Memorandum 18
Submission from British Sky Broadcasting
BACKGROUND
British Sky Broadcasting LTD ("Sky")
is a broadcaster and provider of audiovisual content services
to consumers in the UK and republic of Ireland. Sky distributes
audiovisual content via a variety of platforms, including digital
satellite, cable, and digital terrestrial television, as well
as online and via other new media platforms.
Sky's audiovisual content services include in-house,
commissioned and acquired programmes, all of which contain copyright
works. Sky has negotiated a number of licences from licensing
Bodies (as defined by the Copyright, Designs and Patents Act 1988,
("Act")) relating to music. The relevant licences permitting
exploitation of those sound recordings and musical works within
programmes are acquired principally from the MCPS and PRS (the
Alliance) for use across all Sky's audiovisual content services,
irrespective of the means of distribution. The use of sound recordings
and music videos in Sky's content is mainly licensed vis PPL and
VPL.
In 1997, Sky and Sky television plc were applicants
on a matter in the Copyright Tribunal and The Performing Rights
Society Limited were the respondents.
EXECUTIVE SUMMARY
1. The Civil Procedure Rules should govern
the proceedings of the Copyright Tribunal, subject to (2).
2. Licensees should continue to be able
to appoint their own experts to give evidence in any challenge
to a licensing scheme.
3. Licensees should not be required to provide
actuarial figures and projections as part of their evidence.
4. The Copyright Tribunal should not take
an active part in formulating criteria for conditions for licensing
schemes or licenses.
5. Licensing Bodies should not be able to
make references to the Copyright Tribunal.
6. The Copyright Tribunal should be entitled
to consider a pan-European scheme to the extent that it has a
material effect on a UK scheme.
THE COPYRIGHT
TRIBUNAL
On 16 August 2007, Sky made a submission to
the Trademarks Directorate as part of the Review of the Copyright
Tribunal. This letter sets out similar issue to that submission.
1. Civil Procedure rules ("CPR")
As recommended by the Review (recommendations
2 and 3), we consider that the Copyright Tribunal's proceedings
should be governed by the CPR and practice directions and that
there should be one standard form for all references to the Copyright
Tribunal.
The recommendations for case management in the
review of the copyright tribunal (recommendations 8, 9 and 15)
are sensible as proper case management should ensure that proceedings
are subject to tighter control.
2. EXPERT EVIDENCE
In its recent decision on the Joint Online Licence
(CT84-90/05), the Copyright Tribunal refers to "the overkill
on expert evidence" and was critical about the disproportionate
amount spent by the parties on fees for the experts.
Recommendation 14 of the Review of the Copyright
tribunal provides that expert evidence should only be allowed
when "strictly necessary" and where necessary the parties
should appoint a single, joint expert. In our view, expert evidence
can be crucial in making as compelling and comprehensive a case
as possible before the Copyright Tribunal. Whilst expert advice
might not be essential to every Tribunal case (and we agree that
a disciplined approach must be adopted so that any evidence provided
is pertinent, removing the ability for applicants and respondents
to call upon such advice and evidence could, in particularly complicated
cases, restrict the wide range of evidence we believe the Tribunal
needs in order to reach a satisfactory conclusion.
We also foresee real practical difficulties
in finding and using a single joint expert.
3. EVIDENCE BEFORE
THE TRIBUNAL
Recommendation 6 of the Review of the Copyright
Tribunal provides that challenges to the terms of a licence should
be based on fact. In the body of the Review, paragraph 7.23 provides
that a challenger should provide "actuarial figures and
projections with full disclosure of the basis for the calculations".
While Sky would be able to provide the rationale including the
business context for why Sky and the relevant licensing body of
the scheme are in dispute and/or why Sky is challenging the terms
of the licence, Sky may not necessarily be able to provide actuarial
figures and projections.
Given that tariffs and any sampling system are
generally proposed by the licensing body, there is often limited
scope for any licensee to propose a wholly alternative scheme
and/or sampling system. In these circumstances, placing such a
significant evidentiary burden on the licensee does not seem appropriate.
4. THE COPYRIGHT
TRIBUNAL'S
ROLE
Recommendation 7 of the Review of the Copyright
Tribunal suggests that the Copyright Tribunal should "take
an active part in formulating criteria for the objectification
of the criteria for the conditions of licensing schemes or licences".
We consider that the benefit of the Copyright
Tribunal is its impartial nature and that its role should be to
assist with resolving disputes and challenges to schemes only
once market-based and commercial negotiations between parties
on any licence have been completely exhausted.
However carefully controlled, the involvement
of the Copyright Tribunal in "formulating criteria"
might prejudice this role. In addition, it has not been our experience
that licensees have particular difficulty in understanding the
logic or reasoning of any licensing scheme or sampling system.
As such, the involvement of the Copyright Tribunal officials in
discussing the basis of schemes or sampling systems with Licensing
Bodies may not significantly assist the process of negotiating
between Licensing Bodies and Licensee.
5. REFERENCES
TO THE
COPYRIGHT TRIBUNAL
The Review of the Copyright Tribunal recommends
that Licensing Bodies should be able to make references to the
Copyright Tribunal in accordance with sections 118 and 125 of
the Act (recommendation 25). We disagree with this recommendation
as we do not share the view that an imbalance currently exists
because:
(a) the Licensing Bodies are de facto
monopolies; and
(b) the Licensing Bodies tend to be the contractual
party in the negotiations with licensees that propose the tariffs
and sampling system.
For these reasons the Licensing Bodies do not
need and should not be given the additional leverage or power
which the ability to make a reference to the Copyright Tribunal
would give them.
6. PAN-EUROPEAN
SCHEME
If the terms and conditions of a pan-European
licensing scheme is incorporated into a UK scheme or is used as
the rationale for a UK scheme, then Sky proposes that the Copyright
Tribunal should be entitled to consider that pan-European scheme
to the extent that it has a material effect on a UK scheme.
January 2008
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