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[2015] ACopyT 1
plaintiff. The Tribunal declared that the Deed transferred to Pocketful of Tunes the synchronisation right and the right of action (future or accrued) for infringement, including the right to claim under s...
The federal government made a DVD to play at citizenship ceremonies that used the well-known song 'I Am Australian'. It paid for performance rights through APRA and AMCOS but forgot to licence the right to sync the music to the pictures. After the discs had been sent to hundreds of councils and used at more than 12,000 ceremonies, the song's owners complained. The Copyright Tribunal had to decide how much the government should pay and who should receive the money after the songwriter had assigned his rights to his company. The Tribunal used a 2007 Brisbane City Council licence as the closest guide, scaled it up for the whole country using population figures, added a small premium for a national deal, and arrived at $149,743.34. It also ruled that the company, not the individual songwriter, was entitled to the payment because the assignment deed validly transferred both the copyright and the right to claim compensation.
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2 cited instruments linked from this judgment.
In late 2008 the Department of Immigration and Citizenship engaged Radiowise to produce a DVD montage for use in Australian citizenship ceremonies conducted under the Australian Citizenship Act 2007 (Cth). The montage incorporated approximately 60 seconds of "I Am Australian" (the Song) in its short version and the full song at the end of the long version. Radiowise obtained and the Department paid for APRA and AMCOS licences covering performance and mechanical rights ($2,954.20 plus GST), but no synchronisation licence was obtained for the reproduction of the lyrics and music on the soundtrack of the cinematograph film ([2]-[3]).
750 copies were delivered in January 2009 and a further 1,000 in May 2010. The discs were distributed to approximately 565 local government councils, 11 departmental regional offices, overseas posts, community organisations and schools. Departmental records showed 474 copies distributed between February 2011 and August 2012. Between January 2009 and August 2012 roughly 12,700 citizenship ceremonies were conducted across Australia, of which about 17% were run by the Department itself ([11]-[13], [78]).
In August 2012 the Department learned of a complaint from Mr Woodley. It immediately wrote to councils directing them to cease using the montage and, in November 2012, formally recalled all copies. A follow-up email was sent in February 2013. Responses from councils revealed that at least 69 had used the montage, 251 had not used it or had no record of receiving it, and 236 gave no clear answer ([14]-[16]).
Mr Woodley and his company Pocketful of Tunes Pty Ltd applied to the Copyright Tribunal under s 183(5) of the Copyright Act 1968 (Cth) seeking fixation of terms for the Commonwealth's use. A statement of agreed facts was filed. Expert evidence was led from Mr Adrian Marchesani on music-industry licensing practices. The Commonwealth relied on evidence from senior officers about the citizenship branch budget (approximately $538,000 salary budget for 5.77 FTE in 2008/09) and the fact that a licence fee of $250,000 per annum would never have been approved ([27]-[29]).
A central dispute emerged concerning a 2013 Deed of Assignment. In February 2013 Mr Woodley executed a deed assigning all his rights in the Song to Pocketful of Tunes with effect from 1 January 2001. The Commonwealth argued that the right to claim compensation under s 183(5) had accrued before the deed and could not be assigned. The Tribunal heard the matter over two days in July 2014 and delivered its determination on 3 March 2015.
Bennett J began from the statutory text. Section 183(1) provides that copyright is not infringed by the Commonwealth doing any act comprised in the copyright if done for the services of the Commonwealth. Once such an act has occurred, s 183(5) requires that "the terms for the doing of the act" be agreed or, in default, fixed by the Tribunal ([3]). The Tribunal's task is compensatory, not to award damages for infringement. The President adopted the principles articulated by Sheppard P in Re Application by Seven Dimensions Pty Ltd (1996) 35 IPR 1: the Tribunal must act fairly and reasonably, have regard to the going market rate, and construct a hypothetical bargain between willing but not anxious parties who would have done business even if the assumption is artificial ([19]).
The only directly comparable transaction was the 2007 Brisbane City Council licence. That licence granted a synchronisation right to use Mr Woodley's own recording on a DVD for citizenship ceremonies for four years at $3,300 per annum inclusive of GST. The parties ultimately agreed that industry practice supported splitting the fee 50/50 between the recording and the underlying musical work, yielding a synchronisation component of $1,500 per annum ([32]-[34]). This became the evaluative starting point.
The applicants pressed various usage-based and per-ceremony extrapolations that produced annual figures between $156,000 and $250,000. The Commonwealth advanced a population-based approach. Brisbane's 2011 Census population (1,041,839) was approximately 5% of the national population (21,507,717). Multiplying the $1,500 base by 20 produced $30,000 per annum. Adding 17% for departmental ceremonies and 2% for schools, overseas posts and community use gave $35,802 per annum. The Tribunal accepted this methodology because the evidence of actual usage was "imperfect" and incomplete: 251 councils had no record of receipt or use, and there was no representative sample of remote or regional councils ([68]-[74]). A pure usage or per-council multiplier would have assumed every council would have taken a licence at the Brisbane rate, an assumption not supported by the evidence.
The period of use was fixed at 3.67 years (January 2009 to August 2012), reflecting the time the Commonwealth had the opportunity to use the montage before recall efforts began ([76]). An additional $5,000 per annum premium was added to recognise that the Commonwealth would have sought, and Mr Woodley would have granted, a single national licence rather than 565 separate negotiations ([78]).
The arithmetic produced $149,743.34 exclusive of GST. The Tribunal emphasised that this figure was not "grossly inadequate" within the Seven Dimensions sense because the Commonwealth's evidence showed it would never have paid the applicants' higher demands, and the salary budget for the entire section was only $538,000 ([77]).
On the assignment issue the Tribunal rejected the Commonwealth's reliance on Poulton v The Commonwealth (1953) 89 CLR 540. Citing Equuscorp Pty Ltd v Haxton [2012] HCA 7 and Insight SRC IP Holdings v The Australian Council for Educational Research (2012) 96 IPR 495 (affirmed on appeal), Bennett J held that ownership of copyright supplies a genuine commercial interest sufficient to allow assignment of an accrued right of action. Clause 2.13 of the Deed expressly assigned the right to bring proceedings for infringement "on and from 1 January 2002" and the benefit of any damages or profits. The right to claim under s 183(5) was therefore an incident of the ownership transferred to Pocketful of Tunes ([81]-[91]).
Before this determination the law on s 183(5) was sparse. Seven Dimensions (1996) and Marine Engineering (1997) supplied the overarching principles but gave little concrete guidance on valuation methodology. Copyright Agency Limited v State of New South Wales [2013] ACopyT 1 had reiterated the hypothetical-bargain approach but again in a different factual setting. The assignability of accrued copyright claims remained unsettled after Poulton; lower courts had grappled with whether an assignment of copyright carried with it the right to sue for past infringements.
This determination clarifies several points. First, it confirms that the Tribunal must ground its valuation in the best available comparable transaction even if extrapolation requires a degree of approximation. Second, it expressly prefers a population-based scaling where usage data is incomplete and where the Commonwealth is licensing for a national governmental purpose. Third, it cements the Equuscorp/Insight exception in the copyright context: an assignee of the underlying copyright has a sufficient genuine commercial interest to take an assignment of accrued statutory compensation rights under s 183(5). The Deed's retrospective effect from 1 January 2001 was effective because the assignment was of both the property right and its incidental enforcement rights.
The practical after-state is that Commonwealth agencies now have clearer guidance on how synchronisation use will be valued when s 183 is invoked. Copyright owners receive confirmation that a properly drafted deed can regularise title and standing even after a demand has been made. The decision also underscores that synchronisation rights are not captured by APRA or AMCOS blanket schemes and must be separately negotiated or compensated.
Paragraph [19] quotes Sheppard P in Seven Dimensions: "The intention underlying s 183(5) is that the Tribunal will act fairly and reasonably as between the parties and, by fixing appropriate terms, compensate the copyright owner for what has been done." In plain English, the Tribunal's job is not to punish the government but to work out a fair price for what it actually used, pretending the parties sat down and negotiated sensibly.
At [62] the President states: "the 'licence fee must be equivalent to the amount which the applicant would have required the respondent to pay to it for permission to use the [work] in the manner in which the respondent did use it'." Translation: ignore what the government could have done differently; value the exact use that occurred.
Paragraph [68] explains why population scaling was chosen: the Brisbane licence "provides a significant sample size of approximately 5% of Australia's population" and "cures some of the deficiencies in extrapolating the licence fee based on known or actual usage, where evidence of such usage is deficient." In other words, when records are patchy it is safer to scale by population than guess how many councils would have paid.
The critical passage on assignability appears at [88]-[91]. After reviewing Equuscorp and Insight, the Tribunal concludes: "When the Deed was executed and when this action was commenced, Pocketful of Tunes had a right of action that was an incident of its ownership of the copyright, including the synchronisation right, and a genuine commercial interest in enforcing the claims that previously were available to Mr Woodley and that had also been assigned. The Deed was effective to transfer to Pocketful of Tunes the synchronisation right and the right of action, future or accrued, for infringement of that right. Logically, that includes the right to claim compensation under s 183(5) of the Act." Plain English: once you own the song, you can also own the right to be paid for past government use; the deed validly moved both to the company.
The decision is triggered when the Commonwealth or a State uses a musical work (or other copyright subject matter) for governmental services without first obtaining a licence, thereby engaging s 183(1), and the parties cannot agree on remuneration. The use must be for "the services of the Commonwealth" – here, production of materials for statutory citizenship ceremonies satisfied that requirement without dispute ([3]).
The precedent is engaged whenever the owner relies on s 183(5) and the Tribunal must construct a hypothetical bargain. Key factual indicators include: (a) existence of a comparable earlier licence for the same or closely analogous use; (b) incomplete evidence of actual usage or audience reach; (c) a government budget constraint that would have prevented payment of a "going rate" derived from commercial advertising campaigns; and (d) a deed of assignment that post-dates the acts complained of but expressly assigns both the copyright and the right to sue or claim compensation.
The valuation methodology is engaged when the use is non-commercial, governmental and national in distribution but the best comparator is a single local-government transaction. The assignment analysis applies whenever a copyright owner has attempted to "regularise" title by a later deed that purports to operate retrospectively and includes an express assignment of enforcement rights.
Although the determination is relatively recent, its treatment of Seven Dimensions has been treated as authoritative restatement of the compensatory purpose of s 183(5). The population-scaling approach has been noted as a pragmatic response to imperfect evidence, consistent with the Tribunal's earlier acknowledgment in Copyright Agency Limited v State of New South Wales [2013] ACopyT 1 that precise calculation is often impossible.
The assignment reasoning has reinforced the post-Equuscorp understanding that ownership of the underlying intellectual property right supplies the genuine commercial interest necessary to overcome the Poulton rule against assignment of bare rights of action. Subsequent Full Court authority has not disturbed the conclusion reached at [91] that a right to claim statutory compensation under s 183(5) travels with the assigned copyright when the deed is appropriately worded.
The emphasis at [61] and [21] on the Tribunal's obligation to "do the best I can" on imperfect evidence has been cited as confirming the discretionary, evaluative character of remuneration assessments. Courts have continued to reject attempts to import ordinary copyright damages principles into s 183(5) proceedings.
Several questions remain unresolved. First, the weight to be given to a copyright owner's subjective "usage does not matter to me" stance when industry evidence demonstrates a clear commercial/non-commercial differential ([26]). The Tribunal noted Mr Woodley's evidence but ultimately preferred objective market considerations.
Second, the precise boundary between a "genuine commercial interest" and a bare right of action in circumstances where the assignee is a related company but the deed does not contain the expansive wording found in clause 2.13. The present Deed was unusually explicit; a less carefully drafted instrument might produce different outcomes.
Third, the appropriate methodology when no directly comparable licence exists at all. The Tribunal was fortunate to have the Brisbane precedent. In its absence, the hypothetical bargain might have to be constructed from more distant analogies or expert "rate card" evidence, an exercise the President described as "notoriously" difficult.
Fourth, the interaction between s 183(5) compensation and any parallel claim for performance rights paid to APRA remains untested. The present reasons carefully distinguished the two ([64]), but a case in which the same use engages both regimes could require further delineation.
Finally, the evidentiary threshold for rejecting a per-ceremony or per-council multiplier when better usage data becomes available in future proceedings is not settled. The Tribunal emphasised the incompleteness of the Department’s records; had every council returned a clear usage report the outcome might have differed. Agencies and owners alike would benefit from clearer guidance on the standard of record-keeping expected when s 183 is likely to be invoked.
REASONS FOR DETERMINATION 1 The applicants, Pocketful of Tunes Pty Ltd (Pocketful of Tunes) and Mr Bruce Woodley, apply to the Copyright Tribunal under s 183(5) of the Copyright Act 1968 (Cth) (the Act) seeking the fixing of terms for the past use by the Commonwealth of the song "I am Australian" co-written by Mr Woodley (the Song). 2 In December 2008, the Commonwealth Department of Immigration and Border Protection (the Department) (formerly the Department of Immigration and Citizenship) engaged Radiowise Media Networks Pty Ltd (Radiowise) to produce an Australian citizenship video montage in DVD format for use in Australian citizenship ceremonies, which included use of the Song (Montage). The Commonwealth paid an amount of $2,954.20 plus GST to Radiowise for music licences through the Australasian Performing Right Association (APRA) and the Australasian Mechanical Copyright Owners Society (AMCOS). It did not, however, obtain a licence to the synchronisation right, the right to reproduce and use the lyrics on the sound-track to a cinematograph film or other audio visual presentation. 3 There is no dispute between the parties that, as the Montage was produced and distributed by the Department for use in public ceremonies for the conferral of Australian citizenship under the Australian Citizenship Act 2007 (Cth), the reproduction of the Song on the soundtrack to the Montage was done for the services of the Commonwealth within the meaning of s 183 of the Act. Section 183 relevantly provides: (1) The copyright in a literary, dramatic, musical or artistic work or a published edition of such a work, or in a sound recording, cinematograph film, television broadcast or sound broadcast, is not infringed by the Commonwealth or a State, or by a person authorized in writing by the Commonwealth or a State, doing any acts comprised in the copyright if the acts are done for the services of the Commonwealth or State. … (3) Authority may be given under subsection (1) before or after the acts in respect of which the authority is given have been done, and may be given to a person notwithstanding that he or she has a licence granted by, or binding on, the owner of the copyright to do the acts. (4) Where an act comprised in a copyright has been done under subsection (1), the Commonwealth or State shall, as soon as possible, unless it appears to the Commonwealth or State that it would be contrary to the public interest to do so, inform the owner of the copyright, as prescribed, of the doing of the act and shall furnish him or her with such information as to the doing of the act as he or she from time to time reasonably requires. (5) Where an act comprised in a copyright has been done under subsection (1), the terms for the doing of the act are such terms as are, whether before or after the act is done, agreed between the Commonwealth or the State and the owner of the copyright or, in default of agreement, as are fixed by the Copyright Tribunal. (emphasis added) 4 There is also no dispute that the terms for the use of the Song as part of the Montage have not been agreed between the applicants and the Commonwealth. 5 The issues presently for determination are: What terms are appropriate to compensate the applicants for the use of the synchronisation right in the Song by the Commonwealth? To which of the applicants should any payment be made? 6 The parties have filed a statement of agreed facts, to which I have had regard and which is annexed (Annexure A). I will set out some of these matters and facts not in dispute as background.
The Song 7 There is no need to recite Mr Woodley's history from his time as a member of the group known as "The Seekers" or the national recognition of the Song. It is sufficient to say that Mr Woodley is a well-known composer and is experienced in music licensing. Mr Woodley's experience is not in dispute. 8 Mr Woodley composed the music and, together with Mr Dobe Newton, the lyrics of the Song. Subsistence of copyright is not in dispute. The rights in the Song were purportedly assigned to Pocketful of Tunes in 2013. This assignment is discussed further below. 9 There is also no dispute as to the popularity of the Song, the music and lyrics, throughout Australia. It is an agreed fact that research has found that when a short segment of the Song was played, 97% of the general public in New South Wales and Victoria and 100% of the 4 to 12 year old children surveyed said that they recognised the Song. 10 The Song has been registered with APRA since at least 8 January 1988 in respect of the rights for public performance and communication to the public. Royalties have been received from AMCOS in respect of mechanical reproductions of the Song, as Mr Woodley has been a member of AMCOS since 12 December 1995. Neither APRA nor AMCOS have been authorised to licence the synchronisation right.
The Montage 11 Radiowise delivered 750 copies of the Montage to the Department in January 2009 and a further 1000 copies in May 2010. Each disc contained two versions of the Montage; a short version which used approximately 60 seconds of the Song and a long version which used 60 seconds of the Song as well as the full Song at the end of the Montage. The Song was performed by an artist other than Mr Woodley. 12 The parties agree that the Montage was: Distributed by the Department to around 565 local government councils (Councils) across Australia for use in citizenship ceremonies, which are held regularly throughout the year; Distributed to 11 regional offices of the Department across Australia for use in citizenship ceremonies and special events; Used at citizenship information services conducted by the Department and by contracted course providers; Made available on request to Australian overseas posts and to community organisations. The number so requested is unknown. 13 Department records indicate that 474 copies of the Montage were distributed by the Department between February 2011 and August 2012. 14 In early August 2012, the Department became aware of a complaint by Mr Woodley in relation to use of the Song and became concerned that appropriate licences may not have been obtained. On 9 August 2012, the Department wrote to all Councils and asked them to cease using the Montage until further notice. 15 On 7 November 2012, the Department again wrote to all Councils and requested that the Montage be returned to it no later than 30 November 2012. A follow up email was sent on 14 February 2013. 16 Ms Christine Evans, Assistant Director of Citizenship Ceremonies and Community Engagement in the Department, said that between November 2012 and March 2013, the Department received a variety of telephone, email and letter responses from Councils in relation to the request for return of the Montage. Ms Evans provided the following summary of those responses: 69 Councils had used the Montage at citizenship ceremonies. 251 Councils did not use the Montage at citizenship ceremonies, or had no record of ever receiving the Montage. 236 Councils either did not provide advice as to whether the Montage was used or were unable to say if it was used at a citizenship ceremony. 17 Between January 2009 and August 2012, approximately 12,700 citizenship ceremonies were conducted by a Council (approximately 10,500 ceremonies) or by a regional office of the Department (approximately 2,200 ceremonies).
Legal principles 18 The principles to be applied in assessing compensation under s 183(5) of the Act are not the same as those to be applied in determining damages for copyright infringement. The determination is of the value of the right that has been exercised by the Commonwealth for which the copyright owner is compensated and not the loss suffered by the copyright owner. There are very few cases relating to s 183(5) of the Act and those that have been decided provide limited guidance on how to proceed with the calculation in this case. 19 The parties agree that the applicable principles are those set out by Sheppard P in Re Application by Seven Dimensions Pty Ltd (1996) 35 IPR 1 (Seven Dimensions): The intention underlying s 183(5) is that the Tribunal will act fairly and reasonably as between the parties and, by fixing appropriate terms, compensate the copyright owner for what has been done (at 18). In assessing the amount of compensation, the Tribunal will ordinarily have regard to the going or market rate for the use of the material (at 18). The analysis involves assuming that the two parties were in an arm's length bargaining situation and reaching a conclusion as to what the parties would have agreed if they had intended to reach a bargain (at 18-19). In making that assessment, one has to assume that the parties would have done business, even if such an assumption is 'artificial and unreal' (at 19). Neither party can be heard to say that he, she or it would not have done business on any terms, or that business would only have been done for a sum which was grossly excessive or grossly inadequate (at 19). The parties must be deemed to have acted reasonably and treated as willing but not anxious parties to the bargain which has to be constructed (at 19). 20 The Tribunal has previously considered these principles and those discussed in Marine Engineering and Generator Services Pty Ltd v State of Queensland (Queensland Emergency Services) (1997) 38 IPR 422 (Marine Engineering) in Copyright Agency Limited v State of New South Wales [2013] ACopyT 1 (at [43]): The difficulty for the Tribunal in assessing equitable remuneration has often enough been remarked upon: see, for example, the musings of Finkelstein DP in Copyright Agency Ltd v Queensland Dept of Education (2002) 54 IPR 19; [2002] ACopyT 1 at [14] ("It is notorious that ascertaining equitable remuneration is a difficult task in almost all cases".) and the stoicism of Sheppard P in Seven Dimensions at 19 (" I must do the best I can"); and of Lockhart P in [Marine Engineering] at 426 ("I must do the best I can on the basis of the material before me…"). 21 Following this, the Tribunal, per Perram AP and Ms Catherine Riorden, concluded that (at [51]): [I]t is useful to approach the present matter on the basis of a hypothetical transaction between the same parties at arms length where it is assumed the transaction would have proceeded and the rate agreed would not have been excessive or inadequate.
Synchronisation right 22 At the hearing, the applicants led expert evidence from Mr Adrian Marchesani. Mr Marchesani is the Course Coordinator for the Bachelor of Business Music Industry at Victoria University and a consultant to Ralph Carr Management, an artist management company and part of the Ralph Carr Group of Companies, an independent entertainment group. Mr Marchesani prepared two expert reports in the proceedings. His expertise in what might generally and relevantly be called "licensing in the music industry", including synchronisation licences, is not in dispute. 23 Mr Marchesani explained that music publishing generates revenue form the copyright which exists in a musical work from three main sources: Mechanical licences, essentially for the sale of recorded music. Licences for the public performance and broadcast of musical works. Licences for the synchronisation of musical works with visual images. 24 According to Mr Marchesani: It is quite common for synchronisation rights to attract a much higher fee than performance rights, making it difficult to draw a comparison between the value of the two types of usage. Performance and synchronisation licensing are completely different areas of licensing. It is difficult to extrapolate a value for a synchronisation licence from a performance licence, as a performance licence is based on performance of the Song at events, whereas the synchronisation of the Song refers to the production of a product whereby the Song is fixed to a specific visual image. Except in the case of "grand rights" (such as the rights in an opera or musical) the public performance of music is generally licensed on behalf of songwriters and owners of recordings by APRA and the Phonographic Performance Company of Australia Limited (PPCA) respectively. By example, a radio station may play a song under the blanket licences issued by PPCA and APRA, which carry a relatively low fee for each broadcast. However, if the radio station wants to use a specific song for an on-air promotion of the radio station it must approach the owners of the copyrights and separately license this usage, which may attract a much higher fee than the broadcast of the Song in normal programming. As such, it is difficult to draw a comparison of value between the two types of usage. 25 Mr Marchesani also explained that: Valuing a licence for a synchronisation right involves consideration of the desired usage and the desired media. A relevant variable is the type of media involved; for example, a licence relating to nationwide commercial free-to-air network usage will be more expensive than a regional radio station. The higher the production fee for a campaign, the higher the licence fee. A higher level of spending on a campaign will usually reflect a desire the reach a large audience. 26 Mr Marchesani conceded that the exposure that he would expect at the citizenship ceremonies would be very much less than the exposure that he would expect by way of nationwide commercial free-to-air network television usage and that this would translate into a licence fee for use at citizenship ceremonies which would be very much less than a licence fee for use on nationwide commercial free-to-air network television. This distinction, between commercial and non-commercial usage that applies generally, is not reflected in Mr Woodley's evidence that the usage did not matter to him and that he would seek to negotiate the same licence fee irrespective of the use.
Commonwealth's evidence as to budget for Montage 27 The Commonwealth relied on evidence from Ms Renelle Foster, Assistant Secretary of the Citizenship branch of the Department. Ms Foster said that the Citizenship branch comprised four sections, one of which was the Citizenship Ceremonies and Promotion section (Section) which was responsible for arranging activities to promote Australian citizenship and assisting in the organisation of citizenship ceremonies conducted in accordance with the Australian Citizenship Act 2007 (Cth). In 2008/2009 the Section had the equivalent of 5.77 full time staff and a salary budget of approximately $538,000. 28 Ms Foster was responsible for approving the expenditure for the Montage. The Department paid an amount of approximately $36,530 on production, licensing and delivery of 750 copies of the Montage from Radiowise in January 2009, and a further $3,905 to procure a further 1000 copies. 29 In response to Mr Marchesani's evidence that the commercial value of the song was in the order of $250,000 to $300,000 per annum and his view that this would have been the likely licence fee negotiated with the Commonwealth, Ms Foster says that the Montage was only one of a range of citizenship promotion activities and that expenditure of such a large sum on a single activity such as this 'would never have been agreed to by the Department nor would have it been approved by me'. Ms Foster considers that, while inclusion of the Song in the Montage was a 'sensible proposal', it was 'definitely not a prerequisite nor a requirement of the Department' and that the Department 'would have been happy to go with another suitable option such as the Australian National Anthem'. Had significant additional synchronisation licence fees been sought above the amount of $3,249.62 paid to Radiowise in respect of licensing costs, then Ms Foster says that the Department would have: Sought a lower cost background music alternative; or Made an alternative montage without music; or Abandoned the citizenship montage proposal.
Previous licences 30 Mr Woodley provided evidence of past synchronisation licences that he has negotiated and the licence fees that he had secured, the details of which are agreed as set out in Annexure A. These licences range from one month to five year terms and cover a broad range of industries, from telecommunications, motor vehicle and manufacturing to government. The licences have generally been used in national broadcasting media campaigns and have been granted exclusively to the licensee for use within a permitted scope. No Licensee Use XXX Term Year Non-Synchronisation licences 1 Department The right to authorise the performance of the song and cause sound recordings of the song to be performed at Australian Citizenship ceremonies and related 50th anniversary events endorsed by the Department. X XXXX 12 months 1999 Synchronisation licences 2 AMP Shopping Centres Pty Ltd The exclusive use (in the category of shopping centres) of excerpts of the song in television, radio and non-broadcast media advertising across Australia. XXXX XX XXX 5 years 1996 3 Holden Limited The use of excerpts of the song in television, radio and non-broadcast media advertising across Australia. XXXX XXX XXXX XXX XXXX XXX XX XXX XXXX 5 years (plus 3 year option) 1998 4 Queensland Rail The use of excerpts of the song in television, radio and non-broadcast media advertising in Queensland only. XXXXX 4.5 years 1999 5 Federal Government of Australia ('Yes' vote referendum) The non-exclusive use of excerpts of the song throughout Australia for on free to air TV/Pay TV/Radio and non-broadcast media/video/events and functions. XXXX 1 month 1999
31 However, during the course of the hearing, it emerged that the majority of these licences were of little assistance, as they differed in critical respects from the licence the subject of the present enquiry. For example, the previous licence taken by the Department related to performance rather than synchronisation rights, while the other synchronisation licences related to a different usage. 32 It was ultimately agreed between the parties that the 'best indication of the value of the [S]ong' was a licence which included the synchronisation right, granted to Brisbane City Council in 2007 (the Brisbane licence). The Brisbane licence was to Mr Woodley's recording of the Song, for use on the soundtrack of a DVD video production to be used at Council citizenship ceremonies in Brisbane for a period of 4 years. The licence fee was $3000 per year plus GST. 33 The relevant terms of the Brisbane licence are: 1. The Licensor, Pocketful Of Tunes P/L, grants to the Licensee, Brisbane City Council, a synchronisation licence to use the Bruce Woodley recording of his Song "I Am Australian" as the sound track for a DVD video production, for use at Council citizenship ceremonies, for the Licence Term as stated in the Schedule. Payments 2. The Licensee must pay the Licensor the licence fee stated in the Schedule at the times and in the manner stated in that item. The licence is not valid until the licence fee is paid in full. Intellectual Property Rights 3. The intellectual property rights in the Bruce Woodley recording of the Song "I Am Australian" remain exclusively the Licensor's. … Schedule Item 1 - The Recording of the Song The recording of the Song is titled "I Am Australian" as recorded by the writer and artist Bruce Woodley. The recording is owned exclusively by Pocketful Of Tunes P/L. Item 2 - The Licence Term The Licence term commences on January 1 2007 and ends at midnight on December 31 2011. Item 3 - The Licence Fee The licence fee is $3300 (inclusive of GST) per annum. The licence fee will be payable in full to Pocketful Of Tunes P/L upon receipt of invoice, and no later than January 1 each year of this licence agreement… Item 4 - Usage The Recording of the Song may be used in synchronisation with a DVD production at all citizenship ceremonies conducted by the Brisbane City Council for the term of the agreement. 34 Mr Woodley said that when he licenses the Song, he sometimes attributes greater value to the music than to the recording. The applicants submitted that such unequal division was logical in circumstances where the Song was not associated with any particular recording. Accordingly, they submitted, the synchronisation right could be valued at up to two thirds of the total fee for the Brisbane licence, that is, $2000. The Commonwealth submitted that one half was appropriate. Mr Marchesani's evidence is that industry practice was to split the fee 50/50 between the performance and synchronisation rights, meaning that the synchronisation right in the Brisbane licence would be valued at $1500. In closing submissions, the applicants appeared to accept that $1500 was the appropriate value to be attributed to the synchronisation rights in the Brisbane licence. In my view $1500 was the appropriate value and I shall proceed on this basis. 35 Having accepted the Brisbane licence as a starting point, the enquiry becomes, as the applicants put it: 'how do you extrapolate from synchronisation by one Council to synchronisation by every Council and the Department itself?'.
Logan City Council licence 36 It should be noted that at the commencement of the second day of the hearing, the applicants sought to introduce into evidence a licence that had just been negotiated (but not finally executed) with Logan City Council. Logan City Council is located south of Brisbane in the Gold Coast hinterland and has a population of just over 300,000. The applicants contend that this licence was negotiated on terms similar to those of the Brisbane licence and was for use of the sound recording and the Song at citizenship ceremonies conducted by the Logan City Council. According to an email sent by Logan City Council on 17 July 2014, the Council was prepared to pay $5,000 per year to enter into the licence. Mr Woodley valued the synchronisation right of that licence at 50% of this fee, namely $2,500. 37 Taking this evidence at its highest, it is that in 2014 one other Council was willing to negotiate an individual licence to use the sound recording and the Song. It does not resolve the difficulties in extrapolating the Brisbane licence, nor the questions which arise in a national context, such as differences in size of population, diversity of population, number of citizenship ceremonies held annually by a Council, the amount of money available to a Council for such licences and the price that an individual Council, such as a council in remote or regional parts of Australia, would be prepared to pay.
Number of ceremonies 38 The applicants provided a table that summarises, from available evidence, the conduct of citizenship ceremonies by a number of selected Councils: 39 At its highest, the table demonstrates that Brisbane City Council, while the largest Council in Australia by population, is not "the high water mark" of the numbers of citizenship ceremonies per head of population. However, it cannot be said that the Councils included in the table are representative of Councils around the country, such as those in regional and remote Australia. The Councils in the table could also be characterised, at least as to some of those Councils, as those with higher numbers of migrants taking up citizenship.
Alternative calculations 40 The parties' ultimate positions as put forth in their final submissions have been summarised below. It is, however, instructive, in order to understand the difficulties of any premium, to note the parties' previous positions and how they evolved during the course of the hearing.
The first alternative calculation 41 Mr Woodley first proposed a calculation as follows: $1500 (the portion of the Brisbane licence applicable to the synchronisation right) x 22% (the proportion of Councils around Australia that actually used the Montage, as estimated by Ms Evans) - a discount of 30% (to take into account the non-commercial nature of the use) = $156,000 per year. This, the applicants submitted, was the minimum fee, based on a maximum discount of 30%. The applicants also proposed a figure of $224,000 per year using an alternative Seven Dimensions approach. 42 The first alternative calculation made no provision for the fact that each Council could have sought to negotiate a licence with Mr Woodley, nor did it acknowledge the evidence, although imprecise, that some Councils did not receive the Montage, or did not respond to requests about whether it was used. However, by applying a discount for the non-commercial nature of the use of the Song, it did attach a lesser value for a licence for the Commonwealth to use the Song. As the evidence of Mr Marchesani bears out, a distinction should be drawn between the types of media campaign or purpose of use attached to the Song, and the particular entity acquiring a licence to use the Song.
Second alternative calculation 43 In the alternative, Mr Woodley relied upon a calculation provided by Mr Marchesani, using a rate that is commonly applied in the music industry for the reproduction of music on a soundtrack to in-house corporate or educational DVDs: $450 per DVD x 565 (the number of Councils to which the Montage was distributed) + 5% per year for inflation = approximately $250,000 per year. This, Mr Marchesani said, would represent a commercially realistic figure. 44 In the applicants' submission in support of this calculation, the critical fact was that the Montage was made available for use or intended use by Councils in citizenship ceremonies conducted across Australia. The applicants submitted that it was not relevant: Whether the Department distributed, and each Council received, a copy with an invitation to use it in its citizenship ceremonies; Whether the Montage was used at each of the 12,700 citizenship ceremonies; Whether individual Councils which received the Montage chose to use it; and That 17% of citizenship ceremonies were conducted by the Department. 45 This calculation was not based on actual usage, in that it did not take into account that not all Councils used or received the Montage. It was based on the actions of the Department in distributing the Montage to all Councils. Further, a corporate DVD used for in-house education or corporate purposes is not, in my view, a reasonable comparison. 46 In each such case, there would be a negotiation between the parties based upon the value of the licence compared to the specific scope of use. 47 The third alternative calculation was the one finally contended for, as summarised at [53] - [56] below.
Commonwealth's alternative calculation 48 The Commonwealth's initial position was: $1,500 (the value attributed to the synchronisation rights in the Brisbane licence) x 20 (the approximate population of Australia) ÷ 2 (to take into account Mr Woodley's evidence that around half of the Councils would be interested in licensing the song for use in the Montage) = $15,000 per annum x 3.67 years = $55,000. 49 Such an approach made no provision for the differential distribution of citizenship ceremonies conducted by different Councils. It also made no provision for the other uses (such as Departmental use, schools and foreign posts) which was agreed between the parties as 17% of the total use, or for the difference between a licence fee to a single Council and a single licence fee for national use. 50 The Commonwealth altered its position by adding a further 17% to the $30,000 per annum licence for Department use. This figure was intended to reflect the number of ceremonies conducted by the Department (2,200 of a total of 12,700). A further 2% was then added which encompassed other uses by schools, community organisations and overseas posts. 51 This is the final calculation contented for and summarised at [57] - [60] below. 52 As the hearing progressed, it became clear that the imprecision of the evidence meant that the evidence alone could not form an adequate basis to support precise calculations. The parties ultimately agreed that the evidence was imperfect and that the calculation could not be done in a rigorous or systematic way. Concessions were correctly made that reflected the difficulties in determining the appropriate calculation and, ultimately, each of the parties departed from the calculations as initially advanced. I shall consider the submissions as finally advanced.
Applicants' submissions 53 The applicants contend for an extrapolation based on actual usage by the Commonwealth and say that this is the only calculation which properly compensates the copyright owner in the circumstances of this case. If the applicants' approach were to be adopted, this would result in a licence fee of $226,000 per year described as being 'on a conservative basis'. This was obtained by taking the Brisbane licence fee for the synchronisation right, being $1500, multiplied by the 124 Councils in Australia each said to be likely to have taken up a similar hypothetical licence, plus an additional 17% for Commonwealth usage (i.e. usage other than by Councils). The applicants' written submissions seem to contemplate that a discount could be applied to this figure, although they do not elucidate how such a discount could be calculated or when it would be appropriate to be applied. 54 The applicants submit that a usage based approach is consistent with: The approach adopted by in Seven Dimensions; The way in which the hypothetical negotiation between a willing licensor and a willing licensee would have been conducted, in circumstances where the Song had previously been licensed on a council by council basis; The rate reached independently by Mr Marchesani, being $250,000 per year, based on the rate applicable to the synchronisation of in-house corporate DVDs, and described by him as a realistic estimate of the fee that could reasonably have been achieved for the usage by the Commonwealth in this case; The rate reached based on the average fee paid per ceremony, which they contend would be a rate of $250,825 per year. This seems to be on the basis of the $1500 fee paid by Brisbane City Council, divided by the number of ceremonies conducted (19) and multiplied by the total number of ceremonies conducted across Australia (12,700); The value of previous synchronisation licences entered into in relation to the Song, which nevertheless would reflect a licence fee as advanced above which is significantly below the "going rate" for the use of the Song in television advertising, being $325,000. 55 The applicants also submit that such an approach takes into account the true value of the Brisbane licence and the likelihood that other Councils would have agreed to licence the Song at the same rate. They rely on the licence negotiated with Logan City Council in support. 56 The applicants further submit that the rate may need to be adjusted in light of the Commonwealth's assertion in opening that the demographics of Brisbane City Council are representative of the demographics of Councils as a whole, together with the evidence that the number of ceremonies conducted by the Brisbane City Council (19 ceremonies) was precisely the same as the average number of ceremonies conducted across Australia during the relevant period (10,500 ceremonies by 565 Councils).
Commonwealth's submissions 57 It is an agreed fact that the population of Australia at the time of the 2011 Census was 21,507,717 and that the population of the Brisbane City Council local government area at that time was 1,041,839. That is, the Brisbane population was approximately 5% of the Australian population. The Commonwealth contends for a calculation based on population size, calculated by taking the $1500 for the Brisbane licence and multiplying it by 20, resulting in $30,000. The Commonwealth submits that the correct multiplier is 20 and not 21, as Brisbane should not be counted twice because it was already licensed. 58 The Commonwealth accepts the applicants' submission that the non-Council, or Departmental use, should be assessed as a further 17%, to reflect the fact that of the 12,700 citizenship ceremonies held, 2,200 of these were conducted by the Department. $30,000 plus 17% of $30,000 yields $35,100 per annum. The Commonwealth also allows for a further 2% to account for use by overseas posts, schools and others. On this basis the total licence fee would be $35,802 per annum. 59 As to the period of the hypothetical licence, the Commonwealth points to s 183(5) of the Act which only gives the Tribunal jurisdiction to assess remuneration in respect of acts done by the Commonwealth. The Commonwealth submits that the relevant period for such acts is 3 years and 8 months (or 3.67 years), presumably based upon the period from January 2009 (when the Department distributed the Montage) to August 2012 (when the Department attempted to recall the Montage). The applicants faintly suggested a four year period but did not really pursue this alternative. 60 $35,802 multiplied by 3.67 years would yield a total licence fee of $131,274.
CONSIDERATION 61 On the basis of what has been conceded to be "imperfect evidence", I must, as Sheppard P said, do the best that I can. 62 As stated in Marine Engineering (at 426), in fixing the amount of compensation, the 'licence fee must be equivalent to the amount which the applicant would have required the respondent to pay to it for permission to use the [work] in the manner in which the respondent did use it'. Accordingly, the fact that it would have been possible for the Commonwealth to achieve the same aim of a Montage without using the applicants' copyright material, or by using it in a way which did not infringe, is irrelevant to the value of the compensation to be paid (Seven Dimensions at 20). 63 As Mr Woodley submits, the licence fee must be objectively determined, on the hypothetical basis that the parties would have agreed to enter into a licence agreement. The starting point is the ordinary or market rate for using the Song in the manner in which it was actually used (Marine Engineering at 426). However, the amount which the Commonwealth had available, or would have spent, for any such licence is also relevant. 64 It should be emphasised that the application only concerns the reproduction of the Song on the soundtrack to the Montage. It does not concern the subsequent public performance of the Song through the playing of the Montage at citizenship ceremonies. Although a licence was also required for this performance of the Song, the fee for that licence was payable, and paid, to APRA and not to the applicants. 65 The synchronisation right is an independent and valuable right and is not governed by a scheme that fixes royalties payable for the exercise of the right. Thus, it is determined by negotiation and may be affected by the nature of the song and the extent and nature of the proposed use. It follows that actual use at a time subsequent to the assumed time of negotiation cannot be taken into account, unless it can be shown to have been in the mind of the parties at the time. 66 On the basis of the evidence, which includes the amount that Mr Woodley says that he would have demanded and the amount that the Department had available and would have been prepared to pay, it is evident that it is most unlikely that any agreement for the licensing of the Song would have been reached. 67 Mr Woodley gave evidence as to past synchronisation licences that he had granted for the Song. While these other synchronisation licences provide some insight into the licence fees that Mr Woodley has secured in the past, it has been agreed between the parties, and I accept, that the only comparable licence fee is the Brisbane licence. It is this licence that forms the best evaluative basis for the appropriate annual licence fee. The Brisbane licence should be considered as comprising one half for performance rights and one half for synchronisation rights. Accordingly, the synchronisation right was valued at $1500.
Conclusion on licence fee 68 I accept that, as identified by the parties, there are deficiencies in extrapolating from the Brisbane licence, either based on numbers of Councils, actual or known usage or based on a population multiplier. However, I find the Commonwealth's submissions more persuasive, that the extrapolation be based on a population factor, for the following reasons: • The Brisbane licence provides a significant sample size of approximately 5% of Australia's population. • Brisbane City Council can be said to represent a broad range of Australia's population with a diverse demographic. It is a large Council that administers a large part of a major urban area in Australia. • A population basis factors in the likelihood the Commonwealth would have sought to negotiate a national licence with Mr Woodley. • This basis cures some of the deficiencies in extrapolating the licence fee based on known or actual usage, where evidence of such usage is deficient. • It has not been established, nor propounded, that every Council in Australia would have sought to negotiate an individual licence for the synchronisation rights in the Song. 69 The applicants' calculations made no provision for the likelihood that different licence fees would have been negotiated with Councils in different parts of the country, in different cities and more remote areas or, indeed, that some of the Councils would not have been interested in taking a synchronisation licence. An approach based on an acceptance that each Council in Australia would have licensed the synchronisation right to the Song for the same fee as the Brisbane licence does not take into account the fact that some Councils, such as large urban Councils, may have had more use for the Montage than did other Councils. Accepting the evidence of the Commonwealth, that 251 Councils did not use, or had no record of ever receiving, the Montage and that a further 236 Councils either did not provide advice as to whether the Montage was used or were unable to say whether it was used at a citizenship ceremony, it is not appropriate, in my view, to use as a multiplication factor the number of Councils in Australia. 70 I recognise that individual Councils may have approached Mr Woodley for an exclusive licence, as did Logan City Council as one example, but also that, while some Councils may have conducted many citizenship ceremonies, others may not have conducted any. This makes a calculation based on actual usage, established in evidence or asserted, inappropriate. 71 The applicants criticise a population based approach on a number of bases, including that such an approach did not accord with: actual uses of the Montage; and previous licence fees negotiated by Mr Woodley. 72 As to previous licence fees negotiated by Mr Woodley, these relate to either different rights to a purely synchronisation right, or different usages, which means that they are of little utility in the present enquiry. 73 The applicants' criticism focuses on the assumptions inherent in the Commonwealth's approach. In particular, they say that there is no evidence adduced by the Commonwealth to support the assumption that a larger population of a local government area will equate to greater use of the Montage in that area. They point to the analysis that they advanced as shown in the table in [38] above, which suggests that Councils with larger populations did not use the Montage as extensively as Councils with smaller populations. The table also demonstrates, they say, that an assumption that no Council used the Montage more than Brisbane is contradicted by evidence which shows that Brisbane held a number of ceremonies that was the same as the national average during the relevant period. 74 The evidence is not complete as to the number of ceremonies carried out in different Councils across Australia. There is no sufficient evidence to determine an approach based on actual usage of the Montage or the anticipated use of the Montage as at the time that an agreement for the licence of the synchronisation right. I do not accept that the evidence of usage in Brisbane can be treated as a national average for other Councils. Nor can it provide a basis for an assumption that that underpins the applicants' approach, that every Council would have licensed the Song. The evidence is to the contrary. 75 To the extent that the applicants rely on previous licences for performance rights, those licences are not helpful. The evidence is that performance rights are valued equally to, not greater than, synchronisation rights, as the applicants submit, and they are different rights. Further, the applicants rely on licences for those rights to support a per Council or per ceremony basis, which is not an appropriate basis for the reasons already discussed and for which there is insufficient evidence. The same applies to an approach based on corporate DVDs.
Period of licence 76 The applicants propose that the hypothetical licence that would have been negotiated between the parties would have been for a period of four years. The evidence of the Commonwealth is that, once it became known that the Department did not have permission to use the Song, efforts were made to stop its use. The Commonwealth submits that there is no evidence to suggest that the Councils would disobey a direction from the Department after this message was communicated to each Council. On the basis of the evidence in the context of the present task, it is appropriate to calculate the licence based on the period during which the Commonwealth had the opportunity to use the Song, which is 3 years and 8 months.
The final figure 77 The applicants submit that a licence fee based on population size will be "grossly inadequate" and therefore inconsistent with Seven Dimensions. However, the corollary of this argument is that the fee cannot also be "grossly excessive". The principles in Seven Dimensions require that, in making that assessment, one has to assume that the parties would have done business. The evidence of Ms Foster establishes that she would never had recommended or approved the Commonwealth paying a synchronisation fee of $250,000 for the Song. This evidence is supported by the fact that the salary budget during the relevant period for the entire section was only $538,000, approximately double the various annual licence fees proposed by the applicants. 78 I accept the final calculations proposed by the Commonwealth in its closing submissions. I will also provide for an additional premium to allow for the fact the Commonwealth would have sought to negotiate for a national licence for use by all Councils, for which I propose to add an additional $5,000 per year. 79 Accordingly, the fee that should be paid by the Commonwealth for the synchronisation rights to the Song over the 3 years and 8 months in issue (or 3.67 years) is based on: The value of the synchronisation right of $1500 To be multiplied by 20 = $30,000 To which is added 17% for Departmental use = $35,100 To which is added 2% for other uses = $35,802 To which is added a premium of $5,000 = $40,802 Which is multiplied by 3.67 years = $149,743.34 80 The final figure for the synchronisation right of $149,743.34 is exclusive of GST. ASSIGNMENT OF SYNCHRONISATION RIGHT 81 In September 2002, Mr Woodley was assigned all of the synchronisation rights previously owned by Mr Newton in relation to the Song. The agreed facts state that in February 2013, Mr Woodley assigned all of his rights, title and interest in the Song to Pocketful of Tunes, with effect from 1 January 2001. This gives rise to an issue as to which of Mr Woodley and Pocketful of Tunes is the correct applicant in these proceedings and the correct party to be paid the moneys owed by the Commonwealth. Mr Woodley explained that he has proceeded on the assumption that he had assigned the rights to Pocketful of Tunes in 2001 and contends that this assignment was "regularised" in February 2013 through an executed deed of assignment (Deed). 82 After the assignment of copyright, including the synchronisation right, from Mr Newton in September 2002, Mr Woodley owned the copyright in the Song. By the Deed, Mr Woodley assigned all of his rights, title and interest in the Song, and all associated rights, to Pocketful of Tunes. This included the right to bring legal proceedings for any third party infringement. Clause 2.13 of the Deed provided: Without limiting Clause 1, [Mr Woodley] acknowledges that [Pocketful of Tunes Pty Ltd] has the sole and exclusive right in perpetuity to exercise the following exclusive rights in any medium, material, means or technology whether presently existing or yet to be invented…to bring legal proceedings for any third party infringement of the [Song] on and from 1 January 2002, including the right to the benefit of any damages or account of profits in respect of such infringement… 83 This proceeding was commenced on 6 September 2013. While related proceedings were apparently commenced in the Federal Court on 18 February 2013, this is also after the execution of the Deed. 84 A demand was first sent to the Commonwealth in 2012, prior to the execution of the Deed. The Commonwealth contends that it is then relevant to ascertain when the cause of action accrued in order to determine which of the applicants was entitled to the cause of action. 85 The right of action for a tort is incapable of assignment, at law or in equity (reaffirmed in Poulton v The Commonwealth (1953) 89 CLR 540 at 602 (Poulton)). 86 However, in Insight SRC IP Holdings v The Australian Council for Educational Research (2012) 96 IPR 495 (Insight), Besanko J considered the assignment of existing rights of action and the relevance of various deeds of assignment of ownership of copyright. His Honour pointed out at [104] that an assignment of copyright must be in writing (s 196(3) of the Act), as must an exclusive licence (ss 10 and 119) and that an assignment of copyright does not, without more, carry with it accrued rights of action for infringement. Prior to the written assignments or licences conferring rights, rights of action for infringement of copyright can only be held if they were assigned by the holder of the rights at the time they accrued. 87 His Honour considered whether the agreement in question in that proceeding purported to assign not only the copyright but also rights of action held by the assignor for infringement of copyright prior to the date of the agreement. The deed of assignment provided that it 'more completely gives effect to those earlier agreements and more perfectly assigns the intellectual property than was achieved by those earlier agreements'. It would seem that the earlier agreements were, or included, oral agreements. 88 Justice Besanko acknowledged the principle in Poulton and then referred to and discussed Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham's Warehouse Sales Pty Ltd [2012] HCA 7 (Equuscorp). In that case, French CJ, Crennan and Kiefel JJ said (at [50] - [51]) that a right of action was assignable if it was an incident of, or subsidiary to, a right of property or if the assignee had a genuine commercial interest in the enforcement of the claim of another. Their Honours gave as an example of the latter where a claim for money had and received was assigned together with contractual rights. Gummow and Bell JJ, together with Heydon J, agreed that there was an exception to the rule against the assignability of a bare or mere right of action and that a genuine commercial interest was a sufficient interest (Trendtex Trading Corporation v Credit Suisse [1982] AC 679). Justice Besanko concluded that: 'it must now be taken to be established in Australia that the circumstances in which a bare or mere right of action may be assigned include a case where the assignee has a pre-existing genuine commercial interest in enforcing the claims of the assignor' (at [119]), and that ownership of copyright is a sufficient genuine commercial interest for the purpose of sustaining an assignment of a bare or mere right of action for infringement of copyright (at [120]). Insight was the subject of an appeal to the Full Court (Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62) but this conclusion was not disturbed. 89 The Commonwealth submits that the principle in Poulton applies and that the assignment of the right of action for infringement, an action in tort, was not effective but this does not refer to the further consideration in Equuscorp and Insight. 90 The Commonwealth also submits that, by the time that the Deed was executed in February 2013, this was after the facts arose which gave rise to Mr Woodley's entitlement under s 183(5) of the Act and that, accordingly, he could not legally assign that right to Pocketful of Tunes, because it could not be assigned retrospectively. The Commonwealth submits that only Mr Woodley has standing to seek the remuneration sought in the application.
Conclusion on standing 91 I do not accept that the Commonwealth's submissions accord with the facts or principles of Equuscorp or Insight. When the Deed was executed and when this action was commenced, Pocketful of Tunes had a right of action that was an incident of its ownership of the copyright, including the synchronisation right, and a genuine commercial interest in enforcing the claims that previously were available to Mr Woodley and that had also been assigned. The Deed was effective to transfer to Pocketful of Tunes the synchronisation right and the right of action, future or accrued, for infringement of that right. Logically, that includes the right to claim compensation under s 183(5) of the Act.
Conclusion 92 The fee that should be paid by the Commonwealth to Pocketful of Tunes for the synchronisation rights to the Song is $149,743.34, exclusive of GST. 93 The applicants seek costs and stated that they wished to be heard as to the appropriate order. I will give the parties an opportunity to make written submissions as to costs. 94 Finally, Pocketful of Tunes has claimed confidentiality over some of the licencing fees for the Song. Accordingly, the reasons have been redacted to remove confidential figures. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Determination herein of the Honourable Justice Bennett.
Associate: Dated: 3 March 2015 ANNEXURE A COMMONWEALTH OF AUSTRALIA Copyright Act 1968 IN THE COPYRIGHT TRIBUNAL FILE NO. RE APPLICATION BY: POCKETFUL OF TUNES PTY LTD (ACN 005 750 185) First Applicant and BRUCE WILLIAM WOODLEY Second Applicant
Statement of Agreed Facts This document is not exhaustive of the facts relied upon by the parties. Where the parties rely upon other factual material they will refer to it in their submissions Where, in this Statement: (a) there is reference to a document number, that is a reference to a document behind a divider with a corresponding number in the folder comprising annexure BWW-1 to the affidavit of Bruce William Woodley affirmed 4 February 2014 (the Woodley affidavit); and (b} there is reference to a track number on Document 1, that is a reference to the audio-visual clip identified by that number on the DVD behind tab 1 of annexure BWW-1 to the Woodley affidavit. A THE APPLICANTS 1 The First Applicant (Pocketful of Tunes} was incorporated on 9 December 1980. 2 The Second Applicant (Woodley) is and has at all material times been the managing director of Pocketful of Tunes. 3 Woodley has a background in the advertising industry and has been a professional musician for over 50 years. 2 4 From 1962 to 1968, Woodley was a member of the group The Seekers. 5 From 1969 to around 1992, Woodley worked as an independent producer and freelance music writer, writing songs for other musicians and radio and television jingles for commercial clients. 6 Since 1992, Woodley has continued to record and tour with The Seekers, and to pursue his own projects as a writer and performer. B CREATION OF THE SONG 7 In 1987 Woodley asked Dobe Newton (Newton) to assist him with the composition of a song he was writing entitled "I Am Australian" (the Song). 8 Woodley composed all of the music of the Song. 9 Woodley composed the whole of the first verse and chorus of the Song. 10 Woodley and Newton each composed the lyrics of the remaining verses of the Song. 11 Document 3 is a copy of the lyrics of the Song with the lyrics written by Newton underlined. 12 The Song was first reduced to material form in a recording at Metropolis Audio in South Melbourne in August 1987. 13 At all material limes during the making of the Song, Woodley and Newton were Australian citizens or persons resident in Australia for the purposes of the Copyright Act 1968 (Cth). 14 In September 2002 Woodley was assigned all of Newton's synchronisation rights in relation to the Song. 15 In February 2013, Woodley assigned all of his right, title and interest in the Song to Pocketful of Tunes with effect from 1 January 2001. C POPULARITY OF THE SONG 16 The Song was originally distributed as part of a promotional album produced by Woodley called "I Am Australian". Document 4 is a copy of this album. 17 Between 1987 and around 1994, the Song was broadcast across Australia on the ABC Radio program "Australia All Over". 18 Since the early 1990s, the Song has been taught in schools across Australia. 19 In 1991, Woodley performed the Song at a drought relief concert at the State Theatre in Melbourne. 20 In 1993, Woodley performed the Song with The Seekers as part of their 25th anniversary reunion tour. 21 In October 1994, Woodley performed the Song with The Seekers at the Australian Football League Grand Final at the Melbourne Cricket Ground. 3 22 In December 1994 and January 1995, the Song was used in a series of community service announcements broadcast on television across Australia. Document 5 is a DVD containing a copy of these announcements. 23 In 1996, the Song was used in television and radio advertising for the Salvation Army's Red Shield Appeal. 24 In 1997, a recording of the Song by Judith Durham, Mandawuy Yunipingu and Russell Hitchcock was released as a single and reached number 15 on the Australian charts. Document 6 is a copy of this recording. 25 In 1999, the Song was used in television advertising for the 'yes' campaign of the republic referendum. Track 3 of Document 1 is an example of this advertising. 26 In 2000, the Song was one of the songs played as the Australian team entered the Olympic Stadium at the Sydney Olympics. 27 In 2001, Woodley performed the Song at the ceremonial sitting of the Federal Parliament in Melbourne to mark the centenary of Federation. 28 In 2000, 2002 and 2003, the Song was used in television advertising by Telstra Corporation Limited (Telstra). Document 26 is a DVD containing copies of the advertisements broadcast by Telstra in 2000. Tracks 4 and 5 of Document 1 are copies of the advertisements broadcast by Telstra in 2002. Tracks 6 and 7 of Document 1 are copies of the advertisements broadcast by Telstra in 2008. 29 In 2003 a recording of the Song by Rai Thistlewayte was released as a single and sold at Telstra Shops to raise funds for drought relief. 30 In 2009, Woodley performed the Song at the national memorial service for victims of the Black Saturday bushfires. Track 2 of Document 1 is a video of this performance. 31 The Song has also been sung at Anzac Day and Australia Day commemorations, at events to mark the Queen's Diamond Jubilee and at other occasions of civic importance. 32 The Song has been translated into Auslan {Australian sign language) and Wongatha, an indigenous language from the Western Desert. 33 From time to time there have been calls in the media and online for the Song to replace "Advance Australia Fair" as the official Australian national anthem. 34 In 2000, research conducted by Quantum Market Research found that with no more prompting than the name of the Song, 73 percent of the general public in New South Wales and Victoria were aware of the Song. 35 The research also found that when a short segment of the Song was played, 97 percent of the general public in New South Wales and Victoria, and 100 percent of the 4-12 year old children surveyed, said that they recognised the Song. Document 14 is a copy of this research. 4 D LICENSING OF THE SONG 36 In the early 1990s, Woodley established a company Known as I Am Australian Licensing Pty Ltd to sub-licence the rights in the Song. 37 At all material times, Woodley was a director of, and the sole shareholder in, I Am Australian licensing Pty Ltd. 38 When the Song was composed in 1987 Pocketful of Tunes and Woodley were members of the Australasian Performing Right Association (APRA). 39 The Song has been registered with APRA since at least 8 January 1988. 40 It is a standard term of membership with APRA that members assign to APRA their rights in respect of the public performance and communication to the public of each registered song (music and lyrics). APRA then collects licence fees for the public performance and communication to the public of those songs, which it distributes to its members, in accordance with its Distribution Rules and Practices, depending on the number of times the song is performed or communicated. 41 Woodley has been a member of the Australian Mechanical Copyright Owners Society (AMCOS) since 12 December 1995. 42 AMCOS collects and distributes mechanical royalties for the reproduction of its members' musical works on record, compact disc or other format, depending on the mandate given by the member. 43 Since 1988 Pocketful of Tunes and Woodley have received royalty payments from APRA and AMCOS in respect of public performances and mechanical reproductions of the Song. These payments have included: (a) XXXXXXX from APRA for the period January 2000 to December 2012 in respect of public performances in logged venues: (b) XXXXX from APRA for the period 2005 to 2010 in respect of public performances in unlogged venues; and (c) XXXXXXX from AMCOS for the period June 2008 to May 2010 in respect of mechanical reproductions. 44 Neither APRA nor AMCOS has ever been authorised to licence the reproduction of the Song on the soundtrack to a cinematograph film (the synchronisation right). 45 In 1996 AMP Shopping Centres Pty Ltd (AMP) licensed excerpts of the Song for use in television, radio and non-broadcast media advertising across Australia for a period of 5 years for a fee of XXXXXX per year. The licence comprised the exclusive right to use and reproduce the Song in the advertising and promotion of shopping centres. Document 21 is a copy of this licence. 46 The licence entered into by AMP was exclusive in the category of shopping centres but not otherwise. 5 47 In 1998 Holden limited (and related companies) (Holden) licensed excerpts of the Song for use in television, radio and non-broadcast media advertising across Australia for a period of 2 years, with an option to extend the licence for a further 3 years, for a fee of XXXXXX on signing of the agreement and XXXXXX for every six months thereafter. The licence comprised the right to reproduce the song in the soundtrack of and in relation to commercials, advertising or promoting Holden Automotive Products. Document 22 is a copy of this licence. 48 The licence entered into by Holden was exclusive in the automotive market but not otherwise. 49 In 1999 Queensland Rail licensed excerpts of the Song for use in television, radio and non-broadcast media advertising In Queensland only for a period of 4.5 years for a fee of XXXXXX. Document 23 is a copy of this licence. 50 The licence entered into by Queensland Rail was exclusive in the category of transport services in Queensland but not otherwise. 51 Pursuant to the licence, Queensland Rail used the Song in advertising in Queensland in 1999. 52 In 1999 the Department obtained a license to authorise the performance of the Song and cause sound records of the Song to be performed at citizenship ceremonies endorsed or conducted by the Department for a period of 12 months for a fee of XXXXX. Document 34 is a copy of the licence. 53 In 1999 the "yes" campaign for the republic referendum licensed excerpts of the Song for use in television, radio and non-broadcast media advertising across Australia for a period of 4 weeks for a fee of XXXXX. Document 24 is a copy of this licence. The "yes" and "no"·campaigns were funded but not managed by the Commonwealth. 54 The licence entered into by the "yes"·campaign was not exclusive. 55 Pursuant to the licence, the "yes" campaign used the Song in advertising across Australia between October and November 1999. 56 In 2000 Telstra licensed excerpts of the Song for use in any media across Australia for corporate branding or high-level product branding (other than the promotion of specific products or offers) for a period of 3 years, with an option to extend the licence for a further 2 years, for a fee of XXXXXX in the first year and XXXX X X per year thereafter. The licence was an exclusive licence including the right to reproduce, publish, perform, broadcast and cause the Song to be transmitted and adopted and the exclusive rights to enter into a commercial rental agreement in relation to any recording of the Song made by or on behalf of Telstra. Document 25 is a copy of this licence. 57 The licence entered into by Telstra in 2000 was exclusive in relation to commercial use during the term. 58 Pursuant to the licence, Telstra used the Song in advertising across Australia in 2000. 59 In 2002 Telstra licensed excerpts of the Song for use in any media across Australia for corporate branding, commercial branding, or any other commercial, charitable, business or 6 Income producing activity (other than the promotion of specific products or offers) (the permitted purposes) for a period of 7 years, for a fee of XXXXXX in the first year and XXXXXX per year thereafter. The licence was an exclusive licence to use the excerpts in any media for corporate branding, commercial branding or any other commercial, charitable business or income-producing activity. Permitted uses included reproducing all or part of the sound recording or excerpts or rearranged excerpts on promotional, advertising or marketing material and in any material form or format. Document 27 is a copy of this licence. 60 The licence entered into by Telstra in 2002 was exclusive in relation to use for the permitted purposes during the term. 61 Pursuant to the licence, Telstra used the Song in advertising across Australia in 2002, 2003 and 2008. 62 In 2007, Brisbane City Council (the Council) licensed Woodley's recording of the Song for use on the soundtrack of a DVD video production to be used at Council citizenship ceremonies in Brisbane for a period of 4 years, for a fee of $3,000 per year. Document 30 is a copy of this licence. 63 Pursuant to the licence, the Council created and used the DVD containing the Song throughout the period of the licence. Document 31 is a copy of this DVD. 64 In 2009, Telstra licensed excerpts of the Song for use in any media for the permitted purposes across Australia for further a period of 3 years, for a fee of XXXXX per year. Document 29 is a copy of this licence. 65 The licence entered into by Telstra in 2009 was exclusive in the category of telecommunications and internet products but not otherwise. 66 In 2012, the Council licensed Woodley's recording of the Song for a further period of 2 years, for a fee of $5,000 per year. The licence was to use the Bruce Woodley recording of the Song as the soundtrack for a DVD video production for use at council citizenship ceremonies and other occasions of civic importance. Document 32 is a copy of this licence. 67 Pursuant to the licence, the Council continued to use the DVD containing the Song throughout the period of the licence. E USE OF THE SONG BY THE COMMONWEALTH 68 In December 2008, the Commonwealth Department of Immigration (the Department) engaged Radiowise Media Networks Pty ltd (Radiowise) to produce an Australian citizenship video montage in DVD format for use in Australian citizenship ceremonies (the Montage). 69 The contract between the Commonwealth and Radiowise required Radiowise to obtain all necessary music licences on behalf of the Commonwealth for the use of the Montage in citizenship ceremonies. The Commonwealth paid an amount of $2,954.20 plus GST to Radiowise for music licences through APRA/AMCOS. 7 70 In January 2009 Radiowise delivered 750 copies of the Montage on DVD to the Department. 71 In around May 2010, Radiowise delivered another 1000 copies of the Montage to the Department. 72 Each DVD delivered to the Department contained two versions of the Montage: a short version, which used approximately 60 seconds of the Song during the Montage; and a long version, which used approximately 60 seconds of the Song during the Montage and also used the full Song at the end of the Montage. The version of the Song was performed by an artist other than Woodley. 73 Document 37 is a copy of the Montage. 74 In January 2009, the Department distributed the Montage to around 565 local government councils across Australia for use in citizenship ceremonies conducted on behalf of the Department. 75 Document 38 a list of the councils to whom the Montage was distributed. 76 The Montage was also distributed to 11 regional offices of the Department across Australia for use in citizenship ceremonies and at special events. 77 Citizenship ceremonies are held regularly throughout the year, including in particular on days of national significance such as Australia Day, Harmony Day, Constitution Day and Australian Citizenship Day. 78 Between January 2009 and August 2012, there were approximately 12,700 citizenship ceremonies conducted Australia-wide by local government councils or regional offices of the Department. 79 The Montage was also used at citizenship ceremony information sessions run for local council staff and Australian citizenship courses conducted by the Department and by contracted course providers. 80 The Montage was made available for distribution on request to Australian overseas posts for use as part of Australia Day celebrations or Australian citizenship ceremonies. It is not known how many posts requested copies of the Montage. 81 The Montage was made .available for distribution on request to community organisations and other citizenship stakeholders. It is not known how many organisations or stakeholders requested copies of the Montage. The Montage was made available for distribution on request to primary and secondary schools as an educational resource package. It is not known how many schools requested copies of the Montage. 82 According to the records of the Department, 474 copies of the Montage were distributed by the Department between February 2011 and August 2012. 83 In August 2012, the Department wrote to local government councils and asked them to cease using the Montage until further notice. 8 84 In November 2012, the Department wrote to local government councils and recalled all copies of the Montage. 85 The population of the Brisbane City Council local government area at the time of the 2011 Census was 1,041,839. 86 The population of Australia at the time of the 2011 Census was 21,507,717. DATED: 2 May 2014
Pocketful of Tunes Pty Ltd
The Commonwealth of Australia
(2012) 96 IPR 495
(1997) 38 IPR 422
(1953) 89 CLR 540
(1996) 35 IPR 1
(1996) 35 IPR 1
(2002) 54 IPR 19
The Tribunal declared that the Deed transferred to Pocketful of Tunes the synchronisation right and the right of action (future or accrued) for infringement, including the right to claim under s 183(5). The Commonwealth was ordered to pay Pocketful of Tunes $149,743.34 exclusive of GST. The parties were directed to file submissions on costs.