Minter Ellison has successfully acted on a Full Federal Court case that makes it cheaper for gyms to play music in its workout classes.
Minter Ellison acted for Fitness Australia in an appeal against a decision by the Copyright Tribunal in May to increase a licence fee for music played in fitness classes from 96.8c to $15.
Fitness Australia is the national health and fitness industry association, representing over 1200 businesses and 20,000 registered exercise professionals.
The fee was collected by the Phonographic Performance Company of Australia (PPCA) on behalf of record labels and artists. The fee applied to any songs protected under copyright.
"To set the levy, the PPCA used a pilot survey of six gyms, without previously telling anybody, and that denied my client procedural fairness," Minter Ellison partner and intellectual property specialist Charles Alexander said.
Gilbert + Tobin acted for the Copyright Tribunal of Australia.
Fitness Australia said that if the $15 levy remained, a typical fitness centre with 1500 members would be forced to pay over $80,000 in fees, as compared to $2000 that they currently pay.
"This decision will ensure that gyms, fitness and recreation centres remain viable and affordable for all Australians, helping them to maintain a healthy lifestyle," Fitness Australia chief executive officer Lauretta Stace said.
While the Full Federal Court's decision was welcomed by gym owners, the music industry has condemned the ruling.
The PPCA has said that the "billion dollar a year fitness industry should pay a fairer price for licensed music used in fitness classes".
"Artists and labels deserve a fair return when their music is used as a resource in commercial businesses and are currently being significantly underpaid by the fitness industry," PPCA chief executive Dan Rosen said.
When the licence fee was increased in May, Lindy Morrison, the former drummer of one of Australia's greatest bands, the Go-Betweens, said that "we have to create the product [songs] and it costs us a great deal of money so we should be able to get a fair return".
The licence fee will now be redetermined by the Copyright Tribunal in early 2011.
Troy Gurnett, a senior associate at Middletons who has acted for APRA previously, said that while the decision of the court was a win for the fitness industry, it may well be short lived.
"There is little doubt that whatever the new rate is, it will be higher than 96.4 cents per class," he said. "Whether the rate is as high as $15 per classs now seems unlikely."
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