Copyright

Lord Clement-Jones Excerpts

Thursday 5th December 2013 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, I welcome this opportunity for the Committee to consider the proposed copyright exceptions before they are introduced, and thank my noble friend Lady Buscombe for securing it. My noble friend the Minister is only too well aware that the creative industries sector is very exercised by the potential negative impact that some aspects of these draft exceptions could have.

As I said last July during the passage of the IP Bill, copyright exceptions should be adopted only in response to both well defined public policy objectives and market failure. In this regard, what advice have the Government received that their proposed exceptions meet the requirements of the Berne convention and the three-step test?

The proposals take no account of developments in licensing both during and after the Hargreaves process. Digital market-based solutions are being found through a combination of improvements to licensing and technology, not least through the copyright hub. My noble friend Lady Buscombe asked about impact assessments. Does the Minister still stand by the statement on page 3 of Modernising Copyright, the Government’s response to the consultation on copyright exceptions published this time last year, that,

“these measures could contribute over £500m to the UK economy over 10 years on a conservative view, with likely additional benefits of around £290m each year”.?

In its recent report on supporting the creative economy, the Culture, Media and Sport Committee was highly sceptical of these impact assessments. It said,

“We are not persuaded that the introduction of new copyright exceptions will bring the benefits claimed and believe that generally the existing law works well”.

Dr George Baker of University College London recently carried out an analysis for the MPA and concluded that,

“the evidence relied upon is being misinterpreted by the Government”.

Have new economic impact assessments been conducted, or the current ones revised, to take account of the many developments in the licensing markets?

The draft data analysis exception is a particular example of this. Most recently, the International Association of Scientific, Technical and Medical Publishers produced a commitment by publishers to enable text and data mining for non-commercial scientific research. Likewise, as regards consumers, a private copying exception should not apply where a commercially available alternative exists. Nowhere is that clearer than in the audiovisual sector. Products such as iTunes and UltraViolet allow legal and secure access to that content through the cloud among six family members for up to 12 personal devices, thereby enabling format-shifting. At the same time, a multitude of new digital audiovisual services has occurred under the existing legal framework.

It could not be clearer that there is no market failure that needs addressing here. The same is true for the quotation exception, where publishers are already addressing the market via large-scale and low-cost licensing technologies. Far from incentivising the market to continue innovating in the interests of the consumer, it may well be that the exceptions proposed will undermine the thriving market for new and innovative digital content services.

As regards business-to-business or institutions, each of the exceptions include a provision that would render unenforceable contracts which seek to restrict or prevent the relevant exception. Another new and untested concept in UK copyright law, this has not received nearly enough examination and consultation. From conversations I have had with industry representatives, it is clear that at no point has any substantial discussion been held. Even though the attendees of various forums were led to believe that separate sessions would be held on this issue, this did not transpire. Given their importance to all the proposed SIs, why have the proposed contract override provisions not been subject to a separate consultation and discussion? Override of contract is not required by the copyright directive. Indeed, Article 9 states that the directive should be without prejudice to the law of contract. It is unclear how the proposed provisions sit alongside these or why it is felt to be necessary. There is also the question, which I hope the Minister will answer, of why wording already in place within Section 50 of the CDPA cannot be used to address the apparent concern.

The IPO has failed to set out a compelling case for why the provisions are required and exactly what problems they solve. Rather than encourage innovation, these provisions will encourage challenge and breach of existing licensing terms put in place for users of copyright works. The Publishers Association makes the important point that British creators will now be put at a significant competitive disadvantage as investors turn away from the UK and invest in content made in other jurisdictions. Has the Minister undertaken any analysis of the impact of this on the UK’s competitive position? The proposed exceptions potentially run into conflict with the ability of rights holders to ensure the enforceability of technical protection measures. It is unclear from the current drafting how this will interact with the proposed provisions on contract override. The most probable outcome is consumer, business and rights holder confusion.

These are all substantial objections. In the ordinary way these fundamental amendments to sections of the CDPA would be dealt with by discussion in a normal parliamentary process, in both Houses, with amendments being debated. Why is such a fundamental change to the application of UK contract and copyright law being made by secondary legislation?

Finally, on the broad objections to the exceptions, it seems that some exceptions may not even comply with EU law. The private copying exception, as currently proposed, would not provide any compensation to rights holders for harm that private copying might inflict on them. How confident are the Government that this will survive legal challenge? Why have the Government chosen to ignore the ruling in the Padawan case, which makes it clear that member states must, when introducing a private copying exception, include a mechanism for calculating compensation, even if the subsequent calculation is that that compensation is zero? How does the private copying exception square with the fact that the software directive excludes private copying from the scope of permissible exceptions?

I have dealt with the very broad objections. There are a host of drafting objections to the individual exceptions that I am unable to cover today but many of them have been dealt with by my noble friend Lady Buscombe. ITV rightly points out that this whole exercise is fraught with the risk of unintended consequences. Have the Government really thought things through properly?