Vice-chancellors' representatives told a tribunal this week that the copyright licensing scheme was "a bureaucratic nightmare for hard-pressed university staff" and seriously inhibited teaching.
The Patent Office tribunal between Universities UK and the Copyright Licensing Agency began in London this week.
The two sides are arguing over three key issues relating to photocopying: the cost of copyright fees; the licensing of course packs; and the licensing of artistic works.
The Higher Education Copyright Agreement was drawn up by the CLA and the UUK copyright group in 1998 to run for three years. Institutions pay a blanket fee of £3.25 per full-time student, but this does not include materials for course packs, which have to go through the CLA Rapid Clearing System (Clarcs).
UUK said users found the agreement excessively complex from the start. Later in 1998 the CLA made a new deal with the Design and Artists Copyright Society to cover "incidental" artistic works, proposing to increase the blanket fee to cover embedded illustrations.
But this did not include separate whole-page works, and the two sides began to review the agreement. After negotiations broke down last July, UUK called for a copyright tribunal to review the terms and conditions of the agreement. The two-week hearing will cost hundreds of thousands of pounds.
UUK contends that not only has the cost of the blanket licence increased but its scope has decreased. It says fees are arbitrary and do not reflect the true economic value of the works.
UUK is arguing for a 60p blanket fee per student, to include course pack copying, and for Clarcs to be abolished and to come under the blanket licence.
The CLA countered that the blanket fee was reasonable and gave universities indemnity in cases of licence infringement. It said universities were probably being undercharged for photocopying and called for a £10.25 fee.
Clarcs could not be included in the blanket licence, the CLA's counsel said, because some rightsholders had specific copyright requirements.
The DACS said that universities should pay more to the CLA to cover artistic works copyright. It suggested this should be collected via a 20 per cent increase in the blanket fee, which would provide indemnity for artworks, both embedded and separate.
The ruling from tribunal chair Christopher Floyd QC is expected to take several weeks.