UK IP Chief: Copyright System A “Constant Conflict”

By Dugie Standeford for Intellectual Property Watch
The copyright system is not a balance but a “constant conflict” whose nature must be continually debated, UK Intellectual Property Office Chief Executive Ian Fletcher said at a 31 March Westminster eForum seminar on the future of copyright. The office is in the throes of a consultation on possible new copyright law exceptions, the most controversial of which is a proposal to allow limited format-shifting.

Britain’s copyright regime faces several challenges, Fletcher said. It must continue to create the right incentives for artists while not propping up outdated business models. It must take into account the broader interests of consumers and society in general by not engaging in protection “term creep” without a clear moral or economic rationale, he said.

The system also must consider different kinds of users, such as the education community, and other types of creators and rights-holders, among them those whose work is not inherently commercially valuable, Fletcher said. Consumers must be educated about the need for copyright, and business models must keep pace with their expectations, he said. The right enforcement tools are needed to counter infringement and crimes, he said.

The UK views copyright as an economic concept, other European nations as a moral right, Fletcher said. Divergent philosophies must be brought to the surface and addressed, he said. The UK Intellectual Property Office (UKIPO) strongly believes that empirical evidence of the need for IP regulation is needed, he said.

Speakers made clear that issues such as internet service provider (ISP) responsibility for online piracy and the feasibility of levies on copy media and devices remain far from settled.

Debate Over ISP Role Continues

The recording industry has made inroads against Internet pirates but needs more cooperation from ISPs, said Shira Perlmutter, executive vice-president, global legal policy, for IFPI, the International Federation for the Phonographic Industry. Talks are yielding progress on a so-called “graduated response” system (sometimes known as “three strikes and you’re out”) under which ISPs would notify subscribers whose Internet Protocol addresses are found by copyright owners to be unloading infringing material. Users who refuse to stop uploading would face penalties that could ultimately lead to termination of service. Market research shows such an approach would be effective, Perlmutter said.

But JupiterResearch Vice President and Research Director Mark Mulligan said file-sharing over peer-to-peer networks, already a well-established internet behaviour, makes it harder for ISPs to trace pirates. As one network closes another pops up, he said, and there is a steady, strong growth of file-swapping over blogs, email and other services ISPs cannot monitor. Instead of trying to enforce copyright laws, businesses should give consumers genuine, viable alternatives to file-sharing, he said.

Sometimes “pirate” is a word used to signal inefficiencies in the marketplace, said Open Rights Group Executive Director Becky Hogge. The issue for UK policy-makers is proportionality. Cutting off internet services to potentially millions of Britons will not help the country’s e-agenda, she said.

The UK government is expected this month to consult on proposals to deal with ISPs and copyright infringement, Michelle Childs, Knowledge Ecology International Head of European Affairs, reported recently. It prefers a voluntary agreement between service providers and rights-owners but said it will regulate if necessary, she said. No details of the proposal have emerged, but the UK has been in “close contact” with France about its three-strikes approach, Childs said.

Virgin Media was widely reported this week to have partnered with the British Phonographic Industry (BPI) on a tiered approach to quashing online piracy. However, BPI Chief Executive Geoff Taylor said on 1 April that while the organisation is talking to major ISPs about how to reduce online music theft, “unfortunately it simply isn’t true that we have agreed a pilot – or any sort of deal – with Virgin Media.”

Burning, Copying and Format-Shifting

The UKIPO consultation proposes an exception [pdf] to allow a consumer to copy a work he legally owns in order to play it in another format on a device in his lawful possession. The exception would apply only to personal, private uses, and would not be subject to a fee (levy) to compensate rights-owners for private copying.

Physical piracy of CDs, DVDs and other audiovisual media is a huge problem for the music industry, said Enders Analysis Research Coordinator Alice Enders. Format-shifting without an accompanying levy is rooted in physical piracy, she said. Enders called for an economic impact study of such an exception on each of the creative industries.

The case for format-shifting is self-evident but the UKIPO proposal appears to ignore EU directives and copyright law by not providing for compensation to rights-holders, said Sarah Faulder, public affairs director for rights collection society MCPS-PRS Alliance. Studies show consumers are willing to pay to format-shift, she said.

Makers of iPods, MP3 players and other devices appear to be driving the demand for format-shifting, so the music industry wants manufacturers to bear the cost of reimbursing artists, Faulder said. The alliance proposed an “exception subject to a license” which would let consumers copy from a physical format to a device they own legally for their personal use. The compensation system would be operated by an umbrella organization formed by rights-holders, she said.

“We think levies are a terrible idea,” said Francisco Mingorance, Business Software Alliance director for public policy for Europe. Studies show private copy levies tax consumers several times, and often fail to take into consideration the existence of technical protection measures, he said.

Levies are a tax on one sector of the economy at the insistence of another, said National Consumer Council Policy Director Jill Johnstone. If the UK adopts the levy approach, consumers will expect a much broader private copying exception, she said.

The UKIPO consultation ends on 8 April. Input from the eForum will be sent to lawmakers and government officials.

Dugie Standeford may be reached at info@ip-watch.ch.