23 February 2012

No extra music royalties from streamed radio programs because they're broadcasts, says Federal Court

In the latest case involving online technologies and copyright, the Federal Court has held that radio programs simulcast over the internet are "broadcasts", so broadcasters do not need to pay extra royalties for using copyrighted music (Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Limited [2012] FCA 93).

The applicant, Phonographic Performance Company of Australia Ltd (PPCA), represents the interests of copyright owners of sound recordings. The Commercial Radio Australia (CRA) members were granted a non-exclusive licence to broadcast music, which they simulcast as part of radio programs over FM radio and the internet.

The PPCA sought a declaration from the Court that the licence did not allow the CRA members to simulcast the music over the Internet, so the internet simulcast was a breach of copyright.

The licence granted the CRA members "the right, from time to time, to Broadcast Sound Recordings in Australia".

The word "broadcast" was defined in the licence by reference to sections 85(1)(c) and 10(1) of the Copyright Act 1968. The definition of "broadcast" in the Act refers to "broadcasting service". It was common ground that a "broadcasting service" as defined by the Act clearly covered the right to make available a sound recording in respect of which copyright subsists via the internet. In dispute was the meaning of a Ministerial Determination of the definition of "broadcasting service" in the Act.

The Ministerial Determination set out that any service that makes available television or radio programs using the internet would be excluded from the definition of "broadcasting service" with the following exception:

"[any] service that delivers television programs or radio programs using the broadcast services bands."

PPCA argued that the relevant "service" in the exclusion was the service of transmitting the music over the internet by the CRA members. As internet transmission of the music did not use "broadcast service bands", it was not covered by the exclusion, so as a result the licence did not grant CRA members the right to simulcast the music over the internet.

In response, CRA argued that the word "service" in the exclusion referred to the whole service provided by the CRA members. Consequently, as CRA members simulcast the music both over FM radio (a broadcast service band) and the internet, the service as a whole was a "broadcast service" for which CRA members held the licence.

Justice Foster accepted CRA's interpretation of the word "service" in the Ministerial Determination, noting that:

"The service which transmits the very same radio programs at essentially the same time both to the FM transmitters and beyond and to the web stream services and beyond is one service."

Consequently, Justice Foster found the simulcast of the music as part of radio programs via the internet and FM radio was within the definition of "broadcast" in the Act. As a result, the CRA members were not in breach of the licence or the Act and no extra royalties were payable to the PPCA for simulcasting the music over the internet.

By Mary Still and Rachel Wright

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
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