UK Copyright: How it compares internationally and who are the winners and losers

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Westminster eForum: IP and the Future of Copyright

UK Copyright: How it compares internationally and who are the winners and losers

March 2008

Ray Corrigan

Open University

Academics tend to get to talk to monochromatic audiences of peers or students and I usually find myself talking to lawyers about technology or technologists about law. So I am delighted to have the opportunity to address such a diverse group of people today, as I firmly believe a cross-disciplinary, evidence-based approach to intellectual property policy-making is essential in our modern world. So many thanks to the Westminster eForum for inviting me along today.

My brief for this morning is to look at current UK copyright legislation – how it compares internationally, and who are the winners and losers. I will be starting with a whistle-stop tour of UK copyright law in historical context, before looking at international comparisons and then focusing on the winners and losers.

Copyright protects literary, dramatic, artistic and musical works, such as books, music, software, films, sound recordings, databases, packaging, tickets, lists of rules, advertisements. It protects the expression of an idea not the idea itself. So if I wrote an article about painting a wall blue and this had never been thought of before, the article would be protected by copyright but everyone would be free to paint their walls blue.

To make things we need resources, including intangible resources like information and ideas. Authors, inventors, blues musicians, creators of all kinds do not create things out of thin air. They use language, stories, professional skills, musical notes and chords, facts and ideas, all building on the work of earlier creators, and their own talents and experience.

To understand copyright in the UK, we really need to understand something about its historical context. The Statute of Anne is sometimes referred to as the first copyright act[1] but was primarily concerned with regulating the monopolistic practices of the book trade. The copyright of the Statute of Anne was designed to protect publishers’ rights to exclusive publication but by 1774, the House of Lords in Donaldson v Beckett held that the limitations on copyright in the statute also applied to authors. What started as a law to protect publishers became a law to protect the rights of authors and today copyright protects the content of the published work itself. Thomas Babbington Macaulay went on to describe copyright in speeches to the House of Commons in the 1840s as a tax on readers to benefit authors.

In 1885 the Berne Convention for the Protection of Literary and Artistic Works was established to encourage respect for copyright internationally. With Victor Hugo being one of the prime movers in developing the convention it arguably stems from the continental tradition of copyright deriving its legitimacy from the rights of the author, as opposed to the English copyright which was based on economic rights.

Britain incorporated its interpretation of the Berne Convention and its subsequent revisions into the Copyright Acts of 1911 and 1956 and the Copyright Designs and Patents Act 1988. There have been a whole host of other important international regulatory instruments which have had an impact on UK copyright law –

• The Rome Convention (International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, 1961)
• The GATT/WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS signed 1994, coming into force in 1995)
• The 1996 World Intellectual Property Organisation (WIPO) Treaties
• Many EU directives since the early 1990s – the intellectual property rights enforcement directive, e-commerce directive, copyright and related rights directive, and directives on databases, software, semiconductors and copyright term harmonisation

– listed primarily to illustrate that the UK does not have a completely free hand in setting domestic copyright policy. So, for example, prior to the copyright term harmonisation directive of 1993, the UK copyright term, in line with the Berne Convention was the life of the author plus 50 years. It was then extended to life plus 70 in line with the directive. Outside of the EU and the US which extended its term to life plus 70 in 1998, in order to match the EU, many jurisdictions still offer the Berne norm of life plus 50, though Mexico is now at life plus 100 years.

Andrew Gowers published his review of UK intellectual property policy in 2006 and made a number of important recommendations, some perceived as controversial, others less so. He recommended stronger enforcement, a private copyright exception to allow format shifting e.g. from CDs to MP3 players, that the UK Patent Office should become the UK Intellectual Property Office, which has had a number of operational implications for our next speaker; and the setting up of an advisory board on IP to include advisers from industry. He also, unusually, commissioned an economic study to consider the extension of copyright term in sound recordings and firmly came out against such a move.

Since the mid 1990s when the World Wide Web (that part of the Internet accessible through a browser) hit the public consciousness, the copyright landscape has been undergoing an upheaval of earthquake proportions. In addition to domestic changes to copyright laws all over the world, there have been a number of international instruments like the 1996 WIPO treaties, EU directives and a number of bilateral and multilateral trade agreements which affect the shape of copyright policies. It is impossible in a short talk to cover every aspect of all of them so I’m just going to consider a couple – copyright terms and how a variety of jurisdictions deal with alleged illicit music sharing via the Internet.

There is no simple answer to the question ‘how long does copyright last for?’ It depends on a number of factors including what type of work it is, where and when it was created and/published and whether it was produced by an individual creator or by or for a commercial agent. In the US and EU copyright in literary works now lasts for the life of the author plus 70 years. In Mexico it is life plus 100 years and many other jurisdictions still maintain the Berne Convention norm of life plus 50 years. Sound recordings are now protected in the EU for 50 years and the US for 95 years. Andrew Gowers recommended against extending this term, as I mentioned previously but Internal Market Commissioner Charlie McCreevy recently committed himself to extending the term in sound recordings at an EU level to match the US term of 95 years. This raises a number of questions e.g.

If the economic case against term extension is so strong, as Gowers concluded, are there other compelling reasons for such an extension and how can we test them?

If the move is to match the US situation, will it mean that artists lose royalties on radio play in the EU which are not available for radio play in the US?

Etc.

Now aside from copyright terms, it is probably also worth thinking about different approaches to ISP liability for copyright infringement. Gowers recommended a voluntary agreement between the relevant agents – the ISPs and the music industry – with the threat of government regulation if they can’t sort it out between them. In the US, ISPs can avail themselves of the DMCA s512 and CDA s230 safe harbour provisions to avoid liability for copyright infringement, provided they have acted quickly to remove the relevant material, once they are notified of an alleged infringement. Arguably Articles 12-15 of the (2000/31/EC) e-commerce directive (and the UK Electronic Commerce (EC Directive) Regulations 2002, s17-19) gives EU ISPs a similar privilege.

But a Belgian court case,[2] towards the end of 2007, has raised significant questions about this by pointing out that the EU copyright directive of 2001 states that “Member States shall ensure that rights holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right”. The court ordered the ISP to deploy filters to block copyright infringement. The case is under appeal but will be worth watching closely.

Arguably the most useful thing that ISPs can do for the music labels is to link an IP address to an individual ISP subscriber. The Totalise v Motley Fool[3] Internet defamation case in 2001 made it legitimate for an ISP to reveal personal information in this way despite possibly contravening section 35 of the Data Protection Act. The automatic rubber stamping of the revelation of personal data allowed under the DMCA in the US is arguably not permissible in the EU (see the Sheffield Wednesday case[4] from 2007 where the UK High Court ruled that comments made on a fan's website, though technically defamatory, were still sufficiently trivial that they did not merit invading personal privacy to the extent that the club's directors should be allowed to access the identity of the 7 individuals making those comments.) In Canada the situation is similar to the EU where, in 2005, the Canadian federal appeal court refused to allow the music industry access to the identity of ISP customers suspected of engaging in copyright infringement.[5]

But the disclosure of identity is just the first step in the process of going to court or issuing a cease and desist letter. This takes time and money and is not streamlined and although Ireland, England, the US and a number of other jurisdictions facilitate the identification of ISP subscribers suspected of illicit file sharing, upper courts in Germany, Canada and elsewhere have blocked such revelations on privacy grounds. So the process can be a bit of a lottery for all concerned.

This leads us neatly on to winners and losers.

There are three main parties with a stake in the copyright pie:

• Creators

• Agents (and I use the term in the economic sense here to cover all the commercial entities involved in the copyright arena e.g. music, film, software, media companies, publishers etc.)
• And the general public (or consumers)

Each of the three sets of stakeholders will have within them a massive range of different kinds of creators, businesses or consumers – all of which will have their own demands of the copyright system – but for simplicity sake I am just going to look at the three groups.

We can take a theoretical stab at how the state of the copyright system – depending on, for example term, scope, penalties, case law, enforcement – will affect each of our stakeholder groups. And we can see from the graphs that the optimum system is different for each group but for it to work the interests of all three groups must be catered for. So immediately we see the need for compromise. Strong copyright might raise economic incentives to create and commercialise, for creators and agents, but it may restrict public access and the access of creators to build on the work of earlier creators. Weak copyright lowers economic incentives for creators and agents but consumers and second generation creators have greater access and freedoms. So there always have to be trade offs for the system to work, since theoretically

Z_a > Z_c > Z_consumers

(possibly) and we can construct a model illustrating that the “best” copyright system, at least from an economic perspective, is one where the weighted sum of the benefits to creators, agents and the public is maximised.

The problem is that there is very little empirical evidence available on copyright and intellectual property policymaking more generally. And the studies that are available are often contradictory. So for example Oberholzer and Strumpf (2004) concluded that Napster had little effect on music sales, yet Blackburn (2004) concluded that it had a substantial effect. The only thing we really know is that internet music swapping, the volume of which we can only guess at but again do not know, has a non-trivial relationship with music sales.

• Some file sharers would otherwise have bought the music,
• some buy more as a result of finding bands they like,
• some get access to music that is no longer commercially available or music released under different licenses like creative commons,
• some would not otherwise get access to the music at all because they lack the disposable income and so on.

So who are the winners and losers when copyright changes?

Let’s take Commissioner McCreevy’s proposed 45 year term extension in sound recordings for example.

Clear winners are creators and agents with commercially successful works which would otherwise fall into the public domain 45 years earlier. Now only about 4% of copyright works older than 20 years are commercially available, so 96% remain locked up for another 45 years even though no one is selling them. So the public lose out, as do creators who would like to build on those works (and the 4%).

Another recent development has been the French government’s signing of a memorandum of understanding with the ISPs and the entertainment industry, to facilitate a 3 strikes rule. The idea is that people suspected of infringement get one warning, one temporary suspension of services for a second offence and then get locked out of the Net for a third offence. Japanese ISP associations are considering a similar deal but in Sweden the government has rejected such an idea.

The winners are again some creators and agents whose sales are undermined by the users targeted. Losers are the public subject to constant surveillance, some agents like ISPs who bear the cost of policing the system, and the folk who get cut off from the Net – a severe sanction – possibly without due process guaranteed by human rights laws. Practical considerations might mean that for the scheme to be workable on the part of the ISPs it would have to be automated and internal to the ISPs – though in the French case the process is to be supervised by a judge and independent tribunal.

The system also raises quite a few other legal questions e.g. there is a presumption of guilt not innocence. The person linked to the IP address identified as an alleged source of infringement is automatically assumed to be guilty and has the burden of proving their innocence. There are a large number of ways that people might be wrongly accused - there are a lot of reasons why the person linked to the IP address - i.e. the formal ISP subscriber - might not be the infringer. It could be other family members or their friends or others accessing open wireless access points (wifi piggybacking), or trojans enabling remote control of that machine.

There are a lot of questions of detail with no clear answers yet available. Will there be access to the courts for those wrongly accused? How long does the Internet ban last? Etc.

Even if we could overcome these problems, there is the legal question about whether a 3 strikes law is a proportionate response to the specific problem. According to the Promusicae v Telefonica case in the European Court of Justice (2008), the rights of the music labels to protect their copyrights must be balanced with the basic human rights of users of the Net. Having access to the Net is now a basic part of nearly everyone's life in the developed world and it relates to basic rights to

• free expression
• freedom of association
• education
• and employment

And the European Convention on Human Rights and every other serious international charter of rights says that if a law is not proportionate it is not legal.

In other words, even with the legitimate aim of defending or protecting copyrights, the ECJ clearly instructed member state governments that they are not to endanger human rights or proportionality. Some legal commentators, most notably Professor Lilian Edwards of Southampton University, actually think that this part of the decision was clear dicta from the court, aimed directly at the kind of 3 strikes notice and disconnect schemes the French have implemented and others are considering. So there is a good chance that the ECJ would strike down such schemes challenged at that level, on the grounds of proportionality.

I will round off, then, with a call for evidence based policy making on copyright and ask you to remember that radio took 40 years to reach an audience of 15 million. TV took 15 years and the World Wide Web part of the Internet did it in 3 years. The law cannot and does not have to instantly react to changes in technology. So when it comes to regulating in this area, I tend to subscribe to London University Professor Chris Reed’s doctrine of creative inertia – watch closely to see what happens, gather robust empirical evidence on creators, agents and consumers, and legislate based on that evidence.

Thanks for your time and attention.

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[1] There were earlier related acts such as the Star Chamber Decrees of 1586 and 1637, the Ordinances of 1643 and 1647 and the Licensing Act of 1662 (which expired in 1694)

[2] SABAM v Tiscali (Scarlet). See http://www.cardozoaelj.net/issues/08/case001.pdf for a translation of the decision.

[3] See http://www.hrothgar.co.uk/YAWS/reps/totalise.htm for full decision

[4] See http://www.bailii.org/ew/cases/EWHC/QB/2007/2375.html for full judgement

[5] See http://www.canlii.org/en/ca/fca/doc/2005/2005fca193/2005fca193.html BMG Canada Inc. v. Doe, 2005 FCA 193 (CanLII)

Update: After the problem with Slideshare I noticed there was a typo on one of the original slides which I have now corrected (Slide 7. Now reads CDA s230, instead of CDA s236)