On 19 June 2015, the High Court quashed the newly introduced UK exception to copyright law in the Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (‘the Regulations’). The Regulations, which came into force on 1 October 2014, allowed individuals who legitimately acquired copyright content (music, films, books etc.) to make copies for his/her own private use without infringing copyright. Under the Regulations, content could be copied onto other formats or stored in the cloud provided that it was for private, non-commercial use.
However, Mr Justice Green ruled that evidence put forward by the UK music industry claimants did not support the government’s claim that it was justified in ignoring the requirement in the EU Copyright Directive (2001/29) that the introduction of an exception by member states must include compensation for right holders who suffered harm as a result.
21 out of the 28 EU Member States chose to introduce compensation schemes funded by, for example, levies on manufacturers of blank media (including CDs and DVDs) or equipment (such as MP3 players and printers), with the percentage levy increasing in line with the storage capacity of the product. Malta, Cyprus and Luxembourg chose to regard private copying as causing de minimis harm and therefore introduced the exception without any compensation scheme. In today’s digital age, it is undeniably common practice for consumers to format shift content - for example by copying music to different devices or making back up copies. In 2010, amid mounting pressure to update copyright law to reflect this reality, the UK government conducted a wide-ranging consultation to evaluate the various options for implementation.
From the outset, the Government was keen to avoid the idea of a levy or other compensation scheme on the basis that it would be unpopular with consumers. Following the results of the consultation, the department of Business, Innovation and Skills concluded that any harm caused by the introduction of a new exception would be so insignificant that compensation would be redundant. The basis for this conclusion was, first, that in terms of harm through lost duplicate sales, even if consumers felt they should be entitled to copy content they had bought, it did not necessarily follow that consumers would instead make multiple purchases of the same content if copying were unlawful. Secondly, the government claimed that the value lost from compensation could be recovered by rights owners directly, as they would take account of consumers' additional freedom to make personal copies and adjust market prices accordingly.
The Judicial Review
The High Court, however, disagreed, instead finding in favour of the representatives from the UK music industry including the British Academy of Songwriters, Composers and Authors and the Musicians’ Union, who argued that the exception represented a potential annual revenue loss of approximately £58 million and was therefore far from being de minimis.
The Court allowed that the Secretary of State was entitled to have a predisposition against the introduction of a levy. Furthermore, if the Secretary of State had decided not to introduce any exception at all on the basis that he could not do so without also introducing a compensation scheme, this would also have been lawful. However, the Government’s decision to introduce an exception without compensation was not lawful as it was not justified by sufficient evidence that harm to rights holders would be no more than minimal.
The quashing of the Regulations was prospective, so acts of private copying which would have fallen under the exception while it was in force will now once again constitute acts of infringement. However, the judge felt that to quash retrospectively to the date that the Regulations came into force would be unfair to people who had commenced copying on that date believing that they were entitled to do so.
The Secretary of State is to reconsider whether a further private copying exception should be introduced.