17 December 2013

Copyright Licensing BBC v EOS



As everyone knows, copyright restricts the acts listed in s.16 (1) of the Copyright, Designs and Patents Act 1988 ("CDPA") in relation to a work in which copyright subsists ("a copyright work"). Those acts include copying, issuing copies, renting, lending or communicating the work to the public etc. Anyone who does any of those acts without the owner's licence infringes that copyright. He or she may be sued or in an extreme case prosecuted.

Clearly, if you want to broadcast, perform or otherwise make use of a copyright work it is a good idea to get a licence. As all those lovely artists, choreographers, composers. dramatists, novelists, poets, song writers and other authors need to live it is only right that they get paid a reasonable fee for their trouble. But therein lies the rub because what may seem reasonable to you and me as consumers may not feel reasonable to an artist in his garret or, more importantly, his agent in his BMW. As I argued  at the Arab-British Chamber of Commerce conference on IP last week, copyrights and other intellectual property are not an unalloyed good for they confer monopolies which restrict competition and consumer choice.

Monopolies and exclusive rights are particularly baleful when the owners of those rights get together in collecting societies or other licensing bodies.  In saying that I mean no criticism of authors or other intellectual property owners.  It is after all only human to exploit an advantage. But to prevent intellectual property owners from holding the public to ransom some safeguards are required. In the United Kingdom these are provided by Chapters VII and VIII of Part I of the CDPA.  

Chapter VII regulates licensing schemes, that is to say schemes setting out -
(a) the classes of case in which the operator of the scheme, or the person on whose behalf he acts, is willing to grant copyright licences, and
(b) the terms on which licences would be granted in those classes of case.
The definition " includes anything in the nature of a scheme, whether described as a scheme or as a tariff or by any other name (s.116 (1)).

Chapter VIII provides for the Copyright Tribunal (originally set up by S.23 of the Copyright Act 1956 and then known as "the Performing Right Tribunal") to adjudicate disputes over the terms of licensing schemes between those who grant licences such as collecting societies and those who want licences over the terms of such licensing schemes.

A very good example of such a dispute is the one that arose between Eos (an association of Welsh language song writers and others) and the BBC over the terms on which Welsh language content was to be licensed to the Corporation. The content providers wanted £1.5 million while the Beeb offered £100,000. As they couldn't agree the BBC referred the dispute to the Tribunal.   For the BBC's side of the story see "Eos loses £1.5m BBC royalty battle and get £100,000" 16 Dec 2013. For Eos's see "Basic Facts about Eos and the Current Dispute with the BBC". For the Tribunal's decision, see BBC v Eos  (16 Dec 2013).

The provision under which the BBC referred the dispute was s.125 of the CDPA:
"(1) The terms on which a licensing body proposes to grant a licence may be referred to the Copyright Tribunal by the prospective licensee.
(2) The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.
(3) If the Tribunal decides to entertain the reference it shall consider the terms of the proposed licence and make such order, either confirming or varying the terms, as it may determine to be reasonable in the circumstances.
(4) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine".
The Tribunal had already accepted the reference earlier in the year as the BBC had applied for an interim order to allow it to use the Eos repertoire at such a rare and on such terms as the Tribunal thought fit pending a substantive hearing (see BBC v EOS (17 May 2013). The substantive hearing took place in September.

The Tribunal found for the BBC on the amount of the royalty because there was already a licensing scheme in place for non-Welsh content between the Performing Right Society ("PRS") and the Mechanical Copyright Protection Society ("MCPS") and the BBC for which s.129 of the CDPA required the Tribunal to have regard. Eos had argued that this scheme was inapplicable because Welsh language authors had not been separately represented in the negotiation. It also contended that Welsh language material was a special case needing special treatment and, in particular, more money for content providers.  The Tribunal was unimpressed with those arguments.   It concluded at paragraph [52] that the PRS and MCPS alliance agreement was a useful starting point and that the methodology used by the BBC to allocate the licence fee payable under that (scheme which was based on content consumption) was a fair basis for apportionment. That would have resulted in a licence fee of £46,000 but it allowed an uplift to £100,000 to take account of special factors relating to Welsh content.

The irony of this case is that the content providers found themselves bound ultimately by the terms of a scheme with which they were dissatisfied and which had prompted them to leave the PRS and set up Eos instead (see the press release "Over 2,000 composers in Wales go it alone" 4 Oct 2012), In the light of the Copyright Tribunal's decision they can be forgiven for wondering why they bothered.  At paragraph [7] of its decision the Tribunal said that its discretion was not unfettered because the Act required it to take account of certain factors in coming to its decision but, if that is so, it is surprising.  The discretion in s125 (3) seems wide enough in that it allows the Tribunal to "make such order, either confirming or varying the terms, as it may determine to be reasonable in the circumstances (my italics)." It is true that s.129 to have regard to the availability of other schemes, or the granting of other licences, and to the terms of those schemes and licences but it is not hidebound by them and in particular it has a duty under s.135 to have regard to all relevant circumstances. If it so wishes Eos can appeal to the High Court on a point of law under s.152 of the CDPA but it must do so within 28 days from the date of the decision in order (rule 33 (1) of the Copyright Tribunal Rules 2010).

Should anyone wish to discuss this article or indeed copyright licensing in general he or she is welcome to call me on 020 7404 5252 during normal business hours or message me through my contact form. He or she can also tweet me, write on my wall or contact me through G+, Linkedin or Xing.

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