EXPLANATORY STATEMENT
No. 293, 1983
COPYRIGHT REGULATIONS (AMENDMENT)
These Regulations raise the statutory rate of royalty payable under the Copyright Act 1968 (“the Act”) by manufacturers of sound recordings of copyright works to the owners of copyright in the works recorded.
Authority
Section 249 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing (inter alia) all matters required or permitted by the Act to be prescribed.
Legislative Framework
Copyright in a musical work includes an exclusive right to reproduce the work in a material form, including the making of a sound recording of the work. However, this right is qualified by section 55 of the Act which provides that manufacturers may, under certain conditions, make recordings of musical works without the permission of the copyright owner, subject to payment of a royalty.
Section 56 sets an initial royalty rate, which is 5% of the retail selling price of the record. There is provision for revision of this rate, however. Under sub-section 58(1), the Attorney-General may request the Copyright Tribunal to conduct an inquiry into the equity of the initial rate (or any rate set subsequently in accordance with the provision) and make a report to him on the matter. Sub-section 58(2) provides that at any time after the Copyright Tribunal has made such a report, the regulations may provide that the royalty rate set by section 56 in its application in respect of records generally (or in a particular class) shall have effect as if it were subject to such variations as are provided by the regulations, being such variations as the Governor-General thinks equitable. Under sub-section 58(3), before making regulations for the purposes of sub-section 58(2) the Governor-General is required to take into account the report of the Copyright Tribunal.
Copyright Tribunal’s Inquiry
Pursuant to a request made under section 58 on 30 December 1977 by the then Attorney-General, the Copyright Tribunal conducted an inquiry into the royalty payable in respect of records generally.
The Tribunal made its report in December 1979, concluding, inter alia, that the royalty under sub-section 56(1) was not equitable and should be raised from 5% to 6.75% of the retail selling price of records net of sales tax. The report was tabled in Parliament in May 1980.
New Regulations
The new Regulations vary the record manufacture royalty rate as follows:
(1) immediately, to 6% of the retail selling price of records; and
(2) from 1 October 1984, to 6.25%.
These rates accord with the wishes of the great majority of composers of musical works recorded on records manufactured in Australia and are acceptable to the great majority of Australian record manufacturers, who have advised that they have been paying the 6% rate for some time.
Overview
The Copyright Regulations (Amendment) of 1983 were enacted to address the problem of the perceived inequity in the royalty rates paid by manufacturers of sound recordings to the copyright owners of the works recorded. This amendment arose from the Copyright Act 1968, which allows for the setting of royalty rates and the possibility of revision through regulation by the Governor-General. The problem identified was that the initial statutory royalty rate of 5% of the retail selling price of the record did not adequately reflect the equitable compensation for the use of the copyrighted works. This legislative amendment was enacted by the Commonwealth Parliament and is aimed at ensuring a fairer royalty rate that acknowledges the value of the copyrighted works to both the copyright owners and the manufacturers. The policy objective of the amendment is to balance the interests of the copyright owners and the manufacturers, leading to a more equitable royalty system.
Scope and Application
The Copyright Regulations (Amendment) increase the statutory royalty rate for the manufacture of sound recordings of copyright works to be paid to the owners of copyright in the works. These Regulations apply to all entities involved in the manufacture of sound recordings in Australia, such as record companies and producers. The geographic reach of these Regulations is national, as they pertain to the Australian jurisdiction. The application of these Regulations is established through the Copyright Act 1968, with any subsequent amendments or variations being made through subordinate instruments, such as the Copyright Regulations (Amendment). The new royalty rates are set at 6% of the retail selling price of records, effective immediately, and then 6.25% from 1 October 1984, as per the recommendations of the Copyright Tribunal’s inquiry. These Regulations aim to ensure fair compensation for copyright owners while also taking into account the interests of record manufacturers.
Key Provisions
The main operative sections of these regulations are sections 56 and 58 of the Copyright Act 1968. Section 56 initially set the royalty rate for manufacturers of sound recordings at 5% of the retail selling price of the record. However, section 58 allows for the Attorney-General to request the Copyright Tribunal to review the equity of this rate and propose adjustments, which can then be implemented through regulations made by the Governor-General. These regulations, specifically made under section 58, now adjust the royalty rate to 6% of the retail selling price immediately and further to 6.25% from 1 October 1984.
The Act imposes specific obligations on manufacturers of sound recordings. Firstly, they must adhere to the royalty rates set by the regulations, which means they must pay 6% of the retail selling price immediately and 6.25% from 1 October 1984. These payments are to be made to the copyright owners of the works recorded, ensuring that the rights of the copyright owners are financially recognised. The manufacturers also need to ensure that all records produced and sold comply with these new royalty rates, reflecting the adjustments made through the regulations.
Breach of the provisions set out in these regulations could lead to various legal consequences. While the regulations themselves do not explicitly state penalties for non-compliance, failure to adhere to the royalty rates specified in the Copyright Act could result in civil liabilities for the manufacturers. This might include compensating the copyright owners for any underpaid royalties. Additionally, if the non-compliance is deemed significant or deliberate, it could potentially lead to criminal charges, depending on the interpretation and application of other sections within the Copyright Act. The penalties for such breaches would typically align with those stipulated elsewhere in the Act, which could include fines and, in severe cases, imprisonment.