20 April 2015

Copyright: Copyright Licensing v. Auckland University

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)

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