Copyright Regulations (Amendment)

EXPLANATORY STATEMENT

STATUTORY RULES 1990 NO. 5

Subject - Copyright Act 1968

Parts VA and VC of the Act

Section 249 of the Copyright Act 1968 provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed, or are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Amendments have been made to the Copyright Regulations to enable the operation of new statutory licences in the areas of educational copying of broadcasts and home taping of music.

The Copyright Amendment Act 1989, when commenced, will insert, inter alia, the following new Parts into the Copyright Act 1968:

(i) Part VA (Copying of broadcasts by educational and other institutions)

Under this new statutory licence, educational institutions and institutions assisting handicapped persons may copy television and radio programs, subject to payment of equitable remuneration to a single collecting society representing all relevant copyright owners. Institutions may elect to pay for copying either by way of a per-student annual levy set after sampling of copying patterns, or by full record-keeping and payment for actual material copied. In either case, in the absence of agreement, the quantum of remuneration will be determined by the Copyright Tribunal. The collecting society is to be declared by the Attorney-General by notice in the Gazette.

Section 135K of the Copyright Act 1968 provides for regulations prescribing marking and record-keeping requirements in relation to the copies made. (As to the scope of the regulation-making power see notes on regulations 23A-23H.)

Section 135P of the Act provides, inter alia, that the Attorney-General shall not declare a body to be the collecting society unless its memorandum and articles of association contain such provisions as are prescribed, being provisions necessary to ensure that the interests of members who are relevant copyright owners or their agents are protected adequately, including provisions about certain matters stated in the section. (As to the scope of the regulation-making power see notes on regulation 23J.)

(ii) Part VC (Use of blank tapes for private and domestic copying)

Under these provisions, a royalty is applied to blank audio tapes at the point when they are first sold in Australia. In return, home-taping of music and other sound recordings on such tapes is permitted. The royalty is to be paid by vendors to a single collecting society representing all relevant copyright owners. The royalty will be an amount per minute of playing time, which must be determined by the Copyright Tribunal. The collecting society is to be declared by the Attorney-General by notice in the Gazette.

A system of exemptions and refunds is provided for consumers who do not use tapes for home-taping of music and other sound recordings.

Section 135ZZR of the Act, inter alia, provides that the royalty is not payable where the vendor sells to a prescribed organisation or an exempt body provided the vendor gives the society particulars of the normal playing time of the tape, and such other particulars (if any) of the tape and sale as are prescribed. (Regulations 23L and 23M refer.)

Section 135ZZS(1) of the Act, provides that a “refund” is payable where a prescribed organisation or an exempt body which purchases a tape gives the society particulars of the normal playing time of the tape, such other particulars (if any) of the tape and purchase as are prescribed, and a receipt for the purchase. (Regulations 23L and 23N refer.)

Section 135ZZS(3) of the Act provides that a “refund” is payable where any purchaser of a tape gives the society a receipt and a statutory declaration containing, inter alia, particulars of the normal playing time of the tape, and such other particulars (if any), of the tape and purchase as are prescribed. (Regulation 23N refers.)

Section 135ZZU of the Act provides, inter alia, that the Attorney-General shall not declare a body to be the collecting society unless its memorandum and articles of association contain such provisions as are prescribed, being provisions necessary to ensure that the interests of members who are relevant copyright owners or their agents are protected adequately, including provisions about certain matters stated in the section. (As to the extent of the regulation-making power see notes on regulation 23P.)

The regulations relate to all of the areas of regulation-making power identified above. (See notes on clause 5.)

The opportunity has also been taken to insert Part headings into the Copyright Regulations, largely corresponding to those in the Act (see notes on clauses 1-5) under the general regulation-making power continued in existing section 249 of the Act.

Details of the regulations are set out in the Attachment.

ATTACHMENT

Details of Copyright Regulations (Amendment)

NOTES ON CLAUSES

CLAUSE 1: Part heading - Part 1

The Part heading follows the Act.

CLAUSE 2: Part heading - Part 2

The Part heading is adapted from the corresponding Part (Part III) of the Act.

CLAUSE 3: Part heading - Part 3

The Part heading follows Part IV of the Act.

CLAUSE 4: Part heading - Part 4

The Part heading follows Part V of the Act.

CLAUSE 5: Insertion of Parts 5 and 6; Part heading - Part 7

Part 5: Copying by Educational and Other Institutions of Broadcasts

The Part heading is adapted from the heading to Part VA of the Act.

Regulation 23A: Interpretation: Adopts a number of terms which are defined for the purposes of Part VA of the Act, namely “administering body”, “broadcast”, “collecting society”, “institution”, “relevant copyright owner” and “rules”.

Regulation 23B: Marking of copies etc. - paragraph 135K(1)(a) of the Act: The regulation sets out the particulars to be marked on copies of broadcasts (or on their container) where the institution concerned has elected full record-keeping. Instead of the 4 particulars prescribed, it is sufficient if the marking consists merely of a reference number which

enables the collecting society ‘conveniently’ to identify the institution and to locate the actual copying record. The word ‘conveniently’ has been used to ensure that administering bodies keep copying records in a sequence that enables the collecting society to locate a relevant copying record without undue delay. In addition, alternative marking particulars may be agreed with the society.

Regulation 23C: Prescribed particulars - paragraph 135K(1)(b) of the Act: The regulation sets out the particulars to be recorded in copying records where the institution concerned has elected full record-keeping.

Regulation 23D: Prescribed retention period - paragraph 135K(1)(c) of the Act: The regulation specifies 2 years as the period for which each copying record must be retained.

Regulation 23E: Sending of copies of records - paragraph 135K(1)(d) of the Act: The regulation requires copies of all such records to be sent to the collecting society by registered or certified mail within 21 days from the end of each calendar quarter.

Regulation 23F: Prescribed manner of keeping records - paragraph 135K(2)(a) of the Act: The regulation allows copying records to be kept on computer. (Note that section 25A of the Acts Interpretation Act 1901 relates to the production of records kept in computers. Where a person who keeps a computer record is required to produce the record then that person is deemed to be required to produce the record in a form capable of being understood. Accordingly, when such records are sent to the collecting society under the preceding regulation they would need to be reduced to an appropriate printed form, or supplied in a computer-readable form suitable for the collecting society’s purposes.)

Regulation 23G: Prescribed form - paragraph 135K(2)(b) of the Act: The regulation prescribes the form in Schedule 11AA as the form for copying records.

Regulation 23H: Marking of copies etc. - subsection 135K(3) of the Act: The regulation sets out the particulars to be marked on copies of broadcasts (or on their container) where the institution concerned has elected to pay a per-student annual levy based on sampling of copying patterns. The particulars are similar to those prescribed for marking where the institution elects full record-keeping, except that the reference number option (see note on regulation 23B) is not allowed for. Alternative particulars may be agreed with the collecting society.

Regulation 23J: Prescribed provisions - paragraph 135P(3)(d) of the Act:

The regulation prescribes provisions which must be included in the rules (memorandum and articles of association) of the collecting society. (These provisions are additional to the provision, required by paragraph 135P(3)(c) of the Act, prohibiting payments of dividends.)

The provisions are, in the language of paragraph 135P(3)(d) of the Act, “necessary to ensure that the interests of the collecting society’s members who are relevant copyright owners or their agents are protected adequately”. They include provisions that the operations of the society be divided into accounting periods, and that a consistent practice be followed in attributing receipts and expenditure to particular periods (see paragraphs (a) and (b) of subregulation 23J(1)). Those requirements are intended to ensure that the society maintains an even hand between current and future beneficiaries.

In addition, as required in paragraph 135P(3)(d) of the Act, they include provisions about -

(i) the collection of equitable remuneration: Paragraph (c) of subregulation 23J(1) requires reasonable diligence in the collection of remuneration due to the society. It is not intended, however, that the society be heedless of the expense entailed in collecting every amount of remuneration due. Reasonableness is a matter for the society’s Directors, and the members in general meeting, to judge;

(ii) the payment of administrative costs: Paragraph (d) requires a limit on gifts for cultural and benevolent purposes. Paragraph (e) requires a provision that the general administrative costs and other outgoings be reasonable. Beyond this, reasonableness is a matter for the society’s Directors, and the members in general meeting, to judge;

(iii) distribution: This is dealt with in 2 stages.

necessary to fund continued operation pending receipt of further remuneration. As the society becomes established on a firm footing it is envisaged that the amount brought forward at the beginning of a current period would approximately offset the amount withheld from distribution and carried into the succeeding period. “Qualified persons” include relevant copyright owners or members of the society representing them.

Paragraph (g) deals with actual distribution. Shares allocated to members are to be distributed to them. Shares allocated to relevant copyright owners who are non-members are to be held in trust and distributed when the owner is a member or is represented by an agent who is a member;

(iv) holding of amounts on trust for relevant copyright owners who are not members: Paragraph (h) requires a provision that a trust fund be operated, inter alia, for the above purpose. Paragraph (i) requires the rules to state a minimum period (at least 4 years) during which amounts which cannot be allocated or distributed must be held in the trust fund. Apart from the case of non-members, this might apply, for example, where available data on copying patterns is not yet sufficient to enable an allocation to be completely effected, or where, even though a complete allocation has taken place, the society has lost contact with a member entitled to a share;

(v) access to records of the society by members:

Paragraph (j) states that the rules must guarantee members reasonable access to the records of the society. Once again, reasonableness is a matter for the society’s Directors, and the members in general meeting, to judge.

Part 6: Use of Blank Tapes for Private and Domestic Copying

The Part heading follows Part VC of the Act.

Regulation 23K: Interpretation: The regulation adopts a number of terms which are defined for purposes of Part VC of the Act, namely “blank tape”, “collecting society”, “relevant copyright owner”, “royalty”, “rules” and “vendor”.

Regulation 23L: Prescribed organisations - sections 135ZZR. 135ZZS and 135ZZT of the Act: The regulation prescribes organisations, and classes of organisation, which, in effect, do not have to pay the royalty on blank tapes used by them: the vendor may sell royalty-free tapes to such organisations; if a royalty is paid in respect of the sale, the organisation may obtain a refund from the collecting society. Organisations listed are largely confined to a number of

categories already defined for purposes of the Act, including bodies which own copyright in a broadcast, and bodies administering educational institutions, institutions for the handicapped, libraries, archives, museums and art galleries. An organisation constituted by statute is also covered. Note that, under the Act, bodies not listed as prescribed organisations may nevertheless be declared exempt, at the discretion of the collecting society, if they can show that they do not use blank tapes for unauthorised copying of sound recordings.

Regulation 23M: Prescribed particulars of sale - paragraph 135ZZR(a) of the Act: The regulation sets out particulars (in addition to those required in paragraph 135ZZR(a) of the Act) which must be given to the collecting society where the vendor seeks exemption from the royalty in respect of a sale to a prescribed organisation or an exempt body.

Regulation 23N: Prescribed particulars of purchase - paragraph 135ZZS(1)(b) and subparagraph 135ZZS(3)(b)(i) of the Act: The regulation sets out particulars which must be given to the collecting society where the purchaser seeks a refund of royalty payable in respect of the sale of blank tape. Subregulation 23N(1) specifies the particulars which are required, (in addition to those specified in subsection 135ZZS(1) of the Act), where the purchaser is a prescribed organisation or an exempt body. The particulars are similar to those which must be given by a vendor seeking an up-front exemption in respect of a sale, so that any deliberate or inadvertant “double-dipping” (ie, purchaser seeks refund even though vendor has obtained exemption from paying the royalty in the first place) can be detected. Subregulation 23N(2) specifies the particulars, in addition to those stated in subsection 135ZZS(3) of the Act, which must be included in a statutory declaration by any other person seeking a refund on tapes purchased.

Regulation 23P: Prescribed provisions - paragraph 135ZZU(3)(d) of the Act:

This is a regulation similar to regulation 23J (which relates to the collecting society under the broadcast copying scheme).

The regulation prescribes provisions which must be included in the rules (memorandum and articles of association) of the collecting society. (These provisions are additional to the provision, required by paragraph 135ZZU(3)(c) of the Act, prohibiting payments of dividends.)

The provisions are, in the language of paragraph 135ZZU(3)(d) of the Act, “necessary to ensure that the interests of the collecting society’s members who are relevant copyright owners or their agents are protected adequately”. They include provisions that the operations of the society be divided into accounting periods, and that a consistent practice be followed

in attributing receipts and expenditure to particular periods (see paragraphs (a) and (b) of subregulation 23P(1)). Those requirements are intended to ensure that the society maintains an even hand between current and future beneficiaries.

In addition, as required in paragraph 135ZZU(3)(d) of the Act, they include provisions about -

(i) the collection of royalties: Paragraph (c) of subregulation 23P(1) requires the society to ensure that royalties are collected from all vendors, so far as is practicable. The purpose of this requirement (which differs from the corresponding requirement under regulations 23J and 23X) is to meet a concern that selective enforcement would place some vendors at a competitive disadvantage;

(iii) distribution: This is dealt with in 2 stages.

Paragraph (f) requires a provision that the “distributable amount” in each accounting period be allocated to “qualified persons” in accordance with criteria stated in the society’s rules. The “distributable amount” is defined, in summary, as the net royalties available for distribution after gifts and expenses have been met. The royalties “available” may include royalties collected in respect of an earlier period which have been held on trust (see (iv) below) and which remain unclaimed at the end of the trust period. The definition also envisages that the society may withhold from distribution amounts necessary to fund continued operation pending receipt of further royalties. As the society becomes established on a firm footing it is envisaged that the amount brought forward at the beginning of a current period would approximately offset the amount withheld from distribution and carried into the succeeding period. “Qualified persons” include relevant copyright owners or members of the society representing them.

(v) access to records of the society by members: Paragraph (j) states that the rules must guarantee members reasonable access to the records of the society. Once again, reasonableness is a matter for the society’s Directors, and the members in general meeting, to judge.

Part 7: Miscellaneous

The Part heading groups together provisions made under various Parts of the Act.

CLAUSE 6: Schedule 11AA

Schedule 11AA sets out a form of copying record for the purposes of new regulation 23G. The form is to be used to record copying under Part VA of the Act (Copying of broadcasts by educational and other institutions).

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