Jurisdiction and Procedures of the Copyright Tribunal

Copyright Law Review Committee

December 2000

The Copyright Law Review Committee is a specialist advisory body established in 1983 to inquire into and report to Government on specific copyright law issues.

© Commonwealth of Australia 2000

ISBN 0 642 20981 2

Requests to reproduce this document for commercial purposes should be directed to:

Commonwealth Copyright Officer
Legislative Services
AusInfo
GPO Box 1920
CANBERRA ACT 2601

Tel: (02) 6275 3649
Fax: (02) 6275 3694

email: cwealthcopyright@dofa.gov.au
http://www.ausinfo.gov.au/

Note: The law as contained in this report is stated as at 21 April 2000.

Contents

• Preface
  • The Committee
  • Course of the reference
  • The Terms of Reference
• Abbreviations
• Section 1 – Consolidated Recommendations
• Section 2 – Background
  • Chapter 1 – Purpose of the Copyright Tribunal
    • History and background
  • Chapter 2 – Australia's international obligations
    • Permissible limitations on the abuse of monopoly power
      • Berne Convention
      • TRIPs
      • Rome Convention, WCT, WPPT
    • Conclusion
  • Chapter 3 – International models
    • Regulation by civil courts
    • Regulation by a specialist tribunal
    • Regulation by an administrative authority
    • Conclusion
  • Chapter 4 – The role of copyright collecting societies
    • Australasian Mechanical Copyright Owners' Society (AMCOS)
    • Australasian Performing Right Association (APRA)
    • Copyright Agency Limited (CAL)
    • Phonographic Performance Company of Australia (PPCA)
    • Screenrights
    • Vi$copy
  • Chapter 5 – Nature of cases heard before the Copyright Tribunal
    • Nature of the applications
    • Nature of the parties
    • Size of the proceedings
    • Duration of proceedings
  • Chapter 6 – Related inquiries
• Section 3 – Jurisdiction of the Copyright Tribunal
  • Chapter 7 – Constitutional issues
    • Background
    • Recent judicial consideration
  • Chapter 8 – Jurisdiction of the Copyright Tribunal
    • Non-statutory licences
    • Statutory licences
  • Chapter 9 – Effect of the Copyright Amendment (Digital Agenda) Bill 1999
  • Chapter 10 – Competition policy
    • Jurisdiction of the Competition Tribunal
    • Comparison of the Copyright Tribunal with the Competition Tribunal
    • Conclusion
  • Chapter 11 – Output arrangements
    • Overview
      • Definition of 'output arrangements'
      • Justification for changes to the Tribunal's jurisdiction over output arrangements
    • Statutory licences
      • Existing jurisdiction of the Tribunal
      • Methods of working out equitable remuneration and of record-keeping
      • Method of working out payment of prescribed royalty for recording of a musical work
      • Requirements for marking, record-keeping and inspection of records under statutory licences
      • Remuneration notices under Parts VA and VB
    • Non-statutory licences
      • 'Transactional licences'
    • Expansion of the Tribunal's jurisdiction over collectively administered licences
      • Background
      • Option 1 – Extension of the Tribunal's jurisdiction to all licence schemes, excluding transactional licences
      • Option 2 – Extension of the Tribunal's jurisdiction to all licence schemes administered by a collecting society, excluding transactional licences
      • Option 3 – Extension of the Tribunal's jurisdiction to all licences administered by a collecting society, including transactional licences
      • Definition of 'collecting society'
      • Use of the term 'collecting society'
      • Substitution of collectively administered licence schemes and transactional licences
      • Extension of the Tribunal's jurisdiction to licences agreed between the parties
  • Chapter 12 – Input arrangements
    • General jurisdiction over input arrangements
      • Declaration and revocation procedures under the Act
      • Contractual remedies
      • Corporations Law
      • Fiduciary duties
      • Judicial review of administrative decisions
      • The jurisdiction of the ACCC and the Australian Competition Tribunal
      • Internal mechanisms of collecting societies
    • Jurisdiction over input arrangements in respect of a class of
      copyright owners
    • Conclusion
  • Chapter 13 – Declaration of collecting societies
  • Chapter 14 – Compulsory referral of licences
  • Chapter 15 – The determination of equitable remuneration
    • General
    • The Tribunal's approach to the determination of equitable remuneration
    • Factors for determination of equitable remuneration under Parts VA and VB
    • Is prescription of factors necessary?
    • Equitable remuneration under proposed statutory licences
  • Chapter 16 – Guidelines regarding what is 'reasonable in the 'circumstances'
  • Chapter 17 – Anomalies in statutory licences
    • The Tribunal's jurisdiction to determine a record-keeping system
    • The determination of different amounts in accordance with a records notice
    • The determination of different amounts under sampling systems
  • Chapter 18 – Untraceable copyright owners
• Section 4 – Membership, Practice and Procedure of the Copyright Tribunal
  • Chapter 19 – Membership of the Copyright Tribunal
    • Appointment of more members
    • Appointment of members with industry experience
  • Chapter 20 – Practice and procedure
    • The Copyright Tribunal's power to determine its own procedure
    • Case management
    • A more active role
    • Incorporating Federal Court case management strategies
    • Deciding matters on the papers
    • Preliminary determinations
    • Should the Tribunal rely on independent expertise?
      • Controlling the use of experts
      • Tribunal-appointed experts
      • Panel of experts
    • Conclusion
• Section 5 – Other Matters Addressed by the Committee
  • Chapter 21 – Alternative dispute resolution
    • Private ADR
    • Industry-based ADR
    • Tribunal-annexed ADR
    • Conclusion
  • Chapter 22 – Code of conduct
  • Chapter 23 – Ombudsman
  • Chapter 24 – Accessibility and promotion of the Copyright Tribunal
  • Chapter 25 – Implementation of the Committee's recommendations
    • Recommendations to the Government
    • Recommendations to the Copyright Tribunal
    • The impact of the Committee's recommendations on the Copyright Tribunal's administration
    • Review of recommendations made by the Committee
• Appendices
  • Appendix A – List of submissions
  • Appendix B – Interests represented at the September forum
  • Appendix C – Jurisdiction of the Copyright Tribunal
  • Appendix D – Re Applications by Australasian Performing Right Association
  • Appendix E – Alternative dispute resolution
  • Appendix F – Table of decisions of the Copyright Tribunal
• Endnotes

Preface

The Copyright Law Review Committee was established in 1983 by the Attorney-General as a specialist advisory body to report to the Government on specific copyright law issues referred to it for its consideration.

From 1983 to 1995 the Committee was chaired by the Hon. Justice I.F. Sheppard AO, then a Judge of the Federal Court of Australia and President of the Copyright Tribunal. During that period the Committee reported on eight references: the meaning of 'publication' in the Copyright Act 1968 (Cth) (the Copyright Act); the use of copyright material by churches; performers' protection; moral rights; the importation provisions of the Copyright Act; conversion damages; journalists' copyright; and computer software protection.

In 1995 the then Minister for Justice reconstituted the Committee and asked it to advise on simplification of the Copyright Act. Mr Peter Banki, formerly a member of the Committee, was appointed Chairman. Following the 1996 federal election, the Attorney-General, the Hon. Daryl Williams AM QC MP, reviewed the structure and function of the Committee and relocated its Secretariat to Canberra. In May 1996 Mr Banki resigned from the Committee.

In September 1996 the Attorney-General appointed Professor Dennis Pearce as the Chairman of the Committee. The Committee recently completed a report on the simplification of the Copyright Act in two parts. Part 1: Exceptions to the Exclusive Rights of Copyright Owners was published in September 1998. Part 2: Categorisation of Subject Matter and Exclusive Rights, and Other Issues was published in February 1999.

The Committee

Professor Dennis Pearce is Chairman of the Committee. The other members of the Committee are Ms Maureen Barron, Ms Susan Blackwell, Ms Mara Bún*, Mr Tom Cochrane, Mr Chris Creswell and Dr Warwick A. Rothnie.

Enquiries concerning the Committee and its work should be directed to:

Director
Copyright Law Review Committee Secretariat
Attorney-General's Department
Robert Garran Offices
National Circuit
BARTON ACT 2600

ph: 02 6250 6076
fax: 02 6250 5989
email: clrc.secretariat@ag.gov.au

* Ms Bún resigned as a member of the Committee on 29 February 2000.

Course of the reference

On 20 April 1999 the Attorney-General asked the Committee to inquire into and report on the need for changes to the Jurisdiction and Procedures of the Copyright Tribunal under Part VI of the Copyright Act. The Committee's terms of reference are set out below. In carrying out its reference, the Committee advertised widely, invited submissions from a wide variety of interests and carried out consultations with key interest groups and affected parties. (A list of those who made submissions to the Committee is at Appendix A.)

On 18 June 1999 the Committee published an issues paper, Jurisdiction and Procedures of the Copyright Tribunal. The paper invited submissions on the matters raised in the Committee's terms of reference. The paper identified and described the key elements of the current Copyright Tribunal regime, and identified many of the issues associated with an expansion of its jurisdiction and with any changes to the procedures of the Tribunal. Twenty submissions were received in response to the issues paper.

On 11 August 1999 the Committee held a meeting in Sydney with Justice Burchett and former Justice Sheppard, the current and past Presidents respectively of the Copyright Tribunal. The Justices provided valuable insight based on their experience of serving on the Tribunal and responded to issues arising out of the submissions received from interests in relation to the issues paper. On the same day the Committee also met with Mr Shane Simpson, author of the Review of Australian Copyright Collecting Societies, to seek his response to issues raised by interests in response to the issues paper.

Pursuant to paragraph 2(a) of the Committee's terms of reference, the Chairman of the Committee met with Mr Henry Ergas, the Chairman of the Intellectual Property and Competition Review Committee (IPCRC), on two occasions, in September and October 1999, to discuss the progress of the IPCRC's reference and that of the Committee.

On 27 September 1999 the Committee held a half-day forum in Sydney (referred to in this report as the 'September forum') with particular interests to discuss issues relevant to its reference. Representatives from copyright industry bodies and user organisations attended the forum. (A list of interests represented at that meeting is at Appendix B.)

On 9 February 2000 the Committee published a draft report on its findings and proposed recommendations for public comment. Fifteen submissions were received by the Committee in response to the draft report. The Committee considers that the small number of submissions it received in response to the draft report indicated that its draft recommendations were largely uncontroversial.

This final report on the Jurisdiction and Procedures of the Copyright Tribunal is an amended version of the Committee's draft report. It is the Committee's intention that readers be able to study this report without the need to refer to the draft report.

The Committee's recommendations in this report have remained substantially the same as those in its draft report. However, in light of submissions received in response to the draft report and further consideration, the Committee has changed some of its draft recommendations. The most significant of those changes are those in relation to marking, record-keeping and remuneration notices (Chapter 11); input arrangements (Chapter 12); and untraceable copyright owners (Chapter 18).

The Terms of Reference

1. The Copyright Law Review Committee (the Committee) is to inquire into and report on the need for changes to the jurisdiction and procedures of the Copyright Tribunal under Part VI of the Copyright Act 1968. The Committee should assess the need to increase the Tribunal's capacity to address matters arising under the Copyright Act, and related legislation, having regard to new uses of copyright materials made possible by ongoing technological developments. The Committee should also examine ways to facilitate access by parties to the Tribunal.

In so doing, the Committee should consider:

1. the Tribunal's structure, constitution, rules and practices;
2. the existing jurisdiction of the Tribunal under Part VI of the Copyright Act and the scope for any expansion in the Tribunal's role to cover new uses of copyright materials, including electronic uses, and any regulatory mechanisms that may be used to effect that cover;
3. the consequences of any expansion in the Tribunal's role on its administration;
4. the need and desirability for an independent alternative dispute resolution mechanism to complement the Tribunal's jurisdiction and procedure;
5. the costs and benefits on business, consumers and the community as a whole of any expansion in the Tribunal's role to cover new uses of copyright materials, including electronic uses, and of any independent alternative dispute resolution mechanisms;
6. how Part VI of the Copyright Act could be simplified to incorporate any proposed recommendations;
7. whether there is a need to actively promote the Tribunal to persons who may wish to use the Tribunal;
8. incidental matters arising from the examination of points (a) to (g), which are able to be addressed by the Committee within the time frame for the reference; and
9. a strategy to implement and review any recommendations made by the Committee.

2. In undertaking the inquiry the Committee will have regard to:

1. the recommendations and findings made in relevant Government reviews or inquiries (including the review of the Copyright Act in 1999­2000 under the Commonwealth's Legislation Review Program) and any reports by relevant expert or advisory bodies including the views of relevant expert or advisory bodies and other interests;
2. any relevant amendments to the Copyright Act or associated regulations that are introduced into Parliament, or which the Government announces are proposed to be introduced or are being considered;
3. any relevant international copyright obligations including those in treaties to which Australia is considering becoming a party;
4. the principle that legislation which restricts competition should be retained or new legislation made only if the benefits to the community as a whole outweigh the costs; and if the objectives of the legislation can be achieved only by restricting competition;
5. domestic and international tribunal models;
6. the possible effect on the operation and complexity of any future copyright legislation as a result of the need to introduce new transitional provisions relating to Part VI of the Copyright Act; and
7. the Government's policy that the compliance costs and paper work burden on small business should be reduced where feasible.

3. In undertaking the review, the Committee is to advertise widely and consult with key interest groups and affected parties.

4. In undertaking the review and preparing its report and associated recommendations, the Committee is to report to the Attorney-General by 30 April 2000.

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Abbreviations

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Section 1 – Consolidated recommendations

Chapter 10 – Competition policy

10.16 The Committee considers that the Copyright Tribunal is functioning well and that it performs a role that would not be as effectively performed by another existing body. However, the Committee considers that its function would be enhanced by the adoption of the Committee's recommendations set out in the following chapters of this report.

Chapter 11 – Output arrangements

11.12 The Committee recommends that the Act be amended so that the jurisdiction of the Tribunal applies to collectively administered licences (whether statutory or non-statutory licences) concerning all types of copyright material and copyright uses. (The Committee's particular recommendations to give effect to this recommendation are set out below.)

11.20 The Committee recommends that ss. 55(1)(d)(ii)(B) and 59(5) (and the regulations made under those provisions) be repealed and the Tribunal's jurisdiction to determine the manner in which the royalty is payable in the absence of agreement between the parties be the basis for determining a dispute between the parties.

11.31 The Committee recommends that the Copyright Tribunal's jurisdiction be extended to allow it to determine a dispute about any matter relating to an agreement between an 'administering body' and the declared collecting society under Part VA or VB, which is outside the terms of the statutory licence. (The Committee notes that this recommendation is consistent with its majority recommendation at paragraph 11.100 below, in relation to non-statutory licences, for the Tribunal's jurisdiction to extend to all licence schemes and transactional licences administered by a collecting society.)

11.32 The Committee recommends that the detailed requirements for marking, record-keeping and inspection under s. 47A be repealed in favour of a single provision that those details should be left to the agreement of the parties or, failing agreement, determination by the Copyright Tribunal.

11.67 The Committee recommends that the jurisdiction of the Tribunal over non-statutory licences be confined exclusively to the review of licences administered by a collecting society, and that the Act be amended accordingly.

11.94 The dissenting member recommends that the Act be amended to extend the jurisdiction of the Copyright Tribunal to licence schemes, but not transactional licences, administered by a collecting society.

11.100 The majority of the Committee recommends that the Act be amended to extend the jurisdiction of the Copyright Tribunal to all licence schemes and transactional licences administered by a collecting society.

11.101 (The majority of the Committee further notes its recommendation at
paragraph 11.67 that the jurisdiction of the Tribunal be confined exclusively to the review of licences administered by a collecting society.)

11.108 The Committee recommends that no amendment be made to the Act to establish a register of collecting societies for the purpose of determining the jurisdiction of the Tribunal under the Act.

11.121 The Committee recommends that the definition of 'licensor' in s. 136 of the Act be amended so that it applies to a person or a body of persons, if the Tribunal is satisfied that the person or body collectively administers rights in respect of a substantial number of works or other subject matter in a class. Additionally, the Committee recommends that the definition of 'licensor' apply to a person or body of persons that administers a licence scheme, whether or not that person or body also administers transactional licences or carries on some other type of activity.

11.129 The Committee recommends that the Tribunal have jurisdiction to substitute a licence scheme if such a scheme is put forward by a party, in addition to its existing jurisdiction to vary or confirm a scheme or specify charges and conditions in relation to licence schemes. Likewise, the majority of the Committee recommends that the Tribunal have a power to substitute, vary or confirm a transactional licence put forward by a party.

Chapter 12 – Input arrangements

12.21 The Committee recommends that the jurisdiction of the Tribunal not be amended to include a power to review input arrangements generally, subject to the Committee's recommendation at paragraph 12.22 below.

12.22 The Committee recommends that a declared collecting society have the ability to make an application to the Tribunal for an order confirming, varying or substituting an existing or proposed scheme of distribution.

Chapter 13 – Declaration of collecting societies

13.15 The Committee recommends that the Attorney-General retain the power to declare a collecting society for the purposes of Parts VA and VB (and under the proposed statutory licence for retransmission of free-to-air broadcasts set out in the Digital Agenda Bill), in the first instance, and to revoke such a declaration.

13.16 The Committee further recommends that the Act be amended so that the Attorney-General may exercise a discretion to refer an application for declaration to the Tribunal if s/he considers it appropriate in the circumstances. Consistent with that recommendation, the Committee recommends that the Attorney-General have the power to refer a question of a revocation of a declaration of a collecting society under Part VA or VB to the Copyright Tribunal if s/he considers it appropriate in the circumstances.

Chapter 14 – Compulsory referral of licences

14.15 The Committee recommends that there be no change to the Tribunal's jurisdiction to adopt a mechanism for compulsory referral of licence disputes.

Chapter 15 – The determination of equitable remuneration

15.13 The Committee recommends that the Act not prescribe factors to which the Tribunal may have regard in determining remuneration under the various statutory licences. The Committee does not intend by this recommendation that there be any change to the approach of the Tribunal in deciding issues which it has developed to date.

15.14 In accordance with that recommendation, the Committee recommends that ss. 153A(3)(b) and 153C(3) of the Act, and the regulations made under those provisions, be repealed.

15.18 In relation to the Digital Agenda Bill, the Committee recommends that:

• no factors be prescribed for the Tribunal to have regard to for the determination of the equitable remuneration payable by retransmitters to underlying copyright holders for the retransmission of free-to-air broadcasts; and
• no factors be prescribed for the Tribunal to have regard to in relation to the determination of equitable remuneration for copying and transmitting material in electronic form.

Chapter 16 – Guidelines regarding what is 'reasonable in the circumstances'

16.14 The Committee recommends that no change be made to the Act to codify factors for the Tribunal to take into account when determining what is 'reasonable in the circumstances' in relation to licences.

Chapter 17 – Anomalies in statutory licences

17.06 The Committee recommends that ss. 135H and 135ZV of the Act not be amended to extend the Copyright Tribunal's jurisdiction to include the power to determine a record-keeping system.

17.13 The Committee recommends that ss. 135H(2) and 135ZV(2) be omitted from the Act.

17.15 The Committee recommends that ss. 135J(4) and 135ZW(4) be omitted from the Act.

Chapter 19 – Membership of the Copyright Tribunal

19.10 The Committee recommends that more presidential and non-presidential members be appointed to the Tribunal. The non-presidential members should be people with relevant industry experience and care should be taken to ensure that there is an even representation of people from both copyright owner and user backgrounds among appointees.

Chapter 20 – Practice and procedure

20.29 The Committee recommends that, where appropriate, the Tribunal employ the case management mechanisms of the Federal Court. It should also use other strategies, such as deciding matters on the papers, if appropriate.

20.30 The Committee does not recommend that the Tribunal be required to hand down preliminary determinations.

20.31 The Committee recommends that the Tribunal be given the same express power to control the use of expert evidence as the Federal Court, including power to appoint experts to assist it in dealing with technical evidence and to receive expert evidence by using the panel approach.

20.32 In order to ensure flexibility, the Tribunal should retain a wide discretion as to its procedures.

20.33 The Committee recommends that r. 40D of the Copyright Tribunal (Procedure) Regulations 1969 be amended to allow the Tribunal to continue to hear a matter where a discrete question of law is referred to the Federal Court. However, the regulation should prevent a final decision by the Tribunal pending the decision of the Federal Court on the question of law.

Chapter 21 – Alternative dispute resolution

21.23 The Committee recommends that collecting societies adopt ADR for the resolution of their disputes with copyright users and potential users, as well as their disputes with members.

21.24 In keeping with the earlier recommendation (at paragraph 20.29) for the Tribunal to adopt a more active case management approach, the Committee recommends that the Copyright Tribunal should encourage parties to explore ADR and should have the power to compel them to do so where the Tribunal thinks it is appropriate.

21.25 The Committee recommends that the Copyright Tribunal utilise the Federal Court mediation service as an effective form of ADR. It should also be able to refer matters for private mediation.

Chapter 23 – Ombudsman

23.05 The Committee does not recommend the establishment of an ombudsman of collecting societies by the Government. The Committee notes that this recommendation is no barrier to collecting societies establishing their own industry ombudsman.

Chapter 24 – Accessibility and promotion of the Copyright Tribunal

24.06 The Committee recommends that collecting societies notify parties that they may take up a dispute with the Copyright Tribunal (including an outline of its procedures and functions) at the time of sending out notifications of decisions regarding licence applications. The Committee acknowledges that this may not always be necessary, depending on the constituency of the particular collecting society.

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Section 2 – Background

Chapter 1 – Purpose of the Copyright Tribunal

History and background

1.01 The Copyright Tribunal is a specialist administrative body established primarily for the purpose of dealing with disputes regarding statutory licences and particular non-statutory licences. The Copyright Tribunal is established under Part VI of the Copyright Act and its jurisdiction is provided for in Division 3 of Part VI.

1.02 While the jurisdiction provided for is complex, the Tribunal generally speaking has the function of determining remuneration payable under the statutory licence schemes provided for in the Act, and has jurisdiction in respect of licence schemes falling within the definition of a 'licence scheme' in s. 136, where the scheme has been referred to it by a party.

1.03 Pressure for a tribunal arose in Australia after the formation of the Australasian Performing Right Association (APRA) in 1926, which first licensed the public performance right in musical works. Similar concerns were expressed in the UK about the equivalent position of the Performing Right Society (PRS) and that of Phonographic Performance Limited, which was established by the record industry in 1934 to exploit the performing right in sound recordings.

1.04 In 1932 a Royal Commission (the Owen Commission) was formed to inquire into and report on the exploitation of the performing rights in response to those concerns.¹ The Owen Commission concluded that APRA performed its functions to the benefit both of owners, 'who individually cannot effectively protect their interests', and of the users of copyright.² It recommended the establishment of a tribunal to counterbalance the position of APRA which it described as 'a super-monopoly controlling, or claiming to control, most of the music which users in public must use and is able to dictate its
own terms'.³

However, that recommendation was not acted upon because of doubts about whether an enactment providing for compulsory arbitration of disputes between APRA and other bodies would be consistent with the Berne Convention.

1.05 In Australia the Copyright Tribunal was established by s. 138 of the Copyright Act in response to the perceived need to control the exercise by collecting societies or other organisations of the rights given to them by copyright owners in respect of the public performance and broadcast of their musical works and sound recordings. To a large extent, the current limited jurisdiction of the Copyright Tribunal is explained by that background. It is notable that the current jurisdiction of the Copyright Tribunal (with the significant exceptions of the statutory licences under Parts VA, VB and Division 2 of Part VII of the Act) centres on statutory and non-statutory licensing matters relating to the public performance and broadcasting of sound recordings and of literary, dramatic or musical works (or an adaptation thereof) and the recording of musical works.

1.06 The jurisdiction and nature of the Copyright Tribunal, as it is today, was largely built on the recommendations of the 1959 Report of the Committee Appointed by the Attorney-General of the Commonwealth to Consider What Alterations are Desirable in the Copyright Law of the Commonwealth (the Spicer Committee Report). One of the major problems which the Spicer Committee was called on to solve was whether or not the provisions of the UK Copyright Act 1956 should form the basis of an Australian Copyright Act. As the rationale for the Australian Copyright Tribunal's current jurisdiction arose substantially from that report, and from the UK model to which the Spicer Committee had regard, it is instructive for the Committee to outline that model and the relevant recommendations of that report.

1.07 Part IV of the UK Copyright Act 1956, which established the UK Performing Right Tribunal, implemented recommendations by the 1951 UK Board of Trade Committee (the Gregory Committee) for the establishment of a standing tribunal with binding powers of determination in cases where conditions of monopoly or quasi-monopoly obtained, for example, disputes with PRS or in respect of rights owned by a limited number of companies, such as the performing right in sound recordings. It recommended that licences granted or refused except on certain conditions by individual authors for the performance of their work should not be subject to the Tribunal's jurisdiction.

1.08 The Spicer Committee agreed with that recommendation and recommended that the Australian Copyright Tribunal should, in relation to the performing and broadcasting rights (the 'performing rights'), have jurisdiction to determine disputes between persons or organisations requiring licences and the following bodies:

(a) organisations which have as one of their main objects the negotiation or granting of licences to perform or broadcast literary, dramatic or musical works;

(b) in the case of licences to perform or broadcast a sound recording, the owner of copyright in the recording or any person or body authorised to grant or negotiate the granting of such licences; and

(c) in the case of licences to perform publicly television broadcasts to a paying audience, the owner of copyright in the broadcast or any person or body authorised to grant or negotiate the granting of such licences.⁴

1.09 In relation to paragraph (a), the Committee further recommended that:

the same limitation as appears in the proviso to section 24(3) of the 1956 Act, namely, that it shall not extend to an organisation by reason that its objects include the negotiation or granting of individual licences, each relating to a single work or the works of a single author, if they do not include the negotiation or granting of general licences, each extending to the works of several authors. The purpose of this is to exclude publishers and producers whose practice is to grant individual licences in respect of particular plays or musical works.⁵

1.10 While the Committee's general recommendations in relation to the performing rights and the statutory licence for the recording of musical works (among others) were ultimately enacted, its recommendation for a limitation on the scope of paragraph (a) was not. The then Attorney-General, the Hon. Nigel Bowen QC, in the Second Reading Speech to the Copyright Bill 1967 noted that, instead, the jurisdiction of the Copyright Tribunal in this regard was to follow the provisions of the New Zealand Copyright Act 1962. It is not clear to the Committee why the Australian Government of the day took that approach.

1.11 Thus, while the Tribunal was principally established under the Copyright Act to counterbalance the monopoly position of particular collecting societies, it was also granted jurisdiction to determine particular disputes between users and copyright owners in respect of licences for use of a single work or other subject matter. Despite this, the great majority of matters heard before the Tribunal have involved disputes between large institutional users of copyright material and collecting societies in relation to licence schemes. In relation to the Tribunal's jurisdiction over non-statutory licences, there have not been any applications regarding the failure or refusal to grant a licence in respect of a single work or sound recording.

1.12 The Committee has had regard to this background in determining the nature of the extension to the Copyright Tribunal's jurisdiction, which it recommends in Section 3.

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Chapter 2 – Australia's international obligations

2.01 Australia is a party to a number of international agreements which impose obligations regarding the nature of the rights that are to be granted to copyright owners and the permissible limitations on those rights. Accordingly, any proposal for an extension to the jurisdiction of the Copyright Tribunal, in so far as the Tribunal's jurisdiction may operate as a limitation on the exclusive rights of copyright owners, must have regard to the permissible limitations open to Australia under those treaties.

2.02 Paragraph 2(c) of the Committee's terms of reference instructs it to have regard to any relevant international copyright obligations including those in treaties to which Australia is considering becoming a party. In that regard the following treaties of which Australia is a member are relevant for the purpose of considering changes to the jurisdiction of the Copyright Tribunal:

• the Berne Convention for the Protection of Literary and Artistic Works (the Berne Convention);
• the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (the Rome Convention); and
• the World Trade Organisation (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). TRIPs relevantly provides that members shall comply with the substantive provisions of the Berne Convention, other than art. 6^bis relating to moral rights.

2.03 Also, the Committee understands that the Government is considering whether Australia should become a party to the World Intellectual Property Organisation (WIPO) Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) adopted at the Geneva Diplomatic Conference on Copyright in December 1996. The obligations under those treaties do not apply to Australia until Australia ratifies them. The Government has recently introduced amendments to the Copyright Act in the form of the Copyright Amendment (Digital Agenda) Bill 1999. In the Second Reading Speech to that Bill, the Attorney-General stated that the enactment of the Bill 'will be a major step towards aligning our copyright laws with the obligations imposed by the [WCT and WPPT]'.⁶ Accordingly, the Committee has also had regard to the obligations under those treaties in making its recommendations.

Permissible limitations on the abuse of monopoly power

Berne Convention

2.04 The Berne Convention provides that authors of literary and artistic works shall enjoy a number of exclusive rights. Concerns that exercise of those rights may amount to an abuse of monopoly power were expressed at an early stage in the development of the Berne Convention, particularly in relation to the performing and broadcasting rights. Those concerns were expressed at the Rome (1928) and Brussels (1948) Revision Conferences. Australia shared those concerns and associated itself, along with a number of other countries, with a declaration of the British delegation to the Brussels Revision Conference that, in relation to art. 11 of the Berne Convention (which was amended at that Convention to become a general right of public performance):

it [is] understood that the Government of His Majesty remains free to promulgate any legislation that it thinks necessary in the public interest to prevent or remedy any abuse of the exclusive rights belonging to a copyright owner by virtue of the laws of the United Kingdom.

2.05 While indicating that some States adopted different views at the Brussels Conference as to the extent of measures that may be taken to restrict abuses of monopoly power, Professor Ricketson has summarised the general principle accepted at that Conference to be that:

Berne Members are free to take all necessary measures to restrict possible abuses of monopoly, and this will not be in conflict with the Convention so long as this is the purpose of the measures, even if, in some instances, this means that the rights of authors are restricted. All private rights have to be exercised in accordance with the prescriptions of public law, and authors' rights are no exception to this general principle. This therefore would not exclude the imposition of such measures as compulsory licences or price controls where this provided the most effective way of controlling the abuse in question.⁷

2.06 The issue of the permissible limitations on abuse of monopoly power discussed at the Rome and Brussels Revision Conferences led to a general agreement that members of the Berne Convention had broad freedom to regulate such potential abuses. This general principle was also accepted at the Stockholm Revision Conference (1967) and, as stated by Australia, was noted at the 1996 Geneva Diplomatic Conference on Copyright. Accordingly, it appears that proposals to include a specific exception in this regard at the Stockholm Revision Conference (including such a specific proposal made by Australia) were not adopted on the basis, in part, that they were unnecessary.

2.07 Further, the Berne Convention provides for limitations on a number of rights, for the purpose of balancing those private rights with the broader public interest.
Article 9(2) of the Berne Convention, concerning the reproduction right in literary and artistic works, provides that:

It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.

2.08 Articles 11^bis(2) and 13 of the Convention provide that members may determine the conditions under which the broadcasting right and the right of recording of musical works may be exercised. Those articles explicitly contemplate the role of a body such as the Copyright Tribunal as a rate-setting body, where the parties cannot agree on what amounts to equitable remuneration. Thus both of the articles include the formula that those conditions shall not be prejudicial to the author's right to obtain equitable remuneration 'which, in the absence of agreement, shall be fixed by the competent authority'.

2.09 More generally, the Committee considers that the Copyright Tribunal's role in relation to the statutory licences under the Act is permitted by other articles of the Convention which provide that it is a matter for the legislation of member States to place particular restrictions on the exercise of authors' rights (arts. 2^bis(2), 10, 10^bis).

TRIPs

2.10 Like the Berne Convention, it is clear that TRIPs provides scope for member States to impose measures to prevent abuses of intellectual property rights. A number of articles of TRIPs are relevant in that respect. Article 7 provides that the protection and enforcement of intellectual property rights should promote social and economic welfare and a balance of rights and obligations. Under the heading 'Principles', art. 8(2) states that:

Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade.

2.11 In relation to copyright and related rights, TRIPs permits the qualification of exclusive rights in particular cases, including provision for limitations or exceptions to those rights in accordance with art. 13, which is worded similarly to art. 9(2) of the Berne Convention.

2.12 Further, art. 40(2) of TRIPs provides that:

Nothing in this Agreement shall prevent Members from specifying in their national legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices.

2.13 The Committee also notes its agreement, expressed in Part 1 of its report on Simplification of the Copyright Act 1968,⁸ with the report of the WIPO International Bureau which examined the relationship between art. 13 of TRIPs and the exceptions to authors' rights permitted under the Berne Convention.⁹ That study commented that generally and normally there is no conflict between the Berne Convention and TRIPs as far as exceptions and limitations to exclusive rights are concerned. This suggests that the Committee's observations above in relation to the limitations permissible under the Berne Convention in respect of abuses of monopoly would be similarly applicable under TRIPs.

Rome Convention, WCT, WPPT

2.14 Unlike TRIPs, the Rome Convention does not include provisions dealing explicitly with limitations to prevent 'abuses' of the rights in relation to performers, producers of phonograms and broadcasting organisations provided by the Convention. Likewise, no such explicit provisions are included in the WCT or the WPPT.

2.15 Article 15 of the Rome Convention allows member countries to provide for exceptions in relation to private use, using short extracts to report current events, ephemeral fixations for broadcasting and for teaching and scientific research. Member countries can also impose the same types of limitations as are permitted for copyright works. However, compulsory licences may only be provided in a manner compatible with the Rome Convention.

2.16 The exceptions provided for in the WCT (art. 10) and WPPT (art. 16) are worded similarly to art. 13 of TRIPs. Accordingly, the Committee understands that, to the extent that the jurisdiction of the Tribunal would be permitted under the limitations provided for by art. 13 of TRIPs, and under the compulsory licences permissible under the Berne Convention (which is incorporated by reference into TRIPs), the Tribunal's jurisdiction would also generally be compatible with the permissible limitations under the Rome Convention, and the WCT and WPPT. The Committee notes that the agreed statement at the Diplomatic Conference regarding art. 10(2) of the WCT was that it 'neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by the Berne Convention'. This agreed statement was applied by the conference mutatis mutandis to art. 16 of the WPPT.¹⁰

2.17 More importantly, it appears to the Committee that the general principle accepted in relation to the Berne Convention that all private rights have to be exercised in accordance with the prescriptions of public law would apply similarly to permit restrictions on abuses of rights provided under the Rome Convention, or the WCT and WPPT.

Conclusion

2.18 The prevention of the abuse of monopoly power is today a feature of the copyright regimes of a large number of countries. However, the Committee notes that there does not appear to be any consistent international approach to the manner in which countries place restrictions on possible monopoly abuses of copyright. (Some summary information on a number of those models is set out at Chapter 3.) In Australia, that function is performed, in particular cases, by the Copyright Tribunal and, more generally, by the operation of Part IV of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) other than conditions in some licences and assignments of intellectual property rights that are exempted from some provisions of that Part by s. 51(3) of that Act. (A short discussion of the relevant provisions of the Trade Practices Act is at paragraph 10.07.) Those limitations on the exclusive rights of copyright owners appear to operate under the general principle that countries may limit the exclusive rights under the treaties referred to above in the public interest.

2.19 It is notable that proposals in relation to the collective administration of rights were put forward by WIPO to the committee of experts considering a possible Protocol to the Berne Convention (ultimately adopted at the WIPO Diplomatic Conference in 1996), to prevent 'discrepancies of views that have surfaced, or may surface in the future'.¹¹ One proposal was that the Protocol include a provision that 'government intervention in the determination of fees and conditions of authorizations given by a collective administration organization is only allowed if, and to the extent that, such intervention is indispensable for prevention or elimination of actual abuse (particularly abuse of a de facto monopoly position) by a collective administration organization'.¹² This proposal was not accepted as one of those to be considered by the committee of experts. The failure of the committee of experts to address this proposal suggests that there remains no clear international consensus about the manner in which permissible limitations may be imposed on the licensing activities of collecting societies.

2.20 Accordingly, it appears to the Committee that the establishment of a Copyright Tribunal or like body, with a broad jurisdiction to regulate monopoly conduct in respect of the various rights that Australia is obliged to protect, does not conflict with Australia's international obligations, or potential future obligations under the WCT or WPPT.

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Chapter 3 – International models

3.01 In accordance with paragraph 2(e) of its terms of reference, the Committee has had regard to different international models for the resolution of copyright disputes.

3.02 In its issues paper, the Committee invited comments on the suitability or desirability of adopting aspects of any of the approaches embodied in foreign legislation as a model for Australia and, particularly, how those approaches work in practice. At the September forum, the Arts Law Centre drew the Committee's attention to the functioning of collective administration in the Nordic countries. With that exception, the Committee did not receive any submissions (either in writing or through direct consultations) which provided information on models that regulate the licensing of copyright in other countries.

3.03 The Committee notes that the establishment of specialist copyright tribunals is not a universal practice and that other models for the resolution of copyright disputes have been adopted in various overseas jurisdictions. Broadly, the supervision of collective administration organisations and the management of copyright disputes may take three forms: regulation by civil courts; adjudication by specialist tribunals or other arbitration bodies established for this purpose; and the official supervision or approval of the fees and terms of a licence by an administrative authority.¹³ Some features of each of the three models, and examples of each model, are set out below.

Regulation by civil courts

3.04 Many countries have not found it necessary to establish specialist tribunals, including Belgium, Greece, Italy, Japan, Spain, Sweden and France. In those cases, the activities of copyright collecting societies are regulated by civil courts (for example, in accordance with unfair competition law) or by a form of officially provided mediation.

3.05 For example, in Sweden, questions concerning remuneration for exploitation of copyright works are settled by means of contract and are subject to regulation by the courts. However, licences in some areas, such as the performing rights, may be subject to scrutiny under the Unfair Competition Act.

3.06 In the United States, disputes concerning the rate or fee of a licence agreement offered by performing rights associations may, in some instances, be brought before the courts. As a result of anti-trust actions, the two main music performing rights associations in the US, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc (BMI), entered into consent decrees with the US Department of Justice. One of the main features of these consent decrees was the establishment of a mechanism for the fixing of licence fees where a licensee and the performing right association are unable to agree on terms. This mechanism is known as the 'Rate Court'.

Regulation by a specialist tribunal

3.07 The Committee understands that copyright tribunals similar in varying degrees to the Australian model have been adopted in other countries with a common law tradition, borrowing from the precedent of the UK Performing Right Tribunal or its successor, the UK Copyright Tribunal. Those countries include New Zealand, Canada, India, Singapore, South Africa and Ireland. (However, in South Africa and Ireland this jurisdiction is conferred on one person: the Commissioner of Patents and the Controller of Industrial and Commercial Property, respectively.) The Committee also understands that other countries, including Denmark and Germany, have adopted a form of tribunal.

3.08 The United States also operated a tribunal model from 1976 to 1993 when that tribunal was abolished by the Copyright Royalty Tribunal Reform Act 1993 and replaced with a system of ad hoc Copyright Arbitration Royalty Panels established by the Librarian of Congress. The panels adjust the copyright compulsory licence royalty rates and distribute the royalties collected by the Licensing Division of the Copyright Office to the appropriate copyright owner.

3.09 In Denmark, disputes about the level of remuneration payable under particular statutory licences may be referred to the Copyright Licence Tribunal. Applications can also be made to the Tribunal in regard to certain licences. For example, if consent to record a broadcast is refused or the parties are unable to agree on conditions, the Tribunal can determine these matters.

3.10 In Germany, copyright disputes are referred to an Arbitration Board. The type of disputes that can be referred to the Arbitration Board include those in which a collecting society is a party if it concerns the use of copyright works or performances or the conclusion or amendment of a contract for use of copyright works or performances. The Arbitration Board proposes a settlement to the parties which, if not disputed, forms the basis of a contract between the parties. If the settlement is disputed, the claims may be heard in civil court proceedings.

3.11 The Committee understands that Austria and Switzerland operate arbitration boards which perform a function similar to that of the Australian Copyright Tribunal.¹⁴ In Switzerland, tariffs set by collecting societies have to be submitted to the Federal Arbitration Board for the Exploitation of Authors' Rights and Neighbouring Rights for approval. The Board has the power to modify the tariffs as it deems appropriate. It is to be noted, however, that any litigation in a specific case regarding, for example, remuneration based on a tariff, or remuneration based on contract, has to take place before a civil court.

3.12 While some of these tribunals perform functions broadly similar to those of the Australian Copyright Tribunal, it appears, so far as the Committee is aware, that procedures for official arbitration in relation to copyright licences may vary significantly between those countries.

Regulation by an administrative authority

3.13 In Japan, all licensing tariffs set by JASRAC (the authors' society administering public performance and reproduction rights in musical works) have to be submitted in advance to the Commissioner of the Agency for Cultural Affairs and cannot come into force until they have been approved. If a dispute arises in relation to any of the rights provided for in the Copyright Act, the parties concerned may apply to the Commissioner for mediation.

3.14 In the Netherlands, a Commissioner, appointed by the Ministry of Justice, exercises general supervision over the operation and conduct of the Dutch performing right society (BUMA). The Committee notes that the Ministry of Justice in the Netherlands is currently giving consideration to other models, including the creation of a specialist tribunal, and, in that respect, has requested information on the operation of the Australian Copyright Tribunal.

Conclusion

3.15 The Committee notes that this survey of some international models has revealed that there is a variety of methods for resolving copyright disputes, and it is often the case that elements of more than one model are employed within a single country.

3.16 The Committee is of the view that the resolution of copyright disputes requires a form of specialist management. However, it notes that it did not find any of the various models discussed above particularly instructive for its consideration of the need for changes to the jurisdiction and procedures of the Australian Copyright Tribunal. That the Committee did not receive submissions regarding any of these models and how they work in practice reinforces that impression.

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Chapter 4 – The role of copyright collecting societies

4.01 Collecting societies offer advantages to both copyright owners and users. The collective administration of copyright can reduce the transaction costs associated with the use of copyright material. For copyright owners, collective administration facilitates the commercial exploitation of their copyright by alleviating the potentially prohibitive financial and administrative burdens that would be incurred by individuals. Collecting societies are often effective in preventing unauthorised use of copyright and in promoting awareness of copyright in the community. For copyright users, collecting societies provide relatively easy access to an extensive repertoire without the need to identify and locate individual authors or copyright owners.

4.02 As noted above, the Copyright Tribunal's work to date has principally been in the resolution of complex disputes between copyright collecting societies and large institutional users regarding licence schemes administered by the collecting societies. For the reasons set out in Chapter 11, the Committee has made recommendations about the Copyright Tribunal's jurisdiction over collectively administered licences. In determining what is 'collectively administered', among other matters it has considered, the Committee has had regard to the nature of the societies concerned with the collective administration of copyright in Australia.

4.03 The nature of each of the main copyright collecting societies and their licensing activity in Australia (with the exception of Vi$copy which was subsequently established) was addressed at length by the 1995 Review of Australian Copyright Collecting Societies by Mr Shane Simpson (the Simpson Report). Accordingly, the Committee describes them here only in summary. Some particular features of the principal copyright collecting societies in Australia are set out below. The following summary particularly sets out the nature of some of the licence schemes (sometimes known as 'blanket licences') administered by the collecting societies, which are, or would be, if the Committee's recommendations on the Tribunal's jurisdiction were adopted, the principal focus of the Tribunal's function. Licence schemes are typically standard licences for a particular industry or other collectively identifiable group which require the payment of a standard fee regardless of the level of use.

4.04 Under s. 136 of the Act, 'licence scheme' is defined as:

a scheme ... formulated by a licensor or licensors and setting out the classes of cases in which the licensor or each of the licensors is willing, or the persons on whose behalf the licensor or each of the licensors are willing, to grant licences and the charges (if any) subject to payment of which, and the conditions subject to which, licences would be granted in those classes of cases.

4.05 It is notable that the variety of the licence schemes administered by the societies is very broad. Many licensees, particularly licensees of the public performance right in musical works, administered by APRA, and the right to cause a sound recording to be heard in public, administered by PPCA, are currently able to make applications to the Copyright Tribunal in accordance with its jurisdiction under the Act (summarised at Appendix C). However, a number of users, such as those who are party to non-statutory licences with CAL, are currently excluded from the jurisdiction of the Tribunal.

Australasian Mechanical Copyright Owners' Society (AMCOS)

4.06 AMCOS represents music publishers in relation to licences for the mechanical (ie, for reproduction on to records) and photographic reproduction of musical works. AMCOS is the exclusive licensor in Australia of the reproduction right in musical works that are under its control. However, under the Mechanical Copyright Agreement, the six major record companies make direct payments to music publishers for the licensing of records. AMCOS, therefore, does not have the right to collect the majority of mechanical copyright income and generally collects the income that is unprofitable for the publishers to collect individually.

4.07 While it is difficult to estimate the percentage of music publishers represented by AMCOS in Australia, it is evident that a large number of music publishers are members of the society. Further, most music composers are members of APRA and therefore have access to membership of AMCOS through APRA. AMCOS also appears to represent the majority of music publishers and composers in Australia, through its reciprocal arrangements with societies overseas.

4.08 Some examples of significant licence schemes administered by AMCOS for the reproduction of musical works are:

• the radio station blanket licence (ie, licences for the use of production music recordings in commercials. AMCOS has licence agreements in this regard with the majority of commercial and community radio stations);
• the film and video 'synchronisation licence' (ie, licences for the incorporation of musical works into film soundtracks); and
• the television blanket licence (ie, licences to make reproductions of musical works for the purposes of television broadcasting. AMCOS has licence agreements in this regard with the ABC, SBS and commercial television stations, including those that transmit free-to-air and by subscription).

Australasian Performing Right Association (APRA)

4.09 APRA represents composers, songwriters and publishers of musical works for the purpose of administering licences for the broadcasting and public performance of those works. It was noted in the Simpson Report that, by reference to the logs APRA receives from both radio and television stations, APRA assumes that it represents over 99 per cent of all writers whose works are publicly disseminated in Australia.¹⁵ APRA takes an assignment of a portion of the rights in the musical works of its members for that purpose. However, in accordance with the recent decision of the Australian Competition Tribunal in Re Applications by the Australasian Performing Right Association,¹⁶ the Committee understands that APRA is instituting a 'license-back' mechanism, under which members may license back the rights in a particular class of musical works previously assigned to APRA.

4.10 The licensees under the licence schemes that APRA administers are in many cases also licensees under the licence schemes administered by PPCA (described below).

Copyright Agency Limited (CAL)

4.11 CAL represents the owners of copyright in published literary works, principally authors and publishers, in administering copyright licences with users for the reproduction of copyright material. However, as the declared collecting society under s. 135ZZB for the purpose of the statutory licence for educational and other institutions and under
s. 153F for the purposes of the Crown use of statutory licences (Division 2 of Part VII), CAL also administers the reproduction rights of other copyright owners, such as those in artistic and musical works.

4.12 Membership in CAL is voluntary. It was noted in the Simpson Report that CAL estimates that, in regard to the licensing of educational institutions, it represents over 90 per cent of copyright owners whose works have been copied.¹⁷ The Committee notes that CAL was initially established to administer that statutory licence in respect of print works.

4.13 The Committee understands that the majority of CAL's members generally license their copyright to CAL on an exclusive basis, although some members also license CAL on a non-exclusive basis. That is, a copyright user may, in some cases, be free to deal directly with a CAL member (such as a publisher) to negotiate a licence for a copyright use of that member's copyright material. From CAL's submission and the September forum, the Committee understands that CAL administers both licence schemes and 'transactional licences' (the Committee defines the nature of 'transactional licences' at paragraph 11.44).

4.14 Some licence schemes that CAL administers include:

• crown copyright licences (CAL administers those licences under the statutory licence for the use of copyright material for the Crown under Division 2 of Part VII of the Act. Accordingly, CAL has agreements in place with various Commonwealth and State/Territory government departments and agencies);
• educational copying licences (these licences are administered under the statutory licence in Part VB of the Act for the copying of works etc by educational and other institutions);
• corporate copying licences (CAL administers a number of non-statutory licences with generally large corporations for their copying of published print copyright material);
• media monitoring licences (these are non-statutory licences with for-profit media monitoring organisations); and
• church copying licences (these are non-statutory licences for copying done by churches).

Phonographic Performance Company of Australia (PPCA)

4.15 PPCA's membership comprises over 1,500 labels, including the six major record producers, and over 1,000 individual artist members, as owners of copyright in sound recordings. PPCA administers licence schemes for the broadcast and public performance of sound recordings and music videos on the basis of a non-exclusive licence of rights from its members. PPCA estimates that it represents 95 per cent of copyright owners of sound recordings in Australia.¹⁸

4.16 Some of the licence schemes that PPCA administers are licences with businesses in respect of the public performance of sound recordings in:

• commercial or professional premises (eg, retail stores, clubs, hotels);
• restaurants or cafes;
• public vehicles (eg, tourist buses, aircraft or taxis); and
• fitness centres.

4.17 PPCA also administers licence schemes for the broadcasting of sound recordings and music videos by television stations and for the broadcasting of sound recordings by radio stations. Further, PPCA is currently a party to an application to the Tribunal to determine a proposed licence for the broadcast of sound recordings included in films, following on from the High Court's decision in PPCA v FACTS.¹⁹

Screenrights

4.18 The Audio-Visual Copyright Society Ltd (trading as Screenrights) represents owners of copyright in films, sound recordings and works included in audiovisual products. The rights of those owners are licensed to Screenrights on a non-exclusive basis.

4.19 In Australia, Screenrights principally administers the Part VA statutory licence for educational and other institutions. The licence schemes that Screenrights administers under Part VA include those in relation to off-air copying by universities, schools, TAFE and other colleges. In addition, Screenrights is currently an applicant to the Tribunal to be declared under the statutory licence for the use of copyright material for the Crown under Division 2 of Part VII of the Act.

Vi$copy

4.20 Vi$copy represents particular owners of copyright in artistic works. The rights of those owners in their works are licensed to Vi$copy on an exclusive basis, though members can choose to exclude certain works from that licence. The Committee understands that Vi$copy principally administers transactional licences on behalf of its members.

4.21 Vi$copy estimates that it represents over 750 Australian painters and sculptors and approximately 200­300 Australian photographers and graphic designers. Through its reciprocal arrangements with collecting societies in Europe, Scandinavia and the United States, Vi$copy also represents a large number of owners of copyright in artistic works in Australia.

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Chapter 5 – Nature of cases heard before the Copyright Tribunal

5.01 Since its creation, 32 applications have been made to the Tribunal. Table A (at the end of this chapter) is a summary of all the applications that have been made to the Tribunal, in descending order from the provisions of the Act under which the largest number of applications were made to those under which the least number of applications
were made.

Nature of the applications

5.02 The majority of applications have required the Tribunal to:

• determine a rate of equitable remuneration payable under a statutory licence (the relevant applications in that regard have been made under ss. 135J, 135ZJ, 135ZK, 135ZL, 135ZW, 152, 183 and the repealed s. 53B);
• confirm or vary a proposed or existing licence scheme (under ss. 154, 155 and 156) as the Tribunal considered reasonable in the circumstances; and
• review a failure or refusal to grant a licence or the offer of a licence on charges or conditions that were alleged to be not reasonable in the circumstances (under s. 157).

Nature of the parties

5.03 It is notable that the majority of applications made to the Tribunal have involved parties that are large institutional licensors of copyright material, principally collecting societies and record companies, and large institutional licensees, principally universities and broadcasters.

Size of the proceedings

5.04 It is evident that many of the cases that the Tribunal has heard have involved determinations regarding large sums of money. Many of those applications have involved the determination of equitable remuneration payable under the statutory licences for educational and other institutions under Parts VA and VB of the Act. In their submission to the Committee, the AVCC noted that the university sector is currently paying total annual amounts by way of statutory licence fees under Parts VA and VB in excess of $10 million.²⁰ Similarly, MCEETYA (which said that it represented the majority of providers of primary and secondary education in Australia) noted that, in 1998, schools that it represented paid annual amounts of approximately $9 million to CAL and $8.4 million to Screenrights under those statutory licences.²¹ Universities and a number of primary and secondary education providers have been parties to a number of applications to the Tribunal.

Duration of proceedings

5.05 Because of the size and complexity of the matters heard before the Copyright Tribunal, many matters have taken some time to finalise from the date of application. Excluding those matters that are currently on foot and those matters discontinued, the average time taken to finalise matters (including those heard together) appears to be about 22 months.

5.06 The matter that was resolved by the Tribunal most quickly was CAL's unopposed application to be declared as a collecting society under s. 153F of the Act (CT3/98). The application was filed on 27 October 1998 and the order entered on 18 January 1999. The matter that took the longest period to resolve was the recently decided case of Australasian Performing Right Association Limited v Federation of Australian Radio Broadcasters Ltd,²² in which the application was filed on 7 December 1995 with the decision handed down on 17 September 1999 (a major delay in resolving that case occurred because it was stood over pending the outcome of the separate case before the Australian Competition Tribunal in Re Applications by Australasian Performing Right Association Ltd²³).

Table A – Overview of applications made to the Copyright Tribunal

Application under...	Tribunal Nos	Copyright owners/ licensors who were applicants or respondents †	Copyright users who were applicants or respondents * †
Reference of licence schemes to Tribunal and refusal to grant licence or unreasonable terms (ss. 154, 156, 157)	1/98; 1/97; 2/95; 2/93; 1/93; 1/92; 1/91; 2/87; 1/81; 2/81	APRA; PPCA; Festival Records	AMA; Registered Clubs of NSW; Fitness Industry Confederation of Australia; Victorian Fitness Industry Association; Registered Clubs Association of NSW; YMCA; Quality Health & Fitness Centres; FARB; SBS; ABC; Fair Fitness Music Association; MCM Networking Pty Ltd; FACTS; Tasmanian Television
Applications made in respect of matters under statutory licences for educational and other institutions Parts VA and VB (ss. 135J, 135ZN, 135ZV, 135ZW and s. 149A, s. 53B now repealed)	45­73/94; 3/97; 5/97; 4/97; 5/96; 6/96; 2/98; 1/89; 1-3/83	AVCS; CAL	NSW Department of Education & Ors; University of Newcastle; Australian Catholic University & Ors; University of Adelaide & Ors; Queensland Department of Education & Ors; ANU; UNSW; University of Qld; UTS; NSW Department of Education; Macquarie University; NSW Institute of Technology
Statutory licence for use of copyright material by the Crown (s. 183)	2/90; 1/95; 2/96; 3/96; 4/96; 2/97	Gradient Modelling Pty Ltd; Seven Dimensions; GS Technology; Marine Engineering & Generator Services Pty Ltd; Harold Thomas; K. Allanson	National Parks & Wildlife Service of NSW; Department of Conservation & Environment; State of New South Wales; State of Queensland; Commonwealth; State of Queensland (Fire Service)
Application to Tribunal to declare collecting society for government copies (s. 153F)	3/98; 1/99	CAL; AVCS
Broadcasting of published sound recordings (s. 152(2))	1/96; 1/80	EMI Music & Ors; WEA Records; CBS; EMI; Festival & Polygram	FACTS
Determination of amount of royalty payable for recording musical works, order determining manner of paying royalty (ss. 152A(5) and 152B(6))	2/99	ARIA	EMI Music Publishing & Ors
Making a copy of a sound recording for the purpose of broadcasting (s. 107(3))	1/87	Festival Records	MCM Networking Pty Ltd
Part VC (application dismissed following declaration by the High Court that Part VC was unconstitutional)	1/90	BMG; Mushroom; AMCOS	ATMA; ACFOA; ACA

* The list of copyright user applicants or respondents is indicative only of those who have been parties to Tribunal matters. In cases where there were a large number of applicants/respondents of a class to the same matter (eg, where a large number of universities have been party to an application, such as CAL v University of Adelaide & Ors (1999) 42 IPR 529, in which a large number of universities were respondents), only one such party is listed for that matter.

† A number of applicants/respondents listed have been party to a number of applications under the same provision of the Copyright Act, particularly the collecting societies and the universities.

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Chapter 6 – Related inquiries

6.01 This Committee has addressed the need for changes to some aspects of the jurisdiction of the Tribunal as part of its previous references. In its 1995 report on Computer Software Protection,²⁴ this Committee recommended that the Copyright Act be amended to extend the jurisdiction of the Tribunal to enable it to consider licence agreements involving the use of copyright materials in electronic databases.

6.02 In Part 2 of its report on Simplification of the Copyright Act 1968 (the Part 2 report),²⁵ this Committee addressed outstanding issues from the report of the Copyright Convergence Group (CCG) Highways to Change.²⁶ The CCG had noted that an issue which had been raised with it was the appropriateness of extending the jurisdiction of the Copyright Tribunal to include all forms of collective licensing and that, in this regard, attention would need to be paid to Australia's obligations under the Berne Convention which prohibit fettering of some exclusive rights. Noting that this was a complex and controversial issue, the CCG had recommended that the jurisdiction of the Tribunal should not be extended without there first being a detailed review of its operations.

6.03 In the Part 2 report (at paragraph 7.51) this Committee was, like the CCG, minded to recommend an extension to the jurisdiction of the Copyright Tribunal in accordance with clear support for such an extension in submissions made to it under that reference. However, the Committee supported a more general review of the Tribunal's jurisdiction and, if that were to occur, recommended that such an extension be considered more fully in that context.

6.04 Previous inquiries that have considered the jurisdiction and role of the Copyright Tribunal in some part have similarly supported an extension to its jurisdiction. Thus the Simpson Report included recommendations that:

• the Copyright Tribunal should have jurisdiction over all collectively administered licence schemes. It should be the appropriate forum for the variation, approval and interpretation of all licensing schemes, proposed or negotiated by collecting societies;
• alternatively, that the definition of 'licence' in s. 136(1) of the Act should be amended to cover all licences, in a way similar to s. 116(3) of the UK Copyright, Designs and Patents Act 1988; and
• that the procedures of the Tribunal be examined to see how matters might be dealt with faster and more cheaply.²⁷

6.05 The Simpson Report further recommended that the Copyright Tribunal have jurisdiction to review determinations of an Ombudsman of Collecting Societies, an appointment which was also recommended in that report.

6.06 In May 1998 the House of Representatives Standing Committee on Legal and Constitutional Affairs tabled its report Don't Stop the Music! Report of the Inquiry into Copyright, Music and Small Business. That report included recommendations that:

• the Copyright Tribunal should have as wide a jurisdiction as possible in respect of licences and licence tariffs including the variation, approval and interpretation of all licensing schemes; and
• mediation between parties in a dispute over a licensing scheme should be available through the Copyright Tribunal.²⁸

6.07 More recently, the Intellectual Property and Competition Review Committee (IPCRC) was established by the Government under the National Competition Principles Agreement to inquire into and report on the effects on competition of Australia's intellectual property laws, including the Copyright Act. The IPCRC released a discussion paper in September 1999 which invited submissions on a wide variety of matters, including submissions on 'any of the conclusions and recommendations' in the Simpson Report and the Don't Stop the Music! report.²⁹ The IPCRC released an interim report on 6 April 2000. The IPCRC is to report to the Attorney-General and the Minister for Industry, Science and Resources by 30 June 2000.

6.08 On 6 December 1999 the House of Representatives Standing Committee on Legal and Constitutional Affairs (CLCA) tabled its Advisory Report on the Copyright Amendment (Digital Agenda) Bill 1999. Some issues raised in that report are also addressed in this report. The Government is yet to respond to the CLCA's report.

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Section 3 – Jurisdiction of the Copyright Tribunal

Chapter 7 – Constitutional issues

Background

7.01 Australia's constitutional system of government is founded on the doctrine of separation of powers. Hence, power is divided between the Executive, the Legislature and the Judicature.

7.02 As an administrative body, the Copyright Tribunal may not exercise judicial power. It is, however, not always easy to determine what is an exercise of judicial power. A range of factors may be looked at, such as who the parties are, the subject matter of the dispute, whether new rights are created, and whether the determination is susceptible to collateral attack. Where such indicators are equivocal, an activity is said to be an exercise of judicial power if it leads to an enforceable determination.

Recent judicial consideration

7.03 The constitutional validity of the Copyright Tribunal has yet to receive detailed consideration by the courts. However, the constitutional validity of other administrative bodies has been examined in a series of cases.

7.04 The meaning of enforceability was reviewed by the High Court in Brandy v HREOC.³⁰ There the Court considered legislation providing that the filing of an order of the Human Rights and Equal Opportunity Commission in the Federal Court of Australia had the effect of making the order enforceable as an order of the Federal Court. The provisions setting up this procedure were struck down as an improper conferral of judicial power on an administrative body. This decision acted as a catalyst for the reform of the way many administrative bodies functioned.

7.05 More recently, in Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd,³¹ the Full Federal Court, in a 2:1 decision, suggested that the meaning of enforceability may be extended to a situation where the order of an administrative body is indirectly enforced by a court of competent jurisdiction granting injunctive relief or prescribing criminal sanctions. If this were so, there might have been significant consequences for the validity of the Copyright Tribunal. That is because Part VI of the Copyright Act provides for the recovery of licence fees set by the Tribunal as a debt due in a court of competent jurisdiction. It also provides for injunctive relief and criminal sanctions in certain instances.

7.06 The High Court has since overruled the decision in the Wilkinson case in Attorney-General of the Commonwealth v Breckler.³² The court held unanimously that although injunctive relief could be sought to enforce the determinations of the Superannuation Complaints Tribunal, this would require an independent exercise of judicial power by a court of competent jurisdiction. Hence, the determinations of the Superannuation Complaints Tribunal were not enforceable in themselves and the legislative scheme in question was not beyond power.

7.07 This decision appears to limit any danger to the constitutional validity of the Copyright Tribunal. That is because decisions of the Copyright Tribunal are not directly enforceable but may be enforced only through the courts. Furthermore, as administrative decisions, they are subject to judicial scrutiny and so do not constitute final determinations. The fact that parties generally submit voluntarily to the Copyright Tribunal's jurisdiction also reinforces the constitutional validity of the Tribunal's power. That is because, to the extent that its determinations are enforceable, that enforceability is derived from the parties' undertakings and not from a conferral of power by Parliament.

7.08 On the basis of the case law in this area, problems would arise if legislation compulsorily referred disputes to a tribunal for the purpose of making binding determinations as to existing rights and duties and, in so doing, purported to oust the jurisdiction of the courts.

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Chapter 8 – Jurisdiction of the Copyright Tribunal

8.01 The jurisdiction of the Tribunal is provided for in Division 3 of Part VI of the Act. Generally speaking, the Tribunal has the function of determining the remuneration payable, and associated matters, under the statutory licence schemes in the Act. In respect of non-statutory licences, the Tribunal also has jurisdiction in relation to a 'licence scheme' (as defined in s. 136), and licences or proposed licences where a licence scheme does not apply and where an application has been made to it by a party.

Non-statutory licences

8.02 In accordance with the definition of 'licence' in s. 136, the Tribunal's jurisdiction in respect to non-statutory licences is generally limited to licences or proposed licences and licence schemes for the public performance or broadcast of literary, dramatic or musical works or an adaptation thereof, or of sound recordings.

8.03 A 'licensor' is defined as the owner or prospective owner of the copyright in the work/sound recording or any body of persons (whether corporate or unincorporate) acting as agent for the owner or prospective owner in relation to the negotiation or granting of such licences. While that definition would clearly include licences administered by collecting societies, it is not limited to them. It would also include small licensors who are administering a licence scheme or a licence where a licence scheme does not apply.

Statutory licences

8.04 The Act provides for a number of statutory licences whereby acts that would otherwise constitute an infringement of copyright are permitted in specified circumstances.

A number of these statutory licences are subject to the payment of equitable remuneration for the exercise of the right. The amount payable may be determined by agreement between the person exercising the right and the holder of that right. In the context of the statutory licences in respect of which the Tribunal has jurisdiction, the relevant rights will often, although not invariably, be under the control of a collecting society. In the absence of agreement between the user and owner of the copyright, the Act provides that an application may be made to the Tribunal for an order determining the equitable remuneration to be paid to the owner of the copyright for the exercise of the right.

8.05 The matters in respect of which applications may be made to the Tribunal are set out in Division 3 of Part VI of the Act. The provisions of Part VI are extremely detailed. A comprehensive description of the Tribunal's jurisdiction is included at Appendix C.

8.06 In summary, applications may be made to the Tribunal for an order determining the amount of equitable remuneration payable in respect of statutory licences provided in the Act for:

• the making of a recording or film of a work or of an adaptation of a work for the purpose of broadcasting the work (s. 149);
• the broadcast of a literary or dramatic work by the holder of a print disability radio licence (s. 149A);
• the making of a copy of a sound recording for the purpose of broadcasting the recording (s. 150);
• causing a sound recording to be heard in public (s. 151);
• broadcasting of a published sound recording (s. 152);
• the manufacture of a record of a musical work (s. 152A);
• the making of a copy of a broadcast by a body administering an educational or other specified institution (s. 153A);
• the making of copies of works by a body administering an educational or other institution (s. 153C); and
• the doing of an act comprised in a copyright where the act is done for the services of the Crown (s. 153E).

8.07 An application may also be made to the Tribunal for matters related to the payment of remuneration, being:

• an order determining the manner of payment of royalty payable by the manufacturer of a record of a musical work (s. 152B);
• an order apportioning the amount of royalty payable in respect of a record between the owner of the copyright in the musical work and the owner of the copyright in the literary or dramatic work (s. 153);
• an order determining a sampling system in respect of statutory licences for copying of transmissions by educational institutions (s. 153B);
• an order determining a sampling system in respect of a statutory licence for the copying of works by educational institutions (s. 153D);
• a declaration that a company be a collecting society for the purposes of Part VII, Crown use of copyright material (s. 153F);
• the revocation of a declaration made under s. 153F that a company is a collecting society (s. 153G);
• a method for working out payment for government copies (s. 153K); and
• a review of a declaration that an institution is an educational institution within the meaning of the Act (s. 153L).

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Chapter 9 – Effect of the Copyright Amendment (Digital Agenda) Bill 1999

9.01 As part of its current reference, the Committee is required to consider any relevant amendments to the Copyright Act that are introduced into Parliament.

9.02 The Copyright Amendment (Digital Agenda) Bill 1999 (the Digital Agenda Bill) was introduced into Parliament on 2 September 1999 and referred to the House of Representatives Standing Committee on Legal and Constitutional Affairs. The Committee tabled its report on the Digital Agenda Bill on 6 December 1999. The Government is currently considering the Committee's report.

9.03 For the purposes of this reference, the key features of the Bill include:

• the introduction of a new technology-neutral right of communication to the public. The Bill provides that 'communicate' means make available online or electronically transmit (whether over a path, or a combination of paths, provided by a material substance or otherwise) a work or other subject matter. The new right will replace and extend the existing technology-specific broadcasting right which currently applies only to 'wireless' broadcasts. In addition, the new right will replace the current limited right to transmit to subscribers to a diffusion service;
• the extension of the existing statutory licence scheme for educational and other institutions to permit those institutions to make electronic copies of works and to communicate them to students for educational purposes, subject to the payment of equitable remuneration to the copyright owner; and
• the implementation of a new statutory licence for retransmitters for the retransmission of free-to-air broadcasts without the permission of the copyright owner subject to the payment of equitable remuneration by the retransmitter to the underlying rights holders.

9.04 The Committee notes that the Bill, if passed in the form in which it was introduced into Parliament, will extend the jurisdiction of the Copyright Tribunal under the Copyright Act in relation to the following matters:

• the determination of the equitable remuneration payable by retransmitters to underlying copyright holders for the retransmission of free-to-air broadcasts (under proposed Part VC);
• the determination of a record system for the retransmission of free-to-air broadcasts (under proposed Part VC);
• the determination of the equitable remuneration payable in relation to the reproduction and communication of copyright material in electronic form under Part VB of the Copyright Act (under proposed Division 2A of Part VB);
• the determination of matters and processes, and any other related matters, constituting an electronic use system established for the determination of the amount of equitable remuneration payable under an electronic use notice for licensed copies and communications (under proposed Division 2A of Part VB);
• the determination of the division of royalties between the respective copyright owners where there is illustrative artwork accompanying an article or other work that is reproduced or communicated in electronic form (under proposed Division 2A of Part VB); and
• the arbitration of disputes in relation to the grant and terms of licences for the subscription broadcasting of sound recordings (under proposed amendments to s. 136).

9.05 The introduction of the new right of communication to the public may prompt applications to the Copyright Tribunal where the parties cannot agree on matters not previously subject to the provisions for statutory licences.

9.06 The Committee also notes that submissions to it reflected an expectation from interests that the workload of the Tribunal would increase significantly in the future as a consequence of the reforms proposed in the Digital Agenda Bill.

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Chapter 10 – Competition policy

10.01 Paragraphs 2(a) (in relation to relevant Government reviews and inquiries) and (d) of the Committee's terms of reference instruct it to have regard to competition issues.³³ Accordingly, the Committee has considered the interaction of competition regulators particularly the Australian Competition and Consumer Commission (the ACCC) and the Competition Tribunal with the specialist role of the Copyright Tribunal.

10.02 As the Competition Tribunal recently acknowledged:

a legislative purpose of the Copyright Tribunal in Australia is to act as a curb on potential abuse of the monopoly power or near monopoly power gained by a voluntary collecting society by aggregating the rights of individual copyright owners.³⁴

10.03 As the Committee discussed in Chapter 3, some jurisdictions other than Australia also have specialist bodies (tribunals or administrative bodies) to regulate the monopoly or potential monopoly position of collecting societies, while others rely on competition law. The National Competition Policy: Report by the Independent Committee of Inquiry (the Hilmer Report) touched on the need for specialist industry regulators in addressing the essential facilities doctrine. Essential facilities are facilities deemed so important that it is necessary to provide a public access regime. Common examples are telecommunications and utilities such as gas, water and electricity. The policy basis of the essential facilities doctrine is similar to that of the statutory licence in the copyright context.

10.04 In considering how the public access regime for essential facilities should be regulated, the Hilmer Report started with the proposition that competition policy across all Australian industries should desirably be administered by a single body. The Report acknowledged that each industry had its own specific issues but did not see that as a bar to regulation by an economy-wide body. The Report envisaged that the enforcement of access declarations could be dealt with by binding arbitration of the competition regulator, which could appoint experts if necessary.³⁵ This has been transposed to the current legislative framework under which the ACCC, and accordingly the Australian Competition Tribunal, have jurisdiction over access disputes in relation to matters such as telecommunications.

10.05 The Copyright Tribunal was, of course, established long before the Hilmer Report and has continued to operate effectively after most of the Hilmer recommendations have been put in place. In the context of the Hilmer Report's recommendations, it is appropriate to compare the role of the Copyright Tribunal with Australia's economy-wide competition regulators, and in particular the Competition Tribunal.

Jurisdiction of the Competition Tribunal

10.06 The Competition Tribunal hears applications to review determinations of the ACCC in relation to authorisations and notifications which, broadly speaking, provide protection from an action for breach of the Trade Practices Act.³⁶ It is therefore necessary to look at the decisions it reviews in order to obtain an accurate picture of its jurisdiction.

10.07 Part IV of the Trade Practices Act regulates restrictive trade practices. For example, s. 45 prevents a corporation from entering a contract, arrangement or understanding which has the purpose or likely effect of substantially lessening competition. Section 47 prevents a corporation from engaging in exclusive dealing. Other provisions regulate resale price maintenance (s. 48), mergers (s. 50) and misuse of market power (s. 46). Because the Trade Practices Act recognises that some of society's broader obligations may be served by non-competitive markets, it provides certain exceptions to the restrictive trade practices provisions. An example of such a provision is s. 51(3), which contains certain exemptions in relation to some conditions of licences or assignments of intellectual property rights.

10.08 A party dissatisfied with a determination or a notification handed down by the ACCC may apply for review by the Competition Tribunal (ss. 101, 101A). While the Competition Tribunal reviews the merits of the ACCC's decisions in terms of competition, the ACCC's decisions are subject to review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act).

Comparison of the Copyright Tribunal with the Competition Tribunal

10.09 A detailed discussion of the Copyright Tribunal's jurisdiction is found in Appendix C. To the extent that the licences with which the Copyright Tribunal deals contain provisions that offend Part IV of the Trade Practices Act (for example, if they are not covered by s. 51(3) and are likely to substantially lessen competition), they may be subject to the authorisation and notification processes of the ACCC and so may come within the jurisdiction of the Competition Tribunal.³⁷

10.10 The Committee notes that the Competition Tribunal and the Copyright Tribunal share several features in terms of both their structure and policy basis. They both have Justices of the Federal Court as their president and deputy presidents, as well as other non-presidential members with appropriate qualifications. They both have a wide discretion as to their practice and procedure and are administered by staff of the Federal Court Registry. Furthermore, they both have a role as competition regulators, whether that it is explicit, as in the case of the Competition Tribunal, or implicit, as in the case of the Copyright Tribunal.

10.11 Unlike the Competition Tribunal, the Copyright Tribunal is a tribunal of first instance. Further, while the Copyright Act and regulations made under the Act set out factors to be taken into consideration by the Tribunal in making a determination, it does not have to apply a formal public benefit/detriment competition test as does the Competition Tribunal. This may be because the grant of a statutory licence in the first place is the result of a balancing process.

10.12 Although the Competition Tribunal is a review body, its procedures are similar to those of the Copyright Tribunal. Section 146 of the Copyright Act mirrors s. 103 of the Trade Practices Act in giving the Copyright Tribunal discretion as to its procedures, providing that the Tribunal is not bound by the rules of evidence and that matters are to be conducted with as little formality and as expeditiously as possible. Notably, however, there is no specific provision that enables the Copyright Tribunal to request assistance from an expert body, such as the ACCC, as in s. 102(6) and (7) of the Trade Practices Act.

10.13 The main distinction between the two tribunals was identified by the Competition Tribunal. Namely, the Copyright Tribunal's jurisdiction is limited to licences, and thus 'output arrangements'. It is therefore up to the Competition Tribunal to look at 'input arrangements' and so to determine the structure under which the 'output arrangements' falling under the Copyright Tribunal's jurisdiction are made.³⁸ (The Committee discusses the nature of output and input arrangements at paragraphs 11.02­11.03, and 12.01.)

Conclusion

10.14 The Committee believes that the jurisdictions of the Competition Tribunal and the Copyright Tribunal are complementary. While the Hilmer Report raised, at a broad level, the issue of whether there should be a single economy-wide regulator, from a practical point of view, there is no reason why the Copyright Tribunal should not continue to perform its separate, specialist function. This view is consistent with submissions received by the Committee, none of which expressed support for the abolition of the Copyright Tribunal.

10.15 The Committee notes that the Copyright Tribunal has an established history and expertise in dealing with matters within its jurisdiction and performs these functions well. The Committee believes that there would not be any added efficiency or fairness to the parties for the functions of the Tribunal to be taken on by an economy-wide regulator, such as the Competition Tribunal. Given that the Competition Tribunal and the Copyright Tribunal both operate out of the Federal Court, such a change may even lead to further problems in securing hearing dates. Further, the Committee believes that the absorption of the Copyright Tribunal's functions into the Competition Tribunal may create further inefficiencies by exposing applications to a two-stage process of determination by the ACCC and then review by the Competition Tribunal.

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Chapter 11 – Output arrangements

Overview

11.01 In this Chapter, the Committee addresses the question of changes to the jurisdiction of the Tribunal in respect of output arrangements relating to:

• statutory licences, in particular:
  • the Tribunal's jurisdiction to determine methods of working out equitable remuneration under s. 55 and Parts VA and VB of the Act, and the requirements for marking, record-keeping and inspection of records under s. 47A, and Parts VA and VB of the Act; and
  • the Tribunal's jurisdiction to determine equitable remuneration and matters related to the payment of equitable remuneration;
• non-statutory licences, in particular:
  • the Tribunal's jurisdiction in relation to licences for single works or subject matter, or the works of a single author or subject matter of a single maker ('transactional licences'); and
  • an expansion of the Tribunal's jurisdiction in relation to collectively administered licences generally.

Definition of 'output arrangements'

11.02 The Committee summarised the recent decision of the Australian Competition Tribunal in Re Applications by Australasian Performing Right Association at Appendix D. In that decision, the Competition Tribunal outlined the nature of APRA's 'input' and 'output' arrangements, and its 'distribution' and 'overseas' arrangements in considering whether to grant authorisation in respect of each of those arrangements. For the purpose of this part of this report, the Committee has adopted the term 'output' arrangements in considering the need for changes to the jurisdiction of the Tribunal. The Committee addresses the Tribunal's jurisdiction over 'input' arrangements below (at Chapter 12). While those terms were used by the Competition Tribunal, particularly in relation to the arrangements of APRA, the Committee uses them more broadly in this part in relation to the collective administration of rights by collecting societies generally.

11.03 In keeping with the use of that term by the Competition Tribunal, the Committee uses the term 'output arrangements' to describe the licensing arrangements between a body collectively administering copyright and its licensees, or potential licensees, of copyright material. As noted at paragraph 1.11, the jurisdiction of the Tribunal has almost exclusively been invoked to arbitrate in matters regarding the output arrangements of collecting societies.

Justification for changes to the Tribunal's jurisdiction over output arrangements

11.04 The Committee's detailed recommendations in respect of the Tribunal's jurisdiction over output arrangements are set out below. Overall, the Committee is in favour of an expansion of the Tribunal's jurisdiction to cover all collectively administered licences (whether administered under a statutory or non-statutory licence) concerning all types of copyright material and copyright uses. The Committee is also in favour of reducing the Tribunal's current jurisdiction in so far as it may presently extend to claims relating to licences in respect of a single work or subject matter, the works of a single author or the subject matter of a single maker of that subject matter, other than where collectively administered.

11.05 As the Committee noted at paragraph 1.05, the fundamental rationale for the establishment of the Copyright Tribunal was to counterbalance the monopoly or potential monopoly position of collecting societies administering rights in musical works or sound recordings. The Committee considers that this rationale would similarly apply to the collective administration of rights in respect of other works or subject matter.³⁹

11.06 At the time of the Tribunal's establishment in 1969 (at the commencement of the Copyright Act), APRA was perhaps the most prominent example of the operation of a monopoly administration of the performing rights in musical works. Since that time, a number of collecting societies have been established to collectively administer rights in relation to particular classes of copyright material.⁴⁰ Relevantly, the Simpson Report noted that:

whenever a number of exclusive rights owners join together to form a licensing system, there is a potential for abuse and there is no doubt that each of the five collecting societies [APRA, PPCA, CAL, Screenrights, AMCOS] do have a dominant position in the market-place with respect to the types of rights that each controls.⁴¹

11.07 The Committee agrees with that observation, particularly as it applies as a justification for the role of the Copyright Tribunal. The Committee also notes that, in addition to the five principal collecting societies referred to in the Simpson Report, Vi$copy represents a substantial number of owners of copyright in particular artistic works (see the Committee's discussion in this regard at paragraphs 4.20­4.21). Accordingly, the Committee considers that each of those collecting societies has at least the capacity to exercise a monopoly.

11.08 Submissions made in response to the Committee's issues paper generally favoured an expansion of the Tribunal's jurisdiction to all collectively administered statutory and non-statutory licences.

11.09 As the Committee noted at paragraphs 6.04­6.06, similar proposals for an expansion of the Tribunal's jurisdiction were made by the Simpson Report and the Don't Stop the Music! report. In particular, the Simpson Report suggested that, in principle, the Tribunal should have as wide a jurisdiction as possible in respect of licences including:

• the setting of licence fees;
• the setting of any non-financial terms of agreements with licensors; and
• the equity or otherwise of sampling schemes and other methods for the quantification of payments.

11.10 The Simpson Report further recommended that those principles apply regardless of whether the relevant rights are administered under a statutory or non-statutory licence.

11.11 For the reasons set out at paragraph 11.05, the Committee agrees with the submissions made to it, and the conclusion