University of Newcastle v Audio-Visual Copyright Society Ltd - [1999] ACopyT 2

COPYRIGHT TRIBUNAL OF AUSTRALIA
University of Newcastle v Audio-Visual Copyright Society Ltd [1999] ACopyT 2
COPYRIGHT TRIBUNAL – annual amount of equitable remuneration for copying under Part VA – consideration of the meaning of “equitable remuneration” – principles upon which the expression “equitable remuneration” in the Copyright Act should be construed, and the effect on its construction, if doubtful, of the Berne Convention – construction of s 153A of the Copyright Act1968 to give effect to the purpose of the legislation, legislative inadvertence being demonstrated – “broadcasts” read as “transmissions” in s 153A – effect in the assessment of equitable remuneration of a previous negotiated agreement between the parties – consideration of Audio-Visual Copyright Society Ltdv New South Wales Department of School Education (1997) 37 IPR 495 – discussion of the indexation of remuneration assessed – relationship between equitable remuneration and the extent and nature of the copying done – “judicial estimation” – discussion of the special position of schools as compared with universities – effect of production of copies not really required but kept because of a failure to implement properly the “preview” system for which the Act provides – weight to be given to the growth of copying in universities – whether a rate can be assessed per student which is detached from any measure of the copying actually done – effect of characterising remuneration as “super-profit” – effect of financial stringency affecting universities – proposition that copyright owners are not obliged to subsidize universities – reference to the question of discount for bulk – effect of some uses of copies amounting to “fair dealing”.
Copyright Act 1968 (Cwth), ss 103A, 103C, 135A, 135E, 135F, 135G, 135H, 135J, 135K, 135P, 149, 149A, 150, 152, 153, 153A, 153C
Copyright Act 1911 (UK), s 19
Copyright Act 1956 (UK), s 8
Copyright, Designs and Patents Act 1988 (UK), s 140, Chap VII
Berne Convention, Articles 9, 10, 11bis
Copyright Tribunal (Procedure) Regulations, reg 25A
Copyright Agency Limited v University of Adelaide [1999] ACopyT 1
Audio-Visual Copyright Society Ltd v New South Wales Department of School Education (1997) 37 IPR 495
Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5
Hall v Jones (1942) 42 SR(NSW) 203
Cooper Brookes (Wollongong) Proprietary Ltd v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297
Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292
Regina v Minister of Housing and Local Government. Ex parte Finchley Borough Council [1955] 1 WLR 29
D & R Henderson (Mfg) v Collector of Customs for New South Wales (1974) 48 ALJR 132
Phonographic Performance Company of Australia Ltd v Federation of Australian Commercial Television Stations (1998) 154 ALR 211
Reference by Australasian Performing Right Association Ltd; Re Australian Broadcasting Corporation (1985) 5 IPR 449
UNIVERSITY OF NEWCASTLE & ORS v AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
CT 3 of 1997
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED v AUSTRALIAN CATHOLIC UNIVERSITY & ORS
CT 5 of 1997
Burchett P
12 March 1999
Sydney

COMMONWEALTH OF AUSTRALIA
COPYRIGHT ACT 1968

IN THE COPYRIGHT TRIBUNAL

CT 3 of 1997
BETWEEN
THE UNIVERSITY OF NEWCASTLE AND ORS
Applicants

AND:
CT 5 of 1997
BETWEEN:
AND:

AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
Respondent

AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
Applicant

AUSTRALIAN CATHOLIC UNIVERSITY AND ORS
Respondents

TRIBUNAL:

BURCHETT P

PLACE:

SYDNEY

DATE:

12 MARCH 1999

THE TRIBUNAL DIRECTS THAT:
The respondent in CT 3 of 1997 and applicant in CT 5 of 1997 bring in, on a date to be fixed, short minutes of orders to give effect to the decision of the Tribunal.

COMMONWEALTH OF AUSTRALIA
COPYRIGHT ACT 1968

IN THE COPYRIGHT TRIBUNAL

CT 3 of 1997
BETWEEN
THE UNIVERSITY OF NEWCASTLE AND ORS
Applicants

AND:
CT 5 of 1997
BETWEEN:
AND:

AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
Respondent

AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
Applicant

AUSTRALIAN CATHOLIC UNIVERSITY AND ORS
Respondents

TRIBUNAL:

BURCHETT P

PLACE:

SYDNEY

DATE:

REASONS FOR DECISION
BURCHETT P

In these matters, the Copyright Tribunal has the task of determining the amount of “equitable remuneration”, in accordance with s 135J of the Copyright Act 1968 (the Act), payable by over thirty Australian universities to Audio-Visual Copyright Society Limited, operating under the name of, and commonly known as, Screenrights, as the collecting society declared by the Attorney-General under s 135P. The equitable remuneration to be determined relates, for a period until the coming into effect on 30 July 1998 of amendments made by the Copyright Amendment Act (No. 1) 1998, to broadcasts (defined in s 135A to refer to sound or television broadcasts) copied by the universities; and is to be assessed in respect of that period, pursuant to s 135J in the form it took before the amendments, as an “annual amount per student of the institution concerned”. After the amendments made by the amending Act in 1998, it became permissible to assess equitable remuneration, in respect of the universities’ further copying, simply as an “annual amount”, not necessarily per student, and the range of copying covered by the relevant provisions of the Act was enlarged.
Before outlining the way in which the issues to be decided have come to be brought before the Tribunal, I shall refer briefly to the principal provisions of the Act under which those issues arise, and by which universities (as well as some other institutions) are given what is often called a statutory licence to copy. By s 135E, it is provided that the copyright in a broadcast (before 30 July 1998), or in a transmission, which may be a broadcast or a transmission to subscribers to a diffusion service (from 30 July 1998), or in any work, sound recording or cinematograph film included in a broadcast or in a transmission (depending on the date) is not infringed by the making of certain copies. The copies covered by s 135E include a copy made by, or on behalf of, a body administering an educational institution if the copy is made solely for its educational purposes or those of another educational institution; if a remuneration notice is in force; and if the requirements of s 135K (which is concerned with the identification of copies) are complied with. Section 135G provides for the giving of remuneration notices, in writing, by which the administering body of, for example, a university, may “undertake to pay equitable remuneration … for copies of [broadcasts or transmissions as the case may be] … being copies made while the notice is in force.” Such a remuneration notice is required to specify whether the amount of equitable remuneration is to be assessed on the basis of a records system or a sampling system. It should be noted that provision is made by s 135F for the special case of the making of preview copies, which must be destroyed within fourteen days unless retained as copies under s 135E. Section 135H then provides for the consequences of the service of a records notice, and s 135J for those of the service of a sampling notice. As sampling notices are in question in the present matters, it is convenient to set out s 135J, omitting sub-s (5) which is concerned with non-compliance:
“(1)Where a sampling notice is given by, or on behalf of, an administering body, the amount of equitable remuneration payable to the collecting society by the administering body for copies of transmissions made by it, or on its behalf, while the notice is in force is such annual amount as is determined by agreement between the administering body and the collecting society or, failing such agreement, by the Copyright Tribunal on application made by either of them.
(1A)If a determination has been made by the Tribunal under subsection (1), either the administering body or the collecting society may, at any time after 12 months from the day on which the determination was made apply to the Tribunal under that subsection for a new determination of the amount of equitable remuneration payable to the collecting society by the administering body for copies of transmissions made by or on behalf of that body.
(2)The annual amount referred to in subsection (1) shall be determined (whether by agreement or by the Copyright Tribunal) having regard to the extent to which copies of transmissions are made by, or on behalf of, the administering body in a particular period and to such other matters (if any) as are relevant in the circumstances.
(3)The extent of copying of transmissions and any other matters that are necessary or convenient to be assessed by use of a sampling system, shall be assessed by use of a sampling system determined by agreement between the administering body and the collecting society or, failing such agreement, by the Copyright Tribunal on application made by either of them.
(4)For the purposes of subsection (1), different annual amounts may be determined (whether by agreement or by the Copyright Tribunal) in relation to different institutions administered by the administering body.”
I have set out this section as it now stands. Prior to 30 July 1998, the word “broadcasts” appeared wherever the word “transmissions” now appears, and in sub-s (1), after the words “such annual amount” there appeared the words “per student of the institution concerned”; also, at the end of sub-s (4), the words appeared “and different classes of students of an institution administered by it”.
The provisions to which I have referred are contained in Part VA of the Act. In Division 3 of Part VI of the Act, the part dealing with the constitution and functions of the Copyright Tribunal, s 153A provides for an application to the Tribunal under s 135H or 135J(1). Section 153A provides:
“(1)The parties to an application to the Tribunal under section 135H or subsection 135J(1) for the determination of the amount of equitable remuneration payable to the collecting society by an administering body for the making, by or on behalf of that body, of a copy of a broadcast are the society and the body.
(2)Where an application is made to the Tribunal under section 135H or subsection 135J(1), the Tribunal shall consider the application and, after giving the parties to the application the opportunity of presenting their cases, shall make an order determining the amount that it considers to be equitable remuneration for the making of copies of broadcasts.
(3) In making an order, the Tribunal:
(a)shall have regard to the extent to which copies of broadcasts are made by, or on behalf of, the administering body solely for the purpose of enabling the material included in the broadcasts to be heard, or seen and heard, as the case may be, at times more convenient than the times when the broadcasts were made; and
(b)may have regard to such other matters (if any) as are prescribed.
(4)An order may be expressed to have effect in relation to copies of broadcasts made in reliance on section 135E before the day on which the order is made.
(5)In this section, administering body, broadcast, collecting society and institution have the same meanings as in Part VA.”
Prior to 30 July 1998, in sub-s (1) the expression “television broadcast” appeared where the word “broadcast” now appears; in sub-ss (2) and (3)(a) the expression “television broadcasts” appeared where the word “broadcasts” now appears; and in sub-s (5) there was a reference to the word “student” as having the same meaning as in Part VA, but no reference to the meaning of “broadcast”. It will be apparent that the amending Act produced a disconformity between the terms of Part VA, which (as amended) referred to transmissions, and s 153A, which (as amended) referred to broadcasts. The confusion is highlighted by the addition to s 153A(5) of the word “broadcast”, as having the same meaning as in Part VA, at the very time that the definition of “broadcast” was removed from the interpretation section of Part VA, s135A. It seems obvious, and counsel were agreed, that a blunder occurred when s 153A was amended, and that the intention was to keep it congruous with Part VA. This intention was carried out in so far as the provision in sub-s (2) for the making of an order “determining the amount that [the Tribunal] considers to be equitable remuneration” was substituted for the more restrictive previous provision for the making of “an order determining the amount per copy or per student of the relevant institution, as the case may be, that [the Tribunal] considers to be equitable remuneration”; and in so far as the definition of “student” was removed from sub-s (5). The language of sub-s (3)(a) was also widened and clarified by the substitution of the words “broadcasts to be heard, or seen and heard, as the case may be” for the previous expression “broadcasts to be seen and heard”. It may be that the problems with s 153A can be avoided by referring the relevant powers of the Tribunal to s 135J alone. The language of s 135J(1A), which refers to “a determination … made by the Tribunal under subsection (1)”, does suggest that s 135J is itself a source of the Tribunal’s power. However, there is a more complete solution.
Using characteristically sardonic language, Jordan CJ said in Hall v Jones (1942) 42 SR(NSW) 203 at 208 that “a Court is entitled to pay the Legislature the not excessive compliment of assuming that it intended to enact sense and not nonsense”. Section 153A, as a provision dealing with the exercise by the Tribunal of the powers conferred by s 135H and s 135J(1) would make nonsense if it were intended to confer powers only in respect of a form of copying to which neither section any longer makes reference; and if, by way of adding a cap with bells, it were intended to refer to the definition in Part VA of “broadcast”, as its only true subject, when Part VA is now concerned with a transmission, and no longer defines or refers to a broadcast. The decision of the High Court in Cooper Brookes (Wollongong) Proprietary Ltd v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 makes it clear that where the operation of a statute, if it were read literally, would be absurd or capricious, or where, in less colourful language, it may be said “for good reason” that “the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions”, the court may attribute to the statute a fairer and more convenient operation so long as it conforms to the legislative intention. In Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 at 302, McHugh J said:
“To give effect to the purpose of the legislation, a court may read words into a legislative provision if by inadvertence Parliament has failed to deal with an eventuality required to be dealt with if the purpose of the Act is to be achieved.
In Tokyo Mart Pty Ltd v Campbell (1988) 15 NSWLR 275 this Court applied the principles formulated by Lord Diplock in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-106 concerning the circumstances in which a court may read words into a legislative provision to give effect to its purpose. Lord Diplock said that a court may read words into a statutory provision when three conditions are fulfilled. First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.”
I am in no doubt that Parliament intended s 153A to embrace the amended provisions of s 135H and s 135J(1) so as to implement those provisions in respect of their subject, transmissions, and not merely their previous (now replaced) subject, broadcasts. So the relevant purpose of Parliament is known; the inadvertence is obvious; and there is certainty that the words “transmission” and “transmissions” would have been inserted in s 153A, but for the inadvertence, where the words “broadcast” and “broadcasts” now appear. I construe s 153A accordingly.
Well before the enactment of the Copyright Amendment Act1989, by which Part VA was originally introduced into the Copyright Act 1968, together with s 153A, discussions took place between representatives of the interests of copyright owners and of universities with a view to the establishment of a proper basis for appropriately remunerated copying of television and radio broadcasts. As negotiations got under way, they involved the Australian Vice-Chancellors’ Committee (AVCC), a corporation the members of which are vice-chancellors of universities, and a Copyright Interests Committee from which Screenrights took over in 1990, after its incorporation. It would be unnecessary and tedious to recount in detail the various proposals which the parties explored. The evidence makes it clear that neither side was able to determine rates, to be applied in the calculation of remuneration, on the basis of any existing market that could be regarded as fully comparable. There was no such market. There was a commercially unsuccessful licensing scheme for off-air copying in Australia, operated by an entity known as Video Licensing Centre, and there was a market for the sale of video cassettes to educational institutions, which catered for only a tiny proportion of the broadcast programs that would be available for copying by universities. Also, video cassettes were sold on terms that did not permit the making of further copies or the manipulations which could be involved when universities copied broadcasts in reliance on the statutory licence. On the other hand, the price of a video cassette covers more than the licence given upon its sale.
Ultimately, the parties had to come to grips with the problem by negotiation, or alternatively, equitable remuneration would have had to be fixed by the Copyright Tribunal. Negotiation was pursued. After a series of proposals and counter-proposals, on 12 January 1990, Miss Bridge, who became from its incorporation the Chief Executive Officer of Screenrights, put a proposal to the AVCC which divided copying of television programs into three categories – A, B and C – and dealt with copying of radio programs separately. Category A was a special category, designed to cover some programs specifically made for the educational market, which in practice fell into disuse, but Categories B and C continued to be reflected in arrangements that persisted until 31 December 1997. For Category B, Miss Bridge proposed $2.50 per minute, and for Category C seventy-five cents per minute. For radio, she proposed $2.50 per quarter hour or part thereof. Mr Mullarvey, the Deputy Executive Director of the AVCC, understood this offer to be made on a take-it-or-leave-it basis; but I am satisfied that in this respect he was in error. However, it does not matter; Screenrights is entitled to point to the ensuing agreement as the result of prolonged negotiation, which, whatever the imperfections of the sources of information available to the parties, represented their commercial judgment as to the appropriate rates. At the same time, the conclusion of such an agreement, though important, is by no means conclusive.
On 11 May 1990, the formal agreement was entered into between the AVCC, another corporation the members of which were directors and principals of Higher Education Institutions, and Screenrights, which was intended to provide for the reproduction in any manner of the whole or part of television or radio broadcasts including works, cinematograph films and sound recordings, during a period of four years beginning on 1 January 1990 and ending on 31 December 1993. This agreement contemplated the subsequent execution by individual universities of what were called Collection Scheme Agreements, to be in a particular form, which would provide for remuneration on the basis that had been agreed. In the form of Collection Scheme Agreement, Category C programs were defined, for the purposes of remuneration rates for the copying of television broadcasts, to mean programs “classified by [Screenrights] as being one of the following: -
- news
- current affairs (magazine)
- series
- serials
- light entertainment
- sports programs
- advertisements”
and Category B programs were defined to mean those other than Category A or Category C. As I have said, Category A fell into disuse in practice, so that Category B came to represent programs other than those in Category C. Provision was made for indexation of the amount of remuneration for years subsequent to the first. Special provision was also made for past copying back to 1 January 1984.

Collection Scheme Agreements were entered into with universities during the year 1990. These agreements were on the basis of record-keeping.
The purpose of the division between Category B and Category C programs, and the justification for the considerable difference in the rates payable for these categories, was to reflect the distinction between programs of an essentially ephemeral nature (Category C) and those having a more lasting value. Counsel for the universities criticized it as arbitrary, but there was agreement between the expert representatives of the parties, after much anxious consideration, that some such categorisation of programs was necessary. Problems in its application did lead to some errors, but those errors have been rectified.
Following the conclusion of the agreement of 11 May 1990, the secretary of a joint copyright committee of the AVCC and the body representing the Principals and Directors of institutions of higher education not then being universities (they were known as colleges of advanced education) wrote a memorandum, dated 6 August 1990, to Vice-Chancellors, Principals and Directors, which stated the committee “believed that the rates agreed were most acceptable being comparable or significantly lower than the rates applying for similar commercially available materials.”
During the operation of the 1990 agreements, problems were encountered by the universities in the keeping of records and the submission of returns, and discussions began between Screenrights and the AVCC about the possibility of substituting a sampling system. From the beginning, a sampling system was operating, by virtue of a special agreement, in relation to Monash University. It showed significantly higher levels of copying than those reported by other universities. Screenrights came to think that the records kept at other universities were deficient, and that serious under-reporting was occurring. Although Mr Mullarvey disputes this, on all the evidence I am satisfied that the complaints made by Screenrights were understood by the Vice-Chancellors to be justified. I am also satisfied that they were justified.
Notwithstanding Screenrights’ concerns, the 1990 agreements, on the basis of record-keeping, continued in operation until the expiry of their term on 31 December 1993.
During 1993, Screenrights and the AVCC negotiated both on the question whether there should be new agreements on the basis of a sampling system and on the question whether equitable remuneration should be assessed at an amount per student. At the end of 1992, Screenrights had proposed a rate of $1.51 per EFTSU (that is, equivalent full-time student, a statistical concept representing the load on a university of one full-time student, which I attempted to explain in Copyright Agency Limited v University of Adelaide [1999] ACopyT 1). On the issue of sampling, Screenrights took the view that the establishment of short periods during which copying would be required to be reported for the purposes of a sample, preceded by an appropriate training program, would be likely to achieve better compliance with the obligation to report copying. On the other hand, the AVCC took the view that the absence of a requirement to keep a record, except during sampling, would lead to an increase in the amount of copying done. This would swallow up any saving on administrative costs. However, ultimately, the AVCC decided to endorse the principle put forward by Screenrights, while warning universities of the possible consequences.
On 20 December 1993, an agreement was concluded between Screenrights and the AVCC, pursuant to which new Sampling Collection Scheme Agreements were entered into with all the universities, covering the period from 1 January 1994 to 31 December 1997. There was alternative provision for universities to opt to enter into fresh agreements on a record-keeping basis, but in the event all universities chose the sampling basis. Similarly, there was provision for the continuance of the Sampling Collection Scheme Agreements from year to year after the end of 1997, but that provision was in the event not utilised. I shall refer to the head agreement between Screenrights and the AVCC and the agreements with the individual universities as “the 1994 agreements”. They provided for the calculation of the value of copying, on an annual basis, by the application of rates derived by indexing from the rates previously agreed, but omitting the disused special rate. The new rates were eighty-one cents per minute for ephemeral copying (designated Category N television programs – news, drama serials, sports, advertisements (other than advertisements incidentally copied), and current affairs programs) and $2.71 per minute for copying deemed to have a more lasting value (designated Category O, being all television programs not included in Category N) and $2.71 per quarter hour or part thereof for all programs copied from radio. These were the rates for the first year; indexation was to be applied to them to derive rates for subsequent years. Copying was to be assessed by a sampling system in which universities undertook by their agreements to participate, and sharp variations in the level of copying were to be smoothed out by an averaging process, taking into account more than one year’s results. There was also a division of universities into strata determined upon the basis of two years during the currency of the 1990 agreements. The object of the division of universities into strata was to provide for lower ultimate rates per student for universities which did less copying and higher rates for universities which did more copying.
During the negotiations preceding the conclusion of the 1994 agreements, the universities expressed a desire that there should be developed a mechanism (referred to as a “gateway” mechanism) to enable universities to be reclassified from one stratum to another, should that be justified. An understanding was reached that Screenrights would arrange for AGB-McNair Pty Limited (now known as A C Nielsen Pty Limited), who were to administer the sampling system, to develop such a gateway mechanism. In the event, this proved impossible, and the issue was the subject of considerable complaint by the universities. It seems to me that two aspects of the concerns felt by the parties should be recognized. In the first place, the whole idea of a system of strata was based on records which the event showed had generally not been kept properly. In the second place, the understanding in question seems never to have been sufficiently definite to be incorporated in the agreements, and in fact both the head agreement and the individual agreements with the universities contained clauses specifying that each agreement “contains the entire Agreement between the parties and supersedes any other communication or representation made in connection with the subject matter”.
From the point of view of the issues which arise for determination by the Tribunal now, it is important to note that the rates previously negotiated for the 1990 agreements were simply adopted, as adjusted by indexation, in the 1994 agreement. By the application of these rates, an annual amount per student could be derived based, subject to the averaging procedure I have mentioned, on the copying during the previous year as estimated by the sampling done over that year. As an incentive to the universities to adopt sampling, Screenrights agreed to allow a discount of 7½ per cent.
A sampling survey procedure for the implementation of the 1994 agreements was designed by AGB McNair Pty Limited, so as to include all universities at least once during the cycle of the four years being the life of the agreements. Survey reports each year estimated copying in terms of “copying units”, a measure designed to take account of the difference in rates per minute for different categories of copying. One minute of what was called the general category equalled ten copying units and one minute of the ephemeral category equalled three copying units. Fifteen minutes or part thereof of radio copying equalled ten copying units. On this basis, the estimated copying units per student amounted in 1994 to 33.67, in 1995 to 41.16, in 1996 to 28.44 and in 1997 to 15.66, an average over the period of four years of 29.73. A calculation from that average number would yield a fee per student of approximately $9 at the rates for which the agreements provided.
It should be understood that the sample design was devised to give a fair estimate of copying over the period within the universities. It was not intended to provide an accurate estimate of the copying within any one university, or of the copying in any one year. The averaging procedure, though its prime purpose was to avoid sharp fluctuations in the amounts universities would have to pay, was also a recognition of this aspect of the sampling agreements. I am satisfied that A G Nielsen Pty Limited carried out their task competently, and that a suggestion made by the universities of partisanship on their part should be rejected. It was not borne out by the evidence.
The room for imprecision inherent in the design of the sample could not, however, account for the great disparity between the results of sampling in the year 1994, the first year of the sampling agreements, and the copying reported during the preceding three years under the record-keeping system. Notwithstanding the implications of this discrepancy, Screenrights agreed to extend the averaging principle, for which the agreements provided, so as to average the much higher 1994 sampling results with the 1993 record-keeping results, in order to reduce substantially the sudden increase in the amounts payable by way of equitable remuneration by the universities for the year 1995.
The sampling results in 1995 again showed significant levels of copying, and led to litigation instituted in the Federal Court by the AVCC against Screenrights in 1996. The court case was resolved by a settlement agreement dated 20 November 1996, which varied the method of calculating the equitable remuneration for 1997, and would have varied it for 1998, had the agreements been extended, so as to provide that the per EFTSU rate would have been the average of the previous two years’ sample rate and $8.67, and for 1999 and beyond the average of the relevant annual per EFTSU rate and the previous two years’ sample rates. Otherwise, the settlement agreement did not alter the copying rates for which, subject to indexation, the 1990 and 1994 agreements had provided. It did eliminate strata, combining all universities into one group. Pursuant to the settlement agreement, the amount payable per EFTSU for 1997, before discount or averaging, was $8.67 for all universities.
On 25 September 1997, the universities, probably unnecessarily, gave notice of termination of the 1994 agreements, to be effective on 31 December 1997, the date when, by their terms, those agreements were anyway due to expire.
On 18 December 1997, each of the universities gave a remuneration notice to Screenrights which was a sampling notice under the provisions of Part VA, to come into effect on 1 January 1998. It is in respect of copying done in reliance on these notices that the Tribunal is required to determine equitable remuneration in the present matters.
Quite apparently, an important trigger that set off the decision of the universities not to renew the 1994 agreements, and to pursue these proceedings in the Tribunal, was the decision of the Tribunal handed down by Sheppard P on 1 May 1997 in Audio-Visual Copyright Society Ltd v New South Wales Department of School Education (the “Schools Case”) (1997) 37 IPR 495. There, after providing for increasing rates of equitable remuneration over the preceding three years, Sheppard P determined a rate of $2.60 per student, to be indexed in accordance with the Consumer Price Index. By the expression “per student”, his Honour meant to refer to a student “actually or notionally full-time”, ie, the school equivalent of an EFTSU. The disparity between $2.60 per student payable by the New South Wales Department of School Education and the amount per student payable by the universities, as calculated pursuant to the 1994 agreements, even as adjusted by the settlement agreement, plainly disturbed the AVCC and the universities. By virtue of the settlement agreement, the amount payable by the universities per student for the year 1997 was $8.67 before the application of any discount or averaging with prior years.
It is therefore appropriate to turn to the Schools Case, and to examine its implications. The Schools Case was concerned with the copying of television broadcasts by schools for their educational purposes. There had been agreements between Screenrights and educational authorities, made in 1990, pursuant to which equitable remuneration was fixed for copying in schools at rates which increased to $1.00 per student for the financial year commencing 1 July 1993. These agreements were terminated by Screenrights as from 30 June 1994. It claimed that the rates negotiated with the universities provided guidance as to the rate which should be applied to the schools. But Sheppard P referred (at 502) to the “vast disparity between the university rates and the school rates”. He said the university rates “would have yielded figures of well over $20 per student, an increase of 20 or 25 times over the rate of $1 or so which applied in relation to the schools up to the end of 1994.” Doubtless in recognition of the size of the difference, counsel for Screenrights, in the Schools Case, restricted their claim by the allowance of discounts, although they still claimed very great increases. In negotiations prior to the hearing before Sheppard P, Screenrights offered a scale of increasing remuneration per student, year by year up to 1999, culminating in a figure of $2.50 per student in that year. This offer, which was not without prejudice, appears to have been very close to a basis of settlement on which the school authorities would have agreed.
Sheppard P referred to the principles he had discussed in Copyright Agency Ltd v Department of Education of New South Wales (1985) 4 IPR 5, to which I also subsequently referred in Copyright Agency Limited v University of Adelaide. His Honour then said (at 507) he had held “that the preferred approach was to see first of all whether there was a normal rate of profit or royalty”; and continued:
“If the circumstances were comparable, this would establish a going rate which was the best guide to what the parties themselves would have agreed upon if they were treated notionally as a willing, but not anxious, licensor and a willing, but not anxious, licensee. In cases where the evidence did not disclose a going rate of profit or royalty, it might nevertheless be possible to approach the matter upon the basis of a hypothetical bargain. There might be evidence which would enable the court or tribunal to conclude that in the circumstances of the instant case willing but not anxious parties would have arrived at a particular figure for a licence. But I said that the evidence would need to be carefully scrutinised to ensure that comparisons with other cases did not lead to a result which was artificial.
I also said … that, if the notional bargain approach were not available or thought to be fallible in the circumstances of a given case, the task became one of judicial estimation, the court or tribunal doing its best in the circumstances upon the basis of the evidence which there was. I remarked that this was always a difficult task but by no means an uncommon one. It follows that there are three stages. If there is a going rate, it will normally be applied or at least treated as providing strong guidance as to the outcome. If there is not a going rate, it may be possible to approach the matter upon the basis of a hypothetical bargain. But care has to be taken that this does not lead to an artificial result. If that approach is not thought to be helpful, one must fall back on judicial estimation and do the best one can.”
In the Schools Case, each party contended for a going rate – Screenrights for the rate then agreed with the universities, and the educational authorities for the rate of $1 previously agreed between them and Screenrights. Sheppard P concluded (at 508):
“I think that there is much to be said for the view that [the parties’] negotiations give good guidance as to the area or range in which the tribunal’s determination should fall.”
He also concluded (at 511) that the disparity between what had been earlier agreed in respect of the schools and what had been earlier agreed in respect of the universities was a result of the lack of communication between the school authorities and the AVCC. He thought that, had the rates agreed by the universities been suggested to the schools, the schools would simply have said that they were beyond their means. However, he added:
“Notwithstanding these various considerations, I do not consider that the matters to which I have referred satisfactorily explain how the disparity came about. But, whatever the reasons for the disparity, the important thing is the amount of the rates. … I am satisfied that the rates are relevant but they are by no means determinative or conclusive of what should be done.”
After referring again (at 517) to “the schools’ capacity to pay or the willingness of governments to pay”, and to “a sense of reality”, being of the view that the schools simply would not pay the rates that had been agreed by the universities, Sheppard P added (at 518):
“In any event my task is to assess equitable remuneration for copyright materials used by the schools under a compulsory licence. There is in fact no question of unwillingness to deal. The parties must deal. However difficult the task, I must fix equitable remuneration. And I must fix it, so it seems to me, not in a vacuum but in the setting and context of all the surrounding circumstances. In my opinion, it is relevant and appropriate for the tribunal to take into account realities such as the capacity and willingness of the schools to pay. Parties who were willing but not anxious to deal would clearly do so. The tribunal should not be in any different position.”
Sheppard P then stated (at 519) his conclusion that neither the agreements with the universities nor the agreements with the school authorities established any going rate, and continued (at 520):
“Is it then an appropriate case in which I should endeavour to construct a notional bargain between the parties? I do not think that course is appropriate here because I am not confident enough to construct the sort of hypothetical bargain that would need to be constructed if that course were followed. The exercise would have an undesirable artificiality about it which would make it not useful.
That leaves judicial estimation. Difficult and uncertain though that is, it is I think the only choice that I have. I must do my best, taking into account the whole of the evidence and the whole of the circumstances of the case, to reach a conclusion on what I consider to be equitable remuneration in all the circumstances. The exercise is a difficult one. It involves a large degree of uncertainty and it also involves the tribunal selecting a figure not only with which not everyone would agree but which may be only one of several figures which could reasonably be arrived at in the circumstances.”
Rejecting on the one hand (at 520) guidance from the rates agreed with the universities “other than the fact that they do suggest that the rates for schools ought to be substantially higher than they are at present”, and, on the other hand, a submission that Screenrights should be held to the one dollar per student, plus indexation, to which it had agreed in 1990, Sheppard P said (at 521):
“The 1990 rates remain in the background as relevant factors. They are more relevant than the university rates because they represent an agreed rate between [Screenrights] and the schools in relation to the very use which is in question in this case. It would be open to the tribunal to … hold [Screenrights] to the 1990 rates. But having considered the whole of the material … , I do not think that that result would be correct. I am of opinion that [Screenrights] is entitled to have an increase in the rate which was originally agreed because, on the whole of the evidence, I consider $1 per student not to represent a fair payment for what the schools take. It would not be equitable remuneration. But the difficult question is to determine what the new rate should be.”
His Honour then decided that he could index the rates payable to “enable rates which are paid to be kept in line with the real value of money”, and he fixed the rates to which I have already referred.

Some important propositions may be derived from this decision. In the first place, Sheppard P regarded the schools agreement in 1990 as “more relevant than the university rates because they represent an agreed rate between [Screenrights] and the schools in relation to the very use which is in question in this case”. By parity of reasoning, the 1990 agreements, the 1994 agreements and the settlement agreement involving the universities have a special weight in the present applications as against the decision in the Schools Case and the negotiations which preceded its hearing. At the same time, and although Sheppard P referred (at 510) to the great difference in numbers between the students in the universities sector, some 575,000, and the students in the school sector, some 3 million, and although Sheppard P also placed great weight on the question of the schools’ lack of ability to pay, the extent of the disparity between the rates he fixed for the schools and the rates previously agreed for the universities does provide a strong argument that equitable remuneration for copying in the university sector ought to be fixed in accordance with rates at least somewhat lower than those which have obtained under the 1990 and 1994 agreements.
The question of indexation should be noted. Sheppard P provided for this in the Schools Case, and I provided for it in my decision in Copyright Agency Limited v University of Adelaide, where I said (at 30) that it should be ordered “to preserve the full measure of the equitable remuneration I [had] determined”. Counsel for the universities suggested that video prices were coming down, but there are two answers to this as an argument against indexation. In the first place, the suggestion was left unsupported by any clear evidence. In the second place, the universities’ contention did not sit well with their own insistence that the prices of video cassettes, when used as some indication of the level of equitable remuneration, should be pared to their copyright component.
The decision in the Schools Case also throws light on a broader question which was debated before me. Counsel for Screenrights put the proposition that my task is to construct a notional bargain for the granting to the universities of licences to copy in accordance with Part VA. Counsel for the universities, on the other hand, contended that it would be artificial to introduce into a process of judicial estimation any such construction of a notional bargain. I think that is so, and that in the passages I have cited, Sheppard P made it clear he preferred to approach directly the task of judicial estimation. In my respectful opinion, the view adopted by Sheppard P is in accordance with principle. To be guided by the concept of willing but not anxious negotiators in a market is to accept well–tried guidance long accepted in the law. But it is important to remember that, for present purposes, the aim is the fixing of equitable remuneration. The processes discussed by Sheppard P in the Schools Case and in his earlier decision in Copyright Agency Ltd v Department of Education of New South Wales are only means to that end. Where the circumstances make the particular means of the construction of a notional bargain fallible, or too artificial to provide real assistance, the court may be thrown back on judicial estimation.
It is essential not to lose sight of what equitable remuneration is. When the statute uses the expression to describe remuneration which, failing agreement between the parties, is to be determined by the Copyright Tribunal under s 153A, as being the amount “that it considers to be equitable remuneration for the making of copies of broadcasts”, I think guidance may be obtained in the traditional way, but ultimately the language of the statute must determine the nature of the decision.
Although the task of assessing equitable remuneration necessarily involves an exercise in measurement, and as Sheppard P pointed out in Copyright Agency Ltd v Department of Education of New South Wales at 32, “the Tribunal … has used the analogy of the measure of damages in infringement actions”, the ultimate task is the statutory one; as Sheppard P also pointed out in the course of the same passage, Parliament did not use the Tribunal’s analogy. The thing to be measured must never be confused with the measuring rod, and the analogy adopted for the task of measurement is only appropriate where it proves to be, as very often it will, a satisfactory means of achieving the statutory purpose. That purpose is not limited to an exercise in the nature of valuation. For s 153A(3) requires the Tribunal to have regard to a particular purpose, as well as to the nature and incidents of the copying, and also entitles the Tribunal to have regard to other matters that have been prescribed. The prescribed matters are not restricted to matters affecting the commercial value of the statutory licence. They are prescribed by regulation 25A of the Copyright Tribunal (Procedure) Regulations, which reads:
“1.      For the purposes of paragraph 153A(3)(b) of the Act the following matters are prescribed:
(a)the nature of the works, sound recordings or cinematograph films included in the broadcasts;
(b)      the institutions for which the copies of the broadcasts are made;
(c)any matters that have been assessed by use of a sampling system determined under subsection 135J(3) of the Act;
(d)the need to ensure adequate incentive for the production of educational works, educational sound recordings and educational cinematograph films in Australia;
(e)       the purpose and character of the copying;
(f)the effect of the copying on the market for, or value of, the material included in the broadcasts;
(g)the special circumstances of external students including any difficulties faced by those students in meeting the requirements of s 103C of the Act;
(h)any unremunerated contribution by institutions to the creation of the material included in the broadcasts.
2.        In subregulation (1), “external student”, in relation to an institution, means a person undertaking a correspondence course or external study course provided by the institution.”
It seems to me that s 153A(3) reflects the breadth of the concept of equitable remuneration. In this statutory context of a determination by a special tribunal, having regard to the matters mentioned in the statute, I do not think Parliament intended by the expression “equitable remuneration” to refer to particular orders made by a court exercising equitable jurisdiction. The word “equitable” has a wider meaning than that. It means “characterized by equity or fairness; fair, just”: see The New Shorter Oxford English Dictionary (1993). In Regina v Minister of Housing and Local Government. Ex parte Finchley Borough Council [1955] 1 WLR 29 Devlin J (as Lord Devlin then was) expressed the view (at 35) that the word “equitable”, used in the conferral upon a minister of a statutory power “to make such order in the matter as to him seems equitable”, might “signify that the Minister has powers wider than the application of principles of law might confer upon him”. Lord Goddard CJ said (at 31) that the power “to decide what is equitable … means fair and reasonable”. It seems to me that the expression “equitable remuneration” reflects the true meaning of the word “equitable”, and views of its application such as those of Lord Devlin and Lord Goddard draw on an understanding of the nature of equity which goes back, long before the formulation of precise principles in courts of chancery, to Aristotle’s Nicomachean Ethics, where in Book 5 sec. X (J A K Thomson translation) equity is conceived of as leading to a decision that is “just”, but is to be distinguished from an ordinary legal decision because it is in accordance with a “rule [that] is not rigid but is adapted [so as to be] framed to fit the circumstances”.
The expression “equitable remuneration” is used in a number of places in the Copyright Act, apart from s 153A - for example, ss 149, 149A, 150 and 153C. In the immediate context of these sections, s 152(6)(c), s 152(14)(b) and s 153(3) enable the Tribunal to make particular dispositions “as [it] thinks equitable” or to apportion certain amounts between owners of different copyrights “in such manner as it thinks equitable”. The use of the word “equitable” in these ways confirms that it was intended to convey the meaning of fair, just and reasonable. I do not think the word was intended to convey a different meaning when it was used in the composite expression “equitable remuneration”. When, following the report of the Copyright Law Committee on Reprographic Reproduction (the Franki Committee) of 1976, s 53B was introduced into the Act to facilitate copying by educational authorities, the Minister in charge in the House of Representatives of the Bill which became the Copyright Amendment Act1980 said, in his second reading speech (see House of Representatives Hansard for 9 September 1980 p 1011), that “the Committee saw a need to ensure that copyright owners were fairly remunerated in certain fields of multiple copying carried out by educational establishments.” He also said (ibid) that the Bill gave “effect to the recommendations of the Franki Committee”. This suggests that the provision for “equitable remuneration” was intended to ensure that copyright owners were fairly remunerated. To use the word “equitable” in that way in an Act dealing with copyright was to continue a usage established in the United Kingdom at least as far back as 1911. In the Copyright Act 1911 (UK), s 19(3) makes provision for the Board of Trade to vary the royalty rate in respect of the making of contrivances by which a musical work “may be mechanically performed” in reliance on s 19(2). If “it appears to the Board of Trade that [the statutory rate] is no longer equitable, the Board of Trade may … make an order either decreasing or increasing that rate to such extent as under the circumstances may seem just”. Similar provision was made by s 8(3) of the Copyright Act 1956 (UK), which changed the key expressions minimally to “has ceased to be equitable” and “as the Board may consider just”. Clearly, in these sections what is equitable is assimilated to what the Board considers just. It should be added that the relatively new Copyright, Designs and Patents Act 1988 (UK), in providing for educational copying, makes use of the concept of reasonableness: see s 140, and generally Chapter VII.
If the statutory expression “equitable remuneration” be regarded as uncertain or ambiguous, recourse may be had, to assist in resolving its uncertainty or ambiguity, to the Berne Convention, the international convention to which Australian copyright law gives effect in part: D & R Henderson (Mfg) v Collector of Customs for New South Wales (1974) 48 ALJR 132 at 135; Phonographic Performance Company of Australia Ltd v Federation of Australian Commercial Television Stations (1998) 154 ALR 211 at 219. In Ricketson: The Berne Convention for the Protection of Literary and Artistic Works: 1886-1986 at 910-911, the compulsory licence provisions originally embodied in ss 53C and 53D were stated to be related to the provisions of Articles 9(2) and 10(2) of the Berne Convention (Paris Act) (Australia became a party to the Berne Convention on 14 April 1928 and to the Paris Act on 1 March 1978: Ricketson, op. cit. 956). Article 9 reads as follows:
“(1)     Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorising the reproduction of these works, in any manner or form.
(2)      It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.
(3)      Any sound or visual recording shall be considered as a reproduction for the purposes of this Convention.”
Commenting on the expression “does not unreasonably prejudice the legitimate interests of the author”, Professor Ricketson makes it plain (at 484) that the language refers to “a flexible standard of reasonableness to be ultimately determined by each national law”. He continues:
“It also seems clear …that ‘unreasonable prejudice to the legitimate interests of the author’ may be avoided by the payment of remuneration under a compulsory licence … .”
He refers to the report of Main Committee I at the Stockholm Conference, which revised the Convention in 1967, as having stated that “a rather large number of copies for use in industrial undertakings … may not unreasonably prejudice the legitimate interests of the author, provided that, according to national legislation, an equitable remuneration is paid.” The right to “equitable remuneration” is also preserved by article 11bis (2), which is concerned with the conditions under which the exclusive right of authors of literary and artistic works to authorize the broadcasting of their works may be exercised; it provides that these conditions “shall not in any circumstances be prejudicial to the moral rights of the author, nor to his right to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority.” Professor Ricketson notes (at 103, 523) that this provision had its source in a French proposal at the Rome Conference of 1928. In the version of article 11bis of the Berne Convention in the French language, the words equivalent to “equitable remuneration” in the English language version are “une rémunération équitable”.
It is thus clear that the expression “equitable remuneration” has a long history in the Berne Convention. It is an expression which may be taken to have been flavoured by the understanding of the concept of equity of European lawyers, which draws heavily on Aristotle, and embraces a broad notion of fairness, seeing equity as the justice of the particular case: Aequitas and Equity: Equity in Civil Law and Mixed Jurisdictions, ed. by Professor A M Rabello (1997), 1-6, 30-31, 63-65, 241-242, 313-314, 317, 386-387, 438 n.120.
Such guidance as I have been able to find in the decisions confirms that “equitable remuneration” is concerned with what is fair, reasonable and just. In Copyright Agency Ltd v Department of Education of New South Wales at 30, Sheppard P said his approach was “based on considerations of fairness”. And at 33, he said he was “making it clear that the figure has to be fair and reasonable”. In the Schools Case, Sheppard P held that $1 per student “would not be equitable remuneration” because it did “not represent a fair payment for what the schools take”. In Copyright Agency Limited v University of Adelaide at 10 (para 11), I cited with approval a passage from the decision of Sheppard P in Copyright Agency Ltd v Department of Education of New South Wales (at 13), where his Honour referred to “the equitable remuneration which needs to be determined” as “the remuneration which will equitably, that is, fairly, compensate the owner for the loss of the exclusive right which he has to reproduce a given work or a substantial part thereof.”
But this is not to suggest the Tribunal can assert an idiosyncratic view that it is fair and reasonable, for instance, to require copyright owners to subsidize universities: cf Copyright Agency Limited v University of Adelaide at 16 (para 18). That is not what equitable remuneration is about. Generally, a copyright owner will be equitably remunerated by the value of what is taken, assessed in one of the ways explained by Sheppard P in the passage I have cited in para 24 of these reasons. But not an abstract value: a fair, just and reasonable value in all the circumstances (see s 135J(2), to which I shall make further reference), which include the fact of the statutory licence itself, and its incidents.
It follows that, in my opinion, it is appropriate in these applications to do what Sheppard P did in the Schools Case, that is to say, to accept guidance from the agreements of the parties, and then ultimately to reach a determination upon the principles of judicial estimation, obtaining also assistance from the decision and reasons in the Schools Case.
In the making of that estimation of the amount of equitable remuneration, does the statute offer any more precise guidance? There are, of course, the matters to which s 153A(3) points. I think there is also a clear indication, in the terms of the Act, that the equitable remuneration to be assessed must bear a relationship to the actual copying done, whether fixed by records or ascertained by sampling procedures. Though it may be arrived at by a process of judicial estimation, it is not simply a figure plucked out of the air as a toll levied upon educational institutions, in the nature of a capitation fee charged per student, simply because they do some copying. The Act requires more precision than that. Even when, before 30 July 1998, the annual amount of equitable remuneration was expressed to be an amount “per student of the institution concerned”, s 135J(1), at the same time as so providing, also stated that the amount was “payable … for copies”. Subsection (2) expressly provided that this annual amount “shall be determined … having regard to the extent to which copies … are made … and to such other matters (if any) as are relevant in the circumstances”. While other matters might be determined under sub-s (3) by the use of a sampling system, “[t]he extent of copying” was required to be so assessed in a case falling within s 135J. Section 153A(2) then expressed the Tribunal’s duty, in such a case, as being to “make an order determining the amount that it considers to be equitable remuneration for the making of copies of television broadcasts”. In the present applications, I am concerned with the position both before and after the amendments. For the period before the amendments, I must express my determination “per student of the institution concerned”; for the period after I may choose, but am not bound, to do so. Nevertheless, in either case, the assessment is related to the extent and nature of the copying revealed by the sampling performed.
Although the Act requires me to assess equitable remuneration “having regard to the extent to which copies … are made”, I am also to have regard to any other matters that are “relevant in the circumstances”. It seems to me that the practical implications of a sampling system in the circumstances of the universities, with their academic years, their division into faculties and other academic organisational units with widely differing needs, and the constraints imposed by their requirement to make budgets extending into the future, support the view urged by both parties that the Tribunal is entitled to determine equitable remuneration for a period of years on the basis of the copying shown to have been done by sampling during a previous period. Such a determination will enable the universities to budget more smoothly, a matter that is I think relevant, actually in the interests of both sides, and is justified as a basis for a determination because the copying done over a period in the past does furnish a measure for copying over a reasonable period into the future. But I do not accept the suggestion, made by counsel for the universities, that the fixing of an annual amount per student should be detached from the sampling process. Where sampling notices as contemplated by s 135J have been given to the collecting society, equitable remuneration for copies “is to be assessed on the basis of … a sampling system” (s 135G(2)). I think this contemplates a currently functioning system, although, as I have said, the results may be projected for a reasonable period into the future in the interests of practicality. I propose to determine an amount of equitable remuneration per student, to be projected into the future for a reasonable period, subject to indexation, but on the footing that sampling will continue and that my decision will not be intended to impede (as, indeed, it cannot) the statutory right of either side to apply “at any time after 12 months” under s 135J(1A) for any such new determination as the continued sampling may show to be called for. Both sides submitted that a period of four years would be a reasonable period for which to make the determination now required.

It should be apparent from the foregoing discussion that I do not resile from the view I expressed, in Copyright Agency Limited v University of Adelaide at 27 (para 43), in favour of determining equitable remuneration by reference to the copying actually done rather than per student, or per that statistical avatar of a student, an EFTSU. However, I think the history of the implementation of the agreements between the parties in respect of audio-visual copying and the current approaches of both sides, as well as the approach taken in the Schools Case, suggest that there are special reasons to make a determination here of the kind I have indicated.
As I explained in Copyright Agency Limited v University of Adelaide at 4-5 (para 4), speaking of comparable sections of the Act, I do not think the requirement, with reference to the period prior to 30 July 1998, to determine an “annual amount per student of the institution concerned” can be transformed, in the face of the statutory language, into a requirement to determine an amount per EFTSU. However, it is obviously possible to derive an amount per student from an amount calculated per EFTSU, and this problem can be deferred, as Sheppard P deferred a similar problem in the Schools Case, until I come to formulate my orders.
The fundamental issue is whether the 1990 agreements provide a reliable indication, as a negotiated bargain made between parties at arm’s length, on which to base a conclusion about equitable remuneration. I refer particularly to the 1990 agreements because, although Screenrights is certainly entitled to rely on their reflection in the 1994 agreements, and even in the settlement agreement, I think those are of less significance than the original agreements, because their acceptance by the universities at the time they were made may have been owed, at least in some measure, to a flow-on effect, as may have been the accession of the numerous similar agreements with colleges of technical and further education and religious and other educational institutions that followed suit. Both the strength and the weakness of the 1990 agreements are revealed in the following question and answer during the cross-examination of Miss Bridge:
“Q.And really, the rates that were negotiated in the 1990 agreement were a stab in the dark, so far as both the copyright owners and the universities were concerned, weren’t they? A. No, I think I’ve agreed with you that it was a very difficult exercise and we weren’t confident that we could do it with mathematical precision, and in the end we didn’t do it with mathematical precision. But years of effort went into talking about it, meeting with people who are specialists in film and television, and [in] the educational context, the universities did their own research. There was a good faith effort on both parts to come up with a rate that was a market rate. In the end, I don’t think you could say with mathematical precision that it was a market rate. So it had to be done by negotiation, bearing in mind all of the research that each party had done.”
As against Screenrights’ reliance on the 1990 agreements and the other agreements to which I have referred, the universities placed strong reliance on the Schools Case, and on Screenrights’ willingness to settle that case on a basis involving very much lower remuneration than that claimed from the universities. It was pointed out that Screenrights had espoused, as a matter of principle, a policy according to which the schools and the universities should have been charged at the same rate per copying minute. However, there is nothing unusual in a commercial negotiation arriving at a denouement that involves a sacrifice of principle to practicality. As a practical matter, the decision of Sheppard P in the Schools Case - and the passages from his reasons which I have quoted make this very clear - was heavily dependent upon “a sense of reality”, acknowledging as it did that the schools were neither willing nor able to pay at the rates agreed with the universities. This sense of reality, I infer, did not arise suddenly during the Tribunal hearing, but was present at the discussions before that hearing which almost achieved a settlement, and on which Sheppard P relied. Since the special position of the schools and their economic circumstances were so important for the decision in the Schools Case, I do not think it can provide direct guidance to the appropriate amount of equitable remuneration in relation to the different situation of the universities, just as, for the same reason, the 1990 and 1994 agreements between Screenrights and the universities did not provide direct guidance in the Schools Case. In the Schools Case, however, the rates agreed by the universities did “suggest that the rates for schools ought to be substantially higher than they are at present”; and, conversely, the rates discussed, and almost agreed, and those fixed ultimately by the Tribunal, in respect of the schools, do suggest that the rates for the universities ought to be lower than they were under the 1990 and 1994 agreements. I have already noted that conclusion, and I do not think I should draw more than this from the decision in the Schools Case with respect to the assessment of the figure representing equitable remuneration.
Although Screenrights did attempt in the past to establish a principle of uniformity of rates, there are a number of indications in the evidence to confirm a practice, quite apart from the Schools Case, according special treatment to schools. The licences to copy off-air offered by the Video Licensing Centre, to which Screenrights had regard in the early days of negotiations with the universities, provide an example. Licences were offered to universities at $7.00 per minute, to colleges of technical and further education at $3.50 per minute and to schools at $1.00 per minute. Similarly, an analysis of videos available for sale to educational institutions in Australia prepared by Screenrights showed that video distributors commonly differentiated between the education sectors in their pricing policies. On average prices, universities were paying $4.61 per minute, while secondary schools were paying $2.45 per minute. The disparity was even greater with the more expensive videos, for which the universities were paying $8.06 per minute and the secondary schools $3.36. In the United Kingdom, the Educational Recording Agency submitted for certification, in 1989, a scheme involving a tariff of 15p per pupil in primary education, 30p in secondary education, 50p in further education and £1 in higher education.
Presumably, there would also be differences between the nature of the material copied for schools and the nature of the material copied for universities, and certainly as regards the uses made of the material copied. So far as the universities are concerned, the evidence shows that between 1994 and 1997 40% of the copying minutes were taken up by documentaries, 18% by feature films and 12% by current affairs and news programs. The remaining 30% covered a diverse range of programs.
A factor tending to reduce the value in total of the copies taken under the statutory licence is specifically provided for in s 153A(3)(a), which is set out in paragraph (3) above. Under this provision, regard must be had to the extent to which copies of broadcasts are made solely for the purpose of enabling hearing, or viewing and hearing, to take place at more convenient times. However, I think this circumstance is unlikely to apply, bearing in mind the significance of the word “solely”, except in respect of some copies falling into the “ephemeral” category. The evidence does not permit me to put a figure on the proportion of copies in this category which are made solely for the purpose specified in s 153A(3)(a). I can only take the point into account in a general way, on the basis that undoubtedly it does apply to some of the copying done in the universities.
Another factor tending to reduce the value of the copies taken under the statutory licence, which I think may not have been sufficiently appreciated when the 1990 agreements were under negotiation, is that the practice of copying off-air is likely to involve a percentage of useless copies. Useless copies are unlikely to be used much, to reduce the point to an oxymoron, and should not attract payment, or at any rate, full payment. The Act recognizes this in s 135F, under which a preview copy can be made without the incurring of a liability to pay remuneration, provided it is destroyed within the preview period of fourteen days. But in practice, the evidence suggests, and I accept, that not all lecturers succeed in applying this provision. The consequence is that material is copied and kept which should really have been discarded. Associate Professor Quin of Edith Cowan University, Perth, gave frank evidence of what happens:
“The truth is that most of us don’t bother to preview the tapes because of the time it takes, so you tend to ask for the recording to be done, then when you’re looking for something go and scour through, because of just the amount of time it takes to preview tapes and make your decision; and you also work on a kind of banking notion that it may come in handy at some stage or other. You have to remember that for some of us all of our work, both our research and our teaching, revolves around film or television, so there is the idea that it may come in handy sometime.”
Plainly enough, strong administrative practices could minimize the adverse effects of this kind of inertia. A head of department could simply require copying units to erase all copies on the fourteenth day after their making, unless they had been reviewed and were the subject of an instruction to keep them for which an appropriate member of staff had taken responsibility. But I think I should accept that, in reality, an unknown but not insignificant proportion of copies made will never be utilized, and also that this situation, although capable of being improved by appropriate administrative measures, is unlikely ever to be fully remedied.
The inability of university administrations to respond appropriately to wasteful copying is relevant to another point which I should mention. In general, the fact that the copying of broadcasts has expanded greatly during the periods covered by the 1990 and 1994 agreements would suggest the agreements were not concluded at too high a price: cf Copyright Agency Limited v University of Adelaide at 18 (para 22). But the weight of such an indication may be diminished by the circumstances. Here, regard must be had to the lack of a sufficiently suitable and convenient alternative means of satisfying the need of lecturers at universities teaching media courses and other courses concerned with popular culture. To this must be added the consideration I have just mentioned, that there is also a lack of flexible response in the administration of a number of universities which seems to make it difficult for them to adjust to indications of waste in the particular matter of the copying of broadcasts. Furthermore, the apparent increase in copying over the period mentioned has not all been real, since I am satisfied true and complete records were not maintained in the period prior to the adoption of sampling.
In addition to various arguments I have considered so far, or in amplification of them, counsel for the universities made a number of points which, they claimed, should reduce my assessment of equitable remuneration:
(a)They categorized the statutory licence as involving a very narrow and particular right, merely to copy the relevant transmission. However, there is no doubt that a copy may come into existence with a value inhering in it by virtue of the uses to which it is capable of being put.
(b)It was said, as I have already noted, that the division of transmissions into two categories is arbitrary, and that, within each category, the fixing of a single rate for all programs is also arbitrary. Some programs may be of comparatively little value. But the nature of the task compels resort to categorization. This has been held appropriate in other cases, as for example in Copyright Agency Limited v University of Adelaide. An average rate is not necessarily invalidated because some instances covered by it will really be less valuable and others more valuable.
(c)It is said there are defects in the survey techniques which were employed under the 1994 agreements. This does not seem to me to have more than marginal relevance to the fixing of the rates for copying, although, to the extent that it is correct, it is obviously relevant to the question whether the survey methods should be changed. It does, however, also have a bearing on the assessment of rates per EFTSU, which are founded, not only on the general and ephemeral copying rates, but, of course, also on the quantities of copying assessed by the sampling system. On the basis particularly of the evidence of Mr Alexander, I accept that the sampling system is generally reasonably accurate, but there have been some failures, which I think are best taken into account broadly as a factor tending to reduce an amount assessed per EFTSU. I think any attempt to reflect this factor more precisely would be misleading rather than helpful.
(d) It is suggested that the agreed prices for copying of programs are shown to be too high by comparison with prices for which the same programs could be obtained in other ways. There are several difficulties with this point, to which I shall return. In the first place, it applies to only a tiny proportion of the programs copied, since the vast majority are not obtainable more cheaply in any other way. In the second place, where copies of the programs might be thought to be obtainable more cheaply otherwise, the very fact that the universities have not so obtained them, tends, at least to some extent, to refute the point.
(e)It is suggested that technological change is decreasing the extent to which universities use off-air recorded material. However, I am not satisfied that this is so. A very recent reduction, after what appears to be a pattern of increase, does not appear to me to justify the conclusion that counsel for the universities would urge upon me. Furthermore, the argument seems to run counter to the universities’ own basic submission, that I should fix a per EFTSU rate detached from any survey of the copying actually done. This would obviously not be in the interests of the universities if it were true that copying is declining.
(f)The submission was made that remuneration under Part VA is “super-profit” received by the copyright owners. This is probably true in a proportion of cases, in the sense that some programs would not otherwise be marketed again after their transmission. But it is not a valid argument that the owner of a form of property loses some or all of his right to remuneration for the taking of it by someone else if he can be shown not to have intended to set about marketing it. At most, the argument provides a reason to be conservative rather than liberal in assessing equitable remuneration, and even so, it does not apply to all programs.
(g)The universities submitted that they have a limited and shrinking ability to pay. There are two difficulties with this argument. In the first place, no sort of financial analysis was advanced upon which it could be realistically weighed, and its validity and effect determined. In the second place, it seems to come down to a plea that copyright owners should be selected from the community to bear the burden of subsidising universities. The Tribunal (Sheppard P and Mr A Horton) rejected this in Reference by Australasian Performing Right Association Ltd; Re Australian Broadcasting Corporation (1985) 5 IPR 449 at 480 in terms which I adopted in Copyright Agency Limited v University of Adelaide at 16 (para 18). See also Copyright Agency Ltd v Department of Education of New South Wales at 33, where Sheppard P eschewed any reduction of the equitable remuneration payable “simply because of the large liability that educational institutions may face as a result of this case”. Nevertheless, a more confined proposition is available. In the estimation of a price at which a particular purchaser might enter into a contract of purchase, the purchaser’s impecuniosity would have a bearing on the price that might be agreed, as Sheppard P held in the Schools Case.
(h)The universities’ argument placed great emphasis on the Schools Case, and on the negotiations which preceded it. I have already discussed these. However, I should note that the argument for the universities sought to make direct use of the figure of $2.50 per EFTSU discussed in those negotiations. The submission was that the readiness of Screenrights to settle at that figure “is a powerful admission on the part of Screenrights that $2.50 is a suitable rate”. This argument does not seem to me to be valid. The rate per EFTSU discussed in the Schools Case referred to three million students, whereas a per EFTSU rate fixed for university students would apply to a small fraction of that number. It could only be by sheer chance that the total number of copying minutes in the universities sector, adjusted to allow for the nature of the programs and divided by the number of university students in Australia, could equal the total number of copying minutes in the schools sector, similarly adjusted and divided by three million. No attempt was made at the hearing before me to demonstrate such a proposition by a detailed comparison of the quantities and types of copying of transmissions in the schools sector with those in the universities sector. Although the considerations which I have discussed earlier in these reasons are the considerations which, I think, should define the place of the Schools Case in my reasoning towards a conclusion in relation to the present applications, the proposition put on behalf of the universities could not in any event be accepted.
(i)It was suggested that the 1990 agreements with the universities should be discounted as package deals involving forgiveness for past infringements of copyright. On the evidence, I do not think it is correct to say that the rates on which those agreements were based had been arrived at on any such footing. I think the question of past infringements was dealt with as a separate issue.
(j)It was suggested that a greater allowance should be made for bulk, now that the quantity of copying is known to be very much higher than it might have been thought to be in 1990 and 1994. I have discussed the way I think this factor should be viewed in Copyright Agency Limited v University of Adelaide at 20-21 (para 28), and shall not repeat the discussion here. I adhere to the views I expressed in that decision.
(k)It was suggested that I should reflect in the rate to be assessed the lower costs involved in a sampling system by comparison with the records system in respect of which the 1990 agreements were concluded. But there is more than one difficulty about this argument. In the first place, the agreed rates were repeated in the 1994 agreements, and in the settlement agreement, all of which were sampling agreements. In the next place, I am asked to determine rates for a period to extend some years into the future. But before submissions in the present matter had all been filed, most of the universities had withdrawn their sampling notices and given notices based on a records system. It is very doubtful whether a sampling system, involving only a small number of universities, will in fact have lower costs, and in any case there was no evidence upon which I could give rational consideration to that question. However, there is evidence that during the period of negotiation that preceded the 1990 agreements, those negotiating on behalf of Screenrights thought its collection costs would be a substantially higher percentage of receipts than they turned out to be over the period of the 1994 agreements. What they will be in the future I do not know, although in general terms, it could be assumed that Screenrights’ costs, as a percentage of the remuneration collected, would be lower for a large amount of copying than for a smaller amount. But in considering what weight to give that factor as a reason for reducing the rates, the Tribunal should not attribute to the negotiators on either side in 1990 an inability to perceive the probability that collection costs as a percentage of receipts would fall as systems became established, and the Tribunal should also beware of making a double allowance for the same saving by allowing it under this heading and also under the heading of discount for bulk.
(l)By s 135P(3)(b), it is provided that the persons represented by the collecting society (Screenrights) shall be “all relevant copyright owners, or their agents”. The expression “relevant copyright owner” is defined in s 135A to mean “the owner of the copyright in a work, a sound recording or a cinematograph film”. Accordingly, the universities submit that where a copy is of a broadcast or transmission which has underlying it no work, sound recording or cinematograph film, no remuneration is payable. Assuming the sampling system picks up such copies, this would be a reason for reducing the rates. However, the evidence does not suggest that any particular, or any significant, proportion of the copies sampled would involve no underlying work, sound recording or cinematograph film.
(m)For the universities, reliance is placed on the proposition that some of the uses to which recorded broadcasts or transmissions are put are permitted under special provisions of the Act, for example, s 103A in the case of a fair dealing for the purpose of criticism or review, and s 103C in the case of a fair dealing for the purpose of research or study. But no attempt was made to measure the uses to which materials are put that are relevant to this submission; or to show that the same materials are not also put to other uses. Measurement might have been difficult, but the information is certainly in the possession of the universities rather than in the possession of Screenrights. More fundamentally, the real issue is remuneration for the exercise of the statutory licence to copy; the use made of the copies is relevant, but is not the essential point. In the case of useless copies, as I have explained, there is good reason to allow a reduction of remuneration, but otherwise, if the universities choose to exercise the statutory licence when other means of achieving the same ultimate object may be open, that does not seem to me to be a reason to deny the copyright owners the equitable remuneration due to them for the use made of their property. Of course, if a university chooses not to rely on Part VA, it will not mark copies, or containers of copies, under s 135K and, though it may possibly be liable for infringement of copyright, depending on the circumstances, it will not be liable to pay equitable remuneration in respect of those copies.
(n)An argument which was presented in many different forms was to the effect that much of the material copied was really of little use, or was little used. I do not think it is necessary to pursue every variant of this argument. One of the difficulties about it arises from the simple fact that the material was copied. The view might perhaps be taken that what is worth copying is worth paying for. Another difficulty was pointed out by counsel for Screenrights – that no attempt was made to quantify the extent to which material was copied, but not used, or used only for the extraction of tiny excerpts. However, I have already made it clear that where copies are useless for any purpose of the universities, allowance should be made, to the extent that the evidence enables it to be made, in the assessment of equitable remuneration. The universities were, of course, well placed to call the relevant evidence.
(o)It was suggested the universities were charged for copying in some instances where licences to copy, other than the statutory licence, in fact existed. I am prepared to accept that this may have happened on occasion, but the evidence did not show that it had actually happened to any significant extent except perhaps on a few occasions, and particularly not in relation to the 1996 and 1997 samples. Doubtless, with experience, university administrators have become less likely to permit such a mistake to occur.
(p)Various other errors have been alleged in respect of the recording and assessment of data for sampling purposes. However, the submission urged upon me on behalf of the universities is that I should fix a flat fee per EFTSU, not tied to the results of sampling. Unless I were to conclude – as I certainly do not – that the sampling process was completely invalid, this would be an even less accurate way of calculating equitable remuneration. Given the general accuracy of the sampling, particularly in recent years, of which I am satisfied, these allegations cannot be accorded significance.

I have mentioned the comparison with video cassette prices. When the original 1990 agreements were negotiated, as has been said, there was little directly comparable pricing information available. One form of information which the representatives of the parties did analyse was the cost of acquiring videos. There were a number of reasons why this cost could not be determinative, one of which was the unavailability of videos in the vast majority of situations where copying was required. However, there is no doubt the parties did their own sums on the basis of video costs, as one guide to the assessment to which they were negotiating. In the reconsideration the problem received during the hearing before the Tribunal, various calculations were made. One calculation put before me by Miss Bridge analysed videos available for sale to educational institutions in Australia, utilising data obtained from all distributors known to Screenrights who distribute videos to universities. The results showed the average price per minute which those documentaries that had been copied off-air by universities would have cost, had the videos been purchased from the distributors. That average price was $3.50 per minute. Miss Bridge also placed before me evidence of the cost to purchase a video of a news program from Media Monitors Pty Ltd, a broadcast monitoring company which supplies its clients, on request, with copies of transmitted television programs. The cost of such a video is equivalent to between $5.33 and $5.50 per minute. Of course, a monitoring service might be expected to charge for facilities which go beyond the mere provision of a copy of a nominated program. Competing arguments were put as to the conclusions to be drawn from these figures. For the universities, it was said that the minuscule proportion of programs available on video represents the more valuable programs, and that, even so, the majority are available for less than the unweighted average figure of $3.50 per minute. On the other hand, counsel for Screenrights pointed to the very unavailability of the vast majority of programs copied by the universities as conferring on them a special value to which the prices charged by a broadcast monitoring service might furnish a guide. Other factors have to be taken into account, such as the cost of the tape, the return received by copyright owners from sales, and the cost of private hirings. But private hirings would involve contractual conditions limiting the audience, and the restriction of copyright owners to remuneration calculated on the basis of their royalties was specifically rejected by Sheppard P in Copyright Agency Ltd v Department of Education of New South Wales at 29, which I followed in Copyright Agency Limited v University of Adelaide at 12-13 (para 14). The returns received under the sampling system in respect of particular documentaries were also analyzed by the universities, which suggested they were excessive. However, I think there is force in the riposte made by counsel for Screenrights that these returns were an effect of the operation of the distribution side of the sampling system, and provided no evidence of any error or excessive payment on the collection side. Having regard to the smallness of the proportion of copying in question which is of programs available as videos, I do not think it would be useful to pursue every argument and counter-argument relating to videos in detail in these reasons. Undoubtedly, there are fluctuations in the comparisons that can be made. Some cheap prices for videos probably do not involve rights as extensive as those conferred by the statutory licence. It may be, on the other hand, that video prices have been reduced in recent years, although comprehensive information on this point was not provided to me.
I have come to the conclusion that the fundamental issues are the extent to which I should rely on the negotiated agreements, reached only after prolonged consideration, between the universities and Screenrights, on the one hand, and the extent to which I should think that those negotiated agreements must now be modified in the light of changed circumstances, and particularly in the light of the partial failure in practice of the preview system, and in the light of the Schools Case, on the other hand. The core questions revolve around these issues, and even if I had given weight to some points raised by either side to which I have not, or more weight to some points than I have, I do not think I should have arrived at a significantly different conclusion. That is because, in my opinion, what is determinative is the resolution of these fundamental issues, a resolution which does require a reduction of the rates previously agreed, but not to the special level found appropriate in the Schools Case. For the foregoing reasons, and on all the evidence, and having regard to the quite voluminous submissions of the parties, I have decided to make an order under s 153A(2) determining the amount of equitable remuneration for the making of broadcasts or transmissions, as the case may be, in a sum equivalent to $5-50 per EFTSU, for 1998, to be indexed in accordance with the Cost Price Index for each year subsequent to 1998, subject to any adjustment upon which the parties may agree, or which the Tribunal may order, for any year subsequent to 1998, having regard to the sampling done over a previous period, on the basis that the quantity of copying, adjusted (to reflect the types of material copied) by the method used by A C Nielsen Pty Limited in 1994, 1995, 1996 and 1997, shall have varied significantly by comparison with the average of the annual total copying units estimated by A C Nielsen Pty Limited for those years. For the purposes of any such adjustment, I note that the average of the annual total copying units per EFTSU estimated for the years 1994, 1995, 1996 and 1997 was 28.46, which, having regard to previous arrangements between the parties, translated to a per EFTSU figure of $8-62. I also note the parties’ concurrence, already mentioned, in the view that the Tribunal’s assessment of the equitable remuneration to be paid is intended to be operative over a period of four years. The precise formulation of the determination should await the submission of short minutes, which I direct Screenrights to bring in on a date to be fixed.

I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Decision herein of Burchett P.
Associate:
Dated: 12 March 1999

Counsel for the Applicants
(“Universities”) in CT 3, Respondents in CT 5: Mr J Campbell QC with Mr R J Webb

Solicitors for the Applicants in CT 3, Respondents in CT 5:
Baker & McKenzie

Counsel for the Respondent
(Audio-Visual Copyright Society Limited) in CT 3, Applicant in CT 5: Mr D Catterns QC with Mr N Manousaridis

Solicitors for the Respondent in CT 3, Applicant in CT 5: Mallesons Stephen Jaques

Dates of Hearing:

Written submissions lodged:

7, 8, 9, 14, 15, 16, 17, 21, 22 September 1998

23 December 1998

Date of Decision: 12 March 1999

IN THE COPYRIGHT TRIBUNAL
CT 3 of 1997 BETWEEN	THE UNIVERSITY OF NEWCASTLE AND ORS Applicants
AND: CT 5 of 1997 BETWEEN: AND:	AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED Respondent AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED Applicant AUSTRALIAN CATHOLIC UNIVERSITY AND ORS Respondents
TRIBUNAL:	BURCHETT P
PLACE:	SYDNEY
DATE:	12 MARCH 1999

Counsel for the Applicants (“Universities”) in CT 3, Respondents in CT 5:	Mr J Campbell QC with Mr R J Webb
Solicitors for the Applicants in CT 3, Respondents in CT 5:	Baker & McKenzie
Counsel for the Respondent (Audio-Visual Copyright Society Limited) in CT 3, Applicant in CT 5:	Mr D Catterns QC with Mr N Manousaridis
Solicitors for the Respondent in CT 3, Applicant in CT 5:	Mallesons Stephen Jaques
Dates of Hearing: Written submissions lodged:	7, 8, 9, 14, 15, 16, 17, 21, 22 September 1998 23 December 1998
Date of Decision:	12 March 1999