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Nowadays, technology has bypassed the formal relationship between national collecting societies, which has become outdated.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.

HADOPI: news hot off the press

From one of the 1709 Blog team's new members, Asim Singh, comes some pretty hot news from France. As Asim explains:

"Just days after President Sarkozy expressed his firm desire to update the HADOPI law to enable this body to act beyond its original P2P file-sharing mandate to reach DDL (direct downloading) and streaming sites, and one week after the CJEU’s seminal Scarlet ruling, news emerged in France that three professional bodies representing film producers (Association des producteurs du cinéma), distributors (Fédération nationale des distributeurs de films) and video publishers (Syndicat de l’édition video numérique) have taken matters into their own hands.

Availing themselves of the provisions of a section of the French Intellectual Property Code that was part of the HADOPI I law (Act of 12 June 2009), the APC, FNDF and SEVN have issued a writ against the major internet access providers (Orange, Free, Numericable, etc.) as well as Google, Yahoo and Microsoft seeking their cooperation in “disappearing” four websites (Allostreaming.com, Alloshowtv.com, Alloshare.com et Allomovies.com) with which they take issue. Section L.336-2 reads as follows:.

“In the presence of an infringement of copyright or a neighbouring right due to [“occasionné par” in French] the content of an online public communication service [a website], the High Court, ruling in the form of référés [ a specific form of legal proceedings] may order, upon action by rightsholders [or representative bodies] any measures appropriate to prevent or put an end to such infringement against any person capable of contributing to remedying the situation.”

The case-law on this provision is not exactly legion. The Court of Appeals of Paris handed down a decision on 3 May 2011 in which the provision was relied upon against Google Suggest and its habit of suggesting terms such as “torrent”, “megaupload” and “rapidshare”; the Court held that the requirements set out by the provision were not satisfied in that Google Suggest was merely a tool and was not itself the source of infringement as required by Section L.336-2.

The first hearing in the new case is scheduled for December 15, 2011".

Hard cheese for content owners in the cantons

Torrentfreak reports that the Swiss Government has decided that downloading music and movies will stay legal. With an estimated one in three of the Swiss population admitting to downloading content without permission, Swiss policy will now be that downloading for personal use WILL be legal since people eventually spend the money saved on entertainment products.

The Swiss government had been conducting the study into the impact downloading has on society, and this week their findings and the overall conclusion reached is that current Swiss copyright law, under which downloading copyrighted material for personal use is permitted, doesn’t have to change.

The Report notes that whilst the photocopier, audio cassette tape and VCR were all excellent and efficient copying devices, the internet has an added ‘bonus’- the world wide web offers near instant and global distribution of copies at the click of a button. The Report, which favours the option of putting technology to good use instead of taking the “repressive” approach says “Every time a new media technology has been made available, it has always been “abused”. This is the price we pay for progress. Winners will be those who are able to use the new technology to their advantages and losers those who missed this development and continue to follow old business models,” the Report notes.

The Report further concludes that even in the current situation where piracy is rampant, the entertainment industries are not necessarily losing money. To reach this conclusion, the researchers extrapolated the findings of a study conducted by the Dutch government last year, The report states that around a third of Swiss citizens over 15 years old download pirated music, movies and games from the Internet. However, these people don’t spend less money as a result because the budgets they reserve for entertainment are fairly constant. This means that downloading is mostly “complementary”. Equally the Dutch study showed that downloaders are reported to be more frequent visitors to concerts, and game downloaders actually bought more games than those who didn’t. And in the music industry, lesser-know bands profit most from the sampling effect of file-sharing.

The Report also reviews some of the new digital regimes adopted in other countries, in particular the three-strikes law Hadopi now operating in neighbouring France. The Report points to the expense of such systems and questions whether a three-strikes law would be legal, with access to the internet having been deemed a human right by the UN Human Rights Council. Other measures such as filtering or blocking content and websites are also rejected, because these would impinge of the right to freedom of speech and violate privacy protection laws. The report notes that even if these measures were implemented, there would be several ways to circumvent them. In 2010 the Swiss Federal Supreme Court ruled that ISPs and content owners are not allowed to collect IP-addresses of file-sharers when Logistep AG was prohibited from collecting personal IP addresses of suspected pirates on behalf of music and film groups such as the RIAA and Motion Picture Association, making it impossible for rights holders to gather evidence. The case was brought by the Swiss Federal Data Protection and Information Commissioner

So the message to the content industries is this – adapt to changes in consumer behaviour - or die

http://torrentfreak.com/swiss-govt-downloading-movies-and-music-will-stay-legal-111202/

Logistep AG : http://jumpcgi.bger.ch/cgi-bin/JumpCGI?id=08.09.2010_1C_285/2009 (8th September 2010) cf the decision of the German Hanseatisches Oberlandesgericht (decision 5 W 126/10, 3 November 2010)

Keep in Touch With the Dutch

Melchior the Magi

Torrent Freak reports a sad tale about Netherlands collecting society BUMA/Stemra which does little credit to either the society or a board member of that society - one Jochem Gerrits.

The tale involves a Dutch composer, Melchior Reitveldt, who wrote a work for an anti-piracy campaign being run by BREIN. The video was shown at a film fesival - so far, so worthy. But then our hero found the video turning up on other commercial DVDs including such slow sellers as Harry Potter! No money was paid to Melchior so he alerted his local collecting society BUMAS/Stemra - expecting their aid. Aid turned up all right in the shape of caped crusader, and BUMA/Stemra Board member Jochem Gerrits. The proposal was this.......can you see where this is going, oh jaded music industry types? Idealists, look away now.

Gerrits offered to help on condition of Melchior assigning the copyright to Gerrits and thus entitling Gerrits to 1/3 of the revenue. (How Gerrits found out about our hero's problem is a complete mystery!) Torrent Freak provides all those interested with a delicious link to a POWNews recorded conversation between Melchior's financial adviser and his would-be saviour.

Melchior Reitveldt is claiming Euros 1.3 million. Jocchem Gerrits is claiming he can help.

BUMA/Stenmra quote of the week: "1 euro in, 1 euro out. Like all associations, Buma is not about making profits. The same applies to Stemra. Our exclusive function is to represent the interests of music authors"

Copyright protection of graphic user interfaces: the show must go on…

The 1709 Blog has learned from the excellent Zuzana Hecko (Allen & Overy, Bratislava, Slovak Republic) about recent events in light of the dispute over copyright in graphic user interfaces (GUIs) which briefly disturbed the serenity of the Court of Justice of the European Union in Case C-393/09 Bezpečnostní softwarová asociace – Svaz softwarové ochrany, in which judgment was given last December. Let Zuzana explain:

"Many were surprised when the Czech Supreme Administrative Court submitted the question of whether Graphic User Interfaces (GUI) can benefit from copyright protection as computer programs to the Court of Justice, thinking, “of course they cannot”. The case arose in the Czech Republic in 2001, when the Security Software Association (Bezpečnostní softwarová asociace – Svaz softwarové ochrany; BSA) asked the Czech Ministry of Culture for authorisation to collect royalties for the collective administration of economic rights in respect of computer programs. The request was refused under the reasoning that copyright protects only the source and the object code of a computer program, not the GUI, for which the laws of unfair competition were relevant. This did not please the BSA and in 2009 the case escalated to the Court of Justice. 

The Court of Justice, not surprisingly, confirmed that the GUI merely constitutes one element of a computer program and therefore, as such, cannot benefit from the copyright protection provided under Directive 91/250 on the legal protection of computer programs. The court, however, stated that the GUI, even if not protected as a computer program, can benefit from copyright protection under Directive 2001/29 (Copyright in the Information Society Directive), if it is original and the author’s own intellectual creation, which is for the national court to decide. 

The court gave further guidance to the national court as to how to assess the eventual copyright protection of the GUI, and stated that the national court should pay specific attention to the specific arrangement or configuration of all components which form part of the GUI in order to determine whether they are “original” and that this criterion is not met if the components are differentiated only by their technical function. The judgment clearly follows the opinion of the Advocate General Bot, who stated that it seemed that the criterion of originality was not met and that whether the GUI constitutes the author’s own intellectual creation needs to be assessed on a case-by-case basis. 

One could hardly interpret such decision as a blanket “yes” to whether GUI can benefit from copyright protection, as anything in this world can be copyright protected if it is original and if it is author’s own intellectual protection. 

Nevertheless, after the judgment, ignoring the court’s “ifs”, the Czech collecting society OOA-S, interpreting this judgment as a major victory for the copyright protection of GUI, started to demand conclusion of licence agreements and payment of royalties from internet cafés in respect of GUI for games. Internet cafés, having already paid licence fees to the games manufacturers, seem to be very unwilling to pay yet another fee, to yet another collecting society (not being certain about whom this collecting society represents and on the basis of which titles). 

These developments assure us that the peculiar situation regarding the potential copyright protection of GUI in the Czech Republic is not over. Watch this space for news of further developments".