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7.—(1) This article applies in any case in which–

(a)a work was made before 1st August 1989 (commencement of Part I of the Act) and copyright under the Copyright Act 1956 did not subsist in it when it was made, or

(b)a work is made on or after 1st August 1989 and copyright under the Act does not subsist in it when it is made,

but copyright subsequently subsists in it by virtue of article 2(1), 3, 4(1) or 4(5) above.

(2) Where in any such case a person incurs or has incurred any expenditure or liability in connection with, for the purpose of or with a view to the doing of an act which at the time is not or was not an act restricted by any copyright in the work, the doing, or continued doing, of that act after copyright subsequently subsists in the work by virtue of article 2(1), 3, 4(1) or 4(5) above shall not be an act restricted by the copyright unless the owner of the copyright or his exclusive licensee (if any) pays such compensation as, failing agreement, may be determined by arbitration.