British Music Rights is the consensus voice of Britain’s composers and songwriters, music publishers and their collecting societies. The members of British Music Rights are the British Academy of Composers & Songwriters, the Music Publishers Association (MPA), the Mechanical-Copyright Protection Society (MCPS) and the Performing Right Society (PRS).
I. Significance of Copyright Tribunal decisions
Licences and licensing schemes operated by our collecting society members (MCPS and PRS) are subject to supervision by the Copyright Tribunal. Referral to the Copyright Tribunal is typically instigated by commercial music users such as broadcasters, record companies, telecommunications companies; but also by licensees whose businesses are not premised predominantly on music use, such as airlines. The decisions of the Tribunal have a significant impact on the income of composers, songwriters and music publishers who rely on collecting societies to collect and distribute royalties for
(1) the exercise of the performing right in musical and literary works, including the right to perform the work in public and to communicate the work to the public (PRS) and
(2) the administration of the “mechanical” rights to copy the work, and to rent or lend the work to the public (MCPS).
The MCPS-PRS Alliance is the operational alliance through which these societies streamline their activities e.g. by providing a Joint Online Licence for online services.
Our comments are limited to the UK Copyright Tribunal, and do not relate to the possible dispute resolution system for cross border conflicts on online licensing as suggested in the Commission Recommendation (2005/737/EC) dated 18th October 2005. We have seen the submission by the British Copyright Council and agree with the points expressed in their response.
II. General
We welcome recent changes following the Woolf Reforms as well as the wording of the 1995 Practice Direction (as amended), in particular the guidance to the parties with a view to achieving a just, expeditious and economical disposal of proceedings. Further improvements to the Copyright Tribunal could include:
III. Detailed comments
1. The Role of the Tribunal
More commercial approach
The main function of the Copyright Tribunal is to “decide, where the parties cannot agree between themselves, the terms and conditions of licences offered by, or licensing schemes operated by, collective licensing bodies in the copyright and related rights area.”
This is essentially a dispute resolution mechanism for commercial disputes. Therefore it is vital that the Copyright Tribunal considers fully the commercial reality in determining the appropriate licensing terms and conditions. The commercial focus of a dispute on the negotiations between collecting societies and commercial users should be at the heart of the Tribunal’s statutory task of “conclusively establishing the facts of a case and of coming to a decision which is reasonable in light of those facts.” This is all the more important since decisions of the Copyright Tribunal only are appealable to the High Court on points of law (and not on commercial facts).
The Patent Office should take steps to counter any potential perception amongst parties affected by Tribunal decisions that the inherent purpose of proceedings is the regulation of collecting societies and the prevention of their “abusive” conduct. The implicit presumption that any licensing terms and conditions proposed by collecting societies are unreasonable simply because of the de facto monopolistic nature of collecting societies is unsatisfactory. Perhaps this is explicable because of the historical position of its predecessor, the Performing Right Tribunal (PRT) established “to control possible abuse of monopolies in the performing rights field.”
However, this is not the purpose of the Copyright Tribunal under the 1988 Act and we would welcome clarification wherever appropriate that any regulatory considerations regarding collecting societies are outside the remit of the Copyright Tribunal and that the purpose of the Tribunal is to provide a neutral and fair dispute resolution forum with a focus on the commercial issues.
Recommendation:
We strongly welcome the proposal outlined in the Patent Office’s recent Innovation Support Strategy consultation document, that the Government benchmarks tribunal practices and proceedings against those in other national IP offices. We recognise that the German equivalent to the Copyright Tribunal, the Deutsche Marken und Patent Amt focuses their considerations on the financial circumstances and economic considerations of the dispute.
Double jeopardy
As referred to above, the Office of Fair Trading (OFT) has a very broad regulatory remit often dealing with disputes between members and their collecting societies. However, its broad remit would include disputes between users and collecting societies on all manner of issues including potentially specific disputes on licensing schemes and tariffs. This renders collecting societies exposed to the risk of double jeopardy.
Recommendation
It should be clarified that the OFT is a competition authority and should hence not deal with matters which are essentially commercial disputes about tariffs and licensing terms and conditions, where the appropriate forum is the Copyright Tribunal.
Neutral Administration
Any system supervising commercial negotiations on licensing tariffs needs to be recognised as neutral by the parties involved. We see, therefore, some attraction in ensuring that the administration of the Copyright Tribunal is quite distinct from the policy making body, the Patent Office’s Intellectual Property & Innovation Directorate. We have seen the submission of PPL and are interested in exploring further the prospect of transferring the administration of the Copyright Tribunal to the Department for Constitutional Affairs but have not had an opportunity to consider it fully.
Recommendation
In addition to a more commercial approach outlined above, to explore whether neutrality could be accentuated if the administration of the Copyright Tribunal were removed to a body unconnected to the policy making Patent Office’s Intellectual Property & Innovation Directorate, such as the Department for Constitutional Affairs.
2. The Structure of the Tribunal
Transparency of appointment and provision of adequate training for lay members
In order to ensure the commercial approach referred to above it is essential that the lay members of the Tribunal have either relevant experience or adequate training. The lay members cannot be expected to have the necessary detailed knowledge of the music business and the role of collecting societies; the training should also draw on the expertise of all parties since disputes between collecting societies and commercial users are usually extremely complex.
Recommendations
We suggest more transparency on the selection criteria for the appointment of the members of the Copyright Tribunal in so far as they are not set out in the Terms and Conditions of Appointment for Ordinary Members.
We suggest the creation of a programme of adequate training for lay members, in consultation with interested parties such as collecting societies.
3. Conduct of Proceedings
Efficiency
Cost and time efficiency is of essence for both collecting societies and commercial users. In our experience this criteria corresponding with the guidance provided in the Practice Direction for a “just, expeditious and economical disposal of proceedings” is not always met. Moreover, the procedure is such that parties generally feel compelled to instruct senior lawyers to represent them, and the costs and length of proceedings are generally excessive.
Recommendation
We suggest to emulate fully the reforms introduced in the UK in April 1999 by Lord Woolf updating UK procedural law by reforming civil procedure rules with the objective to provide an easy, timely and cost - efficient procedure for the Courts and Tribunals. The overriding objective of the Woolf reforms in civil proceedings is the resolution of a conflict rather than successes based on procedural strategy.
Pre - Trial Procedure/ Mediation
We are receptive to the obvious benefits of pre - trial dispute resolution: this clarifies the subject matter of the dispute and might lead to an agreement before the case has to be heard. Any pre - trial resolution of the conflict will be more cost efficient and will maintain healthy business relationships between the parties involved.
In its recent press release on their new Mediation Service as an alternative to expensive litigation, the Patent Office acknowledged that “Intellectual Property disputes and litigation in general place a burden on businesses both in terms of cost and time.”
We wholeheartedly welcome this initiative offering facilities for mediation and/ or a mediator; we agree with the benefits of mediation for settling a dispute efficiently as outlined by the Patent Office.
This will encourage the parties to engage in informal and private discussions with an independent mediator with a view to reaching a pre - trial agreement which should lead more readily to solutions than a dispute at the Copyright Tribunal which invariably will be more adversarial. Pre - trial discussions between the parties will also help to focus the dispute by singling out the specific issues of disagreement.
Recommendation
Whilst the Mediation Service seems primarily intended to resolve patent and trademark disputes, we hope that it will also cover copyright disputes. Furthermore, we suggest the introduction of a strong incentive for disputing parties to employ mediation services. This could be framed along the lines of the requirements under UK civil procedure rules to consider any form of Alternative Dispute Resolution as an alternative means of resolution at every stage of proceedings.
Summary Applications
We also support the proposal set out in the BCC’s submission for the possibility of early assessment of the issues by the Chairman to consider applications to dismiss references on the basis that they are premature, vexatious or abusive.
Notes
1. Para 1 of the 1995 Practice Direction dated 7th April 2004
2. www.patent.gov.uk
3. The Performing Right Society also provides for an Appeal Panel to deal with disputes with their members
4. C.f. footnote 1