Case Details
- Citation: [2021] SGCRT 1
- Court: Intellectual Property Office of Singapore
- Date: 2021-12-28
- Judges: Mr Edwin San, Deputy President, Mrs Lee Ai Ming and Mr Low Chai Chong, Members
- Plaintiff/Applicant: IPOS: SingNet Pte Ltd
- Defendant/Respondent: Composers and Authors Society of Singapore Ltd
- Legal Areas: Intellectual Property – Copyright
- Statutes Referenced: Australian Copyright Act, Australian Copyright Act 1968, Copyright Act (Cap. 63)
- Cases Cited: [1991] SGCRT 1, [1993] SGCRT 1, [2011] SGCRT 1, [2020] SGCRT 1, [2021] SGCRT 1
- Judgment Length: 93 pages, 27,002 words
Summary
This case involves a dispute between SingNet Pte Ltd, an internet service provider and pay television service operator, and the Composers and Authors Society of Singapore Ltd (COMPASS), a collective management organization that administers music copyright. SingNet challenged the reasonableness of the 1.5% license fee rate that COMPASS sought to impose on SingNet's net television revenue for the right to communicate copyright musical works. SingNet filed an application to the Copyright Tribunal under section 163(2) of the Copyright Act, arguing that the license fee rate was unreasonable. After considering the evidence and submissions, the Tribunal dismissed SingNet's application and upheld the 1.5% license fee rate as reasonable.
What Were the Facts of This Case?
SingNet and COMPASS have been in negotiations over the license fee rate since 2010. In 2014, they entered into a letter agreement where SingNet paid COMPASS SGD1,070,000 in license fees for the period from 2007 to 2013. However, the parties were unable to reach an agreement on the license fees for the period from April 2013 onwards.
From August 2016 to January 2019, the parties resumed negotiations but still could not reach an agreement. On January 31, 2019, SingNet filed an application to the Copyright Tribunal under section 163(2) of the Copyright Act, challenging the reasonableness of the 1.5% license fee rate imposed by COMPASS.
Separately, in March 2019, COMPASS commenced a copyright infringement lawsuit against SingNet for alleged infringement since April 2013. The High Court stayed this lawsuit pending the determination of the present proceedings before the Copyright Tribunal.
What Were the Key Legal Issues?
The key legal issue in this case was whether the 1.5% license fee rate imposed by COMPASS on SingNet's net television revenue was reasonable under section 163(2) of the Copyright Act. SingNet argued that the rate was unreasonable and arbitrary, while COMPASS contended that the rate was reasonable.
The Tribunal also had to consider the scope of its jurisdiction under section 163(2), including whether it had the power to grant a retrospective order covering the period from April 2013 onwards. This issue was referred to the High Court, which held that the Tribunal had no such jurisdiction.
How Did the Court Analyse the Issues?
The Tribunal examined various approaches to assessing the reasonableness of the license fee rate, including the market rate approach, the notional bargain rate approach, the comparable bargain approach, and the judicial estimation approach. The Tribunal also scrutinized COMPASS's methodology in arriving at the 1.5% rate, including its reference to a 6.5% rate, the limitations of the StarHub survey, and the discount from 2.5% to 1.5%.
The Tribunal also considered the negotiation history between the parties, including the lack of change in the royalty base, the changes in the license rate, SingNet's initial acceptance of the 1.35% rate, and COMPASS's treatment of SingNet compared to other licensees like StarHub.
Additionally, the Tribunal examined the degree of music use and the value of music in SingNet's sports content, as well as the revenue attributable to such content. The Tribunal also analyzed SingNet's proposed alternative license rate based on the post-Turner rates and the appropriate royalty base.
What Was the Outcome?
The Tribunal dismissed SingNet's application and upheld the 1.5% license fee rate as reasonable. The Tribunal found that SingNet failed to discharge its burden of proving that the rate was unreasonable, and that COMPASS's methodology and approach were reasonable in the circumstances.
The Tribunal's decision means that the 1.5% license fee rate will apply prospectively from the date of the Tribunal's order, and not retrospectively from April 2013 as SingNet had sought. The copyright infringement lawsuit filed by COMPASS against SingNet will now proceed, with the Tribunal's decision on the reasonableness of the license fee rate being a relevant factor.
Why Does This Case Matter?
This case is significant for several reasons. First, it provides guidance on the legal principles and the burden of proof applicable in proceedings before the Copyright Tribunal under section 163(2) of the Copyright Act. The Tribunal's decision reaffirms that the applicant bears the legal burden of proving that the charges or conditions imposed by a collective management organization are unreasonable.
Second, the case highlights the Tribunal's role as a check against the potential abuse of monopolistic power by collective management organizations like COMPASS. The Tribunal's analysis of COMPASS's methodology and approach in setting the license fee rate demonstrates its willingness to scrutinize the reasonableness of such rates.
Finally, the case clarifies the Tribunal's jurisdiction, with the High Court's ruling that the Tribunal cannot grant retrospective orders. This means that any order made by the Tribunal will only have prospective effect, which may impact the strategies and negotiation positions of parties in future disputes.
Legislation Referenced
Cases Cited
- [1991] SGCRT 1
- [1993] SGCRT 1
- [2011] SGCRT 1
- [2020] SGCRT 1
- [2021] SGCRT 1
Source Documents
This article analyses [2021] SGCRT 1 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.