What are we trying to do?
We want to achieve two things:
- To simplify copyright licensing and to facilitate access to some works that are currently locked up; and
- At the same time we want to make it easier for rights holders to enforce their rights – to get people to stick to the rules – both now and in the future.
We want a framework for copyright and performers’ rights that reflects the needs of the digital age, and gives the UK’s creative industries the chance to develop new legitimate digital products delivered in the way people want, at a price that is fair. That means we need to make doing business easier in this area, and to significantly reduce the amount of online infringement of copyright.
This need for action on several fronts – education, commercial offers and enforcement – which underpins this work is also reflected in the Government’s copyright strategy which looks at what may be needed to ensure that the copyright framework keeps pace with technological developments and remains fit for purpose.
We describe in more detail below what the different measures mean and what they will do – but it is important also to keep in mind that this is part of a bigger picture. Copyright, if it is to maintain respect, must be seen as a fair deal – for the creator, the investor, the re-user and also the consumer. This legislation aims to take some important steps in that direction.
What is copyright licensing and what are you doing to modernise it?
Copyright and performers’ rights licensing is the means by which right holders (such as artists or musicians) grant permission for the use of their work, usually in return for a fee. Licensing is often handled by collecting societies on behalf of their right holder members but may also be negotiated on a work by work basis.
This legislation takes three powers for improvement, and one power to help with later changes to the Copyright Designs and Patents Act 1988 (CDPA), as well as making some changes to the existing financial penalties for criminal copyright infringement.
It makes provision for the legal use of “orphan works” (copyright works or performers’ rights, but where the owner of the rights cannot be identified or found). The law currently prevents some uses of orphan works or rights without the consent of the right holder, meaning that some material of real cultural value cannot be accessed, or included in digitisation initiatives.
It makes provision for extended collective licensing to help streamline the rights clearance process. It will permit collecting societies, subject to appropriate safeguards, to assume a mandate to license the use of works and collect fees on behalf of rights holders who have not signed up to that society, subject to the rights holders retaining the ability to opt out of such arrangements. There is a similar provision to improve the situation for performers’ rights.
The Government intends that any new powers for collecting societies and other bodies that will be authorised to license the use of orphan works or rights, or set up extended collective licensing schemes should be balanced with appropriate safeguards, including codes of practice for collecting societies. There are powers to introduce authorisation and regulatory requirements to ensure a correct balance between consumer and rights holder interests.
It increases the maximum financial penalty that can be imposed on summary conviction for some criminal infringement of copyright and performers’ rights to £50,000. This is in recognition of the importance of having penalties that are proportionate to the harm caused to UK industries and which are effective deterrents against infringement. It is worth noting that this £50,000 fine will apply only to criminal offences, and not to cases such as the majority of file sharing cases for example, which comprise civil rather than criminal infringement.
It includes a power that will allow the Secretary of State to amend the CDPA for the purpose of preventing or reducing online copyright infringement, in relation to technological developments that have occurred or are likely to occur. This is in recognition of the fact that the measures also in this legislation specifically to tackle online infringement of copyright (see below) will not, by themselves, tackle the whole range of such infringement. Technology develops at a great rate and it is likely that the coming years will bring new challenges in terms of tackling copyright infringement. This power will provide the Government with a flexible approach to dealing with emerging threats quickly and in a targeted way, but we will have to consult on anything we propose, and Parliament will have the opportunity to check that it is fair and proportionate to all parties.
Why are you doing this now?
The advent of digital media has brought into sharp relief the need to review the structures for authorising the use of copyright material and performers’ rights through licensing. Designed for an analogue age, they are sometimes ineffective at managing copyright and performers’ rights in today’s digital world to the disadvantage of rights holders and consumers.
What are the benefits to business?
This creates powers to streamline some licensing procedures (saving time and money), to open up new opportunities for use of orphan works and rights, and to discourage illegal use of works. All of these will help to underpin and further support this important economic sector.
What are the benefits to consumers/citizens?
As well as reducing the complexity of the licensing process, which should make it easier for new content services to be created (and at less administrative cost), these proposals may also allow legal access to culturally valuable material that cannot currently be used legitimately because right owners cannot be identified or traced. Taken together these measures should increase the number of works that can be accessed, from new commercial services, to important historical records.
Will this reduce the ability of creators to control uses of their work?
It will not. Both in the case of rights covered by an extended collective licence, and orphan works or rights being used under licence, the rights holder (if identified or traced in the case of an orphan work or right) will retain the ability to opt out of the arrangements and stop the use being made of their work or right. In both cases, the rights holder will be paid royalties for any use of their work or right licensed by a collecting society or other body able to authorise such use. In practice, we expect opt-outs to be rare because the rights holder (where identified in the case of orphan works or rights) will benefit from the licences entered into.
What about online infringement of copyright?
Online infringement of copyright includes peer-to-peer (P2P) file-sharing, and currently this is estimated by rights holders to account for the bulk of online infringement. This is a technology which is used to transfer large volumes of data online. Although it has many legitimate uses, it can be used for sharing copyright material in breach of copyright. Typically the material shared is music, films, TV, software or games but this is spreading as technology develops
We are introducing two obligations on Internet Service Providers (ISPs) – to send notification letters to their subscribers linked with an alleged on-line copyright infringement and to record the number of these notifications with which each subscriber is associated and make this data available to rights holders on an anonymised basis on request. This would allow rights holders to apply for a court order to get access to the names and addresses of serious repeat infringers and thus take targeted legal action against those who appear to be responsible for the most damage to the industry. We will also introduce a reserve power to impose a further obligation to require technical measures (such as bandwidth capping or temporary account suspension) against the most serious infringers in the event the initial obligations do not prove as effective as expected.
Why are the changes needed now?
Current legislation allows rights holders to take civil action against individuals who breach copyright. This is ineffective against online infringement of copyright in cases such as P2P file-sharing because it is difficult and costly to identify the individuals concerned and the number of individual infringements is huge (industry estimate some 6.5m people file-share in the UK). To date, civil action is only possible against an individual on the evidence of a single infringement. The changes should educate and deter people from such unlawful activity and provide a stimulus for the development of new commercial content models.
What are the benefits to business?
Industry estimate file-sharing costs music £180m pa (source BPI) with film and TV a further £150m (IPSOS). Other genres (video games, sport and software) also suffer considerable losses. Significantly reducing the amount of file-sharing should translate into increased revenue for the content industry. For ISPs, the development of new commercial models should provide them with new (shared) revenue streams and legitimate content sources to stimulate further demand for higher broadband speeds and the next generation broadband infrastructure.
What are the benefits to consumers/citizens?
Twofold. Consumers should benefit from a wider range of competitive content offers from safe (virus-free) sources. They will also benefit from the continued re-investment in new content and talent. More generally, society should benefit from the increased awareness of the importance of copyright.
What about account suspension?
Introducing account suspension is by no means a given. If the initial obligations prove as effective as we expect, we will not need to introduce technical measures. If we do need further measures, then suspension is but one option. But it would only be introduced after several warnings to subscribers, and in conjunction with a clear route of appeal, including up to a First Tier Tribunal. We recognise that there is some concern over the proportionality of this measure, and so we will ensure that the interests of consumers are properly recognised.
How does this fit with the objective of universal broadband access?
We want everyone to enjoy the benefits that follow from access to broadband. But that means we expect people to behave responsibly. We want to educate consumers about both the importance of copyright and provide the legal alternative but ultimately if they ignore clear repeated warnings and carry out with unlawful behaviour then they should face the consequences.
What about new business models?
There is widespread agreement that the continued development of new business models which give consumers the type of content they want at a fair price will have a positive effect in reducing online copyright infringement. Most people do not want to commit an offence, and will use legal services if they are appropriately priced and convenient. It is also clear that industry needs a regulatory baseline and time to develop these new business models. This legislation will provide a clear framework for tackling the problem and provide some incentives for all parties to develop new content offers.
Another way in which we are assisting in the creation of new business models is through the provision of Digital Test Beds. This allows for the first time the opportunity for companies to test innovative technologies and concepts over a representative network. They are being delivered by the Technology Strategy Board on behalf of BIS and the first studies and projects are now underway. The Test Beds will provide a facility and environment to develop and test concepts such as micropayments and innovative IPR solutions.
What about educating consumers?
We will be looking for the creative industries affected by online infringement of copyright to do their bit by making the terms on which material is available clear, and by making consumers aware of the legal services which are available. In addition, the letters sent to alleged infringers will provide clear and easy to follow advice on what they are alleged to have done, where they can get the material legitimately, background on the importance of copyright and advice on how to secure their Internet connection.
Related papers: Copyright strategy