CSC Media Group Ltd (Formerly known as Chart Show Channels Ltd) v Video Performance Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Lord Justice Wilson,Lord Justice Longmore |
| Judgment Date | 27 May 2011 |
| Neutral Citation | [2011] EWCA Civ 650 |
| Date | 27 May 2011 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2010/2111 |
[2011] EWCA Civ 650
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COPYRIGHT TRIBUNAL
MR JUSTICE FLOYD
CH/2009/APP/0563
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Longmore
Lord Justice Wilson
and
Lord Justice Etherton
Case No: A3/2010/2111
Mr Michael Crane QC and Mr Edmund Cullen (instructed by Davenport Lyons) for the Appellant
Mr Ian Mill QC and Mr Tom Weisselberg (instructed by Olswang LLP) for the Respondent
Hearing dates: 13th April 2011
Introduction
This is an appeal by CSC Media Group Limited ("CSC"), a broadcaster of television music channels, from the order of Floyd J dated 30 September 2010 by which he set aside part of the interim decision ("the Decision") and order dated 7 September 2010 of the Copyright Tribunal ("the Tribunal") (HH Judge Fysh QC SC, Rear-Admiral James Carine and Colonel Roderick Arnold) and he remitted certain matters to a newly constituted Tribunal for re-hearing. The part of the Decision and order which the Judge set aside was the Tribunal's determination that the royalty rate payable by CSC to the respondent, Video Performance Limited ("VPL"), for the use of VPL's music video repertoire in CSC's television music channels should be the headline rate of 12.5% of CSC's gross revenue, pro-rated by reference to the total broadcast hours.
The decision of the Tribunal was made on CSC's application under section 126 of the Copyright, Designs and Patents Act 1988 ("the Act"). That section provides that a licensee under a copyright licence from a licensing body like VPL, which is due to expire, may apply to the Tribunal on the ground that it is unreasonable in the circumstances that the licence should cease to be in force. Section 126(4) provides that, if the Tribunal finds the application well-founded, it shall make an order declaring that the licensee shall continue to be entitled to the benefit of the licence on such terms as the Tribunal may determine to be reasonable in the circumstances.
The hearing before the Tribunal lasted three weeks, in which evidence was given by 14 factual witnesses and 2 expert witnesses. The decision runs to 50 pages and 210 paragraphs. By the time the Tribunal published its decision the costs incurred by each side were in excess of £1m.
The Judge considered that the Tribunal's decision on the royalty rate was fundamentally flawed by, among other things, its methodology and its failure to take account or sufficient account of a licence previously granted by VPL to BSkyB; and that the Tribunal acted improperly and irrationally in deciding on a pro-rating formula which differed from that agreed by both parties. The Judge concluded "with considerable regret" that the matter would have to be remitted for a re-hearing before a differently constituted Tribunal.
Mummery LJ granted permission for a second appeal to this Court. CSC does not challenge the Judge's order insofar as it sets aside the Tribunal's decision on pro-rating. It only appeals the Judge's order insofar as it sets aside the entirety of the Tribunal's decision on the royalty rate. VPL has issued a Respondent's Notice seeking to uphold the Judge's order on four further grounds in respect of which, VPL argues, the Tribunal was plainly wrong.
Background
The following summary is mostly taken from the Judge's clear and helpful account.
VPL is a licensing body within the meaning of section 126 of the Act. Its members are record companies and other persons who are owners or exclusive licensees of the rights to broadcast and show certain music videos in public and the right to permit the copying of those videos for the purpose of subsequent broadcast or public show. VPL licenses broadcasts of music videos on behalf of its members (and copying for the purpose of such broadcasting). VPL seeks to grant licences to its repertoire ("the VPL Repertoire") in return for a royalty calculated by reference to the gross revenue that will be received by a licensee in respect of the broadcast of the television channel, pro-rated by reference to the channel's usage of the VPL Repertoire. It has also granted licences on a fixed fee basis. Its licensees are generally broadcasters of music television channels (that is, television channels where a substantial proportion of the broadcasting output comprises music videos).
CSC carries on business as a broadcaster of music television channels. It initially operated three music television channels. From 2004 it additionally managed three music television channels for BSkyB. Those channels were then purchased by CSC in 2006. CSC now operates seven music television channels and a similar number of non-music channels.
CSC has effectively been licensed by VPL since September 2002 under the terms of a written licence which provided for the payment to VPL of a pro-rated fee based on the headline rate of 20% of gross revenue ("the CSC 2003 Licence"). The CSC 2003 Licence was never signed. It expired on 17 September 2005. CSC has been licensed since then under the terms of a letter ("the Extension Letter") whose purpose was to give the parties three months in which to negotiate new terms. Following the making of the application to the Tribunal under section 126 of the Act, CSC has been licensed by virtue of section 126(3). That sub-section provides that, where a reference has been made to the Tribunal in respect of a licence, the licence shall remain in operation until the proceedings on the reference are concluded.
The legal principles
As mentioned above, the licence terms to be determined by the Tribunal under section 126(4) are those which are "reasonable in the circumstances". Section 128(3) provides that the Tribunal may direct that an order under section 126 has effect from a date before that on which it is made, subject to certain limitations. Section 129 provides, among other things, for the Tribunal to have regard to comparables, as follows:
"129. In determining what is reasonable on a reference or application under this Chapter relating to a licensing scheme or licence, the Copyright Tribunal shall have regard to—
(a) the availability of other schemes, or the granting of other licences, to other persons in similar circumstances, and
(b) the terms of those schemes or licences,
and shall exercise its powers so as to secure that there is no unreasonable discrimination between licensees, or prospective licensees, under the scheme or licence to which the reference or application relates and licensees under other schemes operated by, or other licences granted by, the same person."
Section 135 provides that the obligation to have regard to those specific matters "does not affect the Tribunal's general obligation in any case to have regard to all relevant considerations".
By virtue of section 152(1) of the Act there is a right of appeal from the Tribunal to the High Court on a point of law.
The role of the appellate court on an appeal from the Tribunal was helpfully reviewed by Arnold J in PPL v The British Hospitality Association [2009] EWHC 209 (Ch). As he pointed out, the appellate court will accord due respect to the Tribunal as a specialist tribunal created by Parliament specifically for the purpose of regulating collective copyright licensing. On that point, Baroness Hale's well-known observation in AH (Sudan) v Secretary of State for the Home Department [2007] UKHL 49, [2008] 1 AC 678 at [30] (with reference to the Asylum and Immigration Tribunal) is apposite:
"… This is an expert Tribunal charged with administering a complex area of law in challenging circumstances. To paraphrase a view I have expressed about such expert Tribunals in another context, the ordinary courts should approach appeals from them with an appropriate degree of caution; it is probable that in understanding and applying the law in their specialised field the Tribunal will have got it right: see Cooke v Secretary of State for Social Security [2001] EWCA Civ 734, [2002] 3 All E R 279 at [16]. They and they alone are the judges of the facts. It is not enough that their decision on those facts may seem harsh to people who have not heard and read the evidence and arguments which they have heard and read. Their decisions should be respected unless it is quite clear that they have misdirected themselves in law. Appellate courts should not rush to find such misdirections simply because they might have reached a different conclusion on the facts or expressed themselves differently."
That passage was cited by Jacob and Toulson LJJ in HMRC v Procter & Gamble UK Ltd [2009] EWCA Civ 407, [2009] STC 1990, in which Mummery LJ added at [74]:
"I cannot emphasise too strongly that the issue on an appeal from the Tribunal is not whether the appellate body agrees with its conclusions. It is this: as a matter of law, was the Tribunal entitled to reach its conclusions? It is a misconception of the very nature an appeal on a point of law to treat it, as too many appellants tend to do, as just another hearing of the self-same issue that was decided by the Tribunal."
There are three connected points. First, it is not necessary for the Tribunal to mention every argument and every piece of evidence deployed before it. As Sir Richard Scott V-C said in PPL v Candy Rock Recording Ltd [1999] EMLR 806 at 822:
"It cannot be necessary for a Tribunal to mention expressly every relevant matter that has been placed before it in argument or in evidence. Remarks made by Lord...
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