House of Commons - Innovation, Universities and Skills

Select Committee on Innovation, Universities and Skills Second Report

1 Introduction

1. The Copyright Tribunal is an independent tribunal established in 1988 as the successor to the Performing Right Tribunal. As the Intellectual Property Office described during our inquiry, the Copyright Tribunal's function is narrow but important.[1] Its main role is to adjudicate in commercial disputes and to ensure that the monopoly which copyright holders and their agents, the collecting societies, have is not abused. Anyone who has unreasonably been refused a licence by a collecting society, or who considers the terms of an offered licence to be unreasonable, may refer the matter to the Tribunal.[2] The Copyright Tribunal has the statutory task of conclusively establishing the facts of a case and of coming to a decision which is reasonable in the light of those facts. Its decisions can be appealed to the High Court only on points of law.[3] The Copyright Tribunal does not have jurisdiction over breaches of copyright. Nor is it a regulator supervising the workings of collecting societies. Regulatory responsibilities lie within the jurisdiction of the Office of Fair Trading and, in the case of matters affecting interstate trade, the Directorate-General Competition of the European Commission.[4]

2. The Copyright Tribunal comprises a Chairman, two deputies and a pool of up to eight lay members. The Chairman and deputies are appointed by the Lord Chancellor, in consultation with Scottish ministers. The Lord Chancellor is also responsible for issuing the Tribunal's Rules, which set out its scope and operational parameters. The lay members are appointed by the Secretary of State for Innovation, Universities and Skills.[5]

3. Since it began in 1988, 106 references have been filed with the Copyright Tribunal. Ninety-five of those references have been dealt with and 11 references are still outstanding. Of the 95 dealt with, 44 were withdrawn, 28 were resolved after a hearing, 14 were settled before a hearing, eight were dismissed and one was struck out.[6] Cases heard by the Tribunal are often substantial in size and lengthy, involving a large number of parties and substantial costs, with wide ranging judgements.[7]

Collecting Societies

4. Collecting societies licence rights to use copyright-protected content to third parties. Because some organisations make use of a large amount of copyright material in different ownerships—for example, clubs and radio stations playing music—it would be impractical and very expensive to identify and pay the individual owners of the copyright of all the material being used. Consequently, collecting societies have been formed which licence a large repertoire of copyright works. One of the oldest is PPL (Phonographic Performance Limited) which was formed by EMI and Decca in 1934 and collects royalties for 47,000 performers and 3,500 record companies.[8] PPL explained to us that the monopoly it enjoyed was there for "a very good reason":

It is because both the users and the rightsholders want us to have a monopoly. We are a straightforward service organisation aggregating the rights so that any music user can get a single licence covering the entire repertoire. In our case the entire repertoire is sound recordings. The pub […] has to get one licence to play music for the entire year and that is the entire catalogue, rather than three and a half thousand licences from three and half thousand record companies.[9]

As the means to copy and disseminate copyright material have grown and it has become easier to obtain, so the collecting societies have become more important in obtaining appropriate recompense for their members. The collecting societies are non-profit making organisations and the money that they collect, apart from administration costs, goes to their members—writers, composers, artists and performers.[10]

UK Intellectual Property Office

5. The Copyright Tribunal is an independent body but it lacks its own administrative support. This is provided by the UK Intellectual Property Office (the operating name of the Patent Office since April 2007),[11] which also has responsibility for policy on intellectual property. The Intellectual Property Office is responsible for granting Intellectual Property rights in the United Kingdom which include patents, designs, trade marks, and copyright. The Intellectual Property Office is a trading fund, for which the Department for Innovation, Universities and Skills (DIUS) is responsible.

Reviews

6. The Copyright Tribunal and its predecessor, the Performing Right Tribunal, have been subject to a number of reviews over the past 20 years. Because the rightsholders and their agents, the collecting societies, hold a monopoly with statutory protection, there have been two Monopolies and Mergers Commission reports: Collective Licensing[12] in 1988 and Performing Rights[13] in 1996. The 1988 Report concluded "that collective licensing bodies are the best available mechanism for licensing sound recordings provided they can be restrained from using their monopoly unfairly".[14] The 1996 Report made a number of recommendations concerning the operation of the Performing Right Society Limited and pointed out that the interests of users of music were primarily protected through the Copyright Tribunal.[15]

7. In December 2005, the Government asked Andrew Gowers to conduct an independent review into the UK Intellectual Property Framework. The Gowers Review of Intellectual Property[16] was published in December 2006. Although the Review recognised that the framework was broadly satisfactory, it made various recommendations.[17] It did not, however, examine the work of the Copyright Tribunal. In 2006 the Intellectual Property Office commissioned David Landau, Principal Hearing Officer in its Trade Marks Directorate, and Chris Bowen, Assistant Principal Hearing Officer, to undertake a review of the Copyright Tribunal. They were chosen on the basis that, as inter partes hearing officers[18] for the Trade Marks Directorate, they had experience of a tribunal, the proceedings of which were generally considered to be efficient and relatively inexpensive. They looked at all aspects of the work and the powers of the Copyright Tribunal.[19] Their report, Review of the Copyright Tribunal,[20] ("the 2007 IPO Review") was published in 2007 and made 30 recommendations, which, if implemented, will require significant changes to the existing arrangements. Comments were invited on the recommendations by 31 August 2007. We expect that the Intellectual Property Office will shortly publish its conclusions on the 2007 IPO Review.

Our inquiry

8. As part of our scrutiny of the work of DIUS and the public bodies for which it has responsibility, we decided to take evidence on the work and operation of the Copyright Tribunal. We received submissions from the licensing societies, performers, authors, users of copyright and the Intellectual Property Office. We held a two-part evidence session on 28 January 2008: first with the Authors' Licensing and Collecting Society (ALCS), Phonographic Performance Limited (PPL), a collecting society, and the Libraries and Archives Copyright Alliance, users of copyright-protected material; and secondly with His Honour Judge Fysh QC SC, Chairman of the Copyright Tribunal, and three officials from the Intellectual Property Office, two of whom had been in post for a short time.[21] We are grateful to all those who contributed evidence for this inquiry.

9. Our Report examines:

a) the performance of the Copyright Tribunal, particularly its role and operation;

b) certain recommendations from the 2007 IPO Review;

c) possible arrangements to provide access for individuals and small businesses and institutions; and

d) orphan works.

1 Q 93 Back

2 "About the Copyright Tribunal", Intellectual Property Office website, www.ipo.gov.uk/ctribunal/ctribunal-about.htm Back

3 "About the Copyright Tribunal", Intellectual Property Office website, www.ipo.gov.uk/ctribunal/ctribunal-about.htm; The Copyright Tribunal also has the power to decide some matters referred to it by the Secretary of State for Innovation, Universities and Skills and other matters even though collecting societies are not involved. For example, it can settle disputes over the royalties payable by publishers of television programme listings to broadcasting organisations. Back

4 Ev 29, para 19 Back

5 Ev 34, para 8 and "About the Copyright Tribunal", Intellectual Property Office website, www.ipo.gov.uk/ctribunal/ctribunal-about.htm Back