COPYRIGHT TRIBUNAL OF AUSTRALIA
Reference by Powercom Interactive Media Pty Ltd [2003] ACopyT 1
COPYRIGHT – Copyright Tribunal – jurisdiction of Tribunal – musical works – ringtones of mobile telephones – one collecting society grants licences to reproduce musical works – another collecting society grants licences to transmit musical works electronically – company needs licences from both in order to carry on its business of supplying ringtones – dispute between company and the two collecting societies as to terms of licences including amounts of licence fees – scheme under which licences to transmit are granted is within s 155 of Copyright Act 1968 (Cth) – question whether scheme under which licences to reproduce are granted is within that section – coordinated schemes or single scheme jointly administered by the two collecting societies – jurisdiction of Tribunal to consider matter in dispute and to make order.
Copyright Act 1968 (Cth) ss 136 (“licence”, “licence scheme”, “licensor”), 155, 160
Reference by Australasian Performing Right Association Ltd [1995] ACopyT 3 cited
Universal Music Australia v EMI Publishing Australia Pty Ltd (2000) 155 FLR 362 cited
REFERENCE BY POWERCOM INTERACTIVE MEDIA PTY LIMITED
(ABN 94 096 014 710)
CT 2 OF 2002
LINDGREN P
18 MARCH 2003
SYDNEY
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IN THE COPYRIGHT TRIBUNAL |
CT 2 OF 2002 |
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REFERENCE BY: |
POWERCOM INTERACTIVE MEDIA PTY LIMITED (ABN 94 096 014 710)
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RESPONDENTS: |
AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED AUSTRALASIAN MECHANICAL COPYRIGHT OWNERS’ SOCIETY LIMITED
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LINDGREN P |
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DATE OF ORDER: |
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WHERE MADE: |
SYDNEY |
THE TRIBUNAL ORDERS THAT:
1. The following question be decided separately from any other question and before the final hearing in the proceeding:
“Does the Copyright Tribunal have jurisdiction to consider the matter in dispute and to make an order under subs 155(5) of the Copyright Act 1968 (Cth) in so far as that matter relates, and such an order would relate, to the terms, including those as to the payment of charges, of any scheme under which licences are granted by the Australasian Mechanical Copyright Owners’ Society Ltd for the reproduction of musical works?”
2. The question referred to in Order 1 be answered: “No”.
3. The proceeding be stood over to Thursday 20 March 2003 at 9.30 am for directions.
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IN THE COPYRIGHT TRIBUNAL |
CT 2 OF 2002 |
introduction
1 Subsection 155(1) of the Copyright Act 1968 (Cth) (“the Act”) provides as follows:
“Where, at any time while a licence scheme is in operation, a dispute arises with respect to the terms of the scheme between the licensor operating the scheme and:
(a) an organization claiming to be representative of persons requiring licences in cases included in a class of cases to which the scheme applies; or
(b) any person claiming that he or she requires a licence in a case included in a class of cases to which the scheme applies;
the licensor, organization or person concerned may refer the scheme to the Tribunal in so far as the scheme relates to cases included in that class.”
2 Subsection 155(5) provides, relevantly, as follows:
“... where a licence scheme is referred to the Tribunal under this section, the Tribunal shall consider the matter in dispute and, after giving to the parties to the reference an opportunity of presenting their cases, shall make such order, either confirming or varying the scheme, in so far as it relates to cases included in the class of cases to which the reference relates, as the Tribunal considers reasonable in the circumstances.”
3 Powercom Interactive Media Pty Limited (“Powercom”) claims that it requires a licence in a case or class of cases to which a licence scheme or licence schemes operated by Australasian Performing Right Association Limited (“APRA”) and Australasian Mechanical Copyright Owners’ Society Limited (“AMCOS”) (collectively “the respondents”) applies or apply. Subsection 155(2) of the Act provides, relevantly, that the parties to a reference under s 155 are the person referring the scheme (Powercom in the present case) and “the licensor operating the scheme”. Below I decide that this expression is a reference to APRA alone in the circumstances of the present case. But both APRA and AMCOS are respondents.
4 Powercom’s complaint is that the grant of the licences by the respondents is subject to the payment of charges that are not reasonable in the circumstances of the case. Powercom requests the Tribunal to make an order varying the schemes or scheme in question and specifying the charges, if any, which the Tribunal considers reasonable in the circumstances.
5 The respondents have raised a question as to the jurisdiction of the Tribunal to consider the reference and to make any order, in so far as the reference and order relate to the licence offered by AMCOS. Counsel for the respondents has informed the Tribunal that his clients do not welcome a situation in which the Tribunal lacks jurisdiction, but have felt obliged to raise the issue.
6 The parties have agreed that the question of jurisdiction should be determined as a preliminary issue.
7 Section 164 of the Act provides that in proceedings before the Tribunal, the procedure of the Tribunal is, “subject to [the] Act and the regulations”, within the discretion of the Tribunal. The “regulations” are the Copyright Tribunal (Procedure) Regulations 1969, reg 36A of which gives me the power to give directions as to the procedure to be followed in connection with the hearing of the reference. By consent, I have decided to order that the following question be decided separately from any other question and before the final hearing in the proceeding:
“Does the Copyright Tribunal have jurisdiction to consider the matter in dispute and to make an order under subs 155(5) of the Copyright Act 1968 (Cth) in so far as that matter relates, and such an order would relate, to the terms, including those as to the payment of charges, of any scheme under which licences are granted by the Australasian Mechanical Copyright Owners’ Society Ltd for the reproduction of musical works?”
THE AMENDED REFERENCE, POWERCOM’S POINTS OF CLAIM and the respondents’ points in reply
8 The matter in dispute, as alleged by Powercom, is as follows (no evidence has been led and I make no findings of fact).
9 Powercom carries on business in Australia as a provider of managed telecommunications bureau services. In the course of that business it provides bureau services to entities engaged in the business of marketing short message service (“SMS”) products, including “ringtones”, to the users of mobile telephones. A ringtone is a sound recording which reproduces a fragment of a musical work in digital form and which is intended to be downloaded to, and function as the ring of, a mobile telephone. At present, Powercom is providing its bureau services to Iya Vaya Design Ltd, an Irish corporation, which provides ringtones and other SMS products. In the telecommunications industry, such providers are called “Information Providers” or “IPs”.
10 The bureau service provided by Powercom to an IP requires Powercom to take the following steps:
“(a) to store ringtones and other SMS products provided by the IP on computers owned and controlled by it;
(b) to obtain from Telstra the allocation of a phone number to be used exclusively for the supply of the ringtones and other SMS products of the IP;
(c) to provide interfaces between its computers, the public or private internet network, and Short Messaging Service Centres of mobile network operators;
(d) to provide the means by which a caller to an allocated number can select a stored ringtone or other SMS product of the IP;
(e) to cause the electronic transmission of a copy of a ringtone or other SMS product selected by such a caller to a mobile phone nominated by him or her.” (my emphasis)
Together, the activities set out above constitute the provision of interactive voice response services (“IVR services”) by Powercom.
11 In storing ringtones on its computers, Powercom makes reproductions of those parts of the musical works embodied in the ringtones (cf s 31(1)(a)(i) of the Act).
12 In electronically transmitting ringtones to nominated mobile telephones, Powercom exercises the right of communication to the public in respect of those parts of the musical works embodied in the ringtones (cf s 31(1)(a)(iv) of the Act). (The word “communicate” is defined in subs 10(1) of the Act to mean “make available online or electronically transmit ... a work or other subject-matter”, and it is not disputed that the ringtones are so made available to members of the public who wish to have them as the ring of their mobile telephones.)
13 By providing the IVR service, Powercom authorises the making of the copies of the ringtones which are created in nominated mobile telephones upon the electronic transmission of them (cf s 36 of the Act).
14 According to the amended reference, there are either two schemes (one administered by AMCOS and the other by APRA) or one scheme administered by AMCOS and APRA. Powercom’s points of claim state in par 9 that “AMCOS and APRA have jointly implemented a licence scheme ...”. According to both the amended reference and the points of claim, Powercom requires both a licence to reproduce from AMCOS and a licence to communicate from APRA for the provision of its bureau services in respect of ringtones.
15 Paragraphs 3 to 8A of the amended reference are as follows:
“3. [AMCOS] has brought into operation a licence scheme to license the reproduction of musical works by the making of Ringtones for the purpose of sale.
4. The licence scheme relates to licences in respect of rights in musical works controlled by AMCOS.
5. A copy of the standard terms of the AMCOS licence is annexed to this amended Reference and marked ‘A’.
6. [APRA] has brought into operation a licence scheme to license the communication of Ringtones by means of a short message service over an [IVR service].
7. The licence scheme relates to licences in respect of rights in musical works controlled by APRA.
8. A copy of the standard terms of the APRA licence is annexed to this amended Reference and marked ‘B’.
8A. Alternatively AMCOS and APRA have brought into operation a licence scheme for the reproduction of musical works in Ringtones and their communication by means of IVR Services in the terms set out in the licences which are annexures ‘A’ and ‘B’ to this amended reference.” (my emphasis)
16 Annexure “A” referred to in the paragraphs set out above is a standard form of licence agreement between AMCOS as licensor and a party whose name is to be inserted as licensee (“the AMCOS licence”). The AMCOS licence recites that AMCOS controls in Australia and New Zealand “the right to reproduce AMCOS Works”. “AMCOS Works” are the musical works for which AMCOS is entitled to grant the licence referred to in subcl 2.1 (see below). The document recites that the licensee is in the business of providing customised mobile telephone ringtones for sale by means of IVR services and requires a licence from AMCOS in order to pursue that business activity. Clause 2 of the AMCOS licence agreement provides for the grant of a licence. Subclauses 2.1 and 2.2 are as follows:
“2.1 AMCOS grants the Licensee a non-exclusive licence to:
(a) reproduce the AMCOS Works in the form of Ringtones in the Territory for the purpose of selling the Ringtones by means of IVR services;
(b) subject to clause 2.2, authorise reproductions of the Ringtones by the Licensee’s customers onto mobile telephones to complete the sale of the Ringtone; and
(c) reproduce the Ringtones for the sole purpose of demonstrating the Ringtones to potential customers,
in the Territory.
2.2 The Licensee must only authorise or permit the reproduction of Ringtones by the Licensee’s customers onto mobile telephones which prevent the further reproduction of the Ringtones.” (my emphasis)
17 The word “ringtone” is defined in the AMCOS licence to mean “a monophonic reproduction of an AMCOS Work used as a ringtone on a mobile telephone”. By cl 4 of the AMCOS licence, the licensee undertakes to pay the licence fee calculated in accordance with the formula in Schedule 1 to that document.
18 Annexure “B” to the amended reference is a standard form of licence agreement expressed to be made between APRA as licensor and a party whose name is left blank as licensee (“the APRA licence”). The APRA licence is remarkably similar to the AMCOS licence. The address of APRA, as stated in the APRA licence, is identical to the address of AMCOS, as stated in the AMCOS licence, even to the extent that in each case the licensor’s email address is shown as “online@apra.com.au” that is to say, that email address is the email address of AMCOS as well as of APRA.
19 The APRA licence recites that APRA owns or controls for Australia and New Zealand “the exclusive right of public performance and communication to the public in relation to a large number of musical works and associated lyrics”. It recites the nature of the licensee’s business which is, mutatis mutandis, identical to the relevant recital in the AMCOS licence. Clause 2 of the APRA licence contains the grant of the licence. By that clause APRA grants to the licensee the licence to communicate the APRA Works for the purpose only of communicating the ringtones by means of an SMS over an IVR service, specified in Schedule 3 to the document, for the purpose of the licensee’s sale of customised mobile telephone ringtones. (Schedule 3 is headed “IVR TELEPHONE NUMBERS” and is, of course, otherwise blank (except for horizontal lines permitting the insertion of the telephone numbers).) The APRA licence applies in respect of all musical works, including any words normally associated with those works by the copyright owner for Australia, the right of public performance of which is vested in APRA for Australia and New Zealand. The licensee promises to pay APRA the licence fee calculated in accordance with a formula in Schedule 1 to the document.
20 Paragraphs 9, 10 and 11 of the amended reference are as follows:
“9. Powercom requires a licence or licences from AMCOS to reproduce the musical works in Ringtones and APRA to communicate the musical works for the period commencing June 2001 but the grant of a licence or licences in accordance with the licence schemes referred to in paragraphs 3 and 6 or the licence scheme referred to in paragraph 8A above would be subject to the payment of charges that are not reasonable in the circumstances of the case.
10. The cases in which a licence or licences to reproduce and communicate musical works are required by Powercom, are:
a. Where musical works are reproduced in the form of Ringtones for the purpose of sale by means of IVR Services;
b. Where Powercom authorises the reproduction of the reproduction of musical works for the purpose of downloading a Ringtone into Powercom’s customer’s mobile phone;
c. Where the musical works are reproduced in the form of Ringtones for the purpose of demonstrating the Ringtones to potential customers;
d. Where musical works are communicated to customers’ mobile phones by means of a short message service.
11. Powercom requests the Tribunal to make an order varying the scheme and specifying charges, if any, as the Tribunal considers reasonable in the circumstances.” (my emphasis)
MY REASONING IN RELATION TO THE QUESTION OF JURISDICTION
21 It will be recalled that subs 155(1) (set out at [1] above) refers to “a licence scheme” and “the licensor operating the scheme”, “licences” and “a licence”, and that subs 155(5) (set out at [2] above) refers to “a licence scheme”. The expression “licence scheme” is defined in subs 136(1) of the Act. The definition includes a reference to “licences” and to a “licensor” or “licensors”. The expressions “licence” and “licensor” are also defined in subs 136(1). The three definitions are as follows:
“licence means a licence granted by or on behalf of the owner or prospective owner of the copyright in a literary, dramatic or musical work, or of the copyright in a sound recording, being:
(a) in the case of a literary, dramatic or musical work – a licence to perform the work or an adaptation of the work in public, to broadcast the work or an adaptation of the work, to make a sound recording or cinematograph film of the work or an adaptation of the work for the purposes of broadcasting the work or adaptation, or to electronically transmit the work or an adaptation of the work (other than in a broadcast) for a fee payable to the person who made the transmission; or
(b) in the case of a sound recording – a licence to cause the recording to be heard in public, to make a copy of the sound recording for the purposes of broadcasting the recording, or to broadcast the recording in a broadcast transmitted for a fee payable to the person who made the broadcast.
licence schememeans a scheme (including anything in the nature of a scheme, whether called a scheme or tariff or called by any other name) formulated by a licensor or licensors and setting out the classes of cases in which the licensor or each of the licensors is willing, or the persons on whose behalf the licensor or each of the licensors acts are willing, to grant licences and the charges (if any) subject to payment of which, and the conditions subject to which, licences would be granted in those classes of cases.
licensor means:
(a) in relation to licences in respect of a literary, dramatic or musical work – the owner or prospective owner of the copyright in the work 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; ...”
22 Section 30 of the Act provides as follows:
“In the case of a copyright of which (whether as a result of a partial assignment or otherwise) different persons are the owners in respect of its application to:
(a) the doing of different acts or classes of acts; or
(b) the doing of one or more acts or classes of acts in different countries or at different times;
the owner of the copyright, for any purpose of this Act, shall be deemed to be the person who is the owner of the copyright in respect of its application to the doing of the particular act or class of acts, or to the doing of the particular act or class of acts in the particular country or at the particular time, as the case may be, that is relevant to that purpose, and a reference in this Act to the prospective owner of a future copyright of which different persons are the prospective owners has a corresponding meaning.”
I proceed on the assumptions favourable to Powercom that APRA is the owner of copyright in certain musical works in respect of that copyright’s application to the act of communication of the work to the public, and that AMCOS is the owner of the same copyright in respect of its application to the act of reproduction of the musical works.
23 The respondents refer to the four subparagraphs of par 10 of the amended reference (set out at [20] above). They do not dispute that the Tribunal has jurisdiction to consider the scheme under which APRA licenses the communication of musical works (subpar 10(d) above). They submit, however, that the Tribunal does not have jurisdiction to consider the scheme under which AMCOS licenses the reproduction of musical works (subpars 10(a), (b) and (c) above). In support of this submission, the respondents deal successively with the jurisdiction conferred on the Tribunal by ss 149, 152A, 154-157 and 160 of the Act, and submit that these are the only sections which might be argued to give jurisdiction to the Tribunal in relation to the latter scheme, but that upon analysis, none of them will be found to give that jurisdiction. Powercom does not rely on s 149 or s 152A.
24 Section 160 provides as follows:
“Where an application or reference is made to the Tribunal under this Act, the Tribunal may make an interim order having effect until the final decision of the Tribunal on the application or reference.”
This section has been construed widely: see Reference by Australiasian Performing Right Association Ltd [1995] ACopyT 5; Universal Music Australia v EMI Publishing Australia Pty Ltd (2000) 155 FLR 362. But the section does not broaden the scope of the final orders which the Tribunal is empowered to make. If I can determine now that the Tribunal is not empowered to consider, or to make any final order in respect of, a licence scheme in so far as it relates to the licence to reproduce offered by AMCOS, an interim order having effect until the final decision of the Tribunal in support of such final relief cannot be made either.
25 In substance, the respondents’ submission is that the AMCOS licence, being a licence “to reproduce” the AMCOS Works, is not a licence of any of the kinds referred to in the definition of “licence” in s 136, which lies at the heart of the definitions of “licence scheme” and “licensor” in that section, and which therefore lies at the heart of s 155. It will be recalled that the definition of “licence” in s 136 in relation to a musical work is a licence:
· to perform the work or an adaptation of the work in public;
· to broadcast the work or an adaptation of the work;
· to make a sound recording or cinematograph film of the work or an adaptation of the work for the purposes of broadcasting the work or adaptation; or
· to electronically transmit the work or an adaptation of the work (other than in a broadcast) for a fee payable to the person who made the transmission.
26 It is quite clear that a licence to reproduce a musical work is clearly not within the definition of “licence”. It plainly follows:
- that the APRA licence is a “licence” within ss 136 and 155, but that the AMCOS licence is not;
- that APRA is within the definition of “licensor” within those provisions, but that AMCOS is not; and
- that in order to be a “licence scheme” within those provisions, there must be a scheme “formulated” by APRA, not by AMCOS, setting out the classes of cases in which APRA, not AMCOS, is willing to grant the APRA licence, not the AMCOS licence.
27 Senior counsel for Powercom submitted that “for the purpose of a threshold analysis in relation to jurisdiction, the participation of each of the respondents is required for there to be a licence enabling the electronic transmission of the ringtones in the manner sought by [Powercom]” and that “the fact that the respondents have offered a coordinated scheme is sufficient to attract the jurisdiction of the Tribunal”. In oral submissions, counsel claimed that the evidence might show the existence of a single scheme administered by APRA and AMCOS under which the licence to transmit is granted by APRA and under which a necessary ancillary licence to reproduce is granted by AMCOS. He submitted that on this basis the Tribunal would have jurisdiction in respect of the whole scheme.
28 It is conceivable that there is a single scheme formulated by the licensor, APRA, which is “operated by” APRA somehow in conjunction with AMCOS, because of the necessity of a grant of the AMCOS licence (to reproduce) if the APRA licence (to communicate) is to be useful. It is, on the other hand, conceivable that there are two schemes, one formulated and operated by APRA in relation to the APRA licence, and the other operated by AMCOS (regardless of who may have formulated it) in relation to the AMCOS licence, both being administered in coordination for the reason mentioned. Either way, it is a matter for argument (I need not form a final view at present) whether AMCOS is a proper party to the only reference by Powercom to the Tribunal which s 155 permits, namely, a scheme formulated and operated by APRA under which the APRA licence is granted.
29 It is clear, however, even at this stage that s 155 does not give the Tribunal jurisdiction to consider any matter in dispute in so far as it relates to the terms of any scheme under which the AMCOS licence is granted, or to confirm or vary any such scheme in so far as it relates to such a dispute.
30 My conclusion does not signify a ruling at this early stage that the terms of a scheme under which AMCOS offers the AMCOS licence could not be relevant to the dispute over the reasonableness of the terms of a scheme under which APRA offers the APRA licence. Evidence and submissions would be required before I could rule on that question. But the terms of the former scheme would not be the subject of consideration, and that scheme would not be the subject of any order, under s 155 of the Act.
conclusion
31 For the above reasons, the question ordered to be separately decided is answered “No”. The proceeding will be stood over to a date for the making of directions for the further conduct of the matter in the light of this answer.
32 It is unfortunate that I have felt constrained to reach this conclusion. As noted at [5], it is not a result that either party desires. Moreover, in its report “Jurisdiction and Procedures of the Copyright Tribunal” made in December 2000, the Copyright Law Review Committee unanimously recommended that the jurisdiction of the Tribunal be extended to cover just such a case as the present one (see pars 11.94 and 11.100). Moreover, those submissions made to that Committee which commented on the matter unanimously favoured extension of the Tribunal’s jurisdiction so as to cover “collectively administered non-statutory licences” and no submissions opposed that extension (ibid, par 11.69).
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I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Decision herein of the Copyright Tribunal constituted by Lindgren P. |
Associate to the President:
Dated: 17 March 2003
Counsel for the Referring Party
(Powercom Interactive Media Pty Ltd): Mr R J Webb SC and Mr M Green
Solicitors for the Referring Party
(Powercom Interactive Media Pty Ltd): Baldwin Shelston Waters Law
Counsel for the Respondents
(AMCOS and APRA): Mr R Cobden
Solicitors for the Respondents
(AMCOS and APRA): Banki Haddock Fiora
Date of Hearing: 5 February 2003
Date of Judgment: 18 March 2003