Copyright lawyers want legislation reformed and simplified to create a level playing field for movie distribution channels
Slipping a DVD or Blu-ray disc into a multimedia entertainment system is the modern equivalent of winding up the gramophone or gathering around the piano for past generations.
But couples snuggling on sofas with a bucket of home-made popcorn and the latest Hollywood blockbuster or quirky British comedy are likely to be blithely unaware they are potentially participating in a highly questionable practice.
Legislation requires all physical copies of films sold in the UK to be branded with a British Board of Film Classification (BBFC) stamp of approval. And yet lawyers claim that both large and small online distributors are flogging thousands of unclassified discs in the UK over the internet.
Indeed, the legislation generally governing Britain’s multibillion-pound DVD and entertainment disc business – the Video Recordings Acts 2010 and 1984 – is outmoded and potentially in breach of European fair trade rules, lawyers claim. City-based fraud and IP specialists are calling for the National Trading Standards Board, launched a year ago, to co-ordinate enforcement of existing laws amid fears that smaller traders are being unfairly targeted while large, multi-jurisdictional internet platforms are escaping scrutiny.
They point to a crackdown by local branches of Trading Standards, which have launched dawn raids on small distributors, confiscating warehouses of stock and effectively forcing them out of business.
Small UK distributors import DVDs of mainstream cinema-release films from around Europe that either have no classification or bear stamps of approval from other EU governing bodies, such as those in Ireland or Scandinavia. Lawyers acting for smaller players readily acknowledge that reselling discs without BBFC classification is a crime, carrying a maximum sentence of a two-year prison term. However, innovative deals cut with Trading Standards – allowing for the return of stock provided the distributors seek classification for all discs – often prove too expensive for small businesses.
Too big to bust
At the same time lawyers claim that multinational businesses are left untroubled by Trading Standards investigators because they are too big and too difficult to challenge.
One City law firm acting for a small distributor tells The Lawyer it has “moaned” to Trading Standards officers about their alleged inconsistency in enforcing the legislation. While the law firm’s client had put its hands up, investigators turned a Nelsonian eye on a larger international distributor – “with a warehouse down the road the size of a small aircraft hanger full of unclassified DVDs”.
Officials acknowledge the inconsistency of enforcement.
“Larger sites such as Amazon and eBay are much more difficult to police,” says Handley Brustad, lead IP officer at the Trading Standards Institute. “It’s difficult to know what each individual Trading Standards authority is doing in relation to Amazon and other large platform sites.
“The problem is that those sites are more widespread – they appear across Trading Standards authorities around the UK. And at the moment there is no mechanism to deal with the issue on a national basis.”
Indeed, it doesn’t take more than five minutes to find discs for sale on Amazon UK that appear not to carry BBFC classification – or the classification is ambiguous. Only a few days ago films such as Quentin Tarantino’s latest gore-fest Django and Marlon Brando’s career highlight A Streetcar Named Desire fell into those categories, along with at least half a dozen other titles. But Amazon UK’s head office failed to respond to repeated requests for comment, while its legal department declined.
In defence of the big players, others point out that there is a practical difference between independent suppliers trading through the large platforms such as Amazon and eBay, and the products sold directly by the sites themselves.
But a spokesman for the Federation Against Copyright Theft (Fact) also points out that even discs bearing a BBFC stamp could be illegal.
“We are seeing a lot of box sets of DVDs carrying forged BBFC and even Fact logos,” he says.
This is no popcorn issue – it involves big money. Internet streaming of films may be making inroads, but sales of physical discs in the UK still take the lion’s share of trade, with the latest figures from the British Video Association showing the UK market was worth more than £1.8bn last year.
But according to Brustad, Trading Standards as historically organised cannot allocate sufficient resources to enforce the classification law.
“We have to ask whether we can afford to take on a national problem and investigate it when we’ve only got local resources,” he says. “The fairly obvious answer is ‘no’.”
That stark and realistic approach comes as no surprise to specialist lawyers.
“I’ve become accustomed to the fact that it’s difficult to predict what specific Trading Standards bodies will do, owing to the local nature of their structure,” comments Andy Millmore, IP litigation partner at Harbottle & Lewis. “That’s been the way even before the advent of the internet and online sales. The difficulty has become all the greater with the explosion of e-commerce and foreign-based businesses operating here but without any physical office in the UK.”
Millmore takes the view that the disparity in approach to small and large disc distributors is blatantly unfair.
“It shouldn’t be happening,” he says. “It’s contrary to the act.”
The Government maintains that the National Trading Standards Board will step into the gap, having set up a UK-wide e-crime monitoring and enforcement unit.
A spokesperson for the Department for Business, Innovation and Skills, which oversees trading standards issues, says the new board has not yet looked at the issue of larger distributors breaching the Video Recordings Act but it “could be asked to do so by trading standards services if it was viewed as a national threat and a strategic priority to tackle any risk”.
All a bit vague, respond specialist lawyers, who are calling for the legislation to be reformed and simplified.
A “simple solution”, advises Michael O’Kane partner and head of business crime at Peters & Peters, would be to follow the example set by the EU-wide regulation of video games.
“A pan-European standard,” he explains, “so wherever you buy a video game in Europe, you know the classification covering its suitability for various age ranges is recognised across the EU. Films are behind the times.”
His colleague, associate Maria Cronin, argues there are wider European implications of the present UK position.
“The British requirement is effectively a restriction on trade, unless it can be justified on the principles of proportionality or the public interest principles set out in EU law,” she explains. “But no one has ever tested it.”
Many in the entertainment sector argue that a tussle over the legalities of disc distribution in the UK is not worth the effort, as the ground is rapidly shifting away from hard copies of films to streamed versions over the internet. Non-physical copies fall outside the BBFC classification requirements, points out Tony Ballard, a broadcast and telecoms partner at Harbottle.
So is the BBFC shortly to become redundant?
“When there are no more physical carriers, it won’t have anything to classify,” is Ballard’s succinct response.
In the meantime, cosy couples and sad singletons alike wanting to stay on the safe side of the law should keep their eyes peeled for legitimate BBFC stamps – or simply stick to an old-fashioned trip to the local flea pit.
The National Trading Standards Board was launched a year ago, bringing together representatives of Trading Standards from England and Wales “to prioritise, fund and co-ordinate national and regional enforcement cases”, according to the Department for Business, Innovation and Skills.
Consumer affairs minister Norman Lamb touted the board’s launch as being “exactly what we need to combat priority areas such as loan sharks and internet scams”.
Federation Against Copyright Theft
Edwards & Co (Belfast, for actions in Northern Ireland)
QEB Hollis Whiteman
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The organisation is also understood to be on the verge of appointing its first general counsel, with an announcement expected next month.
Local Trading Standards authorities routinely instruct barristers direct, including:
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Gough Square Chambers
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They also instruct patent and trade mark attorneys Marks & Clerk