Whilst my UK readers were enjoying a rain-sodden Bank Holiday weekend, I've spent a marvellous, sunny few days in beautiful Prague, after talking on - what else? - copyright at a business congress. Whilst there, I bumped into one of my blog readers. So TF, thanks for reading!
The digital media story, so far: we've taken a quick overview of "digital media" and the febrile state of the market and gone on to look at two out of my four focal areas of change - 'What and How to Regulate?' and 'Who Carries the Can?' In this post, I'm looking at the third area - copyright, privacy and the boundary between the public and private domain.
WHERE SHOULD THE BOUNDARY BETWEEN THE PUBLIC DOMAIN AND THE PRIVATE DOMAIN BE DRAWN?
I’m going to start with copyright. The debate about copyright in the digital age, which started in ‘cyberspace’ in the early 1990’s, still rages. Many advocates of the Web’s culture of collaboration, mixing and mashing argue that we’re in a world of limitless and perfect digital copies produced at zero cost where copyright is overly restrictive. One leading economist argues that the declining costs of production of original and subsequent digital copies of works means that the optimal term of copyright protection is 15 years (Professor Rufus Pollock at Cambridge University).
Is digital different?
At the same time, public bodies such as libraries argue for wider and broader copyright exceptions for the digital age. Ask them - “is digital different?” - and they will say “no” and so argue that all the existing exceptions to copyright law should apply in the digital age.
You can understand their position given their ambitions in the digital age. On the other hand, the creative industries – from individual photographers, authors and artists to media corporations – argue that the raison d’être of their businesses is to produce and make all kinds of content available for consumers but, without copyright, there is no incentive to invest in the creation of works nor to protect that investment online when it’s ripped off. Content may be free at the point of consumption, but, at least in the commercial sphere, it is never free.
So if you ask right holders if “digital is different”, they’ll say “yes, it is different”, pointing to the fact that digital technology and broadband networks enable the distribution of limitless, perfect copyright infringing digital copies of films, sound recordings, TV programmes and books.
The public good v. the commercial interest
The central challenge is to balance the public good with legitimate commercial interests. Let me nail my colours to the mast right away. Of course, I declare an interest. I get paid by rights holders. But rights holders are a diverse bunch from authors and agents to publishers, producers, distributors, online service providers and ‘Web 2.0’ businesses. But I firmly believe – not least of all for the benefit of UK plc – that copyright is and remains absolutely central to our economic and cultural well being.
At the same time, the creative industries need to work even harder to deliver licensing solutions. The answer to copyright’s critics lies in the marriage of technology and licensing solutions to enable users to find what they want, get what they want, where and when they want it in return for a fair reward. But as we transition the digital world, the struggle over what you might call the ’balancing mechanisms’ of copyright, which weigh exclusive rights against public access, goes on.
The balancing mechanisms of copyright
Those balancing mechanisms are (1) the length of the term of protection of copyright term, (2) the scope of the exclusive rights it gives; (3) how those rights are managed and (4) exceptions which enable works to be copied and used without permission. At the moment, regulatory attention is on exceptions and rights management. Following the Gowers Review of Intellectual Property last year, the Government published a Consultation Paper with proposals to update exceptions to copyright law. The consultation process closed in April and draft legislation is likely to follow later this year.
The role of exceptions in the digital environment
The issue of copyright exceptions sounds – and often is – very legalistic. But it goes to the very heart of how copyright functions in the digital world, drawing a boundary between those things that need permission and those which users are free to do. Copyright exceptions have to pass the so called ‘3-step’ test which is found in the Berne Copyright Convention.
It states that: Exceptions are to be applied ‘in certain, special cases’…. Which do not conflict with the normal exploitation of the work and..... Do not unreasonably prejudice the legitimate interests of the right holder. In particular, it means that: The use must be non-commercial such as copying for research and private study. In the case of certain exceptions, the rights holder must receive ‘fair compensation’.
This can be by a licence granted by the rights owner or by a collecting society. For example, the Copyright Licensing Agency recently launched a series of new digital licences, starting with the licences for Business and for Public Administration, which permit the copying and re-use of electronic and online publications as well as limited central storage of extracts and articles. In continental Europe, ‘fair compensation’ is achieved through a share of the levies imposed on copying equipment or recording media.
Here’s an example of how this ‘3 step test’ may apply to proposed extensions to existing copyright exceptions in the UK. Under current copyright law (s.36 of the Copyright, Designs & Patents Act) a teacher can photocopy passages from published literary, dramatic or musical works for classroom purposes up to specified limits.
Should the teacher be allowed to do the digital equivalent using an electronic whiteboard in the classroom? The answer, of course, is “yes” and that is one of the proposed extensions to existing copyright law which the Government is proposing. But to keep within the ‘3 step test’, the expanded exception, like current law, would not apply if the educational institution can get a licence from the publisher or a collecting society.
In fact, licensing solutions are available or will be developed, either directly from publishers as part of their online service or through their collecting society. So with this background in mind, I’m going to look briefly at some of the other Government’s proposed changes to copyright exceptions which are on the table.
The proposal here is to create a new exception that, in the Government’s words, would allow consumers to make a copy of a work they legally own, so that they can make it accessible in another format for playback on another device which they own. The copy could not be sold, loaned or given away nor file shared. Put that way, it sounds fine. To be respected, copyright law needs to be seen to take account of the realities of the digital world.
But the devil is truly in the detail. Should it apply to all categories of works? Should copies of literary works and films be treated in the same way as musical recordings? How many format shifts should be allowed? Should more than one copy be allowed to address the technological process of transferring content? Should the exception apply just to copies made after the law changes or, to allow format shifts of personal archives, should it apply to works copied after the law changes?
There are other big questions as well. The European Union Copyright Directive allows an exception for consumer private copying on condition that the right holder receives ‘fair compensation’. Supporters of the format shifting exception say that as there’s no harm to rights holders from the format shift, that could be “zero. But is that right?
The Music Business Group (MBG) is an umbrella group of trade bodies representing music managers, songwriters, publishers and performers. In its response to UK-IPO’s Consultation, it argued that "enormous value is derived from the transferability of music," it said in its submission. "Last year alone, over 20 million MP3-capable portable devices were sold in the UK, and over 90% of music on the average MP3 player is music that has been copied." "UK creators and right holders are legally entitled to benefit from this value. At present, this value is enjoyed by both consumers and technology companies while creators and right holders are effectively excluded from any value. This constitutes market failure," it said.
The need for licensing solutions
So, they’re proposing a license for format shifting carrying a licence fee would be determined by commercial negotiations between creators and right holders and manufacturers and distributors of devices substantially used or marketed for making copies of music. So rather than a statutory levy, it’s a licence-based solution. So this is by no means a settled issue.
But however it is resolved, it again illustrates the need to provide licensing solutions for the digital age. In a nutshell, copyright exceptions are fine as long as they don’t undermine legitimate commercial content services. There are other proposed copyright exceptions:
To extend the existing exception which allows educational establishments to record broadcasts for educational, non-commercial purposes to allow them to record on-demand communications in addition to traditional broadcasts. [The question here is why do we need an exception if the educational institution can get it on-demand?] To allow libraries and archives to make copies of sound recordings, films and broadcasts for preservation or replacement.
To expand the current ‘fair dealing’ exception for copying for non-commercial research and private study to cover all forms of content, including films and sound recordings, and not just literary, artistic, dramatic and musical works. For example, it would allow researchers to copy parts of archival film materials to consider how best to preserve the materials.
Controversially, to create a new exception for parody.
Licensed use, not exceptions
So there’s going to be plenty of debate over the legislative detail to implement these changes. Overall, there is one key theme which emerges: licensed use, not exceptions. The greater the number and variety of licensed online services– whether it’s music, educational content, films or otherwise – the less need their customers have to rely on applicable exceptions to use that content.
Instead of reliance on copyright exceptions, it’s the terms of service which prevail. But licences need to be ‘exceptions +’; they must ensure that they give the user the permission to do the things they’re permitted to do under copyright exceptions along with all the other licensed uses for which permission is needed.
In short, we need to code exceptions into contracts.
In my next post, we'll take a look at my 4th focal area of change - the transition from analogue to digital.
Have a good week.