Faulty powers

Fighting online piracy has been a hot issue for several years. Do we need a new Copyright Act? Four leading in-house lawyers have their say


Chris Johnstone
Chris Johnstone

The world of copyright is developing fast, in line with digital innovation. But to date legislation is yet to catch up. Although the UK Digital Economy Act (DEA) came into force in June 2010, many of its most important provisions are yet to take effect.

The lack of implementation is causing headaches for those industries for which copyright is a key ­consideration. Our panel of general counsel this week argue that, rather than the Government dithering with a succession of sketchy proposals, a new Copyright Act would resolve many of the current issues.

What impact has the DEA had on your business to date?

Ted Shapiro, general counsel Emea, Motion Picture Association of America (MPAA): The ­impact of the DEA on the audiovisual sector has been limited due to the fact that the relevant provisions haven’t been implemented. In fact, I’d say the delay in implementing those provisions is having a negative impact on the digital economy.

The delay, which is in part due to the ­judicial review action brought by two large telecoms operators, is ­creating a great deal of uncertainty that is ­affecting not only DEA-related ­investment decisions, but also those concerning the launch and further development of new online services.

The expected benefits, in particular in terms of heightened consumer awareness and improved cooperation between internet service pro-viders (ISPs) and rights-holders, have therefore yet to be realised.

Debbie Stones, general counsel, PRS for Music: Pending the act coming into force, it’s had no direct impact on our business to date. The uncertainties and the delay in ­implementation, however, have done little to help further the essential message that it is right that creators of music deserve fair rewards when their music is exploited and shared over networks.

Hugh Jones, copyright counsel, Publishers’ Association: Given that the Government is yet to implement any of the most important measures in the act, none. It is ­imperative that the initial obligations code is produced as soon as possible. Next spring will be the two-year ­anniversary of the DEA achieving Royal Assent, but there is no ­likelihood of the notifications system being in place until 2013.

Every month lost in implementation is another month in which ­online copyright infringement is not being dealt with effectively.

Chris Johnstone, head of legal, Music Choice: No impact anywhere. This legislation was enacted as part of the ‘wash-up’ at the end of the last Labour government and it shows. Its implementation has been mired in controversy and uncertainty, which is hugely disappointing considering the importance of the issues. This is a shame, because if this legislation had been properly implemented in the first place it could have formed part of a wider raft of measures that might be helpfully re-educating end-user habits away from illegal downloading. As things stand the DEA is a sorry shambles.

What impact do you think Ian Hargreaves’ May 2011 report on IP will have on your business?

 

In particular, do you support his proposals for a digital copyright exchange?

Shapiro: The Hargreaves Report, if implemented fully, will have a negative impact on the audiovisual sector in the UK. Rather than recognising that the legislative framework for copyright in the UK has made a significant contribution to the creation of the strongest content sector in the EU, and helped to attract massive ­foreign investment into the country, the report adopts anti-copyright rhetoric in support of ambitious ­recommendations that would limit copyright and introduce further ­regulation of its exercise.

Stones: In part it will be a distraction from business, being the latest in a slew of proposed reviews and revisions of copyright in the UK in the past few years, particularly also where it’s acting in parallel with ­initiatives from Europe.

It’s also difficult to be precise about what the direct impact will be until the consultation process has properly kicked off and some of the detailed thinking is revealed. We do know that there will be directly relevant ­provisions concerning codes of practice for collecting societies, but as we ­already operate codes that broadly have been met with the approval of the Intellectual Property Office (IPO), it is not clear how much we’ll have to change or develop our own practices.

The digital copyright exchange concept has certainly sparked debate in copyright circles. While we have profound reservations as to the ­feasibility or desirability of the creation of a single, fully fledged licensing forum, we’re certainly looking ­forward to exploring what may be achievable, particularly in the area of improving the infrastructure underpinning different licensing activities.

Jones: Considerable impact, depending on which recommendations are finally implemented. Publishers broadly support the idea of a digital copyright exchange, provided it’s implemented by the creative industries in ways complementary to existing rights and permissions data systems, is consistent with the Berne Convention (which normally bans formalities such as registration) and does not create an unfair and unreasonable two-tier copyright system.

Other recommendations publishers support include the likely ‘orphan works’ licensing proposal, but we’re concerned about some of the other ‘blunt instrument’ recommendations made on the basis of little or no evidence, such as the idea of ­exceptions for data mining or for ­(unspecified) uses enabled by ­developing technology.

Johnstone: No impact. The report contains much that is sensible, but, like the Labour government’s Gowers Report, I fear that Mr Cameron’s ­Hargreaves Report will turn out to be a damp squib.

For example, Hargreaves recommends strongly that Government IP policy should follow evidence rather than lobbying – but we have the 2011 copyright term extension for neighbouring rights, the result of extensive lobbying by record companies and their vassals.

In my opinion the Government has opted for another quick and cheap fix – a headline-grabbing placeholder at best, when so much more is needed. The best and clearest-thinking judges in the country are crying out for a root-and-branch reform of UK copyright legislation.

Do you anticipate more copyright litigation in 2012?

Shapiro: The judicial review of the DEA will continue into 2012, as the case is now before the Court of ­Appeal. A number of rights-holders’ groups intervened in the case as ­interested parties to support the ­Government. In the UK I expect copyright enforcement-related litigation to continue in 2012, with a ­particular focus on Section 97A of the Copyright, Designs and Patents Act 1988 (CPDA) and rogue websites that are structurally infringing copyright.

Stones: Yes – both in the UK and in the European courts. As new ­business models develop there are inevitably questions raised around the parameters of our law. There has also been a notable flurry of references to the European Court of ­Justice for guidance on law and the underlying directives, and we believe this will continue next year.

Jones: Following the success of the MPAA in bringing a successful ­Section 97A case against BT with ­respect of Newzbin 2, it would be ­surprising if other creative industry bodies did not seek similar injunctions. But it would be far better if ISPs worked with rights-holders and ministers in arriving at voluntary agreements so that such actions could be expedited.

The process must always be ­subject to judicial oversight, but ISPs could choose not to contest every last detail of a case where it’s clear that copyright infringement is taking place.

Johnstone: Of course. If one thing is certain, it’s that the commercial spheres that fall within the ambit of copyright law will continue to ­expand exponentially – and do so a lot faster than the law, which is still trying to get to grips with the basic stuff that’s been on the table for over a decade, such as online piracy.

How are you addressing cross-border copyright issues?

Shapiro: Addressing such issues is time-consuming and expensive. As I’m in charge of managing copyright litigation and policy issues in Europe, I work with likeminded local organisations and counsel across the region.

Through regular exchange of ­information we’ve developed a useful early warning and referral system. One of the main problems inherent in copyright infringement online is that it’s borderless. Rogue sites ­regularly hop from jurisdiction to ­jurisdiction while using intermediaries in many countries. This ­requires strategic enforcement and litigation decisions relating to choice of venue, targets and remedies.

Jones: On the basis of existing ­territorial rights, on which most ­publishers’ licensing is based. We’re anticipating an EU directive on ­collective licensing in 2012, which may well affect publishers’ licensing best practice, as well as those of other sectors, such as the music industry.

Johnstone: Cross-border copyright music licensing in Europe is a mess. A European online music ­service must not only negotiate limited multi-repertoire, single-territory ­licences with a separate authors ­collecting society for each of 27 EU member states, it must also conclude single repertoire, multi-territory deals with each of the special ­purpose vehicles (SPVs) set up by the major publishers.

Whereas before there was at least the certainty of a blanket deal for each country, now we must conclude separate licences of ‘mechanical rights’ to the Anglo-American repertoire of a single publisher. It appears to be the case that smaller players who operate in only one country may now be able to get a blanket licence from the local society – so they’re back where they started.

However, the major publisher SPVs may extend the scope of their ­withdrawal of repertoire to include on-demand services on television networks, which are invariably single territory.

I frequently meet with European authors’ societies and the truth is that they’re as puzzled as I am as to what’s going to happen next.

 

What is top of your agenda at the moment with relation to copyright and brand protection?

Shapiro: My priority is proposing legal and policy actions that contribute to a digital environment in which legal audiovisual content ­services can flourish to the benefit of stakeholders, including in particular consumers.

While the right legislative framework and enforcement policies are vital to any strategy designed to ­foster the creation of a level playing field for content distribution online, ­content owners must continue to ­innovate by launching and licensing services that cater to consumers’ ­demands. Our focus will be on ­building on important legal precedents ­established in the UK and other member states in 2010 while participating in stakeholder dialogue ­pro-moted by the Government.

Stones: The issue at the top of our agenda is to make sure that the significant technological developments we’re seeing with regard to online music services do not devalue the fair return to creators. We also want to see appropriate licensing arrangements in relation to creators; to ensure that any legislative developments do not promote the interests of consumers to the detriment of the bona fide ­interests of the creators of music; and to promote efficiency and transparency in collective management.

Jones: We’re concerned at the apparent lack of any consultation on the recommendations of Hargreaves that do not require changes to UK law.

The recommendations on commercial research and technological development were not subject to any detailed economic analysis by Hargreaves or the IPO, and yet officials are still apparently briefing the European Commission that such changes would be a big gain. It’s hard to fathom how they know this.

Johnstone: The UK is crying out for a new Copyright Act to replace the old CPDA, as amended and patched up again and again and again. Legislation enacted in the days when all phones had wires, records played at 45rpm or 33rpm and a web was still something made by spiders can no longer be fit for purpose.

There’s little point in governments commissioning the likes of Gowers and Hargreaves to come up with bright ideas every four years if no one’s going to do anything to get to the heart of the matter. The longer they leave it, the worse it will get.