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High Court of Australia Transcripts |
Last Updated: 10 May 2011
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S23 of 2010
B e t w e e n -
PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED ACN 000 680 704
First Plaintiff
EMI MUSIC AUSTRALIA PTY LIMITED ACN 000 070 235
Second Plaintiff
SONY MUSIC ENTERTAINMENT AUSTRALIA PTY LIMITED ACN 107 133 184
Third Plaintiff
UNIVERSAL MUSIC AUSTRALIA PTY LIMITED ACN 000 158 592
Fourth Plaintiff
WARNER MUSIC AUSTRALIA PTY LIMITED ACN 000 815 565
Fifth Plaintiff
J ALBERT & SON PTY LIMITED
Sixth Plaintiff
and
COMMONWEALTH OF AUSTRALIA
First Defendant
AUSTRALIAN BROADCASTING CORPORATION
Second Defendant
COMMERCIAL RADIO AUSTRALIA LIMITED ACN 059 731 467
Third Defendant
FRENCH CJ
GUMMOW J
HAYNE J
HEYDON
J
CRENNAN J
KIEFEL J
BELL J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 10 MAY 2011, AT 10.16 AM
Copyright in the High Court of Australia
____________________
MR R. COBDEN, SC: May it please the Court, I appear with my learned friends, MR J.K. KIRK and MS A. RAO, for the plaintiffs. (instructed by Gilbert + Tobin Lawyers)
MR S.J. GAGELER, SC, Solicitor-General of the Commonwealth of Australia: If the Court pleases, I appear with MR S. LLOYD, SC and MS K. RICHARDSON, for the first defendant. (instructed by Australian Government Solicitor)
MR J.C. SHEAHAN, SC: May it please the Court, I appear with my learned friend, MR C.A. MOORE, for the second defendant. (instructed by ABC Legal Services)
MR A.J. MEAGHER, SC: May it please the Court, I appear with my learned friend, MR G.R. KENNETT, SC, for the third defendant. (instructed by Minter Ellison Lawyers)
FRENCH CJ: Yes, Mr Cobden.
MR COBDEN: Thank you, your Honours. Just preliminary matters. Your Honours should have, I think you are now receiving, an outline of the oral submissions we propose to make and, secondly, your Honours, I formally seek leave to add some supplementary written submissions to our reply that were supplied to the Court last Friday.
FRENCH CJ: Yes, you have the leave.
MR COBDEN: Thank you, your Honours. Your Honours, this special case states three questions for the opinion of the Court concerning provisions in the Copyright Act 1968. The case concerns – I will try to use terms that are not tendentious for the moment – things that happened to copyright in recorded sound when copyright law was reformed and, in one sense, repatriated by the Copyright Act 1968 which came into effect on 1 May 1969. That Act succeeded, as your Honours will know from the outline supplied, and doubtless other sources, the what might be called hybrid legislation of the 1911 imperial or Copyright Act (UK) which was applied in Australia and modified by the Commonwealth Act which came into effect on 1 July 1912.
For the purposes of the special case, examples of five recordings that were in existence as at 1 May 1969 have been identified and details of them are to be found in the special case. They were all recorded in the period 1957 to 1966 and we have listed them in our primary submissions, your Honour. They are: A Pub With No Beer, Slim Dusty; Yesterday, the Beatles; You Don’t Have to Say You Love - - -
HAYNE J: They are unforgettable, Mr Cobden.
MR COBDEN: I am sorry, your Honour?
HAYNE J: They are unforgettable.
MR COBDEN: Absolutely, your Honour. A Dusty Springfield track; Move Baby Move by Johnny O’Keefe; and She’s So Fine by the Easybeats. We were not proposing to play them to your Honours, although in one aspect of the argument I will be asking your Honours to imagine that you are hearing them. That is to answer the question of whether a record can be performed, but I venture to say they are possibly tracks that may be known to your Honours or some of your Honours.
Copyright and sound recordings under the 1968 Act, as your Honours know, is dealt with under Part IV of the Act along with other what are called manufacturers copyrights, that is to say, copyrights that do not have authors and do not have the quality of originality attached to them, and your Honours know that under Part III, literary, dramatic, musical and artistic works have that quality of originality which, of course, informs many things such as subsistence and substantial part.
The other Part IV copyrights, of course, are cinematograph films, broadcast copyrights which are enjoyed by the radio broadcasters or the television broadcasters and perhaps the slightly poor cousin, the published edition copyright, short copyright of only 25 years with very limited rights. Now, the rights in sound recordings, which of course are the subject matter of the present special case, are to be found in section 85, and at the time of enactment, they included three rights:
(a) to make a record embodying the recording –
As your Honours know, that involves also making a record of a substantial part of the recording, but this case does not concern those issues –
(b) to cause the recording to be heard in public;
(c) to broadcast the recording.
The Acts as now delineated in section 85 are somewhat different but embrace all of those rights that were enacted in 1968 and in effect in 1969 and they are now in section 85(1):
(a) to make a copy of the sound recording;
(b) to cause the recording to be heard in public –
Those are unchanged –
(c) to communicate the recording to the public –
That is the technologically neutral right, so-called, introduced into the digital agenda reforms in 2001 but it now embraces, as a subset, “broadcast” and “broadcast the recording” is left defined for the purposes of that definition being used and attached onto in such provisions as the provisions we impugn here, sections 109 and 152. So some aspects of the communication right, which was the old broadcast right, as it were, are preserved for the purposes of some special treatment, and then a right that was added some years ago:
(d) to enter into a commercial rental arrangement in respect of the recording –
That is a right that has not been looked at by any court, and I do not think it comes into any area of the Copyright Tribunal’s jurisdiction. The 1911 Act, which is the Act under which we submit the property and the five sound recordings I listed, was worded and treated – the question of copyright in recorded sound – somewhat differently and the crucial section there is section 19. Can I take your Honours quickly to the 1911 Act just to identify the different wording. I will return to it in due course. It is to be found in the book of documents that was filed in support of the special case at volume 1, tab 15.
There will be some considerable debate, particularly when we get to the question of what rights did in hearing sound recordings under the 1911 Act, about the precise wording here. If I can take your Honours – and I will also return to the way in which copyright was treated. Your Honours see behind that tab the first page reads, “Copyright Act 1912”. That is at page 383 of the book, but if your Honours go through to page 395 your Honours will find the 1911 imperial Act, the United Kingdom Act, reproduced as a schedule.
Again, I would need to return for identification of the relevant legal rights and their practical and legal effect to some of these sections, but if your Honours turn over to page 402 of the book, this is where we have a provision, the history of which I will also give your Honours in due course. It says:
Copyright shall subsist in records, perforated rolls, and other contrivances by means of which sounds may be mechanically reproduced, in like manner as if such contrivances were musical works -
Then the special provision as to the term - - -
GUMMOW J: What is the distinction between section 19 and section 1?
MR COBDEN: Section 1 sets up the Act.
GUMMOW J: It talks about works.
MR COBDEN: It does, your Honour, yes it does talk about works because the primary way in which that operates is - - -
GUMMOW J: It talks about authors.
MR COBDEN: Yes, it does, your Honour.
GUMMOW J: Section 19 does not do either, does it?
MR COBDEN: First of all, it says, “in like manner as if such contrivances were musical works,” so we have to go back to see what sections 1 and 2 say about works, and then further on in section 19 it says:
and the person who was the owner of such original plate at the time when such plate was made shall be deemed to be the author of the work –
So, in other words, it latches on, as it were, your Honour, to sections 1 and 2, in our submission.
CRENNAN J: I think it is what Professor Cornish refers to as entrepreneurial copyright as distinct from authorial copyright.
MR COBDEN: Quite so, your Honour, or sometimes manufacturer’s copyright because you achieve a copyright by the manufacture of something.
CRENNAN J: Or in Cawardine I think it is referred to as an auxiliary right.
MR COBDEN: Yes, your Honour, and that remains true of course, today of Part IV copyrights, cinematograph films, broadcast copyrights and published vision. You achieve them by the doing of an act creating something but not with originality or authorial input.
GUMMOW J: I am sorry. The comparable provisions in the 1968 Act are sections 31 and 85, are they not?
MR COBDEN: Yes quite so, your Honour; 31 in relation to works, 85 in relation to sound recordings and then onwards, 86, 87 for the other. I will use the expression Part IV copyrights, if I may. Indeed, as your Honour Justice Gummow points out, one goes then, to see if they are protected in like manner as musical works, to go back to see how a musical work is protected because it is the like manner, and they are protected in the way described in section 1(1). Then for the content of that right we go to subsection (2):
For the purposes of this Act, “copyright” means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatsoever –
and that is the reproduction right or the copying right, as it is called, for sound recordings nowadays –
to perform, or in the case of a lecture to deliver, the work or any substantial part thereof in public –
Of course, always, certainly since the 1911 Act and probably since before then, the notion of performance in public has been crucial and, of course, your Honours have looked at that in many, many cases over the years and perhaps most recently in the Telstra and APRA Case, that performance in private would not be caught. The development of the law both in England and here in relation to the meaning of “performance in public” extended between 1911 and 1956 in England, or 1911 and 1969 here to, in the case of works and we say also sound recordings, but I will come to that, the notion of performance was said to embrace the notion of broadcasting. Broadcasting came along. Doubtless the technology was beginning to be known in 1911. I cannot take it off the top of my head the date of Marconi’s experiments, but I think much before that, but did not become a commercial phenomenon, as the special case describes, and I will take your Honours to, until further into the 20th century.
GUMMOW J: What was the term in section 19?
MR COBDEN: The term in section 19, your Honour, is 50 years and that is in the third line:
but the term of copyright shall be fifty years from the making of the original plate from which the contrivance was directly or indirectly derived –
That again is echoed, your Honour, these days because we do not have life of the author, plus 50 or now 70 years, but instead have a term of copyright, the 1968 Act, as enacted. It is Division 4, Part IV, section 93. As enacted it was 50 years after the end of the calendar year in which its first publication, now 70 years. The same for films. It was 50 and is now 70. Television broadcasts were 50 and remained 50 years from the making of the broadcast. I, just in passing, remind your Honours, of course, that The Panel Case was a case that concerned that particular copyright in television broadcasts, and published editions, I said perhaps a little pejoratively, they were the poor cousin, but they get only 25 years and their rights are very limited when one looks at those.
CRENNAN J: I realise the compulsory licence here is very different from the one under consideration, but I wanted to ask you, is this the first Copyright Act in which there were a compulsory licensing scheme of some sort?
MR COBDEN: The compulsory licence of mechanical works in section 19, the balance of section 19?
CRENNAN J: Yes.
MR COBDEN: I think so, your Honour, but I have not really turned my mind to that topic. I will certainly come up with an answer for your Honour in due course. Just to interpolate there, we will get to it in the history which I do not propose to dwell on in great detail, that compulsory licence arose because in the 1880s and 1890s the convention provided that mechanical reproductions of works, including musical works, would not be a reproduction in material form and in that period of time, the 1880s through to 1911, particularly the pianola roll industry sprang up, not paying any royalties at all, and there was a vigorous controversy between, on the one side, music publishers, sort of Boosey & Hawkes of the time, and on the other side, the pianola roll makers, some of whom matured into gramophone record makers saying that we will be ruined because we have built this business on free use. So this is the first classic compulsory licence introducing a rate of five per cent of the retail selling price of the contrivance, something that continued through into the 1968 Act and in a reformed fashion is still there today.
Those are, in overview, the two ways in which sound recordings, although not called sound recordings under the 1911 Act, have been treated. If I can see if I can put to one side some matters of terminology, we remain, of course, alive to the differences in wording and if some things made it, particularly in relation to a performance right between 1911 and 1969, on the one hand, they are copyright in records or contrivances and on the other hand, now copyright in a sound recording defined in the style of the 1956 English and 1968 Australian Acts as an aggregate of sounds embodied in a record.
So there is a very clear conceptual division now between what is the incorporeal thing, the copyright, and anything in which it may be located such as a book or a record. I will not be ignoring the importance of those distinctions if I refer to what – this is just sound recording copyright. I hope it is not inconvenient to your Honours by simply saying there has been some sort of copyright in recorded sound since 1911. There continues to be a copyright in recorded sound now called sound recording copyrights.
Under the 1911 Act, as I say we will return to analyse it in a little detail, there was no limitation, we submit, on the licensing of sound recording for broadcasting assuming that the right existed, which we contend that it did. In other words, the owner of that copyright in that record or recorded sound could withhold it at will and charge without any limit or cap. That is, of course, generally speaking, the default position in relation to copyright and there are many instances, even to this day, where very important and powerful copyrights can be withheld or licensed at will.
One, perhaps, key example is a literary work in the form of a book, setting aside educational exceptions and setting aside some other exceptions in relation to photocopying, the author or the publisher of the book, whoever owns the copyright, can simply say, “No, you may not reprint that book no matter how much you offer me while the copyright subsists.” Also cinematograph film was very largely unaffected by any of the licensing provisions in the Act. Owners of cinematograph film decide whether they will or will not licence it for public performance in a cinema or for release on television or whatever else. So there is nothing unusual about that being the default position.
Under the 1986 Act, along with the scheme, for example, carried over from the 1911 Act of the mechanical royalty provision, there are many other provisions that are now described under the general term of compulsory licences. One of them is section 109 read with 152, which is what we attack here. This Court made some observations in the Copyright Agency Limited v NSW Case [2008] HCA 35; 233 CLR 279. I do not think I will need to take your Honours to it. In paragraph 14 this Court identified two broad classes, as it were, of exceptions to infringement to be found in the Copyright Act. The first, such as the long-established fair dealing exceptions, some first included in the 1911 Act. I was reading from paragraph 14, your Honours.
There are many current examples. I think your Honours, rather than listing them all, gave a reference to a Copyright Law Review Committee report that was looking at the question whether they should be replaced by some general – as is in America, a fair use provision. Some of them are free, they are referred to as free use provisions, and then, as your Honours point out, other exceptions permit use on the condition that remuneration is paid and those are described often as compulsory licences for remunerated uses.
CRENNAN J: What about new fair use provisions, are they subject to the same sort of argument you are raising here?
MR COBDEN: We would say not for a number of reasons, your Honour, and the first is that there would be no acquisition. Of course I will come directly to this topic which is at the heart of the case, if I may, in due course, which is to say, what is our answer to the statements about section 51(xxxi) that say a lessening in the reduction of the exclusive rights is not something that is attracted by section 51(xxxi). We do have something to say about that. I would like to - - -
CRENNAN J: I do not want to take you off course.
MR COBDEN: Thank you, your Honour. But in short we would say no acquisition or that is in the area where it is not – where it would be incongruous for section 51(xxxi) to operate against, for example, the new and recently introduced fair dealing for parody or satire, which is available to the world at large. It is a fair dealing, not just a free commercial use of the copyright attended by the all considerations of fair dealing, and so for a number of reasons we would say – we would not say that arguments we are putting up would prevent the introduction of fair dealing defences.
I am not suggesting for a moment that your Honours have identified any sort of taxonomy in paragraph 14 between free uses and remunerated uses, but there is such a division in broad terms in the Act and that is the sort of thinking where one might be directed toward – although it is a little bit the end producing the means reasoning, it is the sort of a provision as a reproach, that one might say, well, there are some things that are appropriate to be dealt with, the boundary between the public generally and copyright owners, and there are other things which are apt to be – leap right in, acquisitions of property, which can be attended to with appropriate terms.
FRENCH CJ: Does it mischaracterise your case to say that it is directed to the introduction of the conditional immunity against infringement?
MR COBDEN: In sections 109 and 152?
FRENCH CJ: Yes.
MR COBDEN: No, it is directed to that, your Honour.
FRENCH CJ: Yes, and there is nothing beyond that characterisation?
MR COBDEN: Section 109 tied to the caps.
FRENCH CJ: Yes.
MR COBDEN: If there were no caps in 152 – and, as your Honour knows, when I says “caps”, it is the one per cent of gross earnings of the commercial radio broadcasters, or the half a cent per head of population of the ABC, and if it was left to the Copyright Tribunal to adjudicate equitable remuneration, we would not be here. As your Honours said, again in the Copyright Agency Limited Case, equitable remuneration has a real echo of - - -
FRENCH CJ: The caps goes to the justice of the terms.
MR COBDEN: Yes.
FRENCH CJ: The conditional immunity against infringement goes to acquisition.
MR COBDEN: Yes, and just to leap in ahead where I am going to be going a bit more carefully, a conditional immunity in favour of an identifiable group of enterprises effectively, radio broadcasters plus the ABC. I should take your Honours, indeed, immediately to the sections as enacted and identify the way in which they work.
FRENCH CJ: And it is at that time and at that point that the invalidity arose, of course.
MR COBDEN: Yes, quite so, your Honour. Your Honours should have a bundle of legislation, I think, which includes the 1968 Act as enacted – that we have put on a list and I think your Honours have been provided with it. I have read out loud to your Honours, as it were, section 85 and if I could now go to section 109. As I said, this was one of a number of subsections introduced in relation to sound recordings. There are sections introduced in relation to works. There is a jurisdiction of the Copyright Tribunal over licence schemes and licences and there is the compulsory mechanical licence scheme Justice Crennan raised. So this is one such scheme:
Subject to this section, the copyright in a published sound recording is not infringed –
and that is really the classic licence of what your Honours have called the “compulsory licences”. It operates as an excuse for infringement but on a methodology that is still used in relation to all the educational copying schemes that have been introduced over the years. The first is if:
there is no order of the Tribunal in force under section 152 –
then the broadcaster gives an undertaking to the owner of the copyright and says, “I will pay whatever the Copyright Tribunal specifies”, in accordance with 152, and your Honours see, reading on, that it refers to –
an order of the Tribunal made under that section in respect of the broadcasting by the maker, during a period within which that broadcast was made, of published sound recordings in which the copyrights are owned by that person and which include that recording –
In the end, when one looks at these provisions, they contemplate, as was said in the WEA v Stereo FM Case by the Copyright Tribunal, effectively, industry-wide arrangements, if provided you give the undertaking to the necessary number of owners or an agent of the owners, then the broadcaster gets a defence against published sound recordings generally provided they have given that notice, albeit if there is such an order applying to the maker and the copyright recording is owned by a person specified in the order, then there is a defence for infringement. Subsection (2) preserves the right to make agreements and there have, in fact, been agreements over most of the time – all of the time I think – since the enactment of the 1968 Act and its coming into force, and subsections (3) and (4) deal with various other special arrangements. May I take your Honours over then to section 152.
GUMMOW J: Just going back to what the Chief Justice put to you, looking at section 152, if subsections (8), (9) and (10) were invalid and severable, would the section still have any capacity to work for sound recordings?
MR COBDEN: Not for sound broadcasting, your Honour. It would still have practical work to do for television broadcasting.
GUMMOW J: Why would it not have any work to do?
MR COBDEN: I am sorry, I am incorrect, your Honour. It would have practical work to do. I misunderstood your Honour’s question. I do apologise.
GUMMOW J: Are (8), (9) and (10) not a qualification to (6) and (7)?
MR COBDEN: Yes. The Tribunal would simply make an order taking into account all relevant matters and – subsection (6):
make an order:
(a) determining, or making provision for determining, the amount payable by the broadcaster to the owners of copyrights in published sound recordings.
Pausing there, the Tribunal, in the Stereo FM Case, Justice Lockhart, Mr Purvis and Mr Malcolm, said that they took that to mean an amount of equitable remuneration exactly the same as in the other provisions.
GUMMOW J: That was construing subsection (6) or (7)?
MR COBDEN: Yes, it was, your Honour. So the answer to your question is yes, your Honour, and for another reason that we will identify, because of amendments in recent years, in fact, even if the whole of 109 and 152 went, which is not something we urge upon Your Honours, but we will deal with that, there is now provision for the Copyright Tribunal to deal with this topic under its general jurisdiction, but again we will come back to that.
So section 152, your Honours, which I did not go through, but I will just sketch over, if I may, contemplates an application being made to the Tribunal for the order determining the amount payable. Perhaps I should add, your Honour, subsection (2) is also effectively the subject of that finding by the Tribunal, that the amount payable would be an equitable amount payable. That application can be made. It can be made by a broadcaster or the owner of the copyright, as happened in Stereo FM.
GUMMOW J: So it is implicit, in your submission, there is no presumed equitable remuneration would constitute a just term?
MR COBDEN: Yes. Looking at the way in which such an application would proceed, what one sees is that fairly rapidly one moves to the idea that other organisations or persons might be joined to the application, (4) and (5), and that is a further indication, as indeed held by the Tribunal, that this is really going to deal with probably broadcasters generally but certainly sound recording copyright owners generally in relation to a broadcaster. Then the Tribunal hears the application and makes provision for determining the amount and specifying how it is to be divided up, et cetera.
Subsection (7), taking into account all relevant matters, including the extent to which there is use and the extent to which the copyright subsists in them, recordings used and the extent to which they are used by the people in the application. Then subsection (8), which is the shall not make an order which would require a broadcaster to pay:
an amount exceeding 1% of the amount determined by the Tribunal to be the gross earnings of the broadcaster –
that is the particular expression used, effectively for a year ending 30 June. Subsection (9), or a different year if the broadcaster uses a different system. This is, of course, the old section 9 as enacted, so it refers to the old broadcasting supervisory bodies. Subsection (10) says that the broadcaster must establish an amount of gross earnings. Subsection (11) is the one that deals with the ABC. First, this partly reflects an answer I gave to your Honour Justice Gummow a moment ago, the Tribunal has to make separate orders in relation to sound broadcasts and television broadcasts by the ABC because television broadcasts are not covered by the half a cent cap and then (b) is the one that bites:
shall not make an order that would require the Corporation to pay, in respect of sound broadcasts –
of course now the Australian Broadcasting Corporation –
of published sound recordings –
in respect of a complete year exceeding half a cent per head of population, effectively. Subsections (12), (13) and (14) are a little sub-regime that deals with people, records companies effectively, who were not party to the application but come along saying, “I should be getting a slice of the cake.” That deals with that. Then (15) says that on order applies for a year. It raises the spectre of annual Copyright Tribunal applications, which I think is very unlikely to happen in a practical sense, and then ways of recovering the money down to subsection (18). Subsection (19) is important because it says that:
the gross earnings of a broadcaster in respect of a period are the gross earnings of the broadcaster during that period in respect of the broadcasting by the broadcaster of advertisements or other matter - - -
GUMMOW J: You say subsection (11) is invalid as well?
MR COBDEN: Yes, we do, I am sorry, your Honour, I should have paused and said that.
GUMMOW J: So it would be a question of whether (8), (9), (10) and (11) could be severed?
MR COBDEN: Yes.
GUMMOW J: It is said against you that there is a degree of flexibility, both as to the commercial broadcasters by the one per cent of gross earnings which goes up and down and, in respect of the ABC, by the population.
MR COBDEN: Precisely, those are the only variables, your Honour, yes, quite so. Of course, the half a cent which was introduced in 1968, while it changes by population, has never been indexed in any sense. A rough calculation which we have done on a footnote in our reply, compiling ABS inflation rates, that would not be five cents by now if that were the other variable introduced. Section (19) focuses on what the gross earnings are taken to be, which is earnings in respect of the broadcasting by him:
of advertisements or other matter, including the gross earnings of the broadcaster during that period in respect of the provision by the broadcaster of, or otherwise in respect of, matter broadcast by the broadcaster.
There might be some questions about what the royalty base could be. Subsection (20) deals with non-monetary transactions and (21) allows the Tribunal, it does not require the Tribunal, to bring into that calculation earnings by related parties, if that is appropriate. In our submission, (19), (20) and (21) would become inutile if subsection (8) were to go because they serve only to supply definitions and information for the calculations in that section. This Court has in another context looked at the operations of sections 109 and 152 and that was in the case of PPCA, the present first plaintiff, v The Federation of Australian Commercial Television Stations, known as PPCA v FACTS, and in paragraph 85 of our primary submissions - - -
GUMMOW J: Citation.
MR COBDEN: I am sorry, your Honour?
GUMMOW J: What is the citation?
MR COBDEN: It is [1999] HCA 17; 195 CLR 158 and at paragraph 16, which we have set out in full, the majority judgment in that case, Justice Gaudron and your Honours Justices Gummow and Hayne, explained, as much as I have done it in a rather longer and less concise way, the way in which 109 works, copyright would otherwise be infringed under 101. I had not put that section into the run of sections I took your Honours too, but that is the infringement section:
by the making of a broadcast of that sound recording will not be infringed if there if there is in force a determination . . . or if an undertaking to abide by such a determination has been given. These provisions operate to dispense with the need for an actual licence from the copyright owner. The statue “grants a liberty to do that which otherwise could be prevented by the copyright owner”, the latter losing the right to sue for infringement but gaining the right to receive amounts payable pursuant to an order of the Tribunal under s 152.
Our case really is adapting that sort of language, that the copyright owner loses the right to sue for infringement. The broadcasters gain a valuable advantage of being able to use the recordings in their core enterprise for which they pay terms by a royalty as fixed by the Copyright Tribunal but, of course, as we will submit in due course, not just terms because rather than – this is the essence of it – being able to give full reign to the concept of equitable remuneration, which the Tribunal does, is given full reign in every other instance, it is limited to one per cent of gross earning or a half a cent per head of population.
HAYNE J: Is that question to be answered as at 1968?
MR COBDEN: As at 1 May 1969, yes, your Honour.
HAYNE J: 1969, yes. One is to assume that the Act will remain unchanged in this respect?
MR COBDEN: I think so, your Honour and that looking at the notion of the annual applications that the Copyright Tribunal may be visiting the topic a number of occasions in the future where all sorts of circumstances may change valuation questions but will always be capped at the one per cent or the half a cent per head of population.
HAYNE J: But the constitutional question is to be answered as at 1969 on the assumption that the Act will remain in force in the form in which enacted for the life of the copyright concerned.
MR COBDEN: These provisions of the Act, not the whole of the Act, I would submit, your Honour.
HAYNE J: So these particular provisions are to remain in this form without amendment?
MR COBDEN: Yes, your Honour. Dealing with that topic, there have been some changes to these provisions. They have been, as it were, matching the provisions to such things as slight definitions in the change of broadcaster, which has never at any point excluded any of the commercial radio broadcasters who were in it from the start and are in it now, changes by reference to where the relevant broadcasting legislation or the governing body has changed - we just saw a reference to one of the broadcasting regime governing bodies there.
Those sort of references have changed and one exception has been made and that is section 109 as it now appears in its opening words excludes a class of broadcaster who were not around in 1969 and possibly only just been thought of, in this country anyway, because we now have 109(1) - it excludes broadcasts transmitted for a fee payable to the person who made the broadcast - so subscription television and subscription radio when they came into being - and I do not think there is very much subscription radio at all - were not in this regime. There is another regime in the Copyright Act that will allow them to approach the Tribunal for equitable terms or an equitable licence.
CRENNAN J: Is there a complication for us if the caps conformed to being equitable remuneration as at 1 May 1969?
MR COBDEN: In other words, the question of what was the actual value at 1969?
CRENNAN J: Yes.
MR COBDEN: We submit not, for reasons that we will come to in some detail in relation to just terms. We submit that the structure of the Act and, indeed, the need to demonstrate, as we will submit in the words of Georgiadis and picked up by Chief Justice Gleeson in Smith v ANL, that what is given is full compensation and we say that that cannot be demonstrated for a number of reasons.
HAYNE J: Thus, the inverse - and I know that this is something to which you will come in due time, but the inverse of the proposition is that to be just terms the terms must be such as can cope with any change foreseen or unforeseen through the life of the copyright.
MR COBDEN: Yes, I think I embraced that proposition, your Honour.
GUMMOW J: Including an extension of the life of a copyright itself of which you take advantage?
MR COBDEN: Of course, we will come to that, your Honour. In short, your Honour, yes, sometimes where there is a statutory scheme that replaces something else it is a consideration that might need to be taken into account whether that extension does, in fact, compensate for this taking but again we will come to it.
Indeed, putting the case, as your Honours have indicated by those questions and as appears in the submissions from our learned friends, there are a number of hurdles we must confront and clear and we are not going to shy from them and at the heart of them lie some quite controversial issues but I apprehend that I should start at what I am told is the appropriate starting point, as it were, particularly in the Telstra Case. Conscious that the property that we assert has acquired arises under statute so what we should do, I apprehend, is to take the following course - refer to a couple of observations about this Court, about the nature of the constitutional guarantee but then move rapidly to expose the practical and legal operation of the provisions in issue.
That will involve some historical excursion into copyright, to some extent generally, but more particularly into the evolution and development of sound recording copyright and to touch upon - or indicate to your Honours where it is in the special case, at the very least, the history of recording industry, sound recording, copyright and the copyright reform process that led to the 1968 Act, the history of the broadcasting industry in Australia and the dealings between the two. It is all set out in the special case, of course, but it is relevant to a couple of purposes.
One is if one is going to enter into the discourse of the adjustment of competing rights and things that need to be regulated in the common interest or the public interest then the history, we will respectfully submit, will inform that and ultimately it also comes to the question of just terms. In the course of that exercise, your Honours, we propose to deal with what is put against us, which is that contrary to what was decided in 1934 in the Chancery Division by Mr Justice Maugham in the Cawardine Case that it is put against us there was, in fact, no broadcasting right in the 1911 copyrights.
We have to address that and we will deal with that then identify the mechanism by which recorded sound underwent the transformation with the 1968 Act and then, of course, turn to the critical topic of the identification of the property, explain why it is an acquisition and why we say – this is a summary of what we will say in terms of the settled law why what took place was an acquisition, not merely a reduction of the content of the exclusive rights created by the copyright legislation and at which point, of course, we have to deal with the Tape Manufacturers Case.
FRENCH CJ: Just going back to the proposition that Justice Hayne put to you, do you say that is made out by reference to some objective test or by reference to – in other words just call it retrospective objective test or by reference to what, in the circumstances, a reasonable legislator might have anticipated as covering all eventualities in 1968?
MR COBDEN: I think, your Honour, that in relation to valuation that objectively over let us say a 50-year copyright, particularly of recordings generally and as used by one broadcaster, that one could not say with any confidence that one per cent of gross earnings would be full compensation for all the uses that might occur.
FRENCH CJ: In other words if we were back in 1968 you would be able to put that proposition now?
MR COBDEN: Yes, and in terms of looking at whether, the compound expression, it is property capable of acquisition, capable of attracting just terms, there are many examples in the very Act that was passed where the notion of equitable remuneration or reasonable rates was embraced, indeed offering that very flexibility. Just to return to how we propose to deal with the matters put against us, yes and to add to that answer indeed it demonstrates it would not be hard to do as a legislative matter. One would simply say equitable remuneration and have a body like the Copyright Tribunal to deal with it.
So we have to address the matters that are put against us under such labels as the constitutional guarantee under 51(xxxi) is incompatible with the exercise, or incongruous with the exercise of power under section 51(xviii), that these are statutory rights inherently susceptible of change or variation and conceivably the notion of adjustment of competing rights necessary in the public or general interest. We hope not to fall into a trap of addressing those as if they are exceptions to a rule, but we obviously need to address them. They are raised vigorously against us.
I would then conclude addressing on just terms and, with your Honours’ indulgence, I will ask Mr Kirk to follow briefly on the questions of reading down and severance. I do no more than say to your Honours with a little trepidation, they are well-rehearsed principles that section 51(xxxi) is spoken of as a constitutional guarantee and a very great safeguard and to be liberally construed – not only overall as an overall phrase, but in relation to each part of it as well – that can commend those approaches to section 51(xxxi) to your Honours and in terms of the question of copyright - - -
GUMMOW J: Some of these matters about section 51(xxxi) were not so clearly understood on 1 May 1969, of course.
MR COBDEN: No, your Honour.
GUMMOW J: Which is another temporal dimension to all of this.
MR COBDEN: No, quite so, your Honour, and were we apportioning blame, which we are not, one might say things have developed since then, but the Act speaks then, that 51(xxxi) is what it is, and of course continues to speak today in terms of limits on valuations. Can I say a couple of things very shortly about copyright history? We do not urge upon your Honours that this case turns upon a great consideration of the history of copyright from 1709 to 1911, your Honours will be pleased to hear - - -
GUMMOW J: It does not help you because it is about authors, you see. That is what Justice Crennan was putting to you.
MR COBDEN: Quite so and, indeed, your Honour, we in a sense embrace that by simply saying it is quite clear that our copyright is a statutory copyright. That emerges clearly from the history and it emerges plainly from the simple way in which our copyright arose in the end of the 19th century into 1911. The special case does deal with all these matters, and I can do no more than direct your Honours to perhaps where things are.
The ABC points to the author’s copyright and to the very real debates in the seminal cases of Millar v Taylor and Donaldson v Becket about what did the Statute of Anne in 1709 actually do to common law copyright. We say that that is a fascinating topic, but it is ultimately not going to inform, we would respectfully submit, how this Court approaches this case because as one can see particularly from the Gorell Committee Report, if one wants to look at the history of copyright up to 1911 and what were the forces prevailing upon the United Kingdom Parliament to attend to reforming and codifying copyright in one consolidated act, then one would need to do no more, in my respectful submission, than look at the report of the Gorell Committee at volume 1, tab 13 of the book of documents, where the committee – and this is at page 329 of the documents – refers to some observations of an 1878 Royal Commission, which in effect say that:
The law is wholly destitute of any sort of arrangement, incomplete, often obscure, and even when it is intelligible upon long study, it is in many parts so ill-expressed that no one who does not give such study to it can expect to understand it –
and referring then to – this is just really a very brief answer to what the ABC says about Millar v Taylor and Donaldson v Becket which were the great debates about whether common law copyright was extinguished or not, such a vexing topic that the House of Lords referred it to the 12 judges of England for opinion, but halfway down page 329, your Honours will see some tart observations about the history of the law made in 1878, some interesting observation that the law reform did not come until 1911. Down the bottom of that page:
In order to show the present state of confusion, and to assist in the appreciation of the alterations proposed . . . and necessary to place British law on a proper basis, a short epitome of the statutes . . . follows –
and your Honours will then see that there are - - -
GUMMOW J: Just before we get too far into this, I think it is said against you somewhere that even the Statute of Anne contained a provision for the regulation of price.
MR COBDEN: It did, your Honour; quite so.
CRENNAN J: So you have always had the interest of the public in having access to properties of published works - - -
MR COBDEN: Yes; quite so, your Honour.
CRENNAN J: A matter which has been addressed, as Justice Gummow said, right back to the Statute of Anne.
MR COBDEN: Yes. There is no longer any such approach. There has not been any such approach in copyright law – if you do not like the price of a book, you can go along to any one of the long list of eminent persons and apply to have the price of the book reduced. That has long gone. Those sorts of considerations, we would respectfully submit, are addressed in such things as fair dealing defences and the like.
GUMMOW J: Are addressed to what?
MR COBDEN: Those sorts of provisions are addressed – I am sorry, the fair dealing provisions are addressed to the relationship between copyright owners as a class and the common interest or the public interest or the general interest, we would respectfully submit.
GUMMOW J: But this is before fair dealing ideas.
MR COBDEN: Yes. The Statute of Anne is well before fair dealing, of course, your Honour, and indeed - - -
GUMMOW J: Fair dealing comes out of equitable remedies.
MR COBDEN: Quite so, your Honour, and had its early relationship with substantial part when those - - -
GUMMOW J: The point that is being put to you is that there has been a concern with balancing public interest, even since 1709.
MR COBDEN: Yes, we accept that, your Honour. The question we get to, your Honour, is if we are looking at adjustment of competing rights or a phrase like that, the broadcasters, in the context of the 1911 Act and the 1968 Act, the public interest – or are they clothing themselves in the public interest because were there really enterprises for making, as it were, full use of copyright for an enterprise purpose. The application under the Statute of Anne to the long list of eminent persons was if somebody did not like the price of a book they could go and get the price of that book reduced, so that they could read the book, not so that they could then use the book in their enterprise or reproduce it further themselves. We would submit it is a different adjustment, but I understand what your Honour is saying.
Just to give content to the observations that there are a vast number of statutes regulating this, they are all listed in those pages of the Gorell Report going right over to page 333 at the end of which it is said that that sufficiently indicates the confusion which prevails and there would be great advantage if the British law placed it on a firm footing. But none of that has anything to do with sound recording copyright.
GUMMOW J: Does the Australian Copyright Act 1905 have any bearing on any of this?
MR COBDEN: I was going to address that because nobody has mentioned it, your Honour, and I did not want your Honours not to be alert, as your Honour obviously is, to the fact that it was there. Yes, your Honour, if I can just deal with that very briefly. The 1905 Act is said to be an attempt to consolidate the key principles under that long catalogue of Acts that are listed in the Gorell Report. It was a fairly brief Act, but in its main principles it dealt with the ideas that were in that long string of Acts, the Dramatic and Engraving Acts, the Performance Acts, the Dramatic Copyright Works Acts, et cetera. It did not deal with unpublished works, for example, and it had a very short life, came in and passed in 1905, effective in 1907, and of course was entirely superseded by the 1912, 1911 Act, effective 1 July 1912. We see indeed, just while your Honour mentions that, there is indeed an echo of the 1905 Act - - -
GUMMOW J: Well, it was repealed by section 4 of the Australian Copyright Act 1912.
MR COBDEN: It was, your Honour, but interestingly, even in the 1968 Act we see some echoes of it because, as your Honours know, there are transitional provisions in Part IX of the 1968 Act. I should probably look at it as enacted, although they are still there in the Act today because in addition, it being 1968 and doubtless it had been - - -
GUMMOW J: Section 209.
MR COBDEN: Yes, your Honour, there is a reference there. The key provisions – and there are some savings provisions, your Honour, which are in Division 5, section 243 and onwards of the Act as enacted. They still appear there today preserving the particular treatment of works that existed as of 1 July 1912, so that they did not do better or worse effectively – I am just saying that very roughly – under the 1968 Act than they are done under the 1905 Act. So other than as an important thing to note that in passing Australia had moved in and done something, an attempt to consolidate copyright from 1905, or 1907 effectively to 1912, it does not otherwise impinge upon the arguments that I think nobody has mentioned before now.
FRENCH CJ: There were various colonial statutes in place before Federation.
MR COBDEN: Colonial statutes before that, quite so, your Honour, yes. But no question that the effect of the 1912, 1911 – 1912 Act arrangements was to codify, consolidate and exclude both unpublished and published copyrights other than as under the Act. There was a brief phase between the Gorell Committee in 1909 and the 1911 Act being passed with an imperial conference being convened so that the colony’s views were sought.
I did notice in a document - I think it is in the book and I will get a reference - that Australia was represented at that by Lord Tennyson, the former second Governor-General, perhaps thought to be too much to send a representative all the way to a conference on copyright, but that was what happened, and so there was some general consensus, imperial consensus about the passage of the 1911 Act, which as your Honours will recall was provided in subsection 1(1) of it to extend to His Majesty’s dominions, those parts to which the Act extends, and there is provision for a self-governing dominion and Australia fell in that description – to extend the Act to apply to it, and that is what the 1912 Act does, which is why one has the slightly hybrid situation of an imperial Act which applies by direct force in Australia by reason of the passage of the 1912 Act.
Can I go quickly now to the 1911 Act again. I have identified section 1 to your Honours which, as your Honour Justice Gummow pointed out, deals with works and copyright, including produce or reproduce the work, and here we get the notion of a substantial part thereof. I cannot tell your Honour at this moment whether that had crept in at some point in the 19th century. It certainly was not around in the Statute of Anne regime where it was really a right to copy the whole book or the book – you could not copy the book and you made colourable reductions in it. We get the notion of substantial part. We get the notion of performance in public and these are all notions that are still very much with us today, of course. Particularly (2)(d) introduces the right, in relation to:
a literary, dramatic, or musical work, to make any record, perforated roll, cinematograph film, or other contrivance by means of which the work may be mechanically performed –
So that fills the gap, overcomes the Boosey v Whight, Piano Roll Case, gives, particularly the musical work owners, the right of reproduction and led to the introduction of the compulsory licence I had a discussion with your Honour Justice Crennan about. Section 2 gives infringement rights, which are an important indicium, we would say, of the notion of these sorts of rights as property rights. Section 5, importantly subsection (2), says that:
The owner of the copyright in any work –
we submit, mechanical contrivances are about to be protected in like manner as if they were musical works. That is a reference to those as well –
may assign the right, either wholly or partially, and either generally or subject to limitations . . . and either for the whole term of the copyright or for any part thereof –
So it is a right that can be assigned in part. So, for example, one could assign the performing right, one could assign a section of the performing right or one could assign the right in one dominion or one part of the world to which the Act extended or just assign it for a period of a few years or for the whole term.
That notion remains today, of course, your Honours, in sections 196 and 197 of the present Copyright Act and has been there more fully expressed in the modern style of drafting that tends to express these things more fully, that copyright can be assigned, transmissible by assignment, by will, by devolution, by the operation of law and any way so as to apply to one or more classes of Acts and the like. The concepts that are embraced in section 196 were well and truly there, we respectfully submit, in section 5(2).
There is a range of civil remedies given, of course, and then we will get to section 19, which I have already taken your Honours to. While at section 19, can I just draw your Honours’ attention, because it becomes relevant to later debate, to the rate that was fixed in relation to the mechanical royalties. First can I say this, your Honours. After section 19(1), which is about conferring of the copyright on the contrivances or records, the topic that is dealt with in the rest of section 19 is the compulsory mechanical licence which is really talking about the musical works that are reproduced on the mechanical contrivances or records. So in a sense it is a division of topics between section 19(1) and the following subsections.
Subsection (3) fixed the rate, those contrivances, an initial low rate – an initial, as it were, phase-in rate I think perhaps we would call it now. Then next, the permanent rate was five per cent of the ordinary retail selling price and a minimum, no less than a halfpenny, et cetera. Then a proviso that after seven years the board of trade, if they thought the rate was no longer equitable, so we see the introduction of that, could make an order decreasing it, but it was subject to disallowance by Parliament. That is, as it were, the imposition on musical compositions that was in place in the 1911 Act when the 1968 Act came along.
The reason I mention it, and I will just leap ahead, is that we say that the only provisions that have the firm unchangeable cap, as it were, of one per cent or half a cent are sections 109 and 152. It is said against us, though, when that mechanical royalty was brought over into the 1968 Act, it was five per cent in the Act and it was capped as well. We say two things about it. The first is that that cap could be reviewed if the Tribunal was asked to do so by the Attorney-General. Admittedly it did not come into force unless the Governor-General proclaimed it to do so. So there was that level of interference - - -
GUMMOW J: Sorry, say that again. What is the significance about the provisos of 19(3)?
MR COBDEN: The first significance is that it is five per cent and that was an imposition existing on sound recordings when the – on musical works.
CRENNAN J: Is there a real difference between specifying the per cent and having a cap?
MR COBDEN: No, your Honour, but the musical works already had under the 1911 Act that cap imposed upon them. So there was no change coming into the 1968 Act. In fact, the 1968 Act made provision then for the increase in musical work royalty. It had two steps in it. It was not just the Tribunal looking at equitable remuneration. It had two steps. One, the Attorney-General had to refer the matter to the Tribunal. Secondly, when the Tribunal made a decision, it had to be implemented by the Governor-General.
There was such an inquiry, as we have referred to it in the special case, in 1979 by the Tribunal. It did recommend an increase to 6.75 per cent. The only increase that was implemented was 6.25 per cent. So there was some capping there. It may well be that but for the fact that the musical works had arrived with this five per cent already imposed on them in 1968, they had a similar argument to us, but whatever that argument might have been in 1989 or the 1990s, that was swept away and the Copyright Tribunal now has an unfettered power to grant equitable remuneration in relation to the musical work, mechanical - - -
GUMMOW J: Where is this provision about the Governor-General?
MR COBDEN: I am sorry, your Honour. It is section 55 of the Act as passed.
GUMMOW J: Section 55?
MR COBDEN: Yes, 55 of the Act as passed. I may be slightly wrong, but I am in the right region. Section 56 is the precise fixing of the royalty and 58 was the review process. Does your Honour see 58? The Attorney-General had to refer the matter to the Tribunal, 58(1), and 58(2) and (3), it required the Governor-General to agree with the Tribunal to some degree. He, or now she, would have to think it equitable and take account of the report of the Tribunal. So there is still an element of equitable remuneration being there.
Your Honours, I am sure your Honour Justice Gummow will recall the 1979 inquiry into the amount payable in respect of records. Generally, it was a very big inquiry of the Tribunal. I think it is reported in the papers, and it made a recommendation. The regulation was in part put by the Governor-General but, as I say, since then it has been reformed so there is no notion of a cap in that area at all. Of course, the other thing perhaps to say I think in answer to your Honour Justice Crennan, it was certainly a completely new right in 1911 because Boosey v Whight had held, presumably validly for Australia as well to the extent that we have those copyright laws, it would not have been an infringement at all of the musical work copyright. So it was imposed as part and parcel of the giving of the right.
CRENNAN J: In the background of free use prior?
MR COBDEN: Yes, against the background of free use prior. It is very long, but the whole of the record’s royalty inquiry is reproduced at volume 4, tab 117 of the books. I will not take your Honours to that at all. Just to complete that picture of that musical work licence, in the Act as presently standing section 55 grants the licence. There is no longer a section 56, there is no longer a section 58. Instead 55(6) has the Copyright Tribunal having full power to determine remuneration or the amount of royalty, again decided by the Tribunal a very long time ago and confirmed by many tribunals since, that means equitable remuneration, but there is a fallback rate. So 6.25 per cent is, in subsection 55(6)(b), a fallback rate, not a cap. Those are the matters that I was proposing to draw your Honours’ attention to in relation to the 1911 Act.
GUMMOW J: While the 1911 Act is being prepared, the Congress is producing the 1909 Act in the United States. Did that have a broadcast provision?
MR COBDEN: It had nothing in relation to sound recordings or contrivances at all.
GUMMOW J: Nothing in relation to sound recordings at all, did it?
MR COBDEN: Nothing at all, no. No protection of sound recordings or records or contrivances arose until very much later; I think well after the Second World War. Initially, and I will have to check this, I am sorry, your Honours, by I think State anti-piracy laws gathered together finally into some – at a federal statute around 1972 and consolidated into a title 17 in 1976, I think, your Honour, but, yes, there is an absence of protection for sound recordings in the United States right up until then. Of course, as is well ventilated in this case, there was in the 1960s and continues to be an absence of a performing right or broadcasting right in sound recordings in the United States. The position is different in relation to internet communication which has been, as it were – public performance and broadcasting have been grandfathered, might be the term, if I can use - - -
GUMMOW J: They had no equivalent in 1909 of section 19?
MR COBDEN: No. That, your Honours, if your Honours find yourselves looking at any Tribunal decisions, particularly brought by my client, PPCA, your Honours will find a lot of references to the division with protected and non-protected sound recordings both in the public performances cases and in the broadcasting cases, although mainly the cases have been public performance cases, and that is shorthand for non-protected, not having a broadcast or public performance right, protected, having a broadcasting or public performance right. There is always a lively dispute, certainly arose in Stereo FM, as to the proportion of protected recordings that is played or used by any particular user who claims the benefit of one of these licences, and it is a lively question because the Tribunal wants to bring that question to bear on the amount that should be paid for the remuneration.
I am reminded that section I, paragraphs 133 to 140 of the special case in the special case book at pages 99 and onwards deal with the very topic that your Honour Justice Gummow has just been asking me about and I think I did – I hope I got it broadly right. So the long period 1909 to 1976 where the 1909 statute deals with it, your Honours will recall that one vexing issue internationally, not in relation to sound recordings, but copyright works generally, was that the US was not a member of the Berne Convention from a mid century or onwards, or some time in the 20th century, they were a member of the Universal Copyright Convention, one that they had, I think, tailored for themselves to some extent, and it was not until the 1980s that they acceded to the Berne Convention and that is the reason for the “C in a circle” notice and for the registration provisions with which we are all familiar.
In the United States they had a deposit-based and notice-based system, quite contrary to Berne, which was always non-formality based. But turning to the quite distinct topic of sound recordings 1972, there is a duplication right. That was picked up in the 1976 consolidation. Then, as we have noted in paragraph 137, in 1995 there was a right given, included to sound recordings, for digital audio transmissions.
GUMMOW J: Paragraph 139 is important.
MR COBDEN: Yes quite so, your Honour. There was a lively debate which is reflected even in some advices reproduced in the special case documents, particularly one from Sir Garfield Barwick, I think, and quite a significant debate. Professor Sterling, who is still extremely active in the copyright field, in 1967 provided some memoranda to Mr Bowen, as he then was, about the extent to which there might or might not be protection on United States recordings by reason of simultaneous publication in Canada.
It is a topic that all researchers of all of us over here have not been able to produce a great deal of illumination about, particularly in relation to a 14-day simultaneous publication, except to be able to say this, that by the 1960s there seemed to be a very strongly growing practice of simultaneously publishing US recordings in Canada probably to try and attract the 30-day period of the 1956 English Act to which I will come. I will not take your Honours to it, but at volume 3 at tab 50 is a long memorandum from Mr Sterling. It is entitled “Broadcasting and Public Performance Rights in Records. A Survey of the Rights in National and International Law.”
In short, what we have to say and it is said in writing, I certainly do not want to use up time by repeating things that are said in writing, but in paragraphs 24 to 30 of our primary submissions we have listed the six or so factors that we say are pointers that we derive from the 1911 Act and sections of the 1911 Act that I have just taken your Honours to, to identify not only the copyright or the section 19 copyright in records and contrivances as being a.....and valuable exclusive assignable right, but also because by reason of the divisibility of that copyright we make the same submission in relation to the broadcasting right, which was part of the public performance right.
That brings me, of course, to the question of the existence of such a broadcasting right in a sound recording copyright under the 1911 Act and the Cawardine Case. The Cawardine Case [1934] 1 Ch 450 is in the book of documents, volume 1 at tab 18. We respectfully submit that Mr Justice Maugham, as his Lordship then was, was correct in his analysis of the 1911 Act and indeed the very words of the 1911 Act that I have read out to your Honours a couple of times now – that “Copyright shall subsist in records . . . in like manner as if such contrivances were musical works”, his Lordship said, and we have dealt with this particularly – just to identify where it appears in our written outlines – in paragraphs 16 to 21 of our reply outline.
Mr Justice Maugham said the phrase – that is to say, “protected in like manner as if they were musical works” – is not apt to describe a mere right to prevent the reproduction in a physical form of the record and a right to sell the record. In paragraph 18 – I will not read it out – we go through a number of points made by his Lordship which all support his Lordship’s reasoning. It does not matter that there be co-existing copyrights in one article – for the record – that is not unknown to copyright law at all, because, of course, the example his Lordship gives is that there would be co-existing copyrights in a translation that appeared in a book under the 1911 Act. Presumably, the copyright of the original language author is, in one sense, superior to that of the translator because the translator would need the licence of the original owner to make the translation and, secondly, the - - -
GUMMOW J: It was Sir Stafford Cripps who cooked up this argument, which succeeded.
MR COBDEN: Yes, quite so, your Honour.
GUMMOW J: Lord Morton, the future Lord Morton at page 454, said – and it is not a silly point:
a record cannot be “performed”: to “perform a record” is a complete contradiction in terms. It is the work recorded that is performed: the record is used to perform it.
MR COBDEN: Yes.
GUMMOW J: Anyhow, that was the debate.
MR COBDEN: That was the debate, and it is put up against us again, your Honour. Mr Justice Maugham did not have any difficulty with the conception that you could be performing a record. Once you look at section 19 and see that you are going to protect - - -
GUMMOW J: It comes down to “in like manner”, does it not?
MR COBDEN: It does come to “in like manner”; quite so, your Honour, and a consideration of what those terms might mean, given some background to copyright law. I venture to say that I am not pleading a special case for interpretation of copyright statutes, but certainly your Honours did say in The Panel Case that one cannot necessarily approach these things without some understanding of what it is the copyright law is talking about. It is not talking about the protection of physical articles. In 1911, and that long history that is in the Gorell Committee Report, makes it clear that it is talking about the conception of the thing that is being protected which will then be reproduced into lots of different records.
So we would submit that – and if one reads out a translation there is no difficulty of the fact that you perform it. You would be performing if it was public – are two works: the translation and the original work. We would say that if – and this is the moment when I am – rather than playing a sound recording, I am just going to say to your Honours I would ask your Honours to imagine it, but imagine that one is playing the precise recording released by the Beatles of Yesterday in 1965 or1966, when it was released, it does not, with respect, we submit, require particular flexibility of thought to know that you are listening to, on the one hand, a musical work which could be performed in a different recording or live in a simple piano arrangement with quite a different singer, or could be performed by a choir.
That is the abstract conception of the musical work but you are also listening at the same time to the performance that is captured by the record. So we would respectfully submit that Mr Justice Maugham in understanding that contrary to what was put - - -
GUMMOW J: But he then had to join the two together and he gets this word “subsidiary”, does he not?
MR COBDEN: Yes, your Honour, and we respectfully submit that what that means is, as I was saying about translations, that of course if you depend upon one copyright to be able to make your copyright, it is subsidiary in that sense. In other words, if you did not get the licence of the musical work copyright owner, albeit compulsory licence, you could not make the record. If the person who is performing the record does not have the licence of the musical work copyright owner, they cannot perform the record either. So in that sense, you always have to keep going back to the musical work copyright owner, but that does not mean you do not also have to go to the sound recording copyright owner.
GUMMOW J: This word “subordinate” is on page 459 about point 8.
MR COBDEN: Yes, your Honour. Yes, and we would respectfully submit that because the rights of the composer did not subsume in any way into the recording when it was made, even with his or her licence or compulsory licence, they endured, so it is really a reflection, we would respectfully submit, of the concept that is now recognised in plain words by section 113 of our Act, but it is a concept that existed before, that is to say there could be two co-existing copyrights, the first in time is the one whose licence is needed to create the second one and, indeed, to use the second one, but the concept is saying that you need to have the licence of both copyright owners, that is, the work and the contrivance, and that, indeed, is our principal submission on that.
We make, in paragraph 21 of our reply and onwards - deal with some points that are raised against us such as the Owen Royal Commission which was inter-broadcasting in 1935, I think - no, earlier, 1933 – 1932, 1933, had to some extent criticised the right. Cawardine was still pending then. The Owen Commission report refers to the fact that they understand the case is pending, but it was not claimed for a long time, but that is true of many such rights. Not tested in litigation, I suppose the simple answer is, it is being now, although we would point to the longstanding nature of the decision as being a reason why it should stand.
We say it was a sole right. That is the answer I just gave to your Honour Justice Gummow, not sought by the record manufacturers before the Gorell Committee. Of course the critical question as before Mr Justice Maugham was what do the words of the statute mean. Other countries do not provide for it, that is not a reason why that word “statute” does not have that meaning, and for a while not all broadcasts might have been public performances, and that is Lord Maugham now in APRA and Mellor.
But when one goes to that case, and I was not proposing to take your Honours to it, it rather represents a view of “in public” or “public performance” that has certainly been revealed to be something a bit narrow by APRA and Commonwealth Bank and then in due course by Telstra and APRA in this Court because there was a suggestion that – I do not need to go into that in detail, it is getting a little esoteric.
GUMMOW J: In Cawardine itself the music, if you look at page 451 - - -
MR COBDEN: It was out of copyright.
GUMMOW J: All this is going on in the tea and coffee room, one of the tea and coffee rooms run by this chain it seems.
MR COBDEN: Yes, quite so, your Honour.
GUMMOW J: But was the music itself out of copyright?
MR COBDEN: Yes, it was. It was deliberately out of copyright so as to test the point of the right under section 19.
GUMMOW J: Was there any general arrangement after this case settling the position through a collection agency?
MR COBDEN: In Australia, your Honour, as your Honour will see under protest thereafter for decades some amounts were paid or benefits given by both the ABC and the commercial broadcasters. It has gone into in great - - -
FRENCH CJ: Fifteen minutes free time?
MR COBDEN: Sometimes free time, yes. But always under protest, your Honour. As to what happened in the United Kingdom I will have to check, your Honour, but I rather think that was taken as being settled by this case.
GUMMOW J: The other side of the coin is it might not matter what is happening in the tea rooms, but if the BBC is broadcasting this it has the advantage for the record manufacturer, does it not, of publicising their works, publicising their recordings, I should say.
MR COBDEN: Quite so, your Honour, and that, of course - - -
CRENNAN J: The value of airplay may be a relevant consideration.
MR COBDEN: Yes, and, of course, is always argued both against the composers and against the record companies in the Tribunal whether particularly in broadcasting, but even in the public performance sphere and finds its place in the assessment of equitable remuneration. In other words should we - absent of a compulsory licence you could charge anything. We are going to look for equitable remuneration. When we are thinking what you would charge you would take into account the fact that you are getting air time or needle time or publicity for your recordings through the broadcast.
CRENNAN J: I suppose you do not disagree that a compulsory licence in the context of collective societies is convenient?
MR COBDEN: No, not at all, not at all. Sorry, we do not disagree at all. We would point, I think, to many of the instances where collecting societies and this type of arrangement is adopted as being the most convenient way. But once that happens then it is probably easy to say it is now recognised, certainly it is best for an adjudicating body like the Copyright Tribunal to be able to step in and, among other things, prevent excesses of power by either side acting together. So, no, we do not at all.
Indeed, a collecting society on one side and a broadcasting organisation on the other side, here Mr Meagher’s client, the Commercial Radio Association – it used to be known as FARB, I think, the Federation of Australian Radio Broadcasters and something else before that - effectively these industries have talked to one another industry to industry, as the special case reveals, since the 1930s.
CRENNAN J: One thread that seems to run through the policy debates about terms in a compulsory licence, such as a percentage, is that collecting societies in their own right are a new form of monopoly.
MR COBDEN: That has been said since, I think, the founding of the Performing Rights Society in the early part of the 20th century in England. There is no question, I would venture to suggest, that that is why the reach of the Copyright Tribunal has been increased, so that it really now covers in reforms that we have taken your Honour to and particularly the severance part of the debate. It used to be confined to some quite deliberate topics or a topic that is picked up. Section 109 finds it way, under section 152, to the Tribunal, but even in its general jurisdiction conferred by sections 136, 154, 155 and 157, it used to be very confined to a limited series of topics. It is now effectively, we submit, anything that a collecting society does. We will be taking your Honours to those provisions to make that good. I think I am agreeing - - -
GUMMOW J: It was not so on 1 May 1969.
MR COBDEN: That the Copyright Tribunal had such broad jurisdiction?
GUMMOW J: Yes.
MR COBDEN: No. It was specific jurisdiction of which this is one example. I was really more agreeing, I think, with her Honour Justice Crennan’s description of a policy debate and a trend. I hope I was. Can I now refer your Honours, just quickly, to section 13A of the Copyright Act - - -
GUMMOW J: There was a policy debate before 1 May 1969, undoubtedly, but it shifted. It seems to shift over time. That is what is being put to you.
MR COBDEN: Yes, as such things do, I suppose, your Honour.
GUMMOW J: Then the shift sometimes finds its form in legislation.
MR COBDEN: Yes, quite so, your Honour. But ultimately it begs the question what is the character of that legislation, that particular provision, and do we get into the area of section 51(xxxi) or is it a debate that is outside the area of 51(xxxi)?
GUMMOW J: Does 51(xxxi) have to accommodate this protean debate?
MR COBDEN: At some levels I think it does, your Honour, yes. That was, I think, the answer I attempted to give in relation to, for example, the new parity and satire defence. On the other hand, one can talk about that in quite orthodox 51(xxxi) terms by saying that a reduction in the rights of exclusive rights of the owner – and I am using, of course, a phrase used by your Honour in WMC and appearing in Tape Manufacturers particularly – and an analysis simply within the terms of section 51(xxxi) without resort to a policy question of whether it is a proper competing adjustment and those sorts of things can be simply said that it is not an acquisition when on the other side of the equation there is something as diffuse as the whole of the general public. There is no measurable corresponding advantage or benefit when one draws a line by reason of a fair dealing defence on something like parody or satire.
CRENNAN J: How do you say the line is drawn if you have, in the context of new defences – you seem to be suggesting some of them will fall foul of the constitutional guarantee and some will not.
MR COBDEN: Yes, we are. We do say that, but in orthodox service principally, because there is no acquisition in the sense of a measurable advantage or benefit conferred. If one, on the other hand, goes to a question of adjustment of competing rights and starts to look at “in the common interest” or “in the general interest”, then we would say – and I think I am drawing on something your Honour Justice Gummow analysed – when looking at that sort of concept, I think in Airservices, one has to really ask the question asked in the US context. If in fact it is in the interests of a particular group of traders who say well, of course, this is in the common interest or general interest because we are a medium through which it is purveyed to the general public, one may treat that claim with some circumspection because one looks at what the right that is given to them is. It is not a fair dealing – in other words, you cannot just use it for anything. There is an adjustment of – I should probably avoid the word “adjustment” – there is a - - -
CRENNAN J: A new defence is always going to involve the benefit of not being subject to injunctive relief.
MR COBDEN: Yes, quite so, your Honour. I certainly do propose to address that when I get to the question of what do the cases mean by a reduction of the rights of the owner and which sorts of dealings with copyright by legislation might fall foul of section 51(xxxi) and which might not. I hope I am not postponing the question too often. Mr Kirk reminds me that in Smith v ANL – I am referring to the judgment of Justice Gaudron and your Honour Justice Gummow:
Questions of substance and of degree . . . merely of form, are involved –
It is in 204 CLR 493 and I was reading from paragraph 22, and paragraph 23 – that is, as it were, on the one hand:
On the other hand, the degree of impairment of the bundle of rights constituting the property in question may be insufficient to attract the operation of s 51(xxxi).
That is the area of discourse we would be going into. We will deal with that topic in more detail. Can I just address some brief submissions to section 13A introduced into the 1912 Act in 1933. Cawardine was, of course, decided in 1934. The Owen Royal Commission - - -
GUMMOW J: No, it was not. It was decided in 1933. You look at the report.
MR COBDEN: I am sorry, your Honour. Yes, December 1933.
GUMMOW J: Yes, a week before the debate, was it not?
MR COBDEN: Thank you, your Honour.
GUMMOW J: Was it not?
MR COBDEN: I am afraid I cannot answer that question, but I will make sure I am in a position to. Yes, quite so, your Honour. The Amendment Act which deals with this topic was assented to on 15 December 1933.
GUMMOW J: Sir John Latham was presenting his second reading speech, I think, on 13 December or so, was it? Yes, 8 December. Yes, as Justice Heydon says, at 1.48 am - - -
MR COBDEN: Within the day or so – the time differences, I am not quite sure how one would resolve that and what the method of communication was, your Honour. One could say at least this, doubtless the liveliness of the debate was in everyone’s mind, but can I just go to section 13A. We respectfully submit that in its terms it recognises that there will be a performing right in the contrivance of, as it calls it, the records, because it says that if there is – and I interpolate what this does is set up a voluntary arbitration system, not a Copyright Tribunal style arbitration system and secondly, as far as the researches of everybody in the Court have revealed, it was never invoked but it was brought in. So it contemplates a dispute arising between any persons –
(a) being an owner of copyright; or
(b) claiming the right to payment of royalty in respect of copyright,
in literary, dramatic, musical or other works, or between any person being a manufacturer of records by means of which any such works may be mechanically reproduced, and any person using or desirous of using any such works or records, regarding the rates and methods of payment –
et cetera. So we say the better view of that is that it is confirmatory. It takes the same view of the 1911 Act as Cawardine’s Case took and as Mr Justice Maugham took, but very much as an alternative, but as of that time, it amplifies, explains one’s understanding of the meaning.
GUMMOW J: I think if you look at Sir John Latham’s second reading speech in the Hansard for 8 December 1933 at page 5837, you will see that representations have been made from the gramophone companies as well as the other interested players, which supports what you are saying, I suppose.
MR COBDEN: Thank you, your Honour. Can I just find the dates, if I may, because my memory of the date of the release of the report of the Owen Royal Commission, which is reproduced in the first volume - I will come back and give your Honours the date for that, but that I think was 1933, and had certainly said that some attention should be given to this topic. The preferred attention that the Owen Royal Commission would have had given to it would have been to make it clear that there was no such right in records or contrivances - 24 May 1933, Empire Day, I think, and so one can see a certain agitation about the topic. The Owen Royal Commission’s preferred view would have, as I said, been to make it clear that the right did not exist in what seems to have been known as – in December 1933, section 13A introduced.
For those reasons, and the reasons that we put in the written submissions, we submit to your Honours that Cawardine’s Case was properly decided and that the right enjoyed by the records, and particularly of course, the five records I have identified, included a broadcasting right as at midnight 30 April - 1 May 1969.
HAYNE J: Is there anything we know about the reaction to Mr Justice Lowe’s earlier decision in Australia?
MR COBDEN: Yes, your Honour, it is mentioned in the Owen Royal Commission report. Each side in this litigation - I can give your Honour a reference to that, sorry - in paragraph 21 of our reply submissions and footnote 24, we give your Honours a reference to book of documents 1/127. We say that the report, with great respect, slightly misreads Mr Justice Owen’s decision and says that it does not support the view expressed in Cawardine. Mr Justice Maugham took the view that it did support the view that he - and we suggest that is the case.
GUMMOW J: Which paragraph in your reply?
MR COBDEN: Paragraph 21a and footnotes 23 and 24. As your Honour Justice Hayne has noticed that the Cawardine report – at page 127 of volume 1 of the book of documents, the second-last paragraph on the page is a reference to Mr Justice Lowe’s opinion and as your Honours have seen from the Cawardine Case, it was certainly drawn to Mr Justice Maugham’s attention and he drew some comfort from the reasoning which he felt was the reasoning he had adopted.
HAYNE J: An injunction went in the 3DB Case.
MR COBDEN: Yes. I think the 3DB Case concerned musical works, your Honour, and they were really further observations about the contrivances. There were a number of cases at that time about musical works, notably in the Supreme Court of Victoria. That is held - in [1929] VLR held that the defendant had thereby committed an infringement of the plaintiff’s copyright of musical works. The plaintiff there was APRA, well known generally and to this Court.
That brings me to identify, perhaps, more than go into great detail what went on between the recording and broadcasting industries in the 20th century, between the 30s when the broadcasting industry had sprung up well and truly and into the 1960’s and to the debates leading up to the 1968 Act. Can I just do it in this way so that your Honours know if your Honours need to find it in more detail just identify where these matters are dealt with in the special case without, of course, going into great detail about the special case or certainly not reading it out.
In Section C of the special case there is a description of commercial radio broadcasting and the early days of Australian commercial radio. It started with some sealed set schemes. It did not work very well. General broadcasting really started in 1924 and your Honours see that the growth in broadcasting stations is traced in paragraphs 20 to 28.
We just make this observation. It has always been a confined class of enterprises, growing fairly quickly. Your Honours see that there were 46 by 1932 reaching the population increasingly - paragraph 23 indicates reaching “5.77%”. Of course, we would have to assume now that it is pretty much universal reach, assuming some people still have a radio. Perhaps that may not be an assumption we can make. The number of radio sets – 24 - grew dramatically even in a year and even at the time of the Depression. Paragraph 25 importantly:
By 1967 there were 112 commercial radio stations -
Paragraph 28, now:
273 commercial radio licences on issue -
There may be a little bit of a difference between those concepts but it is not, for example, a large class of businesses on the high street. It is a confined group.
Then there is a history of the ABC there and, in particular, we know that the ABC is just one ABC. But we got some detail in paragraph 31 that it is 71 radio stations, particularly ones in Australia now:
nine metropolitan and 51 regional stations –
paragraph 32. We say that what that informs us is that, as I have said a few times, it is a relatively small class of people engaged in an enterprise. I would probably be able to say traders or a commercial enterprise, but for the ABC so.....enterprise. Now, a lot is made, particularly by our learned friends, of the dealings between the record manufacturers as a group and commercial broadcasters as a group especially, a bit about the dealings with the ABC from the 1930s to the 1960s and especially intense in the lead up to the 1968 Act which was really first forecast in 1966. There was a bill in 1967 and then it was enacted in 1968.
Can I just identify without going over it in great detail and touch on a few topics where that is in the special case. Section K, because it deals with the history of payments, page 111 of the special case book, paragraphs 173 and onwards, takes us back to the 1930s. I think this is a partial answer to a question put to me from the Bench from Justice Gummow. What arrangements did people, as it were, enter into following these events of the early 1930s? There were assertions of the right, there were bans and then there were agreements. Your Honours see there at paragraph 178 the beginning of a series of agreements with the “record manufacturers and the commercial broadcasters” and that is all traced through, including to the extent able to be found, amounts paid about which both sides have made some submissions.
Paragraph 182 how they were global amounts, fixed amounts per annum not percentages, some disputes arising, particularly about what should happen during the war time. A couple of instances where if you calculate back for the gross income and percentages a couple of stations, but no more than that – we cannot make any more than that of it – paid more than one per cent. We accept generally speaking they were paying less than one per cent.
We are tracing through and I am going over in very light touch as I assume your Honours do not want me to go into more detail. This is all here in the special case - 191 and onwards. The broadcasters are becoming a member of a body, which I think it is fair to say is now Mr Meagher’s client, the Commercial Radio Association or CRA.
EMI, for reasons that your Honours will find in areas of the special case that deal with the record industry, were very much a monopoly, effectively a monopoly in Australia in relation to recordings for a very long time until, I think, well after the Second World War and the payments that were negotiated were made as between the radio sector, as your Honours see in paragraph 199, the EMI group, which effectively spoke at that time, although perhaps with decreasing occupation of that near 100 per cent position for many years.
Your Honours will see both in this account and in the account given of the events surrounding the introduction of FM radio there are quite often bans. That is to say the radio will not play the recordings or a particular class of recordings. It will not play English recordings. It will only play cover versions or American versions and the like. So 212 and onwards there is a settlement of a particular ban and that takes us up to the agreement that was in place in the 1960s.
HAYNE J: Was there at any time during this period some regulation of Australian broadcast content for radio?
MR COBDEN: Regulation of Australian broadcast content? I cannot answer your Honour’s question immediately. I will certainly come back to it. I suspect there might be because there is a document forwarded to the Attorney-General’s Department – and ultimately, I think, seen by the Attorney-General, Mr Bowen – from Ms Shewcroft of the ABC suggesting that, as a kind of quid pro quo, there ought to be an imposition on record manufacturers that they should make sure they recorded at least five per cent of their output of Australian composers.
HAYNE J: The only statutory hook I could quickly find that may or may not be relevant was that in the Broadcasting and Television Act as it stood in 1963 there was the general provision in section 100(4) for prescription of standards. There is a half-baked memory that there was some Australian content standard for radio as well as television.
MR COBDEN: We will find out. If we cannot find that rapidly, it is quite likely that those instructing Mr Meagher will have significant knowledge of all that history. I think even today it is ultimately dealt with by the Broadcasting Services Act. I think ultimately it is a code of conduct rather than an imposed standard, but I cannot be certain about that. There is certainly an echo, certainly in what the ABC said in the lead-up to 1967 – a feeling that certainly the ABC had to, or did, put on a lot of Australian content – should be required of record manufacturers.
I just took your Honours to section K and identified section L which, again, without going over it, deals with – page 126 through to 130 – the ABC’s payments in the period up to the 1968 Act. That was a long stretch of time – the 1930s through to the 1960s. Section J, and this is slightly chronologically out of order, but it is by reason of the way in which the special case deals with topics – which is at page 102 and onwards – deals with the other obviously payments and boycotts. The bans were one area of controversy.
The other area was the lead-up to the Copyright Act 1968. Again, going over it fairly lightly, I indicate to your Honour that there was, of course, the Spicer report referred to. There is not a great deal in the Spicer report that ultimately casts light on these issues. There were submissions made to the Spicer Committee. The report was issued and then at 146 and onwards we see that from the 1960s, and picking up pace in 1966 and onwards, the broadcasting interests submitted very firmly to the Attorney-General that part of the solution of a repatriation and consolidation of the copyright law and the Act that was being proposed at the end of the 1960s should involve a clear statement that the Cawardine right did not exist, the broadcasting right, and it should go. That is reflected in paragraph 148.
The then Attorney-General, Mr Snedden, made a statement to say that it would not be continued or it would be abolished, whatever way one looked at it, but then in 1967 Mr Bowen became Attorney-General and recommended that that be reversed and then introduced a 1967 Bill. We have given your Honours details for that. Then not only the commercial radio interests but also the ABC entered the lobbying process quite strongly.
Paragraph 156 is where there is that memo – the third item there in the documents, volume 3, tab 45, and I do not think I will take your Honours to them in the interests of time – from Ms Shewcroft, which does have that proposition I just put to your Honours that there should be an imposition of an Australian quotient of record manufacturers and a strong flavour that these are foreign record companies. Even the Australian subsidiaries are foreign owned and there should not be an outflow of money to foreigners at the expense of the public purse.
There is a series of other letters between particularly the ABC and its chairman as it was of course, always then, but for the time being to the Postmaster-General and on to the Attorney-General, other than give your Honours a reference to volume 3, tabs 43, 44 et cetera, though to 45. I will not take your Honours to that, but it does - - -
GUMMOW J: Something had to be done, because the 1956 UK Act had come in and this Court had said in the Copyright Owners Case [1958] HCA 54; 100 CLR 597 in 1958 that nevertheless the imperial Act still obtained here.
MR COBDEN: Quite so, your Honour, and I did want to mention that - - -
GUMMOW J: So we are in some anomalous situation.
MR COBDEN: We were, and that is Copyright Owners Reproduction Society v EMI, I think, is it not, your Honour? Yes, quite so, your Honour, I did want to mention that because I think no one has touched on it, and just in the interests of your Honours knowing what happened there, there was the anomaly of course, the 1956 Act – let me go back a step.
The UK started the reform process after the war a bit earlier than we did and the Gregory Committee investigated, just as the Spicer Committee did, here, into what further reform and consolidation copyright should have and particularly in regard to a number of international developments and the need to re-express it that the Copyright Act 1956 (UK) was passed in 1956 and it repealed the 1911 Act, and as your Honour Justice Gummow just said, that is an anomalous situation. The home Parliament of the Act which is applying by direct force here had repealed it and what had happened and just does not, I think, bear on any particular issue in this case, but in the case that - - -
GUMMOW J: Well, I think there is some debate between you and the Commonwealth, is there not, as to how sections 5 and 6 of the 1968 Act work?
MR COBDEN: Yes, there is, your Honour. But the outcome of this case, importantly, is to say, despite its repeal in the United Kingdom by reason of a series of mechanisms that are gone into in some detail here - - -
GUMMOW J: It is said the Australian Act operated “to the exclusion of the Copyright Act, 1911”. That is section 5(1). It did not repeal it.
MR COBDEN: No, quite so, because – and I am just going to come to that in a moment, the need for a somewhat tailored solution to dealing with the 1911, 1912 Act in the 1968 Act because of the curiosity that the 1911 Act was an imperial statute being applied here by direct force. As to what was happening between 1956 and 1969 and how it was so that the 1911 Act was continuing to apply here by direct force even though it had been repealed, I think, and that is dealt with in considerable detail in this – the Copyright Owners Reproduction Case.
GUMMOW J: I mean, section 5(2) said that:
For the purposes of –
the transitional provisions in the Interpretation Act, the imperial Act –
shall be deemed to be an –
Australian Act –
and to be repealed.
It was all quite complicated.
MR COBDEN: It is quite complicated. Your Honour, I was going to touch very briefly on that topic. It is complicated because of the situation that was addressed in the Copyright Owners Reproduction Society Case that your Honour referred to. There was an adventurous submission made by Mr Bowen in that case. I think the effect was that there was no copyright law in Australia between 1956 and as at the date of that case and I think this Court said that was not the case and went into the mechanisms by which the 1911 Act was still applying here.
That really brings me to this very transitional point, your Honours, and the suggestion by the defendants that we, the plaintiffs, have attacked the wrong target. What we say is this about that, your Honours. First of all, looking at the intent of the statutory reform it was to continue existing copyrights, not only 1911 Act copyrights, but as the brief discussion earlier indicated even the 1905 Act copyrights were given special treatment to make sure that the preservation of existing copyrights did not conform to the boundaries, as it were, of the existing copyrights and new copyrights did not spring up by reason of the 1968 Act being expressed to apply to events before its coming into being.
It was the curiosity, we would respectfully submit, of the way that those copyright rights existed in Australia - and I am talking about the 1911 Act rights – by direct force of the 1911 Act which was applied by the 1912 Act and some modifications by the 1912 Act and because of that repeal in the 1911 Act in England and because – unless one made some provision for all of this but simply applied the 1968 Acts that took place before the 1968 Act came into being one had the real risk of having duplicate copyrights or double copyrights or some confusion about what had attracted copyright, in what things copyrights existed. There was no intention, as it were, to give fresh copyrights that would not have been in place as at 1 May 1969 but there was an intention to regulate all copyrights as much as possible under the new scheme.
CRENNAN J: What was the position under the 1956 Act in the UK? Was it that there was no compulsory licensing but there was a tribunal to determine disputes?
MR COBDEN: Yes, there was a tribunal. I do not think there was compulsory licensing. I think one went to it on a voluntary basis. Again, can I answer that question immediately after lunch? There is certainly discussion in the Spicer report about the desirability of a copyright tribunal here and there is certainly an immediate vesting in the Copyright Tribunal of a range of jurisdictions over a range of topics which we have listed in our submissions. I will come back to it, your Honour, if I may, on the 1956 Act?
CRENNAN J: When you read the second reading speech in relation section 13A, you will detect a resistance to the idea of a tribunal.
MR COBDEN: Yes.
CRENNAN J: Coming from - - -
MR COBDEN: From our side?
CRENNAN J: Well, there were even very distinguished people from the musical world opposed to the idea of a tribunal.
MR COBDEN: Perhaps they were happy with that sort of thing by the 1950s and 1960s, I cannot say, your Honour. I am reminded now, it was the Performing Rights Tribunal and a licence scheme had to be referred to it, but I will check that out and I do recall it was called the Performing Rights Tribunal.
GUMMOW J: The seventh schedule to the 1956 Act contained very complicated transitional provisions.
MR COBDEN: Yes, your Honour. I think it is in part those that are referred to in the Copyright Owners Reproduction Society. The drafting style of the 1956 Act was deliberately not adopted by us at the recommendation of the Spicer Committee who did not find favour with them. So, your Honours, turning to the way in which the 1968 Act treated the existing copyrights, it had to do a number of things. It had to cause the 1911 Act to cease to apply. It then had to repeal the 1911 Act to avoid any dual protection and it had to have transitional provisions to ensure that copyrights did not spring up where old ones would not have existed.
So that is what we say is the explanation of the scheme of sections 5, 6, 8, 207 and 220, but what one focuses on, we respectfully submit, is the substance of what the scheme achieved and that is, there was never any moment when the old copyrights, which did not change the basis for them arising, no moment at which they ceased to exist. They kept going through and the overall transfer of copyrights was effected in relation to all copyrights.
GUMMOW J: Sorry, section 207?
MR COBDEN: Yes, your Honour.
GUMMOW J: What is the other, 220?
MR COBDEN: Section 220, yes, your Honour, as enacted. So after what is dealt with by 5, 6 and 8, then 207 applies:
Except in so far as this Part otherwise expressly provides –
and that is a reference to the way in which this Part reproduces the relevant language of the old Act to preserve the same sorts of copyrights and not to have fresh ones bring up by reason of – 207 would have had an operation that would have caused a lot of copyrights to spring up that never existed before. So:
Except in so far as this Part otherwise expressly provides –
and then we find that this part otherwise expressly provides in a range of ways and if one looks at them and they are setting aside necessary provisions like 210 which is to make sure that expired copyrights do not revive, so one can see a real concern here for, as it were, freezing the position of the 1911 Act copyrights, 211 applying to works, 212 applying to photographs, one sees in all these sections a plain echo or literal reproduction of the language of the 1911 Act.
GUMMOW J: But these are talking about works, 211.
MR COBDEN: They are, your Honour, quite so. The only point I am making is that they consciously reproduce the language of the 1911 Act so that 207 would not cause lots of copyrights to spring up that would never have existed, and 220 is the provision that deals in the same manner precisely with sound recordings. What we submit in relation to the basis for our attack is that in the case of all these works and 211, we just saw it happening to literary, dramatic, musical artistic works, which is a vast body of works. We see it happen to cinematograph films were protected as if by analogy with dramatic works under the 1911 Act and we see it in relation to the sound recording copyright, that the whole corpus of them is - - -
GUMMOW J: I think the Commonwealth puts against you that this is an indication of retroactivity of the 1968 Act.
MR COBDEN: Yes.
GUMMOW J: If it had not been for the special retroactive provisions, you would have nothing.
MR COBDEN: We would have a lot from section 207.
GUMMOW J: No, if section 207 had not been there, you would have had nothing. That is what is put against you, as I understand it.
MR COBDEN: Yes, quite so, your Honour.
GUMMOW J: It is no good saying you had some rights and they carried over. That is something that skims over a surface a bit.
MR COBDEN: In this sense, your Honour. If one goes against us and says there was a termination of all copyright rights and then a recreation of all copyright rights, we could have nothing to complain - - -
GUMMOW J: I think that is the gist of it.
MR COBDEN: Yes, that is the gist of it. That per se would not give us anything to complain about because there is no acquisition. There is no transfer of benefits to any identifiable person or measurable advantage to any person commensurate with any loss that we have suffered. The only moment, we respectfully submit, when one looks at the substance of these provisions and what I have just taken your Honours to, that in respect of the sound recording copyright – and I am setting aside further benefits conferred in this because I will come to that – but the impingement that happened on the rights that we had and have under the 1968 Act was that then 109 and 152 bite upon us. So the only thing we, as it were, can complain about is 109 and 152 because otherwise there is no acquisition or nothing that we can complain about in terms of section 51(xxxi). It is the biting of sections 109 and 152 - - -
GUMMOW J: Section 5(1) said that from 1 May 1969 a new statute operated “to the exclusion of the Copyright Act, 1911.”
MR COBDEN: Well, of course, under the Copyright Act 1911 all our copyrights had sprung up. If they had been abolished, there might have been some very interesting questions. They were not. The overall effect of this scheme, we submit, is the continuation that we have identified and the only thing that bites upon it in the sense of transferring a measurable identifiable advantage on another person commensurate with any loss that we suffered is 109 and 152 and for those reasons we say - - -
FRENCH CJ: Can I just ask you about the working for a moment of the 1912 Commonwealth statute. Does section 8 only engage with section 25 of the imperial statute to enliven the condition for its application to Australia or does it have also the function of incorporating terms of that imperial statute by reference as though it were a federal law?
MR COBDEN: I hope I am answering your Honour’s question, in the absence of the 1911 Act, unless something was said about it, one might think that common law copyright sprang up again.
GUMMOW J: This is 25 of the imperial Act.
FRENCH CJ: Section 25 of the imperial Act extends it to Australia if Australia – or to any self-governing dominion, if it is “declared by the Legislature of that dominion to be in force therein”.
GUMMOW J: Either or without any modifications.
FRENCH CJ: Yes, and that condition you could say is satisfied by section 8 of the 1912 Commonwealth Act.
MR COBDEN: Section 8 I suppose and section 5(1), yes.
FRENCH CJ: But one might say that section 8 on the face of it also has the operation of simply incorporating by reference, subject to amendment set out in the Commonwealth statute, the terms of the imperial statute as a Commonwealth law so that the subsequent repeal of the imperial statute has no effect.
MR COBDEN: Yes, I had not thought of it that way, your Honour.
GUMMOW J: There might then have been a Colonial Laws of Validity Act problem, that it was repugnant to the Imperial Act.
MR COBDEN: Yes, the number of thorny questions. Might I just take that question on notice, your Honour, and answer as soon as I possibly can after lunch?
FRENCH CJ: Yes.
MR COBDEN: Of course, section 8 had an amount of other work to do and that one of the effects would have been what I just, I think, submitted to your Honour, that in the absence of declaring that, clearly, there might have been a springing up not at all in relation to sound recordings, of course, of notions of common law copyright, particularly in unpublished works which was, I think, that certain work section 8 had to do.
GUMMOW J: I think until the Statute of Westminster there were decisions that said the Colonial Laws of Validity Act applied to the Parliament of the Commonwealth.
MR COBDEN: Yes.
FRENCH CJ: That disapplied it to the Commonwealth, but it left it in place for the States, but until the Statute of Westminster, the CLVA and imperial statutes expressly extending to the colony were - - -
MR COBDEN: Yes, I will take all that on board and answer your Honour’s question as soon as I - - -
FRENCH CJ: So that 25 looks like a conditional express extension.
MR COBDEN: Yes, I understand, your Honour. Just to return, if I may - - -
GUMMOW J: I think at some stage there was a Gazette notice, was there not, on 25(2) of the imperial Act? I think we have seen that at some stage.
MR COBDEN: Yes, and I think, reaching into my memory, there was a Gazette notice - - -
GUMMOW J: Quite important for the international structure.
MR COBDEN: Yes, I will look at that as well, your Honour. There is certainly a flurry of Gazette notices in the immediate late days of April – I have seen Lord Casey’s stamped signature on a number of things tidying up some of these things. I had thought myself that it addressed mainly the issues addressed under the Copyright Owners Reproduction Case, but we will take all that on notice and - - -
GUMMOW J: Was there a commencement date for the Australian Act?
MR COBDEN: Which is that, sorry, your Honour?
GUMMOW J: The 1912 Australian Act?
MR COBDEN: Yes, your Honour. It commenced the 1911 Act retrospectively.
GUMMOW J: Where do we see that?
MR COBDEN: At section 8, your Honour:
The British Copyright Act, a copy of which is . . . shall be deemed to have been in force therein as from the first day of July, One thousand nine hundred and twelve.
FRENCH CJ: Deeming by operation of federal law.
MR COBDEN: Yes, even though this Act – assent was given to the 1912 Act, I think, in December 1912.
HAYNE J: 20 November 1912.
MR COBDEN: Thank you, your Honour. So this 1912 Act presumably commenced itself upon royal assent, but it had that retrospective operation in its application of the 1911 Act. One might speculate that perhaps not to the surprise of everybody by reason of the imperial conference in 1910, the outcome of which was presumably publicised to people to say we will be doing this. I cannot assist your Honour any further than that on that topic.
GUMMOW J: Then section 26 of the imperial Act is important too.
MR COBDEN: Of the imperial Act, your Honour?
GUMMOW J: Yes.
MR COBDEN: Yes, there is a preservation of rights on repeal.
GUMMOW J: More than that. It means the Commonwealth may repeal this Act, does it not, so far as it was operative, provided that – and I think that was all in the mix too in 1968. An appreciation of section 26 as well as the Statute of Westminster.
MR COBDEN: Yes, quite so, your Honour. I will see if I can answer all those varied questions on that topic as soon as I can after lunch. I did want to mention and it arises in a number of contexts, perhaps setting aside the slightly discrete topic of the 20-year term extension coming about by reason of the US Free Trade Act, but the defendants list in their submissions a little catalogue of various benefits that were obtained by, in one instance and I think one instance only, perhaps copyright owners and sound recordings specifically by reason of an adjustment of the year from the end of which the calculation of their copyright term was made, but generally such things as an extension of the limitation period, a number of other factors, the availability of account profits against even innocent infringers. In paragraph 13 of our reply we deal with a number of these.
This seems to be put in a couple of ways. One way is to show that these are statutory rights, I think, in the way it is put, inherently susceptible to variation. We certainly address that topic separately. In one way this sort of analysis can be true of any statutory regime that replaces either a previous statutory regime or a right under the general law. We would respectfully submit that if those matters go to anything, they would really go to the question of just terms.
I refer to what Chief Justice Gleeson said in Smith v ANL, and I will come back to it, at paragraph 8 where his Honour said there were other benefits conferred on Mr Smith by reason of the new statutory scheme. They do not attack – they do not really go to the heart of the question as to whether the property was being acquired and whether it was property and the like, but really much more to the question of whether that could impinge upon the question of just terms.
We would submit, as we do in our reply, that where, particularly in relation to all copyright owners, such things as extended limitation periods and availability of certain remedies – the availability of additional damages is also referred to – one cannot relate that in the debate about just terms to that being a compensation, let alone, as it were, full compensation for a right that is taken from us if it has been taken by way of acquisition of property. So for those reasons, we submit, and subject to the answers - - -
GUMMOW J: Just before you leave that, you took us to Part XI, which is transitional in the 1968 Act, and you took us to section 207 in Division 1. Division 2 then deals with original works and Division 3 with matter other than works, so we go to section 220.
MR COBDEN: Yes, and that is following the Divisions of the Act earlier.
GUMMOW J: Yes. Then we have to read that with section 5(2) which draws in section 8 of the Acts Interpretation Act.
MR COBDEN: Yes, your Honour.
GUMMOW J: The enactment of Part XI, that is the provision we have just looked at, shall not be taken to affect the operation of section 8 as it operates by virtue of this subsection by treating the imperial Act as a notional Australian Act in relation to matters to which Part XI does not apply.
MR COBDEN: Yes, there is some gymnastics involved in that one, your Honour.
GUMMOW J: Well, if you look at section 8, that would leave, I think, paragraph (e) which would be litigation on foot, (d) any punishments, but it might not deal with (a), (b) or (c). So there is a question mark over whether (a), (b) and (c) would be saved.
MR COBDEN: Yes, section 210, I think I glossed over a little quickly with your Honours, which seemed to address, for example, the topic in 8(a), in other words, be a topic that is addressed.
GUMMOW J: Section 210?
MR COBDEN: Yes, 210 of the Act as passed, “Expired copyright not to revive”. That would seem to - - -
GUMMOW J: There is some further work to be done in meshing section 8 with Part XI.
MR COBDEN: There is, your Honour. I was now going to turn to the topic of the identification of property or the topic of section 51(xxxi) more squarely, having identified the legal and practical operation of the regimes that led up to the 1968 Act and, indeed, the way the 1968 Act then came into operation.
GUMMOW J: If I could just go back for a minute. One must not forget there is a whole lot of case law on each of those paragraphs in section 8. They have been much litigated over a long period.
MR COBDEN: Yes, your Honour.
GUMMOW J: All right.
MR COBDEN: We will ensure that if there is anything we need particularly to assist your Honours with we will do so. Our primary submissions, your Honours, on the application of a constitutional guarantee to the change in the law effected by sections 109, 152 as they impinged upon – we identify as our rights, stable, valuable rights of the kind that I listed earlier and referred your Honour to earlier parts of our submissions. This is dealt with in paragraph 70 and onwards of our submissions in-chief. The starting point, we respectfully submit, is to accept – and this in a sense sets to one side an awful lot of the historical copyright material that I referred to in relation to the pre-1911 regime, but did so in order to try and answer some things said against us and to give the background.
We accept entirely that copyright and sound recordings or recorded sound is entirely statutory, so the starting point of the analysis of the practical, legal effect of the arrangements is to make that observation. However, to make the observation that purely statutory rights, including statutory rights in intellectual property such as copyright or patents, are well capable of being property within section 51(xxxi), they have been given as examples, as it were, at a high level. One has to, of course, look at the specific operation of provisions in question, specific property that is being affected, but only given as a high level as examples in a number of cases by this Court as being property that is certainly capable of attracting the operation of a statutory guarantee and remind oneself again, we would respectfully submit, that we are not talking about the whole of the copyright necessarily when we are talking about something that is capable of being property which attracts the operation of the constitutional guarantee.
We can be talking about a part of the copyright because, as I took your Honours to subsection 5(2) of the imperial Act, and as is recorded, which as we would say, continued and reflected in section 196 of the 1968 Act, part of the copyright can be assigned. One needs only to look at many of the APRA Cases and the recital of facts in those to see that the general structure, for example, for many decades in relation to the musical works was an assignment of what is called the petty rights, not the ground or stage rights, but the small performance rights to the Performing Rights Societies. That is reflected in many other cases, as it were, a subset of a slice of the copyright. So what we are dealing with, we confront squarely, is a reduction in the content of an exclusive right created by the 1911 Act, and we interpolate, continuing under the 1968 Act.
GUMMOW J: Just to go back to this question of continuation – I am sorry to keep tormenting you – but this problem with the Copyright Act occurred in these years too with the Trademarks Act 1905 which was repealed and replaced by the 1955 Act, with the Patents Act 1903 which was repealed and replaced by the Patents Act 1952, so it would be helpful to know how they meshed, the transition from one to the other.
MR COBDEN: Yes.
GUMMOW J: Do not answer it now, but if you get - - -
MR COBDEN: Perhaps a trite observation will be, of course, that in each case there was a register of rights that was continued and except in a very limited way, there was no register of copyrights – there has been no register of copyrights. That is perhaps the glib answer I can give your Honour.
GUMMOW J: Had not there been provision in the 1912 Australian Act?
MR COBDEN: I was going to say, there was provision in the 1912 Australian Act for a register of copyrights. It seems to be related to – as a partial answer to the suggestion that no innocent infringement could ever be the subject on account of profits. It does not expressly say so but it - - -
GUMMOW J: Division 2.
MR COBDEN: Yes. It seemed to be related to the notion that you could register something and there would be a constructive notice given to people.
GUMMOW J: You got better remedies, did you not?
MR COBDEN: Yes, I think so, your Honour. That is certainly the case also in the United States, even for a foreign work.
GUMMOW J: Anyhow, so there was a register?
MR COBDEN: There was a register, I am sorry, your Honour
GUMMOW J: Yes, all right.
MR COBDEN: I have to be very careful here, but it was not the register that recorded – was a necessary part of recording the property. Whether it was a necessary part of creating the property may depend upon a proper analysis of the - - -
GUMMOW J: Can you remember the Smirnoff vodka people got themselves into all sorts of trouble with the change in the Trade Marks Act in 1955?
MR COBDEN: Yes. We will have a look at that, your Honour.
GUMMOW J: There is a case about it in this Court.
MR COBDEN: That would be the primary difference, I would submit just off the top of my head, but I will not go off the top of my head any longer, your Honour. I wanted to take a simple and, as it were, brutal example about how radio broadcasting rights could be acquired. If there was a provision that said the broadcasting right and the sound recording could be acquired by anyone giving notice and paying $10,000, that would be, as it were, a brutal and clear way that a piece of identifiable property might be taken away and then the question would be raised, was $10,000 fair or was it even putting a fixed sum on a particular copyright fair, but, of course, what we submit is that in the course of the interpretation of section 51(xxxi), that the course of that interpretation demonstrates a far more subtle example of what is property and what is acquisition that are capable of being the subject of a constitutional guarantee.
That really brings me to the heart of the case, particularly the case put against us, which is the controversy about what sorts, if I can put it this way, what reductions of the content and exclusive right created by copyright might attract operation of the constitutional guarantee and what might not. That brings me to taking your Honours to some of the cases, if I may. They are cases that your Honours are all extremely familiar with, but because this is at the heart of the - - -
GUMMOW J: Do not rely on that. We do not have a photographic memory of everything we decide.
MR COBDEN: No, your Honour. They are cases that are at the heart of controversy so I was proposing to take your Honours to some passages in them. I notice the time, I could either – I really am starting on that - - -
FRENCH CJ: Yes, all right. We will adjourn until 2.15 pm.
AT 12.44 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.16 PM:
FRENCH CJ: Yes, Mr Cobden.
MR COBDEN: Thank you, your Honours. Can I indicate one thing briefly which I did not do at the outset of the day about the time. I was proposing to take about the day for our side of the case and then hand over to my learned friends. I am conscious there were three days set out down, but we obviously should not be anything other than economical with the time for that reason.
Can I give some answers, if I may, to some questions that were raised by the Bench in the morning before the luncheon adjournment. The first question was from Your Honour Justice Crennan about compulsory licences and where they first appeared in the 1911 Act. There are, in fact, I think about four compulsory licences of which that one in the 1911 enactment, particularly the mechanical one, was the fourth. There were other ones in relation to preventing the work being previously published, being republished after the death of the author. There was a provision forcing that to happen. There was a non-voluntary licence to permit the importation of reprints of works from the colonies. There was another licence– I have lost one at the moment, but can I give your Honours a reference. It would be much easier than me trying to read something out which I have only had a quick chance to look at. The current edition of.....which is the 16th edition, summarises these various licences and whether they were maintained by the 1911 or 1956 Act, or repealed, at paragraph 28-04.
GUMMOW J: Can we have a copy of that in due course?
MR COBDEN: We can organise that overnight, your Honour, certainly. Your Honour Justice Gummow asked a question about industry adjustments in response to Cawardine. I will not take your Honours - - -
GUMMOW J: You took us to that in the special case.
MR COBDEN: Yes, your Honour, but there is also one brief thing in the Gregory Committee Report. I will just read out the reference, if I may, your Honour. It is in volume 2, tab 23, page 734 of the book of documents. Paragraph 540 of the Gregory Committee Report records that in 1934 the Phonographic Performance Limited in England was set up. So there was an immediate reaction of the record industry, as it were, to set up an industry reaction to that. I gave your Honours a reference to that 1910 imperial conference. There is actually a record of it at volume 1, tab 14 of the book.
I was asked a number of questions about the balance in play since the Statute of Anne. Can we just say two things about that your Honours. One is in the Statute of Anne itself and the section IV, which your Honour Justice Gummow referred me to, which was the ability of somebody who felt that the books were being at too high and unreasonable a price to be able to apply to any one of a number of imminent persons. We would say that the countervailing side to that was if one did make such an application, what happened was that the person concerned would inquire and examine the price, the conditions and then limit and settle the price of each such printed book and books from time to time, according to the best of their judgments, as to them shall seem just and reasonable. That is the print I have got going over the page.
So that we would say that, yes, there was an invasion of the right of the bookseller to set the price, but in turn, if such an application was made, the price that was set would be just and reasonable. We would say, not surprisingly, each of those has an echo of just terms and, of course, equitable remuneration or reasonable charges. We would make this submission, that the balance that prevailed from 1912 until 1969 was the balance drawn in the 1911 Act, drawn in a particular way and pretty much unchanged from 1912 to 1969. That on our case, of course, was the property created, and once created, being by the legislature, it may not be able to be dealt with in any way that the legislature sees fit, if the constitutional guarantee comes into play.
Related to that is the question of whether, as it were, your Honours are drawn into the protean debate about rights of copyright owners or the position of copyright owners versus the position of the public. Again we would draw attention to the fact that by 1969 this was a very stable right enacted in 1911, a parallel right, that is to say, the English right in relation to broadcasting sound recordings at a time when United Kingdom decisions were very persuasive here. It was litigated in 1933 and not again, and there was no change to these rights until 1968-1969.
Your Honour Justice Hayne asked about Australian content and radio, I am afraid we have not been able to discover anything yet, but we are looking at it and anything we can find we will. Equally, your Honour Justice Gummow raised the question of some Gazette notices and I just say this. I have certainly seen some in the course of reading the many documents for this case. I did not think that they bore upon any issue that has to be determined, but we will look at them again, and say if we have found anything very briefly tomorrow.
Similarly with the Trade Marks Act and the Patents Act questions, we are looking at the transitional provisions, your Honours. A cursory glance at the Trade Marks Act 1955 seemed to indicate to me that there were not any transitional provisions which may have been the source of some difficulty. There certainly are in the Trade Marks Act 1995, in particular, preserving the register, but preserving such things as presumptive validity of certain seven-year-old marks. I think your Honours are familiar with that, at least in broad terms. Again we will look at those and, if it will assist, to prepare a short note, we will do that rather than taking up time.
Your Honour the Chief Justice asked a question about section 8 and whether possibly the 1912 Act, as it were, made the 1911 Act a federal Act, if I understood your Honour’s question correctly. I think I would have liked to embrace that proposition, but I think at the face of authority I cannot. The first case I will refer to, your Honours may not have a copy of it, but I will just give the reference now. It is the Gramophone Company Ltd v Leo Feist Inc [1928] HCA 23; (1928) 41 CLR 1 where that issue was debated and this Court held that it was a direct application of the 1911 Act in Australia and that that issue – the reason I have asked that your Honours be given copies of that particularly is because in the Copyright Owners Reproduction Society v EMI Case [1958] HCA 54; 100 CLR 597 which was referred to this morning that the effect of the Gramophone Company v Leo Feist Inc was referred to and not doubted, then your Honour Justice - - -
FRENCH CJ: Not that it makes any difference, I think, to your argument, but the copyright property that you are talking about at the time of the 1968 Act is the product of an imperial statute.
MR COBDEN: Yes, your Honour. And then your Honour Justice Gummow referred to the extensive savings and transitional provisions in the 1956 Act. They are certainly labyrinthine and they are on page 604 of [1958] HCA 54; 100 CLR 597. One can see how labyrinthine they are and, indeed, the Chief Justice goes through them and analyses their effect, but the ultimate effect is that yes, that could be.....by reason of the force of an imperial Act.
Can I pick up where I left off and, as I said, go to the heart of controversy and the case put against us, certainly perhaps most forcefully as put against us by the defendants. I was going to start by taking your Honours to Chaffey [2007] HCA 34; 231 CLR 651 and this is for the proposition that copyright rights, in other words, rights arising under legislation passed by the Commonwealth Parliament pursuant to the power in section 51(xviii), can be susceptible of the operation of section 51(xxxi).
Just in passing, referring to paragraph 4 of the first joint judgment, I think, in Chaffey, of course this arose under section 50 of the Self-Government Act, but as their Honours say there, there is no relevant distinction between section 50 and section 51(xxxi) of the Constitution. Can I then move over to paragraph 21 on page 663 under the heading of “Acquisition of property” and a reference to the specific statutory provisions in play there and, importantly, over at paragraph 24 - - -
GUMMOW J: The last sentence may be too wide, I think. Maybe it should be “could” rather than “would”.
MR COBDEN: I am very sorry, your Honour.
GUMMOW J: That is what we are debating about I suppose.
MR COBDEN: I am awfully sorry, your Honour, I have got a slight cold.
GUMMOW J: The last sentence on paragraph 24, maybe “would” should have read “could”. That is what we are debating today.
MR COBDEN: Yes, “could”, I accept that, your Honour, and of course I was going to that sentence in the end of the paragraph saying it is too broad a proposition:
that the contingency of subsequent legislative modification or extinguishment removes all statutory rights and interests –
That is of course an answer to the simple proposition that they are statutory rights, therefore always capable of modification, not capable of attracting section 51(xxxi) and I doubt that anybody would put that so starkly. Then, as their Honours say, and your Honour Justice Gummow points out, that it certainly says:
a law reducing the content of subsisting statutory exclusive rights, such as those of copyright and patent owners, would –
accept “could” –
attract the operation of s 51(xxxi).
The reference that is given there is to the footnote (54), WMC Resources and the reference is the judgment of your Honour Justice Gummow. We will certainly come to that. That is all I wanted to take your Honours to in Chaffey.
Can I then take your Honours to Wurridjal 237 CLR 309. This is a more recent case and this is the judgment of your Honour the Chief Justice. I was going to take your Honours to page 359 starting at paragraph 88 and reminding us that there is a “linkage between the concepts of property and acquisition”. Paragraph 89 over the page:
The Court has restated its liberal approach to the construction . . . in Telstra Corporation Ltd v The Commonwealth, the Court reaffirmed that s 51(xxxi) is concerned with matters of substance rather than form and that acquisition and property are to be construed liberally –
Paragraph 90:
Although broadly interpreted, acquisition is to be distinguished from mere extinguishment or termination of rights.
Then there is a reference to Tape Manufacturers and to the quotation of approval of the statement about it not being sufficient to:
adversely affects or terminates a pre-existing right . . . there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be.
Paragraph 91:
A law which is not directed to the acquisition of property as such, but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity, is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property –
Paragraph 92:
A right which has no existence apart from statute is one that of its nature may be susceptible to modification or extinguishment . . . Nevertheless a law of the Commonwealth which extinguishes purely statutory rights having no basis in the general law can effect an acquisition of property.
Paragraph 93:
When the property said to have been acquired is of statutory origin the terms of the statute and the nature of the property to which it gives rise require consideration to see whether or not it attracts the protection of s 51(xxxi).
Then a reference to Chaffey and the reference to the broad proposition we just looked at. Over the page, we would say a precise echo, with great respect, of Chaffey:
Similarly, a law reducing the content of subsisting statutory exclusive rights in intellectual property –
Your Honour the Chief Justice has corrected “would” to “could” –
attract the operation of s 51(xxxi).
and the note there is to Chaffey. So we have a position where there are statements about that even a law reducing the content of subsisting exclusive rights such as copyright could be susceptible or may attract the operation of section 51(xxxi). That is all I wanted to take your Honours to in Wurridjal. I will come to WMC shortly, but before I turn to WMC, can I go straight to the Tape Manufacturers Case, and I will give that reference as I make some introductory remarks about it. It is in 177 CLR 480. Tape Manufacturers is erected, certainly by our opponents, as the most formidable obstacle we have to overcome because, for example, the CRA puts it that this case is on all fours with Tape Manufacturers. Can I just briefly remind your Honours what Tape Manufacturers was about.
It was about a very widespread problem. Indeed, one might say so widespread as to really permeate society at large as opposed to a sector of society of home taping. It may have only been a moment in time but one was able at that particular time to focus on cassette tapes as being the medium of home taping. If I could take your Honours, just to identify the problem and the extent of it, Tape Manufacturers itself, to the judgment of Justices Dawson and Toohey, which is the judgment on which I will be focusing, sets out the background to the problem at page 512 starting at the foot of that page having recited what the exclusive rights were in copyright and, of course, here we are talking about what people call the primary copying right:
Notwithstanding the existence of copyright, the private or domestic taping –
and I emphasise the words “private or domestic” –
of sound recordings has become widespread and there has hitherto been no practical means by which the owners of the copyright in them could control this practice or obtain compensation for the use of their material. Material placed before the Court without objection indicates that the practice is world-wide and, although there is no evidence before us of its exact extent in Australia, it is clearly the mischief at which the legislation is aimed.
There is a reference then to Lord Templeman’s speech in CBS Songs Ltd v Amstrad and their Honours appear to adopt that as being, as they say, describing the practice in vivid terms. As one can see, Lord Templeman said:
Millions of breaches of the law must be committed by home copiers every year. Some home copiers may break the law in ignorance, despite extensive publicity and warning notices on records, tapes and films. Some home copiers may break the law because they estimate that the chances of detection are non-existent. Some home copiers may consider that the entertainment and recording industry already exhibit all the characteristics of undesirable monopoly . . . Whatever the reason for home copying, the beat of Sergeant Pepper and the soaring sounds of the Miserere –
I think that is a reference to Allegri –
from unlawful copies are more powerful than law-abiding instincts or twinges of conscience. A law which is treated with such contempt should be amended or repealed.
So it gives one a definite flavour of the widespread nature of the way that it has permeated society in general.
GUMMOW J: This is paragraph 102 of your submissions, is it?
MR COBDEN: Pardon me a moment, your Honour?
GUMMOW J: You have a whole series of paragraphs on Tape Manufacturers starting at 97 and finishing up with a call to arms at paragraph 110.
MR COBDEN: First of all, if I may your Honours, indicate we do not suggest that the outcome in Tape Manufacturers on the question of whether section 135ZZM, which was the conferral of the defence on the public at large for home taping, we do not suggest that a different outcome should have been reached. Indeed, we say that when one reads Tape Manufacturers carefully and, indeed, appreciates what exactly your Honours are saying, that it does not have to be departed from unless what their Honours are saying, and will come to it, is that the property that has to end up – the benefit that has to end up in the hands of the acquirer of property has to have some nature of property understood in a very traditional way.
Let us see if I can make that good by going briefly but carefully through Tape Manufacturers. The scheme that was adopted was a scheme to introduce Part C into the Copyright Act and in exchange for a defence to infringement conferred upon the millions of individual users, there was an impost placed upon the vendors of blank tape. It is clear from the decision that the vendors of the blank tape were not themselves committing any infringement of copyright or involved in one because they were held not to be authorising infringements of copyright selling articles that had legitimate non-infringing uses. What we submit is that effectively the immunity conferred on the public and the charge on Tape Manufacturers, as it were, passed like ships in the night, there was no measurable identifiable advantage transferred to Tape Manufacturers by reason of the immunity granted.
We have just reproduced for your Honours, because reading the provisions of Part VC as set out in the judgments in Tape Manufacturers is not as stark or as easy to follow, perhaps, if one actually looks at Part VC, which has now vanished from the Act. So we have prepared a copy of an extract from the Act or the reprint of the Act as it was at the time of Tape Manufacturers and Part VC was in the Act. As it happened, Part VC never came into operation, your Honours. It was found invalid before it had come into operation.
Your Honours, the outcome of the decision was that the majority held that the imposition, which is in section 135ZZP, was the imposition of a tax and the appropriate parliamentary procedures have not been gone through for the purpose of imposing – I am sorry – 135ZZN is the way of calculating it, 135ZZP was the imposition of the blank tape royalty. The majority of the whole of Part VC was invalid by reason of imposing a tax without having been through the appropriate parliamentary procedures. It was never reintroduced, I might say.
One aspect of the argument was that the 135ZZM, which is the conferral of the immunity, was itself coupled with 135ZZP, an acquisition of property without just terms. Your Honours see that 135ZZM was a reduction in the rights of the copyright owner by saying that:
Copyright subsisting in a published sound recording, or in work included in a published sound recording, is not infringed by making on private premises a copy of the sound recording if the copy is made on or after the proclaimed day on a blank tape for the private and domestic use of the person who makes it.
Subsection (3) provides that:
Where a copy of a sound recording made in reliance on subsection (1) is used otherwise than for the private and domestic use of the person who made it, subsection (1) does not apply, and shall be taken never to have applied, to the making of the copy.
So we draw attention to that private and domestic use and indeed to the fact that if the private and domestic use is not maintained forever in relation to the copy, then the immunity is never conferred. So it is conferred on, effectively, those millions of users and conferred for their private and domestic purposes and not for any other purpose.
The first joint judgment, the majority judgment, deals with this question of section 51(xxxi) and the guarantee in relation to section 135ZZM in two places, your Honours. The first is at page 495 where the Chief Justice and Justices Brennan, Deane and Gaudron say, about halfway down the page, that they are in agreement with Justices Dawson and Toohey in relation to the conclusion that 135ZZM(1) is not a law with respect to the acquisition of property. Then they reach a different view about 135ZZP, but the basis of their invalidating the law was that it was a tax.
CRENNAN J: A different view of that ZZP turns on a different argument, does it not?
MR COBDEN: Quite a different argument, yes.
CRENNAN J: There are two different arguments you can pick up from 514 when you ponder the page, that is to say, that acquisition of property assertion was made both in respect of the vendors of blank tapes, that is the money, or from the owners of the copyright.
MR COBDEN: Quite so. Really, their Honours’ examination of section 51(xxxi) in relation to the taking of the money from the blank tape vendor does not touch upon the sorts of issues that we are dealing with at all. Quite so, your Honour. But their Honours do touch back on the topic of 135ZZM at page 499 by saying, as Justices Dawson and Toohey have demonstrated, that:
s 135ZZM(1) is not a law with respect to the acquisition of property . . . does not acquire from the copyright owners the whole or part of the exclusive right conferred by s 31(1)(a) –
I think that probably should also have included section 85, to reproduce the copyright material –
Instead, s 135ZZM(1) provides that something which was formerly an infringement of copyright is not an infringement. To that extent, it reduces the content of the exclusive right –
not an acquisition because of the reasons given there. The point is more fully dealt with and agreed with by their Honours by Justices Dawson and Toohey, whose judgment, as I have taken your Honours to, begins at page 512. This part of the reasons, because their Honours deal with many other topics, is dealt with starting at the foot of page 525, the reference to section 51(xxxi) and then their Honours put up at the end of page 526 at the end of the first long paragraph:
First, it is said that there is an acquisition of property from the vendors of blank tapes.
That is the topic your Honour Justice Crennan was just referring to –
Secondly, it is said that there is an acquisition of property from the owners of copyright in sound recordings.
The first argument their Honours do not agree could be sustained, although the majority had said that it could be. At 527 is the critical passage for the present case halfway down –
Nor do we think that there is any force in the plaintiffs’ second argument.
Their Honours say, first of all reciting the exclusive nature of copyright, the most important of which is the copying right, it is “capable of ownership” and make other observations -
There can be no doubt that copyright constitutes property within the scope of s.51(xxxi) of the Constitution.
That is the sentiment that is of course echoed in Chaffey and Wurridjal referred to –
Section 135ZZM(1) provides that copyright is not infringed by the copying of a sound recording on to a blank tape for private and domestic use.
So their Honours encapsulate the entire notion of the particular reduction in rights here –
The effect of that section is to diminish the exclusive rights conferred elsewhere in the Act by way of copyright but it does not result in the acquisition of property by any person. All that the section does is to confer a freedom generally to do something which previously constituted an infringement of another’s proprietary right.
So the word “generally” appears –
Moreover, s. 135ZZZA . . . does not vest copyright in any work or other subject-matter in any person”.
So that is an identification that there is not a particular property vested by this very provision in anybody else -
Whilst the word “property” in s. 51(xxxi) is to be construed liberally so that it extends to “innominate and anomalous interests”, for the paragraph to apply it must be possible to identify an acquisition of something of a proprietary nature. The mere extinction or diminution of a proprietary right residing in one person does not necessarily result in the acquisition of a proprietary right by another.
Section 135ZZZM(1) confers nothing upon any person which may be described as being of a proprietary nature.
That is perhaps the only expression that we would think is explained at least by later cases to which I will come –
If the immunity which the section confers can correctly be described as a right, it is a right which is applicable to all but arises only on the occasions upon which copying takes place.
So there is throughout, we respectfully submit, on a careful reading of the passage, references to freedom generally, the mere extinction or diminution of a proprietary right and a right which is applicable to all and, of course, those, particularly the notion of a right being applicable to all is antithetical to the notion that one might identify a group of persons to whom a commensurate or corresponding advantage is conferred which is, of course, at the heart of the notion of acquisition of property.
So we would submit that if one looks more closely at the particular effect of the statutory provisions under examination to see whether there is another party acquiring property which has a particular meaning in context of section 51(xxxi) and which has been explained in cases and perhaps explained with more breadth in later cases that come after Tape Manufacturers, in particular, of course, we would refer to ICM where in the first joint judgment the notion of property was identified as being an identifiable and measurable countervailing benefit or advantage accruing to another person.
I will give your Honours a proper reference to where I took that from. Pardon me a moment, your Honour, I should be more precise about that. ICM Agriculture [2009] HCA 51; 240 CLR 140 and the passage I just referred to was from the judgment of your Honour the Chief Justice and your Honours Justices Gummow and Crennan.
GUMMOW J: It is really at paragraph 81, is it not, page 179.
MR COBDEN: Yes, I am, your Honour. Thank you very much, your Honour. Too much marking up, I do apologise. Yes, and 82, your Honour, and, of course, your Honours are there citing Mutual Pools. So, first of all, extinguishment and modification and deprivation:
does not of itself constitute the acquisition of property. For there to be an ‘acquisition of property’, there must be an obtaining of at least some identifiable benefit or advantage relating to the ownership or use of property. On the other hand, it is possible to envisage circumstances in which an extinguishment, modification or deprivation of the proprietary rights of one person would involve an acquisition of property by another by reason of some identifiable and measurable countervailing benefit or advantage accruing to that other person as a result.
In the second joint judgment, which is the judgement of your Honours Justices Hayne, Kiefel and Bell, the same concepts are set out in paragraph 147 at page 201 and the last three lines:
But there can be no acquisition of property unless some identifiable and measurable advantage is derived by another from, or in consequence of, the replacement of the plaintiffs’ licences or reduction of entitlements. That is, another must acquire “an interest in property, however slight or insubstantial it may be”.
Going back to the words of the Tasmanian Dam Case. We apprehend that it is said against us that what your Honours there are doing when your Honours refer back to this notion of an interest in property, however slight or insubstantial it may be, is to, as it were, return to very traditional notions of property. We would respectfully suggest that what your Honours are saying there is that the notion of an interest in property, however slight or insubstantial it may be, is now, as described by both of those joint judgments, that is to say, being identifiable and measurable advantage derived by another in consequence of the plaintiffs’ rights.
Indeed, this is a convenient point, we would respectfully submit, to bear in mind that the increase or advantage in the other’s rights need not precisely correspond with, or in more other formulations, correspond in appearance, value or characterisation to that which has been lost and it does not need to be of the same substance or nature or dimension. It can be however slight or insubstantial it may be. So we would respectfully submit that in Tape Manufacturers, first of all, there was no identifiable advantage of commensurate gain in any party other than the diffuse notion of the general public, the millions of users who might have been infringing with home taping.
Nothing has been transferred to the tape owners, of course, they are having an impost placed on them, and one even think that in the light of the background as described by Justices Dawson and Toohey, they probably would not have sold a single extra tape because the practice was so widespread and so spread across different classes of society. So we would respectfully agree that there was no acquisition of property in Tape Manufacturers, but that does not supply an answer in the present case.
Now might I go, your Honours, to WMC [1998] HCA 8; 194 CLR 1, and here I am referring to the judgment of your Honour Justice Gummow which starts at paragraph 152 on page 58, and the part I wish to go to is at page 68 in paragraphs 178 and following and these paragraphs, particularly paragraphs 182 to 184.
GUMMOW J: Should you not begin with Chief Justice Brennan, page 16?
MR COBDEN: Yes, your Honour. The reason I was focusing on your Honour’s judgment was that it is one that is picked up in the footnotes in Chaffey and in Wurridjal. Can I come back to that in just a moment? The reason I wanted to go to particular paragraphs of your Honour’s judgment was, as I mentioned, they are the ones referred to and footnoted in Chaffey and in Wurridjal, and via those to Tape Manufacturers which, in our submission, has the explanation and character that I have just given to your Honours. Can I take your Honours to your Honour Justice Gummow’s treatment of the topic of acquisition of property which starts at paragraph 178 and, in particular, then take your Honours over to paragraph 182. As your Honour says:
The Commonwealth submitted that any right which has no existence apart from a law of the Commonwealth “is inherently subject to modification or diminution by later Commonwealth statute”. It was said to follow that the contingency of subsequent legislative abrogation or extinguishment denied the protection of s 51(xxxi) to any right created solely by a law of the Commonwealth. Such propositions are too broad. This may be illustrated by reference to laws made under s 51(xviii) of the Constitution, such as the Copyright Act 1968 (Cth) and the Patents Act 1990 (Cth).
Then your Honour talks more about copyright and identifies those features of copyright that we have identified in relation to both the 1911 Act and the 1968 Act and, as your Honour then says at paragraph 184 – and it is paragraphs 184, 185 and 186 that we say, with respect, need to be closely and carefully read because of your Honour’s reference to Tape Manufacturers in the expressions of what your Honour is saying. So first:
The exercise of those intellectual property rights may limit and detract from the proprietary rights of third parties which otherwise would exist unaffected in infringing articles. However, “[t]o the extent that such laws involve an acquisition of property from those adversely affected by the intellectual property rights which they create and confer, the grant of legislative power contained in s 51(xviii) manifests a contrary intention which precludes the operation of s 51(xxxi)”.
Your Honour refers to Nintendo. We have referred to Nintendo in our written submissions as identifying that necessarily where an intellectual property right, there a circuit layout right, is being created under section 51(xviii) it may well impinge upon, and there did impinge upon, property rights of people in the process of bringing particular printed circuit layouts into the country. So that is the first proposition, that is Nintendo. That is an area where it would be incongruous in the creation of new intellectual property rights to allow 51(xxxi) to impinge on the operation of 51(xviii). As your Honour goes on to say:
Nevertheless, the position with respect to those intellectual property rights themselves is quite different. As a result of the decision in Australian Tape Manufacturers Association Ltd v The Commonwealth, it is settled that these species of exclusive right constitute property to which s 51(xxxi) of the Constitution may apply.
Then, this is the sentence that is, as it were, most invoked against us. We hope to be able to respectfully suggest that it is read in the light of the whole of the passage your Honour is referring to the very passages of Tape Manufacturers that I have just referred to:
On the other hand, a law which reduces the content of the exclusive rights created by these statutes, for example, by providing that certain acts henceforth will not infringe those rights, will not attract s 51(xxxi). Thus, as Tape Manufacturers decided, the immunity which the law in question conferred upon those who otherwise would have been infringers could not be described as proprietary in nature. For s 51(xxxi) to apply, it would be necessary to identify an acquisition, whether by the Commonwealth or a third party, of something proprietary in nature.
That is a reference back to Tape Manufacturers and we would respectfully submit the “proprietary in nature” is then a reference to the conferring of the advantage, those phrases that I took your Honours to in ICM. So we would respectfully submit that if, as is put against us, that your Honour’s first sentence in paragraph 185 is, as it were, a complete answer to any provision such as 109 and 152 or in the region of that kind, then it has been read out of context and your Honour is cross referring very plainly to the very passages in Tape Manufacturers that use such expressions as mere extinguishment and conferral generally and conferral on all.
The key difference we draw attention to here is that there is, in our respectful submission, in the very terms of section 109 and then reading through it, section 152 as to the terms to be imposed upon 109, the very reference to a group of particular enterprises, that is to say, Commercial Radio Broadcasters. Your Honour saw that they were limited in number, even to this day are limited in number, engaged in an enterprise involved in, as it were, the whole use of copyright for commercial purposes and not, for example, the very limited immunity in Tape Manufacturers given to individuals, untraceable individuals who could only use the copyrights for their private and domestic purposes and lost the benefit of the immunity if it is strayed outside the private and domestic sphere.
Then we point, as we have in our written submissions which I will not, as it were, labour over, to what the measurable advantage or benefit that has been conferred and that corresponds to the loss of our exclusive right, that is to say, our ability to say no, you cannot broadcast or our ability to say you cannot broadcast unless you pay a particular rate which is more than one per cent or more than half a cent per head of population, is twofold. On one level it is, as it were, entirely orthodox by pointing to property that has increased in the hands of the broadcasters and we can point straight to their broadcasting copyright which is conferred on them by the 1968 Act, by the very same Act that confers upon them this immunity, point to that, but equally if we step back from a notion of having to identify something, as it were, concrete and proprietary in their hands, increasing in value as a result of the conferral of the benefit, then we could simply step back and say, look at the general nature of their business.
GUMMOW J: What is the nature of the broadcast right?
MR COBDEN: The nature of the broadcast right, your Honour, is to both as at – I will do it as in the Act as passed and then quickly cross check.
GUMMOW J: As I understand it, you are saying that that right is augmented in the sufficient sense.
MR COBDEN: Yes, your Honour, quite so. The nature of the broadcast right is in section 87 and it wraps around, in this case, the sound broadcast of course – just pausing there, The Panel Case was about television broadcasts. It did not touch on the sound broadcast right, but obviously applicable by parity of reasoning very much to it – wraps around the sound broadcast by the act of making the broadcast some important proprietary rights an exclusive right (a) as television broadcast and that was the subject of The Panel Case, your Honours recall that about the single frame. In the case of a sound broadcast, to make a sound recording of a broadcast or a record, or in the case of a sound broadcast, to rebroadcast it. I will just check the present statute –and as one would expect now, the reference to broadcast in 87(c) has become a reference to “communicate” – to re-broadcast or communicate other than by broadcasting.
So if one is looking for, as it were, a concrete proprietary right in the hands of the recipient of the advantage, there is one conferred immediately by the 1968 Act. It is 50-year copyright. It has those rights. Those were the very rights being exercised, of course, in The Panel Case, that is to say, Channel Nine was suing Channel Ten, roughly, for rebroadcasting pieces of broadcasts, and your Honours made a number of observations about how you identify that copyright and then the majority of the Court said it was important to identify that notions of substantial parts still applied to it, and the like. So it is a, as it were, full and powerful copyright. But even if one did not have that, we would respectfully submit, in stepping back a bit - - -
GUMMOW J: Just slow down for a minute, Mr Cobden. I am not sure how it works. The right conferred by section 85 on the sound recording owner is to broadcast the recording.
MR COBDEN: Yes.
GUMMOW J: So it is an infringement for the broadcaster to do that without a licence even though the broadcaster would hope that in engaging in that activity, if the broadcaster was generating its own copyright under 87, is that the idea?
MR COBDEN: The broadcaster will get licences for all sorts of copyright material, which will invest in its own broadcasts along with its own contribution such as live commentary and the like, values of the copyright.
FRENCH CJ: But if the broadcaster does nothing, if we just focus on the broadcasting of a particular song on a particular occasion, there is a copyright in that broadcast which is protected by 87?
MR COBDEN: Yes, and this Court said that - - -
FRENCH CJ: Regardless of any input or – or the absence of input by the broadcaster apart from the - - -
MR COBDEN: Yes, there is a switch on the transmitter and a broadcaster.
GUMMOW J: But insofar as the broadcast included an unlicensed performance of a sound recording, the rebroadcasting would be liable to an injunction, would it not, at the hands of the sound recording owner.
MR COBDEN: Yes, by the broadcaster. It would be liable to an injunction, yes. Of course, that rebroadcasting right, being an exclusive right, as it were, means that the broadcaster can rebroadcast but it means that the broadcaster can then stop a second broadcaster from rebroadcasting it. So every exclusive right is matched by a right to - - -
GUMMOW J: I know, but can the sound recording owner enjoin the rebroadcasting? That is what I am asking you. Not the broadcaster enjoining another broadcaster.
MR COBDEN: Yes, conceivably, your Honour. The sound recording would not disappear into the broadcast copyright. Of course, the reason that does not happen in relation to published sound recordings of the kind represented by my clients is section 109 in relation to protected sound recordings. Of course, I am not talking about American recordings, and I use that phrase very broadly. Can I also indicate a collateral - - -
GUMMOW J: On that analysis, how does your theory of acquisition of property work?
MR COBDEN: That the diminution of part of our exclusive right to broadcast the recording effected by section 109 results in not an identical by any means, but a measurable advantage in the hands of the broadcaster who is able by reason of 109 to use the recording without infringing in its broadcast to rebroadcast that broadcast – first, to broadcast it initially and then to rebroadcast that broadcast, and it adds value to the broadcast as it goes out by making it more attractive.
FRENCH CJ: The premise on which that is based is that the liability for infringement conferred conditionally by section 109 qualifies the exclusivity of the right to broadcast a recording conferred by section 85. It does not qualify the right, just the exclusivity.
MR COBDEN: Yes.
FRENCH CJ: Maybe they merged.
MR COBDEN: They merged because copyright can only be defined as a set of exclusive rights. Indeed, copyright in sound recording is the exclusive right to do any or all of the following acts. If I can use your Honour’s phrase, they merge, yes. There is a further additional and slightly complicating advantage which is also conferred on the broadcaster. Can I take your Honours just very quickly to section 107 which is referred to as the ephemeral right. It is an ancillary right, really, in a sense, to section 109. It says:
Where the broadcasting by a person of a sound recording would not (whether by reason of an assignment or licence or of the operation of a provision of this Act) –
including section 109 –
constitute an infringement of the copyright in the recording but the making –
of a copy would – remembering that section 109 does not confer any immunity with relation to - - -
GUMMOW J: How does that work in terms of practical example?
MR COBDEN: It means that once the industry represented by PPCA licences the broadcasting industry to broadcast, it carries with it – everyone accepts that, as it were, by 107 – the right to make a copy, but it is a very limited right, your Honour. This was partly the topic of that MCM Networking Case we have referred to. It is a very limited right because it can only be exercised by the actual broadcaster and it is only, in the last three lines of the section, to make the record:
in association with other matter solely for the purpose of the broadcasting of the recording in association with the other matter”.
You cannot make further records, subsection (2). Subsection (3), you cannot, in effect, as it were, pass the recording around to other people unless you pay equitable remuneration and, finally, you have got to destroy the copy, subsection (5), within 12 months. I have not been too complicated if I indicate that that is an adaptation of the English section of the 1956 Act where the period was 28 days. For some reason we adopted a much longer period. That is why it is called an ephemeral right, your Honour, but it is carried along with section 109. So at least for 12 months the broadcaster has amplified rights in relation to its broadcast what we say is a measurable corresponding, although certainly not identical, advantage to the diminution in our rights.
Just for the sake of completeness, because your Honours will know that in many recordings there will be embodied copyright musical works, there is a precisely corresponding provision in section 47 in relation to works, again called the ephemeral provision. At the risk of repeating myself, so understood, we say that Tape Manufacturers, its references to a property in the hands of the user is a reference to the measurable advantage and the like. So understood, section 135ZZM is quite different to section 109. There was no acquisition by section 135ZZM and, in our submission, there is an acquisition by section 109 which then leads into section 152 and the caps.
GUMMOW J: A difference with Tape Manufacturers is that the structure in this case involves 85 and 87, two sorts of non-original work copyrights, and one in a way may at least interplay and one may augment the other, which is not the universe they were dealing with in Tape Manufacturers.
MR COBDEN: No, and also of course in Tape Manufacturers – I think this is related to the same point – Tape Manufacturers themselves, because of the view of the law of authorisation taken by the Court, were not infringers at all. They were not being excused anything. There was not a history of relationship as there is here – I have taken your Honours to in very sketchy detail – from the 1930s to the 1960s where there was a relationship, whether it was reluctant or whether it was under protest, there were payments. In other words, it is a commercial relationship that fits into the composite notion of acquisition of property on just terms.
Terms are available for it. Terms were agreed for it. Terms can be constructed, simple terms of a kind of a royalty percentage of earnings or flat money rates, that sort of thing, and sections 109 and 152 contemplated this might be revisited as often as annually. It is not a private and domestic dealing, which is 135ZZM and it is not a fair dealing for purposes of the kind with emphasis on fair dealing. We have dealt with all of those matters, perhaps with different emphasis and in more detail in some ways in our written submissions, but that is what I wanted to say about that topic orally, if that is convenient to your Honours.
Another way that the case is put against us that this cannot be described as an acquisition of property, effectively 109 and 152 put together, is that they are really described as contracting statutory rights. That is what we deal with in paragraphs 92 right through to 110 of our first written outline. It is really the same point again to say that our statutory rights are contracted, as the Tape Manufacturers point, in other words, whether one uses the expression “contracted” or the expression “reduction” in the exclusive rights of the owner and in our reply also in paragraphs 22 to 30.
HAYNE J: But the notion of contraction in exclusive rights may perhaps mask the fact that there is the question about the interplay between the 1912 and the 1968 regime, because contraction presupposes that there is a right which is then diminished and then how do the 1912 rights play with the 1968 rights?
MR COBDEN: We do not apprehend, in effect, that the way it is put against us is that contraction is anything other than the same as is referred to in the cases, the passage I have taken your Honour to; reduction and exclusive rights. If it is put in some different way, I hope I can deal with at the appropriate time. Then there, as it were - - -
FRENCH CJ: Exclusive rights reduced are those generated by the imperial statute or those which replaced them in 1968?
MR COBDEN: Well, they were the rights in existence as at midnight on 30 April.
FRENCH CJ: The imperial rights?
MR COBDEN: The imperial rights, yes.
FRENCH CJ: So if we want to find the scope of that exclusive right which you complain has been unjustly acquired, we go to the imperial Act.
MR COBDEN: We have to succeed on the Cawardine point for there to be an exclusive right. We can then be - - -
FRENCH CJ: Then go to that for its content as well?
MR COBDEN: Yes. Various other ways of putting the argument against us are raised, but perhaps by way of the identification of what are sometimes called these exceptions to the rule, but we are very conscious that Telstra says that is not a way to approach this issue, but the first one is the question of incongruity between section 51(xviii) and the guarantee in section - - -
HEYDON J: Just before you go to that, your written submissions a couple of times use the language of overruling prior authorities.
MR COBDEN: Yes.
HEYDON J: Is that really called for? I mean, if your argument on distinguishing works, no need. Secondly, did Justices Dawson and Toohey really select the rather narrow account of proprietary rights which seems to underlie this overruling submission?
MR COBDEN: If they did then we make the submission but we rather think that they did not. Really they used the expression “property” but that is explained in later cases rather than – if I have grappled properly with what your Honour is putting to me – rather than needing to say that in the outcome of that case there was no misapplication, if I could respectfully even use that word, with respect to their Honours, of the notion of property, but without question, the notion of property has been explained and amplified in those later cases that I referred your Honours to, I think, your Honour. So yes, the primary point can be distinguished or secondly explained. Really it would be very much a retreat of the last order to say that it need to be departed from.
GUMMOW J: Working out the relationship between 85 and 87, if that is determinative and not rendered irrelevant by the imperial overlay, as it were, or the imperial route, is 113 important?
MR COBDEN: Of the 1968 Act?
GUMMOW J: Yes.
MR COBDEN: Your Honour, it is important, it is plainly an important provision - - -
GUMMOW J: It affirms multiple copyrights.
MR COBDEN: Yes, but we would submit, as I have tried to, but perhaps too elliptically in relation to the Cawardine Case that the notion of co-existing copyrights was perfectly well understood and Mr Justice Maugham says well understood by copyright lawyers as at 1911, translations being the prime example. Because only one variety of copyright was conferred - - -
GUMMOW J: But he used the word “subsidiary”?
MR COBDEN: Yes, and I sought to explain that this morning, your Honour.
GUMMOW J: Section 113 does not use the word “subsidiary”.
MR COBDEN: No, but “subsidiary”, we would respectfully submit in relation to Cawardine, meant one of them came first and to create the second you would need the licence of the first but it did not subsume the first. So the making of the record did not subsume the songwriter’s copyright and if someone wanted to use both they would have to make sure they got both licences. If the record manufacturer wanted to make his record one way or another, compulsory licence or otherwise, would have to get the licence of the songwriter - in that sense subsidiary. But copyrights co-existed, that is what Mr Justice Maugham held. We respectfully say that is what Mr Justice Lowe held and 113 becomes perhaps necessary once one erects copyrights under Part III and Part IV and it opts a drafting technique that does so.
GUMMOW J: Part IV and V?
MR COBDEN: Part III of the Copyright Act and Part IV of the Copyright Act.
GUMMOW J: Yes, III and IV.
MR COBDEN: Yes, III and IV. Because the drafting technique has been erected, instead of dealing with all these as works, we have different subject matters. It may become necessary to be more declaratory in section 113 to make sure that people do not miss the point that all these copyrights can co-subsist.
GUMMOW J: You have to start with section 8(1)?
MR COBDEN: Yes, your Honour.
GUMMOW J: And we are back to where we were.
MR COBDEN: Yes, your Honour. Can I give another illustration of co-subsisting copyrights? Cinematograph films were protected as if they were alike to dramatic works under the 1911 Act and a cinematograph film - and as photographs. So a cinematograph film could well have included a pre-existing photograph. It may very frequently have included a pre-existing dramatic work. It could have included musical works but there is, I think, no suggestion that I can recall anywhere in any writings from 1911 to 1956 or 1969 suggesting that all those copyrights did not subsist independently and co-subsist with one another in, for example, one film. So to that extent section 113 is partly declaratory, in my respectful submission.
Really the answer – I hope I have answered the questions your Honour has posed - in relation to incongruity or incompatibility between section 51(xviii) and section 51(xxxi) is first answered by the many pronouncements of the Court saying that it is possible, could or would that be the case that section 51(xxxi) could or would apply. There is no fundamental incompatibility. We have dealt with the topic in paragraphs 111 and onwards of our written outline.
We would say Nintendo goes perhaps to the heart of where there would be an incongruity and that is the creation of new rights, but as to whether other incongruities might arise well it may well be a question of fact and degree and that has been repeated in the cases and it may be an occasionally difficult question but we would submit that in the present case, section 109 and section 152 dealing with the positions of people who are, on the one hand, the record industries and the broadcasters, all that I have said about advantage and diminution continues to apply.
It has been said against us that this is really just – and it is another perhaps observation about the inherent nature of copyright being a statutory right which is, we have answered a number of times, that it is effectively an incidental adjustment of competing rights, claims or observations. We dealt with this in paragraphs 119 and following of our submissions and, indeed, the notion of competing rights was first clearly articulated as we submit in paragraph 119 in that brief part of the majority judgment, Chief Justice Mason, Justices Brennan, Deane and Gaudron, which we have referred to at paragraph 119, and the question was raised in Nintendo, but we say Nintendo is dealing with a very different topic, that is to say the creation of new intellectual property rights which section 51(xviii) clearly contemplates.
But a difficulty with the notion of competing rights is that once one is in the area of a statutory scheme, once one is in the area of statutory property, which plainly can attract the operation of section 51(xxxi), one is almost invariably in the area of competing rights, is almost invariably in the area of where there are controversies that are ultimately sorted out by the Parliament.
So we submit that merely saying that there are competing rights and there is a necessary adjustment is really just to ask the question rather than to answer it and, in particular, we submit that in relation to the present case, even if there were a notion of adjustment of competing rights it really has no role to play and that is particularly because when one talks about the question of competing rights, the next port of call immediately is competing rights being adjusted in the common interest in the general interest or in the public interest, and there is a real problem, we would respectfully submit, in saying that the competing rights of a broadcaster versus a sound recording copyright owner would be – even if it is an adjustment – is in the public interest and the common interest.
Can I just take your Honours briefly to Airservices 202 CLR 133. Of course, all of these cases to which I am taking your Honours, in respect of which I am taking your Honours just to passages, in many places deal with many of the principles that I have been referring to and I am not taking your Honours to all the applicable passages plainly, but in this case I would like to take your Honours to the judgment of Justice Gummow, and can I pick it up at about paragraph 494, page 298 where, looking at the particular issue there of the constitutional protection of property, as your Honour says halfway through paragraph 494:
It is incongruous to treat the constitutional protection of property in the aircraft as requiring protection of the commercial and economic position of those who employed, or permitted or required the employment of, the aircraft in operations requiring the provision of services which by law could come only at a particular price.
Paragraph 497, going straight back to Tape Manufacturers where this, as we have identified, was first clearly articulated:
It was said in their joint judgment in Australian Tape Manufacturers by Mason CJ, Brennan, Deane and Gaudron JJ, that a law may be supported by a head of power outside the operation of s 51(xxxi) if it imposes an obligation that involves “a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship”. If that relationship “needs to be regulated in the common interest”, the law is likely to fall outside s 51(xxxi) because it is unlikely that any “acquisition of property” which is an incident of the operation of that law will be capable of imparting to the law the character which attracts s 51(xxxi).
The criterion which is invoked by their Honours in this passage has some affinity with the notion attributed to Sir Matthew Hale CJ that when private property is “affected with a public interest” it is subject to regulatory control by the state. The Lord Chief Justice was speaking of the scope and limits of three interests relative to the operation –
et cetera. Paragraph 499 –
This notion for a time was influential in the United States in the interpretation of the guarantee in the Fifth and Fourteenth Amendments against deprivation of property without due process of law. However, Holmes J in his dissenting judgment in Tyson & Brother v Banton said, perhaps characteristically, that “the notion that a business is clothed with a public interest and has been devoted to the public use is little more than a fiction intended to beautify what is disagreeable to the sufferers”. In his dissent in the same case, Stone J discerned an element of circularity in the reasoning involved in application of that notion. In the United States, the “public interest” doctrine, with respect to the permissible regulation - - -
GUMMOW J: That was a polite way, perhaps, of saying – what Justice Stone said throws something of a shadow over Tape Manufacturers, actually.
MR COBDEN: I do apologise, your Honour.
GUMMOW J: What Justice Stone said throws some shadow over the reasoning in Tape Manufacturers.
MR COBDEN: Yes, your Honour, I do apologise.
GUMMOW J: Hence the statement in paragraph 500.
MR COBDEN: Yes, your Honour, and as your Honour says:
it may not be easy to draw a line between a law to which s 51(xxxi) applies and one which resolves competing claims or specifies criteria for some general regulation of conduct which is “needed” in the sense used in Australian Tape Manufacturers -
and needed in the sense of Tape Manufacturers by reason of the particular problem addressed in Tape Manufacturers that was identified by their Honours, and the regulation of conduct that was needed was to give a limited exception to the private and domestic dealings of this large group of individuals, but not – one can see in the public interest there – but not the regulation of two groups of traders, as it were.
We suggest, as a resolution of this, in paragraph 123 of our written submissions, that the notion of permissible adjustment of competing rights may perhaps best be seen as an aspect of the incongruity concept. As we say in 134, to apply the constitutional guarantee to some types of law would have the underminer ability of Parliament to pass regulatory laws and to that extent it is incompatible and one gives full scope to the other power. That might be so, even though it could be said that no power was wholly immune. Nintendo is an example of where 51(xviii) exhibits an immunity, but not the present case.
As we say ultimately in paragraph 26, in this case, the notion of adjustment of competing rights has no role to play. There is no incongruity in applying the constitutional guarantee here and Nintendo is distinguishable. One cannot, we would respectfully say, describe these caps as being in the common interest. That is where we would call in aid those passages I just took your Honours to. It is perhaps a little bit of dressing up to say that it is in the common interest when it is in the interests of the broadcasters where the benefit has accrued in the way that we have already submitted.
GUMMOW J: In understanding Airservices you have to look at paragraph 519, too.
MR COBDEN: Yes, your Honour. I do not think, with respect, that that would affect the submissions I have just been making to your Honour. The notion of inherent susceptibility to variation – there is not conceptually a significant overlap between these answers to our case. There certainly is overlap in fact in the way in which they are put against us. The starting position, of course, is that any statute, as it were, is inherently susceptible to variation. That is not an answer in relation to section 51(xxxi).
The position has been put sometimes as to whether the relevant rights have a congenital infirmity, and many such rights identified in the cases are, as it were, infirm or unstable from their genesis in the ways explained in the cases. But for the reasons I have already submitted to your Honours – and I think I would only be repeating myself if I submit it again – these rights, as conferred by the 1911 Act and materially unaltered from 1912 in Australia to 1969, have every appearance and reality of stability and value. So we would respectfully submit that to attempt to characterise them as being inherently susceptible to variation is to misunderstand them.
Can I turn to the topic now of just terms. The plaintiffs of course accept that as the moving party we bear the burden of establishing each ingredient of the case, but we do refer, as I mentioned at the very outset of my address, to what was said by Chief Justice Gleeson in Smith v ANL 204 CLR 493. There are a couple of things that I want to refer to in the judgment there of the Chief Justice which relevantly, starting at page 499, at the very foot of the page, his Honour is examining the other legislation which of course had replaced the common law right of action with a statutory right of action, and in particular brought down the limitation period, using very general language, to a six-month period. That is where his Honour starts - at the foot of page 499:
The legislation did not operate immediately to divest the appellant of his right of action against the respondent. However, it had the effect that, after the expiration of a further six months, he did not have a right to bring an action . . . Once it is accepted, as the authorities establish, that a chose in action is a species of property to which s 51(xxxi) applies, and that the constitutional guarantee is not to be narrowly confined, then modification of a right to bring an action, in circumstances where a corresponding advantage accrues to the party against whom action may be brought, would ordinarily involve an acquisition of property.
If it matters, and I think it probably beyond dispute, copyright is frequently described as a chose in action, in this way at least that the measurement of damages in copyright is often described as one attempts to measure the diminution of the copyright as a chose in action. Then paragraph 8 on page 500 of ANL v Smith:
The extent of the disadvantage may be a material matter in deciding whether just terms have been provided. The circumstance that the appellant could have avoided the adverse consequences . . . does not, in my view, mean that there was no acquisition . . . So is the fact that the legislative scheme provided certain other benefits in place of the common law rights which it affected.
In other words, his Honour sees that as being an aspect of the question of whether there was provision of just terms, but –
it is the position of the appellant, not other injured seafarers considered collectively, or the public generally, that is to be addressed.
Then his Honour quotes a passage from Justice Brennan in Georgiadis and the part we particularly want to refer to is over at page 501 towards the end of the quote, perhaps four lines down:
The purpose of the guarantee of just terms is to ensure that the owners of property compulsorily acquired by government presumably in the interests of the community at large are not required to sacrifice their property for less than its worth. Unless it be shown that what is gained is full compensation for what is lost, the terms cannot be found to be just.
His Honour then discusses important features of section 51(xxxi) and at paragraph 10 says:
In the present case it is not shown that what was gained by the appellant was full compensation for what was lost, even allowing that, in considering what was lost, the period of six months to bring action should be taken into account.
Inferentially also any other benefits conferred by the new statutory scheme should be taken into account. So, there is a special character or a different character to that ingredient of this action that when the matter is before the court, we would submit that unless it be shown that the compensation is full compensation then it cannot be said to be just terms. Translating that to the present case, is the compensation limited to one per cent or half a cent per head of population, full compensation for what was taken?
CRENNAN J: In this context, would it be relevant that a compulsory licence scheme, as you conceded before, has some advantages for record producers because there is not the need to constantly track the extent of the use, as one example of the convenience?
MR COBDEN: Yes, I think so, your Honour, but - - -
CRENNAN J: That is to say it is not just a question of disadvantage in terms of an immunity from infringement. There are also some advantages involved for the copyright owners being the record manufacturers?
MR COBDEN: That is, as it were, a two-way advantage because it also gives the users, be they public – this is effectively the existence of collecting societies and the existence of compulsory licences - it is a two-way benefit perhaps, I could say, in such a way perhaps as to cancel each other out, because equally for the broadcasters under a scheme like this they do not have to go out and look for individual copyright owners. They simply have to sort of - of course, it is instructive to remember, and this is really our point about deriving the notion that there is no full compensation for us in the one posing what is effectively an arbitrary one per cent limit or half a cent per head of population - that there is no such limitation on APRA being precisely the same circumstances.
So that there would be a benefit of course in people being able to deal with APRA in relation to musical works precisely as there is with us. In other words that is a benefit that, as it were, goes with providing compulsory licences of any kind, but in effect neutralises the playing field as between us and APRA and still begs the question why is a one per cent limit, which had no other genesis other than being one per cent - when one looks through the papers there is no attempt to calculate the one per cent. As it were looking forward from the point of valuation from 1 May 1969, I suppose it could conceivably have been right with all the things that might happen, but it may very well have been wrong. It was arbitrary and not a genuine attempt to calculate any sort of full compensation in the terms of the wording of the judgment I just took your Honours to.
KIEFEL J: The just terms, however, must relate to the diminution of value of the copyright for what they gain.
MR COBDEN: Yes, your Honour.
KIEFEL J: Is that answered simply by saying a one per cent cap might not give us that? I mean do you not have to go a little further and attempt to identify the disconnect between the true diminution of value and how the statute operates?
MR COBDEN: Our first answer to that if we may, your Honour, is to say we would respectfully submit no because an arbitrary cap that is imposed apparently without any justification would itself be bad because one simply would not know. That is the case that we have given your Honours a reference to and referred to in our written submissions, which is the Johnston Fear Case [1943] HCA 18; 67 CLR 314 - if we can just go to that briefly? We refer to it in paragraph 146 of our written submissions and the particular passage is at page 322. Now, we accept that this has the limitation that - - -
HAYNE J: Well, it is by concession.
MR COBDEN: It refers to a concession, yes.
HAYNE J: It is by concession.
MR COBDEN: Yes, it is by concession. Quite so, your Honour. It is recorded without - - -
HAYNE J: What do we get out of it?
MR COBDEN: No more than there is no comment that the concession would be – it was in any sense improperly made. I could accept that entirely, your Honour. The one per cent limit or the half a cent per head limit - - -
KIEFEL J: But is your reliance upon the cap because there is nothing in the past which indicates that its application has no connection with a diminution in or taking away of your value, the commercial value of the copyright, your reliance upon the cap must be based upon the prospect that it might operate at some point in the future to your disadvantage. It has not in the past, but the cap is arbitrary, you would say, in the sense that it can operate when things change.
MR COBDEN: Yes, and it cannot of its nature allow for the operation of equitable remuneration if that equitable remuneration might have exceeded the cap.
KIEFEL J: So your argument is – I am sorry to interrupt – simply that you should leave the Tribunal to determine equitable compensation?
MR COBDEN: Yes, quite so, your Honour. There were one or two instances, but I accept that they are only isolated instances of where the actual amount negotiated before 1969 exceeded one per cent of a station’s revenue, but what we know is that - - -
HAYNE J: It would be necessary to know whether those stations were properly to be regarded as failing stations, would it not?
MR COBDEN: Conceivably, yes, your Honour. What we do know from the development of the jurisprudence of the Tribunal, which we have referred to in the submissions, is that traditional – I am sorry; I will go back a step. The Tribunal has frequently said, and we respectfully submit, correctly, that it is not going to be bound by a past rate necessarily, whether it has been agreed or whether it has been found, because all sorts of things may happen over the life of a copyright. We know from the background that there is an extraordinary capacity for technological change and we know from the operations of the stations that are referred to in the special case that they can change their nature and their activity, their mix of music. What the cap says, effectively, even though the background is that all stations were a mix of music and talk, et cetera, the cap effectively says that a radio broadcaster could turn to broadcasting 100 per cent music 100 per cent of the time but never be required to pay more than one per cent of gross earnings.
HAYNE J: How do we know that that would not be just terms for such a broadcaster adopting an all music format of that kind?
CRENNAN J: If it is all music, some may be out of copyright.
MR COBDEN: Yes, quite so, but of course they could choose to broadcast all this last week’s music. It is the capacity of that under 109. To answer your Honour Justice Hayne’s question, because that has not been shown to be full compensation for the right concerned - - -
KIEFEL J: Shown by whom? I hesitate to say it, but do we not need something in the nature of economic evidence?
MR COBDEN: We would submit not, your Honour, for the reasons that I have put forward. We would submit not because the Act itself – in the case of every other right that was at the time of 1969 or even at later times, if it be relevant, introduction of the educational photocopying regime, the educational audio visual copying regime has, as it were, itself expressed the idea that the appropriate method of discovering what is full compensation for any given statutory licence is to allow the Copyright Tribunal to define what is true equitable compensation for the right.
By the very structure of the Act it speaks like that in relation to all other rights and says that the Copyright Tribunal will find equitable remuneration. There is no limit on it at all. In some circumstances it has found such things as 15 times what the going previous rate was, or 10 times, and we have given some examples of that in our footnote, in our outline. But in this case we have said no, you must not go beyond one per cent or half a cent per head of population.
GUMMOW J: You rely on the admission by the predecessor in title of the Attorney, do you not - paragraph 150 in the second reading speech? Parliament was prorogued and then something happened. What happened was equitable remuneration disappeared to allay fears by your opponent’s predecessors.
MR COBDEN: Yes, and we have referred to this in the written outline. We rely on the very fact that the commercial broadcasters and the ABC said there had to be a cap. They say apart that that might be explained by the possibility that the United States recording would spring up with the copyright. There is a document we have referred to that indicates that New Zealand have been talking about 7.5 per cent and they were saying this will be impossible; we will not – more political pressure to bear to say we will not pay more than 1 per cent and we would say the fact that the very users concerned said that there must be a cap is a very real indication that the cap was intended to have a real effect, that is to say, not to provide for full equitable remuneration in the way that uncapped provisions in the Act would do.
GUMMOW J: What do you say the special circumstance is Mr Bowen is referring to – “now existing in Australia”? Is that the United States situation as you read that?
HAYNE J: It was that that provoked my question about Australian content. It was that reference, but what does it include?
MR COBDEN: It includes, your Honours, a whole range of circumstances that – a particular circumstance that attention had been drawn to was the fact that many of the records and record companies were foreign owned, regardless of whether they were US owned or they were US recordings. We have given a reference, your Honours, to say to go back to a letter I think I will take your Honours to. Yes, indeed, if I could take your Honours to the book of documents, volume 3, and to a letter from Mr Sommerlad, who was the executive - - -
GUMMOW J: Page?
MR COBDEN: Sorry, page 1245 behind tab 42. September 22, 1967, your Honours recall that in a statement from Mr Snedden it was 1966, saying there would not be such a right, and then the 1967 Bill was introduced, which is referred to in this letter to the Attorney-General. The Bill was on the table, including a right or what we would say is the continuation of our Cawardine right, and the motivating force in this letter is information from New Zealand that - paragraph 2:
One of the great concerns of our industry has been to try and assess the financial effects of any performance copyright which may be granted to record manufacturers. We have not been in any position to assess the amount –
So ever since, nobody was in a position to assess it. There was a demand made in New Zealand, fourth paragraph:
representing the record manufacturers in New Zealand, for a royalty payment of 7½% of the advertising revenue . . .
Eventually, after negotiation –
that went up to $2 per hour.
Information received –
over on page 2, is that they have –
heard rumours of a proposal for royalty payments to be on a percentage of gross revenue . . . 7½% being mentioned. Such a claim they said, if successful, would increase their present payment at least tenfold -
which, I think if one does the mathematics, although has to be a bit careful, because it was a New Zealand broadcasting corporation, would be something like 0.75 per cent. Further down:
present arrangements in Australia between APRA and commercial radio and television stations, provide for royalty payments on the basis of a percentage of revenue. Currently this is 1.5% for television and 1.7% for radio . . .
Even the rate of $2 (NZ) per hour as negotiated with the new commercial radio station in New Zealand, however, would place an impossible burden on the industry –
simply would not pay it. So there is no mention there of the United states copyright situation. There is just an apprehension that the Copyright Tribunal, unless it is instructed, is required to impose a ceiling on this may well go above the one per cent on which there were a structural reason within the terms of the Act itself to indicate that that militates against it being shown to be for compensation.
BELL J: If the concerns were as the Commonwealth puts them at 49 and 50 of their submissions, namely, the United States possession, and if it be the fact that by reason of that fear the caps were set as a matter of fact the United States position was not changed, it would not be clear that the cap did not represent just terms, save, as I understood your answer to a question posed by Justice Hayne before the luncheon adjournment, you contend just terms must be adequate to compensate fully for matters seen or unforeseen. So that even if the cap were adequate in circumstances in which the United States’ position did not change in the way that was feared at the date, you would still say the cap was offensive for that reason?
MR COBDEN: Yes, your Honour, and because of the length of time looking forward and of the 50 years of the copyright and the attitude of the Copyright Tribunal to find very different valuation and considerations at the time.
HAYNE J: Of what significance to your argument is the fact that the cap is expressed in terms, in effect, not commensurable with particular format of station, play time or anything? It is simply a percentage of revenue from advertising?
MR COBDEN: It underscores its arbitrariness and, therefore, its inaptness to provide a full compensation.
HAYNE J: It is to be noted from the letter you have just been taking us to at page 1246 of the bundle of documents that APRA, too, made an arrangement by reference to percentage of revenue.
MR COBDEN: Yes, your Honour, and doubtless a copyright owner not trammelled by a particular formula, ie, a percentage of gross earnings or perhaps slightly more odd, an amount per head of population of half a cent, can reach any formula that they think is commercially satisfactory. It could conceivably be, as the New Zealand people did for a while, a lump sum or an amount per hour or it could be an amount per listener on ratings or it could be a percentage of gross revenue. In a sense, that is, as it were, another imposition but a different aspect of the imposition on the ability to deal with their copyright as they choose are the record companies. They are, as it were, forced into a particular formula. I think that is the way I would like to put that, your Honour.
HAYNE J: The particular special circumstances now existing in Australia in relation to broadcasting records, would that be an expression that would include, for example, the fact that the industry at that point was, I think, fairly closely held but whether or not closely held was very closely regulated by the Broadcasting and Television Act.
MR COBDEN: By the broadcasting industry?
HAYNE J: By the Broadcasting and Television Act.
MR COBDEN: The broadcasting industry being so regulated?
HAYNE J: Yes.
MR COBDEN: Yes, conceivably, your Honour. It may also be a slightly cryptic reference if one looks through the documents, particularly the documents immediately leading up to that position, of the particular position of country radio, because again, I have not taken your Honours to the documents that led up to the fierce fight about the one per cent, and I interpolate that the Bill as introduced did not have the one per cent, and then the one per cent was imposed along with the capacity of the Copyright Tribunal to review it after a period. There was further fury from the broadcasters when that review provision was taken out, but when one looks closely at the lobbying it is particularly strongly by the country radio interests. We say that we need to be able to continue to service the country radio interests. I think that is a partial answer, at least, to what your Honour said.
One matter that is put up against us which we have an answer to is that there was one occasion when this issue was dealt with by the Copyright Tribunal, and that is of course the WEA Records v Stereo FM Case 1 IPR 6 our learned friends have put on their list. I am sorry, your Honours have the ALR version. I do apologise.
HAYNE J: 48 ALR 91.
MR COBDEN: Thank you, your Honours. I will now work from that. In this case, this was upon the introduction of FM radio and there are people in this room who know much more about this case than I do, but there was a long period of time, and it is covered in the special case, in which there was not a great deal of change in the relationship between AM radio and the record industry, but one of the motivating factors of this case was that the FM radio band was opened up with, of course, very high quality playing of music, and indeed, even an influence on the question of high quality playing music on the possibility of increasing home taping. So the record companies with PPCA, the first plaintiff, brought the action against Stereo FM – which was one of the new FM broadcasters, and I think it might still even be an FM broadcaster – heard over a long period of time, and by the Copyright Tribunal constituted as your Honours see there.
There is just a reference to that point of home taping because it relates, at least on subject matter if not legally or philosophically, to the Tape Manufacturers Case – if I could just give your Honours a passing reference to page 134 of the report. One of the countervailing factors that is put up was that perhaps the FM radio had increased the pirating of music by their taping. It certainly tells your Honours a bit more about the problem that was being addressed, ultimately, by Part VC which failed and the Tape Manufacturers Case – a few more findings of that kind.
The particular role of the cap, we would respectfully submit, was left very unclear by the Copyright Tribunal when it deals with that issue at page 139, identifies the prohibition at line 33 and the paragraph that goes on from there. The Tribunal is not required – perhaps this is a partial answer to what your Honour Justice Hayne said – to determine the relevant amount by a formula expressed as a percentage of gross earnings, but it must in the end, not award an amount that would exceed that particular amount of gross earnings.
There is an examination of what the gross earnings are and as a very subsidiary point we would point out that it is possible, if one looks closely at the statutory provisions, with the reference of gross earnings to advertising and money received in respect of the broadcasted matter that it is conceivable the commercial radio broadcaster could be funded by something other than advertising and by something other than gross earnings. It is just conceivable, for example, by donations of a philanthropist who wanted a particular point of view generally represented and that would increase the arbitrariness of the one per cent because it could be one per cent of a very small amount.
The Copyright Tribunal looked at some of those provisions I took your Honours to earlier to work out what should be in or out of gross earnings and then without further reference, with great respect to them, to how the one per cent played a role in their thinking, made an award of 0.45 per cent, which is to be found at the very foot of page 140 and one, we would respectfully submit, is left really not knowing from that decision in what precise way that roughly 50 per cent, 45 per cent, came about, except that there is one clue – if I can just find it in the report, which I have not marked up.
There was significant evidence before the Tribunal, which is to be found at page 126, in a long passage, about to what extent there had been use of protected recordings and to what extent use of unprotected recordings. Your Honours will recall I referred to that earlier very, very loosely “unprotected” means US and “protected” means non-US, but that is, these days, subject to very heavy qualification.
There was some analysis of logs, as your Honours see at page 127, giving amounts above 50 per cent. Then, over on page 129, there was further analysis. There was some analysis of what might or might not have been protected and unprotected. Ultimately, the finding that is made is at page 130. Your Honours see that, “As a percentage of total programme time” 1981 and 1982 is 44 and 45 per cent and so while one cannot, as it were, penetrate into the reasoning as exposed by this of the Copyright Tribunal in that case we end up with protected use being 45 per cent of 2MMM’s air time and we end up with a rate of point 45 per cent of 1 per cent.
We might have been more illuminated and perhaps assisted in the answer to your Honour Justice Kiefel’s questions about economic valuation if what the Tribunal had said is, “We find, regardless of the cap, this is the value and now we apply the cap. If it is over 1 per cent we can’t give more than 1 per cent. If it is less then that is what we give it.” We say that the decision does not really take the matter any further.
FRENCH CJ: Your position is that the cap does not inform the concept of equitable remuneration or compress the scale, it is just a cut-off?
MR COBDEN: That is right, yes.
FRENCH CJ: On the proper construction?
MR COBDEN: Quite so, your Honour. Then, of course, I make all the same submissions in relation to - - -
GUMMOW J: There is a point in that regard made by the Tribunal at page 111, line 25. There has to be some connection with damages.
MR COBDEN: Yes, your Honour. Well, the position would be that it could not ever exceed the amount of damages because otherwise what would be the setting aside – the inconvenience of litigation, and the possibility of additional damages, setting those aside – what would be the point of going to a compulsory licensing system if you were going to be forced to pay more than you would be forced if you just infringed and paid damages?
FRENCH CJ: If the broadcaster broadcasts a sound recording without giving the relevant undertaking and without having the benefit of an order from the Tribunal is the measure of damages for infringement defined at all by the cap?
MR COBDEN: We would say it could not be, your Honour. I think I would have to say that. It is an interesting question - - -
FRENCH CJ: A measure of maximum damages, I should say.
MR COBDEN: Of ordinary damages. Can I perhaps say just that it is an interesting question because the diminution and the value of copyright as a chose in action and one might say as a chose in action Australia is subjected to the one per cent cap. The closest we get to finding a parallel value and I am not saying it is exactly the same value is in the MCM Networking Case 25 IPR 597 which we have referred to at paragraph 157 of our submissions. It is in the book of documents, I am sorry, your Honours, at volume 4 behind tab 120.
GUMMOW J: Just before you part from damages would section 115(4) bear on the case, namely additional damages?
MR COBDEN: I do not think I could say that on the philosophical topic we are discussing it would bear on it because additional damages are not related in any way to the traditional concept of the diminution of the value of the copyright as a chose in action - - -
GUMMOW J: I know.
MR COBDEN: But would turn on very particular factors like whether the broadcaster had - - -
KIEFEL J: They are in the nature of exemplary damages.
MR COBDEN: They overlap with exemplary damages.
GUMMOW J: Well, if they had not gone along and observed the licensing system, it would be flagrant, would it not?
MR COBDEN: It probably would, your Honour. Sorry, perhaps I should put it a different way, that I do not think that section 115(4) is embraced in the concept that the Tribunal was examining on page 111 that your Honour took me to.
GUMMOW J: That is what I am wondering, yes.
MR COBDEN: Because it is looking at the General Tire concepts which is the - - -
FRENCH CJ: Sorry, my question was directed to compensatory damages, yes.
MR COBDEN: Yes, and I understood your Honour to be asking it in that way, and back to General Tire. It is the willing but not anxious buyer and not an anxious seller.
HEYDON J: Is the calculation of equitable remuneration to be affected by considering whether an account of profits would lead anywhere under 115(2) of the Act?
MR COBDEN: I do not think so, your Honour, because if one were to elect for an account of profits, one would be effectively condoning the infringement and then taking a very different route on the way in which the - - -
HEYDON J: But it does reflect the value of one’s right, does it not?
MR COBDEN: It may reflect the value of one’s right. It would have to be the profits derived by reason of the infringement.
HEYDON J: It might be extremely hard to calculate.
MR COBDEN: Extremely hard to calculate, yes, quite so, your Honour. I will not dwell long on MCM Networking. It was an application by an organisation that was not a broadcaster for either a licence or for the review of a licence. That is in volume 4 of the book of documents behind tab 120. The party involved, MCM Networking, was not a broadcaster but did two things. One was that it packaged up copies of programs and dispatched them around the country to broadcasters and the second was that by use of a satellite broadcasting technique it also made a program available to broadcasters and for the purpose of doing each of those acts, it needed to make copies of the sound recording.
I took your Honours to section 147 earlier where if it was a broadcaster, that right would be conferred with what I call the ephemeral copying right for free, in some circumstances, on the broadcaster. MCM Networking was not a broadcaster did not have the right to broadcast and could not bring itself within that. What it could do, though, your Honours, and if I could take your Honours quickly to the Act as enacted, the 1968 Act, and take your Honours to section 136, which was the old limited jurisdiction of the Copyright Tribunal. What MCM Networking could do fell within the definition of “licence” in 136(1)(b), one of the two branches of that definition, the first one “to be heard in public”, that is not here:
make a record embodying the recording for the purpose of broadcasting the recording –
So that there was a particular way of getting that sort of activity into the Copyright Tribunal by reason of then a licence scheme being formulated or a licence being wanted. I will do no more than give your Honour references to sections 154, 155 and 157. In those circumstances, that activity came under the purview of the Tribunal which would have the power to examine whether the rates were reasonable or not.
In the case of MCM Networking, it is not a broadcasting right that is being exercised, but it is a closely allied copying right, one that would be free in the hands of the broadcasters. I will not take your Honours to the position in detail, but in that case, the Tribunal ultimately adjudicated that if the programs that were being manufactured by MCM Networking had a certain amount of protected sound recording content, they would be remunerated at 4.5 per cent and a different amount at 6 per cent.
So again, it is an indication that a closely allied right, not a pure copying right, which would enable you to make copies of the sound recording and sell CDs or hand out copies, or sell them through record shops, but a closely allied right, a broadcasting right valued at those figures which are of course considerably in excess of 1 per cent and considerably in excess – well there is really no relationship as between that and the half a cent per head of the cap in favour, we would say, of the ABC.
CRENNAN J: In terms of action by owners, do you have anything to say about 116AAA?
MR COBDEN: Yes, your Honour. Pardon me a moment, I will get my present Act. Only this and of course, accepting the very limited way in which one can look at a later inserted provision to cast light, limited if at all, cast light on what would be meant by something passed in 1968, and effective 1969, there is a technique that is plainly available. If one did not have equitable remuneration there is a technique that is plainly available to ensure that section 51(xxxi) does not invalidate a new provision in the Copyright Act, but I would have to accept, your Honour, that this was a somewhat different task at hand.
What had happened when 116AAA came in was that sound recording on live performances were given, including in respect of past recordings, a share in the ownership of such recordings, along with the record companies, so I would have to accept that it is, as it were, not dealing with the diminution of a right across the board, but more actually focusing on ownership of the entire sound recording and the entire bundle of rights.
Those are the comments that we make about that. For those reasons, your Honour, we submit that it has not been demonstrated there has been full compensation granted by the one per cent or the half a cent. That leaves only for our part, your Honours, the question of a severance or reading down. As I indicated earlier I was going to ask Mr Kirk to deal with it and I see the time.
FRENCH CJ: Yes, all right. Thank you, Mr Cobden. The Court will adjourn until 10.15 tomorrow morning.
AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 11 MAY
2011
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