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2008/SOM3/IPEG/018

Agenda item: 4b-iv

Accountability of Copyright Collecting Societies and the Role of the Copyright Tribunal of Australia

Purpose: Information

Submitted by: Australia

/ 27th Intellectual Property Rights Experts’Group Meeting
Lima, Peru
15-16 August 2008

Accountability of Copyright Collecting Societies and the Role of the CopyrightTribunal of Australia

Gabrielle Mackey, Attorney-General's Department

Asia-Pacific Economic Cooperation

Intellectual Property Experts Group XXVII, August 2008

Introduction

At the last IPEG meeting, Australiatabled a paper on Collective Management of Copyright in Australia. This paper expands on information mentioned in that paper in relation to the accountability of collecting societies and the role of the Copyright Tribunal ofAustralia. Together, the papers provide a comprehensive explanation of the system for collective management of copyright in Australia.

Effective collective administration is an important element of the Australian copyright system. Australian collecting societies have assumed an increasingly important role in making the use and exploitation of copyright workable for owners and users. However, collective management of copyright has the potential to place the collecting societies in a monopoly position in respect of the material that they licence. For this reason, Australia has in place measures to ensure that the collecting societies remain accountable and carry out their functions in a responsible and transparent manner. For example, all collecting societies are subject to corporations and tradepractices laws. The licences that they administer are subject to the jurisdiction of the Copyright Tribunal of Australia. In addition, there are particular obligations and Guidelines for declared collecting societies.

Obligations and Guidelines for the operation of declared collecting societies

Under the Copyright Act 1968[1]the Attorney-General has the authority todesignate a collecting society charged with administering specified statutory licences as a‘declared’ collecting society.[2] The Attorney-General also has the authority to revoke this declaration in certain circumstances.

Declared collecting societies administer specific statutory licences, these are sometimes referred to as ‘compulsory licences’, and enable a person to use copyright material provided that they fulfil certain conditions, including paying equitable remuneration to the declared copyright collecting society. Examples of statutory licences include the special provisions for educational institutions, governments and institutions assisting people with an intellectual or print disability.

Declared collecting societies are subject to a number of detailed requirements. First, there are a number of provisions in the Copyright Act requiring the declared collecting societies to behave in a certain way. For example, they are required to provide the AttorneyGeneral with annual reports on their operations and audited accounts of their transactions and financial position. The AttorneyGeneral is in turn obliged to table these reports in Parliament.

Secondly, the Copyright Actrequires that each declared society’s rules contain certain provisions. For example, the Act requires that such rules contain a provision prohibiting payment of dividends to members.

Finally, the declared collecting societies are required to observe relevant guidelines, such as the AttorneyGeneral’s Guidelines.[3] These Guidelines are issued by the Attorney-General on the interpretation of the relevant obligations of declared collecting societies under Australian copyright laws. The Guidelines outline the higher standard of conduct expected of declared collecting societies, than that of other collecting societies.

The Guidelines state that the fundamental objectives of regulation are to ensure:

  • that each society diligently collects all money to which it is entitled, and none to which it is not
  • that the society manages its operations efficiently and does not incur improper expenses
  • that the distribution of royalties to relevant copyright owners is fair, and is seen to be fair, and
  • that the society maintains an even hand as between current and future beneficiaries.

Non-compliance with these Guidelines may also be relevant to consideration of whether the declaration of a collecting society should be revoked.

The Attorney-General’s ability to revoke the declaration of a society in certain circumstances is an important means of ensuring compliance by declared societies with the accountability requirements of the legislation and Guidelines. Under the Copyright Act the Attorney-General may revoke a declaration provided that he or she is satisfied of certain grounds, including:

  • that the society is not functioning adequately
  • that it is not acting in accordance with its rules, or the best interest of its members
  • that it has altered its rules contrary to requirements for its declaration, or
  • that it has failed to file annual reports and accounts with the Attorney-General.

To date, the Attorney-General has had no cause to consider revoking the declaration of the existing declared societies (ie Copyright Agency Limited (CAL) and the Audio-Visual Copyright Society (Screenrights)) in relation to the statutory licences which they administer.

The Copyright Tribunal of Australia

Jurisdiction

The Copyright Tribunal of Australia[4]is a specialist administrative body which has jurisdiction to deal with both licence schemes and statutory licences.

The jurisdiction of the Tribunal with respect to licence schemes only extends to those administered by collecting societies.[5] ‘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.’[6] The Tribunal has no jurisdiction over one-off (‘transactional’) licences not offered by collecting societies. ‘Subject to that limitation, the licences to which the provisions apply are licences to do any act comprised in the copyright in any work or other subject matter.’[7]

Statutory licence schemes, as outlined previously in this paper, are a form of compulsory licences which enable use of copyright material for particular users, subject to specified conditions including the payment of equitable remuneration to the declared copyright collecting society. A decision of the Full Court of the High Court of Australia handed down on 6 August 2008 summarised the particular role of declared collecting societies and the statutory licences they administer as follows:

There are now several licence schemes in the Act which have developed in tandem with improved techniques for copying works. These include the scheme in PtVA (copying and communication of broadcasts by educational institutions and institutions assisting people with disabilities), PtVB (reproducing and communicating works by educational institutions and institutions assisting people with disabilities) and PtVC (retransmission of free-to-air broadcasts). It has been remarked, in relation to the common features of the statutory licence scheme for government use in PtVII and other statutory licence schemes, that: “In most, but not all, cases the users are readily identifiable, because they are significant entities such as radio broadcasters, recording companies and educational institutions. Copyright owners, on the other hand, are often more disparate, and it is only when they are organised collectively that they are really able to participate successfully in these schemes. Collective management of rights through collecting societies has become more prevalent in recent years. ... Indeed, the educational copying schemes under PtsVA and VB of the Copyright Act 1968(Cth), the retransmission scheme under PtVC, and the government reproduction scheme under PtVII, Div2 recognise the role of such societies explicitly and are predicated on the assumption that users will be represented by such bodies.”[8]

How and why matters are brought to the Copyright Tribunal

The Copyright Tribunal of Australia will consider a matter on a reference by the licensor, would-be licensees, oran organisation representing them in relation to an existing or proposed licence scheme.

Generally, the most common forms of applications made to the Tribunal require it to:

  • determine a rate of equitable remuneration payable under a statutory licence
  • confirm or vary a proposed or existing licence scheme, or
  • review a failure or refusal to grant a licence or the offer of a licence on charges or conditions that were alleged to be unreasonable in the circumstances.

Authority of the Copyright Tribunal in relation to licence schemes

TheCopyright Tribunal of Australia has the authority to confirm or vary the licence scheme, or substitute a new scheme proposed by one of the parties.[9]

A recent example of a determination to vary a licence scheme involved a determination by the Copyright Tribunal of Australia in July 2007 in the reference by the Phonographic Performance Co of Australia Ltd (PPCA). The Tribunal’s determination resulted in an increase in licence fees from $0.07[10] to $1.05 per person in relation to the use of sound recordings in nightclubs and from $0.20 to $3.07 per person in relation to the use of such music in dance parties. The Tribunal’s determination was subsequently upheld on judicial review by the Federal Court of Australia in March 2008.[11]

The Tribunal can also make a range of orderswhere parties have been unable to agree to the grant of a licence. As it considers applicable, the Tribunal can make orders relating to the charges and conditions under a licence scheme. The Tribunal can also make orders in relation to the granting of a licence, in specific circumstances. For example, the Tribunalcan order charges and conditions that it considers “reasonable in the circumstances”.

Authority of the Copyright Tribunal in relation to statutory licences

In relation to statutory licences, the Tribunal has the authority to determine the different amounts of equitable remuneration as between different classes of copyright works or other subject matter. The Tribunal also has the authority to review arrangements in respect of disputes between declared collecting societies and their members over distribution of amounts collected.

The Copyright Tribunal’s authority to declare collecting societies

As previously noted, the Attorney-General has the primary authority to declare a collecting society, or to revoke such a declaration, for the purposes of the statutory licences contained in the Copyright Act. However, the Attorney-General may also refer such a decision to the Copyright Tribunal for consideration.

These decisions are made on the basis of an application by the collecting society to the AttorneyGeneral. The Attorney-General then has the authority to refuse the application, accept it, or refer it to the Tribunal. Similarly, the Attorney-General may revoke a declaration, or refer the matter to the Tribunal to determine. The ability to refer a matter to the Tribunal provides an added measure of transparency to decisions about declarations, particularly where there may be competing applications.

The role of the Tribunal in the declaration of collecting societies has been in force since January 2007. It is noted that there have been no applications for declaration of a collecting society since the enactment of this provision.

The Australian Competition and Consumer Commission

In a reference or application to the Copyright Tribunal concerning licence schemes a party may request the Tribunal to have regard to any relevant guidelines issued by the Australian Competition and Consumer Commission (ACCC). If such an application is made, the Tribunal must have regard to those relevant guidelines (if any). The Copyright Act makes it clear that it is still open to the Tribunal to have regard to other matters that it considers to be relevant in addition to those Guidelines.

To date, the ACCC has not issued any such guidelines. Draft guidelines have been released on the ACCC website for public consultation, entitled Copyright licensing and collecting societies: a guide for copyright licensees.[12] The ACCC has indicated that it will review these draft guidelines in light of public submissions and pending the outcome of current proceedings in the Copyright Tribunal referred to below.

The Tribunal has a specific power to make the ACCC a party to proceedings under Part VI of the Copyright Act concerning voluntary licences and licence schemes if the ACCC makes an application and the Tribunal is satisfied that, in the circumstances, the ACCC should be a party. This is in addition to the Tribunal’s broad discretion to make an organisation or person with a substantial interest a party to an application under provisions of the Act and regulation 34 of the Copyright Tribunal (Procedure) Regulations 1969.

In practice, the ACCC will only seek become a party to Tribunal proceedings in very limited circumstances. ‘The ACCC’sprimary consideration whether to intervene in private proceedings is whether it wouldbe in the public interest.’[13]

Since the implementation of this provision in January 2007, the ACCC has been made a party to a reference to the Copyright Tribunal by the PPCA in relation to a proposed fitness class licence scheme. This could prove an important test case on the impact of the ACCC on the Copyright Tribunal proceedings. A determination on this reference is expected during 2009.[14]

Alternative Dispute Resolution

The Copyright Act provides the Tribunal with scope and encouragement to refer parties to Alternative Dispute Resolution (ADR) and for the speedy conclusion of Tribunal proceedings where there is a successful outcome of the use of ADR. The Copyright Act lists a number of procedures and services that come within the definition of ADR. This includes conferencing, mediation, neutral evaluation, case appraisal, conciliation – but not arbitration.

Conclusion

The Australian Government considers that copyright users and copyright owners in Australia benefit from collective rights management which contributes to an efficient and workable copyright system.

To ensure that these collecting societies operate in an open and accountable manner, there are a range of mandatory and voluntary measures in place. Firstly, all collecting societies as privately-formed corporations are subject to the corporate regulator under corporations and trade practices laws. Secondly, disputes relating to licences administered by the collecting societies may be referred to the Copyright Tribunal for determination. In addition, there are particular obligations and Guidelines for the two declared collecting societies. Substantial amendments to the CopyrightAct in 2006 included the expansion of the role of the Copyright Tribunal in response to a number of review recommendations. These amendments reflect the necessity of ensuring that Australia continues to review and refine its copyright licensing system to ensure that the right balance is struck between the copyright owners’right to secure equitable remuneration and copyright users’ fair access to copyright materials.

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[1]The Copyright Act is available at: <

[2]The Attorney-General has declared that Copyright Agency Limited (CAL) and the Audio-Visual Copyright Society (Screenrights) will administer certain statutory licences under the Copyright Act.

[3]The Attorney-General’s Guidelines are available from the Attorney-General’s Department website at:

[4]Note that the ‘Copyright Tribunal’ was redesignated as the ‘Copyright Tribunal of Australia’ in December 2006.

[5]Australia has six collecting societies: the Australasian Performing Right Association Ltd (APRA); Australasian Mechanical Copyright Owners Society Limited (AMCOS); CAL; Phonographic Performance Co of Australia Ltd (PPCA); Screenrights; and Viscopy Ltd

[6]Copyright Law Review Committee, Jurisdiction and Procedures of the Copyright Tribunal, December 2000 atpage28 <

[7]Justice K Lindgren, ‘The Jurisdiction of the Copyright Tribunal of Australia: the 2006 amendments’ (2007) Copyright Reporter, Volume 25 Number 3 at page 5.

[8]Copyright Agency Limited v State of New South Wales [2008] HCA 35 at paragraph 49.

[9]See sections 154 – 156, and 159 of the Copyright Act.

[10]All figures are quoted in Australian dollars.

[11]Australian Hotels Association v Copyright Tribunal [2008] FCAFC 37.

[12] The draft Copyright licensing and collecting societies: a guide for copyright licensees is available from the ACCC’s website at: <

[13]The ACCC, Copyright licensing and collecting societies: a guide for copyright licensees, 2006 at page 33 <

[14]PPCA, ‘Artists Push for Fairer Deal on Fitness Centre Music’, Press Release, April 2008 <