COPYRIGHT TRIBUNAL OF AUSTRALIA
Copyright Agency Ltd v University of Adelaide  ACopyT 1
COPYRIGHT TRIBUNAL – annual amount of equitable remuneration for copying under Part VB – discussion of statutory licence to copy – whether previous requirement to express a determination of equitable remuneration “per student of the institution concerned” authorized a determination per EFTSU (“Equivalent Full Time Student Unit”) – whether different rates could be fixed for calculation of the amount to be determined in respect of different kinds of copying – discussion of Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR5 – whether there have been significant changes since that decision – how equitable remuneration is to be assessed in the absence of a “going rate” – whether an author’s primary royalties, converted to a page rate, provided a measure of equitable remuneration for copying – how charges made by document delivery services, or particular publishers granting permissions, should be viewed – discussion of out of print works – effect of evidence that some academic writing is motivated by considerations related to prestige and promotions, not royalties, and is encouraged and assisted by universities – whether the universities have provided “unremunerated contribution … to the creation of the material copied” within reg. 25B(1)(h) – relevance of costs of collection to equitable remuneration – relevance of demonstration by practical experience of the viability of a particular level of charge – relevance of universities’ ability to charge for copies supplied to students – discussion of change in teaching practices by which “coursepacks” are now sold to students, representing less ephemeral copies than the generality of copying in the early 1980s, which was for short-term uses – “Docutech” technology – whether equitable remuneration should allow a discount for bulk, or whether coursepacks should be regarded as selecting the best of a work for copying which merited a higher rate – discussion of the case of multi-authored books – whether the simplicity of the statutory scheme under Part VB, as compared with the former s.53B, should involve a discount – reference to copying for external students done in reliance on s 40(1A) and (3) as an issue for the Court, not the Tribunal – consideration of print music and artistic works and slides as special cases of copying – discussion of the effect of s.135 ZM – discussion of copying in the “closed reserve” sections of university libraries – reference to the issue whether this is “fair dealing” – discussion of digital storage of, and access to, works – principle that equitable remuneration should be determined on the basis of the copying actually done – separate rates fixed for general copying, coursepack copying, print music, artistic works and slides, to be indexed.
Statute of Queen Anne of 1709 (UK), s.V
Copyright Act 1968 (Cth), ss 10 (1A), (2), (3)(k), 40, 53B (now repealed), 135H, 135ZB, 135ZD (now repealed), 135ZJ, 135ZK, 135ZL, 135ZM, 135ZU, 135ZV, 135ZW, 135ZX, 135ZZB, 153C
Copyright Amendment Act (No. 1) 1998 (Cth)
Copyright Tribunal (Procedure) Regulations, reg 25B
Copyright Agency Limited v The University of Adelaide (1997) AIPC 39,396 discussed
Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5 applied
General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd  RPC 198 applied
Tonson v Walker (1739) Coram Lord Hardwicke LC, referred to in Millar v Taylor (1769) 4 Burr 2303; 98 ER 201 and Millar v Taylor referred to
Tonson v Walker (1752) 3 Swans 672; 36 ER 1017 referred to
Copyright Agency Limited v Victoria University of Technology (1994) 53 FCR 56 referred to
Copyright Agency Limited v Victoria University of Technology (1995) 55 FCR 1 referred to
Audio-Visual Copyright Society Ltd v New South Wales Department of School Education (1997) 37 IPR 495 applied
Fair Fitness Music Association v Australasian Performing Right Association(unreported, Burchett P and Profs. Ricketson and Pearce, 1 October 1998) referred to
Reference by Australasian Performing Right Association Ltd; Re Australian Broadcasting Corporation (1985) 5 IPR 449 referred to.
COPYRIGHT AGENCY LIMITED v THE UNIVERSITY OF ADELAIDE and others
CT 4 of 1997
2 FEBRUARY 1999
COMMONWEALTH OF AUSTRALIA
COPYRIGHT ACT 1968
IN THE COPYRIGHT TRIBUNAL
CT 4 of 1997
COPYRIGHT AGENCY LIMITED
THE UNIVERSITY OF ADELAIDE, THE AUSTRALIAN NATIONAL UNIVERSITY, AUSTRALIAN CATHOLIC UNIVERSITY, UNIVERSITY OF BALLARAT, BOND UNIVERSITY, UNIVERSITY OF CANBERRA, CENTRAL QUEENSLAND UNIVERSITY, CHARLES STURT UNIVERSITY, CURTIN UNIVERSITY OF TECHNOLOGY, DEAKIN UNIVERSITY, EDITH COWAN UNIVERSITY, THE FLINDERS UNIVERSITY OF SOUTH AUSTRALIA, GRIFFITH UNIVERSITY, JAMES COOK UNIVERSITY OF NORTH QUEENSLAND, LA TROBE UNIVERSITY, MACQUARIE UNIVERSITY, THE UNIVERSITY OF MELBOURNE, MONASH UNIVERSITY, MURDOCH UNIVERSITY, THE UNIVERSITY OF NEW ENGLAND, UNIVERSITY OF NEW SOUTH WALES, THE UNIVERSITY OF NEWCASTLE, NORTHERN TERRITORY UNIVERSITY, THE UNIVERSITY OF QUEENSLAND, QUEENSLAND UNIVERSITY OF TECHNOLOGY, ROYAL MELBOURNE INSTITUTE OF TECHNOLOGY LIMITED, SOUTHERN CROSS UNIVERSITY, SWINBURNE UNIVERSITY OF TECHNOLOGY, THE UNIVERSITY OF SYDNEY, UNIVERSITY OF TASMANIA, UNIVERSITY OF SOUTHERN QUEENSLAND, UNIVERSITY OF SOUTH AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY, VICTORIA UNIVERSITY OF TECHNOLOGY, THE UNIVERSITY OF WESTERN AUSTRALIA, UNIVERSITY OF WESTERN SYDNEY, UNIVERSITY OF WOLLONGONG
2 FEBRUARY 1999
THE TRIBUNAL DIRECTS THAT:
The applicant bring in, on a date to be fixed, short minutes of orders to give effect to the decision of the Tribunal.
COMMONWEALTH OF AUSTRALIA
COPYRIGHT ACT 1968
IN THE COPYRIGHT TRIBUNAL
CT 4 of 1997
REASONS FOR DECISION
1 The Statute of Queen Anne of 1709 which is generally regarded as the genesis of the law of copyright, not only as it is known in common law countries but also as it has come to be accepted throughout the world, contained (in s V) a special proviso conferring on “the libraries of the universities of Oxford and Cambridge, the libraries of the four universities in Scotland, the library of Sion College in London, and the library commonly called the library belonging to the faculty of advocates at Edinburgh”, as well as upon the Royal Library, a right to receive, each of them, a copy, “upon the best paper,” of each book to be printed and published. So, from the beginning, universities were accorded a privileged position in respect of copyright. The Australian Copyright Act 1968 continues to favour educational institutions, including universities, in providing a mechanism by which they may obtain compulsory licences in respect of copyright material. The present application is concerned with the fixing of amounts payable, by the Australian universities which are the respondents, in relation to statutory rights to make copies of articles appearing in periodical publications (an expression which, it is important to appreciate, really refers to issues of periodical publications: s 10(3)(k)), copies of certain literary and dramatic works published in anthologies, and copies of other literary, dramatic, musical and artistic works. These rights are contained in Part VB of the Act, in ss 135ZJ, 135ZK and 135ZL, as amplified by s 135ZM. A copy made by a body administering an educational institution in reliance on any of these sections is called (by s 135ZB) a “licensed copy”.
2 It is unnecessary to set out here each of the similar, but not identical, provisions made in respect of copies of various kinds of works by ss 135ZJ, 135ZK and 135ZL. The nature of the statutory rights is sufficiently indicated by the terms of s 135ZL:
“(1) Subject to this section, the copyright in a literary, dramatic, musical or artistic work (other than an article contained in a periodical publication) is not infringed by the making of one or more copies of the whole or a part of the work by, or on behalf of, a body administering an educational institution if:
(a) a remuneration notice [this is defined in s 135ZB to mean ‘a notice referred to in subsection 135ZU(1)’], given by or on behalf of the body to the relevant collecting society [defined in s 135ZB as a body declared to be such under s 135ZZB – in this case, the applicant Copyright Agency Limited], is in force;
(b) the copy is made solely for the educational purposes of the institution or of another educational institution [the meaning of this is expanded by s 10(1A)]; and
(c) the body complies with subsection 135ZX(1) or (3), as the case requires, in relation to the copy [the former of these prescribes the marking of copies and the making of records required in cases where what is known as a ‘records notice’ has been given, and the latter prescribes the marking of copies required where what is known as a ‘sampling notice’ has been given].
(2) This section does not apply in relation to copies of the whole, or of more than a reasonable portion [as to which see s 10(2)], of a work that has been separately published unless the person who makes the copies, or causes the copies to be made, for, or on behalf of, the body is satisfied, after reasonable investigation, that copies (other than second-hand copies) of the work cannot be obtained within a reasonable time at an ordinary commercial price.”
Section 135ZU(1) provides for the giving of a
notice, by (inter alia)
a body administering an educational institution, to a collecting society such
as the applicant, undertaking “to pay equitable remuneration to the society for
licensed copies made by it, or on its behalf, being copies made while the
notice is in force”. Subsection (2)
requires a remuneration notice to “specify whether the amount of equitable
remuneration is to be assessed on the basis of a records system or a sampling
system”. Hence the expressions “records
notice” and “sampling notice”, as is noted in s 135ZB. Separate provisions are made, by ss 135ZV and 135ZW, for the consequences of the giving of
records notices and sampling notices respectively. As the notices I am considering in the
present matter were sampling notices, it is sufficient to set out the terms of
s 135ZW. In doing so, I shall include,
in square brackets, certain words which were included at the time the
application to the Tribunal was filed, on 19 December 1997, but were removed by
the Copyright Amendment Act (No
1) 1998 as from 30 July 1998. Set
out in this way, s 135ZW contains (in part) the following:
“(1) Where a sampling notice is given by, or on behalf of, an administering body, the amount of equitable remuneration payable to the relevant collecting society by the administering body for licensed copies made by it, or on its behalf, while the notice is in force is such annual amount [per student of the institution concerned] as is determined by agreement between the administering body and that collecting society or, failing such agreement, by the Copyright Tribunal on application made by either of them.
(2) The annual amount referred to in subsection (1) shall be determined (whether by agreement or by the Copyright Tribunal) having regard to the number of licensed copies made by, or on behalf of, the administering body in a particular period and to such other matters (if any) as are relevant in the circumstances.”
Further provision for the determination by the Copyright Tribunal of the annual amount referred to in s 135ZW is contained in s 153C, which was also amended when s 135ZW was amended. I set out the relevant parts of s 153C in the same way as I have set out the relevant parts of the earlier section:
“(2) Where an application is made to the Tribunal under s 135ZV or subsection 135ZW(1), the Tribunal shall consider the application and, after giving the parties to the application the opportunity of presenting their cases, shall make an order determining the amount [per licensed copy, or per student of the relevant institution, as the case may be], that it considers to be equitable remuneration for the making of a licensed copy.
(3) In making an order, the Tribunal may have regard to such matters (if any) as are prescribed.
(4) An order may be expressed to have effect in relation to licensed copies made before the day on which the order is made.
(5) In this section, administering body, collecting society, institution and licensed copy have the same meanings as in Part VB.”
The expression “per licensed copy” in the original form of sub-s (2) was relevant where a records notice had been given under s 135ZV; for present purposes, the relevant expression is the alternative “per student …”, sampling notices having been given, as previously mentioned. Subsection (3) has been implemented by the prescription of matters by regulation 25B of the Copyright Tribunal (Procedure) Regulations.
proceeding further, I should note one aspect of a determination, to which the
amendments made as from 30 July 1998 inevitably draw attention. This is that, whereas previously the annual
amount to be determined, in a case where a sampling notice had been given, was
required to be expressed “per student of the institution concerned”, now it
need not be. That means, in the present
case, that the equitable remuneration must be expressed for 1998 as an annual
amount per student, but thereafter may be expressed simply as an annual amount:
Copyright Society Ltd v New South Wales Department of School Education
(1997) 37 IPR 495 at 497. Prior to the amendments, s 135ZB defined the
word “student” by reference to s 135ZD, which has now been repealed. Relevantly, that section gave the word no
special meaning – it simply described “a student of the institution”. My reason for mentioning the matter here is
that counsel for the universities asked me to express my determination as to
equitable remuneration as an amount “per EFTSU”. Counsel referred to the statutory
requirement, which existed until 30 July 1998, to determine an amount “per
student”, as if this were the same thing.
But an EFTSU (the acronym stands for “Equivalent Full Time Student
Unit”) is an artificial unit designed to facilitate the comparison of student
numbers, and of the loads imposed upon universities by their student bodies; it
represents the equivalent of a full-time student, whether there is in fact a
full-time student or whether there is a sufficient number of part-time
students, each being taught for some number of hours or fulfilling some
requirements, to be regarded, in the aggregate, as the equivalent of one
full-time student. However convenient it
may be to talk of EFTSUs, I am unable to see how the
unadorned statutory reference to students can be transformed into EFTSUs. It is not as
if the draftsman of the Act was not aware of the existence of different classes
and ss 135H(2)(c) and 135ZV(2) show
that he was. In other circumstances, that
provisions and 135ZV(2) enable allowance to be made for “different
classes of students of an institution”.
For 1998, I must express my determination “per student of the
institution concerned”; b.
However, this difficulty, being noted, may be put on one side until I
come to formulate my orders, a course favoured by Sheppard
P in Audio-Visual Copyright Society Ltd v
New South Wales Department of School Education at 509-510, where I do not
understand his Honour to have been laying down any definitive construction of
the word “student” as used in the legislation, but rather to have been exposing
the practical problem to be solved by an appropriately structured
determination. What it is essential to
keep in mind is the requirement of s 135ZW(2) that the amount in question
“shall be determined … having regard to the number of licensed copies made … in
a particular period and to such other matters (if any) as are relevant in the
5 Another legal question of a preliminary nature was debated at the hearing. The applicant asked me to determine the amount of equitable remuneration on the basis of different rates for different kinds of copying which it identified in its submissions. With a few exceptions, these rates were rates per page copied. The universities accepted, despite their preference for paying per EFTSU, that the amount to be determined should be calculated in accordance with pages copied. But their counsel submitted the Tribunal would be bound to apply a single rate per page, and would not be entitled to assess and utilize different rates for different kinds of copying. I do not accept this proposition. Sections 135ZW and 153C require me to determine an “annual amount” which, for the period prior to 30 July 1998 must, and thereafter may, be expressed “per student of the institution concerned”. But in doing so, I am to have regard (by s 135ZW(2)) both to the number of licensed copies made and to other matters relevant in the circumstances. The values to be attributed to different kinds of copying, or copying to serve different purposes, seem to me plainly to be relevant to the equitable remuneration for copies made. Nothing in the sections requires me to fit every form of copying to one Procrustean bed, chopping off the fair remuneration for some kinds of copies and stretching that for others. Of course, the nature of the task requires me to generalise, since the numbers are very great, but the most convenient way to do so is in categories, and the Act does not forbid this method. It was not argued that Regulation 25B of the Copyright Tribunal (Procedure) Regulations is other than valid; and the nature of the matters to which, by virtue of s 153C(3) and this regulation, I “may have regard”, starting with the very first of them, in itself suggests the Tribunal may proceed by categories. Regulation 25B relevantly provides as follows:
“(1) For the purposes of subsection 153C(3) of the Act the following matters are prescribed:
(a) the nature of the works … copied;
(b) the institutions for which the copies are made;
(c) any matters that have been assessed by use of a sampling system determined under subsection 135ZW(3) of the Act;
(d) the need to ensure adequate incentive for the production of educational works … in Australia;
(e) the purpose and character of the copying;
(f) the effect of the copying on the market for, or value of, the material copied;
(g) the special circumstances of external students including any difficulties faced by those students in meeting the requirements of sections 41, 49 or 135ZG of the Act;
(h) any unremunerated contribution by institutions to the creation of the material copied.
(2) In subregulation (1), ‘external student’, in relation to an institution, means a person undertaking a correspondence course or external study course provided by the institution.”
6 Counsel for the universities claimed the decision of Lockhart J in Copyright Agency Limited v The University of Adelaide (1997) AIPC 39,396 required the conclusion that different rates could not be assessed. But I do not think this case has anything to do with the point. His Honour was there concerned, not with how the Tribunal should proceed in carrying out its task of assessing equitable remuneration, but with whether each of the universities involved in the present case was entitled to give separate remuneration notices for copying by different means and for different purposes, being (in one instance) a sampling notice and (in other instances) records notices. Lockhart J, sitting as the Tribunal, held (at 39,403) that a remuneration notice “must cover all classes of copyright in the relevant articles as between the education institution and the particular collecting society”. He said:
“The option is given by the Act either to have equitable remuneration determined on the old basis [ie the records basis] or on the sampling basis; but it seems to me this must be in respect of one remuneration notice between each educational institution and each collecting society in force at any one time.”
With respect, I accept this unreservedly; any other view would involve complications which Parliament could not be supposed to have intended. But once the statutory election is made, and if the parties cannot agree, the Tribunal must undertake the task of determining equitable remuneration, and if that involves looking at different types of copying, then the Tribunal must do so. As Lockhart J pointed out (at 39,399), the legislation derives from the report of the Franki Committee of October 1976, which considered “that multiple copying should not be carried out without remuneration to the copyright owner in any case where it represented a substantial use of his property”. The proper assessment of equitable remuneration is fundamental to the implementation, upon which Parliament plainly decided, of this principle.
7 It is appropriate at this point to set down the claims which were put forward by the applicant, although it is fair to say there was an acceptance by counsel, in argument, that the foundation of some of these claims might need to be established by orders of a Court before the Tribunal could assess equitable remuneration in respect of them. This difficulty did not apply to the basic claim, which was that the rate of 2 cents per page fixed by the Tribunal (Sheppard P) on 20 March 1985 in Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5 in respect of pages copied pursuant to the former s 53B of the Act, by virtue of the statutory licence conferred by that section, should be raised from its present indexed equivalent of 3.562 cents per page to a new rate of 10 cents per page. In addition to this new basic rate, the applicant sought a special rate of 30 cents per page for artistic works, for print music, and for pages containing artistic works so as to fall within s 135ZM of the Act. Then, the applicant made further claims based on the particular purpose or character of various kinds of copying. These claims may be summarised as follows:
(a) a claim that anthologies or compilations of licensed copies bound so as to resemble books and known as “coursepacks”, which are commonly sold to students in university bookshops at their approximate cost (see Copyright Agency Limited v Victoria University of Technology (1994) 53 FCR 56; and on appeal, (1995) 55 FCR 1), should be regarded as different in kind from the copying generally done in 1985, and should bear a rate of 15 cents per page, increased to 45 cents per page in the case of artistic works and music.
(b) it was claimed that copying carried out by students in the “closed reserve” sections of university libraries should be regarded as equivalent to copying done in the compilation of coursepacks and should be paid for at the same rates. (This, and the claims in respect of digital copying to which I shall refer next, were claims the pursuit of which may have to await court proceedings, as I have mentioned, or the taking of steps by the universities, or some one or more of them, in reliance on the statutory licence to copy.)
(c) a claim was made of $2-00 per item for artistic and literary works and $6-00 per item for musical works to which digital access might be provided in university libraries.
(d) a claim was made of $2-00 per item (journal article, chapter or artistic work copied under the statutory licence) and $6-00 for print music, where these items are digitally stored in university libraries. (It was accepted that digital storage of such items is an impending, rather than a present, phenomenon, and that there are alternative ways of dealing with it if it eventuates.)
(e) Finally, a claim was made of $2-00 per slide for the copying of artistic works by means of slides.
8 The starting point of these claims is the decision of Sheppard P in Copyright Agency Ltd v Department of Education of New South Wales, to which I have referred. The applicant says there have been significant changes since the early 1980s, the period to which the evidence supporting this decision related. No attack is made on his Honour’s reasoning; indeed, the applicant relies on that reasoning. Similarly, the universities accept the validity of the basis on which Sheppard P made his determination, but they point to changes (other than those identified by the applicant) in the circumstances of the copying done in the universities to contend that the rate, not only should not be raised, but should be lowered to 2.75 cents per page, which should then be converted to $9.275 per EFTSU, to be increased in accordance with the CPI for the years 2000 and 2001. It was agreed that I should not deal, at this stage, with any question relating to the manner in which sampling should be carried out.
9 Since both sides took the decision in Copyright Agency Ltd v Department of Education of New South Wales as the foundation on which their contentions were based, although they were not entirely agreed upon how that decision should be understood, I now turn to the reasons of Sheppard P. His Honour was determining claims made under the then s 53B of the Act, which provided for the fixing of equitable remuneration to the owner of copyright for the making of copies under a statutory licence comparable to that conferred by the present Part VB. The copying in question had been done in schools as well as in universities and other institutions of tertiary education. The instances brought before his Honour were, as he said (at 8), “test cases”, intended “to fix a remuneration which will apply in respect of all copying in all educational institutions in Australia, provided that the copying is done pursuant to the provisions of s53B and in accordance with the conditions which it prescribes.” Sheppard P recorded (at 8) that the parties were united in asking him to “determine the same equitable remuneration for each of the applications”, although that would “probably involve the Tribunal applying some averaging process, and [might] produce a somewhat artificial result”. His Honour noted:
“The reason for the respondents’ request [in which the applicant joined] that the Tribunal determine the same rate for copying for all works, and that the determination be expressed on the basis of cents or fractions of cents per copy page, is that this will facilitate and reduce the costs of record keeping, as well as collection and distribution of remuneration to copyright owners.”
Although Sheppard P saw difficulties in this course, he acceded to the parties’ request. Nevertheless, he stated (at 8) that “there may be some unfairness, as amongst the various owners of copyright, in dealing with the applications in this way”; but he took comfort in the fact that he was only determining a limited number of instances of copying, and he made the point (at 8-9):
“If the applicant or any copyright owner or, indeed, any educational institution, is dissatisfied with the decision, fresh applications may be made to the Tribunal, assuming no agreement is reached, for the determination of equitable remuneration for the copying of any works not the subject of the applications now under consideration or for the copying of works which are the subject of the applications on occasions other than those specified therein. For this reason the course which the parties wish taken will not operate legally to deprive any copyright owner of any substantial entitlement to remuneration or impose any unfair burden on any educational institution. And one would hope that, at the least, the decision will provide a basis for agreement in most cases.”
10 Two comments should be made on this aspect of the decision. In the first place, the reference to the facilitation of record keeping, and the reduction of the costs associated with it, reflects the fact that s 53B knew nothing of sampling procedures, the development of which has since overcome some of the difficulties that concerned the parties in Copyright Agency Ltd v Department of Education of New South Wales. The greater fairness Sheppard P saw in a spread of rates may now be more achievable, and in any case, one party, the applicant, no longer acquiesces in a single undifferentiated rate. In the second place, the hope expressed by his Honour was realized, and his decision did lead to a series of agreements spanning the period between that decision and the present time. One matter, to which I shall make further reference later, that was picked up by agreement related to the copying (in whole or in part) of articles in academic journals. No copying from such an article was in question in the proceedings heard by Sheppard P.
11 Sheppard P pointed out (at 13) that the “right to reproduce a work in a material form is one of the exclusive rights conferred on a copyright owner” who, except in cases of assignment or devolution by operation of law, is the author. “It follows,” his Honour said, “that the equitable remuneration which needs to be determined is the remuneration which will equitably, that is, fairly, compensate the owner for the loss of the exclusive right which he has to reproduce a given work or a substantial part thereof”. A publisher’s rights were not involved, unless he happened to own the copyright. (But, quite often, a publisher does own the copyright).
12 Sheppard P discussed (at 13 et seq) a number of authorities bearing on the way in which the Tribunal should go about the task of assessing equitable remuneration. As there could not be said to be a “going rate” for educational copying under the statutory licence, he gave particular weight to what Lord Wilberforce said in General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd  RPC 198 at 214, where his Lordship laid down the proposition:
“The ultimate process is one of judicial estimation of the available indications.”
See Audio-Visual Copyright Society Ltd v New South Wales Department of School Education at 506-507, 519-521; and Fair Fitness Music Association v Australasian Performing Right Association (unreported, 1 October 1998), where the Tribunal (Burchett P. and Professors Ricketson and Pearce) discussed some of the authorities which provide guidance to the way in which the task of assessing equitable remuneration should be approached.
13 The applicant in Copyright Agency Ltd v Department of Education of New South Wales relied on evidence concerning a range of permissions granted by authors or publishers in relation to copying done by educational institutions in Australia. However, the number of instances was relatively small. Although there could not be said to have been a “going rate”, it was possible to argue, and the applicant did argue (as is indicated at 17), that the evidence revealed a “most common charge”, which was 4 or 5 cents per page. Evidence was given, too, of a comparatively large number of free permissions. As against the applicant’s reliance on its evidence of the most common charge, the respondents put forward (as appears at 19 et seq) tabulations based on the royalties usually received by authors from the sale of their works, tabulations which suggested an amount per page of the order of .5 of a cent. In outlining the respondents’ argument, Sheppard P stated several times (at 20) that it was usual for an author to agree with a publisher upon a royalty of 10 per cent of the retail price of each book sold. It is apparent that this was a broad statement covering publishing generally, for after saying that “it may sometimes be slightly more”, Sheppard P added:
“However, it would seem to me to be unlikely that an educational author would receive more than 10 per cent in many cases. Sometimes educational works, thought by a publisher to be in demand, are commissioned. In such cases the copyright, by agreement, often becomes that of the publisher”. (Emphasis added.)
I have drawn attention to the way in which Sheppard P referred to the matter of the author’s 10 per cent royalty because counsel for the universities suggested, in argument before me, that there had been a change in respect of this particular matter. A number of educational publishers pay royalties of 10 per cent, not of the retail price, but of the wholesale price, which reduces the value of the royalty by about one third. But the evidence did not show that at some particular time, since the early 1980s, there has been a change of practice in this respect. And there was evidence to support a distinction between the basis of payment of royalties in general publishing and the basis applied specifically in respect of educational publications. When what Sheppard P wrote is examined in the light of these considerations, I do not think it emerges that he based his assessment upon a precise royalty rate in respect of educational publications which has since undergone some alteration.
14 In any case, the issue is a false issue. For when Sheppard P came to the crux of the matter, he rejected both the “most common charge” approach and also the approach which would have assessed a rate per page for copying by extrapolation from the primary royalty paid to the author by the publisher. Sheppard P pointed out (at 29-30) that “[p]ublishing costs are high”. He continued:
“No doubt a minimum number of sales have to be made to make the publication worthwhile. Only if it is, is it likely that the book will become sufficiently well known and well regarded for educators to seek to use it in their teaching. However, once that point is reached different considerations begin to arise. The author may then expect to receive a greater proportion of gross amounts paid for other uses to which his work is put. It would seem to me to follow that what he would receive by way of royalty on the sale of a hardcover copy of his work may not provide the best guide to what he should receive if his work is photocopied. I say what I have not unmindful of the fact that it is the work, that is, the book, from which copies are made.
There are more fundamental considerations. No purchaser of a book concerns himself with the fact that 90 per cent of the retail selling price goes to the publisher and retailer and 10 per cent to the author. For him the only question is the cost of the book. That is, its value. In my opinion the fallacy in the respondents’ royalty approach lies in discarding 90 per cent of the value of the book which is copied. The author has to have a publisher or incur publishing and marketing costs himself. In ordinary circumstances, in order to market his work, he has to agree to a ten per cent royalty at least in respect of the initial runs of it. In a sense the 90 per cent taken by the publisher and retailer is the cost to the author of getting his work into bookshops. How in those circumstances it could be equitable to calculate the remuneration payable in respect of the copying of his work upon the basis of his royalty alone, I do not understand. To do so would be to ignore what in truth the author himself has had to expend to transform his work into a marketable commodity and thus into a form from which it may be copied. If the respondents’ royalty approach has validity as a guide to what should be done, the only fair way of applying it is to take the price or value of the book as the starting point, although I myself would be inclined to think that it should be the wholesale price and not the retail price. …
A further matter reinforces me in thinking that the view I have of the respondents’ royalty approach is correct. There are not an insignificant number of examples in the evidence where the publisher is the copyright owner. In such cases he has commissioned the work on the understanding that he, and not the author, will own the copyright. I do not think that it could be right, in cases of that kind, to take as a starting point the amount which the author, if he had been the owner of the copyright, would have earned by way of royalty on the sale of the work. If the respondents’ approach is incorrect for these cases, I think that it must also be incorrect for all other cases.”
His Honour concluded that calculations based on the author’s royalty provided neither “reliable guides to what equitable remuneration should be found” nor an acceptable basis for “establishing a ceiling above which no award should be made”. It seems to me to follow that, if I am to take the decision in Copyright Agency Ltd v Department of Education of New South Wales as a starting point, as the parties agreed I should, the suggested change in the basis of payment of authors’ royalties, if it occurred, was a change that made no difference.
15 The applicant’s “most common charge” argument addressed to Sheppard P was echoed by evidence and contentions put forward by both parties in the present matter. The applicant relied on rates for copying charged under the schemes applicable to universities overseas, especially in Great Britain and Canada, although, of course, differences between those schemes and Part VB reduce the value of the comparisons drawn. Nearer to home, the applicant pointed to the high charges raised by document delivery services for the supply of copies, although, in this case, allowance has to be made for all the incidents of the service provided, which goes beyond mere copying. The universities relied on evidence of “several examples”, as their counsel said, of permissions to copy given by particular publishers to other publishers for substantially less than the current amount payable for copying under Part VB, or for nothing. But this evidence fell short of establishing a general practice, or a common charge; indeed, the evidence of the representative of the largest academic publisher in the Australian market, Prentice Hall Australia Pty Limited, was to the effect that it was “getting tougher”, and doing so “very quickly”, in dealing with requests for permission to copy. The right way to view the comparison evidence called by each side, I conclude, is to see it as providing a series of reference points partially delineating the general area within which a judicially estimated figure should lie; but not as providing anything like a going rate, or even a most common charge, for application directly to the problem of fixing a rate. That is how the case stood, as Sheppard P found, in 1985; and, in the final analysis, it remains the position today.
16 A matter which did not loom large at the hearing before Sheppard P, but was raised on behalf of the universities before me, is the problem of the copying of works that are out of print. Sheppard P discussed the issues briefly (at 31), saying there had been no submission “advocating a lower rate for out of print works”. This, of course, was inherent in the approach the parties then took that there should be one flat rate; and it remains inherent in the competing approaches adopted before me, neither of which suggested the splitting off of a special rate for out of print works. Sheppard P said:
“There could be said to be a case for a lower per page rate for copies of these works than for copies of extracts from other still available works. The author would not be expecting further remuneration from out of print works. The payments would, in a sense, be a windfall. One might well expect persons bargaining in such a situation to agree on a lesser price. On the other hand, if photocopying of out of print works became extensive, it is possible that reprintings and new editions may be discouraged. However, I do not think this is likely because the copying of the whole of a work by a reprographic method can be a most expensive process.”
The comment may be made that the last consideration has less weight now, almost fifteen years later, because of the great advances in photocopying technology that have occurred since Sheppard P wrote. However, it remains a valid consideration, which I must take into account, that some of the works copied under the statutory licence are, at the time of copying, out of print. The extent to which the reprinting of those works may be imminent, and how the copying may affect that prospect, are matters which I cannot determine on the evidence.
17 Another matter Sheppard P discussed, without giving it weight, was a proposition put forward (by evidence set out at 22-23) that authors who are members of the academic staff of universities are appointed on terms which contemplate they will do research involving the writing of books and of contributions to scholarly journals. For them, the rewards of writing are not so much royalties as promotions and prestige. Sheppard P accepted this evidence, but commented (at 23) “that the evidence is general and that it may be unfair to treat it as applying to each and every case of academic writing”. He returned to the matter later in his reasons, concluding (at 31):
“Earlier I referred to the fact that some authors write to further their careers. It is something which they are expected to do. They have an interest in their works being read and referred to by others. That interest is not the economic interest they might have in financial gain to be made from the copying of some pages of their work. It is the interest they have in maintaining and furthering their academic standing and in achieving promotions and appointments. In a given case where these circumstances prevailed, one might take these matters into account in determining fair remuneration. But it is very difficult to have regard to them in an exercise which involves the fixing of the same remuneration for authors who write generally and whose works only find some of their use in the educational field and for other authors or publisher copyright owners who, although they write and publish only in the educational area, do so purely for commercial reasons. In such cases there is no warrant for discounting remuneration which would otherwise be payable.”
Accordingly, his Honour did “not feel able to take into account”, in fixing an overall rate, the questions of the effect of writing upon career prospects and the other considerations mentioned, which related to some academic authors. I respectfully agree. Indeed, the creation of much of the world’s greatest literature was not motivated by a desire to earn royalties. A supreme example is Milton’s Paradise Lost, for the first edition of which the already famous poet received a mere five pounds (see the biographical note in the Doréedition of The Complete Poems of John Milton with notes by Dr Thomas Newton – notes which are referred to in the 18th century cases cited below). It did not follow that the copyright was worth very little; the appreciation of this truth by commercial men was manifested by persistent litigation, brought at what must have been considerable expense, in which the copyright in editions of Paradise Lost was disputed: Tonson v Walker (1739) Coram Lord Hardwicke LC, referred to in Millar v Taylor (1769) 4 Burr 2303; 98 ER 201 at 2325; 213, 2353; 228, 2379-2380; 242 and 2407; 257; Tonson v Walker (1752) 3 Swans 672; 36 ER 1017. The suggestion an author’s pecuniary disinterestedness is a reason to deny him the value of his literary property was tersely refuted by Willes J in Millar v Taylor at 2335; 218 (with the approval of Lord Mansfield given at 2395; 251), when he said: “A writer’s fame will not be the less, that he has bread … .”
18 In the present case, counsel for the universities returned to this point, with a new twist. They referred to regulation 25B(1)(h) as entitling me to have regard to “any unremunerated contribution by institutions to the creation of the material copied”. It was suggested that some part of academic salaries might be attributed to the writing of articles in academic journals; that the universities encouraged and assisted academics in that writing; and that particular journals operated from premises and with the help of staff provided by universities. It seems to me there are a number of difficulties with this argument. Like some of the arguments considered by Sheppard P, it simply cannot be applied across the whole area to which it purports to relate. Many journals do not have offices within Australian universities, or indeed within universities, and do not use university staff. Academics who do work for journals may do so in their own time. Authors of articles in journals are not all academics, and those who are, are not all employed in Australian universities. To be weighed against the contention is the fact that, although copying of articles from academic journals was not dealt with by Sheppard P, the universities subsequently entered into agreements with the applicant which expressly treated such copying as subject to the same remuneration as other copying. The evidence shows there was some hope the universities would be able to obtain assignments of the copyright in articles of this kind, but in the event they failed to do so. Perhaps authors consider that the value of a work which has won peer approval, so that it is copied for use in university courses, should be recognised by the payment of the same equitable remuneration attracted by other works. As was observed by the Tribunal (Sheppard P and Mr A. Horton) in Reference by Australasian Performing Right Association Ltd; Re Australian Broadcasting Corporation (1985) 5 IPR 449 at 480, it is not for them “to subsidize a public instrumentality unless they do so willingly”. Finally, on this point, I am not at all satisfied that any contribution made by the universities to academic journals, of the kind that is suggested, can properly be regarded as “unremunerated” within the meaning of regulation 25B(1)(h). If a university made a grant to enable a journal to be published, this might, in some circumstances, be a contribution which could be seen to be unremunerated. But where a university, being an institution created for teaching and research, encourages its academics to publish the results of their research in journals, thereby promoting the research which is one of the objects of its existence and enhancing its own reputation, it is difficult to see why such a generalised contribution is not fully remunerated by the generalised advantages achieved. Indeed, the better view may be that the regulation is not speaking of this sort of situation at all, but rather of direct financial contributions in respect of which one can see that remuneration either is or is not received.
19 Then, somewhat inconsistently, it was urged for the universities that the higher subscription price for journals, charged to libraries, as compared with individuals, should be reflected in lower equitable remuneration for copying by universities. The implication was that, by paying the higher price, the universities had already paid for the copying. But it is not clear how far the difference in price may represent a discount to attract individual subscribers rather than a loading on institutional ones. And the higher price is charged to libraries and other institutions, not just to universities which engage in copying under statutory licence. Finally, and really conclusively, the argument cannot stand with the willingness of the universities, after full discussion of the merits of the issue, to agree to pay for copying of journal articles on the same terms as had been fixed for textbooks.
20 A matter which Sheppard P thought relevant to an assessment of equitable remuneration, but which he was unable, on the evidence before him, to treat as of significant weight, was the applicant’s costs of collection of the remuneration due to copyright owners. His Honour said (at 25):
“Some attempt was made by the applicant to lead evidence of what its collection costs would be likely to be. … In the nature of things, however, the evidence was vague and imprecise. [Copyright Agency Limited was then a new society, which had not yet got into its stride.] I do not feel able to make any estimate of the applicant’s likely collection costs in, say, a year.”
Returning to the point later in his reasons, he said (at 33):
“In an ordinary case one would commence with collection costs. It is quite reasonable for copyright owners to appoint an agent. The copyright owners here have done so. It may be expected that many other copyright owners will do likewise. I am satisfied by the evidence that the applicant will act as the principal collector of remuneration payable under s 53B. But it is not possible at this stage to award any precise figure in respect of collection costs. There is no experience to enable them to be quantified. What I have done is to take the matter generally into account and to endeavour to provide for it in the overall figure which I have determined. The allowance I have made is small.”
21 The picture, in this respect, is now very different. The applicant conducts a sophisticated operation, employing quite a large staff (about 60 persons), and handling numbers of millions of dollars. The evidence shows that the collection costs incurred in respect of the equitable remuneration paid for copying by universities amount to 19 per cent of the sums collected. Accepting the view expressed by Sheppard P, these costs should be allowed. They are incurred by reason of each university’s choice to exercise its statutory licence, and unless they are allowed, copyright owners will not actually receive the full amount of the equitable remuneration due to them.
22 A matter which Sheppard P made it clear (at 33) he did take into account was “the circumstance that copying may be discouraged if the figure awarded is excessive”, which “would work to the disadvantage, not only of both authors and the educational institutions, but also of the public, because lecturers and teachers may not be able to make use of much material that desirably should be freely available to students and pupils.” Taking that aspect into account, however, did not involve any assumption that the owners of copyright should subsidise universities. It was taken into account because “if the parties in question were negotiating, they themselves would take it into account”. On this issue, the subsequent march of events has certainly cast light. We now know that Sheppard P successfully avoided the danger to which he drew attention. Far from discouraging copying, the implementation of his decision has seen a growth of the practice which has been vast. Over the nine years to 1998, the total number of pages copied in universities rose year by year, with one very large regression in 1997 which has not been explained, from 50 million, in round figures, in 1989 to 268 million, in round figures, in 1998. This represents an increase of the order of 20 per cent per annum compounded, and is far greater than any increases in student numbers. Indeed, the total EFTSUs in the universities increased over the same period by a fraction under 57 per cent, from 327,725 to 513,258. Just as parties negotiating would take account of a risk such as that mentioned by Sheppard P, so also would they take account of a demonstration of the viability of a charge at a particular rate. Additionally, the applicant and the universities, if bargaining, would today take account of the fact that much copying is now substantially self-funded - by the sales through university bookshops to which I shall refer when examining more particularly the practice with regard to the distribution of the compilations of copies known as coursepacks.
23 Having discussed these and other questions, Sheppard P finally came (at 35) “directly to the task of judicial estimation” and “reached the conclusion that an appropriate award [was] two cents per page”. Indexation, since applied by the parties progressively by agreement, has brought this sum to 3.562 cents per page.
24 In the course of reasoning to his decision, Sheppard P said (at 23-24):
“Importantly, it was emphasised [in the evidence] that most copying was not done for permanent purposes but rather to enable students or pupils to have material for use in a small number of lessons or lectures or for assignments or essays. Sometimes they would keep the material for the balance of the academic year … but rarely would material be kept by them for longer. … The purpose of this evidence was to draw a distinction between the acquisition of an actual book, the life of which might be as long as five years during which time it would be used by a succession of students, and photostat copies which had a life usually of no more than a year and often much less.”
His Honour discussed this point further in the concluding portion of his reasons (at 33-34), when he said:
“Another factor tending to reduce the amount to be awarded is the transient nature of the material which is copied. Except in some cases where works have been fully copied because they are out of print and remain, more or less permanently, on library shelves, photocopied material has no lasting use. It may be kept by students or pupils for, at most, a year or a little longer. If it is needed for other pupils, it is copied again. It may be that well-known works used by some lecturers and teachers will be copied many times and thus will provide a source of revenue to the authors of the material every time this occurs.”
The considerations to which his Honour thus drew attention are fundamental. Copying for short-term uses, of a “throw-away” kind, however bright the light it may cast ephemerally upon a subject, is unlikely to be seen as having the same value as a more lasting reproduction of a work.
25 But counsel for the applicant says there has been a large change in the teaching practices of universities since the early 1980s. Much of the greatly increased quantity of copying being done today takes the form of the compilations known as coursepacks, which sometimes amount to anthologies and are much more like books than the transient bundles of copied pages with which the decision of Sheppard P was particularly concerned. The modern copier, such as the machine known as a Docutech, is capable of producing rapidly sharp images of print, much more easily readable than earlier photocopies, with clear images also of accompanying illustrations and diagrams, copied sections from various sources being automatically arranged together in the form of a bound volume with effective covers. While the result lacks some of the physical qualities and qualities of presentation of ordinary books, its content may be infused with the merits of the best parts of the copied works of which it consists. The evidence showed that relatively rudimentary versions of this kind of thing were in existence at the time of the earlier case. The technology of today is capable of copying that is far superior, and is carried out on a far larger scale. At the same time, it should be said that this technology is not yet fully exploited and that, while some reproductions put before me were superb, others still left much to be desired. On balance, however, quality has improved greatly. The evidence satisfies me that coursepacks represent a new dimension of university teaching in a number of departments, particularly in the humanities and social sciences. They account for at least about 60 per cent of current copying in universities.
26 What distinguishes the widespread use of coursepacks is not only the technological advances that have made the copying process fast and its product extremely clear and legible, but also the economic aspect of their distribution, at a price calculated to return their cost, through university bookshops. At the same time, as counsel conceded in argument, the universities are saved some of the expense of keeping multiple sets of books in their libraries, which students would need to consult if they were not provided so conveniently with copies of the essential parts of them. Coursepacks may be regarded as quite attractive books produced by the use of passages, very often fairly long passages, being substantial portions of copyright works copied in reliance upon the statutory licence. By assembling these passages in a new way, juxtaposed to each other, and binding them in a fairly permanent form, the universities are making a new use of the works taken, which is different from and more valuable than the mere copying of extracts for handing out in classes. The distribution through bookshops is a difference; but what is particularly significant is the difference in nature which has made that method of distribution appropriate.
27 I have concluded that it is proper to accede to the applicant’s request to assess a higher rate for coursepack copying than for general copying. As to what that amount should be, the task remains, as it was when Copyright Agency Limited v Department of Education of New South Wales was decided, one of judicial estimation. Some purely general assistance, by way of comparison, may be obtained from the coursepack rates in England and Canada, converted to Australian currency, which approximate 13c and 5c respectively per copied page. But the very disparity between these figures limits their usefulness.
28 In relation to coursepack copying, as in relation to copying generally, counsel for the universities argued that I should allow a discount for bulk. Of course, as counsel for the applicant pointed out, the extent to which bulk is involved here can easily be exaggerated if it is overlooked that the applicant is not the owner of all these copyrights – it is merely the agent of a great many owners, numbers of whom may not be dealing in bulk at all. But I accept that parties negotiating at arm’s length would be likely to arrive at a lower unit price for an extremely large amount of copying than they would for smaller and more individual transactions. On the other hand, some copying may have a special value because the sections of works selected for copying may well be the key sections of those works, so that the compilation of a coursepack may, as counsel for the applicant rather picturesquely put it, involve “picking the eyes out of” a number of different works. That will not always be so; sometimes a section not intrinsically more important than other parts of the work may be chosen simply because of its suitability for a particular pedagogic purpose. However, the point made by Copyright Agency Limited is a valid point. It also provides a further riposte to the argument put for the universities, which Sheppard P discussed in a passage I have cited, comparing the amounts earned by copyright owners for copying under the statutory scheme with their primary royalties. The contention was that the primary royalties related to the whole book of, say, one thousand pages; that they could be reduced to a royalty rate per page; and that this royalty rate would then provide a guide to the rate which should be paid for copying, say, fifty of those pages. Such a mechanical comparison ignores any higher value the fifty pages copied might have had compared with much of the rest of the work. It assumes that the value of the work is evenly distributed through all its pages. That is an assumption which cannot be accepted without qualification, and is unlikely to be true in respect of many instances where chapters or parts of them are selected for copying for coursepacks.
29 An extension of the universities’ argument that primary royalties in respect of works provided a yardstick was the contention that in the case of multi-authored books, to which Sheppard P gave no separate consideration, a lower remuneration for copying would be appropriate. The basic proposition was that a junior author or contributor might be paid only a relatively small sum, the primary royalties (and presumably any further remuneration) being paid to the senior author or editor, who would normally own the copyright. But why is what a mere junior author or contributor receives relevant to the value inhering in the copyright in the work? It was suggested the smallness of the sum paid would reflect on the value of the copyright, but this is to ignore the contribution of the principal author or editor. And if, in order to avoid that answer, one treats the contributed chapter or essay (in the case of a collection of essays) as the work, there are two difficulties to be met by the argument. First, an editor (still more, a principal author) does in general make a contribution to every part of a composite work; and secondly, if the chapter or essay is to be considered as a discrete work, the small reward paid for it may cease to be small, for relevant purposes, when converted to a rate per page, because the number of pages devoted to that discrete work is small. I do not agree that extracts from multi-authored books should be valued according to a lower measure. In any case, the whole argument depends on the acceptance of primary royalties as a yardstick for equitable remuneration, despite their rejection as such by Sheppard P.
30 Another discount suggested in the case for the universities related to the simplicity of the statutory scheme under Part VB. This was contrasted with the difficulties inherent in the former s 53B. Prior to the enactment of Part VB, it was necessary for the applicant to give indemnities against further claims because it had no automatic agency for all copyright owners. If Sheppard P had allowed some tangible sum for legal and other costs incurred, this matter would have represented a changed circumstance, and so would have arisen for consideration. But he did not. The truth is that an assessment of equitable remuneration may result in the universities bearing indirectly the burden of collection costs; that being the case, the legislature has attempted, in Part VB, to straighten the road and clear it of obstacles for the benefit of both parties. Its having done so does not provide a reason to reduce the sum that represents equitable remuneration to copyright owners for the compulsory use of their property. Nor does the fact that, before the legislature intervened, the applicant used to find it necessary to offer a discount to persuade the universities to co-operate with it in an appropriate scheme for the collection of the equitable remuneration which was due.
31 Counsel for the universities also placed emphasis on the proposition that coursepacks merely replace use which students could make themselves of the books copied; coursepacks, it was said, were a matter of convenience, and a convenience that involved some wastage, although Docutech machines reduce this to a minimum. But the Tribunal has not been asked to assess whether the use of coursepacks is the best way to teach university courses. The Tribunal accepts that coursepacks represent copying done under the statutory licence. It must be concerned with the fact of the copying, and with its nature and effects, rather than with what might have been the position had the universities decided to do things quite differently.
32 One possible effect of the growth of coursepacks that was suggested by the applicant’s evidence was a decline in the sales of journals. So far as university libraries are concerned, it seems to me that the copying of articles for coursepacks must reduce the requirement to make journals available to students. However, I accept the answer made on behalf of the universities to any suggestion that student subscriptions to journals have been affected. Counsel pointed out that students do not generally subscribe to journals, and that, anyway, articles copied in coursepacks are likely to be from back numbers which a student would not obtain simply by becoming a subscriber to a journal.
33 A question was raised about copying for external students. Where such copying is done in reliance on Part VB, by virtue of s 153C(3) and reg 25B(1)(g), I “may have regard to” the prescribed matter “the special circumstances of external students including any difficulties faced by those students in meeting the requirements of sections [sic] 41, 49 or 135ZG of the Act” (these are sections which provide respectively for fair dealing for the purpose of criticism or review, copying by libraries or archives, and multiple copying of insubstantial portions of works). However, I have small ground to apply reg 25B(1)(g) here. If some particular works, or portions of works, were copied for external students because they were external students who did not have ready access to the materials copied, a case for the application of the regulation would arise. But it will not arise merely because a coursepack, such as is made available to other students, is sent to an external student also. However, counsel for the universities told me copying for external students was not done under Part VB, but in reliance on s 40(1A) and (3), that is, on the basis that the copying of the material for an external student is a fair dealing “for the purpose of, or associated with, an approved course of study or research by an enrolled external student of an educational institution”. This being the contention, the dispute between the parties cannot be resolved by the Tribunal; it requires resolution by the Court.
34 As I have said, Sheppard P assessed one rate for all copying. In doing so, he made it clear that he had misgivings about the wisdom and justice of a single rate. However, the parties had asked him to do it that way, and he took comfort in the fact that further applications would remain open, if they proved desirable. I am now asked by the applicant to fix a special rate, not only for coursepacks, but also for artistic works, and also for sheet music. I note that music was one of the instances of a special case to which Sheppard P drew attention, in his reasons, when he pointed out (at 31-32) that “in Norway the 1982 page rate for …. music … was five times the ordinary rate”. The heart of the applicant’s case for a higher rate in respect of sheet music is the consideration that music in written form is very compressed compared with the general run of literary works which may be copied. A copy of a musical work is likely to reproduce the whole or a large part of it, and may do so in just a few pages.
35 In answer to this claim, the universities relied on the small number of licensed copies of music that are made. The suggestion was these did not warrant separate treatment. It was also said that much of the music in question would be out of copyright, although it was conceded that some of the older pieces of music copied would come from prints containing fingering and other additions which would still be in copyright. An argument was advanced, but without any acceptable evidence to support it, that university students of music would not be interested in these matters. I do not agree with that argument, and at all events, if universities copy copyright music under Part VB, the reaction of their students to particular parts of it is not really to the point. It was also contended that if the whole of a work is copied, the copying is not authorized by Part VB, though done in reliance on that Part, and should not be the subject of equitable remuneration, but of a claim for infringement. This, however, is to misread or misapply s 135ZL. Copying of the whole of the musical work may be authorized under the section, and my task under s 153C is to determine the amount that I consider to be equitable remuneration for the making of a licensed copy in such a case.
36 I have concluded that it is appropriate to fix a special rate for the copying of print music.
37 Similar considerations are raised by the copying of artistic works, for which also a special rate is sought by the applicant. Such a work will generally be confined to a single page, so that to apply to it, for that page, the rate applicable to one page of a literary work, which may run to hundreds of pages, would involve an obvious disparity. In the one case, use is made, by copying, of the whole of the work, and in the other case, use is made, also by copying, of a tiny fraction of the work; yet the remuneration would be the same. Counsel for the universities responded that, just because the copying will generally be of the whole of an artistic work, a licensed copy will only be made under s 135ZL where “the person who makes the copies, or causes the copies to be made, for, or on behalf of, [the university] is satisfied, after reasonable investigation, that copies (other than second-hand copies) of the work cannot be obtained within a reasonable time at an ordinary commercial price”. It was suggested this meant there was “no reason to believe that any rate other than the ordinary rate is appropriate to pay”. I do not think that follows. Because a copy is required sooner than it can be obtained at an ordinary commercial price, and is reasonably so required, does not mean that it should be obtained at less than its value. When the Act provided for a licence to obtain it in such circumstances, it did so subject to the obligation to pay equitable remuneration. In my opinion, a special rate should be fixed for the independent copying of artistic works. However, where an artistic work is copied onto a slide, special considerations arise. I accept the submission of counsel for the applicant that a slide is a much more powerful use of an artistic work than a mere photocopy made in the ordinary way. A slide is designed for magnification and exhibition to a number of people. Accordingly, it should attract a special rate of equitable remuneration.
s 135ZM, provision is made for the case where a page copied under the statutory
licence includes an artistic work or artistic works used for the purpose of
explaining or illustrating a journal article or literary, dramatic or musical
work from which the copy is taken. In
this case, s 135ZM(2)(d) and (e) provide for payment of one half of the
remuneration in respect of the page to the owner or owners of the copyright in
the literary, dramatic or musical work and one half to the owner or owners of
the copyright in the artistic work. The
applicant contended that the presence of an artistic work on such a page should
attract a special rate. But it seems to
me that s 135ZM should be read in its
context. It was added, by
No 104 of 1998, to an existing
regime governing the copying of literary, dramatic and musical works. I think it assumed the equitable remuneration
applicable to copying of this kind, and then provided that, for the particular
page including an illustration, the remuneration should be divided in the way
set out in the section. This does not
seem to me to contemplate that the remuneration for that page should be
increased to provide for the artistic work.
If it were increased beyond an amount sufficient to provide equitable
remuneration to the owner or owners of the literary, dramatic or musical work
involved, then an inappropriate (because excessive) remuneration would be paid
in respect of the copying of that literary, dramatic or musical work. Reference was made to the Explanatory
Memorandum prepared at the time the Bill which became the amending Act was
before Parliament of
the Ministerresponsible for the Bill . That seems to me to confirm my
view of the section. Accordingly, I do
not propose to fix any separate rate for illustrations falling within s 135ZM.
39 The claim for copying carried out by students in the “closed reserve” sections of university libraries calls for separate discussion. These closed reserve sections house material which is in great demand – such as articles designated as required reading for particular courses. The evidence shows that banks of photocopiers are located nearby, so as to facilitate copying by students of the material to be studied. I infer that the library’s ability to provide reasonable access to the material would be overstretched if students did not copy it, but instead read it in the library. The applicant says that when a university organizes its library in this way to enable copying of works to be carried out for the purposes of its courses, and to reduce the strain on its own resources, what is involved is not “fair dealing” within s 40 of the Act. The applicant says the university can only make arrangements for copying in a closed reserve of the kind described if it does so in reliance on Part VB. But, on the evidence, the universities do not rely on Part VB in respect of this copying. That being so, it seems to me the onus is on the applicant, if it wishes to contest this issue, to bring court proceedings for infringement or for a declaration. If the applicant wins such a case, the copies made thereafter in university libraries will doubtless be made in reliance on Part VB, so that equitable remuneration will be payable. If the applicant loses, it may well be that any copies made by the university under Part VB for use by students in the closed reserve of its library, and there to be recopied, will in future attract special consideration in relation to equitable remuneration as copies having a much more permanent character than mere copies made in a university department for distribution to students.
40 It follows that no determination of equitable remuneration for copying in closed reserves of libraries should be made until the legal questions have been decided.
41 Then there are the claims for digital access to artistic, literary and musical works through university libraries, and for digital storage of such works. A conflict arose in the evidence as to the role of digital access to works. Strong views were expressed to the effect that digital storage enables the fast and efficient retrieval of works, but does not lead to their serious study being pursued on a screen. Students, it is said, much prefer to use paper, and learn better when they do. On the other hand, the applicant argued that there is now emerging “a new scholarly communications paradigm” through advanced photocopying techniques, digitisation and the Internet, by the use of which sources of knowledge can be accessed and reshaped in ways entirely unknown to Gutenberg, or even a generation ago.
42 The possibilities are fascinating, but they really relate to the future. For the present, the evidence shows, university libraries are indeed providing digital access to some works, but they are doing so under licences which they have purchased together with CD-ROMS. Neither counsel for the applicant nor counsel for the universities submitted that the universities are actually making digital copies in reliance on the statutory licence under Part VB. Counsel for the applicant asked me to establish, in effect, a pilot scheme to facilitate the commencement of such copying; counsel for the universities asked me to fix a fee per EFTSU which would enable copying to proceed unrestrained by a liability to pay further equitable remuneration as the quantities of copies increase. To do this was said to be justified because “it seems to be pretty universally acknowledged that one has great difficulty in predicting where this digital technology is going to go and what use will be made of it”.
43 Counsel for the universities contended that I do not have power to establish a pilot scheme, and I agree. As to whether an annual amount should be determined either per student or per the statistical avatar of a student, an EFTSU, in my opinion there are very sound reasons for not doing that, which doubtless lay behind the 1998 amendment of s 135ZW(1). Where equitable remuneration is determined, it relates to copying, and its amount should be fixed by reference to the amount and character of the copying. Sampling methods make this practicable, while the fixing of an annual amount (such as per student) not tied to the copying done would remove a significant cost restraint. If overcopying resulted, copyright owners would receive (for a time) less than their fair entitlement, and universities would (in the long run) be met by large claims for remuneration for the overcopying. Good administration of the universities, fair remuneration of the copyright owners, and the principle that the statutory licence involves a compulsory dealing with a copyright owner’s property, for which equitable remuneration should be paid, all unite in suggesting that the annual amount to be determined should be determined on the basis of the copying actually done.
44 The applicant did not put forward in its submissions any particular instances of digital copying carried out by a university in reliance on Part VB. It would be perfectly possible to identify and prove such copying, if it occurred, because the university would have to comply with s 135ZX(1) or (3), which would require, at least, the appropriate marking of each licensed copy, or its container. As I have indicated, there were general propositions about the digital future. There were also arguments that Docutech machines involve the making of digital copies; but I am satisfied these are only incidental to the operation of the machine, and would be equitably remunerated, if Part VB applied to them, by the payment of equitable remuneration for the photocopies actually produced.
45 If, despite the protestations of the universities through their counsel, the applicant claims they are making digital copies of works which infringe copyright, the applicant has available to it the remedy of suing in the court. In the absence of reliance on part VB, a university would not have a statutory licence. If, on the other hand, notwithstanding their submissions in this case, the universities do wish to rely on Part VB in relation to digital copying, it remains open to them to do so. Should there be an anxiety, as was suggested, to avoid the risk of an assessment of equitable remuneration at a high figure, a university could copy digitally on a small scale until an agreement was reached or a determination was made. Parliament created the right to make licensed copies, though it is subject to the burden of equitable remuneration, for the benefit of the universities, and the onus is on them. The applicant cannot force their hand, and the Tribunal should not attempt to assess equitable remuneration for a situation that does not yet exist, the outlines of which are obscure: cf Audio-Visual Copyright Society Ltd v New South Wales Department of School Education at 512. It should not rush in where the universities have feared to tread. If it were to do so, it would not be making a judicial estimation based on the relevant facts, but a guess in the absence of facts.
46 Accordingly, I shall not accede to the applicant’s request that I fix a special rate or rates in relation to digital access or storage in university libraries. Indeed, I understood it ultimately to be accepted, if reluctantly, that the applicant’s remedy, were the matter to be pursued, would lie elsewhere, that is, in the court.
47 I return to the question of the particular rates by which the equitable remuneration to be determined should be assessed, having regard to the matters I have discussed in these reasons. Although there is, of course, more information available today than there was when Sheppard P gave his decision in Copyright Agency Ltd v Department of Education of New South Wales, in the end, the figures cannot simply be calculated. The agreements between the universities and the applicant, by which this decision was implemented and continued over some years, are relevant, but not binding in relation to the present application: Reference by Australasian Performing Right Association Ltd; Re Australian Broadcasting Corporation at 478; Audio-Visual Copyright Society Ltd v New South Wales Department of School Education at 520-521. The evolution and identification of the changes to which the parties respectively point, and the very nature of agreements designed to give effect to a determination of the Tribunal in relation to compulsory licences made before those changes occurred, require the conclusion that these agreements, though providing useful guidance, do not establish rates which I should just accept and apply. Judicial estimation is required now, as it was in 1985. No consistent or comprehensive structure of comparable prices emerges from the evidence. Such indicators as there are, taking all the evidence into account, point in both directions. I have referred expressly to those of them that seemed to me to call for discussion or to have been particularly emphasized by counsel, but the length and complexity of the evidence and submissions have made it impossible for me, as it was for Sheppard P, to set out in detail every point that was argued. I have considered them all, and it is appropriate that I should record here my gratitude to those who appeared on both sides for the skill and care with which they approached this difficult matter.
48 As I have made clear, I have decided to accept the applicant’s contentions to the extent of fixing several rates, and not just one, but I have decided not to fix special rates in respect of some types of copying for which the applicant sought to have such rates fixed. Although each side presented figures, designed to support, on the one hand a higher, and on the other hand a lower, rate than that fixed by Sheppard P, each accepted his decision as a starting point. That decision was arrived at by judicial estimation, in the absence of a “going rate” or other compelling criterion. There have been important changes since then, particularly the introduction of the statutory scheme under Part VB which makes a more sophisticated assessment of remuneration possible, and the development of the use of coursepacks in some university departments. Other changes, which may in the future prove more far-reaching, do not yet, in my view, call for reflection in my orders. In this situation, I am not persuaded that it is appropriate to attempt to reinvent Sheppard P’s wheel; what I should do is make some adjustments to it for travel on a somewhat altered road.
49 On all the evidence, and particularly because of the costs of collection which are now known, as they were not when Sheppard P considered the matter, I shall adjust the basic rate from the indexed figure of 3.562 cents per page to 4 cents per page. I have already decided to fix a higher rate for coursepack copying; that rate will be 5 cents per page. For the copying of artistic works and print music, whether or not to be included in coursepacks, I shall fix a rate of 15 cents per page, except where an artwork is copied onto a slide, in which case I shall fix the amount of $1 per slide. Each of these figures should be subject to indexation by reference to the Consumer Price Index, in order to preserve the full measure of the equitable remuneration I have determined: see Audio-Visual Copyright Society Ltd v New South Wales Department of School Education at 521.
50 I direct the applicant to bring in, on a date to be fixed, short minutes of orders to give effect to my decision. In the formulation of the orders, it will, of course, be necessary to comply with the terms of s 153C(2), as they stood at any relevant time. The problem raised by this necessity is discussed earlier in these reasons.
Associate to the President:
Dated: 2 February 1999
Counsel for the Applicant:
Mr D K Catterns QC
Solicitors for the Applicant:
Banki Haddock Fiora
Counsel for the Respondents:
Mr J Campbell QC with Mr R Cobden
Solicitors for the Respondents:
Baker & McKenzie
Dates of Hearing:
30 November, 1998
1, 2, 3, 4, 7, 8, 9, 10, 11, 14, 17, 18 December, 1998
Date of Decision:
2 February 1999