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Tuesday, 2 May 1989
Page: 1629

Senator TATE (Minister for Justice)(10.19) —I thank those honourable senators who have contributed to the debate. My response is rather long and I certainly will not be finished by 10.30 p.m. So much was said in the second reading debate that took place prior to our two-week adjournment that I thought it would be useful if I had a comprehensive reply prepared in relation to those matters that were raised, particularly by Senators Hill, Puplick and Macklin. In passing, I will be answering some of the matters that were raised by Senator Michael Baume.

Following introduction of the Copyright Amendment Bill and the Circuit Layouts Bill last November, there have been extensive discussions with affected interests, including educational institutions, broadcasters, the film industry, performers and copyright owners. As a result of these discussions, the Government will be moving amendments to the performers' protection provisions in the Copyright Amendment Bill to accommodate some of the concerns raised. In particular, concerns about the retrospective application of the provisions and the need for an `ephemeral synchronisation' exception will be dealt with.

Performers' Protection

Amendments of the performers' protection provisions beyond those proposed by the Government are not accepted on the basis that the regime in the Bill provides a workable framework for the exercise of performers' rights. Performers have not been granted a copyright. They have instead been granted real and effective rights enabling them to control the fixation of their performances and the subsequent use of their performances fixed on a sound-recording in the sound-track of a film. The Government does not wish to diminish in any way any of the rights granted under the Bill. To do so would effectively be to subsidise users of performances at the expense of performers.

Educational Copying

Section 53b of the Copyright Act allows educational institutions to copy copyright material if they keep copying records and pay royalties to copyright owners. Where copies are made by institutions for their correspondence students, other than as part of their lecture notes, no royalties are payable. Because of the acknowledged complexity of section 53b, the Bill will introduce a new, more streamlined educational copying scheme. It will not alter the extent of copying which can be done under section 53b but will afford institutions the opportunity to get right away from record-keeping by opting to pay copyright owners so much per student per annum for unlimited copying within the section 53b limits. It does not, however, continue the existing very limited right of institutions to royalty-free copying for correspondence students.

The Bill does, however, recognise the different needs of particular students by expressly allowing the Copyright Tribunal to set different rates for different classes of students, thus enabling institutions to argue for a lesser rate for correspondence students because of their greater reliance on print material.

The scheme in the Bill is the result of long and detailed consultations with educational and copyright interests and negotiations between those groups. The great majority of these interests, including schools, welcome the scheme on the basis that it will streamline and facilitate educational copying.

While recognising the special needs of institutions teaching correspondence students, the Government needs to consider the interests of both copyright owners and users in framing any exceptions to copyright owners' exclusive rights to exploit their works. It believes that the introduction of the optional new per-student royalty scheme represents a reasonable compromise between those competing interests.

The Opposition's proposal that the blank tape royalty scheme be referred to the Copyright Tribunal for consideration should be rejected. The scheme results from extensive, some might even say drawn out, consultations with industry and consumers undertaken over a number of years. Indeed, the possibility of a scheme was first canvassed in 1981 when the Attorney-General's Department undertook a review of audiovisual copyright law.

Several surveys have been undertaken, both here and overseas, to establish the extent of home-taping of recorded material. I believe that in Australia Reark Research Pty Ltd and Australian Nationwide Opinion Polls Pty Ltd, commissioned by the Australian Record Industry Association, have undertaken such surveys. I think that answers, in part, the matter raised by Senator Michael Baume. These surveys show that between 80 per cent and 85 per cent of blank tapes sold are used to copy copyright material. For this reason, a number of countries, including France and Germany, have royalty schemes. Since the decision to implement the scheme was announced, the Government has had discussions with blank tape suppliers, who will be required to pay the royalty, in an effort to ensure that the mechanics of collection are as simple and cheap as possible.

As a result, details of the scheme's operation as first devised have been revised so as to significantly reduce compliance costs: there will be no requirement for special labelling of tapes on which the royalty has been paid; the royalty will be collected at the point of first sale in Australia-thus relatively few suppliers will be involved; and paperwork can be done once in respect of fairly large batches of tape. All costs of distributing the royalty to copyright owners will be borne by the collecting society, not the Government. Net proceeds of the royalty will go only to Australian copyright owners and those from the few foreign countries which operate an equivalent scheme under which Australian copyright owners are entitled to benefit.

Categories of beneficiary will include the owners of copyright in the music-that is, composers and lyricists; and the sound recording-that is, record and pre-recorded tape producers. Performers, while not copyright owners, will benefit indirectly under existing contracts which entitle them to at least 50 per cent of royalties received by record companies. The recording industry has undertaken that new contracts will provide-and those existing contracts which do not provide for the distribution of additional income under which the royalty would fall will be revised to provide-flow-on of the royalty to performers.

The collecting society and its rules require the approval of the Attorney-General. Provision is also made in the Bill to enable the making of regulations requiring the rules to contain specified provisions concerning distribution of amounts collected. The mechanism in the Bill enabling refunds of royalty to individuals is the most appropriate. The requirement to complete a statutory declaration deters abuse of the system while at the same time does not make it excessively difficult for genuine users to obtain refunds. In any case, it must be remembered in this context that institutions and other bodies using blank tapes for purposes which do not infringe copyright, for example, institutes for the blind, or which are licensed under separate arrangements with copyright owners, will be able to purchase tapes free of the royalty.

Any inquiry into the blank tape royalty scheme would be unlikely to raise issues not already canvassed and would seem inappropriate and certainly premature until the scheme has had a chance to operate for a period. In any event, conduct of such an inquiry is a totally inappropriate task to be assigned to the Copyright Tribunal whose function is to set royalty rates under various statutory licences in the Copyright Act.

In response to Senator Macklin's query about why the Government is not including videotapes in the blank tape royalty scheme, I make the point that the audio and video markets have different characteristics. The establishment of an audio royalty would not therefore necessarily constitute a precedent for a video royalty. In addition, video copying is generally done off-air for `time-shift' purposes. The material is usually viewed once only, at a more convenient time, fairly soon after the broadcast; copies are usually not kept and do not generally substitute for purchase. Furthermore, the video industry has not provided evidence or survey material of adverse impact on video sales of domestic video copying comparable to that provided by the recording industry in respect of audio material.

Media Monitoring

I note that the Opposition and the Australian Democrats have foreshadowed amendments in relation to media-monitoring. The Government believes that the service provided by media monitors is certainly useful and worthwhile and should, as far as possible, be allowed to continue to operate. However, it does not believe that it is appropriate to legislate in this area at this time. This is a complex area where the relevant parties have for some time been endeavouring to negotiate voluntary licences. It seems that some headway is now being made, albeit through the pressure of litigation. Accordingly, it would be inappropriate to pre-empt a solution in this matter by legislating prematurely. In any case, the Government is not yet convinced that a free right in favour of media-monitors is the correct solution as such a right diminishes the interests of copyright owners whose material is being used. There are other possible solutions, such as a statutory licence, which should be explored should voluntarily licensing prove to be a failure.

Copyright-Design Interaction

Since the House of Representatives debate on the Bill the Government has received a number of submissions concerning clauses 9 and 10 which deal with the copyright-designs interaction. Having considered these submissions and the wide range of interests affected by the provisions, the Government is satisfied that the long overdue reforms introduced by clauses 9 and 10 represent the most appropriate balance achievable in this difficult area. The Government is confident that the principal objective of the provision, which is to remove existing uncertainties and inequities and to enhance copyright protection for artists and craftspeople, has been met. Moreover, an important Australian creator group is guaranteed copyright protection which previously has not always been available to it.

The Government welcomes the support by the Australian Democrats for clauses 9 and 10 in their present form. On the other hand, the Government rejects the Opposition's proposal to defer passage of clause 10 pending amendment of the designs legislation to cover designs which are presently unregistrable under that legislation. I indicate that the Government will accept the Australian Democrats' second reading amendment in a lightly modified form, not as to its substance.

The designs registration system under the Designs Act is one of the broadest in the world. Amendments of the Designs Act in 1981 had the effect of widening the potential operation of that Act and expanding the range of designs capable of registration. If a particular design for an industrial product does not meet the specified criteria for registration under that system, it is arguable that it is not appropriate that the product receive intellectual property protection at all.

The Opposition's proposal presupposes that amendments of the Designs Act to cover unregistrable designs will, in fact, be made. It is inappropriate to defer the operation of the Government's important and long overdue reforms of copyright law affecting designs, when the proposed Designs Act amendments may be found, upon closer examination, to be inappropriate. The Bill before the Senate deals with copyright-style protection which differs fundamentally from Designs Act protection. The copyright designs reforms stand alone and should not be prejudiced by any decisions the Government might make in relation to the Designs Act.

The Government also rejects the implication that the copyright-designs amendments will act as a disincentive to research and development. On the contrary, the removal of copyright protection for three-dimensional industrial articles will mean that manufacturers will be free to manufacture an article if, upon searching the appropriate industrial property register, the article is not covered by, for example, patents or designs protection. This will greatly benefit research and development of products in the manufacturing sector as a manufacturer will be free to manufacture an article without the risk that there may be in existence a design in which copyright subsists. This was an argument strongly supported by the 1973 Franki Committee which reported on the copyright-designs question. I should also make it clear at this time that the amendments being effected by clause 10 will only apply to the industrial application of designs which takes place on or after the commencement of the new section. The new section has no retrospective operation.

Debate interrupted.