Baroness Buscombe
Main Page: Baroness Buscombe (Conservative - Life peer)Enterprise and Regulatory Reform Bill
Baroness Buscombe Excerpts
Lord Clement-Jones
My Lords, I will also speak to Amendment 84AEA. We had a very good debate in Grand Committee about orphan works, and the Minister gave some very useful assurances about how the orphan works regime would operate. However, there are one or two loose ends, and I want briefly to raise them.
Amendment 84AE is essentially a retabled amendment designed to establish definitively the nature of diligent search. I was slightly disconcerted by the way the Minister replied to this amendment last time. Surely diligent search must cover each work involved, and I hope the Minister can demonstrate how such search should be undertaken. There is no amendment to this effect, but I should say in passing that many of those who have debated this subject believe that it is very important that orphan works cannot be sublicensed. The argument is clear that to permit sublicensing would risk the distortion of the market through, for example, enterprises that sought orphan works licences and then resold them to all comers, circumventing the safeguards promised in the regulations. I do not know whether that is a loophole or simply a fear that will not be realised.
Amendment 84AEA relates to an objectionable feature of Clause 69, which is found in the new Section 116A(6) of the Copyright, Designs and Patents Act 1988. This states:
“The regulations may apply to a work although it is not known whether copyright subsists in it, and references to a missing owner … are to be read as including references to a supposed owner and a supposed right or interest”.
The objection to this is that if copyright does not subsist, the work or performance is in fact in the public domain and there is no rights owner who could reappear.
It seems rather unsatisfactory to introduce what I believe is called the domaine public payant in this surreptitious way. If there is going to be an orphan works licensing scheme it should surely be confined to orphans. If it cannot be determined whether a work is still in copyright, surely an orphan licence should not be available. It should be plain in the Bill that this should not extend to works that may be in the public domain. It would be helpful to have a ministerial assurance on this point. I beg to move.
Baroness Buscombe
My Lords, I support my noble friend in relation to diligent search. I think the amendment speaks for itself, and I echo the words of my noble friend Lord Clement-Jones.
Lord Howarth of Newport
My Lords, I speak to Amendment 84AE only. The noble Lord, Lord Clement-Jones, referred to it as a loose end. It is an issue of fundamental importance. The effect of the amendment would be to require a diligent search to be made for each individual orphan work. It is true that the European Union orphan works directive requires the same. We have not yet incorporated the directive in our own law, nor should we. It is unfit for purpose in this and in other respects. We had some discussion about aspects of it last Wednesday and previously in Committee. The requirement that there should be a diligent search for each individual orphaned work is totally and utterly unrealistic. If it were to be legislated it would scupper the Government’s orphan works project.
The success of the project depends upon the regulations being proportionate and manageable. They should, of course, have a proper regard for the legitimate interests of all rights holders, and certainly for the interests of the publishing and entertainment industries. Equally, however, they should have regard for the wider public interest in enabling as full access as possible—for educational, research and cultural reasons and reasons of public enjoyment by the mass of our people—to the enormous collections of orphan works in our great public cultural institutions.
Carrying out a diligent search to establish the intellectual property rights in orphan works is a time-consuming and laborious business. It is significantly easier when we are speaking of commercially published books. Reference was made in an earlier debate to the British Library’s study, the results of which were published under the title Seeking New Landscapes, which demonstrated that it took on average about four hours and cost some £80 to establish where the intellectual property rights lay in the case of a single book. The noble Lord, Lord Clement-Jones, says that you cannot generalise from that study, but it does demonstrate that this is a laborious, arduous and expensive process.
In the case of a single postcard, perhaps sent in 1916 by someone who simply signed herself “Betty”, copyright resides in the design of the postcard, in the design of the postage stamp on the postcard, and in the words Betty inscribed on the postcard. If you were to be required to investigate to establish where the intellectual property in each aspect of that particular picture postcard now lies, you would spend a lot of time.
There are vast quantities of such items in our public archives and collections. The impact assessment at pages 7 to 11 gives some indication of the scale of orphan works in our public institutional collections. It mentions, for instance, that the BBC has some 5 million photographs and the British Library has 112.5 million newspapers. Inevitably, in an age of mass digitisation we have to think of how we can satisfactorily legitimise digitising en masse this kind of material in public collections.
Extended collective licences already provide for the mass licensing of the use of large numbers of works where it has been recognised that individual negotiations would be impossible because of the volume of the material: for example, in the fields of educational photocopying or musical broadcasting. Extended collected licences are provided for in the other directive—the European copyright directive—so there is some tension between the two directives.
Where market failure means that it would otherwise not happen, public access will be lost unless we have streamlined procedures for rights clearance, so a generic approach is essential. The licensing authority will need to verify that the approach to the search by the cultural institution and its methodology have been appropriate: that it has been reasonable in regard to the nature of the works-whether for example they were originally commercially published or unpublished. It should have regard to the proposed use of these orphan works; to whether access to them would be provided free of charge for educational or cultural research purposes and for the benefit of the general public, or whether they would be charged for; to what the risks might be to rights holders in this particular category of works; and to the feasibility of tracing the present rights holders.
We need to establish under the regulations that the generic approach has been diligent. If we were to insist that there should be a diligent search, item by item, for every orphan work, it would be impossible, and access would continue to be denied to great swathes of our public collections in the Bodleian Library, Cambridge University Library, the British Library, the BBC, the British Film Institute, and many other institutions. If modern copyright law is to be respected, people must feel that it is proportional and rational and sensibly balances the private and public interest.
Lord Clement-Jones
In moving Amendment 84AEB, I wish to speak also to Amendments 84AEC to 84AEG and Amendment 84AF.
I will speak first to Amendment 84AF as it falls outside the scope of the other amendments. Clause 69 as drafted does not factor into the opt-out of ECL the situation where the rights holder is not the creator. A firmer commitment from the Government in the Bill is necessary to give more reassurance to rights holders on the ECL provisions in Clause 69 before the legislation completes its passage. This amendment was tabled as Amendment 28X in Grand Committee. An opt-out is available to copyright owners in the Bill as it stands. The amendment would extend this opt-out to exclusive licensees and authorised representatives.
In Grand Committee, the Minister committed the orphan works and extended collective licensing working group to look into this issue as part of its deliberations. While this commitment is welcome, there needs to be certainty that any regulations for extended collective licensing will include such provision. Since ECL has the effect of exercising property rights, potentially against the will of the rights owner, the ability to opt out under subsection (3) of what will be the new Section 116B must be as straightforward and easy to implement as possible. To effectively administer the repertoire they have invested in, music publishers will need to make catalogue-wide arrangements applicable to hundreds, thousands, or potentially, millions of separate works. The grant of rights and arrangements between creators and music publishers are very often not exclusive assignments of copyright; grants can also be made by way of licences, both exclusive and non-exclusive.
It will be unworkable to have an opt-out which is exercisable only by the copyright owner or exclusive licensee. This would require a publisher to go contract by contract, checking the nature of each grant of rights and, where necessary, asking composers to sign opt-out documentation to be sent to the body seeking to operate the scheme. If the opt-out could be operated by the composer’s authorised representative, this would give a publisher or other representative the right to seek the permission from its composers to exercise an opt-out on their behalf, which could then comprise one repertoire-wide opt-out from a rights owner in a manageable way.
Practical experience abroad is that, in the absence of this possibility, ECL provisions can be manipulated by bodies operating schemes to make it impossible for right owners to opt out in any manageable way. I am informed by representatives from music publishing that one example of this is the operation of the extended collective licensing provisions enshrined in Hungarian copyright law in relation to the performing right. In Hungary, one reason for the failure of being able to rely on the opt-out came from the requirement of Artisjus that the rights owner—not any representative—provide due diligence evidencing ownership of each title in question. In relation to a repertoire of many thousands of works, this represents a huge barrier to successfully exercising the opt-out in terms of tracing the title back to its source. It is often via a complicated chain, redacting and copying documents to comply with confidentiality restrictions and then shipping these across to Hungary.
This example of abuse of proprietary rights provides ample evidence that, in the context of ECL, the burden of challenging any opt-out must sit with the entity operating the scheme and not with the individual rights owner. I believe that it is not the intention of this legislation to create such problems but it is important to guard against potential abuse. Can the Minister give assurances on this?
At the end of the day, I cannot see any downside to giving composers a choice in being able to elect to have their trusted authorised representative act on their behalf in this context. I am also not aware of a prevailing view that would be opposed to creating such a modest requirement. Indeed, in Grand Committee, the Minister stated that the Bill does not rule out such a provision.
With the experiences of ECL in other territories in mind, I hope that Report stage is an opportunity for the Minister to clarify responsibility for overseeing due diligence in an opt-out process. I hope that the Government will use this stage of the Bill to clarify that regulations will be clear that the burden of proof for the due diligence in an opt-out will be on the body applying for ECL.
On Amendment 84AEB, copyright licensing bodies are indispensible in many circumstances. For example, no composer could keep track of all the playings of his or her song on television, radio, the internet and in concerts, pubs, hairdressers, department stores and so on; PRS for music does this collectively. However, this kind of licensing is voluntary, meaning that the rights owner gave his or her permission to PRS to license his or her works for use in broadcasts and public performances. Extended collective licensing means that the licensing body can also license works whose authors have not given permission.
Therefore, ECL—and we have debated this in Grand Committee—is potentially dangerous to rights owners. A rights owner may not know about extended collective licensing and find that his or her work has been licensed without their permission. Perhaps they would not have wanted it in that particular publication, or perhaps they had given another publication an exclusive deal. Perhaps they would have charged a different fee; if they had given permission direct, their fee would not have suffered deduction of the licensing body’s commission. Foreign composers in particular may not be aware of the licence at all and may grant conflicting rights or may not collect their fee.
The Government’s explanations always described ECL as “voluntary extended collective licensing”, but the fact is that ECL allows the licensing body to license its rights without their prior authorisation. It is government policy that the author can opt out, but this acknowledges that the licensing body has permission to license his or her rights in the first place. This permission is ultimately given by the Government by authorising the organisation to license rights that it does not in fact hold, not by the author who must withdraw by opting out.
To their credit, the Government have acknowledged the dangers inherent in ECL, and in Grand Committee on 31 January, the Minister explained the Government’s policy regarding safeguards for rights owners. However Clause 69, which enables ECLs to be created by statutory instrument, only very minimally reflects the safeguards as the Minister has now enunciated them. The Government have claimed that the Nordic ECLs provide a strong precedent. However, the safeguards are set out in the Nordic primary legislation. By “Nordic”, I mean Sweden, Norway, Denmark, Finland and Iceland. Setting out the safeguards in primary legislation is clearly an aspect of the Nordic precedent that the UK Government should follow.
My amendments are essentially translations of the Nordic statutory provisions, adapted to the Copyright, Designs and Patents Act. The safeguards usefully include a requirement on licensing bodies to qualify, the need to explain the type of licence being granted, the need for the authorised body to be representative, the adoption of a code of conduct, the ability to refer to the Copyright Tribunal where a claim is being made that the body is not representative or that licences go beyond scope of existing copyright licences, a limitation on the term of authorisation to five years, and clear provisions about the ability to give notice of exclusion of a work.
The Minister has said that there must be flexibility, but he has been fairly detailed in his description of what the secondary legislation will consist of. Flexibility is not therefore necessarily an argument for excluding safeguards for rights holders from the Bill, and there can be no reasonable argument against including those safeguards. I beg to move.
Baroness Buscombe
My Lords, I should like to speak to Amendment 84AF, to which I have added my name. I spoke at some length in Committee on the extended collective licensing measures in Clause 69, and I made it clear then that I do not like the principle of ECL. I cannot see how it materially benefits the UK and it will bring uncertainty by not being truly voluntary.
I believe—and I have said so previously—that such a scheme should be opt-in, rather than opt-out, whereby rights holders who want to license their content through others can do so. However, I welcome the Minister’s assurances thus far that safeguards to such a scheme are vital, but—I echo the words of my noble friend Lord Clement-Jones—the safeguards should be included in the Bill, not left to secondary legislation. If the Government are backing ECL because it works in the Nordic countries, why not follow the Nordic lead and put the necessary safeguards in the primary legislation? Whoever may benefit from such a scheme can then benefit, and whoever feels threatened by it will have some comfort in knowing that the Government have protected the rights of rights holders.
As I said on an amendment on Report last week, China has just announced that it will implement ECL in its copyright law and has said that the details will be in regulations yet to be published. Where have we heard that before? The UK Government will not be in a position to demand appropriate safeguards for licensing of UK copyrights by ECL in China if we do not have them in our own legislation, as the Nordic countries do, nor will UK rights holders or their representative bodies be in a strong position to safeguard UK rights abused by ECLs in foreign countries if the UK’s own statute lacks the necessary safeguards. My noble friend Lord Clement-Jones and I have tabled a series of amendments to this clause which does just that, putting into statute the very safeguards that the Minister himself has articulated.
Again, I urge my noble friend the Minister to accept these amendments, and avoid a situation in which companies can seize the intellectual property of others and license it on their own terms.
Lord Clement-Jones
My Lords, there is currently in many cases an imbalance in economic power between the creator and those with whom they are dealing on copyright. I moved an amendment similar to this in Grand Committee, and at that time the Minister said that the Unfair Contract Terms Act is intended to regulate only business to consumer relations. Of course that is correct. The Minister has, however, agreed to see what can be done by way of review within the Department for Business, Innovation and Skills of this type of issue.
The amendment is designed to elicit from the Minister an assurance that this work will be undertaken. I have sent the Minister a paper suggesting how such a review might take place. It would be an independent review of copyright contracts for creators and would explore how copyright contracts could be made fairer to ensure that creators receive a fair share of the money that consumers pay for copyright content and that the purpose of copyright in stimulating and sustaining creativity is met.
The kinds of contracts that such a review might consider are those with publishers, broadcasters, record labels and film studios; creator’s contracts with, and mandates to, collecting societies; and contracts with internet platforms such as Flickr. Some possible solutions for the review to explore—I am not going to go through them all—might include whether the doctrine of undue influence that applies when a person in a dominant position uses that position to obtain an unfair advantage for himself or herself could be codified in statute law; or whether, for instance, a right to equitable remuneration for creators is a necessary underpinning to fair contracts for creators; and whether model licences and codes of conduct could extend the benefit of collective negotiations through professional bodies to a wider range of creators, particularly new entrants to the entertainment industries and consumers-turned-creators. I very much hope that the Minister can indicate how a review might take place and who would be responsible for it. I beg to move.
Baroness Buscombe
My Lords, I support this amendment, to which I have added my name. I support everything my noble friend Lord Clement-Jones has already said. This amendment would go some way to mitigate risks to the individual creators, without whom there is no creative economy. We have here more risks of unintended consequences of the government proposal for extended collective licensing. Already before the passage of the Bill, there is renewed pressure on individual creators to sign away to publishers all their rights, including rights to income from extended collective licensing. While creators are vulnerable to the take-it-or-leave-it approach in contracts offered by powerful organisations, the likelihood is that creators will thus be deprived of the compensation for the use intended by the drafters. I should add that we have had so much correspondence in this regard that we are looking to my noble friend the Minister for strong reassurance.
Lord Jenkin of Roding
My Lords, I support this amendment. As I understand it, there has been a presumption in some way that the Unfair Contract Terms Act applies only to dealings between business and the consumer. Of course, there are in the field of copyright—indeed, I suspect in many aspects of intellectual property—areas where there is a substantial imbalance between the negotiating power of the intellectual property owner and the prospective licensee.
I understand that the Department for Culture, Media and Sport has been impressed by this argument. I have been told that there are discussions currently going ahead with my noble friend’s department to see if there is some way in which this imbalance could perhaps be recognised in the law. It might well not be possible to do it in this Bill, and on that I wait to hear my noble friend’s argument. I would like to be assured that the discussions going on within government—I understand this may be between the two departments—will continue so that there can be a proper examination of whether this extension can be made in some way. There is no doubt about it; someone has to deal with what at the moment looks, to many of the people in the creative industries, like a very unfair balance. It is part of the duty of government to see that that is put right. I hope my noble friend will be able to give us that assurance.