BIS Committee’s report on Hargreaves Review. Where next?

I am posting this most excellent update from Laurie Kay as a 'guest Blog' on 1709. My thanks to Laurie for his kind permission in letting me reproduce this item, which features on Laurie's own blog here .

Prof Ian Hargreaves CBE

After a number of false dawns, the reform of UK Copyright law is getting closer. The Business Innovation and Skills Committee’s review of the Hargreaves Report of Intellectual Property: Where next? gives a useful overview of the likely direction of travel and I have commented on some key points below. But aside from the changes themselves, there is real concern in industry about how those changes may be introduced into law. The Government's proposed vehicle for changing copyright exceptions, which form a core part of the proposed changes, is the Enterprise and Regulatory Reform Bill. This would give the Government wide ranging power to amend, remove or introduce exceptions to copyright via secondary legislation. Greater clarity and certainty is needed about what the changes will actually be before all stakeholders can feel comfortable with this. But back to the Committee’s conclusions on Hargreaves’ key proposals. But aside from the changes themselves, there is real concern in industry about how those changes may be introduced into law. The Government's proposed vehicle for changing copyright exceptions, which form a core part of the proposed changes, is the Enterprise & Regulatory Reform Bill. This would give the Government wide ranging power to amend, remove or introduce exceptions to copyright via secondary legislation. Greater clarity and certainty is needed about what the changes will actually be before all stakeholders can feel comfortable with this.


But back to the Committee’s conclusions on Hargreaves’ key proposals.


Digital Copyright Exchange


The big idea of the Hargreaves Review is to create a Digital Copyright Exchange (DCE) to solve problems concerning copyright licensing in the digital age and to make the UK a world leader in licensing creative content. The Hargreaves Review defined the DCE as “an automated e-commerce website or network of websites which allows licensors to set out the rights they wish to license and allows licensees to acquire those rights from the licensors”.


The key here is “network of websites”, recognising that the DCE is unlikely to be an Amazon-style one-stop digital shopping mall but rather a network of rights registries and e-commerce enabled digital content stores operated by rights vendors, collecting societies and others. In that sense, “DCE” is an umbrella term to describe this collection of interlinked machines based on technical standards which allow them to communicate with each other to automate the licensing process.


The Government appointed Richard Hooper to lead a feasibility study into the DCE. In his report at the end of phase 1 of the study, Hooper concluded that there was no evidence of significant problems in the computer games industry, the public performances and theatre sector, or the corporate use of copyright licensing. But he did identify what he regarded as significant problems in a range of other market segments and industry sectors including libraries, archives and museums, educational institutions, the audio-visual industries and in the publishing, music and images industries.


In his phase 2 report, Hooper will focus on the solutions being developed by industry, including collecting societies, to provide technical solutions and standards so that it becomes easier for users, whether individuals, businesses or other organisations, to search for content, clear rights and, where relevant, pay for the use the content. It is likely that, to a large extent, the solutions will be voluntary and industry-led, although the law may have some role to play. We wait to see. The phase 2 report is eagerly awaited and is due before Parliament’s summer recess. Paragraph 108 of the Parliamentary report has caught the mood of industry in recognising the potential value of the DCE whilst emphasising the need to avoid bureaucracy and the replication of existing systems.


Content mining


This is a controversial proposed exception. The Hargreaves Review defined this as “the automated analytical techniques such as text and data mining work by copying existing electronic information, for instance articles in scientific journals and other works, and analysing the data they contain for patterns, trends and other useful information”. Whilst it is common ground amongst all stakeholders that there is no copyright in facts, paragraph 52 of the Parliamentary report notes industry concern that a copyright exception for content mining could prejudice the primary market for, or value of, the copyright works. The report highlights that any exception should have regard to potential risks whilst encouraging the publishing industry to continue to develop licensing solutions. On that basis, data mining would be facilitated by contractual solutions rather than by a copyright exception.


Other proposed copyright exceptions


The Parliamentary report also analysed a number of the other proposed copyright exceptions and generally took a balanced view. On private copying by format shifting, it favoured the least permissive option of permitting personal use or use of a digital copy of a lawfully purchased work within the personal sphere as the most realistic. On the proposed exception for parody, the report concluded that further economic evidence and a risk/benefit analysis were needed on the impact of such an exception and also to assess whether it could adversely affect creators’ moral rights, especially those of photographers.


Orphan works,


The committee recommended an evaluation of a potential orphan works registry should include consideration of the need for author's rights of identification to persist over and against any waiver that has previously been made contractually. The report suggested that this might take the form of a presumed right of identification on the registry (notwithstanding any previous waiver) unless other factors apply such as the scope of the waiver itself.


Enterprise and Regulatory Reform Bill


There have been many false dawns on updating copyright law, including the Gowers Review in 2006. But now the Government appears to mean business. Part 6 of the Bill, unpromisingly headed “Miscellaneous and General”, inserts a new s 28ZA into the Copyright, Designs and Patents Act 1988 which would empower the secretary of state to amend the copyright exceptions in the Act by secondary legislation. Whilst any statutory instrument would be subject to Parliamentary scrutiny, there is definitely concern in some quarters about the use of secondary legislation to make far-reaching changes to copyright law.


How important is this stage? We are approaching a seminal moment in the history of UK copyright law. The creative industries are built on copyright and everyone who is a part of those industries, and who enjoys their output, has a stake or interest in the outcome of these proposed changes to copyright law. Lawyers who advise clients in these industries should pay close attention to these developments.


Laurie Kay
www.laurencekaye.com, Follow Laurie on Twitter @laurencekaye or check out his blog here and www.linkedin.com/in/laurencekaye