The Court held unanimously that those provisions are not invalid by reason of s 51(xxxi) of the Constitution, ie with respect to "acquisition of property on just terms". The judgment is of particular interest regarding the 'confiscation' argument mooted by cigarette companies in relation to the plain-paper packaging (ie restrictions on use of trade marks) legislation highlighted in past posts on this blog. It is also of interest because it concerns the constitutionality and legitimacy of compulsory licensing.
The litigation involved the PPCA, EMI, Sony, Universal Music, Warner Music and Albert Music (ie record industry interests) as plaintiffs. The defendants were the Commonwealth, Commercial Radio Australia (ie the commercial radio industry advocacy group) and the ABC.
The HCA addressed three questions as follows -
Question 1: Are some or all of the provisions in ss 109 and 152 of the Copyright Act 1968 (Cth) beyond the legislative competence of Parliament by reason of s 51(xxxi) of the Constitution?The decision concerns the cap in the Copyright Act 1968 (Cth) for royalties payable for radio broadcasting of sound recordings, notably 1% of the gross earnings of the commercial broadcaster under s 152(8)(b). Caps in the Act are unusual because they are not tied to a discernable economic formula and are set by the Copyright Tribunal.
Answer: The provisions in s 152 of the Copyright Act 1968 (Cth) which were alleged by the plaintiffs to be invalid are not invalid and, therefore, s 109 is not invalid.
Question 2: If so, should some or all of these provisions be read down or severed and, if so, how?
Answer: This question does not arise.
Question 3: What order should be made in relation to the costs of the Special Case?
Answer: The plaintiffs should pay the defendants' costs of the Special Case.
The PPCA acts in the interests of the owners/exclusive licensees/controllers of copyright in sound recordings that currently subsists under Pt IV of the 1968 Act. It litigated on behalf of the second to fifth plaintiffs (eg Warner, EMI and Universal) in respect of sound recording copyrights in published sound recordings made prior to the commencement of the 1968 Act. The sixth plaintiff (ie Albert) is also the holder of relevant sound recording copyrights.
The plaintiffs brought proceedings in the original jurisdiction of the High Court, challenging the validity of the cap created by ss 109 and 152 of the 1968 Act. They argued that in fixing a cap on the amount that the Copyright Tribunal may determine for the compulsory licence of the pre-1969 recordings, ss 109 and 152 represented an acquisition of the property in the pre-1969 recordings on other than just terms. Acquisition on other than just terms - although permissible under state law, would of course be contrary to s 51(xxxi) of the national Constitution. The plaintiffs sensibly did not assert that the compulsory licensing system established by the 1968 Act is wholly invalid or that the 1968 Act is invalid because it brought to an end the operation of the copyright regime under the 1911 Act without provision of just terms.
The Defendants argued that there was no acquisition of property, given that law prior to the 1968 Act did not create a broadcast right. They further argued that even if there was an acquisition of property, it was consistent with the adjustment envisaged by s 51(xxxi) of the Constitution.
Prior to the 1968 Act, the post-Federation copyright regime was shaped by the Copyright Act 1911 (Imp) as modified by the Copyright Act 1912 (Cth) and subsequent amendments. In its media release the HCA states that -
An owner of a copyright in a record protected under the 1911 Act had the exclusive right to perform the record in public, and a correlative exclusive right to license or authorise a radio broadcaster to broadcast the record. Neither the 1911 Act nor the 1912 Act provided for a compulsory license scheme under which a broadcaster could broadcast a sound recording without the consent of the owner.
The 1968 Act commenced operation on 1 May 1969. The effect of transitional provisions contained in the 1968 Act was that pre-1969 recordings which were copyright protected under the 1911 Act were taken to be sound recordings in which copyright subsisted under Pt IV of the 1968 Act. Section 109 of the 1968 Act operates to qualify the exclusive right under the 1968 Act of an owner of copyright to communicate a published sound recording to the public. It provides that copyright in a published sound recording is not infringed by a broadcaster, even in the absence of authorisation by the "owner" of the copyright, if there is either an order by the Copyright Tribunal under s 152 of the 1968 Act in force, or an undertaking given to pay the owner such amounts as may be determined under that section. Section 152 imposes a "cap" on the amount that the Tribunal may require a broadcaster to pay for what is in substance a compulsory license.
The High Court held unanimously that the 1968 Act excluded further operation of the 1911 Act and denied subsistence of copyright otherwise than by virtue of the 1968 Act.
Sections 109 and 152 therefore did not operate to qualify the copyright of the plaintiffs under the 1911 Act and so did not constitute an acquisition of the property in the pre-1969 recordings.
