UK Music Groups Seek Copyright Licences and Levies for Digital Content

By Dugie Standeford for Intellectual Property Watch

The United Kingdom independent music sector wants content distributors to pay creators for transmitting their works over the Internet, mobile phones and other devices. At a 12 July London roundtable headed by the Association of Independent Music (AIM), indie labels, composers, songwriters, musicians, managers, publishers and collecting societies called for changes to national and, perhaps, European Union and international copyright laws to establish a “value recognition right.” Digital rights activists called the idea absurd.

Although the concept has yet to be fleshed out, the value recognition right would facilitate licensing agreements between the music industry and “any company deriving value from either the sharing or storage of music,” the groups said. The aim is to bring Internet services providers (ISPs) into the “official value chain” linking creators to consumers, encourage new legitimate music-sharing services such as peer-to-peer (P2P) and Bluetooth, and make unlicensed intermediaries, rather than end-users, liable for copyright violations.

The debate was sparked by an AIM draft discussion paper, Copyright Reform in the Digital Age. In it, AIM argues that the music industry must change its business model to deal with radical changes in the market and distribution processes. Because the industry is enabled by copyright law, that law must be reformed to “fully embrace the ways that music is bought, distributed, used, manipulated and re-used.” Products of creativity must be “monetised at every point where usage, change of ownership or associated commercial exploitation of any kind takes place,” AIM said.

AIM is calling for three changes to UK law. In place of extensive digital rights management schemes, it wants consumers to reimburse content owners for private copying and sharing via a “digital private copyright remuneration right” in conjunction with a system of charges on hardware and blank recording media.

In addition, AIM said, Internet service providers should take responsibility for their customers’ illegal use of copyrighted works because P2P file-sharing is a key driver in their success. The association called for the creation of a working group to consider the feasibility of the approach.

Finally, AIM said it supports European music industry efforts to extend the copyright protection term from 50 to 95 years. However, the group believes copyright owners should have to register ownership and continued interest in making their copyrights available to consumers at the end of the 50-year period to qualify for the additional 45 years of protection. A proportion of the revenue received during the 45-year term should be paid into a cultural fund. And owners who decline to make their copyright available for the 45-year period should be required to shift ownership of the work to the recording artist, AIM said.

“Ill-Conceived and Grasping”

Digital rights activists and ISPs promptly blasted AIM’s proposal.

Music organizations are “looking at booming technology markets, such as the growth in iPod sales, and wondering how they can get themselves a slice of the action,” said Open Rights Group Executive Director Sue Charman.

Grant of a value recognition right will allow the industry to force licences or levies not only on Internet service providers or telecom companies but on manufacturers of any device capable of storing an MP3 (electronic music) file, she said. And while some countries do impose levies on blank media, applying that to every service or product that “derives value” from music would “drastically over-extend copyright’s reach.” The whole idea is “ill-conceived and grasping,” she said.

Internet service providers (ISP) already cooperate fully with rights-holders on infringement matters, said Malcolm Hutty of the London Internet Exchange. “There is no need for an ISP tax, and it is absolutely inappropriate that the ISP industry should be forced to seek a licence from the music industry in order to operate.” UK law shields ISPs from liability for infringing content when they act as “mere conduits,” the UK Internet Services Providers’ Association said.

Legal Framework Change Necessary?

Securing a value recognition right may require a “series of tweaks” to current copyright legislation, said British Music Rights Chief Executive Emma Pike. For the moment, AIM and its supporters are focusing on UK law, but Pike acknowledged they will also have to consider what changes may be needed at the European Union and broader international level.

The value recognition right concept appears to be driven, at least in part, by the absence in the United Kingdom of either an exception for private copying or a levy to compensate copyright owners, said UK intellectual property attorney Laurence Kaye. That is a problem, he said, because “we know consumers rip and burn and share content over the Internet,” resulting in revenue loss to rights-owners that is partly compensated elsewhere in Europe by levies.

“My immediate reaction is to say that the solution needs to be found within the existing framework of copyright law, not least because it is founded on international copyright treaties,” said Kaye, who stressed he had not studied the proposal in detail. “Renegotiating them, or trying to introduce a brand new ‘sui generis’ like this will take years at a global or international level,”

AIM said it will flesh out its proposal in the autumn and submit it to the UK Treasury Department, which is reviewing the country’s intellectual property laws.

At this point, Pike said, “we have more questions than answers.”