Wednesday, March 28, 2012

Phonographic Performance Co of Aust Ltd v Commonwealth

In 1912 the Commonwealth Parliament enacted the Copyright Act 1912 which declared that the Imperial Copyright Act 1911 was in force in Australia.  Pursuant to the Imperial Act copyright in records was conferred upon the owner of the “plate” from which the record was made.  The copyright included the sole right to perform in public the sound recording embodied on the record.  The corollary of that right was the ability to charge a fee for licensing a user to broadcast the sound recording over radio, and the right to sue for infringement of that right.
On 1 May 1969 the Commonwealth Copyright Act 1968 came into force.  Section 109 of that Act enables radio broadcasters to exercise a “statutory licence” to broadcast sound recordings in respect of which copyright existed by virtue of the Imperial Act, by taking away the copyright owner’s right to sue for infringement where the broadcaster has paid (or give an undertaking to pay) a royalty in an amount determined by the Copyright Tribunal.  The Copyright Act 1968 further provided that the Copyright Tribunal could fix the amount payable by a radio broadcaster to copyright owners in the aggregate, but capped that liability to 1% of that broadcaster’s gross annual revenue (in the case of commercial broadcasters) or 0.5c per head of the Australian population (in the case of public broadcasters).
The Phonographic Performance Company of Australia Ltd and various copyright owners commenced proceedings in the High Court challenging these provisions on the basis that the caps on royalties introduced by the Copyright Act 1968 authorised the acquisition of property without providing just terms, contrary to the requirements of placitum 51(xxxi) of the Constitution.
In Phonographic Performance Company of Australia Ltd v Commonwealth the High Court unanimously (although in three separate judgments) held that there was no relevant acquisition of property.  The Court held that the effect of the Copyright Act 1968 was to terminate the copyrights subsisting as at 1 May 1969 under the Imperial Act, and to bring into effect a new copyright.  There was no challenge based upon the termination of the copyrights under the Imperial Act.  To that new copyright in respect of sound records there was immediately attached the compulsory statutory licensing system, including the cap upon the royalties payable thereunder.  There was therefore no diminution in those rights; they were always subject to the licensing system. 
Having rejected the argument that there had been a relevant acquisition of property, the question of whether “just terms” had been provided did not arise.

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