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1
A Copyright strategy for socialand commercial innovation
Preview of IP and Growth
 –
updating exceptions for the digital age
The Government has accepted Prof Hargreaves
‟
recommendation to update copyright exceptionsin UK copyright law and will bring forward proposals:
 for a limited private copying exception
 to introduce an exception for parody
 to widen the exceptions for non-commercial research and archiving to include recordedmusic and filmAccording to Prof Hargreaves,
„
copying should be lawful where it is for private purposes, or doesnot damage the underlying aims of copyright.
‟
The Review concluded that, in order to support
growth of the UK‟s knowledge economy
, the UK ought to take an approach to exceptions incopyright which encourages successful new digital technology businesses both within andbeyond the creative industries.
Recommendation 5:
‘
Government should firmly resist over regulation of activitieswhich do not prejudice the central objective of copyright, namely the provision ofincentives to creators. Government should deliver copyright exceptions at nationallevel to realise all the opportunities within the EU framework, including format shifting,parody, non-commercial research, and library archiving. The Government should alsolegislate to ensure that these and other copyright exceptions are protected fromoverride by contract.
’
 
The Government has endorsed Prof Hargrea
ves‟ exceptions saying that it „
sees the areas wherecopyright restricts activity to no direct commercial benefit as doubly wasteful: neither newopportunities nor incentive to invest in copyright works result from them.
‟
The Government alsosaid that it shares
„the Review‟s concern that a widespread flouting of copyright through private
copying in particular brings the law into disrepute: it is not appropriate simply to tolerate unlawfulprivate copying where it is not commercially damaging.
‟
 
Event:
Hargreaves’ exceptions
 
 –
format-shifting, parody, research and archiving
House of Parliament: Tuesday 18 October, panel event 6 to 8pm, Committee Room 20Pictfor and Consumer Focus are inviting you to discuss
Prof Hargreaves‟ recommendation
. Thepanel discussion will be chaired by Jim Dowd MP, who will be joined by:
 
Martin Brennan
, founder and CEO of 3GA Ltd
 
Prof Martin Kretschmer
, director of the Centre for IP Policy, Bournemouth University
 
Richard Brousson
, legal counsel at the British Film Institute (BFI)
 
James Sadri
, digital producer at Greenpeace UK
 
Hargreaves’ exceptions:
format-shifting, parody,research and archiving
 
 
2
A private use exception allowing format-shifting
Under current UK copyright law private copying of the music, films and e-books consumers havepurchased is illegal. The only
„
private copying
‟
rights UK consumers have in law is the back-upexception for software and a time-shifting exception for radio and TV broadcast, allowingconsumer to record broadcast for the purpose of enjoying it at a more convenient time. Any otherprivate copying is copyright infringement, including the back-up of music, films and e-books. ProfHargreaves observes that:
„
The copyright regime cannot be considered fit for the digital age when millions of citizensare in daily breach of copyright, simply for shifting a piece of music or video from onedevice to another. People are confused about what is allowed and what is not, with the riskthat the law falls into disrepute.
‟
 Most other European countries have general private use exceptions, which vary in scope, butgenerally permit consumers to copy what they have legally acquired for personal use. In the USprivate copying falls under the fair use defence, while Australia and New Zealand recentlyupdated their laws with exceptions covering format-shifting and time-shifting.Approaches vary from country to country, though the majority of countries have made privatecopying legal. As a consequence the UK was rated among the very worst countries in threesuccessive IP Watchlists, an annual comparison of copyright law from across the worldproduced by Consumers International.
Levies on hardware for private copying:
Under EU law, the UK must ensure
„
faircompensation
‟
if a private copying exception causes economic harm to the copyright owner.The existing time-shifting exception falls under the private copying requiring faircompensation. There is currently no economic evidence to suggest that private copying suchas format-shifting causes harm to copyright owners. The UK Government has committed toimplementing a private use exception covering format-shifting, on the condition:
„That the amount of harm to rights holders that would result in “fair compensation” under 
EU law is minimal, and hence the amount of fair compensation provided would be zero.This avoids market distortion and the need for a copyright levy system, which theGovernment opposes on the basis that it is likely to have adverse impacts on growthand inconsistent with its wider policy on tax.
‟
 Civil law European countries operate levy schemes on hardware or blank media used forcopying. These levy schemes predate the EU requirement for fair compensation and areusually applied to the retail price and subject to fierce debate and legal actions. The Spanishparliament has recently voted to abolish the private copying levy on digital media for being an
„
arbitrary and indiscriminate system
‟
. Similarly the Dutch Government has announced itsintention to abolish levies because it
„
considers new levies on devices such as MP3 players,laptops, DVD recorders and USB sticks undesirable
‟
and
„
obsolete
‟
. According to the Dutch
Government „l
evies only lead to unnecessary or double payments by consumers. Insteadcopyright owners can include a reimbursement for copying in the price of th
e product...‟
 The European Court of Justice has recently decided that requiring businesses to pay levieson hardware is not justified by the fair compensation principle for private copying. ContinentalEuropean consumer organisations are campaigning against levies because the cost they addto digital products, most of which can be used for copying, amounts to an arbitrary digital tax.The Italian consumer organisation Altroconsumo has calculated that an Italian family paysmore
than €100 per year in levies.
A parody exception for creators and consumers
The UK has a significant tradition of parody and until the 1980s courts generally reject claims ofcopyright infringement. However, since then the case law has been significantly narrowed, andany parody containing a substantial part of the original is likely to be deemed copyrightinfringement.
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