Applications under s 152 by WEA Records Pty Limited & Ors [1981] ACOPYT 1

IN THE COPYRIGHT TRIBUNAL THE COPYRIGHT ACT 1968

APPLICATIONS UNDER S 152 BY WEA RECORDS PTY LIMITED & ORS. THE TRIBUNAL: LOCKHART J. – DEPUTY PRESIDENT R.N.J. PURVIS ESQ., Q.C., D.K. MALCOLM ESQ., Q.C.,

DECISION ON PRELIMINARY QUESTION OF LAW WEA Records Pty. Limited, EMI (Australia) Limited, Festival Records Pty. Limited, CBS Records Australia Limited, Polygram Records Pty. Limited, RCA Limited and Astor Records Pty. Limited ("the record-companies") have applied to this Tribunal under s. 152 of the Copyright Act 1968 ("the Act") for orders determining the amounts payable to each of them as the owners of copyrights in published sound recordings by each of the holders of a licence for a commercial FM broadcasting station in Australia which is a party to these applications ("the broadcasters"). The period specified in each application is from 1 October 1980 to the 30th day of June next succeeding any order made by the Tribunal The broadcasters are Stereo FM Pty. Limited (2MMM-FM), Sydney FM Limited (2DAY-FM), Broadcast FM Pty. Limited (3FOX-FM), Adelaide Stereo FM Pty. Limited (5SSA-FM), New Broadcasting Pty. Limited (6NOW-FM), Melbourne FM Radio Pty. Limited (3EON-FM) and Stereo FM Brisbane Limited (4MMM-FM). Phonographic Performance Company of Australia Limited ("PPCA") is a party to the applications. The same counsel and solicitors represent the record companies and PPCA. Each of the record companies is a member of PPCA. The Statement of Case filed by the record companies and PPCA states that the primary object for which PPCA was formed in New South Wales in 1969 was to provide a central administrative organisation for the issue of licences to broadcast, or perform in public, sound recordings in which sound recording copyright is owned by the respective members. Actors' and Announcers' Equity Association of Australia and the Musicians' Union are parties to the applications; but played no role on the hearing of the preliminary question of law. The record companies, PPCA and the broadcasters requested the Tribunal to determine a preliminary question of law before embarking on the substantive hearing of the applications themselves. Counsel informed the Tribunal that the determination of this question would considerably facilitate the preparation by the parties of their respective cases for hearing; probably enable agreement to be reached as to facts and documents; and thus substantially shorten the length of the ultimate hearing. The Tribunal acceded to this request and heard, by consent, argument on a question formulated by the parties in these terms: - "Whether in fixing any amount pursuant to the powers conferred by s. 152, particularly sub-s. (7), the Tribunal, in taking into account the extent of use of records as prescribed in that sub-section, should have regard only to the use by a broadcaster of records with respect to which the applicant's sound recording copyright includes the exclusive broadcasting right referred to in s. 85 (c) of the Act. Or should the Tribunal have regard to the use by a broadcaster of all records in which there subsists in favour of the copyright owner any of the species of sound recording copyright defined in s. 85, other than copyright arising solely by virtue of first publication of a sound recording in Australia." Section 152 of the Act appears in Part VI - "the Copyright Tribunal" - Division 3 - "Inquiries by, and applications and references to, the Tribunal". A proper understanding of s. 152 is impossible without understanding the other sources of jurisdiction of the Tribunal end, indeed, without understanding other relevant provisions of the Act. Many sections are interrelated and s. 152 is no exception. Thus, before turning to the arguments advanced by the parties we propose to examine the Tribunal's jurisdiction in certain areas, including s: 152, and other provisions of the Act that bear upon the Tribunal's jurisdiction. In this way, a better understanding of the questions raised for determination will be promoted. The jurisdiction of the Tribunal is exercised in three main areas relevant to the preliminary question: first, where a royalty or equitable remuneration must be determined for the exercise of a particular right (s. 152 is one instance of this jurisdiction); second, where licence schemes are involved; and third, where an individual requires a licence and there is no licence scheme in operation. As to the first, namely royalties and remuneration: (a) The Tribunal is directed to hold an inquiry, when requested by the Attorney-General pursuant to s. 58, in relation to the royalty payable for the compulsory licence to manufacture records of musical works (s. 148); (b) Application may be made pursuant to s. 47 (3) or s. 70 (3) to the Tribunal to determine an equitable remuneration to be paid to the owner of the copyright in a work for the making of a sound recording or cinematograph film of the work (s. 149); (c) Application may be made to the Tribunal pursuant to s. 107 (3) for the determination of an equitable remuneration payableto the owner of the copyright in a sound recording for the making of a record embodying the recording (s. 150); (d) Application may be made to the Tribunal pursuant to s. 108(1) for the determination of an equitable remuneration to be paid to the owner of the copyright in a sound recording for the causing of the recording to be heard in public (s. 151); (e) Application may be made to the Tribunal pursuant to s. 152 (1) for an order determining the amount payable by a broadcaster to the owners of copyrights in published sound recordings in respect of the broadcasting of those recordings by that broadcaster. The Tribunal cannot make an order requiring a commercial broadcaster to pay an amount exceeding 1% of the amount determined by the Tribunal to be the gross earnings of the broadcaster during the relevant period in which the order applies: s. 152(8). The Australian Broadcasting Commission cannot be required to pay an amount exceeding an amount assessed on a population basis: s. 152 (11); (f) Application may be made to the Tribunal pursuant to s. 59 (3) (b) for an apportionment of an amount payable in respect of a record between the owner of the copyright in a musical work and the owner of the copyright in a literary or dramatic work (s. 153). The second area of jurisdiction of the Tribunal is in relation to licence schemes. "Licence" is defined by s. 136 (1) as meaning: - "...a licence granted by or on behalf of the owner or prospective owner of the copyright in a literary, dramatic or musical work, or of the copyright in a sound recording, being: (a) in the case of a literary, dramatic or musical work - a licence to perform the work or an adaptation of the work in public, to broadcast the work or an adaptation of the work, to make a sound recording or cinematograph film of the work or of an adaptation of the work for the purpose of broadcasting the work or adaptation or to cause the work or an adaptation of the work to be transmitted to subscribers to a diffusion service; or (b) in the case of a sound recording - a licence to cause the recording to be heard in public or to make a record embodying the recording for the purpose; of broadcasting the recording. "Licence scheme" is defined, also by s. 136 (1), as meaning: (a) "...a scheme ...formulated by a licensor or licensors and setting out the classes of cases in which the licensor or each of the licensors is willing, or the persons on whose behalf the licensor or each of the licensors acts are willing, to grant licences and the charges (if any) subject to payment of which, and the conditions subject to which, licences would be granted in those classes of cases;" The jurisdiction of the Tribunal in relation to licence schemes arises: - (a) upon the reference to the Tribunal by the licensor of a proposed licence scheme under s. 154; (b) upon the reference to the Tribunal of an existing licence scheme in the event of a dispute with respect to terms of the scheme between the licensor operating the scheme and (i) an organisation claiming to be representative of persons requiring licences in cases included in a class of cases to which the scheme applies; or (ii) any person who claims that he requires a licence in cases included in a class of cases to which the scheme applies. The licensor, organisation or person concerned may refer the scheme to Tribunal (s. 155); (c) Upon further reference of a licence scheme to the Tribunal where an order has previously been made under (a) or (b) above (s. 156); and (d) upon application to the Tribunal where a licence scheme applies, and a licence has been refused or the charges or- conditions are claimed to be unreasonable (s. 157 (1) and (2)). The third area of the Tribunal's jurisdiction is in cases where there is no licence scheme. An individual or organisation may apply under the Act to the Tribunal if: - (a) he has not been able to obtain a licence and he asserts that it is unreasonable in the circumstances that the licence should not be granted; or (b) the licensor proposes that the licence should be granted but subject to charges or conditions that are claimed to be unreasonable (s. 157 (3) and (4)). The Tribunal can make an order, after hearing all parties, specifying the charges and conditions that it considers reasonable. Copyright subsists in original literary, dramatic, musical or artistic works (s. 32). Part IV of the Act deals with copyright in subject matter other than works. Sound recordings are themselves the subject matter of copyright under the Act; and this species of copyright exists independently of any copyright -subsisting in the literary, dramatic, musical or artistic works embodied in the record. Cinematograph films, television broadcasts and sound broadcasts are also the subject matter of copyright under the Act. Infringement of the copyright in a sound recording may also constitute infringement of, for example, the copyright in music embodied in a record. But this will not necessarily be the case. Each copyright is independent; and questions of infringement in each case depend upon the provisions of the Act relating to each separate subject matter of copyright. Section 10 defines "sound recording" as meaning the aggregate of the sounds embodied in a record; and "record" as meaning a disc, tape, paper or other device in which sounds are embodied. The term "record" therefore denotes the material substance in which the sounds are embodied, the two together constituting the "sound recording". The owner of copyright subsisting in a sound recording generally is the maker of the sound recording (s. 97). A sound recording is deemed by s. 22 (3) (a) to have been made at the time when the first record (ie. disc, tape, paper or other device) embodying the recording (ie. the aggregate of the sound) was produced; and the maker is the person who owns that record at that time (s. 22 (3) (b)), not the artists or anyone else responsible for making the recording. Thus a record is "made" when the matrix is made, and the maker will usually be the recording company that owns the particular disc, paper or other recording material. The term "author" is not used in the Act in relation to recordings, cinematograph films, or television or sound broadcasts as the copyright in the sound recording is essentially a manufacturer's, rather than an author's, copyright. "Author" is a term generally used in the copyright field in relation to original literary, dramatic, musical or artistic works. The Act does not require that the Part IV subject matter be original. Section 85 provides: - "85. For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a sound recording, is the exclusive right to do all or any of the following acts: (a) to make a record embodying the recording; (b) to cause the recording to be heard in public; (c) to broadcast the recording." The making of a record embodying the recording refers to the making of the disc, tape, paper or other device in which is embodied a substantial part of the aggregate of the sounds embodied in the original record (s. 14 (1) (b)). Sound recordings were not the subject matter of copyright until the Copyright Act 1911 (U.K.), s. 19 (1) of which recognised copyright in records, perforated rolls and other contrivances by means of which sounds might be mechanically reproduced. Notwithstanding that there was no specified inclusion in s. 19 (1) of a performing right, such a right was held to exist in England in 1933 in Gramophone Co. Limited v. Stephen Carwardine & Co.[1934] Ch. 450. See also APRA v. 3DB Broadcasting Co. Pty. Limited[1929] V.L.R. 107 per Low J. at p. 113. The exclusive performing and broadcasting rights in sound recordings have been the subject of considerable controversy in Australia, not only with respect to the copyright owner of a sound recording being given such rights at all; but also with respect to royalties payable by broadcasters for playing records on radio. A person performing the record in public or broadcasting it is required to obtain the licence of the owner of copyright in the record, in addition to that of the owner of copyright in the work recorded. The great majority of records sold in Australia are imported or are pressed here from imported matrices. One school of thought contends that the production of a record is the result of an industrial or mechanical process and requires little artistic skill; records being akin to technical or industrial products rather than to original literary or musical works. The Gregory Committee in the U.K., in its report (Report of the Copyright Committee, 1952, Cmd.8662), was sympathetic to this view; but it favoured a reduced term of protection rather than the total denial to records of any copyright protection at all. In Australia, the Spicer Committee took the view that the making of a record involves a considerable amount of artistic and technical skill. It recommended in paragraphs 160 and 238 of its report (Report of the Copyright Law Review Committee, 1959 (Canberra, 1959)) that the owner of copyright in the record should have the performing and broadcasting rights. These recommendations were adopted by the Australian Government and are reflected in s. 85 of the Act. Copyright subsists in a sound recording if the maker was a "qualified person" when the recording was made, if the recording was made in Australia, or if first publication of the recording took place in Australia (s. 89). A "qualified person" is an Australian citizen, an Australian protected person (ie. a person who by virtue of Regulations in force under the Australian Citizenship Act 1948 is, for the purposes of that Act, under the protection of the Australian Government), a person resident in Australia or a body corporate incorporated under a law of the Commonwealth or of a State (s. 84). A sound recording is deemed to have been published if, but only if, records embodying the recording or a part of the recording have been supplied (whether by sale or otherwise) to the public (s. 29). There are important limitations on the exclusive rights of the owner of copyright in a sound recording, the most important of which are the compulsory licensing provisions for the public performance and broadcasting of records. These strike a balance between the claims-of the record producers for an adequate return for their skill and effort in making records and the claims of the broadcasters and those interested in the performing rights. The Act provides for compulsory licences for the public Performance of sound recordings (s. 108) and the broadcasting of sound recordings (s. 109). The essence of the scheme is that it is not an, infringement of copyright in a published sound recording to cause it to be heard in public or to broadcast it, without the consent of the owner of the copyright in the recording, if the recording has been released in Australia or the prescribed period has elapsed since first release overseas, and royalties are paid in accordance with the requirements of the Act. Section 108 (1) provides: - "108 (1) The copyright in a sound recording that has been published is not infringed by a person who causes the recording to be heard in public if – (a) the person has paid to the owner of the copyright in the recording such amount as they agree or, in default of agreement, has given an undertaking in writing to the owner to pay to him such amount as is determined by the Copyright Tribunal, on the application of either of them, to be equitable remuneration to the owner for the causing of the recording to be heard in public; (b) and in the case of a recording that was first published outside Australia - the recording has been published in Australia or the prescribed period after the date of the first publication of the recording has expired." Regulation 18 of the Copyright Regulations 1969 (Statutory Rules 1969 No. 58) provides that the prescribed period is seven weeks. The purpose of the prescribed period of seven weeks after first release overseas before the licence can be exercised is to prevent early exposure by public performance of unprotected imported records before their publication in Australia. Section 108 (2) provides: - "108 (2) A person who has given an undertaking referred to in the last preceding sub-section is liable, when the Copyright Tribunal has determined the amount to which the undertaking relates, to pay that amount to the owner of the copyright in the recording and the owner may recover that amount in a court of competent jurisdiction from the person as a debt due to the owner." Section 109 (1) (2) and (3) provide as follows: - "109 (1) Subject to this section, the copyright in a published sound recording is not infringed by the making of a broadcast of that recording if – (a) where there is no order of the Tribunal in force under section 152 of this Act applying to the maker of that broadcast in relation to the time when that broadcast was made - the maker of that broadcast has given an undertaking in writing to the person who is the owner of the copyright in that recording to pay to him such amounts (if any) as may be specified in, or determined in accordance with, an order of the Tribunal made under that section in respect of the broadcasting by the maker, during a period within which that broadcast was made, of published sound recordings in which the copyrights are owned by that person and which include that recording; or (b) where there is an order of the Tribunal in force under that section applying to the maker of that broadcast in relation to the time when that broadcast was made – (i) the copyright in that recording is owned by a person who is specified in the order as one of the persons among whom the amount specified in, or determined in accordance with, the order is to be divided and the maker of the broadcast makes payments to the person in accordance with the order; or (ii) the copyright in that recording is owned by a person who is not so specified in the order. (2) The last preceding sub-section does not apply in relation to a broadcast of a sound recording if the broadcast was made in accordance with an agreement between the maker of the broadcast and the owner of the copyright in the recording. (3) Sub-section (1) of this section does not apply in relation to a broadcast of a sound recording that has not been published in Australia if the broadcast was made before the expiration of the prescribed period after the date of the first publication of the recording." As with s. 108, the prescribed period is seven weeks (see Regulation 19). The purpose of the prescribed period is the same as in the case of the performance rights under s. 108 but that purpose is even more important in the case of the broadcasting rights under s. 109. The general effect of these provisions is that after a record has been released in Australia, subject to complying with the requirements of the Act; it may be publicly performed or broadcast subject to payment of appropriate royalties and otherwise complying with the Act. If the recording has not been published in Australia, a prescribed period of seven weeks must elapse after the date of first publication before the licence can be exercised. Not all recordings in Australia are entitled to this protection; and in the case of some imported recordings there is no public performance right and no broadcasting right at all. In the context of international copyright protection Australia has adopted the principle of reciprocity. Australia is a member, of the Berne Convention and its revisions and the Universal Copyright Convention of 1952. Both Conventions require its member countries to give the protection of their national laws to non-nationals of fellow membercountries and also to recognise certain basic rights of copyright as exclusive rights. Hence the Act must provide protection for works of foreign origin as required by the Conventions. The Conventions do not, of course, have the force of law in Australia unless specifically enacted as part of our domestic law. This has been achieved by Regulations under ss. 184 and 185 of the Act namely, the Copyright (International Protection) Regulations (the "CIP Regulations") by Implying specific provisions of the Act, so far as relevant, to works or recordings made or first published in a foreign country; to citizens, nationals or residents of a foreign country; to bodies incorporated under the law of a foreign country in the same way as the provisions of the Act apply where Australia, and not the foreign country, is the relevant forum. Under ss. 184 and 185 the provisions of the Act may be applied to a foreign country subject to such exceptions or modifications as are specified in the Regulations and either generally or in relation to specific classes of works as specified in the Regulations. The CIP Regulations apply the provisions of the Act generally in relation to countries that are members of the Berne Convention or are parties to the Universal Copyright Convention. But there are special provisions relating to matters, including the performing and broadcasting rights in overseas sound recordings, which are subject to complex limitations based essentially on the principle of reciprocity. The general effect of the relevant CIP Regulations is that the performing or broadcasting rights in sound recordings cease after publication in Australia or after seven weeks from the date of first publication elsewhere unless the country of which the maker was a citizen, national or resident, or in which the maker was incorporated at the time the recording was made, or in which the recording was made, was a country where copyright in the recording includes the performing or broadcasting rights. These countries are specified in the Third Schedule to the CIP Regulations. First publication of a recording in one of those countries is not a sufficient qualifying factor. In addition, copyright must subsist in the recording by virtue of the operation of the CIP Regulations or of the operation of the CIP Regulations and s. 89 (3) of the Act which provides that copyright subsists in a published sound recording if the first publication of the recording took place in Australia. If the copyright subsists in the recording by virtue only of first publication in Australia or in a country to which the Act extends, the copyright does not include the performance and broadcasting rights (s. 105, 184 and 185): see the CIP Regulations, in particular Regulations 1, 4, 6 and 7. The most important effect of the CIP Regulations is in relation to recordings from the U.S.A. where, until 1971, there was no copyright at all in sound recordings. As a result, there were no performance or broadcasting rights in Australia in respect of those records. This could not be overcome by arranging a first publication of the recording in Australia or in a country to which the Act extends. If therefore a sound recording was made in the U.S.A. by a corporation incorporated there but was first published in say Sweden, copyright would subsist in a recording in Australia. But if first publication in Sweden was the only reason for the application of the Act, then the copyright would be limited only to the right to prevent copying unders. 85 (a) subject to the provisions of Regulations 6 (b) and 7 (1) (b) of the CIP Regulations. We turn now to the arguments of the parties. Section 152 (7) requires the Tribunal, in making an order in elation to a broadcaster, to "take into account all relevant matters, including the extent to which the broadcaster uses, for the purposes of broadcasting; records embodying sound recordings (other than recordings in relation to which s. 105 of this Act applies) in which copyrights subsist, - being copyrights owned by, persons who are, or are represented by parties to the application." The exclusionary words in parentheses relate to recordings in which copyright subsists solely by virtue of first publication in Australia as provided in s. 89 (3) of the Act. Section 105 provides that copyright in a sound recording is not infringed by the public performance or broadcasting of a recording in which copyright subsists only by virtue of ss 89 (3). The record companies' (we shall hereafter use this expression. to refer to the record companies and PPCA for convenience) primary submission was that, in taking account of all relevant matters for the purposes of s. 152 (7), the Tribunal should have regard to the use by broadcasters of all sound recordings in which any species of copyright subsists, even though the exclusive broadcasting right may form no part of the relevant copyright. In support of this submission the record companies relied upon the effect of s. 184 of the Act, which provides for the application of the provisions of the Act to countries other than Australia, and Regulations 4 (1) and 7 (1) of the CIP Regulations which provide for the application of certain provisions of the Act to various countries and for the exclusion of broadcasting rights in some cases. The result of these provisions, so the argument runs, is that the record companies may be shown to have copyright in some sound recordings, other than the broadcast copyright, after a period of seven weeks from the date of first publication of the record in a "First Schedule" country; provided the maker of the record was not, at the time when the recording was made, a citizen or national of, or a corporation resident in a Third Schedule country. It was further submitted that, if these submissions were accepted, the size of the global sum to be divided in accordance with s. 156 (6) could be increased to the extent to which, for the purposes of broadcasting, the broadcasters used records embodying sound recordings in which any species of copyright exists, other than recordings in relation to which s. 105 of the Act applies. Counsel for the record companies made a detailed submission designed to show that there were such species of copyright which could subsist by virtue of the provisions of the Act and Regulations. If this submission were correct it would provide persuasive support for the primary submission In our opinion, the provisions of s. 184 of the Act and the CIP Regulations do not operate in the manner submitted. Section 184 (1) (a) provides that, subject to the section, Regulations under the Act: "...may make provision applying any of the provisions of this Act specified in the Regulations, in relation to a country (other than Australia)..." so that the provisions apply: "...in relation to ...sound recordings ...made or first published, in that country in like manner as those provisions apply in relation to ...sound recordings made or first published, in Australia." What s. 184 (1) (a) contemplates is a Regulation the effect of which would be to apply s. 89 of the Act to a given country as if a sound recording made or first published in that country had been made or first published in Australia. Consequently, if the only connection with the given country was that the recording, wherever made, was first -published there, the effect of the kind of Regulation contemplated would be to apply s. 89 (3) to that recording as if it had been first published in Australia. For the purposes of 's. 105 of the Act we are of the opinion that such a recording would be one in which copyright subsisted only by virtue of s. 89 (3) and its use would be excluded from the matters the Tribunal was expressly required to take into account under s. 152 (7). The CIP Regulations accord with the approach set out in s. 184 (1) (a). Regulation 4 (l) of the CIP Regulations, so far as relevant, provides that, subject to the CIP Regulations: "...the provisions of the Act apply in relation to ...sound recordings ...first published, in a country that constitutes, or forms part of, the territory of a Country specified in Part I or Part II of Schedule I in like manner as those provisions apply in relation to ...sound recordings... first published in Australia." The countries specified in Part I of the First Schedule are parties to the Berne Convention; the countries specified in Part II are parties to the Universal Copyright Convention. The relevant effect of Regulation 4 (1) is to apply s. 89 (3) to a sound recording first published in a First Schedule country as if such a sound recording had been first published in Australia. If copyright does not subsist in the recording for any other reason, it follows, in our opinion-, that the recording is one in which copyright subsists only by virtue of s. 89 (3) of the Act and, therefore, by reason of s. 105, a recording in respect of which public performance or broadcasting in Australia may be undertaken without infringement. It is a species of copyright which does not carry with it the exclusive right to broadcast. Counsel for the record companies sought to displace these conclusions by reference to Regulations 6 and 7, each of which appears to have been made pursuant to s. 184 (2) of the Act, which enables the extent to which the provisions of the Act are applicable to a given country to be modified. Regulation 6 is expressed to apply where copyright subsists in a published sound recording: "...by virtue only of the operation of these Regulations, or the operation of these Regulations and sub-section 3 of section 89 of the Act,..." and also where the recording has been published in Australia, or a period of seven weeks has elapsed from the date of the first publication of the recording. Regulation 6 is concerned with the exclusive public performance right comprised in the copyright which so subsists. Regulation 7 applies in similar circumstances but with reference to the exclusive broadcasting right. In both cases the relevant right is inapplicable unless the record emanates from a Third Schedule country. We do not accept the submissions of Counsel for the broadcasters that such rights were preserved in the case of countries other than Third Schedule countries, such as the United States of America, until either the recording was published in Australia or seven weeks had elapsed, whichever was the earlier. In the case of Regulation 7 (2) the qualification on the exclusive broadcasting right is rendered inapplicable in certain cases. Those are cases in which the relevant sound recording has not been published in Australia and in which: - (a) the record consists of, or includes, a musical work in which copyright subsists; (b) the musical work was made for the purpose of being performed, in association with a dramatic work or has been included in a cinematographic film; and (c) records of the musical work have not been supplied (whether by sale or otherwise) to the public in Australia. Regulation 7 (3) excludes, for the purposes of paragraph (c), any supply otherwise than by or with the consent of the owner of the copyright. In our view the effect of sub-Regulations (2) and (3) of Regulation 7 is that if the matter is covered by those Sub-Regulations the owner of the relevant copyright is not affected by the qualifications contained in sub-Regulation (1) of Regulation 4; but otherwise the benefit of Regulation (4) so far as concerns the broadcast right is applicable. Thus, unless there is a connection with a First Schedule country, no relevant copyright will subsist in the recording. If copyright does exist by reason only of the application to it of s. 89 (3) by virtue of Regulation 4, the recording becomes a recording to which s. 105 applies and may be broadcast without infringement. Counsel for the record companies submitted that copyright could not subsist in a published sound recording by virtue only of the operation of the CIP Regulations. We accept this submission. Copyright subsists in a sound recording to which Regulation 4 (1) relevantly applies by virtue of the operation of the CIP Regulations in applying s. 89 (3) to a recording first published in a First Schedule country as if that recording had been first published in Australia. It follows in our view that such a recording is one in which, for the purposes of s. 105 of the Act, copyright subsists only by virtue of s. 89 (3). The policy of the Act is to apply its provisions to those countries which accord reciprocal protection to Australia. If the record companies' submission were correct it could have the result that a recording first published in the United States of America, which does not recognise an exclusive broadcasting right, would receive greater copyright protection in Australia than a recording first published in Australia. The view we have taken of the -Act accords with the policy of reciprocity. The language of s. 152 (2) suggests that the Act intends remuneration for broadcasting to be an amount payable by a broadcaster) to the owners of copyrights in published sound recordings in respect of the broadcasting of those recordings by that broadcaster. In our opinion it is clear that such remuneration is for the broadcasting of recordings in respect of which the copyright owner is entitled to the exclusive broadcast right under s. 85 (c) of the Act. Where there is no agreement between the parties fixing the remuneration, the broadcaster is protected from infringement under s. 101 by the provisions of s. 109 if he gives an undertaking to pay the copyright owner the amount fixed by the Tribunal under s. 152. The assumption is that, unless the copyright owner's rights would be infringed by broadcasting without his consent, he would not be entitled to remuneration. This explains the exclusion from s. 152 (7) of recordings to which s. 105 applies. Similar assumptions underly the relationship between ss. 107 and 150 and between ss. 108 and 151 which apply to the species of copyright provided for in paragraphs (a) and (b) of s. 85, respectively. By s. 109 (3) the draftsman appears to have met the case where a broadcast is made in Australia of a recording not published in Australia and the broadcast is made before the expiration of the seven week period prescribed by Regulation 19 of the Copyright Regulations1969. Section 109 (3) provides: - "Sub-section (1) of this section does not apply in relation to a broadcast of a sound recording that has not been published in Australia if the broadcast was made before the expiration of the prescribed period after the date of the first publication of the recording." During the prescribed period it is not possible to obtain protection from infringement under s. 109. The copyright owner would be left to his ordinary remedies in respect of such infringement. So far as Regulation 7 of the CIP Regulations is concerned, any limited copyright conferred by that provision is likewise excluded by s. 109 (5) from the protection afforded by s. 109. In our, opinion the provisions of s. 109 (3) and (5) reinforce the view that s. 152 is concerned only with remuneration payable to the owner of the species of copyright referred to in s. 85 (c) in respect of the use of that copyright. Although s. 152 may be invoked without any undertaking having been given under s. 109 (1), once an order is made under s. 152 it follows that s. 109 (1) is brought into play. Hence, it would be surprising if categories of copyright excluded from the protection afforded by s. 109 (1) were included in the categories of copyright in respect of which remuneration is payable under s. 152. The conclusion we have reached is that the remuneration to be fixed under s. 152 is an amount payable by the broadcaster to the owner of the copyright in a sound recording who has the exclusive right to broadcast that recording by virtue of s. 85 (c). It follows that, for the purposes of s. 152 (7 ), the Tribunal is bound to take into account the use made by the broadcaster of recordings which are the subject of copyright under s. $4 (c). It does not follow that the Tribunal is bound to exclude from its consideration the use by the broadcaster of other recordings or any other activity which contributes to gross earnings, except recordings to which s. 105 applies which are expressly excluded by s. 152 (7). Counsel for the broadcasters submitted that under s. 152 not only is the remuneration payable only in respect of the s. 85 (c) copyright, but also the quantum is to be fixed only by reference to the use of the s. 85 (c) copyright. We accept the first part of that submission but not the second. In our opinion the reference to "all relevant matters" in s. 152 (7) suggests that the scope of the inquiry should not be limited in the way in which the submission suggests. Further, the requirement in s. 152 ($) that the amount payable should not exceed 1% of the gross earnings of the broadcaster during the relevant period indicates that the extent to which the use of s. 85 (c) copyright recordings contributes to gross earnings as compared to other activities may be a relevant consideration. As yet the Tribunal has not heard argument on, or made any determination of, the proper basis upon which the amount payable should be assessed in making an order under s. 152. To the extent that the remuneration is related to the exploitation by the broadcaster of the copyright owner's exclusive broadcast right it is envisaged that some value will have to be placed on that right. It remains to be determined whether that value is to be fixed on the basis of the measure of damages for infringement, or an account of profits made by broadcasters as if they had infringed, or by reference to the notional bargain approach or otherwise. Although we do not wish to be taken as making any ruling on the matter in advance, it is conceivable that the earnings of broadcasters from their activities other than the use of sound recordings, their earnings froze the use of recordings other than those in respect of which the copyright owner has the exclusive broadcast right, and the general financial condition or capacity of the broadcaster to pay may be relevant. In the result, our conclusion on the preliminary points which have been argued is that: - (a) The amount payable under s. 152 (2) is in respect of the broadcasting by broadcasters of published sound recordings in respect of which the copyright includes the exclusive right to broadcast under s. 85 (c) which would be infringed by the broadcaster, unless an order is made under s. 152 or an undertaking given in accordance with s. 109 (1); and (b) The amount so payable is to be determined by the Tribunal taking into account all relevant matters in accordance with s. 152 (7); but that sub-section, whilst excluding therefrom the extent to which the broadcaster uses recordings in relation to which s. 105 applies and including therein the extent to which the broadcaster uses sound recordings in which copyright subsists, does not limit the class of relevant matters to the use made of recordings in respect of which the copyright includes the exclusive right to broadcast under s. 85 (c) and which attracts the amount payable under s. 152 (2). At the request of the parties we make no determination or order at this stage; but will adjourn the further hearing of the matter to a date to be fixed, so that the parties may consider what we have said and then bring in short minutes of the appropriate determination or order.