Government’s Response to Hargreaves Review of IP: a good start or more to be done?

Last week the Government released their formal response to the Hargreaves Review of Intellectual Property and Growth . The Response broadly accepts the recommendations made and outlines how the Government proposes to act on each recommendation. Having read the response and taken some time to digest its contents, my overall view is that this is a significant step towards a long overdue copyright reform. However, it is a very ambitious move by the Government, given the tight timescales which have been set to achieve the desired changes to the IP framework. The Government is committed to creating favourable conditions for the encouragement of innovation and growth, but are leaving many of the finer practical details to the wider UK public, most likely those with a vested interest such as consumers, creators and businesses.

So what does the Government actually propose to do? Here’s my brief critical take on what I think are the most ground-breaking of the Government’s plans for action in the areas of copyright:

1. Evidence surrounding the economic issues of IP will be fundamental in shaping policy. Fairness and social impact will also be considered. This is absolutely essential; evidence should drive policy and it is imperative that evidence is high quality and carries no bias. The recognition that fairness and social impact also have a part to play widens the conversation to include moral rights for creators and any potential impact on consumers. Historically, copyright policy has been swayed by opinion and effective lobbying, but the proposals for policy changes will now be looking for hard evidence adhering to Intellectual Property Office (IPO) guidance which will be published later this year.


2. The creation of a Digital Copyright Exchange or similar to enable rights clearance by facilitating copyright licensing. My speculation is that the Government envisages a type of portal incorporating databases of rights information which would allow an organisation or an individual to pick and choose the works they wanted to use and the way they wanted to use them. Similar to a Rights Direct model but on a much larger scale; perhaps a sort of shopping basket approach similar to that of Amazon when you buy multiple items from a range of different sellers. In theory, a great idea - a vast digital marketplace where licensing of works is quick and easy. However, it is not an ideal solution for those rights holders who don't store works in database form already, as uploading individual works into a suitable rights database with metadata and ownership records will take time, skill and effort. It will be interesting to see the development of this proposal. The requirements for the DCE are outlined as follows:
   
   a. It must be free to use
   b. It must attract a ‘critical mass’ of material that is available and readily licensable
   c. Prices to be set or negotiated with rights holders subject to controls on unfair competition
   d. Voluntary scheme, not compulsory
   e. Self-funding, running on licensing transactions


3. Proposals for an orphan works scheme which will allow for both commercial and cultural uses of orphan works. As this topic is prevalent in Europe at the moment, it was always likely that the Government were going to take an active role in tackling orphan works. This will be a hotly contested area, particularly with regards to commercial use of orphan works, but the mention of diligent searches and market rates for the use of orphan works is a good start. The unspoken question though is always going to be: where does the licence fee go? Into the DCE? Perhaps one to muse... The proposals for extended collective licensing are more vague, however, leaving a very unclear picture as to how that aspect will function.


4. Widen the exceptions to copyright within the existing EU framework, provided that harm to rights holders is minimal, EU law and international treaties are adhered to, and that restrictions removed by exceptions are not re-imposed by contract. The exceptions will allow for limited private copying, more materials available to copy under the proviso of non-commercial research, text and data mining, archiving and parody. This will be widely consulted on and the scope of the exceptions will be determined from sound evidence. The proposals to widen copyright exceptions to make use of all the exceptions listed in the EU Information Society Directive will immensely benefit education and research and it is very promising that they have been recognised in such a way.


5. Develop a three-pronged attack comprising enforcement of IP rights, education of users, and appropriation of business models. The Government has outlined in its IP Crime Strategy that it is committed to tackling ‘piracy’ (one hopes with the talk of prosecution under the Copyright, Designs and Patents Act that this report is not referring to file-sharing but rather the more criminal acts of copyright infringement such as mass sale of pirate copies for commercial gain). With civil infringements, rights holders will still have to deal with those themselves, but they (and especially smaller businesses) will be better supported with the introduction of a small claims track in the Patent County Court for claims under £5000 (assuming the cost of introducing one is not prohibitive).For me, the most encouraging aspect of this section is the recognition that business models need to change and adapt to the digital age. As such, the Government has pledged to work with industry to support efforts to develop new legitimate digital markets. File-sharing as an issue is unlikely to disappear, but the availability of high quality desirable digital content at affordable prices in an easy-to-access format should at least provide an incentive to entice people to acquire it via legitimate means.


6. IPO to deliver copyright opinions service to clarify the applicability of copyright law. This may not look like a significant point but it really is. This will give the IPO a role not dissimilar to the Information Commissioner's Office (ICO) in terms of delivering opinions on complex copyright interpretations, and the IPO will become more of a ‘go-to’ service for educators struggling to make judgment calls, particularly in relation to new technology. But more than this: the Government hints that a copyright opinions service may shape the future of copyright legislation, identifying areas of uncertainty and supplementing the judgements of the legal profession and academic community. On the one hand, I see a copyright opinions service being quite fruitful – it’s often useful to be able to go to a public sector body and ask for a definite opinion on a matter. But on the other hand, could this be seen as the more easy way: rather than calling for a large scale review of the Copyright Act, this approach is quite piecemeal, which historically has not benefited copyright law. And how will the IPO interpret the law? Narrowly, as by the precedents set in the ECJ and other significant courts? Or more liberally, applying UK case law and interpretations? One major difference between the ICO and this newly appointed function of the IPO is that Freedom of Information legislation is home-grown and largely unaffected by EU case law, whereas copyright law is hugely influenced by the EU. It remains to be seen whether this will be a viable service or not, particularly where it relates to commercial enterprise.

A longer post than I anticipated, and much more that could be said, but overall it is a good start. Those more cynical than I question whether this will go the same way as the Gowers Review and come to nothing despite the Government’s best intentions. But I remain positive; I think for once a lot of sensible truths based on evidence have been declared and at this difficult point in the economy businesses and the creative industries should be working hard to implement innovative schemes to enable their business to flourish in the digital age. Organised criminal piracy should be countered and prevented, and the Government should take a serious look at the support it needs to offer to creative industries in the form of tax breaks and advice. Education in particular should be able to thrive without fear of infringement of copyright, and the law needs to be brought up to date with digital technology and legitimise activities (i.e. copying a CD to a cassette tape) that have been innocently happening for decades.

File-sharing: a research opportunity for Higher Education?

A question asked by @Ottua at the 1709 Big Copyright Debate organised by @Ipkat earlier this week got me thinking: how can we know for sure how much damage really IS being done to the creative industries by file-sharing?

This question comes up time and again. Surveys churn out various statistics, which show that file-sharing is extremely damaging to the industry which is suffering hugely as a result. Yet often these surveys are found to be commissioned by the industries themselves, which leaves the more sceptical among us wondering if this is really the true picture. Of course, it doesn’t help when we notice some obvious anomales, such as when Avatar managed to be both number one at the box office AND the number one most downloaded film, or the figures which show that alleged pirates are also the largest purchasers of legitimate content.

Let it be clear: I am not advocating piracy or wilful infringement. I am a firm believer that piracy (definition: making a large-scale profit from copies of the original with no remuneration to the rights holder) is a crime, akin to counterfeiting, which is purely for an individual’s or company’s financial gain and motivated by making money at someone else’s expense. However, file-sharing (definition: the upload and download of creative content to freely share for no commercial gain) is a civil infringement, because you are breaching the communication to the public right under copyright. This says (effectively) that when you upload a work which is not your own and without permission from the rights owner, you are infringing copyright. Yet it still happens. Why?

I think that from an early age we learn to share (some also argue that we learn to copy, but I see this as more by way of mimicking rather than copying work per se). Everyone has differing tastes and interests, making each of us a unique individual. And when we encounter others who have similar tastes and interests, our natural enthusiasm for those interests leads us to talking about them and sharing information. And when our interests tend to be, say, a mutual enjoyment of 80s rock music (yes really), we are likely to ask ‘have you heard of Band XYZ?’ They say no, and our immediate response is ‘oh you must! I’ll lend you the CD’. How many of us have lost many of our most treasured possessions this way? (My dad @davecg69 foolishly lent his Beatles 'Let it Be' vinyl with the booklet to a friend and never got it back, regretting it ever since!). So when the technology becomes available in the form of recording to cassette / CD, instead of saying ‘I’ll lend you the CD’, we say ‘I’ll make you a copy’. And the thought of copyright infringement does not even cross our minds.

This has given me food for thought: if file-sharing is damaging, what about all the other ways in which we share content where the rights owner receives little or, more often, no recompense? And for which there is no defence in UK copyright law? What about when one person buys a DVD and a group of flatmates all sit down after a meal one night to watch it? What about when a parent puts on a Disney films for 20 kids at a sleepover or party (usually so they can have an hour’s rest!)? And how many of us read, watch, or listen to something, and when finished with it list it on eBay to sell to someone else? Or give it to a charity shop?

How many of these constitute ‘lost sales’? When you consider the UK alone, almost 62 million people, have been doing these sorts of activities for years, without a private use exception in copyright, how damaging has that been? Yes it is true that you can reach the world through the medium of the Internet, and so instead of just a few people to share with, you can now share with thousands, if not millions. But that is not to say that everyone on the Internet is file-sharing copyright content. And on the flip side: how many people are using other sites where content can be legitimately acquired and paid for? Such as iTunes, or LoveFilm? Perhaps rather than focusing on the damage that file-sharing is having on the creative economy, industries should be comparing those statistics with the growth and use of legitimate downloads. I have little doubt that these sites have steadily increased in use over the past few years as more and more desirable content has become available to purchase.

As I said at the debate, more research needs to be done into this area, and not just industry-led research either, but strong verified independent research. And who better to lead on this than universities? Only the other week I was delighted to read about the Arts & Humanities Research Council’s funding opportunity for a Centre for Copyright and New Business Models in the Creative Economy. This is a first-class opportunity for universities to do some highly valuable research which will benefit the creative economy, looking at (I hope) all the issues I’ve outlined above and more. Research could measure the impact of the recession (people refraining from spend on items for pleasure or luxury, such as film/cinema and books) on the creative economy, contextualising it within the economic climate, as that undoubtedly has had an effect. But universities could also collaborate with businesses and the technology industry to experiment with new and innovative business models, measuring their impact and effectiveness and assessing long-term benefits.

I would urge Higher Education institutions to communicate and collaborate with one another on this project, which has the potential to revolutionise the way that research is being done in this area. A £5 million funding grant is not a figure you should ignore. Don't let this opportunity pass you by - get involved!