Music and IP conference report: 4

Opening the final session of "Music and Intellectual Property", Gwilym Harbottle (Hogarth Chambers) spoke about the attempts that have been made to regulate the activities of copyright collecting societies through the UK's Copyright Tribunal. Gwilym tackled two recent cases: Archive Media Publishing Ltd v MCPS, on the small application track (here), and CSC Media Group v VPL (trial decision here; appeal here). Gwilym entranced the room with his account of the different types of reasonableness which a tribunal should be bound to apply under different provisions of the Copyright, Patents and Designs Act 1988, depending whether it is looking at the facts itself or looking at how another tribunal has looked at the facts. A mere blog post could not do justice to the manner of delivery of Gwilym's account of CSC v VPL, which -- improbably, given the somewhat dry nature of the dispute, encrusted with figures, percentages, 'diminished windows', psychic broadcasts and comparables -- will linger long in the memories of those who were privileged to hear it.

The final speaker on the day's programme was Enrico Bonadio (City University Law School), on "Music Copyright and Policy: Too Much, Too Quickly?". This, as readers might suspect, was a review of some of the most recent thoughts of the European Commission with regard to online collective music licensing. The European Commission's proposals for cross-border licensing should fit in with the sentiments of the Hargreaves Review, not least since the UK is a net exporter of music.  Reciprocal representation agreements already enable customers of collecting societies to obtain a more extended repertoire, to overcome territorial restrictions. However, cooperation between collecting societies has attracted the attention of the EU competition authorities, starting with the November 2000 Simulcast Agreement, with the controversial "customer allocation clause" -- which tied customers to approach their own local collecting society rather than shop around between them. The removal of customer allocation clauses was finally removed, following which the Commission accepted the Agreement.

Nowadays, technology has bypassed the formal relationship between national collecting societies, which has become outdated. The internet is now the major means of delivering copyright content, but it is not per se the subject of any Europe-wide licensing schemes. Enrico explained the significance of this in terms of the upstream shift from reciprocal representation agreements to the introduction of greater choice and competition through collecting societies offering better terms to content owners -- who in turn could move from society to society if they wished their works to be on different terms. Also, collecting societies would be encouraged to develop their own niche markets, defined by repertoire (Latin American, classical, jazz etc) or by medium (regular online delivery, ringtones etc). Not all commercial users of licences would welcome fragmentation of repertoire, though -- and would there be a risk of a "race to the bottom" where collecting societies have to offer cheaper licence terms in order to attract custom. Also, small-time rights holders might lose out. The European Parliament has articulated all of these concerns, and there is also anxiety that music production might be impoverished.

New cross-border platforms have been put together, pooling several repertoires -- for example the CELAS initiative, which sought to provide cross-border online licence services for mobile phones.  Currently its scope is quite narrow. Another such initiative is Warner-Chappell's PEDL. These are part of a new, if timid, trend towards pooling of repertoire. Will the Commission encourage this trend? Said Enrico, we still don't know. He then reviewed the dispute between CISAC and the competition authorities, in which a ruling of the General Court is awaited.

Concluding, Enrico turned to the topic of the Global Repertoire Database, its likely structure and content. This would allow users to identify the rights they exploit, the owners or representatives whom they should approach and the data necessary to negotiate licences. Through the introduction of such a scheme, 100 million euros could be saved annually through the reduction of administration costs -- and returned to rights owners.

Music and IP conference report: 3

Lunch over, but plenty
 food for thought

Lunch over, participants returned to face an enthusiastic Nick Kounoupias (DMH Stallard), who had come to sing the praises of the Patents County Court as a forum for copyright litigation -- and if necessary to answer questions on the MediaCAT case. Till the new Patents County Court (PCC) rules kicked in, litigation for small and medium-sized copyright businesses and individuals was simply not financially feasible. While the PCC has existed for some years, litigation in it was often inefficient and could be more expensive than High Court litigation.

Now, in the music industry, most ordinary infringement cases are unlikely to exceed the £500,000 upper limit on the award of damages by the PCC. A small claims track is also being introduced within the PCC, with an upper limit of £5,000 damages -- which may not sound like much but is great for most copyright cases. Incidentally, the PCC is due for a name-change to the Intellectual Property County Court -- which will be much more descriptive and therefore less misleading.  The High Court route remains, of course, and will always be more attractive for those wishing to bring many witnesses or attract more publicity.

More work is done on
paper than orally

The PCC deals with the main registered and unregistered intellectual property rights, as well as with ancillary contractual issues such as who pays royalties, how much they pay, etc.  Nick felt sure that eventually all PRS and PPL infringement cases will be brought there.  More work is done on paper than orally, and the current judge, Judge Colin Birss QC, is happy to decide matters on paper where appropriate. The new rules mandate specific disclosure only and aim for a two-day limit on hearings. Cases started in the High Court will be kicked down to the PCC wherever appropriate. Cost-capping, said Nick, means that there is far less risk involved in litigation by having to pick up the entirety of the other side's costs. His conclusion on the PCC was that it would change the face of intellectual property litigation -- quite literally, since it is housed in the Rolls Building, a beautiful new edifice which houses all forums for intellectual property litigation.

Music and IP conference report: 2

First to speak after the coffee break in today's Music and IP conference was Rebecca Dimaridis (Jeffrey Green Russell), on the topic "Infringement -- has the Same Old Tune Changed?". This was an analysis of the question whether an old song, "Kookaburra sits in the old gum tree", was infringed by Men at Work's song "Down Under" (see earlier blog posts here and here).  Rebecca treated the conference participants to sound clips of the two works before feeding the notes into the court's legal reasoning. The court's finding that there had been an objective similarity between them was strengthened by the frank admission of musician Colin Hay that there was indeed a causal connection between the two works.

Was the incorporation of two bars of "Kookaburra" into "Down Under" a cultural tribute to Australia, along with the inclusion in the video clip of references to Foster's, Vegemite, a kangaroo, a koala, a beach and a gum tree, and therefore sparing it from being a copyright infringement? Sadly for the defendant band, this didn't help. A copying was no less a copying where it was intended to create a cultural allusion.

Last up before lunch break was 1709 Blogger Ben Challis, on "Business Models and the Music Industry: Successes and Failures". Reminding participants that technology changes rapidly while human nature remains much the same, Ben affirmed that adapting one's business model in light of technological change is not just necessary but can be beneficial too.  Legal action has been tried and legislation is in place, but still the unauthorised copying, downloading and file-sharing continues. Sales of recorded music are plummeting, even though there is more music available than ever before.  There have been some successes, such as the closure down of Limeware and Grokster and successful actions against The Pirate Bay, but these are merely replaced by others.

What then can content-owning industries do? Digital rights management (DRM) has had some successes, for example Sky. The Sony Rootkit infected people's computers, which was a bit of a disaster. Young computer users have the energy and the skill to get round DSM with not too much effort. Bars to access are also accused of infringing human rights. How then do we monetise our creativity? The Americans seem to be able to do it -- and they criticise our failure to do so.

If you can't make money from music, said Ben, try making money from people who make money from music; try making your products and services attractive.  Apple's growth was through its being associated with music, without having to own it. YouTube, Facebook, Spotify all use music lawfully, through licences -- though music  which is being insufficiently monetised. Ben then mentioned his disenchantment with safe harbours and with arguments that conduits need protecting because they can't control traffic -- since they can whenever they want to. ISPs make a lot of money and should be better made to pay for the music they carry in order to do so.

So what does work? Selling music through the web is possibly a dying business. History tells us that things do change. In a global market businesses need global policies, subject to competition law.  Levies are a possibility, but not very generous. Micropayments are better, since young internet users are more comfortable with them. Sponsorship, advertising, more effective use of collecting societies, turning artistes into brands -- these are all possibilities. In this context, Ben cited some leading Court of Justice trade mark rulings that establish the strength of trade mark protection for branded entities. This works for big, well established bands -- but entry-level bands just starting out have no such opportunities.

We need to tidy up the scene for collecting societies, since they are so important for the future. There are far too many of them and it's difficult to deal with them when making cross-border arrangements. Effective licensing schemes are an absolute must.

Music and IP conference report: 1

Some forms of sharing
incur no liability at all ...

This year's Music and IP conference, organised by CLT Conferences, took place as usual in the splendid setting of London's Prudential Building, now fortuitously reconstituted as a suite of offices and conference facilities. First to speak was Fredericka Argent (IFPI), who took the audience through the problems in copyright enforcement which led to the passage of the UK's Digital Economy Act 2010. The Act was predicated on statements in EU Directives to the effect that internet service providers (ISPs) were often better placed than copyright owners to deal with infringements. Fredericka explained the basis of the Act's graduated response to file-sharing. Using date-and-time stamps, ISPs can identify which subscriber is the owner of an IP address at the time of infringement, which enables the right person to be targeted. Once targeted, responses can be ratcheted up, from educational notifications to full-blown legal action.

After outlining the key provisions of the Act, Fredericka reviewed the intended cost-splitting aspects of enforcement: 75% of the enforcement cost is generally to be borne by rights owners, the other 25% by the ISPs. She also reviewed provisions of the Ofcom code which seek to address the regulatory aspects of enforcement, time limits, the content of notification (giving some examples) and the record-keeping responsibilities of ISPs which will enable copyright owners to bring proceedings. Data must be deleted after 12 months, regardless of whether proceedings have been brought in respect of an IP address's owner or not.

Everything, said Fredericka, has been "completely mired in process" and there has been no progress at all in implementing the Act's provisions.  This is not surprising, given further government reviews of online copyright issues and the legal challenge to the Act's scheme by ISPs BT and TalkTalk (on which you can read Fredericka's post on the IPKat here). Fredericka reviewed the grounds of challenge by a judicial review -- and the grounds on which they have so far almost entirely failed (an appeal is now pending, adding to the sense that we are all in limbo).

Fredericka then turned to website blocking, which is increasingly used as a popular alternative to blocking internet access to users. The British version of this was the order Newzbin2, though the UK government doesn't propose to bring forward website blocking measures since rights owners can obtain such orders through a court of law -- even though this is very expensive.

Following Fredericka was Robert Lundie-Smith (McDermott Will & Emery), on "What's New ,What's on the Way: a European Perspective". Robert covered three topics relating to references made to the Court of Justice of the European Union for preliminary rulings. Starting with the topic of fair remuneration of rights holders for private copying -- which remains an option within the EU (and one which the UK has not opted for) -- Robert explained the recent ruling in Case C-462/09 Thuiskopie v Opus on whom should fall the onus of collecting a levy where blank media were "exported" from Germany to the Netherlands by being "imported" by each individual purchaser. The Court of Justice reasoned that the foreign seller should be made to pay, since by charging individual Dutch purchasers for the purchase of their recording media they would be making the individual purchasers pay. The fact that the seller was not located in the levy-collecting country was irrelevant. The Dutch law requires the manufacturer or importer" to pay the levy, so Dutch law will have to be applied or amended in order to effectuate the Court of Justice ruling. This ruling, Robert felt, could have implications for post-Hargreaves treatment of private copying.

The next case discussed was Case C-70/10 Scarlet v SABAM, in which the Court of Justice had to consider the validity of a Belgian court order that an ISP monitor the content of sites it hosted in order to determine whether file-sharing infringed copyright or not. There were also some non-IP arguments here, relating to the freedom of businesses to conduct their business and to data protection. The Court of Justice had no doubt that the Belgian order had gone too far, as its ruling makes plain.  But how far does this ruling affect the pending judicial review of the Digital Economy Act? We shall soon find out.

The third issue discussed by Robert was that of "communication to the public", as reflected in Case C-162/10 I v Ireland (on which see earlier post here).  PPI objected that Irish law exempted hotels etc from paying for music piped into guests' bedrooms under the Rental Directive. The Advocate General, following the Court's ruling in Case C-306/05 SGAE, considered that there is communication to the public by making music available to guests and that hotels, by supplying the equipment by which guests received the music, were the users who were liable to make the payment. The Irish government's argument that, since one payment had already been received for broadcasting a work, no further payment was necessary, was rejected. On the same issue, Case C-135/10 SCF Consorzio Fonografici v Marco Del Corso, a reference from Italy regarding the playing of music in dentists' surgeries, was also discussed. Do the facts that the music is ancillary to dental work, and are not chosen by the patient, lead to a different conclusion? No, it appears: the patient in the dental chair and the guest in his hotel room are essentially the same.

A conference -- and a book

"It's all good fun", said Maud, "but what the Glastonbury
Festival really needs is something a bit more, well, muddy"

This year's "Music and Intellectual Property" Conference, organised by CLT, takes place in Central London on Monday 5 December 2011. The programme is a bright and challenging one, with two 1709 Blog team members taking part in it. Ben Challis (Glastonbury Festival) is taking a look at business models in the music industry, giving some pointers as to what we should look for when deciding which are the winners, which the duds, while Jeremy Phillips is in the chair.

Topics covered this year are as follows:

• Music copyright and policy: Too Much, Too Quickly?
• What’s New, What’s on the Way: A European Perspective
• Infringement - Has the Same Old Tune Changed?
• Business Models and the Music Industry: Successes and Failures
• Online Piracy and The Digital Economy Act 2010 - Where Are We Now?
• Collective Copyright Management in Court
• Music and Copyright in the Patents County Court

For more details and registration, just click here.

This is the second year that CLT has offered Music and Copyright. Last year's conference was a great success and, coincidentally, one of its star speakers -- the University of Glasgow's Dr Andreas Rahmatian -- has just published a very thought-provoking and stimulating critique of proprietary interests in the creative sector: it's Copyright and Creativity: the making of property rights in creative works, published by Edward Elgar Publishing.

What is this book about? According to the publicity material:

"Copyright and Creativity discusses the making of property out of creative works through the legal mechanism of copyright. It shows the manner in which the law translates a great variety of expressions of the human mind into its normative system and transforms them into the property right of copyright or droit d’auteur.

This timely book examines the proprietary features of copyright, the inherent limitations of its powers, and its justification and relationship to the non-proprietary realm of the public domain. The latter part of the book deals with the ‘propertisation/commodification’ of human authors themselves through their works as alienable objects of property, the well-known ‘Romantic author’ critique as a sophisticated justification of that commodification, and at an international level, neo-feudal and neo-colonial developments as a result of this process.

This detailed study will appeal to undergraduate and postgraduate students, legal sociologists, and specialists in copyright, property theory, or legal theory and political philosophy with particular interest in property theory. Practitioners within bodies involved in legal policy, organisations concerned with law reform, European institutions, and international organisations will also find much to interest them in this book".

This blogger read one of the chapters pre-publication and can confirm that it is a work of substantial scholarship which will be much appreciated by anyone who has a good understanding of legal systems, jurisprudential notions of property and the principles of copyright.  It makes no concessions to lazy reading, sloppy thinking or common law sentiments. There's also an excellent 22-page bibliography which reflects not only the author's linguistic skills but the considerable breadth of his inquisitive instincts when chasing strands of thought. For a relatively small book, it's a big, big read.

Bibliographical details: Hardback,  xx + 314 pages. ISBN  978 1 84844 246 7. Price £79.95 (online price £71.96). 35% discount for 1709 Blog readers who purchase it by 31 October .£51.96 + carriage charges. Web page here.