What do the following have in common?
- PR consultants who passed on relevant digital press clippings they received from a press clipping agency to their clients.
- A furniture removal firm that used a photograph on its website which was claimed to originate from an image library's collection.
- A local authority that provided music for fitness classes taking place in its sports halls.
- A chain of garages that turned a blind eye to its employees playing their own radios over speakers in their workshops
- A charity that included on its website photos of drugs it copied from a government sponsored web site
Answer: all of the above are real defendants who are now out of pocket as a result of being involved in copyright disputes before the UK courts.
In order to avoid expensive disputes such as those outlined above, it is important that all businesses (and those that advise them) ensure their employees have a good working knowledge of the day-to-day copyright issues they might encounter.
In November the Government announced that it hoped a "fast track" in the Patent County Court will be operational before the end of 2012. This will available for straightforward intellectual property claims (including copyright infringement claims) where an injunction is not sought and the damages claimed are £5,000 or less (this figure may be increased in due course). In March the Government published further details of how this was intended to work. It is now clear that the current cost rules in the general small claims track are intended to apply to the IP fast track. This development is therefore likely to make court proceedings a speedier and more cost-effective, and so more frequently used, part of copyright enforcement campaigns.
In most of the examples referred to above the claimants were "collecting societies". These may appear to be mysterious entities, but are simply organisations set up to administer and enforce the copyrights of their members. The various collecting societies which businesses are most likely to come into contact with in the UK are listed below.
PRS - The Performing Rights Society Limited - administers and enforces the copyright in musical works and associated literary works (i.e. lyrics) on behalf of music composers, songwriters and music publishers.
PPL -Phonographic Performance Limited - acts on behalf of record companies and performers. Record company members transfer to the PPL their exclusive rights to play or otherwise perform in public the sound recordings they own the copyright to. The PPL also acts on behalf of performers in respect of their public performance remuneration rights. PPL's repertoire includes the vast majority of commercially published sound recordings in the UK.
NLA - The Newspaper Licensing Agency Ltd - a licensing body set up to manage the intellectual property rights of its newspaper members. It licenses, via various schemes, the use of the copyright and other intellectual property rights in the content of its members' offline and online publications.
CLA - The Copyright Licensing Agency Limited - a licensing body (owned by the Authors Licensing and Collecting Society Limited and the Publishers' Licensing Society Limited) which was set up in 1983 to perform collective licensing and enforcement on behalf of member authors and publishers.
Although they are not collecting societies, the well known image libraries (who purchase exclusive licenses of the copyright in the photographs included in their extensive collections) operate large scale enforcement campaigns in the UK as part of their business model. These campaigns are aimed at obtaining compensation for infringing use of the copyright in such photographs. As far as we are aware, only one claim has been made in the UK courts by an image library against an alleged copyright infringer, however, many settlements have been entered into without court action being commenced. The new IP "fast track" court procedure may change this.
Background music and the 31 October 2003 change - PRS and PPL
Although PRS and PPL are both concerned with music copyrights, they are responsible for subtly different sorts of copyright associated with music. Therefore businesses that play music (either via CD/MP3 player, internet, radio or TV) to their customers or staff and wish to avoid a copyright dispute are likely to require a licence from both the PRS and PPL.
Many businesses remain unaware of this requirement for dual licensing. It resulted from a change in the law made on 31 October 2003. Before then, showing or playing an auditory or visual broadcast in public, to an audience who had not paid for admission to the place where the broadcast was to be seen or heard, did not infringe any copyright in any sound recording included in such a broadcast. The result of the amendment was that many businesses that previously provided background music to their staff or customers via broadcasts (i.e. radio) required a licence from PPL for the first time.
Such businesses had always required a licence from the PRS, even before 2003. This is because there has never been any equivalent exception relating to the copyright in the musical and literary works included in such broadcasts.
Common copyright myths
- Works that have been placed on the internet are free to use - NOT TRUE
Some works found on the internet are licensed by the copyright owner under the Creative Commons Licence and similar licences. However, great care needs to be taken to ensure that they are so licensed and there is no guarantee that the named licensor actually has the right to grant such a license.
Particular care needs to be taken if using images found via image searches such as Google Images (i.e. in business materials, presentations and on websites). These type of images are more often than not protected by copyright. If they originate from an image library, then the images are also very likely to be embedded with fingerprint metadata. This enables the image library to use tracking / web crawling software to identify the whereabouts of the infringing copy.
- The work used by my business was included as part of my contract with another business (e.g. a web design agency) so they might infringe, but we don't - NOT TRUE
The contract terms you agreed with your supplier (or an implied term) may give you a claim against your supplier if its services directly resulted in you infringing the copyright of a third party. However, if your supplier infringed by copying an image and then provided that image to you, which you then used, then you are also guilty of infringement.
- We did not know it was a copyright work, therefore we cannot be liable for damages - NOT TRUE
Ignorance, or a misunderstanding of the law, is no defence to a claim of copyright infringement. If you "did not know, and had no reason to believe, that copyright subsisted in the work" this may be a defence to, or a factor which might limit, a claim to damages by the copyright owner. However, it is no defence to a finding of infringement or to the award of an injunction against you.
Further, this defence is very narrow. It requires you to evidence that you had "no reason to believe copyright subsisted at all" (e.g. because you had a good reason to believe that copyright in the relevant work had expired). An incorrect belief that the work was "copyright free" because it had been placed on the Internet, came up in an images search or was covered by Crown copyright, will not help you.
The inside knowledge
All the collecting societies provide standard license terms and have standardised methods or tariffs for calculating what they think any business should be paying them. However, well informed businesses have, in the past, managed to negotiate down the figures originally demanded.
It is also possible to challenge the whole basis of calculation of a standard licence offered by a collecting society before the Copyright Tribunal. For example in 2009 the British Hospitality Association, along with the British Beer and Pub Association and others, forced the PPL to reduce the fees it was charging under various tariffs via this route. More recently in 2012 the Copyright Tribunal required the Newspaper Licensing Agency (NLA) to reduce some of the fees it was charging web media monitoring agencies and their clients for using the content of its newspaper members. However, such proceedings can be protracted and prohibitively expensive. If you are considering making or threatening such a challenge please contact us for further information.
If the copyright owner has not lost profits on sales as a result of the infringement, then a court is likely to calculate infringement damages on the basis of:
"the sum which a willing [licensor] in [the copyright owner's position] and a willing user in the defendant's position would have agreed upon, as a charge for using the [copyright work as it was used by the defendant]".
In pre-action communications copyright enforcers sometimes seek a much higher figure than the amount the court would award on the above basis. Again, we may be able to help you understand what a more reasonable figure might be.
However, it is also possible for substantial "additional damages" to be awarded by a court if it considers that your infringement was "flagrant". Additional damages of double and triple the base amount have been awarded to the PRS and PPL collecting societies where they were able to establish that the defendants knew they required a licence and continued to infringe indifferent to the repeated demands made. These types of awards tend to be made where the profitability of the defendants' business is heavily reliant on using the works in question (e.g. night clubs).
The bottom line
In many cases the practical value of being able to use the work and avoid a legal dispute will justify paying the licence fee. However, in situations where this is questionable it may be possible to adapt business practices so a licence is not required from the relevant licensor in the future.
- Cease playing or allowing the playing of music in your shops/offices altogether or consider subscribing to one of the cheaper "royalty free" music providers so that you avoid the need for PRS/PPL licences.
- Instead of copying press clippings, circulate the original physical clippings cut from the newspapers themselves to your staff via a distribution list (no copying means no need for an NLA licence).
- Produce all photographs or images to be used in your business materials "in-house" or commission a low price agency to produce them for your exclusive use to avoid claims from image libraries.
Note that if there has been infringing use in the past, then you may still be liable for past infringement damages. Rather than attempt to negotiate a standalone settlement for past infringement it is often more cost effective to enter into a licence for the shortest available future term and ensure this includes a waiver for past infringements. An additional sum or "surcharge" may be required for this waiver, but it is often negotiable, because the collecting society will hope that it has signed you up for good. By the time the license period ends, ensure that your use of the relevant works has ceased altogether if you do not want to pay future licence fees! Also ensure that you have a non-infringing alternative option for any future needs.
Relevant legal developments
There have been several recent legal developments which indicate:
- that some businesses may at some point in the future no longer require a licence from the PRS/PPL to play music to their customers or staff; and/or
- the basis some collecting societies use for calculating their licence fees may be unfair.
The practical importance of these developments is that they could assist businesses in licensing or settlement negotiations. A fuller explanation of these developments is therefore provided here.