A Tangle Of Tapes
The Age
Sunday April 18, 1993
A recent High Court decision has revived the vexed issue of home taping as technology leaps ahead of the copyright lawyers. VIRGINIA TRIOLI reports.
YOU have to read the advertisements for Philip's snappy new digital compact cassette rather closely to notice it, but the careful disclaimer is there _ right at the bottom, sober and admonishing.
Just after the breathless advertising copy informs you that ``now you can copy the pure digital sound of a CD on to digital compact cassette (DCC) without any discernible loss in quality", the warning kicks in: ``Copyright may exist in the material you wish to record. Copying of such material requires the permission of the owner." That should just about do it. Such a line should cover any potential breach of copyright that may occur if someone tapes (at home and for personal use) a copyright work _ such as the last INXS album or the re-release of Pink Floyd's `Dark Side of the Moon'. But, unfortunately, that line doesn't do it at all.
The issue of breaching music copyright through home taping refuses to go away so easily. The Australian music industry estimates that artists are losing $226million a year in retail sales lost through illegal home taping, and the launch of newer and more acoustically accurate forms of digital recording (such as the DCC and, later this year, Sony's recordable Mini Disc system) has made the contentious matter of whether Australia will take a stand on the introduction of a blank tape royalty even more urgent.
A home recording _ for personal use only _ of that INXS album on to your new DCC is still a breach of copyright. It is illegal, and also one of the most troublesome copyright breaches of all to police. And not many music enthusiasts think to give Michael Hutchence a quick call to ask permission before they whack their home-taped copy on the Walkman.
``I speak to people who work in record shops," says musician and producer Peter Farnan, guitarist with the group Boom Crash Opera, ``and they tell me that for whatever the hot new record is, like Jimmy Barnes' new one, all the slicks (the colored information inserts) from the cassettes they are selling get stolen out of the cases because kids have taped it." Farnan says: ``Look, we know it goes on and we accept it. It's a bit hard to explain to people that (home taping) is not fair _ but there's a principle at stake _ and that's that something is being got for nothing." This problem looks set to stay in Australia. Last month a majority decision by the High Court threw out a Federal Government attempt to impose a royalty levy on the sale of all blank tapes in Australia.
This levy, in the Copyright Amendment Act 1989, was to have raised royalty money for Australian and some overseas artists whose works may have been copied by home-tapers, thereby providing some cash compensation for sales lost through taping.
The levy would effectively legalise the home taping industry.
THE Government's legislation allowed for a copyright collecting society to collect the levy annually from the wholesale price and distribute the money to record companies, recording artists, song writers and publishing companies.
But Australian tape manufacturers reacted to what they saw as an unfair and additional cost tacked on to their product. The Australian Tape Manufacturers Association challenged the validity of the legislation in the High Court, saying that the law amounted to a tax that tape manufacturers were not required to collect.
The full bench of the High Court upheld the appeal four-three on 11 March, and now the whole tape royalty issue is back to square one.
``The reality is that over 90 per cent of blank tapes (sold) are used to record music, and music is one of the most easily stolen properties in the world," the executive director of the Australian Record Industry Association (ARIA), Mr Emmanuel Candi, maintains. ``The more the industry bleeds from sales lost through taping, the less able it is to produce more new music and more services for retailers and consumers." Peter Farnan says he is disturbed that Australia is now out of step with the rest of the world over music copyright, leaving many Australian musicians exposed. ``Overseas there have been efforts made to tighten up copyright, so that as technology changes the law keeps up _ but we aren't." For the record industry and musicians, the problem is simple: blank tapes are used to ``steal" copies of copyright music and some sort of royalty should be paid. Part of their concern is the parallel _ but separate _ problem of the rental CD market being totally unregulated.
But the tape industry does not believe this is their problem.
``We are selling (tapes) to the retailer who then sells to the consumer who may be infringing a copyright," said the secretary of the Australian Tape Manufacturer's Association, Ian Prosser, when the High Court's decision was handed down. ``We are a fair way from the infringement if indeed there is any." But does the industry that makes the tapes that may then be used to breach copyright feel any responsibility to address the issue? ``No, we don't," Mr Prosser says.
The feeling is widespread. ``No, we don't see it as a problem," says Tim Maclachlan, the marketing manager of BASF, the German-owned tape manufacturer. ``Since 1934 there has been in some sense a recorded music industry and blank media has been available for it for that time. Now suddenly all these people are having a go (at raising money from it)." Put bluntly, the tape industry's attitude seems similar to that of a gun manufacturer: we just make the guns, we don't tell people to shoot them.
But intellectual property lawyers see it differently. ``The issue (of paying a royalty for taping) has been accepted internationally now," says Peter Banki, an intellectual property lawyer and partner with Phillips Fox. ``It has been talked about in the context of GATT and the international Copyright Convention. It's really a part of the world of copyright now." The High Court's decision makes Australia one of the few major music- producing countries in the world that does not have a royalty paid on blank tapes.
The US last year passed the Home Audio Recording Act which allows the payment of a royalty on all recordable digital media _ DCC, Mini Disc and others _ as well as the recording machines used to tape. Two per cent of the wholesale price of a DCC machine or a Mini Disc system now has to be paid to a collecting society, as well as three per cent wholesale on tapes and discs.
Italy has a similar system, the Netherlands pays a royalty on blank audio and video media, and Austria, Finland, France, Germany, Hungary and Iceland already have schemes in place.
For Philips, the High Court decision has jeopardised a very delicate commercial situation _ and unlike the Tape Manufacturers Association, Philips definitely sees a problem.
Philips, the orginal inventor of the CD system, only managed to secure support in Australia for its DCC system by backing the 1989 blank tape legislation. Now with the law thrown out, home taping is illegal again and Philips has a hot situation on its hands.
``We are now making it very clear on all our ads that copyright may exist in some work and permission has to be sought before it can be taped," says Philip's marketing manager, George Sprague.
BUT with people continuing to tape regardless, does Philips see such warnings as an answer to the problem? ``No," says Mr Sprague. ``DCC had a long gestation period in trying to get support from the music industry and the previous legislation was part of providing that agreement _ but now we're back to the original problem." The problem for ARIA is that the pristine quality of DCC provides an irresistible opportunity for home taping. Philips says it has gone some way towards addressing home taping abuse by including a ``serial copy management system" on DCCs, which allows only first generation material to be copied. But, as Mr Candi points out, this hardly halts the infringements.
``It's a step in the right direction, but (the tape manufacturers) can't go some way down the line and then turn around and run the other way as they did in the High Court case." Mr Candi says ARIA is back in talks with the federal Attorney- General's Office over how to try to re-introduce the failed legislation. Intellectual property lawyer Mr Banki says the law could still be re-introduced as a tax collected by the Federal Government, but tape manufacturers are not prepared to go quietly.
``If they do try it again the tape manufacturers will defend their business," says Mr Maclachlan of BASF. And Mr Banki says he doesn't blame him.
``If anyone's at fault it's our legislators," says Mr Banki, ``for not catching up with technological development. It's much too slow."
© 1993 The Age