be noted at 4.1 below, the Amending Act enlarges the Tribunal’s power by allowing it to substitute a new scheme for the one referred to it.
Section 157 provides for various kinds of application to the Tribunal by licensors and would-be licensees and organisations representing them, where there has been a failure to agree on the grant of a licence. Application may be made in cases to which a licence scheme applies and in cases to which a licence scheme does not apply, by persons who require a licence or by organisations representing such persons. The Tribunal is given power to make orders as to the charges and conditions the Tribunal considers applicable under a licence scheme, or, depending on the circumstances in which the application is made, those charges and conditions that the Tribunal considers “reasonable in the circumstances”, in relation to the granting of a particular licence. As will be noted at 4.1 below, under the Amending Act, the Tribunal’s powers when dealing with applications made to it under s 157 are enlarged, and are located in new sub ss(6A), (6B) and (6C) of s 157.
2.2 Statutory licences
2.2.1 General
Generally speaking, the statutory licences are characterised by provisions:
I will briefly describe the statutory licence régimes under Pt VA and Pt VII Div 2 of the Act: the régimes under Pts VB and VC are generally similar to that under Pt VA.
2.2.2 Part VA
Part VA provides for a statutory licence in favour of educational institutions and institutions assisting persons with an intellectual disability,
in respect of the copying of broadcasts and the communicating of copies of broadcasts. Section 135E is to the effect that if the
body administering the institution gives a “remuneration notice” to the collecting society which is declared under s 135P to be the
collecting society for the purposes of Pt VA (Screenrights has been so declared), undertaking to pay to that collecting society equitable
remuneration for copies of broadcasts made by the administering body or on its behalf, or for communications by it or on its behalf
of such copies,
By a “remuneration notice”, the administering body undertakes to pay equitable remuneration to the declared collecting society for the copies of broadcasts or communications of copies: s 135G. Part VA contains detailed provisions directed to enabling a figure to be assigned to the number of copies made or the number of communications that take place.
2.2.3 Part VB
Part VB concerns the statutorily licensed reproduction and communication of works in hard copy and electronic form by educational institutions,
institutions assisting persons with an intellectual disability, and institutions assisting persons with a print disability. CAL and
Screenrights are the collecting societies that have been declared by the Attorney-General under s 135ZZB for the purposes of Pt VB.
CAL has been so declared in respect of the owners of copyright in literary, dramatic, musical and artistic works other than those
included in a sound recording or a cinematograph film. Screenrights has been so declared in respect of the owners of copyright in
works the subject of the Pt VB licence otherwise.
2.2.4 Part VC
Part VC provides for a statutory licence to retransmit free-to-air broadcasts by, in practice, “pay” or “subscription” television companies.
Screenrights is the collecting society that has been declared by the Attorney-General under s 135ZZT for the purposes of Part VC.
2.2.5 Part VII Div 2
Part VII Div 2 provides for a statutory licence relating to the use of “copyright material” (defined widely in s 182B) in favour of the Commonwealth
or a State “for the services of the Commonwealth or a State”. Section 183 provides that copyright is not infringed by the doing of
any act comprised in copyright by the Commonwealth or a State for the services of the Commonwealth or of the State. The Commonwealth
or State must, however, notify the copyright owner that the act has been done. The terms for the doing of the act are those agreed
between the Commonwealth or State and the copyright owner, or, in default of agreement, those fixed by the Tribunal. Where a “government
copy” is made, and there is a relevant collecting society currently declared in relation to the copy, the Commonwealth or State is,
instead, made liable to pay “equitable remuneration” as agreed or as determined by the Tribunal to that collecting society: s 183A.
The régime under Pt VII Div 2 differs from the régimes in Pts VA, VB and VC. First, it is the Tribunal alone that is empowered to declare, and to revoke declarations of, collecting societies for the purposes of Div 2 of Pt VII: see ss 153F and 153J respectively, both within Pt VI of the Act (the Amending Act has now also given the Tribunal a potential role in relation to declarations and revocations in respect of Pts VA, VB and VC collecting societies: see 3.4 below).
Second, s 153F(5) allows for the declaration of different collecting societies in relation to different classes of government copies (ss 135ZZB(1) and 135ZZT(1) allow for the declaration of different societies for different classes of copyright owners for the purposes of the Pts VB and VC licences, but s 135P provides for the declaration of only a single collecting society for the purpose of Pt VA).
Third, non-infringement is not enlivened by the giving of a notice by the Commonwealth or the State, let alone a “remuneration notice” containing an undertaking to pay equitable remuneration. Rather, and more simply, the doing of the act is simply declared not to be an infringement (s 183(1)), but the Commonwealth or State must give notice of the doing of the act.
Fourth, the statutory licence relating to the use of copyright material in favour of the Commonwealth or a State is in respect of any of the acts comprised in the copyright in all classes of works and of subject matter other than works.
Two collecting societies have been declared under s 153F for the purposes of Pt VII Div 2: CAL and Screenrights. On 18 December 1998 the Tribunal declared CAL to be the collecting society for the purposes of Pt VII Div 2 “in relation to Government copies of works and published editions of works, other than works that are included in a sound recording, cinematograph film or a television or sound broadcast”. On 4 May 2000 the Tribunal declared Screenrights to be the collecting society for the purposes of Pt VII Div 2 in relation to sound recordings, cinematograph films, television and sound broadcasts, and works included in any of these.
3. THE AMENDING ACT – AMENDMENTS MADE BY SCHEDULE 10
3.1 Copyright Tribunal of Australia and the Registrar of the Tribunal
(Schedule 10, Parts 3 and 4, items 49–63)
The name of the Copyright Tribunal is changed to “The Copyright Tribunal of Australia”. The change of name is effected by an amendment to s 138 and to the definition of “the Copyright Tribunal” and “the Tribunal” in s 10(1). Within the Act, the abbreviated forms of reference to “the Copyright Tribunal” and “the Tribunal” continue to be used – it is only the formal name of the Tribunal that has been changed.
The change was prompted by a desire to eliminate possible confusion in international contexts between the “Copyright Tribunal” of each of the United Kingdom, Singapore and Australia. The new name is in line with the names of the Australian Competition Tribunal, the Federal Court of Australia, the Federal Magistrates Court of Australia and the Family Court of Australia (although not with the Administrative Appeals Tribunal or the Defence Forces Appeals Tribunal).
The Tribunal now has a Registrar rather than a Secretary: see s 170 and the definition of “Registrar” in s 10(1). A Deputy Registrar of the Federal Court of Australia has always filled the role of Secretary and continues to fill the role of Registrar. An innovation is that the President of the Tribunal is empowered to appoint a person to act as Registrar during a vacancy in the office of Registrar or during any period or periods when the Registrar is absent from duty or from Australia or is unable to perform the duties of the office. This power was recently exercised when the Registrar was absent from duty on leave.
3.2 Summons to produce documents (Schedule 10, Pt 4, item 54)
The former s 167(2) provided:
A member or the Secretary to the Tribunal [sic – A member of or the Secretary to the Tribunal] may summon a person to appear before the Tribunal to give evidence and to produce such documents and articles (if any) as are referred to in the summons.
This provision was productive of inconvenience because it allowed only for production of documents or articles associated with an appearance before the Tribunal to give evidence.
In Audio-Visual Copyright Society Limited v Foxtel Management Pty Ltd (No 2) (2004) 59 IPR 361 at [18]–[20], I drew attention to this position in the following terms:
[18] It is unfortunate that, instead of insisting on production to the Tribunal in association with an appearance before the Tribunal to give evidence, the Act and Regulations do not allow for the issue of a summons which can be complied with by production at the office of the Secretary to the Tribunal: cf Federal Court Rules O27 r4, which permits production to the Registrar at the office of the Registry of the Court, and Administrative Appeals Tribunal Act 1975 (Cth) subs 40(1E), which permits production at the Registry of the Administrative Appeals Tribunal.
[19] I note that subs 105(2) of the Trade Practices Act 1974 (Cth), sub regs 28N(1) and 25(2) of the Trade Practices Regulations 1974 (Cth) and Form K in Schedule 1 to those regulations, relating to the Competition Tribunal, are in terms relevantly identical to subs 167(2) of the Act, subreg 44(1) of the Regulations and Form 2 in Schedule 1 to the Regulations, respectively.
[20] Those responsible might well consider the desirability of amending these provisions (and perhaps provisions like them relating to other Commonwealth administrative tribunals). The Secretary to the Tribunal and the Registrar of the Competition Tribunal are both Deputy Registrars of the Federal Court of Australia; their offices are located within the office of the New South Wales District Registry of that Court; and they are familiar with the procedure of production of documents under subpoenas issued by that Court.
New subsections (2) and (3) of s 167 now provide separately for an appearance before the Tribunal to give evidence, and for production of documents or other articles. In particular, subs (3) provides that a member or the Registrar may summon a person to produce specified documents or articles to the Tribunal by producing them to a specified person at a specified time and a specified place. Thus, it is now possible for the Registrar to summon any person, including a person who is not summoned to appear before the Tribunal to give evidence, to produce specified documents or articles to the office of the Registrar in advance of the hearing.
3.3 Equitable remuneration required by Parts VA and VB – differentiation
(Schedule 10, Part 1, items 1-3)
Amendments have been made to ss 135J (Pt VA sampling notice), 135ZV (Pt VB records notice) and 135ZW (Pt VB sampling notice) expressly allowing for the determination of different amounts of equitable remuneration as between different classes of works, performances, sound recordings, cinematograph films included in broadcasts, “eligible items”, and classes of students, as the case may be. The amendments relate to the Part VA licence for the copying and communicating of broadcasts by educational and other institutions (insertion of new s 135J(4A)), and the Part VB licence for the reproducing and communicating of works etc by educational and other institutions (a substituted s 135ZV(2) and insertion of a new 135ZW(4A)).
The amendments are apparently intended to overcome limitations on the Tribunal’s powers of differentiation of the kind revealed in Copyright Agency Ltd v University of Adelaide [1999] FCA 1818; (1999) 96 FCR 62. That case concerned questions of law that the Tribunal referred to the Federal Court of Australia concerning the proper construction of ss 135ZM and 135ZW, both within Pt VB of the Act. The Court held that the Tribunal did not have power to fix a separate or special rate of equitable compensation for artistic works or literary works containing illustrations, to which s 135ZM of the Act applied, or for a page referred to in s 135ZM(2) of the Act. The Amending Act has not amended s 135ZM itself, but has achieved the desired result by enlarging the powers to determine amounts of equitable remuneration given to the Tribunal by s 135J in Pt VA and by ss 135ZV and 135ZW in Pt VB.
3.4 Declaration of collecting societies and revocation of such declarations – substitution of the Minister for the Attorney-General and potential jurisdiction for the Tribunal in certain cases (Schedule 10, Part 2, items 4–48)
Prior to the Amending Act, the Attorney-General alone had the role of declaring collecting societies for the purpose of the Pt VA, VB and VC statutory licences (but not the government copying licence – see 2.2.5 above), the power to revoke such declarations and certain other powers in relation to collecting societies. The Act has been amended to give such powers to the Minister, or, if the Minister so desires, to the Tribunal. I assume that “the Minister” has been substituted for “the Attorney-General” because paras 52 and 53 of Office of Parliamentary Counsel’s Drafting Direction 2.2 now require that all such references be simply to “the Minister”, and that s 19A of the Acts Interpretation Act 1901 (Cth) be relied on to give meaning to that expression.
In other respects too the Minister is substituted for the Attorney-General. For example, the Minister becomes the person to whom declared collecting societies must furnish an annual report of their operations and to whom they must report any alteration made to their rules.
The amendments in items 4–48 within Pt 2 of Schedule 10 are numerous. The main amendments are to ss 135P and 135Q within Part VA, ss 135ZZB and 135ZZC within Pt VB, and ss 135ZZT and 135ZZU within Pt VC.
Generally speaking, the effect of these provisions is that a body may apply to the Minister to be declared a collecting society; the Minister must make the declaration, refuse to make it, or refer it to the Tribunal, and, in this last case, the Tribunal may make the declaration. Similarly, the Minister may revoke the declaration of a collecting society or refer the question whether it should be revoked to the Tribunal.
As noted at 2.2.5 above, for the purposes of Pt VB (s 135ZZB(1D)) and VC (s 135ZZT(1D)) a declaration may be of a body as a collecting society for all relevant copyright owners or for such classes of copyright owners as are specified in the declaration, and for the purposes of Pt VII Div 2 a declaration may be of a company in relation to all government copies or a specified class of government copies (s 153F(5)), but for the purposes of Pt VA, only a single body may be declared as “the collecting society” (s 135P(1A), (1C)(2)).
The provisions as to revocation of a declaration apply only if the Minister is satisfied that a declared collecting society has fallen down in at least one of four certain specified respects. In that case, the Minister may (not must) revoke the declaration or refer the question whether it should be revoked to the Tribunal. In the latter case, the Tribunal may (not must) revoke the declaration if it is satisfied of at least one of the same four matters.
Thus, if the Tribunal is to revoke a declaration, both the Minister and the Tribunal must have been satisfied that the declared collecting society has fallen down in at least one of the same respects specified in the Act, although it would be possible for the Minister and the Tribunal to be satisfied in relation to different grounds of revocation.
Provisions are introduced governing the procedure of the Tribunal in dealing with applications for a declaration and with revocation of a declaration: see the new ss 153BAB, 153BAC (in relation to Pt VA), ss 153DC, 153DD (in relation to Pt VB), and 153P and 153Q (in relation to Part VC).
4. THE AMENDING ACT – AMENDMENTS MADE BY SCHEDULE 11
4.1 Licences and licence schemes (Schedule 11, Part 1, Divs 1 and 2, items 1-20)
There are new definitions of “licence” and “licensor” in s 136(1). I will not set out the existing definitions, but those introduced by the Amending Act are as follows:
licence means a licence granted by or on behalf of the owner or prospective owner of the copyright in a work or other subject-matter to do an act comprised in the copyright.
licensor means a body corporate for which both the following conditions are met:
(a) the body is incorporated under a law in force in a State or Territory relating to companies;
(b) the body’s constitution:
(i) entitles any owner of copyright, or any owner of copyright of a specified kind, to become a member of the body; and
(ii) requires the body to protect the interests of its members connected with copyright; and
(iii) provides that the main business of the body is granting licences; and
(iv) requires the body to distribute to its members the proceeds (after deduction of the body’s administrative expenses) from payments to the body for licences; and
(v) prevents the body from paying dividends.
The text of the definition of “licence scheme” (set out at 2.1 above) remains unchanged, but its effect has been changed in important respects because of the substitution of the new definitions of “licence” and “licensor” – expressions that appear in the definition of “licence scheme”.
It is convenient to conceive of the “licensor” as now defined simply as a “collecting society”, though, of course, not necessarily one that has been declared for the purposes of one or more of the statutory licences.
The new definitions of “licensor” and “licence” have brought about two changes. First, the licence schemes to which the Act applies are now limited to schemes formulated by collecting societies. Second, subject to that limitation, the licences to which the provisions apply are licences to do any act comprised in the copyright in any work or other subject matter.
The utility of the amendments can be illustrated by reference to Reference by Powercom Interactive Media Pty Ltd [2003] ACopyT1. That case concerned the ring tones of mobile telephones. Two collecting societies were involved, APRA and AMCOS. Powercom Interactive Media Pty Ltd (“Powercom”) claimed that it required a licence in a case, or class or classes of cases, to which a licence scheme or licence schemes operated by APRA and AMCOS applied. Powercom needed to store ring tones and other SMS products on computers owned and controlled by it, and to cause electronic transmission of copies of ring tones or other SMS products selected by callers to mobile phones nominated by the caller.
Both APRA and AMCOS granted licences in respect of musical works. Powercom, APRA and AMCOS desired that their dispute be able to be determined by the Tribunal. The difficulty, however, was that while the Tribunal had jurisdiction in respect of a scheme under which APRA licensed the “communication” of musical works, the Tribunal did not have jurisdiction to consider the scheme under which AMCOS licensed the “reproduction” of musical works. In substance, the AMCOS licence, being a licence “to reproduce” musical works, was not a licence of any of the kinds referred to in the then definition of “licence” in s 136. That definition lay at the heart of the definitions of “licence scheme” and “licensor”, and therefore at the heart of s 155 which gave the Tribunal the jurisdiction that was sought to be invoked by Powercom. Because a licence to reproduce a musical work was not within the definition of “licence”, the Tribunal lacked jurisdiction.
The Amending Act overcomes this shortcoming in the Tribunal’s jurisdiction.
It should be noted that in cases to which a licence scheme does not apply, applications may now be made under s 157(3) and (4) of the Act only in respect of a refusal or failure on the part of a collecting society to grant a licence. That this is so results from the presence in those subsections of the term “licensor” and the new limiting definition of that expression in s 136(1).
A further significant amendment is that the Tribunal is now given power not only to confirm or vary a licence scheme, but also to substitute for it “another scheme proposed by one of the parties”. Provisions dealing with licence schemes that reflect this new possibility are ss 154(4), 155(5), 155(10), 156(1), 156(4), 159(1), 159(2)(a), 159(2)(b), 159(3). No doubt it was possible to achieve “another scheme” prior to the Amending Act, but the associated procedure was probably more troublesome than it will be now.
The former sub ss(7) and (8) of s 154 are repealed and replaced by a single subs(7). Under the new provision, if the scheme referred
to the Tribunal has not already come into operation, the scheme reflecting the Tribunal’s order, that is to say, the scheme as confirmed,
varied or substituted, comes into operation when the order is made and operates as long as the order remains in force.
Within s 157, sub ss(5) and (7) are amended, subs (6) is replaced, and new sub ss (6A), (6B) and (6C) are added. The general effect
of the amendments is to broaden the range of orders that the Tribunal may make when it is satisfied that a claim made under sub ss(1),
(2), (3) or (4) concerning a licensor’s refusal or failure to grant a licence is well founded.
New sub ss(7), (8) and (9) are added to s 159. Section 159 deals with the effect of orders made by the Tribunal under ss 154, 155 and 156. Of some interest is the provision in the new s 159(8) that a person whom the Tribunal has ordered under s 157 be granted a licence, is taken, for the purpose of infringement proceedings, to have been granted the licence, and is liable to pay the copyright owner the amount of any charges that would be payable if the person had in fact been granted the licence in the terms that the Tribunal has ordered. Subsection 159(9) provides that the copyright owner may recover the amount as a debt.
4.2 Involvement of Australian Competition and Consumer Commission
(Schedule 11, Part 1, Div 3, items 21-27)
New ss 157A and 157B are inserted into Pt VI. Part VI is the part of the Act that deals generally with the Tribunal. The new ss 175A and 157B are as follows:
157A
(1) In making a decision on a reference or application under this Subdivision, the Tribunal must, if requested by a party to the reference or application, have regard to relevant guidelines (if any) made by the Australian Competition and Consumer Commission.
(2) To avoid doubt, subsection(1) does not prevent the Tribunal from having regard to other relevant matters in making a decision on a reference or application under this Subdivision.157B
The Tribunal may make the Australian Competition and Consumer Commission a party to a reference or application made under this Subdivision if:
(a) the Commission asks to be made a party to the reference or application; and
(b) the Tribunal is satisfied that it is appropriate that the Commission be a party to the reference or application.
The “Subdivision” referred to in these sections is SubdivisionH dealing with “References and applications relating to licences and
licence schemes” (see 4.1 above).
Consequential upon s 157B, there are amendments to ss 154, 155 and 156 adding the ACCC to the list of parties in cases where the Tribunal has made it a party under s 157B. As well, a note is added to s 157(5) to the effect that the Tribunal may make the ACCC a party to an application by a person who complains over a refusal or failure by a licensee to grant a licence.
In November 2006, the ACCC published a draft of Copyright licensing and collecting societies: a guide for copyright licensees. It has received submissions from interested parties which have been made available on the Commission’s website. I have taken the liberty of annexing to this paper the section of the draft headed “As a party to tribunal proceedings” and “8. Remuneration for the use of copyright material”.
The ACCC has recently made a request pursuant to s 157B to be made a party to a reference to the Tribunal by PPCA of a “Fitness Class Licence Scheme” under s 154 of the Act. With PPCA’s consent, the Tribunal made an order making the ACCC a party. In the affidavit in support of the ACCC’s motion to be joined, the deponent stated:
6. The ACCC seeks to be made a party to this Reference, for the following reasons:
(a) Due to its statutory function, the ACCC is ideally placed to assist the Tribunal to take account of any market power that can be exercised by collecting societies and balancing the public interest in public access to copyright material with the legitimate interests of copyright owners;
(b) In the light of the ACCC’s statutory function in preparing and issuing pricing principles and guidelines, the Tribunal’s consideration of this Reference is likely to influence the way in which the ACCC performs that function in the future; and
(c) The ACCC is able to offer the Tribunal independent assistance in the public’s interest, in the course of the Reference, without advocating any existing party’s position.
7. The ACCC wishes to assist the Tribunal in respect of the Reference before it by:
(1) providing an independent appraisal of the economic arguments put to the Tribunal by the parties;
(2) providing its own independent economic evidence; and
(3) making submissions to the Tribunal in respect of the economic evidence.
The consent order making the ACCC a party was subject to a reservation, namely, that “[t]he question of the terms on which the ACCC is to participate in the Reference be reserved for further determination”. This question will have to be determined at a future directions hearing after the ACCC has had an opportunity to consider material to be provided to it by PPCA. It is clear that PPCA contemplated that at least the ACCC would be entitled to make submissions.
It will be interesting to see the extent to which, in this “test case”, the ACCC will be able to assist the Tribunal in its task.
4.3 Distribution of amounts collected by declared collecting societies (Schedule 11, Part 2, items 28–35)
The Amending Act has implemented a proposal to give the Tribunal jurisdiction in respect of disputes between collecting societies and their members as to distribution of amounts collected by the societies. The form of the provision is that a collecting society or member may apply to the Tribunal for review of the arrangement adopted or proposed to be adopted by the collecting society for distributing the amount it collects in a period, and the Tribunal may make an order varying the arrangement or substituting for it another arrangement. If the Tribunal makes such an order, the arrangement reflecting the Tribunal’s order has effect as if it had been adopted in accordance with the collecting society’s rules, but does not affect a distribution commenced before the order was made.
The new provisions are found in s 135SA (in relation to the PtVA licence), s 135ZZEA (in relation to the PtVB licence), s 135ZZWA (in relation to the Pt VC licence) and s 183F (in relation to the Pt VII Div 2 licence). There are new associated provisions in Pt VI providing for the Tribunal’s powers on an application for review of distribution arrangements: see s 153BAD (in relation to an application under s 135SA), s 153DE (in relation to an application under s 135ZZEA), s 153KA (in relation to an application under s 183F) and s 153R (in relation to an application under s 135ZZWA).
4.4 Manner of paying royalty for copying musical works
(Schedule 11, Part 3, items 36–38)
These minor amendments to ss 55 and 59 do not call for extended comment. Briefly, the effect of the amendments is to remove regulatory intervention as to the rate of royalty payable by a manufacturer of a record to the owner of the copyright in a musical work (amendment to s 55(1)(d)) or in any literary or dramatic work involved (repeal of subs(5) of s 59), in favour of leaving the rate of royalty to be agreed by the parties, or, failing agreement, to be determined by the Tribunal.
4.5 Records notices (Schedule 11, Part 4, items 39–44)
There are provisions giving the Tribunal jurisdiction where there is a dispute in relation to the keeping of records where a record notice is given: see the new s 135K(2A), (2B) and 135BAA (in relation to the Part VA statutory licence); s 135ZX(2A), (2B) and 153DB (in relation to the Part VB statutory licence).
4.6 Alternative dispute resolution (Schedule 11, Part 5, items 55–59)
A new Division 4A (ss 169A–169G) is introduced into Pt VI providing for the President or a Deputy President of the Tribunal, on any application or reference to the Tribunal, to direct the holding of a conference of the parties or their representatives or to direct that a proceeding or a part of it or any matter arising out of it be referred for a particular alternative dispute resolution process (other than conferencing). The notion of “alternative dispute resolution processes” is widely defined in a new definition inserted into s 10(1) of the Act.
Reference may be made to s 53A of the Federal Court of Australia Act 1976 (Cth) which provides that the Court may refer a proceeding or any part of it or any matter arising out of it to a mediator or arbitrator for mediation or arbitration, and that a referral by the Court to a mediator may be made with or without the parties’ consent.
The new provisions are far more elaborate and are generally similar to those found in Div 3 (ss 34–34H) of the Administrative Appeals Tribunal Act 1975 (Cth).
While s 169A does not state that the President or Deputy President may make a direction under the section without the consent of all parties, this must be so – the power is not expressed to be conditional on the consent of all being given.
Subsection 169A(5) provides that where a direction is made for a conferencing or other alternative dispute resolution process, “each party must act in good faith in relation to the conduct of the alternative dispute resolution process concerned”.
Subsection 169B(5) of the Act provides that a person is not entitled to conduct an alternative dispute resolution process unless the person is a member or the Registrar of the Tribunal or a person whose services are made available under an arrangement made by the Registrar and the Registrar of the Federal Court of Australia to conduct the process, or a person engaged under s 169G of the Act. Section 169G empowers the Registrar to engage persons as consultants to conduct one or more kinds of alternative dispute resolution processes.
4.7 Determination of questions relating to Parts VA and VB
(Schedule 11, Part 6, items 60–63)
New ss 135JAA and 135ZWAA give the Tribunal jurisdiction to determine questions where it is necessary or convenient for them to be
determined in order to facilitate future compliance by an institution’s administering body or by a collecting society with certain
provisions within PartsVA and VB respectively. A note has been included in each of these two new sections citing as an example of
such a question the question whether there should be a particular sampling system to provide information to a collecting society
to determine how to distribute amounts it collects. New ss 153BAAA and 153DAA govern aspects of the procedure applicable to those
classes of application to the Tribunal.
5. CONCLUSION
I would not describe the amendments as fundamental. Some of them make practical improvements, such as the amendment giving power to the Registrar to issue a summons for production of documents and things otherwise than in conjunction with an attendance by a person to give evidence before the Tribunal. Similarly, the amendment overcoming the frustrating jurisdictional shortcoming exposed in the Powercom case is a distinct improvement.
Of some of the amendments, it can be said that they “do no harm” and nothing can be said against them. This is the case, for example, in relation to the amendments relating to alternative dispute resolution. In assessing those provisions, however, we should note:
It remains to be seen whether, as a result of the jurisdictional enlargement, more insubstantial and inexperienced parties will come before the Tribunal, and, in any event, the extent to which the new power to refer a proceeding for a particular ADR process will prove useful.
It will be interesting to see if disputes between collecting societies and their members are referred to the Tribunal, and whether parties request the Tribunal under s 157A to have regard to the ACCC guidelines. With respect, I venture to suggest that the ACCC’s participation in particular cases may be found to be of greater assistance to the Tribunal than regard to its general guidelines will be. This is not to say anything against the existing draft general guidelines, but to make the point that the Tribunal is called upon to exercise its jurisdiction in relation to particular industries on the evidence that is put before it in respect of them in individual cases
Finally, I draw attention to the growth in the size of the Act and, in particular, to the identification of sections by lettered numbers. The latter is becoming quite a problem. Between s 135 and s 136, there are now no less than 132 sections, the last being s 135ZZZE. A reader who wishes to refer to s 136 and has the Act open at s 135 (or at any of ss 135AA to 135ZZZE) can have no reliable idea as to how many pages away s 136 is. Put simply, “user unfriendliness” in the Act is on the increase.
This is a revised version of a paper presented at a seminar on “The Copyright Tribunal’s New Jurisdiction” held by the Copyright
Society of Australia in Sydney on Thursday 24 May 2007.
I acknowledge the subsequent assistance of my Associate, Anna Dziedzic, in proofreading and making suggestions concerning the revised
version.
** The historical overview presented here is based in large part on information contained in Appendix 3 of the Senate Standing Committee
on Legal and Constitutional Affairs, Copyright Amendment Bill 2006 [Provisions] (November 2006).
ANNEXURE
Extracted from:
Copyright licensing
and collecting societies:
a guide for copyright licensees
Draft for comment
November 2006
As a party to tribunal proceedings
The Copyright Act gives the tribunal discretion to allow the ACCC to become a party to tribunal proceedings if the ACCC applies and the tribunal is satisfied that it would be appropriate to do so.
However, the ACCC will only seek do so in very limited circumstances. The ACCC’s primary consideration whether to intervene in private proceedings is whether it would be in the public interest. The ACCC will make this decision on a case-by-case basis.
For more information, the guide ACCC intervention in private proceedings is available at the ACCC website, .
8. Remuneration for the use of copyright material
The ACCC does not have a role determining the appropriate level of remuneration for the use of copyright material or other licence conditions. It is a matter for negotiation between the parties (including through any ADR processes) or, failing this, for determination by the tribunal.
The problem of market power
Although collecting societies give rise to considerable practical benefits, they also bring together the rights of parties who would normally compete with each other in the supply of copyright material. This creates scope for collecting societies to exercise market power in the setting of licence fees and conditions because parties wishing to use copyright have limited, if any, alternatives.
The exercise of market (or monopoly) power results in an inefficient use of resources and reduces the overall welfare of society. When prices are raised above a competitive level, consumption and production fall below the socially optimal quantities, since some consumers who value the good or service more than the cost of production no longer buy the product. There is also less pressure on a monopoly supplier to operate efficiently and to offer the types of products and level of service that consumers want.
Concern over the monopoly power of collecting societies was raised as early as 1932 when a Royal Commission was appointed to inquire into and report on the exploitation of performing rights. In particular, the inquiry sought to address complaints about the dominant market position of APRA and the charges the agency imposed. The Royal Commission concluded that APRA was “to all intents and purposes, a super-monopoly controlling or claiming to control most of the music which users in public must use and is able to dictate its own terms”.
More recently, the Review of Australian Copyright Collecting Societies (the Simpson report), which investigated the major copyright collecting societies of the time, APRA, AMCOS, PPCA, CAL and Screenrights (then called the Audio-Visual Copyright Society), stated that
… whenever a number of exclusive rights owners join together to form a licensing system, there is a potential for abuse and
there is no doubt that each of the five collecting societies do have a dominant position in the market-place with respect to the
types of rights that each controls.
The role of the tribunal
The tribunal was “principally established under the Copyright Act to counterbalance the monopoly position of particular collecting societies” and may be called on to set licence fees and conditions in the absence of agreement between parties.
Although the tribunal is not required under the Copyright Act to refer specifically to competition issues when determining an appropriate rate of remuneration, the Australian Competition Tribunal has noted:
Whilst the Copyright Tribunal might not be obliged to treat competition issues as paramount, we cannot accept that it would not take them into account and strive to determine what constitutes reasonable charges and conditions having regard to the wider public interest as well as to the interests of the immediate parties before it.
Further, a recent article by the current President of Copyright Tribunal, Justice KE Lindgren, discusses the role of the Copyright Tribunal and the market power of collecting societies. It concludes that:
As a matter of legislative history, the [Copyright] Act’s provisions giving the tribunal jurisdiction to quantify amounts payable
can be seen to have arisen from concern in the 1920s to 1960s with APRA’s monopoly.
…
Under [the existing statutory descriptions of the amounts payable to copyright owners] the tribunal must determine an amount which
provides equitable or reasonable or just or fair remuneration to the copyright owner, but no more than that. The amount must be fair
to the user of the copyright material as well as to the copyright owner.
Pricing of copyright material
Given the relatively high degree of market power held by copyright collecting societies, the ACCC has included in this guide for copyright licensees some broad principles it considers relevant to the pricing of copyright material.
Price greater than marginal cost
In general, the socially optimal price for a good in a competitive market is the marginal cost of its production, that is, the additional cost from producing an extra unit of the good. When price is equal to marginal cost, all consumers who value the product more than it costs to produce will buy it. However, application of this principle requires consideration of both “short-run” and “long-run” implications.
Static (or short-run) analysis assumes that the copyright material has already been produced. The marginal cost of non-rival goods such as copyright material is the cost of distribution of that material, which is likely to be zero or very close to zero. For example, the marginal cost of producing another CD is minimal, and the marginal cost of having another commercial venue playing a CD is zero.
Setting total remuneration equal to the short-run marginal cost would not provide an incentive for further creation of original works, and the production of such works would fall well below the socially optimal level.
To provide incentives for investment in the production of new copyright material, the sum of remuneration paid by all users of the material should also cover the cost of creating new material. This should include, for example, appropriate reward for the risks associated with production of copyright material.
Difficulty in determining the cost of production
While it may be accepted that remuneration for the use of copyright material should be an amount greater than marginal cost, the task of determining remuneration remains complex. In particular, in the case of copyright, as with other forms of intellectual property, determining the total cost of production is extremely difficult. For example, it is difficult to measure and value the time costs incurred by the creator of the material. The cost of production is a fundamental factor to pricing goods in general. As this is difficult to calculate, the remuneration payable by copyright licensees is similarly difficult.
Price discrimination and licence fee structure
If the total return to copyright owners is set to an appropriate level, it will encourage an appropriate level of production. How that return is generated may affect whether the arrangements are equitable.
Efficient pricing of copyright material will usually involve some degree of price discrimination between different categories of users.
That is, remuneration for the use of copyright material may to some extent reflect the value to and ability to pay of particular
(or particular groups of) licensees. How much a licensee values copyright material is likely to be a reflection of the use made of
that material and the importance
of the material to the licensee’s business.
When various classes of copyright users have different elasticities of demand (i.e. are more or less price sensitive in respect of copyright material), it is more efficient to charge a higher price to those with relatively inelastic demand and a lower price to those with a relatively elastic demand. As prices rise above marginal cost, classes of consumers that are more price-sensitive will reduce their consumption of a good by more than those that are less price-sensitive. Charging less to these consumers (and more to those consumers that are less price-sensitive) might allow copyright owners to recoup the returns owned to them under the Copyright Act in a more efficient way.
The method of calculating licence fees may assist in ensuring that the value of the copyright material to the licensee is reflected in the licence price. For example, it may be that the value is closely correlated with an individual business’s revenue and licence fee can be calculated according to this. In other cases, a more complex approach will be appropriate. For example, the licence scheme for background music for retail and general business use proposed by APRA calculates a fee according to:
There may also be scope for “two part tariffs” in setting remuneration for copyright material. This is where copyright licensees pay
a base fee for access to the copyright
material and an additional fee according to use. This additional fee could be based on, for example, each hour of use, each item of
copyright material used or the number of people that have access to the copyright material.
The ACCC notes that it is important that copyright collecting societies strike an appropriate balance between charging different prices to different consumers and offering licences that provide for ease of administration and enforcement. If licences are too highly individualised or too complex to administer, this may result in excessive costs to both users of the copyright (e.g. in recording details from which to calculate fees) and to the relevant collecting society (e.g. in enforcing the agreement). The costs of negotiating licences and agreeing on the fee payable will also increase to both the collecting societies and licensees if licensing arrangements are highly tailored and/or complex.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/journals/FedJSchol/2007/8.html
