UK copyright law: a change for the better?

“This is a long overdue update that rebalances copyright law in a sensible way,” says Loz Kaye of the planned modernisation to the UK copyright system. The leader of the Pirate Party UK and a relentless campaigner for digital rights, Kaye often squares off against copyright owners, lambasting them for impinging civil liberties.

For rights owners, Kaye’s praise of nine changes that widen the defences against infringement may raise some concerns. But this is not the feeling among IP lawyers. They say the exceptions, expected to come into force in October 2013 and which are designed to strike a better deal for consumers, could have been much worse for rights owners.

The exceptions are part of the UK government’s response to Digital Opportunity, the report by Professor Ian Hargreaves which, in May 2011, recommended sweeping changes to the UK’s copyright system.

Of the nine exceptions, three are prominent. The first is private copying, which allows individuals to copy any type of “lawfully owned” work, including downloaded files, on to any medium or device. A file could be copied in the same format as the original, such as on the cloud storage, but the exception will not cover ‘value-added’ cloud storage services. In theory, works can be copied only for private use, barring friends or family from benefiting from the exception.

While this provision may seem clear at first glance, there may be several problems here, especially for copyright owners seeking to protect their IP online. Looking at the language of the proposal, Adam Rendle, a lawyer at Taylor Wessing LLP, says it’s unclear to him who a “lawful owner” is in the online world.

“Traditionally, you might buy a CD, rip it onto iTunes and you own the CD on which the music is contained. But it’s unclear how the exception will apply to downloads. I don’t think you own an MP3 in the same way as you own a CD—you license that MP3, a licence that typically allows you to reproduce the file on to a device. It’s not like a CD on your shelf. Again, cloud storage, you don’t own it—you have a licence to use it,” he says.

He adds: “It seems to me that the government intends for downloads to fall under the exception, but it will be interesting to see how it draws the distinction between what can and cannot be privately copied.”

The ambiguities in the private copying provision could actually work in favour of copyright owners. If it’s not clear that a download is lawfully owned—and therefore qualifies under the exception— content owners could try to narrow the provision.

Perhaps more interestingly, the impact of the copying provision on specific areas of the copyright industry may vary. Even if individuals have more scope to copy protected works, will music and film producers really care? Illegal copying is nothing new for them, and many rights owners have long experience when it comes to fighting illegal file-sharing. The exception may prove more problematic for newer industries such as e-book producers, which have not suffered from copying to the same extent and may have more to lose.

Fair dealing

The private copying exception poses some interesting questions, but it is merely one of nine exceptions for copyright owners to contend with. A second prominent change relates to fair dealing with quotations, which is no longer limited to criticism, review or news reporting. Now, people can more freely use quotations of any work, provided that the use is “fair”.

While the government has described this as a minor amendment, Rendle says this may have the biggest practical implications for copyright owners. From now on, there will be a more liberal approach to the use of quotes such as text extracts, hyperlinks, tweets, video clips or music samples.

Joel Smith, partner at Herbert Smith Freehills LLP, says: “Potentially, this is a very, very broad exception. The idea is that there will be a more generous fair dealing test but we don’t know how it will be applied.”

"The record company has 12 months to make use of or lose the copyright - the changes have been nicknamed the 'use it or lose it' right."

Traditionally, the fair dealing test assesses whether the use competes commercially with the original work, whether too much has been taken and whether the original work has been published. The government rejected calls to reform the test, but there is expected to be a gradual reshaping of it as courts apply the exception.

“The courts won’t radically change the current fair-dealing test,” says Rendle. “My query is will the three-step test have a more explicit role than it has to date in UK law—identifying whether there is a special case in which the quote can be used and whether the second two limbs of the test would serve to limit it in any way.”

Parody

Clearly a hot topic, fair dealing extends further than mere quotations. The third major exception is a new copyright defence under English law: fair dealing with parody, caricature and pastiche. For years there has been a fine line between the rights and wrongs of using copyrighted works to poke fun, to mimic and to provoke a smile.

“The introduction of this exception has been a long time in the making,” says Rendle.

Smith disagrees: “I’m somewhat surprised it made it in. There are some areas in music where there are debates about whether ‘mashups’ copy music, but in many areas it is not an issue.”

Determining what constitutes parody, caricature or pastiche will not be easy, however. The government has not explained the provision in detail, so it will likely be up to the courts to decide.

As with many of the nine provisions, the parody defence poses some tough questions for rights owners in a world where the government is seeking to place a higher value on the role of the consumer. Smith says the balance has shifted slightly from rights owners towards the individual and consumer, but that it could have been worse.

“As we are part of the EU, the changes are not as radical as the government would have liked,” he says.

Twenty more years

At the same time as the government is seeking to seize power from copyright owners, it is trying to claw some of it back for them—in the world of sound recordings and performers’ rights, at least. The government plans to implement new regulations, in line with the EU Directive 2011/77, which will extend copyright in these areas from 50 to 70 years.

Artists including Cliff Richard have lobbied hard for these changes, as their 50-year copyright is set to expire in their lifetimes. If adopted, the regulations mean that from November 1, 2013 musicians and performers can be safe in the knowledge that they cash in on their success for an extra 20 years.

“This represents a huge grab of property from the public domain,” says Kaye. “There are often accusations of theft in the IP world, but this would be stealing from the shared public culture and it will harm being able to develop innovative services.”

The 20-year extension is not as simple as it looks. “Some interesting things happen when you hit the 50-year mark,” says Sarah Byrt, partner at Mayer Brown LLP. “Namely, that if the record company is not issuing sufficient quantities of music—whatever that means—or making the record available to the public, the performer can warn the record company that it is not doing what it should to exploit the record.”

At this point, the record company has 12 months to make use of or lose the copyright—the changes have been nicknamed the ‘use it or lose it’ right. If a record label fails to produce enough hard copies or downloads, the copyright contained in them would expire and the performer’s right would go back to the artist, who could exploit it as he or she wishes.

Byrt says: “What will be interesting is what is defined as ‘sufficient quantities’. This may require some evidence of physical sales, which is how the EU directive reads, but this will be difficult with the increasing shift to an online era, especially with high street music stores going out of business. It could be easy to meet the online criteria, but offline will be tricky.

“The test should be flexible and the threshold should be fairly low but it’s an interesting question and it will be interesting to see how the courts—if they have to—will define sufficient quantities,” she adds.

The result is that more economic power could shift towards performers. Equally, record labels will want to exploit potentially lucrative music for another 20 years. Byrt says it will be interesting to see how these rights will be negotiated in the future, adding that the practical questions will need ironing out before it becomes clearer what the state of play will be.

Indeed, there are many uncertainties about the 20-year extension. In a similar fashion, there are a number of unanswered questions concerning the nine defences to copyright. Rights owners will be keen to see how both changes play out, if they are approved, and how they should alter their strategies for dealing with them.

While activists including Kaye are keen to suggest some of the changes are a long time coming, it may be just as long again before we know what effects they will actually have.