Private Use
on Musical Works, Rights of Public
Performance,
and Collecting Society Systems.
By'
Judge Visit Sripibool
share
with an uplift to reflect the number of hours of music broadcast by Sky.
In British Airways Plc. v. The Performing Right Society Limited,(292)
British Airways ('BA') sought to alter its existing license allowing it
to broadcast musical works to the passengers in its aircraft. BA argued
that the current tariff should be reduced to reflect a reduced use of
the music broadcast which had not previously been taken into account and
PRS sought to maintain the status quo by arguing that the onus lay on
BA to show that the current tariff was unreasonable. The Tribunal rejected
the PRS argument that the onus lay on BA to establish the unreasonableness
of the current tariff and after comparing the United Kingdom tariff to
the tariffs imposed in other countries it decided that as BA provided
an international product the tariff should be in line with whose of other
countries. The Tribunal also altered the basis of the tariff, deciding
that the royalty rate should take into account: I) a standard flat rate
for the take off and landing music, and II) the number of passengers who
were on flights where 'in-flight' entertainment was available.
It can be noted that each of the decisions outlined above was reached
by the Tribunal in the exercise of a different jurisdiction involving
a different industry and it is therefore not surprising that different
detailed reasons were given to justify the royalty rate determined by
the Tribunal. However, these decisions may be seen as revealing a common
approach to collective copyright licensing, at least as regards the question
of how far the royalty should be based on the user's revenue.
In AEI, the Tribunal accepted the PPL proposal that the closest comparable
was with narrowcasting rather than with broadcasting, because with commercial
radio broadcasting factors other than music commercial radio broadcasting
factors other than music are largely responsible for earning the licensee
its revenue from the broadcasts; for example, the contribution of the
'DJ' can be significant and can affect the numbers of people choosing
one commercial radio station over another, thus materially affecting its
advertising revenue. Consequently, the revenue earned by the radio station
through broadcasting was not directly referable to the use of PPL's repertoire
of sound recordings to provide music. With narrowcasting, however, the
revenue earned through the provision of narrowcasting service was directly
referable to the use of music provided by PPL's sound recordings, even
allowing for any added value the narrowcaster might bring to that music
by his skillful choice and compilation. Furthermore, with narrowcasting,
as with the service AEI was providing, the music is the very essence of
the service: there would be no service without the music.
In Sky, the music that is licensed has a different role to that in the
service provided by AEI, because the music is merely part of a broadcast
for a television programme rather than comprising the whole broadcast
for a radio programme. Only a small part of Sky's revenue is in any sense
attributable to the playing of music, because the service provided embraces
services other than the exploitation of the right licensed by PRS. Further,
that small part of the revenue is itself not capable of being separately
identified. Having rejected the revenue basis the Tribunal considered
the alternative put forward by Sky which amounted to a royalty based on
the numbers of people watching Sky and therefore being exposed to the
music. The Tribunal considered the essence of the Sky proposal to be acceptable,
that is a royalty based on the extent of exploitation of the right. However,
viewing figures alone were not an accurate reflection of the extent of
exploitation, which should also reflect the amount of broadcasting, assessed
by reference to matters such as the number of channels, the types of programmes
and the hours of transmission. These factors were reflected in an uplift
in the royalty.
In BA, neither party put forward a proposal on the revenue basis and the
Tribunal did not choose to consider one either. Clearly, a royalty based
on a percentage of BA's revenue would be wholly inappropriate for the
exploitation of the right to broadcast music, since in-flight music plays
such a small role in the service provided by the airline. It would be
almost impossible to determine bow much of BA's revenue is referable to
the playing of in-flight music. A royalty was set which was based upon
a comparison with airline tariffs set in other countries and by an examination
of the extent of exploitation. The Tribunal considered that a lower tariff
was appropriate as being then assessed the extent of the exploitation
to determine the new rate. The Tribunal determined that there were two
parts to the exploitation of the right by BA. There was the provision
of in-flight entertainment requiring the use of headsets and for this
the Tribunal set a price per passenger and then calculated the number
of passengers using this service. There was also the take-off and landing
music which all the passengers on BA were exposed to and thus a separate
standard price per passenger was added to the other limb of the royalty.
From the cases mentioned above it seems logical to use a revenue based
royalty where the customer of the licensee can be shown to be paying an
identifiable part of the consideration for the benefit of the right being
licensed to the licensee. In such a case the customer of the licensee
is paying for the exploitation of the right and little else, and the revenue
generated by the licensee through the exploitation of the right, rather
than through the provision of other goods or service, can more readily
be separately identified. What else the licensee provides, such as equipment
etc, will not usually be part of the assessed revenue on which such royalty
will be paid, as was the case in the AEI. However, where the music merely
enhances a business rather than being the service provided, such as in
the Sky and BA cases, it is inappropriate for a royalty to be based on
the licensee's revenue when so many factors other than the playing of
music will contribute to that revenue. In such circumstances the Tribunal
will not look to a revenue based royalty but will look to the extent of
the exploitation of the right and decide what is a reasonable price per
unit of exploitation, having considered the possible economic benefits
of the music to the licensee. The precise unit of exploitation will vary
depending on the business but it will be comprised of two parts. First,
the extent of the use of the music, such as the number of hours the music
is played in total and, secondly, the number of people listening or being
exposed to the music.
Although these three decisions can be seen to be based on independent
economic arguments they emphasize that in such cased of collective licensing
of rights there will usually be two alternative bases on which a royalty
may be determined by the Copyright Tribunal: revenue or the extent of
exploitation of the right granted. Which basis is chosen will depend upon
whether or not the revenue earned by the licensee is directly referable
to the licensed act and is also separately identifiable in the hands of
the licensee. It if is, or is sufficiently so, then a revenue based royalty
should be the favoured bases, particularly in view of the difficulties
which the Tribunal invariably faces when it seeks to explain the value
which it places on a unit of exploitation.
In the area of educational institutes, sometimes there are disputes between
universities and collecting societies on the issue of the fee rates. In
2001, in the United Kingdom, there was an interesting case(293) in this
topic. The Tribunal concluded in many issues. That is, it was impossible
to base any quantitative conclusions on page of textbooks or any other
document within the scheme of licenses to calculate the fee rates, the
true economic cost was a useful indicator but was not necessarily the
direct route to the royalty rate. It may be more relevant to consider
the retail price of the book and the value to the student. The material
likely to be copied under the schools' license was different. School books
were much cheaper than university books. So the royalties were altered.
Conclusion
From
all materials abovementioned, a conclusion may be difficult to do so,
if necessary, it would summarize in the way of factors in the present
age. At present, the society is global not rural. Domestic economic system
is no more existing. The global economic system is overwhelmed all. The
economic rights come first. The notion of rewarding the discoverer or
creator for giving society a useful thing is ancient.(294) The school
of thought of public right may be obsolete.(295) Nothing is absolutely
free.
Private
uses on musical works are in trends to be strictly construed. Public performance
on musical works in restaurants, cafes or shops, even small of spaces,
may have to pay fee to the copyright owners or collecting societies. The
exception will clearly be provided by laws. No pay, No rights. As M. Bourget
said "you consume my music, I consume your wares".(296) However,
In some regards, there is a critical question, that is, the all owners'
rights in the scope of the copyright laws are the exclusive right or the
remuneration rights.(297)
Limitations
of exclusive rights, fair use, fair dealing, exhaustion of right, homeuses
and others, may finally be interpreted by courts in the narrow meanings,
or any exemption will ostentatiously be provided by laws, otherwise no
limitations can be raised.
Music
seems to be freely available but it is not free. Music is created and
owned by somebody and that somebody, be it a composer, songwriter, lyricist
or music publisher, has a right to ask for payment.(298) Therefore, normally,
the users inevitably have to pay royalties to the rightowners.
At
present, the collecting societies, the new, or rather no longer so new,
information technology of digitalization and network communication has
radically changed the landscape of copyright collecting societies. They
do not need any longer to be collective, not in their tariffs and other
conditions, nor in their offer of global repertoires and nor in the allocation
of royalties. User contracts can be completely individualized and so must
repertoire and the distribution of royalties.(299) Especially, in the
light of the requirements arising out of the digital environment, it is
necessary to ensure that collecting societies achieve a higher level of
rationalization and transparency with regard to compliance with competition
rules.(300) They will have to develop into completely neutral intermediaries
between two parties in the market, rightowners and users.(301)
On
the basis of the exclusive exploitation right the collecting society can
place a supplementary copyright on the market.(302) However, the royalty
rate must be reasonable compensation for the copyright owner and also
reasonable for the user to pay.(303)
It
is important to realize that the collecting societies in each country
have been established within a particular legal, cultural and economic
context. Therefore how is the best system of the societies would consider
all factors of context of each country.
____________________________________________________________________________
(292) Interim Decision,
January 12, 1998.
(293)
Universities UK v. Copyright Licensing Agency Limited, Decided by the
Copyright Tribunal 13 December 2001, Intellectual Property Decisions,
Informa Law, March 2002 vol.25 no. 3.
(294) Anthony D' Amato, Doris Estelle Long , International Intellectual
Property Law, Kluwer Law International, 1997 at 27.
(295) Id. at 28-39.
(296) Ernest Bourget, a French composer of popular musical chansons and
chansonettes comiques. He said in 1847, and he won before the Tribunal
de Commerce de la Seine. Martin Kretschmer, The failure of Property Rules
in Collective Administration: Rethinking Copyright Societies as Regulatory
Instruments, European Intellectual Property Review, 2002 at 2.(Westlaw)
(297) See Schonning, supra note 133, at 971.
(298) The leaflet released by The Performing Right Society (PRS) March
1993 at 3.
(299) See Jehoram, supra note 186, at 7.
(300) Id.
(301) See Id, at 6.
(302) G. Basset v. Societe des Auteurs, compositeurs et Editeurs de Musiue
(SACEM),[1987] 3 C.M.L.R.173.
(303) See Id, supra note 283. |