The UK Government yesterday published its response to its consultation on copyright exemptions and announced that it plans to give private individuals more freedom to use copyright works. The Government believes that by allowing people to make greater use of copyright works, those works will become more valuable and rights holders will ultimately benefit. Basically, they are positing that if you legitimise certain conduct that is occurring already, you will strengthen the overall legitimacy of the copyright regime in the eyes of the public.

Various changes to the UK copyright framework will be introduced, but in our view the three key changes for the digital media industry are:

  • Format shifting to be legal: Private individuals will have a right to copy content they have bought onto any medium or device they own (e.g. CD to iPod), provided it is for personal use. This right will allow consumers to copy material to and from private online cloud storage – although the announcement says that providers of "value-added" cloud storage will require appropriate licences from copyright owners. This is a significant shift. The UK is one of the few European countries not to have a private copying defence; this will be its first. The express recognition of cloud services by the Government arguably takes it beyond many of the Continental European private copying exceptions, which are often unclear as to whether they extend to circumstances where the "private" copy is made by a third party. It does however beg the immediate question as to where the line is going to be drawn between "value added" cloud services and "private online cloud storage". Also significant is the fact that the Government intends to introduce this change without introducing a copyright levy, maintaining the UK's opposition, along with just a handful of remaining EU members, to the levy system as a means of ensuring rightsholders receive the "fair compensation" that the Information Society Directive promises them in return for private copying exceptions. 
  • Contracting-out to be restricted: The consultation process highlighted concerns that in some circumstances contracts restrict use of copyright which is normally permitted by copyright law. The Government has stated that it believes that such restrictions have a negative effect and permitted acts should not be undermined or waived by contract. This would be a major shift from the current position, where T&Cs often seek to amend the starting copyright position. It also raises the question as to whether this change would be consistent with European law, as the Information Society Directive arguably recognises the right to contractually derogate from the legislative position.
  • Quotations exception to be expanded: The long-running NLA v Meltwater* litigation put centre-stage the application of copyright to online media monitoring services and general search technology. In NLA v Meltwater, the Court of Appeal confirmed that the headlines and hit results returned by Meltwater's search engine (as viewed from the perspective of the end user receiving them) did not fall within the "fair dealing for reporting current events" or "fair dealing for criticism or review" exceptions that currently exist. Among the reasons for coming to this conclusion were that the end users were not reporting current events or criticising/reviewing (i.e. they did not have the requisite purpose) and also that some of the results only identified the source and not the author as required by current law. The Government now intends to introduce a new, broader "quotations" defence, which will not be confined to limited purposes, such as news reporting, but which will apply to use for any purpose, provided it is fair. Perhaps most significantly, according to the announcement, this exception will require the person seeking to rely on it to acknowledge the "source". Particularly relevant to the industry will be whether this is a deliberate choice of word by the Government and that they intend a change to the "sufficient acknowledgment" rule in the digital context, focusing on source and not author.  NLA v Meltwater returns to the UK's Supreme Court in February for further argument on the scope of Article 5(1) of the Information Society Directive (temporary copies exception) and how far it extends to the acts of browsing and caching.

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Next steps - Draft legislation will be published in 2013 with the intention that measures will come into force in October 2013. What’s clear is that 2013 will continue to be a time of change and debate for copyright in the digital context, with these incoming UK changes occurring in the context of calls for new "ancillary copyright" rights to protect online news publishers in Germany and other countries and the EU Commission reviewing many aspects of the European copyright regime.