Memorandum 4
Submission from PPL and VPL
WORK AND OPERATION OF THE COPYRIGHT TRIBUNAL
PPL[5]
and VPL[6]
welcome the Innovation, Universities and Skills Select Committee's
interest in the Copyright Tribunal. In the creative economy, the
Copyright Tribunal plays a crucial role in resolving disputes
over the pricing and other terms of use of creative works.
The IP Office recently completed a thorough
Review[7]
of the workings of the Copyright Tribunal which proposes a number
of Recommendations to make the Tribunal suitable for the online
environment. We support these Recommendations, in particular the
aim of the IP Office Review to:
— Ensure that the Copyright Tribunal
is a party vs party arbiter with a balanced approach.
— Introduce the principles of the Civil
Procedure Rules (CPR) and effective case management.
— Ensure the parties can justify their
arguments and prepare a clear case for a fair Hearing.
— Provide the Copyright Tribunal with
the resource and independence appropriate to the new creative
economy.
We urge the Government to accept and implement
the Recommendations of the IP Office Review. In addition, we make
one further recommendation:
— The Copyright Tribunal should be
administered by the Department of Constitutional Affairs, just
like any other party vs party court.
A. A BALANCED
APPROACH
1. The key feature of the Copyright Tribunal
has been its adversarial approach to resolving disputes between
parties. This is in our view the best procedure for determining
tariffs and operating conditions, which should reflect the market
conditions.
2. The IP Office Review concurred with this
approach and made a number of recommendations to apply this to
the Copyright Tribunal. Those Recommendations are[8]:
Recommendations of the IP Office Review
(1) The CT[9]
should be balanced and have no disposition in favour of one side
or the other. (4.11)
(25) Licensing bodies should be able
to make references to the CT under sections 118 and 125 of the
CDPA. (9.7)
(26) The provisions of sections 128A
and 128B of the CDPA should be reviewed. (10.9)
(27) Whether there should be a reference
to the CT under section 128(A) of the CDPA should be determined
by the chairman of the CT. (10.11)
(30) The collecting societies should
be referred to as licensing societies. (13.4)
3. We agree with these Recommendations.
We would expect any review of sections 128A and 128B (Recommendation
26) to propose repealing these sections as they change the nature
of the Copyright Tribunal and were introduced into law with no
apparent justification.
B. CASE MANAGEMENT
4. The Copyright Tribunal Rules are set
out in a Statutory Instrument[10],
supplemented by practice directions issued by the Copyright Tribunal.
5. The current rules do need to be amended.
Many of the rules are derived from the Arbitrations Act 1950,
which causes confusion as that statute has been repealed. Furthermore,
there are no provisions in these rules for some of the jurisdictions
given to the Copyright Tribunal following amendments to the 1988
Act. Overall, they fall behind modern standards of case management
set by the Civil Procedure Rules.
6. The IP Office Review investigated the
processes and procedures of the Copyright Tribunal in some depth,
going through all previous Hearings and Rulings. In addition to
their general Recommendation that the Copyright Tribunal should
follow Civil Procedure Rules (CPR), they propose a number of specific
changes to improve case management.
Recommendations of the IP Office Review
(2) The Copyright Tribunal Rules 1989
should be repealed and the proceedings of the CT governed by the
CPR and practice directions. (7.12)
(3) There should be one standard form
for all references to the CT. (7.14)
(4) The fees of the CT should be abolished.
(7.16)
(7) The CT (with the extra resources
mentioned in recommendation 18) should take an active part in
formulating methodologies for the objectification of the criteria
for the conditions of a licensing scheme or licence. (7.29)
(8) Once an application has been made
to the CT the case should be allocated to the chairman or deputy
chairman, who should be responsible for all aspects of the case
from thence forward. (7.32)
(9) Once the counterstatement has been
received a case management conference (cmc) should be called as
soon as possible to direct the management of the case. (7.33)
(13) If a hearing is to take place it
should be the subject of a strict timetable. (7.37)
(15) The CT should set a target for
the completion of all cases, from receipt of application, to issue
of decision. (7.41)
(16) Alternative Dispute Resolution
(ADR) should be used when appropriate, there should be no compulsion
to use it. (7.42)
(28) There should not be any change
in the basis for appeal from a decision of the CT. (11.6)
7. We agree, subject to Recommendation 7
applying to the approach the Tribunal expects to take at a case
management conference (rather than an interventionist role in
licensing schemes not referred to the Tribunal).
C. FAIR HEARING
8. The Copyright Tribunal has often appeared
to make a number of presumptions that mitigate against a fair
hearing. Collective licensing societies are often perceived as
large and powerful, while users are portrayed as small organisations
with little bargaining power. The reality is usually the reverse.
In most of the cases heard by the Tribunal, the user has been
significantly larger and more powerful than the collective licensing
society. Furthermore, in some cases, the copyright user has been
given the benefit of the doubt in the treatment of evidence which
on closer examination proves inaccurate.
9. The IP Office Review considered the treatment
of the parties in Tribunal cases and made a number of Recommendations
to ensure a fair hearing.
Recommendations of the IP Office Review
(5) The reasoning behind licence schemes
and tariffs should be clearly shown. (7.22)
(6) A challenge to the terms of a licence
should be based on fact. (7.23)
(10) The CT should ask for particular
questions to be answered in the evidence. (7.34)
(11) The CT should put clear limitations
on the type and quantity of the evidence that is submitted. (7.34)
(12) The emphasis should be on written
rather than oral evidence. (7.35)
(14) Expert evidence should only be
allowed if strictly necessary. If there is expert evidence it
should be by a single, joint expert. (7.39)
10. We agree, subject to the appointment
of a single, joint expert being at the discretion of the President,
and not a requirement in all cases.
D. RESOURCING
THE COPYRIGHT
TRIBUNAL
11. The creative economy is now some 8%
of GDP. Although the Tribunal handles relatively few cases, individual
Rulings can impact licensing arrangements worth hundreds of millions
of pounds. If it is to carry out its task effectively, the Tribunal
needs the resource to be able handle cases efficiently and it
should have the expertise to understand the commercial value of
copyright.
12. The IP Office Review identified that
the Tribunal is currently under-resourced, both in staffing and
in availability of Chairmen and others to sit. The IP Office Review's
Recommendations on resourcing and expertise were:
Recommendations of the IP Office Review
(17) The staff of the CT should be based
in London and the UK Intellectual Property Office should supply
the necessary accommodation. (8.10)
(18) There should be a permanent staff
of two who will report directly to the chairman of the CT. (8.21)
(19) There should be no restriction
on the number of deputy chairmen. (8.23)
(20) The lay members should be abolished.
(8.32)
(21) The head of the CT should be called
the President. (8.34)
(22) The position of president/chairman
should be salaried and an open recruitment exercise held for the
appointment of the first and future presidents. (8.38)
(23) An annual budget for the CT should
be set by the president/chairman in conjunction with the UK Intellectual
Property Office (8.39)
(24) The CT should be responsible for
all content on its own website but the UK Intellectual Property
Office should manage and administer the site for the CT. (8.42)
13. We agree with these Recommendations.
E. ORPHAN WORKS
14. There is one remaining Recommendation
from the IP Office Review, relating to orphan works.
Recommendation of the IP Office Review
(29) The CT should be responsible for
granting licences for the use of orphan works. (12.8)
15. As the music industry has captured the
vast majority of its catalogue in PPL's database CatCo (which
contains metadata, including ownership, of 9m tracks), it is unlikely
there would be too many orphan work requests in relation to sound
recordings.
16. We support this Recommendation. However,
we would caution against giving the Copyright Tribunal additional
responsibilities until it is properly resourced.
F. THE COPYRIGHT
TRIBUNAL'S
PLACE IN
THE JUDICIAL
SYSTEM
17. As a body set up to resolve disputes
between parties, the Copyright Tribunal is similar to a Court,
but with a specific remit. Like a court, it should therefore be
independent of Government and, in particular, the policy-making
departments which relate to copyright.
18. One of the key findings of the Leggatt
Review of Tribunals[11]
was that the Copyright Tribunal should move to the Lord Chancellor's
department (now the Department for Constitutional Affairs). Sir
Andrew Leggatt recommended that "the administration of tribunals
should become the responsibility of the Lord Chancellor".
He noted that the Copyright Tribunal was a party vs party system,
more like a court, whereas most tribunals are citizen vs state.
This recommendation was accepted by the Lord Chancellor in 2003
but has yet to be implemented.
19. We support this recommendation that
the Copyright Tribunal should be administered by the Department
for Constitutional Affairs.
January 2008
APPENDIX A
IP OFFICE REVIEW OF THE COPYRIGHT TRIBUNAL
SUMMARY OF RECOMMENDATIONS
(1) The CT should be balanced and have no
disposition in favour of one side or the other. (4.11)
(2) The Copyright Tribunal Rules 1989 should
be repealed and the proceedings of the CT governed by the CPR
and practice directions. (7.12)
(3) There should be one standard form for
all references to the CT. (7.14)
(4) The fees of the CT should be abolished.
(7.16)
(5) The reasoning behind licence schemes
and tariffs should be clearly shown. (7.22)
(6) A challenge to the terms of a licence
should be based on fact. (7.23)
(7) The CT (with the extra resources mentioned
in recommendation 18) should take an active part in formulating
methodologies for the objectification of the criteria for the
conditions of a licensing scheme or licence. (7.29)
(8) Once an application has been made to
the CT the case should be allocated to the chairman or deputy
chairman, who should be responsible for all aspects of the case
from thence forward. (7.32)
(9) Once the counterstatement has been received
a case management conference (cmc) should be called as soon as
possible to direct the management of the case. (7.33)
(10) The CT should ask for particular questions
to be answered in the evidence. (7.34)
(11) The CT should put clear limitations
on the type and quantity of the evidence that is submitted. (7.34)
(12) The emphasis should be on written rather
than oral evidence. (7.35)
(13) If a hearing is to take place it should
be the subject of a strict timetable. (7.37)
(14) Expert evidence should only be allowed
if strictly necessary. If there is expert evidence it should be
by a single, joint expert. (7.39)
(15) The CT should set a target for the
completion of all cases, from receipt of application, to issue
of decision. (7.41)
(16) Alternative Dispute Resolution (ADR)
should be used when appropriate, there should be no compulsion
to use it. (7.42)
(17) The staff of the CT should be based
in London and the UK Intellectual Property
Office should supply the necessary accommodation.
(8.10)
(18) There should be a permanent staff of
two who will report directly to the chairman of the CT. (8.21)
(19) There should be no restriction on the
number of deputy chairmen. (8.23)
(20) The lay members should be abolished.
(8.32)
(21) The head of the CT should be called
the President. (8.34)
(22) The position of president/chairman
should be salaried and an open recruitment exercise held for the
appointment of the first and future presidents. (8.38)
(23) An annual budget for the CT should
be set by the president/chairman in conjunction with the UK Intellectual
Property Office (8.39)
(24) The CT should be responsible for all
content on its own website but the UK Intellectual Property Office
should manage and administer the site for the CT. (8.42)
(25) Licensing bodies should be able to
make references to the CT under sections 118 and 125 of the CDPA.
(9.7)
(26) The provisions of sections 128A and
128B of the CDPA should be reviewed. (10.9)
(27) Whether there should be a reference
to the CT under section 128(A) of the CDPA should be determined
by the chairman of the CT. (10.11)
(28) There should not be any change in the
basis for appeal from a decision of the CT. (11.6)
(29) The CT should be responsible for granting
licences for the use of orphan works. (12.8)
(30) The collecting societies should be
referred to as licensing societies. (13.4)
APPENDIX B
BRIEFING NOTE ON PPL AND VPL
PPL FACTS AND
FIGURES
— Licenses on behalf of 3,500 record
companies and 47,000 performers.
— Licenses 200 TV channels and 300
radio stations broadcasting recorded music, as well as over 200,000
pubs, nightclubs, restaurants, shops and other places playing
recorded music in public.
— Has negotiated bilateral agreements
with 30 other licensing societies to collect overseas airplay
royalties.
— Collected £97.9 million in airplay
royalties for performers and record companies in 2006.
— Distributes revenue using a comprehensive
track-based system—analysing over 17m uses of recorded music
reported by TV and radio stations, background music suppliers
and venues playing recorded music in public. All track plays are
matched to PPL's repertoire database CatCo, containing information
on 9m tracks.
— Distributes to all the performers—featured
artists, session musicians and backing vocalists—as well
as the record companies that create the sound recordings that
are played.
— Is the largest performer/producer
collective licensing society in the world.
PPL RECENT ACHIEVEMENTS
— In 2006, achieved a 12% growth in
net revenue for the rightholders.
— In the last five years, has increased
net revenue by 50%, generating an additional £28 million
payable to record companies and performers, and almost halved
the cost/revenue ratio.
— In 2005, PPL's CatCo was selected
as the database underpinning the official combined download and
singles chart.
— Signed the IFPI Simulcast Agreement
in 2002 and the Webcast Agreement in 2003 paving the way for multi-territorial
licences.
PPL AND PERFORMERS
— In 2006, merged with AURA and PAMRA
and restructured to bring performers into PPL, for the first time
in its 73 year history. Created four Performer Directors, five
Performer Guardians and established the Performer Board to oversee
performer interests.
VPL FACTS AND
FIGURES
— Represents 1,000 music video producers.
— Licenses 60 TV channels broadcasting
music videos, including 25 specialist music channels.
— Licenses around 2,000 pubs, nightclubs
and other places playing music videos in public.
— Collected £12.4 million in airplay
royalties for music video producers in 2006.
— Analyses usage information from TV
stations and background music services for distribution to rightholders.
— Offers a sourcing service, Music
Mall, for back catalogue video clips and other footage.
— Is the largest music video collective
licensing society in the world.
VPL RECENT ACHIEVEMENTS
— Recently concluded a licence with
MTV on behalf of independent companies throughout Europe.
— In 2003, integrated management operations
with PPL resulting in cost efficiencies to rightholders.
— Concluded licence arrangements for
new video on demand services, such as Home Choice, NTL and Telewest,
and the new store forward and narrowcast services.
— Announced a video digitisation project
to provide online delivery of music videos to users.
5 PPL is the UK licensing society for 47,000 performers
and 3,500 record companies. Back
6
VPL is the UK licensing society for 1,000 music video producers. Back
7
Review of the Copyright Tribunal, IP Office, 2007. Back
8
The original numbering has been preserved for ease of cross-reference.
The complete list of Recommendations in the IP Office Review is
reproduced in Appendix A. Back
9
CT = Copyright Tribunal. Back
10
1989 SI No 1129, as amended by 1991 SI No 201 and 1992 SI No 4667. Back
11
Tribunals for Users-One System, One Service: Report of the
Review of Tribunals, Sir Andrew Leggatt, 2001. Back
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