The Government is pushing ahead with reforming copyright law to make it fit for the digital age, as set out in its paper "Modernising Copyright". The Enterprise and Regulatory Reform Act 2013 (ERRA) has been passed containing a handful of IP provisions, and the IPO has published draft reforms to the exceptions to copyright infringement.

Summary

ERRA received Royal Assent on 25 April. Although the Act largely relates to reform of banking, employment and competition law, it also contains provisions amending certain sections of the Copyright, Design and Patents Act 1988 ("CDPA"), paving the way for secondary legislation to be introduced. The IP sections are to be implemented on a timetable next year from April to October 2014. Although ERRA did not (despite the Government's intention) contain a power to introduce amendment to the copyright exceptions, on 7 June, the IPO published draft legislation amending the exceptions to copyright infringement for consultation.

Business Impact

ERRA contains provisions enabling secondary legislation to be introduced which will:

  • Amend the duration of copyright for:
    • Industrially exploited artistic works, returning the duration to life of author plus 70 years; and
    • Certain unpublished works, where they may be released from copyright protection earlier than the current transitional provisions permit.

This will impact on a wide range of businesses but particularly the creative/design and education/research sectors.

  • Implement the detailed scheme based on the controversial blueprint provisions in ERRA for a new licensing scheme to licence Orphan Works (works where the author is unknown), aimed at facilitating use of this material.

This scheme caused concern particularly amongst photographers who fear their unattributed work exposed on the internet could be swept up in the new licensing regime. However, the IPO has responded to these concerns and the full scheme details are awaited.

  • Implement detailed extended collective licensing schemes and codes of conduct and regulation of the operation of licensing bodies based on the outline provisions in ERRA.

Exceptions

The Government was defeated in its attempt to include in ERRA a provision to enable it to introduce and/or amend exceptions to copyright through secondary legislation. However, despite the lack of enabling legislation in ERRA, the IPO has published the first tranche of proposed reforms to exceptions and invited comments.

The currently published reforms cover:

  • Private copying – aimed at allowing private copying between different media
  • Parody – although on the basis of "fair dealing"
  • Quotation – for purposes such as criticism and review but not limited to these and;
  • Public Administration – to facilitate the making of material available online (limited to material not already commercially available)

Many sectors will be interested in these proposed reforms, but it is likely that any impact will first be felt in the media and press industries.

ERRA

Changes to duration of copyright

Artistic works which are industrially exploited currently have a reduced duration of copyright protection of 25 years under section 52 CDPA. This will be repealed under section 74 ERRA, restoring the duration of copyright protection to life of the author plus 70 years. The Government recognises that this has a potentially significant impact on the design/manufacturing sectors and has committed to further consultation with interested parties before the change is brought into effect, so no date for implementation has been set.

ERRA amends section 170 CDPA to enable a reduction in the duration of copyright in certain unpublished works via secondary legislation to be introduced by April 2014 (section 76 ERRA). This will free up these unpublished works held in libraries for research.

New Licensing Schemes

Orphan works

ERRA introduces new section 116A into CDPA to enable the introduction of a new licensing scheme permitting the licensing of orphan works (those where the author is unknown). The details of the scheme have yet to be confirmed, as ERRA sets out only the fundamental requirements of the scheme. The scheme will provide a body which will oversee the licensing of orphan works. A person wishing to use a work would need to conduct a "diligent search" and if no author is located, could then apply to a government appointed authorised body who could grant a non-exclusive licence for use of the work. The licensing body would verify the search, and will keep a register both of works and licences granted to enable licence holders to check whether their work had been licensed under the scheme. Fees will be due for licences, and monies collected will be held by the authorising body for the rights holder, or onwards distribution after a period of time to be determined.

Due to the concerns raised by various groups in the press following the passing of ERRA, and concerns as to the extent of licensing permitted and whether the "diligent search" required was sufficient, the IPO produced a fact sheet (Myth and Fact information documentation, IPO May 2013) to allay these concerns whilst the full details of the scheme are yet to be published. The IPO has emphasised that full records of works licensed and licences granted will be kept so that rights holders can check the position. It also reiterated that the licensing structure outlined in the act requires a diligent search, which it is intended will be verified by the licensing body, and that any licence granted will be for limited purposes and non-exclusive.

Extended Collective Licensing

ERRA introduces new section 116B into CDPA to enable legislation for the Secretary of State to permit collecting societies to operate voluntary extended collective licensing in the UK. If authorised, these schemes will permit licences to be granted where the licensing body does not itself hold the copyright, nor act for the owner. This mechanism is intended to streamline rights clearance where direct clearance with rights holders is not practicable. To obtain authorisation for extended licensing, a licensing body would need to show that it represented a significant number of rights holders in relation to the type of works licenced. If such a scheme was granted, the practical effect is likely to change the collective licensing of works of that type to one where a rights holder would have to opt out, rather than the current position of opt in. However, a rights holder will always retain the right to opt out.

Sections 116C and D set out additional factors to be covered in the regulations in due course, including a power for the secretary of state to specify additional factors which must be taken into consideration in operation of either licensing scheme. They also include a general provision that the regulations must provide for the authorisation to grant licences to be withdrawn, and a mechanism for determining the rights and obligations of respective parties if the licences are withdrawn. Furthermore, regulations can only be made for either of the new schemes if the secondary legislation by way of statutory instrument is approved by each House of Parliament.

There is also a new provision to allow the secretary of state to issue codes of conduct to apply to collecting societies (Section 77 and Schedule 22 ERRA introducing Schedule A1 "Regulation of Licensing Bodies" into CDPA).

The Government intends to introduce the detailed provisions for these new schemes by October 2014 at the latest. Authorisation and grant of licences may then, of course, take longer.

Penalties for copyright infringement

ERRA also contains provisions to ensure that the current level of criminal penalties for copyright infringement will continue to apply when the copyright term for sound recordings and performers rights is extended from 50 to 70 years on implementation of EU Directive 2011/77/EU (Section 78 ERRA) and also when the exceptions to copyright and performance rights are amended (Section 75 ERRA).

EXCEPTIONS TO COPYRIGHT

The IPO has issued a consultation covering the proposed text of amendments/additions to the exceptions to copyright currently found in Chapter III of the CDPA ("Acts permitted in relation to copyright works"). The requirements for change were identified in the Hargreaves Report in May 2011 to enable copyright to remain applicable to the digital world.

The exceptions published by the IPO so far include:

  • Private copying. The proposed amendment introduces a new section 28A called "private copying" specifically to deal with a limited exception. This will cover individuals using content which they legitimately and permanently own, and copying it onto another medium or device provided it is for their own personal use. For example, this would permit the copying of a CD onto an MP3 player.

This provision is intended to update copyright to the position which was widely recognised in the earlier consultation as being that which most individuals believe to exist already. It is intended that this provision be subject to either a new express provision or section 296Z which prohibits circumvention of any technological measures to prevent copying.

  • Quotation. The proposal recasts the current exception in section 30 CDPA (criticism, review and news reporting) by deleting subsection 30(1) and (1A) and adding a new section 30A titled "Quotation". This new exception expressly states that it will not be infringement to use a quotation from a copyright work for purposes "such as criticism or review" (emphasis added), but only quotation is permitted. However, the exception remains subject to the conditions in the current section 30, namely that the copyright work must be lawfully available to the public, any quotation must contain sufficient acknowledgement and it must be fair dealing.

In order to implement Article 5(d) of the Copyright Directive, two additional restrictions are included to qualify for fair dealing: use of the quote must be in accordance with fair practice, and the extent of the quotation must be justified by the specific purpose for which the quotation is used. The IPO states that this approach will give courts sufficient scope to consider other factors which may mean that a specific use of a quotation is fair dealing. Section 30(1) and (1A) which are to be replaced by this proposed exception apply to all copyright works. Although the new exception is for "quotation", it does not appear that there is any intention on the part of the government to remove specific types of copyright work which would perhaps not ordinarily be described as being "quoted" when used for criticism or review. The reformulation by reference to quotation comes from the language of the Copyright Directive, Article 5(3)(d).

  • Parody. The proposed amendment introduces a new section 30B, which is a new type of fair dealing exception. It is intended to give the UK's creative industries greater freedom to use others' works in the course of creating a parody by removing minor use of copyright for that purpose from the scope of infringement. The provision is framed as one requiring fair dealing, despite the fact that the Copyright Directive does not require fair dealing for the parody exception to apply. The IPO states that the fair dealing element is intended to strike a balance and prevent wholesale infringers and is used as it is a recognised concept in UK law. The proposed legislation does not however define "caricature, parody or pastiche".
  • Amendments to the exception for public administration. This proposed amendment seeks to update the existing sections 47 (Material open to public inspection or on an official register) and 48 (Material communicated to the Crown in the course of public business) to facilitate public bodies making material available to the public online. However, this is to be limited to material which is not available to purchase or license commercially.

The IPO stated that additional draft provisions for other exceptions will be released as and when they are ready. The additional exceptions which the Government committed to introduce in its "Modernising Copyright" report include amendments to fair dealing for educational purposes, together with exceptions for non-commercial research and private study, text and data mining, and permitting the preservation of copies of all types of work by libraries and archives. You can review and comment on the currently proposed legislation before the consultation closes on 17 July. Details are on the IPO website.

Once the text of the legislation is finalised, the Government will need to pass it through Parliament, as the enabling legislation included in the initial draft of ERRA was removed during Committee Stage. MPs decided that further exceptions to copyright protection are too important to be put through as a package of secondary legislation which would not be subject to further scrutiny.

Note that the UK is not the only country currently changing its copyright exceptions. In Australia, there are also moves to reconsider the scope of defences to copyright infringement. See our briefing here.