Laurence Kaye on Digital Media Law

Digital media + big, smart open data

Dear reader

I attended the recent FT Digital Media Conference 2013. As ever, it was full of useful insights and I highly recommend viewing the sessions which are available on demand here. Mostly, it was about incremental change. There were lots of stats and discussion about the year on year growth of digital as a % of media businesses, the proliferation of VOD platforms on TV and mobile, the presssure on advertisers to integrate their ads into content on games and other media to keep viewers' attention, the ongoing challenge for newspapers to monetise their content and generally for traditional publishers and others to transform their existing business models. According to a couple of speakers, digital is now 30% of media businesses and Martin Sorrell of WPP said that 34% of WPP's business is now digital.

But the one theme that, for me at least, really stood out, was data. You name it - big, open, smart, social, CRM and every other kind of data was present in almost every panel. What was really interesting was not just the fact that the gathering, analysis and use of customer and other data gathered online is a core marketing function, it's the way that data management is now at the very heart of business. The language and discourse of media business has changed. One speaker talked about the need for data scientists who can take raw data and push it through their analytic tools and algorithms. Another said "organisations are increasingly data-centric". A representative of The Weather Channel described their business as "a data science and technology company as well as a media company."

Whilst much of the discussion was about customer data gathered via the web and social media, the issue of data is much broader. The availability of open data, the midata initiative and other data sources makes a strategic approach to data management absolutely essential.

My legal eagle readers involved in this area of the law will already have their eyes on the draft EU Regulation which will replace the existing regime set out in Directive 95/46/EC. It contains measures that will harmonise data protection procedures and enforcement across the EU, and aims to achieve consistency with the existing system for ensuring privacy online, which is set out in the Directive 2002/58/EC  (E-Privacy Directive).

I cannot claim any great insight in saying that data protection and privacy is really important to all organisations. Not "just" at the level of legal compliance but at the heart of the brand - just think about Bloomberg's current problems with disclosure of user's data. Sometimes it takes time for the message to sink in. But my tip for anyone looking to build their legal career in the online sector is become a data law expert.

Against this background, the Regulation will  extend the impact of data protection law.  For instance, it's expected to have a significant impact on data controllers and processors who are active within the EU, including many who are located outside it but who monitor the behaviour of EU consumers, or offer them goods or services online. Data processors will now explicitly be included in the scope of the data protection regime. 

In addition, the definition of "data subject" will now make it clear that "personal data" includes all data that can identify an individual, whether that data is held by the data controller himself or by a third party which, in combination with the data held by the controller, could identify the data subject.

So for data scientists and data lawyers, things are getting to get really busy.

Have a good week,

Laurie Kaye

Copyright Meltdown in Supreme Court?

Dear reader

Traditionally the reproduction right - covering copying a work - has been the cornerstone of copyright law. The scope of that right in the digital age has been called into question in the Supreme Court's decision in Public Relations Consultants Association Limited v. The Newspaper Licensing Society.

The Court looked at whether clients of media monitoring agency would need a licence to view a media monitoring report on screen. If they downloaded it to their machines or or printed it they clearly would. But, said the Court, simply viewing a web page was just like reading a book and it's never been an infringement to view or read a copy of an infringing copy in physical form.

Of course, a service provider like a media monitoring agency would need a licence to make press cuttings available online for its end-users. But if the growth of 'cloud-based' services renders redundant the notion of download, the end user's "consumption" of a work by its temporary display on screen will form an economically significant part of the service which, unless the European Court of Justice is in disagreement, will not require a licence. 

True, even if the end user doesn't need a licence merely to view on screen, the content owner could still seek argue in its negotiations with the service provider (SP) that there's value to the SP in being able to make the work available to its end users, including on-screen use, and so the licence charged to the SP should reflect that. But you can see the counter argument.

 The Supreme Court decided that article 5.1 of the Copyright Directive "...extends in principle to temporary copies made forthe purpose of browsing by an unlicensed end-user." So this is a really important issue, and hence the Supreme Court's decision to refer the matter to the European Court, which has already looked at this point in (Case C-5/08) Infopaq International A/S v. Danske Dagblades Forening (“Infopaq I”) [2010], (Case C-403/08) Football Association Premier League Ltd v QC Leisure and Others and (Case C-429/08) Karen Murphy v Media Protection Services Ltd (“Premier League”) [2012] 1 CMLR 769; and (Case C-302/10) Infopaq International A/S v. Danske Dagblades Forening (“Infopaq II”), 17 January 2012.

In thinking about the outcome of that referral, I'd like to add a couple of comments, including some personal recollections. I took part in the negotiations of the Copyright Directive - 2001/29/EC. In particular, I recall a meeting between representatives of the large Telcos on the one hand and rights holders on the other some time around 1999 or 2000. The focus was Article 5.1 of the Directive, the one on which the Supreme Court focused in this case. It was like two nations each struggling to understand the other's language. The Telcos were concerned about being sued for copyright infringement because technical, temporary copies of works being carried on their networks were being made in their routers and server caches.

It was these these types of technical, temporary copies without independent economic significance which were the focus of Article 5.1 of the Directive. It carves out of the reproduction right "temporary acts of reproduction which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary; or (b) a lawful use."

As I recall, the majority of the discussions around Article 5.1 concerned these kinds of temporary copies made by the Telcos' networks and machines. True, the reference to "lawful use" pointed to other, "off the network" technical, temporary copies such as cached copies in a computer's memory which were incidental to some other "lawful use" e.g. prior to a download. But this was not the central point and the notion of "lawful use" was seen in the context of technical copies which happened in the course of some other licensed activity.

True, the Supreme Court has said that European case law has interpreted "lawful use" more widely. Effectively, the Court said that if someone does not need a licence to view a work on screen, then technical copies made the user's machine are "lawful". The Court said that "..the far broader meaning given by the Court of Justice...to the concept of "lawful use" makes it impossible to confine the scope of the exception to the internal plumbing of the internet. Once it it accepted that article 5.1 extends in principle to temporary copies made for the purpose of browsing by an unlicensed end-users, much of teh argument which the courts below accepted unravels."

Getting the ambit of the exemption in Article 5.1 is of fundamental concern for everyone in the digital value chain. It should also be remembered that the debates around Article 5.1 should be seen in the context of the exemptions from liability for 'mere conduite', 'caching' and 'hosting' in the E-Commerce Directive which was going through the legislative process at the same time.

The issues here are complex and what's important is that we 'look through' the technology to get a uniformly agreed and accepted view of preciselly what "lawful use" means in the world of digital copyright. We must get the balance right. Clearly, no-one seeks to turn internet users into copyright infringers. Equally, it's important that there isn't a legal hole in digital content services.

Have a good week,

Laurie Kaye

The ten overriding themes of the 'digital shift' (concluding)

Dear reader

I owe you an apology for my radio silence. But, along with my colleagues Mailin and Sherif, I've been busy with my own 'digital shift', following my firm's amalgamation at the beginning of the month with national law firm Shoosmiths where we've established a publishing and digital media team. Details here. I'm pleased to say it's going really well and our new collegues have been tremendously supporting and welcoming.

The 'digital shift' doesn't stand still. In just a couple of weeks, we've had some important US Court decisions on the scope of the US 'first sale' doctrine (Kirtsaeng v. John Wiley & Sons & Capitol Records v. ReDigi), more of which in another post. We also about to see the details on the European Commission's settlement deal with Google following its investigation into its search business.

Tomorrow, I'll be at the 'Digital Minds' conference and on Tuesday I'll be at the London Book Fair where digital is, of course, high on the agenda. As well as looking around and catching up with all you 'movers and shakers', I'll be running a seminar on Tuesday April 16th at 10 am with Neil Blair of The Blair Partnership and Pottermore and Eric Huang of Penguin on the theme of "21st century publishing - multi-platform, IP-centric" (details here) and at 2:30pm that day I'm a panel member on "What should authors, agents and rights' professionals know when making deals with film and television companies in the brave new digital world?" (details here).

So I hope to see some of you at one of these events.

Anyway, as a result of time passing, I didn't quite get to the end of my 10 themes of the 'digital shift'. As a refresher, you can find a list of them, together with the first 7 themes, here. So I thought it was time to complete the list. I'll keep it brief and just focus on the big picture.

T8: It’s a mobile economy

 The continuing growth in mobile devices – tablets and smartphones in particular – means that mobile commerce and mobile advertising will be an increasingly important part of the digital economy’s landscape and in which it will be vital to create the right advertising products and business models for mobile.

 

T9: Everyone’s in the technology business

I remember a meeting some time in 2000 - (remember Y2K and how the world's IT infrastructure was going to collapse on the chime of Big Ben at 00:00?) - between the representatives of the ISP industry and and the creative industries discussing the Copyright Directive.  The topic under discussion was the copyright exception that the ISP's wanted to ensure that copies of copyright works cached on their servers could not be treated as acts of reproduction needing the copyright owner's permission.

The meeting was a great example of how the worlds of intellectual property and technology lacked a shared vocabulary and vision. That's changing. Slowly. But the drive to collaboration and sharing through machine to machine communications and API's is relentlessly driving the two together. 

The media, entertainment and information industries are now all in the technology business, including learning to borrow programme and content development techniques  like 'agile' from the software industry.

 

T10: It’s a borderless world

This is our number one challenge. National laws, but A global medium. We see this every day. How do we create an effective regulatory framework for the press in the UK when Blogs publish the same content overseas? How does a digital platform based in country A set its standards for data protection compliance when it targets consumers on an international basis with EU and non EU laws often setting different requirements for compliance for user consent?

The answer, of course, is a slow but inexorable move towards harmonised standards of 'hard law' (e.g. through a forthcoming revision to EU's data protection legal framework) and 'soft law' in the forms of voluntary codes of practice and an increasingly international outlook of the Courts.

Have a good week,

Laurie Kaye

The 10 overriding themes of the 'digital shift'

Dear reader

In my last post, I looked at the ‘digital shift’. In this post, I'm going to list the ten overriding, interlinked themes which characterise this shift and shape digital media’s legal agenda. I'll also describe the first 3 themes. I'll look at the remaining themes in my next two posts. In future, when I blog about a new case or legal/business development, I'll 'tag' the post with the relevant theme(s) so that, hopefully, we can continue to see the digital wood for the trees.

So here are the themes:

T1: Digital disruption in the value chain

T2: Being IP centric, platform agnostic

T3: The rise and rise of social media

T4: The digital citizen/consumer calling the shots

T5: Mind the [digital] platform

T6: Collaboration is the name of the game

T7: Consolidation & Fragmentation

T8: It's a mobile economy

T9: Wer'e all in the technology business

T10: It's a borderless world.

I'll now turn to the first three:

T1: ‘Digital Disruption’ in the value chain

Digital disruption is a fact of digital media life. The disrupters are everywhere.

They’re new players, often ‘born digital’ businesses, which enter an industry and create an entirely new business which didn’t exist before e.g.a new consumer products business which use ‘the crowd’ as their ‘R&D’ division to identify new inventions and product or a new entrant like anobii, a social platform for book recommendations.

 They’re also new players who enter an industry and perform an an existing activity in the value chain better and/or differently to existing incumbents and in the process displace them.‘Kobalt’ is an example, a new online platform which offers a service to streamline royalty payments to artistes.

But ‘digital disrupters’ are also existing players who reinvent themselves and in the process even cannibalise part of their business in order to create a new business and income stream e.g. Getty’s ‘istockphoto’ service.

So what’s on the legal agenda with TI? They include the legal structurees which underpin business models and the contracts and business relationships which implement them; applying existing laws to new models e.g. when is a ‘sale’ of a digital work a licence or vice versa? (See here); & watch out for developments in the US case of Capitol Records v. ReDigi which again examines whether a digital file is a licence or a digital good.

 T2: ‘IP Centric, platform agnostic’

Increasingly, content owners are “getting” the fact that they need to take a ‘360 degree’ approach to their intellectual property (IP) in a multi-platform world, multi-format world. For instance, a number of leading publishers have recently created new roles with responsibility to transition publishers into being multi-platform organisations. Often, the people appointed come from outside the industry - games, television etc. - with cross-platform experience.

At the heart of this '360 degree’ approach is a ‘format/platform neutral’ approach to IP and new products and services. In turn, this demands skill in being innovative with IP creation and exploitation, building new business models etc. It also puts IP rights, especially copyright and trade marks (brands) at the heart of the business.

T2’s legal issues include the role of copyright and the copyright reform agenda (Hargreaves etc.), including proposed changes to copyright law. The bigger picture is how copyright continues to maintain the balance between rights holders, users and intermediaries. This is a dynamic area. Only last week, Germany's Parliament have introduced a new 'neighouring right' which gives print publishers the right to licence their web content. This is a hugely significant development.

More broadly, IP covers a whole range of rights including those in brands, designs and patents. These can be used both offensively - see in the ‘patent wars’ in the digital space and defensively. No creative company can be without an IP strategy

T3: The rise and rise of social media

It's already a truism to say that social platforms such as Facebook, Linked-In, Twitter and Pinterest are playing an increasingly significant role n business. For some, these platforms may simply be relevant from a marketing and PR perspective e.g. a company having a FaceBook page to build engagement with its customers.

For others, especially those in the media and information sectors, these social platforms are becoming increasingly integrated into their business. For instance, digital services provider ‘Soundcloud’ are embedded within FaceBook so that FaceBook users can launch sounds on SoundCloud rom within Facebook. This integration process is two way – Facebook is also embedded into these services.

So what are the ‘T3’ legal issues?  Linked to social media, but not confined to it, is the whole issue of tracking consumers’ behaviour online and using this data in an aggregated way for marketing and
advertising purposes. This brings us to the heart of the debate about privacy and data protection.

Also, the presence of celebrities, public figures and others on social media such as Twitter makes reputation management an increasingly important area, which from a legal perspective brings defamation into the picture along with the laws and regulations governing data protection, consumer protection and marketing and advertising.

I'll continue this theme in my next post.

Finally, if you enjoy my blog post, please share it with colleagues and anyone else you think may encourage them, with a suggestion that they might like to subscribe.

Have a good week

Laurie Kaye

 

'IR2' and the Digital Shift

Dear reader 

In my previous post, I wrote that in order to see the wood for the trees in forthcoming legal and regulatory changes and developments, I’d look in a bit more detail at ‘the digital shift’ and then then overriding themes which reflect these complex interactions. This posts looks at that shift.

‘IR2’

The first industrial revolution, which began in the 1750s, lasted for between 80 to 100 years.  The pace of technological change todayencourages us to believe that the 2nd industrial revolution (‘IR2’) will be completed at much greater speed. So if we take the mid-1980s as a starting point, with the emergence of optical disk technologies into consumer markets, you would expect us to be well on the way to completion, 30 years into IR2.

 But we’re not. IR2 is multi-factorial,consisting of developments and changes in technology, law, business models and consumers’ attitudes to copyright, privacy and their use of social media. All of these changes are moving at different speeds, with technology way ahead of the others.  If there isn’t a law which states that that “the pace of change is dictated by the slowest moving part”, there should be.

So let’s assume that 2013 marks an approximate midway point, then it is not unreasonable to guess that we have another 20 years or so to go before the tectonic shifts of IR2 have substantially occurred. On that basis, we are still in a period of flux.

Timing is all

In fact, change seems to occur in bursts of acceleration. For instance, we have seen the rapid emergence of a market for e-books in 2011-2012,preceded by a longer period of around 9 years during which the technology for e-books began to emerge but before the market took off. 

These cycles of impending change and pent up demand, followed by rapid bursts of accelerated change, can lead to complacency (“these changes won’t happen or will only happen much later”) or to over-optimistic projections (“this is all going to happen overnight”).

Both are wrong. The smart money identifies the indicators of change during the ‘impending change’ part of the cycle and makes an informed guess – no-one can precisely predict – about when the trends which are apparent during this part of the cycle are going to burst into market development.  That way, you can be ready to take advantage of these market developments and avoid having to play catch-up.

All human activity is here

The ‘digital shift’ affects all aspects of economic activity.

Certainly, we are seeing how the Web and Mobile connected digital devices, together with social platforms, are transforming the ways we consume and participate in entertainment and information products and services.  But the ‘digital shift’ is also changing the broader world of business and consumer products and services too. New ‘peer to peer’ lending services like Zopa are appearing in the financial services industries. New fashion businesses are being established which sell direct to consumers.  The advertising industry is in the process of re-inventing itself to find new models for mobile advertising that works effectively on tablets and smart phones. Social sites like Facebook and Twitter are emerging as platforms for new services. In the retail industry, the boundaries between physical and online shopping are beginning to blur. Smart phones can be used by customers to get updates on the latest in-store offers and to enhance the shoppers’ in-store experience. The list goes on.

For content owners and producers, the challenge is to avoid dependency. If they acquire their customers through FaceBook or Google, or monetise them through a revenue share with Apple, they have a vulnerable business model in the longer term.  They may start that way but will need to break
one of those dependencies and therefore need a migration path so that they can acquire customers directly or can monetise them through subscription etc.

In my next posts, I’ll look at the  overriding themes of the ‘digital shift’ and 'tag' them with the key legal issues associated with them.

Have a good week,

Laurie Kaye

Seeing the digital wood for the trees

Dear reader

In the world of digital media law, it’s easy to miss the wood for the trees. That’s because the ‘digital shift’ represents a complex set of interactions of ‘multi-track’ and inter-related change - in the law, consumer behaviour and attitudes, organisational structures, technology, traditional supply chains and business models.

This is really well illustrated in the research themes of ‘CREATe’, the cross disciplinary research project launched last Friday in Glasgow by a consortium of Universities. (You can keep tabs on Twitter - #CREATE).

In turn, these shape the many areas of law under review, nationally, internationally and globally. Adjustments to exceptions to copyright law; the role of intermediaries in enforcing the law (e.g. via the Digital Economy Act) and indeed for their own roles and legal responsibilities as platforms v. content distributors; revisions to data protection law to reflect the flows across national boundaries into and out of the ‘Cloud’.

And often it's more a case of fundamental re-think. For instance, As Dominic Grieve commented at a recent lecture, the tendency of Jurors to use the Web can change the evidence on which they base their decisions.

These complex interactions become even more complex because, in the words of the Bard, “one man in his time plays many parts’. You and I are simultaneously citizens, consumers, authors, creators and publishers. Intermediaries can be hosts for other people’s content but can also offer their own services.

When we come to legal and regulatory policy, the real debate has moved beyond a binary ‘good’ v. ‘bad’, ‘copyright maximalists’ v. ‘copyright minimalists’. The challenge now is to create the right legal and policy framework which reflects a world of ‘complex interactions’ in which real innovation is happening right across the entertainment, information and e-commerce indusries. We must encourage and sustain this. This really matters because the creative and cultural industries are one of the ways that the UK economy can really grow and create jobs and opportunities for young people.

Throughout 2013, I will be looking at some of these key policy changes, such as the envisaged changes to UK copyright law and, at a European level, Data Protection law. I will also examine the increasingly varied and complex world of platforms, from the ‘digital gorillas’ to innovative new platforms like ‘Movellas’. In order to see the wood for the trees in forthcoming legal and regulatory changes and developments, in the next few posts I’m going to look in a bit more detail at ‘the digital shift’ and the overriding themes which reflect these complex interactions.

Laurie Kaye

In Praise of the UK's Creative Industries

Dear reader

I spent Friday in an almost sunny Glasgow at the launch of CREATe, the Centre for Copyright and New Business Models in the Creative Economy, which is a partnership of 7 UK-based Universities which will also have industry input, aimed at helping the UK's cultural and creative industries thrive and become innnovation leaders within the global digital economies. I'm delighted to be a partner.

It was a brilliant day. Whilst the regulation, management and enforcement of copyright forms the framework within which these industries operate, the big theme of Friday's launch was collaboration, sharing and innovation across the entertainment and information industries and in cultural institutions through innovative new business & organisational models. 'Digital/physical' hyrid models, Freemium and crowd-funded models (e.g. Knowledge Unlatched), new live events broadcasting services (e.g. Quipu TV) and even opportunities to reinvent the retail experience to use in-store technologies and content to revive the High Street - the day was full of inventive case studies. And there were many more.

Anyone who spent the day at CREATe's launch at the Lighthouse, Scotland's Centre for Design and Architecture,would have found the US West Coast entrepreneurial, 'can do' and creative spirit alive and well on Glasgow's West Side.  

The 'digital shift' is multi-dimensional and CREATe's inter-disciplinary research programme reflects that, with researchers in law, business, economics, technology, psychology and cultural analysis, who will build an evidence base and look at themes and players across the value chains from individual creators to SME's, intermediaries, corporates, cultural institutions and, of course the individual in his or her various roles as citizen, consumer, user and creator.

The buzz evident throughout the day at CREATe demonstrated that the UK does not need to look to the US West Coast or anywhere else for inspiration. It's here, right across the UK from the Lighthouse in Glasgow to the Digital Hub in Brighton and all points in between. It's in every entertainment and information industry and beyond. It's And it's not confined to start-ups. For instance, many innovative big publishers are making their content accessible to developers to create new products via APIs.

As CREATe notes, the UK has probably the largest creative sector in the world relative to GDP, accounting for over 6% of the overall economy and contributing around £60b p.a.

Of course, policy has a role to play. Aspects of copyright law, including exceptions, are going to be updated. Giving consumers and citizens choice about the use of their personal data through data effective and easy to implemen data protection law in a world of cloud-based, global services is a challenge. Competition law has a vital role to play in ensuring a level playing field between the 'digital gorillas' and other players in the value chains of our creative industries.

As industry silos crumble as the digital transition speeds up, so does the need increase for collaboration and communication between policy makers, the creative communities, technologists, academia and business. If we get this right, that 6% of UK GDP will rise and we'll create more jobs for young people.

There are definitely many in Government on both side of the Border that 'get' this. So let's continue to encourage Government to bang the drum for our creative industries at the very highest level.

Finally, well done to the organisers of CREATe and good luck with a great project.

(You can follow on Twitter #CREATe).

Have a good week. 

Laurie Kaye

Data subject access rights – have your say

Dear reader

In the second of a series of posts on recent developments in the field of data protection law, my colleague Sherif Malak highlights some important aspects concerning the rights of individuals to access their data and the consultation on a new code that is currently underway.  A number of privacy campaigns have sought to raise the public’s awareness of the increasing volumes of personal data used and collected by service providers online, so it is important to have the right processes and procedures in place when dealing with a user request for access to their personal data.

The public consultation period for a draft code of practice on the access right of data subject access published by the ICO (the UK data protection authority) is due to end next month.  The 60 page draft code contains guidance on the requirements of the Data Protection Act (DPA) as well as points of good practice that it recommends organisations adopt in respect of the rights of access data subjects have under sections 7-9A of the DPA.  Generally, within 40 days of request and for a nominal fee (max. £10), individuals are entitled to be told whether personal data are being processed and to be given a description of that data, the reasons for processing and whether data will be shared with other organisations or people.  They are also entitled to be given a copy of the personal data and, if available, details of their source. 

For many organisations and other data controllers, such subject access requests (“SARs”) are commonplace and so the guidance may have a significant impact on how they conduct their request handing procedures.  The draft code emphasises that organisations should embrace the opportunity to take a positive approach to data subject access rights by streamlining request handling through staff training and guidance and by monitoring compliance.  We recommend reading through the paper which is quite detailed and provides a number of useful examples.  In the meantime, a few points made in the draft that will no doubt be of interest include:

• Although a SAR must be made in writing, it does not need to take a prescribed form nor mention the DPA (or that it’s a SAR) and can even appear at first sight to be a Freedom of Information Act request. In fact, a request can be sent, directly or indirectly, by post, email, fax, via an organisation’s website  or even posted on its social media site or a third party website.  So make sure you’re vigilantly checking your organisation’s tweets if it has a Twitter page!

• A child’s rights may be exercised by parents/guardians but it is the child who has the right of access.  If an organisation is confident that a child is mature enough to understand his/her rights then it should respond to the child and not to the parent (regardless whether the parent or the child made the SAR). The draft code helpfully lists a number of factors to consider in borderline cases on page 13.

• The 40 day period to respond to a SAR cannot be extended because an organisation is relying on a data processor to supply the required information.  So organisations using data processors take note – you will need to put in place contractual arrangements to make sure that you can deal with SARs promptly, including when they are send to your processors directly.

• You should not ignore a SAR simply because an individual has not paid the fee, has not provided enough information or if you reasonably require more information to confirm the requester’s identity.  You should contact the individual promptly and inform them of what is needed for their request to be processed.  If you have done so, the 40 day period will not begin until you’ve obtained these things from the requester.

• The draft code clarifies that the ‘disproportionate effort’ exception applies to the supplying of the information by organisations but does not permit you to exclude information from your response just because it is difficult to access or find.  Data controllers are therefore obliged to make extensive efforts to locate data relevant to a SAR but not obliged to “leave no stone unturned”.  You cannot require the requester to narrow the scope of their request if they have asked for “all the personal information held” about them.

• You should have procedures in place to find and retrieve personal data requested that has been electronically archived or backed-up.  However, the ICO has said that it does not expect you to use expensive technical expertise to ‘undelete’ deleted information that can technically be recovered.

• The draft code also covers in detail how you should deal with requests involving 3^rd party data, special cases (such as credit and health records) and the form in which you can respond to a SAR.

The consultation period ends on 21 February 2013 and if you would like to participate and provide your feedback, you can find the submission form for your comments as well as a copy of the draft code on the ICO’s webpage here.

Have a great week,

Laurie Kaye

Hurrah…corporation tax reliefs for creative industries move a step closer…

Dear Reader,

It looks like 2013 is off to a good start for the creative industries in a year in which demand for high quality creative output continues to grow.

The Government has published its proposed legislation for new corporation tax reliefs for British high-end television production (namely dramas and documentaries), animations and video games.

I asked my colleague Mailin Bala to look at the draft legislation to see what it delivers and what impact it has on co-productions.

OK, so, what does it amount to?

In short, qualifying companies will be able to claim an additional deduction of 100% of UK qualifying production expenditure in computing their taxable profits. Where that deduction then results in a loss, companies will be able to surrender those losses for a payable tax credit amounting to 25% of qualifying production expenditure.

To qualify for the new relief, the following criteria have to be met:

• there must be a high end TV programme (meaning the average cost of expenditure per slot
  hour must be at least £1m), animation or video game being produced which is intended for broadcast/commercial release;

• the content must be certified by the Secretary of State as being British; and at least 25% of the core production expenditure incurred by the company must relate to expenditure on goods or services used or consumed in the UK.

See here for HRMC's detailed description of each of the reliefs (including the conditions to be applied) and the proposed draft legislation. See also this document for the
Government’s response to the consultation on the reliefs.

What constitutes ‘British’?

That will be determined by scoring a minimum 16 points out of a possible 31. Points will be awarded for using British locations, language, use of UK key staff and promoting British culture. In some cases, it will be sufficient for the content to include EU elements, rather than purely British ones.

When do the reliefs come into play?

All being well, the new reliefs will apply to qualifying expenditure incurred from 1^st April 2013. This
is subject to the government obtaining State aid approval of the ‘British’ test from the European Commission.

Who can claim the relief?

UK companies that are responsible for production activities and for undertaking negotiations and contracting for rights, goods and services in respect of the content.

What about co-productions?

Only one TV production company/games developer can claim the relief per relevant content. If
there is more than one company that meets the qualifying criteria, then it is the company that is most directly engaged in the activities that can claim the relief. However, a company can elect not to be regarded as a television production company/games developer by recording its election in the company's return for an accounting period.

The election will apply to all content that commence principal photography/ or begins production in that, or any subsequent, accounting period, until the election is withdrawn.

There is however, an additional benefit for TV production, in that a co-producer can claim the
relief if:

• the programme  is made under a relevant international co-production treaty (though not
  through a partnership); and
• the co-producer makes an effective creative, technical and artistic contribution to the programme.

In an attempt to avoid over complication and abuse of the relief, the Government has purposely not legislated for other forms of co-production to be eligible for the relief.

This may in itself appear to stymie co-productions, such as cross-industry productions where for example rights holders engage production houses to conduct all or some of their production activity.

Yet, rather helpfully, the government has acknowledged that companies wishing to access the
relief that are undertaking genuine co-productions, may wish to structure their business in such a way in order to access the relief.

Whilst setting clearer boundaries would have been preferable, this appears to be an invitation for other genuine co-productions to set up special purpose vehicles to avail themselves of the
relief; potentially benefitting additional sectors in the creative industries.

 

Have a good week.

Regards

Laurie

Reconciling national laws and legal jurisdictions in a borderless, networked word.

Dear reader

In my last post, I said I'd look at more detail at this issue. If you were an Internet pioneer, you'll remember the adventure book language of 'Cyberspace' and the Wild West in the early 1990's, in which the Net/Web was seen as a parallel universe beyond legal and other norms. But there's been a slow but steady theme emerging that, at least in legal terms, 'online =offline' is a more accurate starting point for cyberlaw analysis, a point hammered home by the recent slew of libel claims arising from tweets on Twitter.

The issue of jurisdiction

Sure, the debate about the enforceability and acceptability of certain aspects of intellectual property and other legal rights as they apply online rages on. But an issue of equal importance is the location of the legal jurisdiction where rights can be enforced. In the online world, there is a cross-border, continuous chain of transmission. Content is copied and distributed across multiple legal jurisdictions on its journey from the browser request, across multiple servers until it's served up to the user's device.

So if that content is illegal or infringing content, where does the rights owner go to enforce those rights? And for rights clearance purposes, which national rights need to be cleared?

In short, the hunt for legal jurisdiction over content online has travelled from "it's nowhere" >"its everywhere" > to "its somewhere". In this post, I examine the rules which determine where that "somewhere" is. As we'll see, under European law it's the country where the recipient computer/device is located assuming there's some targeting of the public there.

The legal framework about jurisdiction is the so-called Brussels Regulation which says that the general rule is that you sue someone where they are domiciled. (So, in the case of a company, it would be where that company was established). But there's an exception for 'torts, including intellectual property rights. In that case, you can sue "where the harmful event" occurs. So with creative content which is travelling from server to server across legal jurisdictions, where does the "harm" take place?

The case

That was the point examined in detail by the European Court of Justice (ECJ) in Football Dataco and others v Sportradar GmbH and another, Case C-173/11, 18 October 2012. The legal right in question was the often misunderstood and often overlooked database right (aka sui generis right), which was created by European law in the Database Directive. The Directive harmonised the rules in Europe about copyright protection for databases but also introduced a new right - the database right - to protect investment in database content. (You can read a guide I wrote about the Directive here).

In short, the database right gives the owner of that right - the database producer or their successor - the right to prevent others from "extracting" or "re-utilising" substantial parts of database without a licence.

Case details

Football Dataco Ltd (Dataco), a UK company, gathered and exploited data about English Premier League football matches through its 'Football Live' database available via the Web. Sportradar GmbH has a competitor service - 'Sport Live Data' - available via its betradar.com website which was hosted on servers in Germany and Austria. UK-based customers were using online betting services provided to them by UK companies who were taking a data feed from Betradar. Dataco alleged that Sportrader had 'extracted' data from its 'Football Live' database without permission.

So the question for the ECJ was this: where was the infringement of the database right taking place? In Germany and Austria where the servers were located, in the UK where the UK customers were using the data or both? (To be precise, the question was whether Sportradar was jointly liable for acts of infringement of the database right by users in the UK who accessed the data).

ECJ's decision

The ECJ decided two things about the Database Directive. First, that sending data that has previously been uploaded from a database protected by the sui generis/database right from a web server to the computer of another person for the purpose of storage in that computer's memory and display on screen, is an act of re-utilisation by the sender (Sportradar in this case).

On the issue of jurisdiction, the ECJ decided that that act of re-utilisation takes place at least in the member state where the receiving computer is located - in this case the UK - as long as there is evidence that the sending discloses an intention to target members of the public in that member state. That evidence about "targetting" must be considered by the national court. Relevant factors in this case might include the fact that Sportrader made agreements with companies which offered betting services to the UK public; the fact that betting companies' websites were in the English language.

In fact, this decision of locating "harm", and therefore jurisdiction, in the "targeted" country is narrower that other intrepretations. The Attorney General had previously given an opinion that infringement proceedings can be brought in any country where an act in the chain of re-utilisation takes place.

Conclusion

This case will not be the last case on the issue. But it does demonstrate that, at least in legal terms, there is growing proximity between the online and offline worlds. In both the physical and digital worlds, "stuff" happens somewhere. And you just have to deal with it.

Have a great week,

Laurie Kaye