Private Copying Exception is no more ... for now?

In his final judgment handed down yesterday Mr Justice Green confirmed his earlier finding that the consultation process which led up to Statutory Instrument 2014/2361 permitting an exception (the new section 28B) for making personal copies of copyright works, other than computer programs, for private use, was flawed. As a consequence the SI cannot stand and is therefore quashed. The Secretary of State (in this case, in effect, Baroness Neville-Rolfe, the Permanent Under Secretary of State for Business, Innovation and Skills) agreed that this was the best course of action and asked the court to make the order while her department thought about how to resolve the underlying issues. The Court decided against making a reference to the CJEU about the issue of 'harm' caused by the introduction of the secondary legislation, but left the door open if the claimants needed to follow up on this aspect of their overall claim at a later stage. This judgment follows-on from the much more extensive (318 paragraph) interim judgment issued in June of this year which was reported on by Ben here, and by Eleonora here.


The bulk of the final judgment was taken up with whether the order quashing the SI should apply from the date of the order, or be retrospective to the date the SI came into force. The court heard detailed argument on both courses of action, but decided that the order should only apply prospectively, or in legal terminology, ex hunc. This leaves a very large number (possibly in the millions, according to the court) of copies made between 16 October 2014 and 17 July 2015 which are legal anomalies. They are may be legal copies - Green J refused to determine their status - whereas copies made under identical circumstances, (ie of legally owned music or films etc for private purposes such as format shifting) made before 14 October 2014 or after 17 July 2015, would definitely be illegal. Considering that one of the reasons for bringing in the exception was the previous uncertainty about the law, because the recording industry had acknowledged that it would not seek to sue private individuals who made such copies, this latest development will merely add to the confusion.

Unfortunately articles such as this one on the BBC Newsbeat website over-simplify the issues. The private copying exception per se has not been declared ultra vires; indeed Article 5(2)(b) of the InfoSoc Directive 2001/29 continues to permit member states to adopt this exception. It is the faulty consultation process which has meant the law cannot be allowed to stand. In theory, following a correctly-conducted consultation, the Secretary of State could re-introduce exactly the same wording in a new SI and that would be legal. Only then would the issue of harm, raised by the claimants, need to be resurrected.

Of course if the British Association of Songwriters, Composers and Authors and others have their way, the new regulations should incorporate some method of compensating artists and authors whose works are subject to private copying. The creative industries generally favour a levy based on sales of recordable media and devices (blank CDs, DVDs, iPods, tablets, laptops, mobile phones, etc), while other options include a bulk payment from public funds, or indeed no compensation at all, as was the case prior to this judgment. The InfoSoc Directive merely requires member states to provide that "rightholders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned". The exact meaning of this clause is some obscure and the Recitals don't really assist. The most relevant one is Recital 52 which says:

"(52) When implementing an exception or limitation for private copying in accordance with Article 5(2)(b), Member States should likewise promote the use of voluntary measures to accommodate achieving the objectives of such exception or limitation. If, within a reasonable period of time, no such voluntary measures to make reproduction for private use possible have been taken, Member States may take measures to enable beneficiaries of the exception or limitation concerned to benefit from it. Voluntary measures taken by rightholders, including agreements between rightholders and other parties concerned, as well as measures taken by Member States, do not prevent rightholders from using technological measures which are consistent with the exceptions or limitations on private copying in national law in accordance with Article 5(2)(b), taking account of the condition of fair compensation under that provision and the possible differentiation between various conditions of use in accordance with Article 5(5), such as controlling the number of reproductions. In order to prevent abuse of such measures, any technological measures applied in their implementation should enjoy legal protection."

Does it mean that rightholders are entitled to compensation in all circumstances of private copying, and that amount of compensation will be varied by the overall extent of the application/non-application of technological protection measures (TPMs), or is the compensation only required when TPMs have not been applied? Logically if TPMs prevent copying, then no compensation should be due in such cases, yet a levy on media and devices would be a blanket one and unrelated to the extent of the use of TPMs in a particular segment of the digital marketplace. For example TPMs are extensively employed in computer games, DVDs/BluRays of films and some eBook formats, but much less so for recorded music. The Directive seems to imply that only those specific works which do not employ TPMs should enjoy any compensation. This would involve the onerous task of remunerating not just specific artists and writers, but also just specific works where TPMs had not been applied. It seems clear why the artists, record companies and collecting societies favour a blanket levy approach.

So this is problem the IPO now faces. As Green J remarked, it seems likely that a replacement SI on the subject may be many months, if not years, away. Alternatively the whole issue could be quietly forgotten.

MusicTank Asks “Who Pays For The Right To Copy?”

The University of Westminster's Music Tank has put together an expert copyright panel to debate a new model for artist remuneration for private copying. The new seminar,  Private Copy Exemption: Rightsholders And Remuneration will consider how a levy system might effectively compensate rightsholders for private copying in the UK, and takes its lead from a paper written by MA Music Business Management post-graduate, Samuel Rudy.

The mechanism, transparency and effectiveness by which rightsholders are compensated for private copying in the majority of European countries remains up for debate.  The majority of EU member states operate variations of traditional blank media levies, with others (Finland and Spain) abandoning those in favour of a state-funded compensation via collecting societies.   The UK belatedly adopted EU Directive on private copy exception last October, which among other rights, grants consumers the legal right to copy CDs and DVDs on to personal computers, mobile devices and internet-based cloud locker services, for their own personal use.  However, UK adoption of this regulation was done without providing ‘fair compensation’ to rights holders - itself a core remit of the EU Directive.  

UK Government’s view was that any such economic harm wreaked by private copying was insignificant and ‘built in’ to the pricing of content.  A large body of rightsholders firmly disagree with that position, with UK Music, BASCA and The Musicians Union appealing for rightsholder compensation in the High Court. However structured, current compensation systems across the EU are largely considered a blunt, opaque and inefficient tool with which to compensate rightsholders.

Discussing the implications, practicalities and grounded realities of private copying compensation is an esteemed panel, chaired by Keith Harris (PPL Director, Performer Affairs and MusicTank Chair), comprising: Jane Dyball, CEO, MCPS, IMPEL and PMLL - one of the UK’s most senior figures in music publishing and an expert in collective and digital rights; Prof Martin Kretschmer – leading copyright academic, CREATe director, advisor to the IPO and an outspoken and profoundly ‘copyleft’ advocate; Balázs Bodó - Senior Research fellow, University of Amsterdam; an expert on alternative compensation system, copyright and economist; John Smith - General Secretary, Musician’s Union, and leading protagonist in the recent high court appeal on private copy exception; Chris Cooke – CMU business editor and industry commentator; and Samuel Rudy, Miloco Group. 

Title:               Private Copy Exemption: Rightsholders And Remuneration
Date/ Time:    Thu 25th June 2015 | 18.30 – 21.00 hrs

Venue:           Fyvie Hall, University of Westminster, 309 Regent Street, London W1B 2UW

This free discussion paper - Private Copying of Music - nuances the debate, focusing not on whether by default, rightsholders should be compensated from lawful private copying, but addresses the issue of charging those who profit absolutely from facilitating the copying of music – digital storage and device manufacturers.

Cost: Earlybird rates currently apply from £20 (students £15)


Information & booking: http://www.musictank.co.uk/events/private-copy-exemption: 1709 Blog users can USE THIS PROMOTIONAL CODE: PCERR0615 (subject to availability) and save £5 on the full price - earlybird rates currently apply until 01.06.15)

My Little Pony gets 3D printed

3D printing is a bit of a buzzword at the moment and its not the first time that this blogger has written about protection of IP rights in the 3D printer world. Rightsholders need to be thinking about how best to exploit 3D printing rather than how to avoid it, and one company that has done just that is Hasbro. 

Rather than targeting creators of fan art to stop them customising the popular My Little Pony range (because, really trying to stop your fans from enjoying your product is not a great business proposition), Hasbro is going to partner with 3D printing company Shapeways to sell fan art.

Five artists will design My Little Pony figurines which can be printed to order. John Frascott, chief marketing officer at Hasbro, describes the process as "mass customisation" - the figurines don't make sense for mass manufacture but enough people will buy them that Hasbro can justify allowing the artists to create and sell them.

It's not clear whether the artists will be employed by Hasbro or whether they are merely granted permission to create fan art (likely the former, for Hasbro to retain control of any copyright created) but it is clear that this is a clear demonstration that we will see more and more customised goods in future, meaning more and more 3D printing.

What has this got to do with copyright?

Well ignoring any trade mark rights which Hasbro may have in My Little Pony, it is likely that the main IP rights subsisting in the figurines are copyright and/or design rights. This raises a few important questions, namely:

1. Are figurines artistic works for copyright purposes (the Storm Trooper helmets were not)?

2. If not, could they be works containing the author's own intellectual creation and so subject to copyright protection in the rest of Europe? (Or in the UK if the concept of a work is found to be harmonised…)

3. If copyright does subsist, will the proposed private copying exception allow people who have access to the design files to make copies for private use at home?

4. Will the files appear on P2P file-sharing sites, and if so how long before we see an application for a blocking injunction against counterfeit My Little Pony files?

Answers on the back of a postcard please!

Hardware providers sue Dutch government over private copying levy hike

Further to recent changes to private copying compensation in Spain, change may also be afoot in the Netherlands.

What do you mean we've moved on?

The private levy system in the Netherlands has been frozen since 2008 meaning that whilst blank audio and video tapes, MiniDiscs and blank DVDs and CDs are subject to levies, smartphones and MP3 players are not. To bring the system up to date, the Dutch government announced in October that new, increased, private copying levies would apply to all hardware from January 2013.

The new levies are set out below. They increase from €0.03 for CDs and DVDs to €5.00 for tablets over 8 Gb, PCs and laptops.

Understandably, this sudden propulsion of private copying levies into the modern world has caused some tension: last week three of the big hardware providers (Dell, Hewlett-Packard and Imation) along with other big players in the industry sent a letter to the State Secretary for Security and Justice, Fred Teeven, saying that the levies would "cause trade barriers and serious disincentives to operating logistics hubs and distribution centers in the Netherlands". Further they said that the levies were likely to conflict with the Information Society Directive which, they say, requires that fair compensation be based on assessment of the harm caused by private copying.

Last Wednesday, Hewlett-Packard, Acer, Dell and Imation, went further and filed a claim against the Dutch government at the District Court of the Hague claiming damages caused by the new, higher, private copying levies.

It is not clear to this blogger how a claim for damages can be filed when as yet no damages have been incurred, however the big four say that in 2013 alone they will suffer damages of  "tens of millions" of Euros. Damages aside the main gripe seems to be that the new levies were based on an estimate that the entertainment industry has lost €40 million due to private copying. The hardware providers say that the estimate is "excessive and unfounded" and that it includes losses due to illegal downloads which should not be recovered by way of private copying levies. As we reported here, the question of how the private copying exception applies to illegal content has been referred by the Dutch courts to the CJEU. Further the hardware providers argue that it is not right that the new levies should apply to all devices, including devices for professional use that are not used for private copying.

Private copying levies are always a touchy subject and such sudden increases were never going to be popular. Is the solution to make private copying illegal, as it is in the UK, and so abolish the levies? Or to implement one European-wide levy so that at least particular markets within the EU are not disadvantaged?

And will the Dutch move on to think about imposing levies on the cloud?