Phonographic Performance Company of Australia Limited v Commonwealth of... [2012] HCA 8 | Case summary

Phonographic Performance Company of Australia Limited v Commonwealth of... [2012] HCA 8 | Case summary | Zoe

The first plaintiff ("PPCA") carries on business as a copyright collecting society. It acts in the interests of the owners and exclusive licensees or other exclusive controllers of copyrights in sound recordings which presently subsist under Pt IV (ss 84‑113C) of the Copyright Act 1968 (Cth) ("the 1968 Act"). PPCA does so by licensing the right to broadcast those sound recordings.
In particular, it is agreed for the purposes of the Special Case that PPCA acts on behalf of the second to fifth plaintiffs in respect of the sound recording copyrights in published sound recordings which were made of performances by well‑known performers and groups[1] before the critical date, namely the commencement on 1 May 1969 of the 1968 Act ("the pre‑1969 recordings"). The sixth plaintiff is also the holder of relevant sound recording copyrights.
Prior to the 1968 Act, the Copyright Act 1911 (Imp) ("the 1911 Act") was in force in Australia, with such modifications as were made by the Copyright Act 1912 (Cth) ("the 1912 Act") as amended from time to time. In respect of the pre‑1969 recordings, it is agreed for the purposes of the Special Case that the effect of the transitional provisions in Div 1 (ss 204‑209) and Div 3 (ss 220‑225) of Pt XI of the 1968 Act is that they are to be taken to be sound recordings in which copyright subsists under Pt IV of the 1968 Act. Copyright in the pre‑1969 recordings will continue for 70 years from the date they were made. This is the consequence of the 20‑year additional term conferred on 1 January 2005 by operation upon the 1968 Act of the US Free Trade Agreement Implementation Act 2004 (Cth)[2] ("the Free Trade Act").
The Commonwealth is the first defendant. The second defendant ("the ABC") is the public broadcaster referred to in s 5 of the Australian Broadcasting Corporation Act 1983 (Cth), being a continuation of the body established pursuant to the Broadcasting and Television Act 1942 (Cth). The third defendant ("CRA") represents commercial radio broadcasters in the negotiation of licence agreements for their benefit.

The presence of compulsory licensing schemes may be a convenience to collecting societies such as PPCA. Accordingly, the plaintiffs do not submit that, with respect to the pre‑1969 recordings or otherwise, the compulsory licensing system in respect of the broadcasting of sound recordings established by the 1968 Act is wholly invalid. Their attack on validity is more narrowly based. The contention is that by fixing the "cap" upon the amount which the Tribunal may determine for the compulsory licence of the pre‑1969 recordings, the 1968 Act did not provide for equitable remuneration. The plaintiffs submit that the 1968 Act effected, on 1 May 1969, an acquisition of the property in the pre-1969 recordings on other than just terms as required by s 51(xxxi) of the Constitution. The result that the plaintiffs seek, in effect, is the retention of the compulsory licence provisions in s 152 but after severance from those provisions of the requirements for the "cap".
The defendants resist this outcome on various grounds. The determinative ground is one advanced primarily by the Commonwealth. This fixes upon the relationship between, on the one hand, the 1911 Act and the 1912 Act and, on the other, the 1968 Act. In short, the Commonwealth denies a critical assumption upon which the plaintiffs' argument rests.
The assumption by the plaintiffs is that the copyright presently enjoyed in respect of the pre‑1969 recordings, and which will expire in accordance with the extended term fixed by the operation of the Free Trade Act upon the 1968 Act, is that which arose under the 1911 Act and was carried forward by the 1968 Act, but with the impermissible imposition upon those copyrights of the "cap" in the compulsory licensing system introduced by the 1968 Act. The Commonwealth denies that assumption. The Commonwealth submission, which should be accepted, is that upon the proper construction of the 1968 Act: (a) copyrights subsisting in Australia on 1 May 1969 under the Imperial system were terminated; (b) thereafter, no copyright subsisted otherwise than by virtue of the 1968 Act; and (c) to that copyright in respect of sound recordings there attached immediately the compulsory licensing system including the "cap" upon the royalties payable thereunder.
It should be emphasised that the plaintiffs do not assert that the 1968 Act is invalid by reason of its bringing to an end the operation in Australia of the Imperial system without the provision of just terms. To do so successfully would be to leave them with such rights in respect of the pre‑1969 recordings as they had under the 1911 Act and the 1912 Act, and without any copyrights subsisting under the 1968 Act. Rather, the plaintiffs seek to attack the validity of the attachment to their rights under the 1968 Act of one aspect of the compulsory licensing system for sound recordings. For the reasons which follow, that attack must fail.

It is necessary to begin with some consideration of the 1911 Act and the 1912 Act and their relationship to the 1968 Act.
It has been said by a contemporary scholar[5] that "the 1911 Act accommodated a broad range of concerns relating to trade, colonial and international relations, authorship and the public interest without necessarily resolving them into a coherent or a unified whole". But that understates the effect of s 36 and s 24 of the 1911 Act. Section 36 of the 1911 Act repealed 21 statutes, and s 24 provided, with respect to an "existing right", for the conferral of a "substituted right", as specified in the First Schedule, and denied entitlement to any "other right or interest"[6]. This, as will become apparent, provided some precedent for what was later to be adopted in Australia as the scheme of the 1968 Act.
Before the enactment of the 1911 Act, in May 1910 an Imperial Copyright Conference was held in London and presided over by the President of the Board of Trade[7]. The self‑governing Dominions - Canada, Australia, New Zealand, South Africa and Newfoundland - were represented; in the case of Australia by the former Governor‑General Lord Tennyson. The memorandum of the proceedings was presented to the Parliament at Westminster in July 1910[8]. Resolution 2(a) of the Conference recognised "the urgent need of a new and uniform Law of Copyright throughout the Empire", and recommended the passage by the Imperial Parliament of a statute "dealing with all the essentials of Imperial Copyright Law" but which was not to extend to a self‑governing Dominion unless declared by its legislature to be in force therein, "either without any modifications or additions, or with such modifications and additions relating exclusively to procedure and remedies as may be enacted by such Legislature". Resolution 2(b) stated: "Any self‑governing Dominion which adopts the new Act should be at liberty subsequently to withdraw from the Act, and for that purpose to repeal it so far as it is operative in that Dominion, subject always to treaty obligations and respect for existing rights."
Section 19(1) of the 1911 Act provided:

It was in that setting that the Parliament enacted the 1968 Act. As indicated above, it is to the 1968 Act, in the form in which it came into force on 1 May 1969, that attention is to be given for the purposes of the Special Case.
Section 6 of the 1968 Act repealed the 1912 Act as it had been amended[17]. However, s 5(1) was not expressed to "repeal" the 1911 Act, whether in exercise of power conferred by s 26(1) of the 1911 Act or by s 2(2) of the Statute of Westminster. Rather it stated: "This Act operates to the exclusion of the [1911 Act]." Then, for the purposes of the application of the transitional provisions in s 8 of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act"), s 5(2) of the 1968 Act "deemed" the 1911 Act, an Imperial law, to be a statute passed by the Parliament of the Commonwealth and to be repealed by the 1968 Act. The result of this "deeming" provision, for example, was to attract the operation of s 8 of the Interpretation Act to the continuation of pending legal proceedings.
Further specific transitional provisions were made in the 1968 Act itself. For example, sub‑ss (2)‑(7) of s 19 of the 1911 Act had established a licensing system for the use of musical works in sound recordings; s 215(2) of the 1968 Act was expressed to operate notwithstanding the general terms of s 5(1), and gave some continued operation to those provisions of s 19 of the 1911 Act.
The presently critical provision in the 1968 Act was s 8. It provided: "Subject to [any prerogative right or privilege of the Crown], copyright does not subsist otherwise than by virtue of this Act or of the Designs Act 1906‑1968."
Part IV (ss 84‑113) was headed "COPYRIGHT IN SUBJECT‑MATTER OTHER THAN WORKS". Section 89(1) provided: "Subject to this Act, copyright subsists in a sound recording of which the maker was a qualified person at the time when the recording was made." In Pt IV, "qualified person" meant certain individuals and "a body corporate incorporated under a law of the Commonwealth or of a State" (s 84). For the purposes of the 1968 Act, and unless the contrary intention appeared, the copyright in a sound recording comprised the exclusive right to make a record embodying the recording (s 85(a)), to cause the recording to be heard in public (s 85(b)), and to broadcast the recording (s 85(c)). Sounds embodied in a sound‑track associated with visual images forming part of a cinematograph film were deemed not to be a sound recording (s 23(1)).
In addition, something more should be said about s 89(3). This provided, without prejudice to s 89(1) and s 89(2), that copyright subsisted in a published sound recording, the first publication of which took place in Australia. But by force of s 105, copyright subsisting only by virtue of s 89(3) was not infringed by the causing of the recording to be heard in public (s 85(b)), or by broadcasting it (s 85(c)); the monopoly created by s 89(3) thus was confined to the making of a record embodying the recording (s 85(a)).

The plaintiffs' submissions depend on s 220. Each sub-section in s 220 is linked to s 89(1) and depends directly (s 220(1)) or indirectly (s 220(2) and (3)) on it.
Section 89(1) is expressed to be subject to the 1968 Act, and hence to s 8(1). Section 8(1) provided that "copyright does not subsist otherwise than by virtue of [the 1968] Act or of the Designs Act 1906-1968." Thus it denied that there was any other possible source of copyright, like s 19(1) of the 1911 Act. Section 8(1) was subject to s 8(2) (relating to prerogative rights and privileges). But s 8(1) was not otherwise subject to the 1968 Act. Hence neither s 5(2) nor any other part of the 1968 Act can be read as contradicting or prevailing over s 8. The consequence is that the 1968 Act stated the law as to copyright exhaustively. It obviated the need to examine the legal position under the 1911 Act.
Section 89(1) was also subject to s 6. Section 6 repealed the 1912 Act. Section 89(1) was also subject to s 5(1). As already noted, it provided that the 1968 Act "operates to the exclusion of the" 1911 Act. And s 89(1) was subject to s 5(2), which deemed the 1911 Act to be repealed.
Contrary to the plaintiffs' submissions, s 8 of the Acts Interpretation Act 1901-1966 did not treat rights in relation to sound recordings under the 1911 Act as being "accrued rights" in relation to matters to which Pt XI applies. Section 5(2) of the 1968 Act specifically provided to the contrary. Among the provisions in Pt XI were ss 207 and 220. Section 220 adopted, but significantly modified, s 89.
Section 89 of the 1968 Act, considered independently of ss 207 and 220, did not have the effect of continuing s 19(1) of the 1911 Act. It did not purport to continue rights which existed before 1 May 1969. Read with s 8, the effect of s 89 was to create new copyrights. It is true that s 89 was subject to the 1968 Act. It is therefore true that s 89 was subject to those of the provisions of the 1968 Act which preserved states of affairs that existed under the 1911 Act. To some extent, in matters to which Pt XI did not apply, preservation was achieved by s 8 of the Acts Interpretation Act 1901-1966. To some extent it was achieved by s 207 in Pt XI of the 1968 Act. Section 207 provided:

CRENNAN AND KIEFEL JJ. The questions of law set out in the Special Case, reserved by a single Justice for the consideration of the Full Court, concern the constitutional validity of ss 109 and 152 of the Copyright Act 1968 (Cth) ("the 1968 Act"). Those sections provide for and govern a compulsory licence scheme in respect of the broadcasting of sound recordings.
The plaintiffs contend that ss 109 and 152 of the 1968 Act, or any parts thereof, are invalid by reason of s 51(xxxi) of the Constitution in that they are laws with respect to the acquisition of property that do not also provide for just terms. The property which is said to have been acquired is a copyright owner's exclusive right (or a substantial part of it) to perform a record in public. For reasons which will become clear, for the purposes of the Special Case this exclusive right was treated as an exclusive right to broadcast a sound recording. It needs to be noted that the Special Case is concerned with copyright in sound recordings made between 1957 and 1966 - that is, recordings which were in existence as at 1 May 1969[22], and in which copyright had subsisted under s 19(1) of the Copyright Act 1911 (Imp) ("the 1911 Act"), in force in Australia by virtue of s 8 of the Copyright Act 1912 (Cth) ("the 1912 Act")[23]. Some details of the rights under copyright law of each of the relevant plaintiffs in respect of the sound recordings in question are set out in the Special Case.
The 1911 Act was adopted by the 1912 Act[24], not as Commonwealth legislation, but as an Imperial Act[25], and thereafter applied in Australia with such modifications and additions as made from time to time. The Copyright Act 1956 (UK) ("the 1956 Act") repealed the 1911 Act[26], but did not contain any declaration that the Commonwealth of Australia requested or consented to the Act. Thus, by reason of s 4 of the Statute of Westminster 1931 (Imp)[27], the repeal by the 1956 Act of the 1911 Act did not extend to Australia[28]. Section 19 of the 1911 Act remained in force in Australia in respect of sound recordings until 1 May 1969. It can also be noted that, whilst s 26 of the 1911 Act imposed limitations on the power of the self‑governing dominions to which it extended to repeal the 1911 Act, that provision subsequently became subject to s 2(2) of the Statute of Westminster.

Relevantly, s 109 of the 1968 Act provides that "the copyright in a published sound recording is not infringed by the making of a broadcast … of that recording" if, at the time of the broadcast, there is an order of the Copyright Tribunal ("the Tribunal") in force under s 152 and the broadcaster makes payments pursuant to that order in favour of the copyright owner, or if there is an undertaking that the broadcaster will pay such amounts as may be determined under s 152.
Accordingly, the section operates to qualify the exclusive right of an owner of copyright to communicate a published sound recording to the public by radio broadcast, by the provision of a compulsory licence to broadcasters. A broadcaster is relieved of the obligation to obtain the owner's consent to broadcasting provided the broadcaster pays a specified amount, determined under s 152, as a quid pro quo for the statutory relief from infringement pursuant to s 101 which is given by s 109. Copying for private and domestic use is covered separately by s 109A.
Sub-sections (8) and (11) of s 152, directed respectively to the amounts to be paid by commercial radio broadcasters and the Australian Broadcasting Corporation ("the ABC"), provide for caps upon those amounts to be determined by the Tribunal. The cap imposed by s 152(8) is determined by reference to a percentage of gross earnings of a commercial radio broadcaster in a specific period, being the period of the same duration as the period covered by the Tribunal's order, ending on the most recent 30 June. The cap imposed by s 152(11) is determined by reference to multiplying a percentage by the estimated population of Australia as last set out in the statistics of the Commonwealth Statistician.
It is those statutory caps in respect of the statutory relief from infringement which are said to give rise to a failure to provide for just terms in respect of the acquisition of the exclusive right (or a substantial part thereof), subsisting under the 1911 Act, to perform a relevant record in public by radio broadcast.

The 1911 Act involved the repeal[34] of a number of disparate copyright Acts, in whole or in part, stretching back to the Engraving Copyright Act 1734 (8 Geo 2 c 13), and including the Copyright Act 1842 (UK) (5 & 6 Vict c 45), which conferred a performing right in certain musical works by extending to musical works the performing right in certain dramatic works under the Dramatic Copyright Act 1833 (UK) (3 & 4 Will 4 c 15).
The 1911 Act extended to His Majesty's dominions[35] and the two connecting factors for the subsistence of copyright were that a published work was first published in such parts of His Majesty's dominions to which the Act extended (s 1(1)(a)), and that an author of an unpublished work was, at the date of the making of the work, a British subject or resident within such parts of His Majesty's dominions to which the Act extended (s 1(1)(b)). The 1911 Act put copyright in both published and unpublished works on a statutory footing.
Relevantly for present purposes, s 1 of the 1911 Act dealt with copyright in original musical works which, by s 1(2), included the sole right "to perform … the work or any substantial part thereof in public". In copyright law, the term "original" as applied to a work had been established as meaning that the work was produced by means of the application of a not insubstantial amount of independent skill and labour. "Performance" was relevantly defined in the 1911 Act[36] to include "any acoustic representation of a work … including such a representation made by means of any mechanical instrument". A broadcast of a musical work was held uncontroversially by the Supreme Court of Victoria to be a performance in public[37].
As explained in the sixth edition of Copinger[38], a change in attitude in favour of protecting authors of musical works from the reproduction of those works by mechanical means, which occurred between the time of the Berne Convention of 1886[39] and the Revised Convention of Berne of 1908[40], is part of the historical background relevant to s 19 of the 1911 Act. Section 19(1) was the first provision for copyright in "records", which are referred to in the 1968 Act as "sound recordings".
Section 19(1) of the 1911 Act provided:

"Plate" was defined[41] as including a number of items "by which records … for the acoustic representation of the work are or are intended to be made".
It is important to note that, unlike the 1968 Act, and before it the 1956 Act, the 1911 Act did not identify the nature of a separate copyright in respect of records. The copyright in records was subsumed under the copyright for musical works. The definition of copyright in s 1(2) of the 1911 Act encompassed both the sole right of multiplying copies of an original musical work and the sole right of performing such a work in public. Thus, although equivalences were expressed generally - that is, the owner of the copyright in a record was treated as the "author" of the record and the record in turn was treated as if it were "a musical work" - such language inevitably suggested that the copyright of an owner of a record must include the same performance right given to an author or composer.
Exceptions to infringement for various forms of fair dealing were provided in s 2(1). Further, there was provision for the payment of royalties after death[42] and for the seeking of a compulsory licence from the Privy Council for the performance of a musical work following the death of an author[43], which provision was, according to the Spicer Committee, rarely used[44].
A specific exception to infringement through a compulsory licence scheme for the payment of prescribed royalties was provided in s 19(2) and (3) of the 1911 Act. That compulsory licence scheme was confined expressly to musical works[45] and essentially obliged an owner of the copyright in a musical work who had permitted a use of that work to licence any further use on the receipt of a notice and the payment of a royalty.
The copyright given to authors and makers of records was, as Augustine Birrell said of the copyright granted by the Statute of Anne of 1709[46], "qualified and time‑limited property"[47]. Although the categories of protected works were much enlarged by the time of the 1911 Act, speaking generally the 1911 Act, like the Statute of Anne, took into account and balanced the interests of authors[48], entrepreneurs[49] and the public. The public's interest lay in the dissemination of copyright works, including dissemination on reasonable terms. Any detailed consideration of the historical context of the Statute of Anne supports this construction of its intent and its provisions[50]. Further, presaging compulsory licence schemes, the prices of books under the Statute of Anne were regulated to ensure that they were "just and reasonable"[51] and the uses by, and rights of, nominated libraries and universities in respect of copyright works were preserved[52].
It was settled in Donaldson v Beckett[53] that copyright in published works depended upon statute, not the common law[54], and that the Statute of Anne limited the exclusive right of an author or owner of the copyright to multiply copies of an original published work so as to balance that right against the public interest in freedom to have access to, and to exploit, such works. It can be noted that the American copyright tradition exemplified in Wheaton v Peters[55] follows Donaldson v Beckett.
As noted by this Court in IceTV Pty Ltd v Nine Network Australia Pty Ltd[56], the "social contract" envisaged by the Statute of Anne, which underpins copyright legislation, is that an author (or owner) of copyright obtains a statutory monopoly, limited in time, in return for making the subject matter of a copyright available to the public. However, recurrent legislative balancing of the competing interests of copyright owners and the public does not support absolute propositions such as that copyright is an inherently unstable right, or that reductions in the exclusive rights to do acts within a copyright are always permissible adjustments under s 51(xviii) of the Constitution which do not attract the guarantee under s 51(xxxi).
Exceptions to infringement, which include fair dealings or fair uses and compulsory licence provisions, constitute qualifications of or limitations upon a copyright owner's exclusive rights to do acts within the copyright, during the term of a copyright. In each case, such provisions reflect a specific public interest in obtaining access to the subject matter of copyright on some reasonable basis, a topic about which more will be said later.
In Gramophone Co v Stephen Cawardine & Co[57], Maugham J had occasion to consider s 19(1) of the 1911 Act. He regarded the copyright given by s 19(1) to the owner of the "original plate" as "special" and as "subordinate" to the copyright given by s 1 to the author (or owner) of a musical work[58]. Professor Cornish and his co‑authors have recognised[59] that this subordinate right is in the same category of rights which Continental copyright jurisprudence would "scrupulously distinguish as a 'neighbouring right'."
Maugham J went on to find[60] that the grant of copyright in s 19(1) was not limited to "a mere right to prevent the reproduction in a physical form of the record and a right to sell the record" but included "the sole right to use that record for a performance in public, provided that the overriding rights of the original owner do not intervene." He said[61] that his construction of the copyright granted by s 19(1) prevented a buyer of a record from obtaining the advantage of "the work, skill and labour expended by the makers of gramophone records for the purposes of a public performance."
Prior to the decision in Cawardine, collecting societies had sprung up to deal with the performance rights of authors and publishers in both the United Kingdom and Australia[62]. Although there was contemporaneous debate in Australia about the ambit of a record manufacturer's copyright in records[63], in 1933 the Commonwealth legislature recognised a record manufacturer's performance right by providing a dispute resolution mechanism applicable to performance rights, including such rights of "a manufacturer of records"[64].
Cawardine was not the subject of appeal to a higher court but the reasoning in Cawardine was criticised before the passage of the 1956 Act[65]. In framing the 1956 Act, the United Kingdom legislature treated Cawardine as good law[66], although the 1956 Act abolished the awkward conflation of the copyright in records and musical works that existed in the 1911 Act[67].

The parties agreed, in accordance with the terms of the 1911 Act and authority[68], that the copyright in issue is a creature of statute.
The plaintiffs relied on Cawardine as supporting an exclusive right to broadcast as part of the copyright of manufacturers of records. It was contended that the copyright was property in the constitutional sense, as a copyright owner had an exclusive right to control copyright and the right was both valuable and assignable.
Secondly, the Commonwealth contended that Cawardine was wrongly decided and that therefore the property upon which the plaintiffs relied did not exist. Australian Tape Manufacturers Association Ltd v The Commonwealth[69] was relied on to support the proposition that a legislative reduction in or impairment of an exclusive right to do an act within a copyright does not necessarily result in the acquisition of property by anyone. Thirdly, on this branch of the argument it was contended by the Commonwealth that, in any event, the degree of impairment of any exclusive right of an owner of a copyright in a pre‑1 May 1969 sound recording was a permissible adjustment under s 51(xviii) of the Constitution and insufficient to attract s 51(xxxi). The Commonwealth accepted that statutory copyright is valuable and can have economic benefits for an owner but went on to contend that copyright is nevertheless a right which is inherently susceptible to adjustment or change[70].
The second and third defendants broadly supported the Commonwealth's submissions. The second defendant submitted that s 51(xviii) of the Constitution should be understood as including a power to make laws which create or modify a copyright, particularly to adjust competing interests, without the need for just terms because copyright was itself an abstraction from liberty which members of the public would otherwise enjoy. It was conceded that s 51(xxxi) could apply to some laws with respect to copyright including those nullifying existing causes of action for infringement. Nintendo Co Ltd v Centronics Systems Pty Ltd[71] was relied upon as supporting the proposition that some exercises of legislative power conferred by s 51(xviii) were necessarily outside the possible application of s 51(xxxi). On this issue, the third defendant joined the Commonwealth in submitting that Cawardine was wrongly decided and further contended that any performance right in sound recordings, if it existed, was at all relevant times uncertain.
All defendants relied on Australian Tape Manufacturers[72] as concluding the issue of whether a record manufacturer's performance right under the 1911 Act was necessarily outside the possible application of s 51(xxxi) of the Constitution.
Three points can be made in response to these submissions. First, inasmuch as the 1911 Act granted a copyright to record manufacturers, which was expressly conflated with the copyright of authors and composers of original musical works, Cawardine was decided correctly. Although it must be admitted that there is some semantic awkwardness in treating a "broadcast" as a "performance in public" of a record, there is a clear analogy with the composer's right to multiply copies of a musical work, in that public broadcasts of a record multiply performance in public as provided for in the 1911 Act. Further, a record constituted a new method of expression of ideas. It is an orthodox application of copyright principle to encourage makers of new subject matter, suitable for copyright protection, with the grant of a limited statutory monopoly in return for the dissemination of the new method of expression to the public.
That the 1956 Act distinguished between copyright in works, including musical works, and copyright in subject matter other than works, which included separate identification of the nature of copyright in sound recordings, does not detract from Maugham J's construction of s 19(1) of the 1911 Act, which contained no such separate identification of the nature of copyrights in musical works and records.
Secondly, a subsisting statutory right to exclude others from doing acts within a copyright, such as the right to perform a record in public (that is, broadcast the record), with the concomitant right to license others to do so, is incorporeal property[73] readily capable of being characterised as property for the purposes of the guarantee in s 51(xxxi) in accordance with established authority[74]. Pursuant to a licence authorising use of copyright material, a licensee acquires an identifiable benefit or measurable advantage[75] relating to the copyright owner's exclusive right to exploit the copyright by doing any of the acts within the copyright. The plaintiffs relied on Attorney‑General (NT) v Chaffey[76] in support of their argument that a law reducing subsisting statutory exclusive rights, such as those of copyright owners, could attract the operation of s 51(xxxi).
Thirdly, new technology can give rise to both the creation of new copyrights in respect of new subject matter and the creation of new exceptions to infringement, which may be assessed differently in respect of s 51(xxxi). New exceptions to infringement can include, on the one hand, a new fair dealing or free use, covering private, domestic or incidental use of copyright material. On the other hand, compulsory licence schemes frequently provide for payment to copyright owners by users of copyright material for multiple uses, or use which might be said to occur on a commercial scale. That distinction in relation to new exceptions to infringement may be relevant in respect of s 51(xxxi). The economic impact of any new exception to infringement on a subsisting statutory monopoly, and the public interest to be served by the creation of a new exception to infringement, may affect the question of whether any acquisition of property which the new exception effects will attract the guarantee in s 51(xxxi).
Australian Tape Manufacturers[77] concerned a widespread practice of copying sound recordings at home by the use of blank tapes. It was necessary to consider the validity of Pt VC of the 1968 Act, being a scheme under the 1968 Act to deal with the practice which included a provision, s 135ZZM(1), which created a new exception to infringement. This covered a new free use in respect of copying a sound recording onto a blank tape for the private and domestic use of the person copying. The finding that to the extent that s 135ZZM(1) reduced the content of the exclusive rights of the copyright owner, it was not a law with respect to the acquisition of property within s 51(xxxi) of the Constitution[78], can be considered in terms of the theoretical underpinnings of copyright law referred to above. First, there is a discernible public interest, analogous to the public interest in familiar fair dealing provisions, in permitting incidental use of copyright material in respect of new technology for private or domestic purposes. Secondly, such use is a use which a copyright owner could not realistically control or practically license. The first point readily fits within the recognition that a degree of impairment to a property right may be insufficient to attract the operation of s 51(xxxi)[79]. The second point is relevant to testing whether what is acquired is "proprietary in nature"[80]; it is also relevant because the extent of the disadvantage to a property owner may be a material matter in deciding whether just terms have been[81], or should have been, provided.
Nintendo[82] concerned a new copyright created under the Circuit Layouts Act 1989 (Cth), the nature of which included an exclusive right to exploit a protected circuit layout commercially in Australia (s 17(c)). A defence to infringement was created under s 20 for a person who innocently acquires and subsequently deals with an unauthorised circuit layout. A conclusion was reached that any acquisition of property in the circumstances of the case from persons adversely affected by statutory provisions creating a new copyright under s 51(xviii) was beyond the reach of the guarantee in s 51(xxxi)[83]. That conclusion has no immediate application to a statutory provision which has the effect of reducing a subsisting statutory exclusive right in respect of a copyright by characterising as no longer an infringement a use of copyright material which constituted an infringement previously and was capable of being licensed at that time.
While it subsisted, a record manufacturer's exclusive right under s 19(1) of the 1911 Act to perform a record in public (that is, broadcast the record) was property which was capable of attracting the guarantee in s 51(xxxi) of the Constitution.
Whether or not any subsequent legislative reduction of that right whilst it subsisted effected an acquisition of that property would turn on several considerations. Such considerations are likely to include the nature of the public interest to be served by the reduction of the copyright owner's subsisting exclusive rights. They could also include the question of whether, prior to the institution of any exception to infringement, the use of the copyright material in question would have been capable of being the subject of a licence between a copyright owner and any user, as that is an indication that what has been acquired is "proprietary in nature"[84].
Compulsory licence schemes which provide that users of copyright material can be excused from infringement, on the making of payments to copyright owners in respect of such use, recognise that users obtain a benefit under such schemes for which copyright owners should be remunerated. The notion of equitable remuneration referred to often in the context of compulsory licence schemes exemplifies this recognition.

In Pt I (ss 1-9A), entitled "Preliminary", s 6 repeals the 1912 Act and amending Acts of 1933, 1935 and 1963. Section 5(1) provides that the 1968 Act operates to the exclusion of the 1911 Act. Section 5(2) provides that, for the purposes of the transitional provisions in s 8 of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act"), the 1911 Act shall be deemed to be an Act passed by the Commonwealth Parliament and to be repealed by the 1968 Act, and that the transitional provisions in Pt XI of the 1968 Act shall not be taken to affect s 8 of the Interpretation Act, as it operates by virtue of s 5(2) in relation to matters to which the transitional provisions in Pt XI do not apply.
The most critical of the preliminary provisions of the 1968 Act, for present purposes, is s 8. It relevantly provides that, subject to prerogative rights of the Crown in the nature of copyright, "copyright does not subsist otherwise than by virtue of [the 1968] Act."
Parts III, IV and XI, to which it is necessary now to turn, must be read in the context of s 8 and the other preliminary provisions to which reference has been made.
Part III (ss 31-83) is headed "Copyright in original literary, dramatic, musical and artistic works". The nature of that copyright is set out in s 31 and, in the case of musical works, the copyright includes the exclusive right "to perform the work in public" (s 31(1)(a)(iii)) and "to communicate the work to the public" (s 31(1)(a)(iv)). Under s 10(1), "broadcast" means "a communication to the public".
Part IV (ss 84-113C) is headed "Copyright in subject-matter other than works". Section 85 sets out the nature of copyright in sound recordings. This relevantly includes the exclusive rights "to cause the recording to be heard in public" (s 85(1)(b)) and "to communicate the recording to the public" (s 85(1)(c))[86]. It can be seen from the separate copyrights in ss 31 and 85 that the awkward conflation of the copyrights in musical works and records under the 1911 Act does not exist in the 1968 Act.
Pursuant to s 89, copyright subsists in a sound recording where one or more of three connecting factors exists: first, the maker was a "qualified person" at the time the recording was made (s 89(1)); secondly, the sound recording was made in Australia (s 89(2)); and thirdly, the first publication of the recording took place in Australia (s 89(3)). The term of copyright subsisting by virtue of s 89 was extended by the US Free Trade Agreement Implementation Act 2004 (Cth) from 50 to 70 years.
Section 84 defines "qualified person" as an individual who is an Australian citizen or resident, or a body corporate incorporated under the law of the Commonwealth or of a State.
Part XI (ss 204-248) is headed "Transitional". Section 207 states that, unless Pt XI otherwise expressly provides, the 1968 Act applies in relation to things existing at its commencement in like manner as it applies to things coming into existence after its commencement. Section 220 covers "sound recordings", and the plaintiffs place critical reliance on s 220(1) to support their contention that copyright under the 1911 Act is "continued" under the 1968 Act.
Before turning to s 220(1), two matters should be noted. First, s 220(2) provides that s 89(2) (which contains the connecting factor based on a recording being made in Australia) does not apply in relation to a sound recording made before the commencement of the 1968 Act. Secondly, pursuant to s 105, copyright under s 85, subsisting only by virtue of s 89(3) (which contains the connecting factor based on first publication in Australia), is not infringed by broadcasting the recording. Such broadcasting would otherwise be within the exclusive right conferred on the copyright owner under s 85(1)(c).
Section 220(1) provides that s 89(1) (which contains the connecting factor based on the maker being a qualified person) applies in relation to sound recordings made before 1 May 1969 as if the reference in s 89(1) to a "qualified person" included a reference to a British subject and to a person domiciled in any part of the Queen's dominions to which the 1911 Act extended. It can be seen that s 220(1), in substance, re-enacts the qualifying provisions under s 1(1)(b) of the 1911 Act, referred to above[87], for the purposes of s 89(1), which is, importantly, "[s]ubject to" the 1968 Act, including s 8.
When ss 8, 31, 85, 89(1), 207 and 220(1) of the 1968 Act are read together, it is clear that the copyright of the relevant plaintiffs under the 1911 Act, which included the exclusive right to perform the record in public, is not continued under the 1968 Act; rather it is replaced. Whilst it is true that, as the plaintiffs submit, certain records in which copyright subsisted under the 1911 Act are brought within the scheme of the 1968 Act, that is achieved by the re‑enactment, in substance, of qualifying provisions in the 1911 Act in, and for the purposes of, the 1968 Act. The effect is that the plaintiffs' entitlement to sue for infringements under s 101 of the 1968 Act in respect of sound recordings in which copyright subsists pursuant to s 89(1) is an entitlement to sue in respect of infringements of the copyright in sound recordings contained in s 85, which replaces the copyright in records under s 19(1) of the 1911 Act. Inasmuch as ss 109 and 152 operate to qualify a record manufacturer's exclusive rights by providing an exception to infringement, it is the exclusive rights under s 85 which are affected, not the exclusive rights under the 1911 Act (which have been replaced).
Whilst the plaintiffs mount no attack on the validity of provisions of the 1968 Act which effect the replacement of the relevant plaintiffs' copyright under the 1911 Act with a copyright under the 1968 Act, their attack on the validity of ss 109 and 152, which depends on the continuing subsistence of copyright under s 19(1) of the 1911 Act, is untenable. If the plaintiffs were to attack the validity of the provisions of the 1968 Act which effect the replacement of copyright under s 19(1) of the 1911 Act with a differently constituted copyright under s 85 of the 1968 Act, they would risk being left not only with the awkwardly expressed copyright under s 19(1) of the 1911 Act in respect of records, but also with a copyright, the term of which was limited to 50, rather than 70, years.

Phonographic Performance Company of Australia Limited v Commonwealth of Australia

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Cases Cited (32)