Owners in rights of electronic works potentially face a loss of revenue if Government proposals go through. The 2006 Gowers Report on the UK’s Intellectual Property regime sets out Proposals which include allowing educational establishments to copy material for the purposes of e-learning, and libraries and archives to copy works for the purposes of preserving them and keeping up with today’s technological advancements. It also introduces a new concept of “format shifting” allowing the institution/consumer to legally take copies or electronically process data where it had previously been illegal.

Clearly, this right to copy will extend to electronic works including MP3 files, e-books and Jpegs. It will not extend to using the file on peer-to-peer systems, but will the average consumer be aware of this, or will this open the floodgates to unauthorised copying leading to a loss of revenue for the right owner?

Article 5 of the Copyright Directive provides that the rights owner must receive “fair compensation” for the loss suffered by the right owner. At present, the Proposals do not intend to recompense the rights owner whatsoever, believing that the prejudice to the rights owner is minimal, as it merely reflects today’s reality.

Steps for rights owners

So what can the electronic right owner do to ensure that they protect their revenues? 

  • Respond to the Government consultation in relation to the proposals if these additional rights will adversely affect your business
  • Adopt technological protection measures such as Digital Rights Management to prevent consumers copying
  • Vary the retail price of the work according to whether DRM is used – that is, a consumer pays less for a work with DRM which cannot be copied and more to have the ability to copy.
  • To further encourage consumers to buy the more expensive, DRM protected works, could have higher sound/visual quality than the unprotected work.

The consultation paper can be found here. Be quick though, as the consultation period expires 8 April 2008.