Copyright Agency Limited v Queensland Department of Education

[2002] ACopyT 1


COPYRIGHT – Copyright Tribunal – copying of educational institutions – equitable remuneration – meaning of – factors to be taken into account - different rates for different works – per capita rate

Copyright Act 1968 (Cth), ss 53B, 55, 135C, 135ZG, 135ZJ, 135ZK, 135ZL, 135ZM, 135ZU, 135ZV, 135ZW, 153C, 160, 203A, 203B, 203C, 203E

Copyright Tribunal (Procedure) Regulations 1969 (Cth), reg 25B

Copyright Amendment (Digital Agenda) Act 2000 (Cth)



Audio-visual Copyright Society Ltd v New South Wales Department of School Education (1997) 37 IPR 495 - applied

Broken Hill Proprietary Company Limited v Latham [1933] 1 Ch D 373 – referred to

General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd [1976] RPC 197 – referred to

Chaplin v Hicks [1911] 2 KB 786 – referred to

Chesterman’s Trusts, In re; Mott v Browning [1923] 2 Ch D 466 – referred to

Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5 – discussed

Copyright Agency Ltd v University of Adelaide (1999) 42 IPR 529 - discussed



F.A. Mann The Legal Aspect of Money, 5th ed. 1992











CT 2 of 1998








 CT 2 of 1998




















1                     Copyright laws attempt to strike a balance between two competing public policy demands.  On the one hand there is the need to reward the author of an original or creative work, so as to encourage the making of those works.  To this end the author is given a statutory monopoly – the exclusive right to reproduce his or her work.  On the other hand, there is the need for further study, research and education.  A strict application of the statutory monopoly would inevitably inhibit the free flow of information, thus hindering the development of new ideas.  So there have always been exceptions to the statutory monopoly, permitting fair dealing for the purpose of research, study, criticism or review, and the reporting of current events. 

2                     When methods of reproduction of published material were unsophisticated, that is when copies had to be made by hand, the volume of copying that fell within the statutory exceptions was not great.  Authors, or more usually their publishers who had been assigned copyright, were not greatly prejudiced, either through lost sales or other economic disadvantage.  However, by the late 1960s, the technology for new methods of facsimile reproduction (sometimes referred to as reprographic reproductions) was well advanced.  It had become possible to make reproductions and multiple copies of documents by a variety of means, including photographic and electronic means, which were both cheap and efficient. 

3                     Inevitably there was a massive increase in the volume of copying of copyright works, particularly at universities, schools and colleges, but with no corresponding benefit to copyright owners.  This led to the reform of copyright law in Australia and elsewhere.  In 1980 the Copyright Act was amended to introduce what is sometimes referred to as a statutory licence.  Under the amended Act “educational institutions” (defined to include universities, schools and technical colleges) were permitted to make copies of material for educational purposes, provided certain conditions were satisfied.  The institutions were required to pay “equitable remuneration” for the copies made, either as agreed or as determined by the Copyright Tribunal:  s 53B(11).  So that the number of copies made could be ascertained, the institutions were required to keep a record of what had been copied (s 53B(7)), and the owner of the copyright was entitled to have access to those records (s 203E).

4                     This was not the first occasion upon which the legislature had enacted a statutory licence.  In 1908 the Berne Convention of 1886 was revised to recognise that contracting states might impose conditions upon the exclusive right of the owner of copyright in a musical work to authorise the mechanical reproduction of that work.  Accordingly the English Copyright Act of 1911, which was adopted here in 1912, created a compulsory licence for the mechanical reproduction of musical works.  The rate of royalty was fixed at 5 per cent of the ordinary retail selling price of the reproduction.  The rate was increased to 6¼ per cent in England and became the minimum rate in Australia in 1989.  Similar provisions were adopted in Canada (Copyright Act R.S., s 19), the United States (United States Code Title 17 – Copyrights, s 1(e)), India (Copyright Act 1957, s 52(1)(j)), South Africa (Patents, Designs, Trade Marks and Copyright Act 1916, s 143), Ireland (Industrial and Commercial Property (Protection) Act 1927, s 169(2)), and New Zealand (Copyright Act 1913, s 25(2)).

5                     The present application is to determine the amount of “equitable remuneration” that is to be paid by certain educational institutions (government, independent and catholic primary and secondary schools represented or administered by the respondents) in relation to their right to make copies of literary, dramatic, musical and artistic works solely for the educational purposes of those institutions.  The works are those contained in articles in printed periodical publications, printed published anthologies of works, and works that are otherwise in hard copy.  The application is made under provisions that were introduced by Act No. 32 of 1989 as Part VB of the Copyright Act (comprising s 135ZB to s 135ZZH), which replaced the original statutory licence provisions with effect from 1 July 1990. 

6                     The applicant is Copyright Agency Limited (commonly referred to as CAL), a collecting society for the purposes of Part VB.  CAL’s members include authors and publishers, and agents of authors and publishers.  CAL has authority on behalf of its members to grant licences to reproduce works in respect of which there is copyright.  In addition, CAL has entered into arrangements with foreign collecting societies to authorise in Australia the reproduction of works the copyright in which is owned by the members of those foreign societies.

7                     According to Part VB, an educational institution (which is defined in s 10 to include the schools administered by the respondents) will not infringe copyright in an article contained in a printed periodical publication, a work contained in a printed published anthology, or in a literary, dramatic, musical or artistic work in some other hard copy form, if certain conditions are satisfied:  see ss 135ZJ, 135ZK and 135ZL as extended by 135ZM.  One of those conditions is that a remuneration notice has been given to the relevant collecting society, which in this instance is CAL.

8                     A remuneration notice is a notice given by a body administering an educational institution, that it undertakes to pay “equitable remuneration” to the collecting society for each copy of the copyright work (referred to in the legislation as a “licensed copy”):  s 135ZU(1).  The notice must specify whether the equitable remuneration is to be assessed on the basis of a records system, a sampling system or an electronic use system:  s 135ZU(2).  When a records notice is given, the amount of equitable remuneration payable for each licensed copy “is such amount as is determined by agreement between the administering body and that collecting society or, failing such agreement, by the Copyright Tribunal”:  s 135ZV(1).  Different amounts may be determined in relation to different institutions administered by the administering body and different classes of students of an institution:  s 135ZV(2).  Where a sampling notice is given, the amount of equitable remuneration is such “annual amount” as is determined by agreement or by the Copyright Tribunal:  s 135ZW(1).  The “annual amount” is to “be determined … having regard to the number of licensed copies made by, or on behalf of, the administering body … and to such other matters (if any) as are relevant in the circumstances”:  s 135ZW(2).  For the purposes of s 135ZW(1), different annual amounts may be determined in relation to different institutions:  s 135ZW(4).  It should be noted that before 30 July 1998 the annual amount was required to be expressed “per student of the institution concerned”.  The number of licensed copies in respect of which equitable remuneration is payable in case a sampling notice is given, is to be assessed by use of a sampling system determined by agreement or by the Copyright Tribunal:  s 135ZW(3). 

9                     Each respondent has given CAL a remuneration notice for copying on and after 1 January 1997 pursuant to ss 135ZJ, 135ZK and 135ZL.  The respondents and CAL have not been able to agree on the equitable remuneration to be paid, which has resulted in the current application to the tribunal.  Each notice specified that the remuneration is to be assessed on the basis of a sampling system.  The exact method of sampling to be used has not been finally agreed and, by its application, CAL requests the tribunal to determine the appropriate system.  By agreement the determination of that system has been stood over, to await the resolution of the dispute concerning equitable remuneration.

10                  It is convenient at this point to make some introductory observations about the operation of Part VB.  When originally enacted, the royalty payable for the statutory licence to make a mechanical reproduction of a musical work was set at a fixed rate – 5 per cent of the selling price:  see s 19(3)(b) of the English Act, and see now the definition of “prescribed royalty” in s 55(6).  A single rate of royalty or remuneration that applies to all works, whether good or bad, and whether by a successful or unsuccessful composer, is inherently unfair.  In 1955 a Mr Finkelstein said of the United States’ position, where the royalty was 2 cents per work that:  “Any law that values all musical works equally at two cents without distinguishing between the quality of the works or the reputation of the writers must evidence either a lack of understanding of the writer as a human being, or a contempt on his part”:  Finkelstein, “These Things Are Mine”, 49th Anniversary Issue of Variety, 5 January 1955, referred to in E Mooney, “The Jukebox Exemption”, Copyright Law Symposium (ASCAP) V: 10 (1959).  It would show an equal “lack of understanding” or “contempt” if it were necessary to apply a single rate of remuneration to all works that are copied under ss 135ZJ, 135ZK or 135ZL.  Fortunately, however, so far as works the subject of the present application are concerned, it is possible to determine different rates for different kinds of works.  This was decided by Burchett P in Copyright Agency Limited v University of Adelaide (1999) 42 IPR 529.  There Burchett P said (at 533): 

“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.”

11                  That said, there is a practical limit to the degree to which different rates should be fixed for different kinds of copying.  It would be an impossible undertaking to set remuneration having regard to each individual item that is copied.  Moreover, while the statute permits different rates of remuneration to be fixed, it contemplates that there shall be but one rate for each category of work that is copied.  The real difficulty in fixing different rates, so it seems to me, will be in determining the different categories of work to which different rates will be applied. 

12                  The second matter concerns the meaning of “equitable remuneration”, and what factors are to be taken into account in arriving at that remuneration.  Not untypically, the Copyright Act gives little assistance in this regard.  Not only is there no definition of “equitable remuneration”, but also there are only limited guidelines of what must be taken into account in fixing the appropriate rate.  Both s 135ZV and s 135ZW contemplate that regard must be had to the particular institution that is making the licensed copy, and s 135ZV shows that the different classes of student at the institution may be considered.  Section 135ZW also provides that the tribunal shall have regard to the number of licensed copies made and “such matters (if any) as are relevant in the circumstances”, but does not elucidate what those matters might be.  A little more assistance is given by s 153C, which is the provision pursuant to which the tribunal makes its determination.  Section 153C(3) provides that in making its determination, the “tribunal shall have regard to such matters (if any) as are prescribed”.  Currently the relevant prescription is made by reg 25B(1) of the Copyright Tribunal (Procedure) Regulations 1969 which relevantly provides that 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.”

13                  According to the cases, for the purposes of Part VB, “equitable remuneration” is remuneration that is fair and reasonable or, put differently, remuneration that is just in all the circumstances:  Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5 (the First Schools’ case); Copyright Agency Ltd v University of Adelaide (1999) 42 IPR 529 (the Universities’ case).  Part VB operates by appropriating to the statutory licensee part of the exclusive rights of the copyright owner, and requiring a judgment to be made as to the proper payment for that appropriation.  So, the appropriate remuneration must be fair to the copyright owner whose rights are being appropriated, in terms of the value to the licensee of having access to his material.  It must also be fair to the licensee, so that, for example, the remuneration should not be greater than the damages that would be paid if, instead of acting lawfully, the licensee had misappropriated the owner’s copyright.

14                  It is notorious that ascertaining equitable remuneration is a difficult task in almost all cases.  The cases I have mentioned suggest various inquiries that can be undertaken, the result of which may be of assistance to the tribunal in carrying out its statutory task.  One inquiry is to see whether there is a normal rate of royalty charged by the copyright owner in relatively similar circumstances.  The theory is that where there is a market for goods or services, rational people will not sell or provide a thing for less than its worth to them, nor buy it for more than its worth.  Obviously one would need to be careful before adopting a so-called “market rate”.  First, it would need to be shown that the market in which the rate was struck was a competitive market, and that there were sufficient transactions in that market to provide a reliable indicator of value.  Second, it must be shown that the circumstances in which the market operates are the same as, or at least comparable with, those in which the equitable remuneration is to be fixed.  If these conditions are satisfied, the market rate (if there is one) will provide the best guide to equitable remuneration.

15                  Usually there will be no market rate, given the nature of the statutory licence.  Another possible line of inquiry is to determine whether there is evidence which would enable the tribunal objectively to determine the notional remuneration that would be agreed in a hypothetical bargain.  In many cases, and this case is no exception, there will be some evidence that will be of assistance in that regard.  In a moment I will come to that evidence.  Before doing so I should mention that, strictly speaking, a notional bargain approach would require separate examination of the notional bargain that would be reached between CAL and each respondent, or perhaps between CAL and each educational institution that is administered by a respondent, because there will be differences between the institutions that may result in a different rate.  It is not suggested, however, that there should be such a detailed examination of the respondents, and the schools they represent are content to have a uniform rate applied to them.  In any event, the evidence does not descend to the required level of detail.

16                  Sometimes there will be no market rate and no, or very few, signposts to guide the tribunal to the appropriate rate of remuneration. What does the tribunal then do?  The answer is that the tribunal must do the best it can.  The nature of the task may be such that the determination will really be a matter of guesswork, as was the assessment of damages in the well known case of Chaplin v Hicks [1911] 2 KB 786, where the plaintiff had lost the chance of winning as a prize an engagement as an actress.  To some, the concept of a tribunal engaging in guesswork may not be particularly satisfactory.  Perhaps a more palatable description, but one which does not alter the underlying function, is that coined by Lord Wilberforce in General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd [1976] RPC 197 at 214 and accepted by Sheppard P in the First Schools’ case, namely that the process is “one of judicial estimation of the available indications”.  What is to be estimated is the value (in money) of the thing compulsorily supplied by the copyright owner – the right to copy his material.  The process will involve giving a value to the utility the educational institutions will obtain from the use of the copyright material, taking into account the disutility the copyright owner suffers on account of providing that material, and the circumstances in which the supply occurs.

17                  Any analysis of the equitable remuneration to be paid by educational institutions in relation to the statutory right to take copies of copyright works must start with the events of the 1980’s.  It will be remembered that the statutory licence provisions in their original form came into force on 1 August 1981.  CAL had been incorporated some seven years earlier, and had been appointed as agent by a number of authors and publishers to license copying by educational institutions.  In 1984 CAL made application to the tribunal for the determination of the equitable remuneration to be paid to the owners of copyright for the making of copies under s 53B.  The tribunal fixed remuneration of 2 cents per page copied.  The case in which this occurred was the First Schools’ case.

18                  The First Schools’ case is of immediate importance because it formed the foundation of both sides’ submissions.  For this reason it is necessary to look at the case in a little detail, to discover the true basis for the decision.  To a large extent this has already been done by Burchett P in the Universities’ case which is another case upon which the parties, particularly CAL, bases their submissions.  I do not wish to repeat Burchett P’s analysis, nor can I usefully improve upon that analysis, so I will content myself by pointing out those features of the First Schools’ case that are of most significance for present purposes.

19                  In all there were fifteen applications to the tribunal, each made in respect of one or more specific instances of copying by a particular educational institution.  The respondents to the applications were educational institutions, some of which were primary, some secondary and others tertiary.  In contrast to the current application, not all primary and secondary schools were parties.  Another difference is that the present applications do not involve any universities.

20                  Section 53B required the tribunal to reach a conclusion as to what amount should be paid as equitable remuneration in respect of each specific instance of copying.  However, the parties requested the tribunal to treat the applications as a “test case”, and fix a single amount of remuneration that would apply in respect of all copying in all educational institutions in Australia, provided the copying was done pursuant to the statutory licence.  It was recognised that this approach might be unfair, but it was certainly desirable from a practical stand-point.  The tribunal, constituted by its then President, Sheppard P, agreed to satisfy the parties’ wish that an across-the-board figure be arrived at.  Sheppard P noted, however, that nothing the tribunal decided would affect any copying other than those instances covered by the applications.  Nevertheless he expected that the tribunal’s decision would provide a basis for agreement in other cases, and history has proved him to be correct.

21                  CAL led evidence of permissions that had been granted by authors and publishers in relation to copying by educational institutions.  This showed that a range of fees has been charged.  Some had been calculated on a per page basis and some as a flat rate.  The per page rates ranged from 1 cent to 10 cents.  CAL argued, and called an actuary in an attempt to establish, that it was possible to deduce from this evidence that there was a “most common charge” for copying.  The actuary said that the “most common charge” was a more useful guide than the arithmetical average (or mean) in establishing a usual practice.  The actuary said that the “most common charge” (taking into account inflation) was 4 or 5 cents per page.  CAL submitted that this must be the minimum amount to which it should be entitled, and that this minimum should be increased to take into account that copyright owners were being deprived of their ability to stipulate conditions for copying, and also to cover the costs of collection.  All up, CAL said that the appropriate figure for copying was 10 cents per page.

22                  The respondents principally relied upon evidence of common royalty rates paid to authors to show that an author earned something in the order of 0.45 cents per page.  They argued that equitable remuneration should be arrived at by deducting from this per page rate a sum to take into account the transient nature of the photocopied material, and came up with a figure of 0.25 cents per page.  The respondents attacked CAL’s “most common fee” approach, principally because it failed to take into account the many instances of free permission copying. 

23                  The tribunal rejected as generally unhelpful the approach suggested by each side.  There were several reasons why Sheppard P refused to adopt the “most common fee” approach.  They included the fact that it was based on a small number of examples (74), the failure of that approach to take into account free permission copying, and the fact that there were indeed a large number of permissions granted at a fee of 1 cent or 2 cents per page.  Sheppard P rejected the respondents’ royalty approach because the per page rate was based on the author’s usual entitlement to receive 10 per cent of the recommended retail price of the work and in so doing it discarded “90 per cent of the value of the book which is copied”:  4 IPR at 29. 

24                  The factors that Sheppard P expressly said he would take into account in arriving at a fair rate of remuneration included the following:  (1) Collection costs, although because there was little or no evidence quantifying those costs, the allowance made was small.  (2) That an excessive fee would discourage copying, to the disadvantage of both the authors and the educational institutions.  On the other hand, Sheppard P explained (at 33) that, although it was not appropriate for authors to subsidise educational institutions, the matter of disadvantage could be taken into account because “if the parties in question were negotiating [a royalty], they themselves would take it into account.”  (3) The transient nature of the material which was copied.  (4) The return authors in fact received by way of royalty or charge (which included the evidence that was rejected as establishing the “most common charge” and the evidence of authors) should nevertheless be taken into account as a relevant “guidepost” to working out the appropriate rate.  Sheppard P said he reached the conclusion that the appropriate rate was 2 cents per page, as a matter of “judicial estimation”.

25                  In one sense the determination in the First Schools’ case of a rate of equitable remuneration was of limited value.  There can be no doubt, as all parties have recognised, that the statutory licence scheme established by s 53B was almost impossible to administer.  There were a number of reasons for this, some of which were inherent in the scheme itself as was explained by Mr Fraser, the chief executive officer of CAL.  Mr Fraser said that in the 1980s there was a “low level of compliance” by educational institutions with the record keeping requirements imposed by s 53B.  Few records were made, and those that were maintained were often incomplete.  Mr Fraser attributed the lack of complete records to the fact that the task of maintaining the records was usually delegated to teachers who regarded it as a major intrusion into their principal task which was to teach students.  There was also some hostility to the notion that a school should pay for material that would be used in the classroom.

26                  The second, and perhaps more important, reason the statutory scheme was not workable, was that to determine the amount of licensed copying it was necessary for the author, or the author’s agent such as CAL, physically to attend every institution where copying was taking place.  The evidence shows that in 1980s, as now, there were around 10,000 schools around the country, with approximately 3.1 million students enrolled at those schools.  It was simply not possible for an author, or his representative, to attend each and every school to see whether any copying had taken place.  I put to one side the additional cost that would be involved in examining the records at each institution.  To put the matter into perspective, in 1986, for example, CAL had one employee, Mr Fraser, and the principal source of its funds was a $105,000 overdraft facility. 

27                  The third reason why the statutory scheme was never going to work was the cost, in both money and time, that would be incurred to maintain the records of copying in the form required by s 53B.  It seems to be common ground that the cost was an excessive burden for the schools.

28                  For these reasons, and perhaps others, it was in the interests of both the copyright owners who were represented by CAL, and the educational institutions, to come to some arrangement that would permit lawful copying of copyright works outside the statutory regime.  This is just what occurred shortly after the decision in the First Schools’ case was handed down.  The nature of that agreement, and those that succeeded it over the next fifteen years, are among the matters to which regard must be had in determining equitable remuneration.  In particular, all parties are in agreement that the various rates of remuneration for licensed copying that were agreed, while they do not establish a market rate, must be taken into account to determine the current rate.  I suppose the reason is obvious.  When it is necessary to decide what is a fair rate of remuneration that should be imposed upon the parties, one could hardly ignore previous rates that the parties agreed in private negotiations.  These agreed rates may be an indication of what the parties regarded as fair.  The extent to which the agreed rates will assist will, of course, depend upon a number of factors, including the period of time that has elapsed since the agreements were made, the circumstances in which the agreements were entered into, what changes have since taken place, and so on.  Thus it is necessary to explore the earlier arrangements in a little detail.  In that connection, I propose only to deal with the arrangements between CAL and the bodies representing primary and secondary schools.  Separate negotiations took place between CAL and the universities, and those are detailed in Burchett P’s judgment in the Universities’ case. 

29                  One of the early agreements, if not the first, was between CAL and the Association of Independent Schools in New South Wales (AIS) made on 1 December 1986, which was soon followed by agreements in similar terms with representatives of other independent schools around the country.  It is necessary to notice two aspects of these agreements.  The first is the indemnity provided by CAL to the schools.  This arose for the reason that CAL did not represent all copyright owners and did not have a full repertoire for which it could claim remuneration.  The extent to which CAL did not cover all copyright owners is a little unclear.  It informed the schools that by 1986 it “represent[ed] the great majority of copyright owners of print material both in Australia and overseas”.  I think I should act on this representation.  Still, independent schools were not prepared to enter into a licence agreement with CAL unless they were given an indemnity from actions that might be brought in respect of any copying that took place in the exercise of their statutory rights.  CAL agreed to provide this indemnity which, as it turned out, was never called upon, but did place it at some risk. 

30                  The second aspect of the agreements was the rate of remuneration that was agreed.  To understand how the rate was arrived at, it is necessary to explain in a little more detail the recording keeping requirements imposed upon educational institutions after making a copy of a work in reliance on s 53B.  Section 53B(7) imposed an obligation on the institution to maintain a record of copying which set out:  (1) the International Standard Book Number in respect of a work, or alternatively, the title or description of the work, the name of the publisher of the work, and the name of the author, (2) the page numbers of the pages that had been copied, (3) the date on which the copies had been made, (4) the number of copies made and (5) particulars of such other matters as were prescribed.  It was an offence punishable by a fine not exceeding $500 not to make and retain the relevant records:  s 203A.  Provision was made for the depositing of copying records with a central records authority (s 203B) in which case it was the obligation of that authority to keep possession of the records:  s 203C.  The owner of the copyright, or the agent of the owner, could inspect the records by giving seven days’ written notice:  s 203E. 

31                  The agreements provided that each participating educational institution would maintain records of copying in a form required by CAL, and would appoint CAL as their central records authority pursuant to s 203B.  In return, there would be a “discount on the remuneration which would otherwise be properly payable”.  Although not expressly stated, the context makes it clear that the “remuneration which would otherwise be payable” was 2 cents per page copied, as fixed in the First Schools’ case.  The amount of the discount was to depend upon the form in which and the time within which the copying records were provided to CAL.  If the records were provided in hard copy form the discount would be 10 per cent, and if provided in computer readable form (as approved by CAL) the discount would be 20 per cent.  Further, if the records were provided to CAL before 12 December 1986, the discounts would be 12½ per cent and 25 per cent respectively.  The effect of the agreement was that no school was required to pay the 2 cents per page rate.  Each school had obtained a discount of at least 10 per cent, and a number of schools obtained a 25 per cent discount, producing a rate of 1.5 cents per page copied.

32                  The 1986 agreement was regarded as only an interim measure.  From the schools’ perspective it reduced the administrative burden and associated costs of keeping records, and allowing inspections of those records.  But the records still had to be prepared, and the cost involved was significant.  Looking at it from CAL’s viewpoint, many of the deficiencies of a record keeping system had not been removed, although the cost of inspection was reduced, perhaps significantly. 

33                  The nominal expiry date of the 1986 agreements was 30 June 1988 though they were to continue from year to year until terminated by notice given by either party.  During late 1987 and early 1988 further discussions took place between CAL (represented by Mr Fraser) and the Australian Education Council Working Party on Copyright Law (AEC) (which was a committee made up of State and Federal Ministers of Education and represented all State Departments of Education), the National Council of Independent Schools Association (NCISA), and the Catholic Schools, with a view to reaching agreement on a more efficient system for determining the remuneration payable for statutory copying.  All parties wanted to reduce the burden of keeping and inspecting records.  In addition, the schools were interested in adopting a per capita, instead of a per page, fee for copying.  Not only would this reduce the need for record keeping, it would also provide certainty to the schools as regards the expenditure to be incurred for this activity, thus making it easier to prepare forward financial plans.

34                  A new agreement was reached in 1988 that was to have effect from 1 January in relation to government schools and from 25 July in relation to catholic and independent schools.  It was made available to all Australian schools and was adopted by many of them.  A principal feature of the agreement was that it did away with the need for record keeping pursuant to s 53B.  In substitution, selected participating schools agreed “to keep records … in order to enable CAL to sample the copying being performed by Schools for the purpose of assisting CAL in the distribution of remuneration to Owners and to assist in quantifying, analysing and assessing the amount of copying performed by Schools.”  Only a small number of schools were to be selected for sampling, and only the schools selected for sampling were required to keep records.  The second important feature of the agreement was that the remuneration to be paid for copying was now an agreed per capita rate.  The rate was 12 cents for each primary student and 60 cents for each secondary student, to be increased annually in accordance with any increase in the consumer price index (CPI).  The agreement explained the per capita rate as based on “a notional copying by a school of 8 pages for each infant and primary student and 40 pages for each secondary student”.  That is to say, it was based on a per page rate of 1.5 cents, multiplied by the number of pages it was estimated would be copied for a primary student and a secondary student.  It is not clear how these numbers were arrived at.  The parties had some knowledge of past copying practices, but not sufficient, I think, to arrive at an accurate estimate.  Perhaps educated guesswork was involved.  In all events, to cover the case of error, the agreement went on to provide (in cl 5.6) that “in the event that the sample records kept in respect of copying performed pursuant to this licence for the period ending 31st August in any year indicate a significant variation from the said notional copying either party may seek to negotiate a new basis of remuneration for the following year commencing 1st January.”

35                  Mr Fraser, who negotiated the 1988 agreement on behalf of CAL, suggested that the 1988 rates did not truly reflect fair remuneration because CAL was not in as strong a position as were the schools to negotiate a reasonable rate.  Implicit in Mr Fraser’s statement is the proposition that fair remuneration would have required payment of 2 cents per page multiplied by the number of pages copied for a student, with that number to be ascertained by sampling.  Mr Fraser attributed CAL’s lack of strength in the negotiations to the following factors:  (a) That CAL did not represent all copyright owners; (b) That CAL was still a small organisation with nothing like the combined financial resources of the schools operating as a group; (c) That the schools organisations spoke for all schools in the bargaining process, and unless CAL agreed to the formula, it may have been compelled to deal with each school individually, which would have been impossible. 

36                  There is some truth in what Mr Fraser says.  In the early days at least, CAL was not well placed adequately to look after the interests of the copyright owners it represented.  But the picture is not nearly as black as Mr Fraser would have it.  The fact that CAL was able to conduct negotiations with a group which represented all primary and secondary schools, with the consequence that if the negotiations were successful all, or most, schools were likely to enter into a voluntary licence, was of enormous economic benefit.  It was of economic benefit because the alternatives, which were to hold separate discussions with each educational institution (or even groups of institutions) or take the schools to the tribunal, would be very expensive.  That the schools were prepared to do away with record keeping in favour of a limited sampling system was also of economic benefit to CAL, as it was to the schools.  The benefit to CAL (more accurately the benefit to the copyright owners) was greater (even if not in money terms) because it did not really have the capacity to bear the costs that would have been involved in a record keeping system, and a good deal of copying could have gone undetected.  The financial advantage to CAL justified a “discount” from what would otherwise have been the applicable rate of remuneration, which according to both CAL and the schools was 2 cents per page indexed to the CPI.  On this view the reduction from the “applicable rate” is not a “discount” in the usual sense of that word – a deduction from actual value.  The schools delivered direct financial benefits to CAL, one consequence of which was that the lower rate would not necessarily diminish the amount that would ultimately reach the copyright owners.  If 2 cents per page indexed to the CPI was fair in the circumstances considered in the First Schools’ case, something less than that rate was justified in the new circumstances, namely where a different regime had been put into place.  Put another way, CAL was not forced to provide a discount, the new circumstances produced a different value for copying.  As I see the position, if CAL had conducted negotiations with the schools in an unregulated market, it would have given ground (reduced the price) to take advantage of the two benefits (a sampling system and bringing in all schools) that were on offer.  This may not be true of the notional numbers of copy pages that were to be attributed to primary students and secondary students.  At its meeting on 9 November 1987, the CAL board noted that the negotiated rate per copy page and the notional number of copy pages for copying in 1988 were decided for “political” reasons and should not be regarded as “equitable remuneration”.  I rather think that the negotiated notional number of copy pages may well have been “political”, in the sense that it was not based on any meaningful survey, and was to that extent arbitrary.  For the reasons I have given I do not agree that the negotiated per page rate was “political”, in that it lacked an economic rationale.  The effect of the “political” agreement on the number of pages was at least ameliorated by cl 5.6, as is evident from the events that occurred in the following year. 

37                  As was contemplated by the 1988 agreement, a sample survey to establish the volume of copying in schools was conducted by an independent company, AGB McNair (now ACNeilsen).  The survey disclosed that in 1988 licensed copying occurred at the rate of 69 pages per primary student and 59 pages per secondary student.  In 1989 the figures were 75 pages and 93 pages respectively.  This volume of copying was considerably higher than had appeared in the records kept by the schools, and it was certainly much higher than the notional rate agreed for the purposes of the 1988 agreement.  The survey also indicated that the volume of copying in educational institutions was increasing. 

38                  As a result of the survey CAL sought to renegotiate the remuneration, as it was entitled to do.  CAL proposed that for 1989 the fee should be calculated by the number of copy pages disclosed by the survey, multiplied by 1.61 cents (that is 1.5 cents indexed by CPI).  This would have resulted in a fee of $1.11 for each primary student and $0.95 for each secondary student.  Remembering that the fees for 1988 were twelve cents and sixty cents respectively, this would have represented a significant cost increase.  The schools rejected the proposal, as an increase of that magnitude would be very prejudicial “in the light of budgetary constraints”.  In any event, according to Mr Chapman, who was conducting the negotiations on behalf of the schools, “in electing to pay under a sampling system schools also elected to pay a fixed amount regardless of the [precise] level of copying”.  Mr Chapman explained that “under the CAL proposal [the schools] contended that CAL would be obtaining the benefit of a sampling system calculated on the basis of a record keeping system”.  He said that the great advantage of the sampling system to CAL was that there was no need to collect and process records which was the trade off for agreeing to a fixed per pupil rate. 

39                  Ultimately the parties agreed to increase the fees for 1989, 1990 and 1991 to a rate which was the mid point between the fee in the preceding year and the fee that would have been payable by multiplying the per page rate plus CPI by the number of pages copied that year according to the sampling survey.  For 1989 the rate was 61.5 cents for each primary student and 77.5 cents for each secondary student.  The schools thereby obtained three significant benefits.  First, they maintained a per capita rate.  Second, that rate did not reflect precisely the number of pages copied.  Third, the rate “lock[ed] in the 1988 copy page fee of 1.5 cents for the next three years subject to CPI increases”, according to Mr Delaney, the chairman of AEC, a view with which Mr Chapman generally agreed.

40                  It is interesting to note that at this time (1989) Mr Delaney was of the opinion (also agreed by Mr Chapman) that if CAL took its case to the tribunal it would “succeed in getting a fee of 2.5 to 3 cents per copy page”, but of course this would be for a records keeping, and not a sample, system.  I do not know whether Mr Fraser would have agreed.  Even when the Copyright Act was amended with effect from 1 July 1990, CAL did not seek to take its claim to the tribunal.  Part VB introduced an optional sampling system which was in the interests of both the statutory licensor and the statutory licensee.  In the case of a record keeping system it required the institution to send the records to the collecting society, which represented a considerable cost saving to CAL.  Importantly, the collecting society would now represent all copyright owners, giving it a full repertoire.  Mr Fraser explained that one reason CAL did not approach the tribunal was that he felt that it would jeopardise the relationship he had built up with the schools during the preceding five or six years.  This was no doubt a sound judgment, but it was a judgment that had, or was designed to have, financial implications.  Here again CAL may have been giving up a benefit, but it expected to receive a corresponding gain.

41                  The final agreement between the parties covered the period from 1992, when the 1989 agreement expired, to the end of 1996.  Before turning to the terms of that agreement it is necessary to say a little about the position taken by the parties during the negotiations.  Initially CAL sought remuneration that was based on the 1985 rate of 2 cents per page, indexed by CPI, and multiplied by the average of the number of pages copied over the previous four years.  Having regard to the current volume of copying, this represented an increase of 70 to 80 per cent above the per page rate that had been paid under the 1989 agreement.  The reaction of the schools was predictable.  They indicated that if CAL insisted on negotiating on the basis that all copies must be paid for (which was not the position it actually took), based on the 1985 rate, then, according to Mr Kyrios who was then conducting the negotiations on behalf of the AEC, “never the twain shall meet”.  Ultimately, however, CAL backed down and agreement was reached that for the next four years the rates would be the previous year’s rate increased by 10 per cent, plus a further 10 per cent of CPI.  It was a condition of the agreement that it would cover 90 per cent of all enrolled students.  The points to note are that CAL’s attempt to introduce the 2 cent per page rate as a basis for the calculation was not successful, that the schools maintained the benefit of a per capita rate, and that the rate was not to be varied according to changes in actual copying but was to increase at a fixed rate.  I assume that there was some relationship between the general rate of increase and the parties’ estimates as to the likely increase in the volume of copying, however it is not clear how close that relationship was. 

42                  Despite extensive negotiations the parties were not able to conclude a new licence agreement that would take effect upon the termination of the 1992 agreement.  That is what brings them before the tribunal.  There is an interim agreement in place pursuant to which equitable remuneration is being paid.  It is not necessary to detail that arrangement, which the parties agree should not influence the outcome of this application.  That is not true, however, of what occurred during the failed negotiations.  The schools place great store by those negotiations for the proposition that CAL should not be entitled to any greater remuneration than the amount it sought to extract from the schools at that time.  As will soon become apparent, CAL is asking for equitable remuneration at a rate which is far greater than the rate it sought in the failed negotiations.  I note that the negotiations were not conducted on a “without prejudice” basis, so there was no issue receiving them in evidence.  I note also that CAL accepts that I should have regard to the negotiations, in deciding the applicable level of equitable remuneration.  In Audio-visual Copyright Society Ltd v New South Wales Department of School Education (1997) 37 IPR 495, 508 Sheppard P noted:

“Both [the applicant’s representative] and [the respondents’ representative] have a keen awareness of what the realities and problems such as this are and each has a keen awareness of what is practical and possible and what is not.  It therefore seems to me that the settlement negotiations between the two have a degree of relevance in that they indicate to the tribunal that these two most experienced people thought that the area in which to negotiate was in the range, or close to the range, of the figures which they discussed.  I would not hold either to the precise figures which were nearly achieved.  But I think that there is much to be said for the view that their negotiations give good guidance as to the area or range in which the tribunal’s determination should fall.”

43                  To put the negotiations, and the financial impact of what CAL was seeking, into context it is helpful to refer first to the rates that were actually paid under the 1992 agreement.  In the first year the rates were $1.50 for each primary student and $2.052 for each secondary student.  Applying the fixed rate of increase provided for in the agreement, the rate in 1996 was $2.216 for a primary student and $3.032 for a secondary student, an increase of about forty-eight per cent.  According to Mr Fraser when one compares the average number of copies made in the three years preceding the 1992 agreement with the average number of copies made in the three years 1994 to 1996, the average copying rate increased by 73.55 per cent for primary students and 42.15 per cent for secondary students.  Thus the effective per page rate that was being paid had decreased during the life of the 1992 agreement.  CAL has calculated the difference as follows:  In 1992 the effective per page rate was 2.17 cents for each primary student and 2.25 cents for each secondary student.  In 1997 the rate was 1.74 cents for each primary student and 1.83 cents for each secondary student.  It is not clear whether these figures have been calculated with precision, but even if there be error, the respondents do not deny that there was a downward trend in the rates.  That downward trend was caused by the fixed annual increases failing to keep pace with the increased volume of copying.

44                  CAL’s proposal was that the parties should adopt the 1985 per page copying rate of 2 cents, indexed by the CPI and multiplied by the product by the number of pages copied as ascertained by survey.  Recognising that this would produce a significant increase in the remuneration that the schools were required to pay, CAL indicated its willingness to phase in the increased rate over a period of four years.  The manner of “phasing in” was explained in CAL’s letter of 5 December 1997 which relevantly reads:

“ The difference in the effective copy page rate now being paid by the schools and the CPI adjusted equitable remuneration page rate would be phased out unevenly over the 4 year period between 1998 and 2001 (following the 10% increase over the 1997 licence fees for 1998 the balance in the difference would be phased out evenly over the 3 years 1999-2001)”.

45                  CAL was keen to move to a position where the basis of remuneration was the 1985 rate indexed.  It wanted to be rid of the “discount” that had been introduced in 1985, and had remained in place every since.

46                  The schools would have none of this.  Their approach was to argue for the effective continuation of the rates provided for in the 1992 agreement with one alteration.  Whereas the 1992 agreement provided for an annual increase of 10 per cent plus 10 per cent of CPI, the schools said that the annual increase should be only 5 per cent, plus CPI.  CAL anticipated that the rate of actual copying would continue to increase, probably at a rate in excess of 10 per cent.  If that prognosis were correct (as seems to be the case, at least in some years) the schools’ proposal would see the rate of equitable remuneration further eroded.  In the circumstances it is not difficult to see why the negotiations broke down.

47                  Having explained what the parties sought, but were unable to achieve, in their negotiations, it is convenient now to set out what they seek from the tribunal.  CAL says that the following rates are equitable:  (a) copying of literary works (other than by digital means) – 6.25 cents per copy page; (b) copying of artistic works, plays, short stories, poetry and other works copied under s 135ZK – 18.75 cents per copy page; (c) copying of overhead transparencies, slides, permanent display copies - $1.00 per copy page; (d) copying by digital means, otherwise falling within (a) – 10 cents per page per student per year; (e) copying by digital means, otherwise falling within (b) – 30 cents per page per student per year.  The schools seek a per student rate for all copying which for 1988 is $2.808 for each primary student and $3.842 for each secondary student, thereafter increased annually by CPI plus 5 per cent.  This is in accordance with the formula used in the 1992 agreement, save that the annual increase is reduced to 5 per cent, and any increase in the CPI is to be allowed in full.

48                  The way in which CAL seeks to justify its claim for what I might call its basic rate (62.5 cents per page) is not complicated.  The starting point is the 1985 rate of 2 cents per page copied.  According to the common law, the value of money is presumed not to change over time; the so-called “nominalistic principle”:  F.A. Mann The Legal Aspect of Money, 5th ed. 1992 at p.90 where it is stated:  “[T]he obligation to pay £10 is discharged if the creditor receives what at the time of performance are £10, regardless of both their intrinsic and their functional value.  It follows that a monetary obligation has no other ‘value’ than that which it expresses.”  See also:  In re Chesterman’s Trusts; Mott v Browning [1923] 2 Ch D 466, 483; Broken Hill Proprietary Company Limited v Latham [1933] 1 Ch D 373, 408.  But in this respect the common law does not represent “perfect” justice.  It is not only economists who recognise and accept that the value of money can change over time.  That is the experience of us all.  This leads to the second step, which is to increase the 1985 rate by the increase in the CPI to arrive at the present (or at least the 1997) value of the 1985 per page rate.  That amount is approximately 3.54 cents.  Having completed the second step CAL says we have now reached the “floor” below which the rate should not be set.  The third step in CAL’s argument is to point to changes that have occurred since 1985, which it says justifies an increase in the floor rate to what I have called the basic rate.  These changes are said to increase the “value” of the copied works.  The changes are in the methods of teaching, the volume of copying, the style of textbooks and teacher support materials (which are now said to be a more valuable resource to teachers and hence more likely to be copied), and finally changes in technology.

49                  It is convenient at this point to refer to some of the evidence of the changes said to have occurred in publishing and in educational practices over the years.  The evidence comes from teachers who were called by the respondents, and from publishers and authors who were called by CAL.  What I propose to do is to summarise the evidence of a number of the witnesses, leaving the resolution of any differences for later consideration.  I will begin with the evidence of certain publishers and authors called by CAL.

50                  Ms Curtain, who runs a publishing company in Victoria, is of the opinion that there is a decline in the sales of books aimed at classroom teachers and teacher educators, and that the likely reason is an increase in photocopying of books which have not traditionally been copied heavily.  She attributes this partly to the books becoming less academic in tone and more reader-friendly, with content based chapters which means that whole chapters may be copied and provided to students.

51                  Mr Spears is the general manager of the schools division of a large publishing company.  He says that competition between publishers has led to full colour publishing, which usually means that publishers are unable to make a profit on the first printing and must rely on a book having a longer life to recoup costs and make a profit.  There is increasing demand for high illustrative content, which is partly the result of syllabuses (now in more common use than syllabi:  see explanation in Fowlers Modern English Usage, 2nd ed. p.610)that require the development of visual literacy and partly the result of students’ and teachers’ preference.  Teachers find it easier to motivate students if the textbook is visually appealing.  There is a growing demand for technology applications to support textbooks, especially websites, CD-Roms, question banks and test generators.  When Mr Spears started in the publishing industry (around 15 years ago), class-set sales were commonplace and publishers produced books specifically to satisfy that demand.  Schools no longer have sufficient funds available for class-set purchases, and these sales today are virtually non-existent.  As a result, the focus of publishers today is very much on core texts.  The challenge is now no longer producing more books, but rather producing better books. 

52                  In an attempt to circumscribe illegal photocopying, some publishers, such as the company for which Ms Genat works, publish materials with the following words marked on the bottom of each page: “If this type appears in black, this page has been illegally photocopied”, or publish materials with permission to photocopy clearly stated on them.  The only circumstance in which that publisher would permit free copying of its materials is where the cost of development of the materials is so high that it would not be possible to recoup the cost from sales.  In those cases, blackline masters are produced, permitting photocopying of the master free of charge.

53                  Mr O’Brien, an author of school mathematics books explains how textbooks have recently become more tailored to the curriculum taught.  This is a trend which started around the early 1990s, after the development of broader primary mathematics curricula.  Now when he writes books, Mr O’Brien researches various States’ curricula, interprets them, and writes material that matches these curricula.  In his experience, the life span of a primary mathematics book is generally three to four years, after which changes are made to the curricula.  Mr O’Brien incorporates in his books ready-made lessons, including questions, answers and follow-up exercises, in a teacher’s book, a student’s book and a mentals book (which revises work taught).  Mr O’Brien says that teaching from his books saves a teacher an enormous amount of time researching, creating teacher aids, planning lessons and worksheets, writing exercises on blackboards, and creating exercises and teaching notes.  In his experience, schools in low socio-economic areas either do not have textbooks, have outdated textbooks, or do not have enough textbooks for each student.  Teachers from these schools tend to photocopy large quantities from textbooks, to compensate for the lack of resources.

54                  Mr Browne, a publisher who comes into regular contact with teachers, says that teachers are now more likely to use a variety of resources rather than relying on a single textbook that covers all the content.  While there may be a core text, this is likely to be supplemented with a range of photocopied pages and other materials, such as CDs, websites, and teacher resource books.  His experience has been that in the past, the main textbook in a subject was generally supplemented by the school purchasing class sets of other textbooks.  Now, however, that supplementary material is generally provided as photocopied sheets from a single copy of another textbook, resulting in reduced textbook sales.  Texts are now interactive, providing traditional content as well as, for example, skills development by a variety of means, diagrams, illustrations, activities and extracts from various sources.  Mr Browne makes a comparison between a book for year 9 mathematics students in NSW published in 1974, and one published in 1996.  During the interval between the publication of these two texts there were at least two major syllabus revisions.  The comparison demonstrates changes in the design of the book, as the new book includes colour pictures and other illustrations whereas the other did not.  A significant change is that the new textbook is part of a range of materials which may include blackline masters, software testbanks and teacher resource books.  The new book also contains many group and individual activities and projects, hands-on activities, integrated problem solving, interspersed literacy exercises, glossary, interesting facts, index for student reference, and graded exercises to assist teachers in assessment.

55                  Mr Browne says that although there has been a move towards using a variety of source materials which has become more significant over time, textbooks still form in most subject areas an “unspoken core” to delivery of the curriculum, and there may even be greater dependence on textbooks now because of the importance of delivering the education outcomes that the syllabuses require.  Mr Browne highlighted the difference between practices in different States on prescribing textbooks.  For example, he said that in government junior secondary schools in Victoria, it is likely that a student will be prescribed a textbook for each subject and that the student’s parents will be expected to purchase those textbooks.  In equivalent schools in NSW, on the other hand, parents are rarely required to purchase textbooks - rather the school will provide them.  This results in greater volumes of books purchased across their life in Victoria compared with NSW.  In Queensland, on the other hand, a book hire system operates whereby the schools buy the books and then charge the students a levy for use of the book.  These differences arise partly because teaching practices and syllabuses differ between the States.

56                  Interesting evidence is given by Mr Horsley, an education lecturer, who founded the Teaching Resources and Textbook Research Unit of the University of Sydney.  Since the 1970s, Mr Horsley has witnessed significant changes in the school education environment, especially in the areas of funding, curricula, technology and pedagogy.  He believes that these changes have had a significant impact on the way in which teaching and learning materials are used in schools.

57                  In relation to funding, Mr Horsley analyses the purchase of textbooks in NSW government high schools.   Before 1990, each school received an allowance from the government designated to purchase textbooks.  In 1990, the NSW government introduced the concept of “global budgeting”, under which the government allocates an amount of money to each education sector, and ultimate responsibility for spending falls to the individual school.  In Mr Horsley’s experience, it has become easier under this system for schools to spend money provisionally allocated for the purchase of texts on other items of expenditure.  As the purchase of a class set of textbooks is a major outlay for a school (and hence a major drain on their budget), there is incentive to spend as little as possible on purchasing new books.  Therefore teachers tend to rely heavily on photocopying to supplement materials which are either not held by the school at all, or are outdated.  This decentralisation of funding controls has been adopted in most States.

58                  In relation to pedagogy, Mr Horsley recalls that 20 years ago, a single textbook may have completely dominated each subject in the classroom.  Nowadays, textbooks do not form the only basis for a course of study.  Texts are viewed as one of numerous resources which teachers have at their disposal.

59                  In relation to curriculum development, curricula in all subjects now tend to focus on problem solving, information organising and analytical skills, whereas in the past the focus was on the learning of specified material.  The current style of syllabus requires students to have greater access to a wider variety of information sources to achieve the syllabus’ aims and objectives.  In some fields, typically the more structured subjects, such as mathematics and the sciences, teachers adhere closely to texts, while in other fields, textbooks are used primarily as a source of information rather than to provide the structure of a course of study.

60                  Mr Horsley says that textbooks now look different to the way they did 20 years ago.  Texts today are more heavily illustrated.  Since the 1980s, textbooks have adopted a principle of “parallel narrative”, ie the illustrations do not illustrate the text, but rather they are the content which is taught.  A single page of a textbook might contain text content, a map with an exercise related to it, and an illustration with an exercise related to it.

61                  As regards photocopying in schools, Mr Horsley says that studies have shown that specialist teachers use photocopied materials to supplement textbook use.  In schools where there is less money for textbooks, schools must make their own textbooks and teaching materials using photocopies.  In addition, there are many schools, for example those with religious focus, which require a particular emphasis to be given to their teaching materials, and it would not be possible to teach in this way without using photocopies as there are no textbooks available for these specific purposes.

62                  I now turn to the evidence given by a number of teachers called by the respondents.  I begin with Ms Malone, the principal of a public school in NSW.  Ms Malone recalls that in the 1970s and 1980s textbooks predominated programs taught in most schools and syllabuses rarely changed.  In the late 1980s curricula had radically changed, and a change of focus had occurred, from teaching practices and strategies to learning outcomes for individual students.  Whereas textbook learning was previously directed toward students reading and regurgitating facts, usually by written exam, students are now offered a variety of practical activities where they become active seekers (instead of passive receivers) of information, from sources as diverse as the Internet, interviews and various forms of media.  Clearly now there is reduced reliance on textbooks.  Ms Malone also says there is less reliance on photocopying.  Technology has had a significant impact in restructuring teaching.  Computers are prevalent among students and are used as an important learning tool, particularly through access to the Internet.  Ms Malone says that although textbook writers may aim to cater for a particular course, she finds that no single textbook is likely to fulfil teachers’ eclectic needs because today’s teaching methods place strong emphasis on the development of individual students.

63                  Ms Davy, the assistant director of curriculum support in the NSW Department of Education and Training, says that textbooks are still used as a teaching resource in both primary and secondary schools and continue to be purchased by schools in class sets from time to time.  However, teaching practices have moved away from use of a single textbook as the sole source of information.  The provision of increased levels of detail in syllabuses and the improved availability of alternative teaching sources has meant that the primacy of the textbook as a teaching tool has subsided.  Regarding technology, Ms Davy refers to the NSW government’s implementation of a program whereby every school (presumably public schools) has been provided with significant numbers of computers, related equipment and software.

64                  Mr Powyer, the principal of a public school in NSW, whose teaching career spans three decades, notes that in the past teaching was largely class-based.  In the 1970s and 1980s the teaching tools were mainly texts, school magazines and overhead and slide projectors.  Recent teaching methods, eg multi-aged classrooms and cooperative learning result in class sets of textbooks proving to be of little value.   Mr Powyer says that since he has been a principal (1980), he has placed a limit on the amount of photocopying paper that is available to each classroom teacher.  This places a limit on what teachers photocopy (typically four to five reams of paper per term per teacher), and on average, Mr Powyer estimates that a six to eight year old student would receive around five or six photocopied pages, or maybe a little more than that, in a week.  According to Mr Powyer, when a teacher photocopies material, this is a professional decision, and the teachers would consider the needs of the students, the relevance of the material, the availability of alternate sources, and time constraints, among other factors.  At Mr Powyer’s school, the teachers themselves do not do the photocopying – instead, there is a person hired to do the photocopying, whose duties include ensuring that the copyright laws, including the amount copied from a particular source, are complied with.  That person reports to the principal regularly, and would highlight any problem areas.

65                  Ms Foxall, the head of library and information services at an independent girls’ school in NSW, recounts the substantial changes that have occurred in teaching philosophy over the past ten years.  The new philosophy, which emphasises self-directed research, aims to provide students with the skills for a life-long learning experience.  She gave examples of the use of Internet sites and CD-Roms by students to access information.

66                  According to Mr Nelson, an education consultant from WA, students now have greater computer access, with over 70% of students in WA having access to personal computers.  He claims that there has been a move from content to context, from objectives to outcomes, from rote-learning to inquiry, from input to individual research.  He predicts that a movement to electronically-stored information will continue to cause an ongoing decline in the use of textbooks, and as a result, no significant increase in photocopying from such textbooks.  On the other hand, there will be an increase in retrieval of information from electronic sources such as the Internet, and in VET (vocational education and training) students accessing training materials rather than textbooks.  Mr Nelson acknowledges that in areas such as mathematics and English literature, traditional textbooks are still required, and little use can be made of the Internet, for example in solving algebraic problems.  However in subjects that require current information such as economics, it would be common for students to use the Internet to access information on, for example, the most recent government budget.  Mr Nelson’s view is that photocopying will still occur, but there will be a movement towards the use of things like newspaper articles, and teachers directing students to download material from websites.

67                  Ms Shepherd, the head of English studies at a large NSW government secondary school, explains how teaching practices involve looking outside textbooks to other materials.  Teachers now use audio-visual resources such as video, film and television excerpts.  In her view, teachers are more inclined to produce their own typed worksheets than in the past, which may incorporate extracts from other authors’ material, but usually involves very little photocopying from other authors’ work.  Ms Shepherd estimates that, within her school, approximately 80% of photocopying from the printed work of other authors is of one or two pages at a time.  In her experience, teachers do not photocopy to avoid purchasing books.  In English classes, the number of texts studied by students in each year has increased.  As well as traditional written novels, “texts” now include audio-visual and electronic materials.  Ms Shepherd says that to the extent that she photocopies from copyright works, she tries to ensure that what she copies is more targeted towards the teaching objective.  She draws from quite a wide range of sources to find cultural or historical material that is relevant to the novel she is teaching her class, and she photocopies it to the extent necessary in order to tie in with the primary text, thereby directly meeting the objectives of the syllabus.  

68                  Mr Fitzpatrick, a mathematics teacher at a NSW secondary school, says that whether a textbook had colour or not would influence his purchasing decision only if the books were equivalent in all other respects.  He considers other aspects of a book to be more important, such as content, layout, grading of exercises and whether a book addresses the syllabus.

69                  A different perspective is given by Mr Shadwick (a CAL witness), the deputy principal of a government secondary school in NSW located in a low socio-economic area.  He gives examples of how lack of funding results in insufficient numbers of class sets of textbooks.  He explains the likelihood of teachers handing out photocopies to students in class.  He says that the easiest way to create materials to suit the needs of the individual class, is by photocopying other materials.  As many textbooks are written to contain activities which require students to write on them, the lack of availability of copies of textbooks means that photocopies are often used.  At Mr Shadwick’s high school, there are three photocopying machines in a separate print room, and a full time employee who photocopies books all day.  Staff also have free access to this room.  There are two photocopying machines in the library to which students have paid access and staff have free access. 

70                  As will by now be apparent, the evidence of teaching and copying practices is not consistent.  Yet I am quite satisfied that all of the witnesses gave accurate evidence, at least as they saw things.  I think that the differences can be explained by the fact that no two schools are identical, and just as there is diversity between schools, there is also a wide range of teaching and copying practices among the schools.  Moreover, I am satisfied that the following propositions can safely be drawn from the evidence.  Over the years there have been substantial changes in teaching practices, with a move to an ‘outcomes-based’ model which attempts to encourage students to be lifelong learners.  In the past, textbook learning was directed towards students reading and regurgitating facts, while in more recent times there has been a move towards teachers setting a variety of practical activities where students become active seekers of information.  This change in philosophy has led to changes in the form and content of school curriculum in many subjects, encouraging the use of ‘multi-source’ teaching material.  As a result, students now have access to a wider range of textbooks, and teachers, in exposing students to this variety, supplement core textbooks (in subjects where they exist) with ‘targeted’ photocopies of materials relevant to the school syllabus.  Now teachers place reliance on single textbooks in few subjects, such as mathematics, physics and chemistry.  In the case of schools with limited budgets, a seemingly common situation, fewer class texts are purchased so that teachers often supplement these texts with substantial amounts of photocopied material.  With budgetary constraints, copying has become both more varied and ‘targeted’, that is, a teacher makes a conscious decision to photocopy information of importance to the students that is not contained in other available resources.  The changes in the style of school curricula and the decrease in reliance on textbooks in many subjects are acknowledged by the respondents.  The evidence suggests that many of these changes were initiated in the 1970s and that the trend towards multi-source teaching began as early as 1968.  However the changes did not become standard teaching practice until much later.

71                  With the changes in teaching practices there have been changes in textbooks and other published materials, which attempt to support teachers in this new learning environment.  In short, textbooks are now being tailored specifically to meet the current curriculum syllabus.  Published learning materials now contain numerous complete short works which are easily used in particular classes, and are divided into content-based chapters which can be copied more easily.  The existence of textbooks that comply with the school syllabus permits schools to obtain several competing textbooks and select and copy the most appropriate material for each individual class.  Many of the changes to the style of textbooks also began in the 1970s, and by the late 1970s texts had adopted a strong inquiry-based methodology and had become more analytically focused.  However, with many subjects, especially those that are within the “humanities” branch of learning, even though textbooks may neatly deal with the curriculum, there has been a shift in pedagogy away from a pure reliance on texts, towards sources such as film, magazines, CD-ROMs, the Internet etc.  Of course, this is not universally true. 

72                  In this context, it is worth making passing reference to the fact that publishers often incur greater cost in preparing the new style textbooks, and these additional costs have to be reflected in the price.  One consequence of this is that some schools are less inclined to buy class sets or prescribe expensive textbooks, and therefore rely more heavily on copying.  The evidence of Mr Shadwick and Mr Horsley supports this view.

73                  It is also important to note that the opportunities provided by technology, such as more sophisticated photocopiers, scanners and digital equipment which support multi-source materials, including material which has been created specifically with syllabus “outcomes” in mind, has resulted in an increase in the quality of photocopied material that is provided to students.

74                  What is the present relevance of these changes?  Do they constitute matters which should be taken into account in assessing equitable remuneration.  I think it is appropriate to have regard to the changing teaching practices, which in many subjects have led to greater reliance on photocopied material as an essential aid to modern teaching.  This is not to suggest that what is copied today is more important than what was copied in, say, 1985.  But it cannot be denied that the manner in which courses are now taught, with the diversity and range of material that is required, means that it is necessary for the student to be provided with much more material than in the past.  The increase in the volume of copying is a reflection of the increasing importance of copied material.  I also think that regard should be had to the improved quality of copying.  I do not subscribe to the view that for the purposes of teaching a student, a poor reproduction of a work is as useful as a clear reproduction.  The ease with which a photocopied work may be read (if in words) or observed (if an artistic work) will assist the student.  I recognise that improvements that have been made in the technology of copying do not reflect any improvement in the work that is copied.  But if the copy is more useful because it is of better quality than could be produced in the past, it is, to my mind, more valuable.

75                  The same reasoning requires account to be taken of the change in the form of texts.  Many are created and “targeted” for schools in keeping with the current curriculum syllabus.  Thus, as CAL says, these works are now highly specialised and have a limited life.  Specialised textbooks are not new.  They had begun to be published in the 1970s, although the impression I have is that they were not as common, and not as specialised, as many of today’s texts.

76                  I have said that there has been increased copying at the schools since 1985.  At the commencement of the hearing, CAL argued strongly that there has been a “dramatic” increase in the level of copying, especially since the 1992 agreement.  CAL said that the increase in the volume of copying showed the importance of reliance upon photocopying material for the purposes of improving student skills, and hence establishes the increased value of that material, an increase which should be reflected in the rate to be paid for copying.

77                  As it turns out, there is substantial disagreement about whether the volume of copying at schools has increased over the years.  Mr Fraser says that the volume of copying had increased by 254 per cent in the period between 1988 and 1998, based on surveys undertaken by ACNielsen, and its predecessor AGB NcNair.  Mr Alexander, the managing director of international research at ACNielsen, gave evidence about a survey designed to record copying patterns at schools.  After explaining the statistical methodology used in the survey, Mr Alexander set out the general conclusions that he reached.  He says that from 1988 to 1997 the level of copying in schools increased, although there were regular fluctuations in copying levels across the years.  From 1990, even numbered years showed peaks within this general upward trend.  In those years New South Wales schools participated in the survey.  From 1990, odd numbered years showed troughs.  In each of those years Victoria participated.  Mr Alexander also said that, on average, the secondary page rate per student was greater than the primary page rate per student.  He tabulated the results in the form of two graphs which are worth setting out:

Figure 1:  Pages copied (expanded to total population); 1988 - 1997

Figure 2:  Page rate per student in the Primary and Secondary sector 1988 - 1997

78                  There is a problem with these results, which is recognised by CAL.  They include the copying of works in respect of which equitable remuneration is not payable.  For example, provided certain conditions are satisfied, under s 135ZG an educational institution is permitted to make copies of one or two pages of a literary or artistic work without being required to pay equitable remuneration:  this is usually referred to as insubstantial copying.  When this was pointed out, CAL requested ACNielsen to undertake an assessment of the volume of insubstantial copying.  The advice received was that insubstantial copying was somewhere between 12.41 per cent and 22.79 per cent of the total amount copied. 

79                  This assessment was subjected to vigorous attack by Professor Dunsmuir, the head of the Department of Statistics at the University of New South Wales.  First Professor Dunsmuir attacked the sample used for the analysis. Then he performed his own analysis of the information and came to the conclusion that insubstantial copying was between 19.9 per cent and 23.6 per cent, with an overall estimate of 21.7 per cent.  However Professor Dunsmuir said that his analysis was based upon assumptions that he had not been able to confirm, so it was not safe to rely on his conclusion. 

80                  Some allowance must also be made for the copying of black line masters.  A black line master, also known as a photocopy master, is a collection of worksheets that are produced in a format that renders them easily capable of being photocopied.  They are supplied to schools with a licence to photocopy.  The consideration for the licence is included in the retail price of the black line master, which is generally higher than a student textbook with the equivalent number of pages.  Mr Browne said that the publishing of black line masters has emerged over the past fifteen years as a response to the upsurge of photocopying in the classroom.  It does appear that black line masters (perhaps not so named) were in existence in 1985 as Sheppard P made some passing reference to “material which is intended to be copied” in the First Schools’ case.  The evidence suggests that somewhere between six per cent and twelve per cent of copying is of black line masters. 

81                  The total volume of photocopy material also includes photocopies of musical works which are made under a separate licence.  The parties seem to be in agreement that approximately 3.5 per cent of photocopied material is of this type of work. 

82                  Fortunately I am not required to determine what proportion of the overall copying in schools is of work which may be copied freely.  Clearly there is a significant volume of insubstantial copying, and when that copying is aggregated with the copying of black line masters and licensed musical works, the increase in the level of licensed copying is much less than CAL originally suggested.  Yet one cannot avoid the conclusion that, after making due allowance for free copying, there has been a steady and significant increase in the volume of copying over the last decade, in large measure due to changes in teaching practices.

83                  Of course not everything will add value to the licensed copies.  To the extent that the 1985 rate is treated as the starting point of the analysis, there should be “discounts” allowed.  I have already dealt with some aspects of these “discounts” when analysing the voluntary agreements that had been entered into over the years.  First there is the “administrative convenience discount”.  It was of considerable benefit to CAL, and will continue to be of benefit, to have in place a single arrangement with all schools.  The benefit is in reduced administration costs.  It will be remembered that the 1992 agreement was conditional upon the number of students in the participating schools amounting to at least 90 per cent of all enrolled students.  CAL could terminate the agreement if the number of students fell below this level.  A “discount for bulk” should be applied because of the volume of copying that is now taking place.  In the Universities’ case Burchett P adopted this approach, presumably for the reason that economies of scale are involved.  One must be careful, however, not to “double count” the discount, because the economic benefits of having all schools covered by the arrangement and bulk copying will overlap.

84                  Another matter said to give rise to a “discount” is that equitable remuneration is being assessed on a sampling basis.  It is no doubt correct that if equitable remuneration was to be assessed by the tribunal on a records basis under the statute, the amount would have to be higher to take into account the higher cost of data collection.  But this is not to say that there should be a “discount” from the 1985 rate because remuneration is being assessed on a sampling system, or because, in the past, CAL had offered a discount to obtain a voluntary agreement.  This precise issue was considered by Burchett P in the Universities’ case in a passage (at 545) which should be set out in full:

“Another discount suggested in the case for the universities related to the simplicity of the statutory scheme under Pt VB.  This was contrasted with the difficulties inherent in the former s 53B.  Prior to the enactment of Pt 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 Pt 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 cooperate with it in an appropriate scheme for the collection of the equitable remuneration which was due.”

85                  In view of the significant increase over and above the last agreed rate that is sought by CAL, there are two matters that I will take into account, that require special mention.  They are, first, the institutions for which the copies are made and, second, the purpose of the copying.  I take these matters into account because I am required to do so by reg 25B(1)(b) and (e) respectively.  Were it not for the regulations, I would in any event have taken those factors into account because my task is to determine a remuneration that is fair.  An appropriately fair remuneration here is not the same remuneration that would be determined by the interaction of buyers and sellers who wish to exchange some service in a market where the buyer tries to obtain it as cheaply as possible and the seller tries to obtain as much as possible for it.  In the first place we are not dealing with a market.  The right to take copies of copyright work is conferred by statute.  Second, and this is really the point I wish to make, the institutions for whom the copies are being made are educational institutions, and the purpose of the copying is to educate students more effectively.  Further, with few exceptions, the educational institutions are non-profit organisations.  While acknowledging the force of the view expressed by Sheppard P in the First Schools’ case that authors should not be required to subsidise educational institutions, it nevertheless remains true that Parliament thought it appropriate to limit the monopoly conferred upon authors, so that the monopoly would not inhibit the proper education of Australian students in an increasingly complex world of ideas.  The public benefit of the statutory licence should not be underestimated.  Setting a rate which would inhibit its use, will be positively detrimental to the public welfare. 

86                  In this connection I should also have regard to the ability of schools to pay equitable remuneration.  While the respondents acknowledge that they have not led evidence of schools’ budgets and the like, nevertheless, common experience suggests, as the respondents say, that on the whole schools operate on relatively tight budgets and there are limited funds available for photocopying.  I propose to act on that basis.

87                  Now I must deal with the ultimate question which is:  What, in all the circumstances, is the amount of equitable remuneration that should be fixed?  It is convenient first to set a basic rate, and then decide whether a higher rate should be allowed for certain types of copying.  In arriving at the basic rate I will not assume the “floor” to be 2 cents per page indexed by the CPI.  That rate was fixed on the basis of a records keeping system and it should not be adopted as the remuneration to be paid on the basis of a sampling system for the simple reason that there is a different (usually lower) cost structure.  But of course the rate struck in 1985 is influential.  Bearing that rate in mind, I think the starting point is to assume that in 1985 an appropriate rate of equitable remuneration for copying based on a sampling system (if one had been permitted by the statute) would have been somewhere between 1.5 cents and 2 cents per page.  This amount would have to be adjusted to keep it in line with the real value of money.  I should also take into account that the 1985 rate was fixed on the basis that little was known about the cost of data collection.  According to its 1998-1999 annual report, CAL’s operating costs were 20.57 per cent of total revenue.  I have been told that the costs of dealing with the schools is around 18 per cent of revenue.  I assume that these costs are not all costs of collection, but most will be.  The increased value of the copied material must be taken into account for the reasons I have already explained at some length.  I think that the rates that were set under the voluntary agreements did not do this.  Thus, while those rates are of course significant, because at least in the later years they will to an extent reflect what the parties saw as fair remuneration in all the circumstances, as they appear not to have taken into account the changes that were occurring, their influence is diminished.  I think the same point can be made in relation to the positions taken by the parties in the failed negotiations.  I must say, however, that I did find troubling the possibility that I might be required to make an award that is greater than the amount claimed by CAL in these failed negotiations.  Yet, if that is what must be done to arrive at a remuneration that is fair, I would have no choice in the matter.  In any event, such a result is not as strange as it might seem at first glance.  Most people will appreciate that when parties attempt to negotiate an agreement, one or both of them will often given ground to secure that agreement.  There are many reasons why this is so, and only some of them are commercial.  Often a negotiated result is thought to be preferable to one that is arrived at through litigation.  This is especially so when, as is the case here, the negotiating parties are, and will continue to be, in a very long term relationship.  I have decided that the basic rate should be 4 cents per page for 1997, and thereafter that the rate should be increased by the CPI.  This amount is marginally higher than that fixed as the basic rate in the Universities’ case.  The difference is to be understood by reference to the greater utility of the licensed copies for students in schools.  I should also say that if the parties were commercial organisations conducting their activities for profit, I would have arrived at a higher figure, much closer to the figure suggested by CAL.  But this is not such a commercial case.  The policy considerations to which I have referred, and which I indicated I would take into account, prevent me from arriving at a “commercial” rate of remuneration because, to my mind, that would not be fair remuneration in the circumstances. 

88                  I do not think that the basic rate should be applied to all copying.  CAL asks for separate rates to be fixed for artistic works, plays, short stories and other works copied under s 135ZK.  Burchett P acceded to a request to fix separate rates in the Universities’ case.  He did so because he thought that it would be unjust to fix a single rate for all copyright work.  I agree with Burchett P, substantially for the reasons he gave in that case, which I need not repeat.  I will, however, adopt a somewhat different course to that taken in the Universities’ case.

89                  I think that I should fix one rate for copying of works generally and separate rates for artistic works copied under s135ZL and for plays, short stories, poetry and other works copied under s 135ZK.  In the Universities’ case Burchett P noted that for the most part artistic works will be confined to a single page.  If they are copied, in most cases the whole of the work will have been taken.  I think that this is also true of poetry.  Many poems are short, not more than a page or so in length.  According to Mr Tranter, a poet and publisher of poetry, publishers are averse to publishing poetry as it is regarded as not being economically viable.  Mr Tranter laments publishers’ failure to recognise the value in poems.  He says that a fine poem is known and valued word by word, whereas very few prose works are scanned and treasured in such detail.  I agree.  I would fix the rate for copying artistic works and poetry at 8 cents per page (indexed by CPI).  In the Universities’ case, the basic rate was increased by just over a factor of three for artistic works.  I think that school students will make less sophisticated use of this type of material than university students, justifying a lower differential.

90                  As I have indicated, a separate rate should also be fixed for plays, short stories and other s 135ZK works.  It should not be as high as the rate for artistic works and poetry, because it is less likely that the whole of these works will be taken.  On the other hand, it is likely that the “heart” or substance of the play, short story or other s 135ZK work will often be taken.  An appropriate rate is 6 cents per page (indexed by CPI).

91                  Another special case is that of overhead transparencies, slides and permanent display copies.  The use of overhead transparencies will often preclude the necessity of a teacher making a photocopy of the relevant work for each student.  In such a case, however, the work will be viewed by many students at the same time.  Putting a copyright work on an overhead is akin to making multiple copies of it.  In addition, overheads have a more enduring character than paper copies.  For these reasons, overheads have a greater value than paper copies.  The same reasoning can be applied to slides and permanent display copies.  As to slides, see the Universities’ case (42 IPR at 547).  I will set a rate of 40 cents per page (indexed by CPI) for this copying.

92                  On the question whether there should be a per capita rate or a per page rate, I am much influenced by Mr Chapman’s evidence and by the past practices of the parties.  In cross-examination Mr Chapman was asked to explain the benefits of a per capita rate.  This is his answer:

“And what do you say the benefits of per capita are? …The schools receive their income on the per capita basis, be it from fees or Commonwealth or State grants, schools operate very much – independent schools most particularly of course, on things to do with costs per people [sic pupil] and the cost of educating a pupil is a nationally known figure.  It’s got various components and variable costs in the education of that child, generally don’t occur within the year.  You know at the beginning of the year what the likely costs are going to be.  It all equates to a per pupil cost and so that’s just the atmosphere, it’s the accounting processes, it’s the budgeting processes of schools and it also reduces the difficulty for the collecting society and reduces the difficulty for the school in terms of the administrative process.”

I think this is a good answer.  It is also interesting to note that in other jurisdictions a per capita rate is set.  This is so in both Canada and the United Kingdom. 

93                  I do not believe, however, that it is appropriate to set a per capita rate unless it is based on the number of pages copied.  As has been the position in the past, the per capita rate should be set by reference to the average number of pages that have been copied over a certain period, say four or five years.  That number should be ascertained by sampling.  If the parties are unable to reach agreement on the appropriate formula, the matter can be referred to me for further determination.

94                  The rate that I have set must come into operation from 1 January 1997.  The respondents say that it should not take effect until 1999 because there has been a substantial delay in the proceeding coming to trial, for which the respondents are not responsible.  I do not accept this submission.  First, I do not think that there has been any unreasonable delay on the part of CAL in bringing this case on for hearing.  Second, and probably more importantly, any delay works to the benefit of the schools.  In a practical sense the schools have had the use of CAL’s money (that is, the difference between the equitable remuneration and the remuneration that is being paid under the interim agreement) and have derived an economic advantage by the delay in the determination of the equitable remuneration.  Having obtained that advantage, it would not be fair to give them the further advantage they seek.

95                  On the other hand, the new rates should be phased in over a period of three or four years, as was proposed by CAL during the failed negotiations.  This will mitigate the effect of the increase.  Again, if the parties are unable to reach agreement on the appropriate mechanism, I will hear submissions on the matter and make a further determination.

96                  This brings me to the final point, which I will dispose of in short compass.  CAL asks me to determine on an interim basis (as to which see s 160) the equitable remuneration that should be paid for digital copying.  The amendments to the Copyright Act made by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) established two schemes for the payment of equitable remuneration for digital copying by educational institutions.  If the original work is in hard copy form, the present scheme will apply.  If, on the other hand, the original is in electronic form, a new scheme, introduced by the amending Act, applies to determine the equitable remuneration that must be paid. 

97                  Be that as it may, although some evidence was led about digital copying, the parties paid very little attention to this form of copying during the hearing.  It should come as no surprise that I would require a good deal more information than is presently before me to fix remuneration, even on an interim basis, for digital copying.  That I decline to deal with the matter at this point, will not disadvantage anyone.  I understand that digital copying is not addressed in the current sampling scheme.  Accordingly it will be difficult, if not impossible, for CAL to make any distribution to copyright owners of any remuneration that is received in respect of digital copying.  In any event, the evidence such as it is, suggests that only minimal digital copying is occurring, which is another reason why the matter is not urgent.  When both parties are better informed, the case for digital copying can be heard.

98                  I will stand the matter over so the parties can bring in short minutes of orders to give effect to these reasons.


I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Decision herein of the Copyright Tribunal constituted by Finkelstein DP.


Dated:              8 February 2002

Counsel for the Applicant:

Mr D Catterns QC

Mr M Green

Solicitors for the Applicant:

Banki Haddock Fiora

Counsel for the Respondents:

Mr M Ellicott QC

Ms A Silink

Solicitors for the Respondents:

Minter Ellison

Dates of Hearing:

10, 11, 12, 17 and 18 October 2000

Date of Decision:

8 February 2002