Arguing
over the level of fees payable for copyright, it was incongruous that
universities complained collectively that they should be treated separately.
Copyright Licensing Ltd is a copyright
collective acting as a licensing body for authors of books, journals,
newspapers and magazines. It is
impracticable for teaching institutions like universities to negotiate with
individual copyright holders for use of their written work. Instead, each university pays a jointly negotiated
fee to Copyright Licensing for permission to make limited copies of copyright
material held by that institution.
Until 2013, universities had agreed to pay a
fee based on the number of students enrolled, calculated at twenty dollars per
year for each equivalent full time student.
The court was told matters reached a head with negotiations for renewal
of the licensing agreement: Copyright Licensing wanted an increase to
twenty-six dollars per student with that figure inflation adjusted. The universities complained there was a
growing level of cross-subsidisation: each paid the same per capita fee but the
amount of material copied varied from university to university. The Court of Appeal commented there was no
evidence provided to support this claim, but presumed it might be true for purposes
of hearing the dispute.
In court, the chosen battlefield was copyright
law. But in practice the fight is over
the universities use of their joint muscle to force Copyright Licensing into
accepting differential pricing for different institutions.
The legal issue was whether Copyright Licensing
was offering a single licence on common terms available to anyone (a scheme) or
each university was operating under a separate licence with each licence
currently on the same terms. Different
rules in the Copyright Act apply when challenging the terms of a separate
licence rather than challenging a scheme.
The Court of Appeal ruled that the existing
licensing agreement between universities and Copyright Licensing is a scheme. It operates as a “standing offer” also
available to others.
Economic theory recognises that copyright
collectives can exercise considerable market power and might exploit a monopoly
position both by setting high prices and by refusing to distinguish between applicants
on price or content when they seek a licensing agreement. The Copyright Tribunal polices misuse of
market power.
Copyright
Licensing v. Auckland University – Court of Appeal (20.4.15)
15.033