Hargreaves’ exceptions: A Copyright strategy for social format-shifting, parody, and commercial innovation research and archiving

Preview of IP and Growth – updating exceptions for the digital age
The Government has accepted Prof Hargreaves‟ recommendation to update copyright exceptions in 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 recorded music and film According to Prof Hargreaves, „copying should be lawful where it is for private purposes, or does not 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 in copyright which encourages successful new digital technology businesses both within and beyond the creative industries. Recommendation 5: ‘Government should firmly resist over regulation of activities which do not prejudice the central objective of copyright, namely the provision of incentives to creators. Government should deliver copyright exceptions at national level to realise all the opportunities within the EU framework, including format shifting, parody, non-commercial research, and library archiving. The Government should also legislate to ensure that these and other copyright exceptions are protected from override by contract.’ The Government has endorsed Prof Hargreaves‟ exceptions saying that it „sees the areas where copyright restricts activity to no direct commercial benefit as doubly wasteful: neither new opportunities nor incentive to invest in copyright works result from them.‟ The Government also said 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 unlawful private 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 20 Pictfor and Consumer Focus are inviting you to discuss Prof Hargreaves‟ recommendation. The panel 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


A private use exception allowing format-shifting
Under current UK copyright law private copying of the music, films and e-books consumers have purchased is illegal. The only „private copying‟ rights UK consumers have in law is the back-up exception for software and a time-shifting exception for radio and TV broadcast, allowing consumer to record broadcast for the purpose of enjoying it at a more convenient time. Any other private copying is copyright infringement, including the back-up of music, films and e-books. Prof Hargreaves observes that: „The copyright regime cannot be considered fit for the digital age when millions of citizens are in daily breach of copyright, simply for shifting a piece of music or video from one device to another. People are confused about what is allowed and what is not, with the risk that the law falls into disrepute.‟ Most other European countries have general private use exceptions, which vary in scope, but generally permit consumers to copy what they have legally acquired for personal use. In the US private copying falls under the fair use defence, while Australia and New Zealand recently updated their laws with exceptions covering format-shifting and time-shifting. Approaches vary from country to country, though the majority of countries have made private copying legal. As a consequence the UK was rated among the very worst countries in three successive IP Watchlists, an annual comparison of copyright law from across the world produced by Consumers International. Levies on hardware for private copying: Under EU law, the UK must ensure „fair compensation‟ if a private copying exception causes economic harm to the copyright owner. The existing time-shifting exception falls under the private copying requiring fair compensation. There is currently no economic evidence to suggest that private copying such as format-shifting causes harm to copyright owners. The UK Government has committed to implementing 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 the Government opposes on the basis that it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax.‟ Civil law European countries operate levy schemes on hardware or blank media used for copying. These levy schemes predate the EU requirement for fair compensation and are usually applied to the retail price and subject to fierce debate and legal actions. The Spanish parliament 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 its intention 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 „levies only lead to unnecessary or double payments by consumers. Instead copyright owners can include a reimbursement for copying in the price of the product...‟ The European Court of Justice has recently decided that requiring businesses to pay levies on hardware is not justified by the fair compensation principle for private copying. Continental European consumer organisations are campaigning against levies because the cost they add to 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 pays more 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 of copyright infringement. However, since then the case law has been significantly narrowed, and any parody containing a substantial part of the original is likely to be deemed copyright infringement. 2

At the same time UK courts have interpreted increasingly minute parts of a copyrighted work as being „substantial‟. Copyright protects the expression of an idea, not the idea itself. Therefore not every parody will necessarily use a substantial part of the work itself. But because parodies need to contain recognisable references to the original work, most parodies will inevitably be regarded as copyright infringement on the basis of existing case law. The UK is among the few industrial countries which does not provide for a parody exception. Belgium, Spain, Switzerland, and France provide exceptions for parody and Australia most recently introduced such an exception in 2006 to create legal certainty for its parodists. In the US courts generally consider parodies to fall under the fair use defence as a form of criticism. However the US landmark cases do not take a consistent approach to parody, leading to calls for the recognition of parodies as an art form in US copyright law. Parodies in digital environment: Parodies have acquired new relevance in the digital environment, were a „meme‟ can go „viral‟ on social networking and user generated content platforms within hours. In the digital environment parodies are frequently made available on content platforms, such as YouTube and Vimeo. Copyright owners may send notice and takedown request for copyright infringement, as Lucas Film did in relation to Greenpeace UK‟s „Turn VW away from the Dark Side‟ parody. Greenpeace pleaded parody under the US fair use defence, and YouTube reinstated the parody under US notice and takedown procedures. However, any UK based parodist still risks being sued for copyright infringement in the UK courts, as has recently happened in the case of the Moshi Monsters parody Lady Goo Goo which performs parody songs on YouTube. Lady Gaga has sued MindCandy, the UK start up behind the popular online game which lets children adopt and care for „moshlings‟. On 13 October Lady Gaga obtained an interim injunction banning Lady Goo Goo from performing songs on YouTube.

Widening the research and archiving exceptions to recorded music and film
UK copyright law currently allows non-commercial researchers and institutions engaged in archiving to make copies under certain circumstances without the permission of the copyright owners. However, it is an abnormality of the law that recorded music and film are not within the scope of these exceptions. Throughout the 20th Century recorded music and film have become increasingly important documents of history and forms of artistic expression. Recorded music and film formats degrade over time, or the hardware needed to play particular formats is pulled off the market. Therefore format-shifting for preservation and archiving purposes, to replace degrading or unreadable copies, is absolutely essential. It is absurd that the lack of an exception should prevent archiving of our cultural heritage, or that contemporary researchers should be prevented from accessing 20th century history documented in recorded music and film. Limiting fair dealing over time: The research exception is provided through a fair dealing provision which dates back to the Copyright Act 1911, which codified case law from the 18th and 19th Centuries. The original fair dealing defence, on which the US fair use defence is modelled, permitted: „any fair dealing with any work for the purpose of private study, research, criticism, review or newspaper summary would not constitute an infringement of the copyright in the original work.‟ The defence was divided into two separate fair dealing provisions in the last significant copyright review in 1988, providing for research, and criticism, review and reporting current events. As part of this the research exception was limited to „literary, dramatic, musical or artistic work‟. Similarly archiving exception was limited to certain types of work, excluding recorded music and film. To remedy this, the Gowers Review of IP recommended for binging recorded music and film within scope of the exceptions in 2006, but despite a wide consensus that the exceptions should be extended, the recommendation was eventually not implemented. 3

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