House of Commons - Innovation, Universities and Skills

Select Committee on Innovation, Universities and Skills Second Report

4 Access for small businesses, institutions and individuals

55. Straddling the question of fairness and effectiveness of the Copyright Tribunal is the position of the user or creator with limited resources—either an individual or a small business or institution. As we noted in chapter 2, the spread of digital technology is leading individuals and small businesses and institutions to become increasingly engaged in the distribution of creative works.

56. Speaking for users, Mr Padfield from the Libraries and Archives Copyright Alliance said that "the Tribunal does tend to hear the big cases, which is unfortunate because it means the small cases tend not to be heard; people are put off bringing the small cases because they do not feel they can afford or they do not dare".[116] He cited a recent case where the issue was:

whether the NHS should have a licence and a licence was eventually taken out. The [Copyright Licensing Agency] seemed to my members to be putting forward a [particular] view of copyright law. […] I am not saying it was not correct but it was its own interpretation of the law. […] They were simply writing to librarians in this case saying, "This is the law; this is what research means in law" and it was simply their interpretation of what research means. There is no means of challenging that.[117]

Judge Fysh gave us an illustration of the problem faced by a single user:

I had a funeral parlour owner who telephoned me recently saying he had been presented with a bill for playing no doubt Rachmaninov or something suitable in his parlour, he could not possibly pay it and what was he to do. I explained to him about how you made a reference and so on. He asked how much would that cost and you can imagine his reaction.[118]

Judge Fysh considered that the situation was "devastating for a small person".[119]

57. From the creator's perspective, ALCS said that:

It is almost impossible for an individual creator to use [the Copyright Tribunal] and [they] are therefore reliant on their representative bodies, be it collecting societies who are representing them through licensing. […] A lot of the measures in the IPO Report aimed at simplifying and reducing costs and reducing process would indirectly benefit the individual creator through the greater abilities that it gives their representative bodies.[120]

58. The growth of creative industries and the amounts now at stake in licensing disputes have impelled the Copyright Tribunal to concentrate its limited resources on adjudicating high value commercial disputes. Neither the user nor the creator of copyrighted works with limited resources—whether an individual or a small business or institution—has any realistic prospect on his or her own of seeking redress in the Copyright Tribunal. In some cases a user, for example, who is a member of a trade association, may be able to persuade the organisation to initiate action. But those without either a well-disposed representative body or deep pockets stand little prospect of making a reference to the Copyright Tribunal. The denial of access to these groups contradicts the Copyright Tribunal's assertion that "anyone who has unreasonably been refused a licence by a collecting society or considers the terms of an offered licence to be unreasonable may refer the matter to the Tribunal".[121] We conclude that the current arrangements unfairly exclude individuals and small businesses and institutions. We recommend the Government rectify this serious deficiency when it responds to the 2007 IPO Review of the Copyright Tribunal. Failure to provide access for individuals and small businesses and institutions casts doubt over the fairness of the operation of the licensing societies' monopoly.

Arrangements to provide access

59. We have chosen not to reach any firm conclusions about the arrangements to provide access for small business and institutions and individuals but we set out the alternatives that have been put to us during the course of the inquiry.

EXPANSION OF THE COPYRIGHT TRIBUNAL

60. One option would be a more radical expansion of the Copyright Tribunal than appears to be planned. Judge Fysh pointed out that the equivalent of the Copyright Tribunal in Canada had a staff of 12.[122] An expansion of the Copyright Tribunal would allow it to consider more cases and to reduce the time that references take to be adjudicated and could allow the Tribunal to provide a court or service dedicated to small businesses, institutions and individuals.

OMBUDSMAN

61. SCONUL suggested that "recourse to the Copyright Tribunal could be avoided more easily if there were a Copyright Ombudsman to help regulate the operation of collecting societies".[123] Mr Fletcher from the Intellectual Property Office commented that one of the uses of ombudsmen was as a backstop to deal with issues of unfairness, "a catcher of the ball of last resort".[124] He considered that "there is scope there, but I would not use the word ombudsman but a smaller claims kind of question".[125]

62. As intellectual property claims can no longer be assigned to the Small Claims Court, the National Union of Journalists proposed the establishment of a Small Copyright Claims court. It pointed out that the copyright infringement cases which it dealt with were typically in the range of £200-£2,000. The costs of pursuing this size of case before the Copyright Tribunal "would almost certainly exceed the value of the claim".[126]

MEDIATION SERVICE

63. The Copyright Licensing Agency pointed out the Intellectual Property Office had established a mediation service and suggested that this could be extended to cover copyright disputes.[127] The mediation could serve two purposes: to provide mediation to parties in dispute; and to prevent references to the Copyright Tribunal for tactical advantage in negotiations. The Copyright Licensing Agency suggested that "parties wishing to launch a reference to the Tribunal should first seek to resolve the dispute through mediation. Currently there is no cost sanction against a claimant who shoots first and asks questions afterwards as there is in the Commercial Court and in civil litigation generally following the Woolf Reforms."[128] The Agency explained:

Currently claimants can launch a reference—without any prior notice to the Respondent—as a negotiating ploy to apply pressure and to improve their bargaining position. Indeed this is specifically recognised in the Copyright Tribunal Rules where it states that it is aware that references are sometimes begun by parties simply to preserve their negotiating position. Given that only the users can launch a reference, this is deeply unfair and leads unnecessarily to the commencement of full scale litigation proceedings. Once started, legal proceedings acquire a momentum of their own which becomes increasingly difficult to stop.[129]

LICENSING AGENCY

64. Universities UK preferred a recasting of the statutory framework for licensing for educational purposes, by establishing an Educational Licensing Agency (ELA). It argued that this would be a cost-effective solution, since the Agency would take over functions from existing collecting societies and so it would be funded—as they were—from a top-slice of the fee revenues. It envisaged the Agency with a Board including representatives of both users and rights-owners, as well as independent experts, which would be able to strike a "balance between rights of use and of remuneration, in a continuous and detailed way".[130]

PPL'S COMMENTS

65. Commenting on the ombudsman and mediation proposals, PPL said that it was not usually possible to:

isolate a particular case so if, for instance, one hairdresser or a pub has a problem with PPL and says, "We do not want to pay the £52.50 a year to play music" it comes to PPL. Fine, that is a dispute between that hairdresser or that pub and the PPL. If a mediation service intervenes in that and comes to a decision, that would affect every other pub in the country. Although you might be thinking that you are dealing with an issue that is £100 actually it is about the entire sector and it is several hundreds of thousands or millions of pounds.[131]

66. The point PPL makes also applies to a Copyright Small Claims Court. It is a strong one and it describes how arrangements work at the moment as well as showing the nature of the obstacles to change. Our concern is that the inflexibility in the system prevents access to individuals and small businesses and institutions from making references to the Copyright Tribunal. We look to the Intellectual Property Office to find a solution. We recommend that the Intellectual Property Office evaluate the options to provide access for small business and institutions and individuals that we describe in paragraphs 60 to 64 of our Report. We conclude that one of the tests against which any changes will be measured is whether the individual or the small business or institution can challenge and change charges for using copyright-protected material without costly litigation but also without incurring major consequences for people not a party to a particular action.

116 Q 11 Back

117 Q 12 Back

118 Q 56 Back

119 Ibid. Back

120 Q 5 Back

121 "About the Copyright Tribunal", Intellectual Property Office website, www.ipo.gov.uk/ctribunal/ctribunal-about.htm Back

122 Q 84 Back

123 Ev 20, para 6 Back

124 Q 94 Back

125 Ibid. Back

126 Ev 48, paras 5.1-5.2 Back

127 Ev 44, para 6.3 Back