Phonographic Performance Limited v Candy Rock Recording Limited

When fixing the terms of a licence under the Copyright, Designs and Patents Act 1988, the Copyright Tribunal must determine what is reasonable in the circumstances and consider all relevant matters. Section 129 requires attention to comparable licences and avoidance of unreasonable discrimination. That assessment must consider how the licences operate commercially, including differences in the way the licensing body obtains remuneration. The provision does not require the Tribunal to secure fair competition or compensate a licensee for every competitive disadvantage. A statutory difference affecting customers may nevertheless be relevant to whether the licence terms discriminate unreasonably. The weight given to relevant considerations is for the Tribunal, and an appellate court will not interfere absent an error of law causing substantial wrong or miscarriage.

Phonographic Performance Limited appealed against the Vice-Chancellor’s dismissal of its appeal on a point of law from an interim decision of the Copyright Tribunal. The Tribunal had fixed royalty rates for Candy Rock Recording Limited’s dubbing licence by reference to a narrowcast broadcasting licence and had taken account of site-performance fees payable by customers of dubbers but generally not by customers of narrowcasters under the Copyright, Designs and Patents Act 1988. The Vice-Chancellor considered that section 129 did not require compensation for competitive advantage, but that the site-licence difference was relevant under section 135. The central issue was whether the Tribunal had misdirected itself and whether the matter should be remitted.

1. Appeal dismissed. The Copyright Tribunal had not misdirected itself in law.
2. Under section 125 of the Copyright, Designs and Patents Act 1988, the Tribunal had to determine licence terms that were reasonable in the circumstances. Section 135 required regard to all relevant considerations. Nothing relevant was excluded, and the weight given to each circumstance was for the Tribunal.
3. Section 129 did not expand the range of relevant considerations. It required the Tribunal to consider comparable licences and to exercise its powers so as to prevent unreasonable discrimination. Whether discrimination was unreasonable depended on how the respective licences operated in commercial reality.
4. The Tribunal was entitled to compare the narrowcast licence with the proposed dubbing licence while considering the way PPL obtained revenue. The fact that customers of dubbers generally paid a site-performance fee, whereas many customers of narrowcasters did not because of section 72, was relevant. Ignoring that difference would produce a false comparison.
5. Section 129 did not impose a duty to secure fair competition. The Tribunal’s reference to enabling dubbers to compete was unfortunate, but the decision read as a whole showed that it had applied the correct objective of avoiding unreasonable discrimination. On the evidence, it was entitled to reduce the royalty rate.
6. Lord Justice Aldous expressed misgivings about the incomplete evidence, including the proportion of narrowcaster customers requiring a site licence and the costs associated with retention of copies. He stated that, in future references, the site-licence factor should be pleaded so that evidence could address those matters. Lord Justices Waller and Rougier agreed with the judgment.
7. The appeal was dismissed with costs on the standard basis if not agreed. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division) — Appeal from the Vice-Chancellor’s decision on an appeal from an interim decision of the Copyright Tribunal. The appeal was dismissed.
• Copyright Tribunal — Interim decision dated 10 November 1998 fixing royalty terms for the proposed dubbing licence.