Laurence Kaye on Digital Media Law: The Hargreaves IP Review

Dear reader

I’m sure that fresh in your mind is the PM’s announcement in November of a review of the UK’s IP laws to see if they are fit for the “internet age”. The PM said:

“So I can announce today that we are reviewing our IP laws, to see if we can make them fit for the internet age. I want to encourage the sort of creative innovation that exists in America."

OK, I hear you say, a touch of déjà vu here (Gowers Review etc.). But maybe this time things will really happen.

The Review is being led by Professor Ian Hargreaves and, at Internet speed, is due to report by the end of April.

The ‘kick-off’ event for the Review was a roundtable discussion hosted by the Institute for Public Policy Research. I was asked to make some introductory remarks to kick-off the discussion. Here they are:

"The interaction between the extant IP regime, innovation and economic growth: what works, what doesn’t and how it could work better

“I was consulted last week by an Internet start-up in the field of education. Their site will include free resources and paid-for content via an e-commerce store, as well as a subscription-based service. It’s just the kind of start-up we want to see thrive.

They wanted to discuss their ‘copyright needs’, as they put it. They made two things clear. First, protecting copyright in their materials, including their authors’ rights, was really important and valuable to them. Second, they had lots of questions about how to deal with rights clearances and permissions. Whilst they saw copyright as central to their business, they had questions about the practical workings of the system. That theme – of bringing permissions and rights management into the 21st century world of ‘search, find, click, clear and, where relevant, pay’ - is in my view the key to making the system work better.

I am not complacent about the copyright system. But there is some merit in the old adage, ‘if it ain’t broke, don’t fix it’. The creative industries are 7.3% of the economy, employing two and a quarter million people. The UK is an international centre of creative activity, bringing major social, cultural and educational benefits to the country as well as the obvious economic ones. The UK has some of the world’s most successful authors and creators. And it is copyright which underpins these industries.

That is all the more so as a result of the ‘digital shift’ - the shift from selling physical goods to the provision of virtual goods and digital services based on licensing– download to own, rental, streaming and so on. Those licences, whether granted individually or by collecting societies, derive from, and are facilitated by, copyright.

But as I said earlier, there is no place for complacency in the search for innovation and growth. In analysing the IP framework in this context, especially in the copyright field, I would suggest some important criteria which should be applied to the case for change:-

First, we need to distinguish between the copyright system per se and the way it works in practice. We should not equate problems about the working of the system with the system itself. For example, improving the way permissions are managed can largely be solved within the existing framework.

Second, we should not ascribe to the copyright framework, problems or barriers to growth which are attributable to other factors such as lack of access to start-up capital, technical expertise or the absence of tax breaks.

Third, where there is a proven case for change to the copyright framework, we should make the minimum change needed to accomplish the objective.

Fourth, solutions should be appropriate and proportionate to the problem. For example, education and information provision are the right tools to use to remove confusion and uncertainty concerning copyright – for example, what can and can’t be taken without infringing copyright. In the case of certain barriers to growth, there are other legal tools available to remove them, such as competition law.

Fifth, let’s be careful not to introduce changes which solve an analogue problem which will disappear over time in the digital age. For example, any proposals to deal with ‘out of commerce’ works should recognise that as works become increasingly ‘born digital’, they will almost always be available in the digital store.

So let’s look at the case for legal change. There are instances where legislative intervention is needed. There is general consensus that the problem of ‘orphan works’ needs a legal solution, most appropriately at the EU level. The most recent statement on the subject was the Report of the ‘Comite des Sages’ published this month from the perspective of bringing Europe’s cultural heritage online.

There is also consensus that some of the proposals following the Gower Review need to see the light of legislative day in the UK, including updating exceptions for education to include distance learning (where no collective licence is available) and the extension of the exception for Libraries and Archives to sound recordings and films. We may need to re-visit the issue of ‘format shifting’ as proposed by Gowers, but only insofar as licensing solutions don’t deal with the issue.

The Call For Evidence mentions investigating the benefits of “fair use” exception to copyright. I have some real concerns about that:-

First, the differences between the US ‘fair use’ exception and the various exceptions in UK copyright law are more apparent than real – compare US cases on ‘fair use’ for commentary and criticism with UK cases on the ‘fair dealing’ exception for criticism and review.

Second, a lot of emphasis is placed on the concept of ‘transformational use’ developed by the US Supreme Court in a line of cases on fair use. We don’t have time for a detailed discussion but it would be misleading to represent it as a simple facilitator for the creation of new works derived from existing ones.

Third, we also need to recognise that introducing a general exception of this type into European copyright law would require deep pockets to fund litigation over a number of years to develop the case law to tell us the scope of any such new exception to copyright law.

I would like to end by making three points:-

First, I would repeat that there is no room for complacency. It is no longer acceptable for rights and permissions to be locked inside old paper contracts stored in filing cabinets. But much of that change we need is non-legislative. In particular, I hope Professor Hargreaves’ Review will focus on the need to encourage the development and take-up of technology to build an integrated rights and transactional infrastructure with machine readable permissions and licences which also accommodate and respect legal exceptions. The core elements are standards-based machine readable expressions (such as Creative Commons, ACAP and ONIX), Online registries, including the ARROW project and the Book Rights Registry, and persistent content identifiers such as ISBN, ISWC and DOI and then linking all of this to payment solutions. And let’s be clear. I am not talking here about ‘DRM’ in the sense of technical protection measures. I am talking about an infrastructure which makes it easy to ‘click, find, use and pay’. If this infrastructure can become as ubiquitous as broadband itself, everyone in the ‘copyright chain’ will benefit – creators, producers, distributors, intermediaries and, of course, the citizen and consumer of digital content and services.

Second, all of this takes investment. Weak IP laws and weak enforcement substantially reduce the case for investment. The Commission’s Report on the Enforcement Directive published in December last year contains some important points about the problems of enforcing IP rights online in the face of the economic damage caused by piracy.

Finally, discussion and debate about copyright can easily become polarised. And that’s something we can all be guilty of. So let’s take as our starting point that we are a ‘community of interests’, encompassing traditional actors in on the copyright stage and new players too, even if those interests sometimes diverge. Working together, we can realise the commercial and societal benefits of a rich and diverse variety of professionally produced and amateur created content.”

I encourage you to respond to the Review’s Call For Evidence here.

Have a great weekend.

Laurie Kaye

10 Comments

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Posted by: Digital media | March 24, 2011 at 05:06 AM

The UK is a worldwide core of artistic activity, bringing major communal, cultural and educational payback to the country as well as the obvious economic ones. The UK has some of the world’s most successful authors and creators. And it is copyright which underpins these industries.

Posted by: Asbestos Lawyers | March 29, 2011 at 06:24 AM