Memorandum 8
Submission from the UK Intellectual Property
Office
EXECUTIVE SUMMARY
1. The Copyright Tribunal is an independent
tribunal established under the Copyright, Designs and Patents
Act (CDPA) 1988. Some operational support for the Tribunal is
provided by the UK Intellectual Property Office (UK-IPO). This
memorandum sets out some of the Tribunal's background, context
and future work being considered by UK-IPO.
2. The memorandum also discusses some recent
intellectual property reviews and their connection with the work
of the Copyright Tribunal.
INTRODUCTION
3. This note is submitted in response to
the Innovation, Universities and Skills Select Committee's invitation
to supply written evidence to assist in its sub committee's inquiry
into the operation of the Copyright Tribunal.
4. UK-IPO welcomes the Committee's inquiry,
which comes at an opportune time as UK-IPO has been looking at
the Tribunal, and considering how its operation might need to
change, along with Judge Fysh, the Chair of the Tribunal. UK-IPO
is now a considerable way down that track and hopes soon to take
this forward. This memorandum therefore, informs the Committee
of where matters rest, and the work that we plan to do next.
BACKGROUND TO
THE COPYRIGHT
TRIBUNAL
5. The Copyright Tribunal is an independent
tribunal established by the 1988 Copyright Designs and Patents
Act. The Copyright Tribunal is a successor to the Performing Right
Tribunal (PRT) established by the Copyright Act 1956. There have
been a number of personnel changes and additions to the Tribunal's
remit since 1988, but its structure has not changed.
6. The Tribunal's primary purpose is to
resolve disputes between collecting or licensing societies (for
example the Phonographic Performance Limited) and users (for example
the BBC) on the terms and conditions of licenses, or on the refusal
by licensing societies to provide licenses. But the Tribunal also
has a wider responsibility to hear cases referred by the Secretary
of State. Not all these referred cases will necessarily involve
collecting or licensing societies. The Secretary of State may
choose to refer cases to the Tribunal for other reasons, for example
the Tribunal can settle disputes regarding the royalties payable
to Broadcasters for the publication of television listings. The
Secretary of State may also direct the Tribunal in respect of
the coverage of a licensing scheme or license in respect of reprographic
copying by an educational establishment. Annex A sets out the
full jurisdiction of the tribunal.
7. The Monopolies and Mergers Commission
reported on Collective Licensing in 1988 and Performing Rights
in 1996, both of these reports made comments on the Copyright
Tribunal.
COMPOSITION OF
THE TRIBUNAL
8. The Tribunal comprises of a Chairman,
two deputies and a pool of up to eight lay members. The Chair
and deputies are appointed by the Lord Chancellor, who is also
responsible for issuing the Tribunal's Rules, which set out its
scope and operational parameters. The Secretary of State for Innovation,
Universities and Skills appoints lay members and UK-IPO provides
operational support for the Tribunal's activities.
WORK OF
THE TRIBUNAL
9. Since it began in 1988, 106 references
have been filed with the Copyright Tribunal. Decisions were reached
on 20 of these references. A further 15 references have had Directions
Hearings but are still ongoing, or have been withdrawn or settled
without a final decision by the Tribunal.
10. Cases heard by the Tribunal are often
very substantial in size involving a large number of parties with
wide ranging judgements and substantial costs. For example a recent
case on downloading involved 15 parties with an interim judgement
of some 80 pages, multi-million pound legal costs and almost 18
months between reference to the Tribunal and the first hearing.
11. These long, complicated and expensive
cases have led to a perception in industry that the Tribunal is
unwieldy and inaccessible in small cases. Indeed the perception
of the Tribunal as slow has carried over from its predecessor,
the PRT, following the case of AIRC v PPL which ran from 1978-86.
In addition there is a perceived imbalance as reference to the
tribunal over a proposed licensing scheme or license may only
be made by users and not by licensing agencies except in relation
to the distribution of equitable remuneration.
12. The perception of the tribunal as expensive
and slow is something UK-IPO aspires to break. Our intention is
to look at amending the Tribunal's remit to respond to current
Copyright challenges. Should the remit be increased UK-IPO would
substantially increase the Tribunal's operational resource. UK-IPO
hopes that the Tribunal will seize the opportunity a wider remit
and increased resource would present. UK-IPO would like to encourage
a wider range of cases to be put before the Tribunal, demonstrating
how it can operate efficiently and economically as a matter of
course, rather than being a matter of last resort. UK-IPO acknowledges
that the Tribunal's Rules have not been updated for some time,
and will work with the Tribunal and the Ministry of Justice to
amend these, to ensure the Tribunal is appropriate for a wider
range of cases.
TRIBUNAL IN
CONTEXT OF
WIDER COPYRIGHT
ISSUES
13. As the global economy develops, with
centres of manufacturing shifting to countries with low cost economies,
the UK needs to find new ways to compete successfully. The Government
recognises that this can be done most effectively by building
an economy built on innovation: encouraging the delivery of high
value innovative goods and services, by well-skilled people employed
in high quality jobs, by successful businesses. Whilst there are
various elements outside the scope of this memorandum which need
to be in place to support such innovation, the one that is of
most interest here is the means of adequately protecting it, via
the intellectual property framework.
14. Intellectual property provides a set
of tools for individuals and businesses to be able to recoup their
investment in bringing their creativity and inventiveness to the
public. Copyright is perhaps the most important of these tools
for the creative industries which include businesses involved
in advertising, computer and video games, design, film, music,
software and television. These industries are an important part
of the UK's economy. Their success is illustrated by the most
recent figures[18]
from the Department of Culture, Media and Sport. In 2005 they
accounted for 7.3% of Gross Value Added (GVA) of the economy,
making them comparable to the financial services industry. They
grew by an average of 6% per annum between 1997 and 2005, compared
with an average of 3% for the whole of the economy over this period.
In terms of employment, they accounted for over 1.1 million jobs
in the summer quarter of 2006, with almost 800,000 further creative
jobs within businesses outside these industries. Exports of services
totalled £14.6 billion in 2005, about 4.5% of all goods and
services exported.
15. With the Creative Industries playing
such an important role in the UK's economy, as well as their pivotal
function in supporting and developing the UK's culture, it is
important that the underpinning protections should function properly,
especially given the rapid rate of technological and digital developments.
The Government commissioned a review of the UK's intellectual
property framework by Andrew Gowers to look at how it functions
in the digital age. The Review reported at the end of 2006 and
concluded that the framework was broadly satisfactory, but made
various recommendations to improve it. Since then the UK-IPO has
been concentrating on taking forward the many recommendations
for which it is responsible, and has most recently issued the
first part of a two-part consultation about potential amendments
to copyright exceptions. Whilst this does not impact on the Copyright
Tribunal directly, it is important to set in context the Government's
intention of delivering a copyright framework appropriate for
the digital age.
16. Copyright enables the Creative Industries
to protect their works by controlling levels of access and setting
remuneration appropriate to that access. For example, over the
internet, the public can access films in a variety of ways, from
"free shorts" to "pay per view" to full price
purchase of the whole film. Copyright owners may choose to set
fees directly themselves, as may be the case for accessing works
over the internet, or more often may be done via collecting or
licensing societies, which have been set up by various of the
creative industries for the express purpose of managing and licensing
their rights on a collective basis. These organisations are often
"not-for-profit". They enable the administrative burdens
of licensing to be shared by rights owners, as well as giving
potential users an easier way of licensing—especially for
the use of multiple works, as would be required for example when
playing music in a pub or club—than by approaching individual
rights owners.
17. Collecting or licensing societies are
mandated by their members to set the terms and conditions of their
licensing arrangements. They will often negotiate with relevant
trade bodies representing users' communities to set terms including
levels of remuneration, to ensure that there is as widespread
a level of agreement as possible for all parties. Unsurprisingly,
this is not always possible, and the terms may be disputed by
users. The Copyright Tribunal exists to resolve such disputes,
but can only receive cases referred to it by users (or some circumstances,
as mentioned in paragraph 6, by the Secretary of State) except
in relation to the distribution of equitable remuneration. It
will take evidence from both sides and determine what terms and
conditions are appropriate in the circumstances. The Copyright
Tribunal's decision is binding: the only appeal is on matters
of law.
UK-IPO SUPPORT FOR
THE TRIBUNAL
18. The successful operation of the Copyright
Tribunal is important to UK-IPO because Copyright is a vital tool
to protect Intellectual Property and the Tribunal has an important
role in maintaining an efficient and equitable licensing system
for Copyrighted works. Consequently, the Office has had significant
involvement with it in a number of ways.
19. Firstly, while the Ministry of Justice
has appointed the judicial members of the Tribunal, and has issued
the Tribunal Rules, UK-IPO has contributed to previous revisions
of those rules and liaises closely with Ministry of Justice on
matters relating to the judicial members of the Tribunal. UK-IPO
also appoints the lay members of the Tribunal.
20. Secondly the office also provides the
Secretariat, and other financial resources, for the Tribunal.
This support is currently provided by a part time Secretary to
the Tribunal and, along with the other support UK-IPO provide,
(for example the expenses of the lay members) costs around £20,000
per annum although this varies considerably with the volume of
cases.
21. Thirdly, and perhaps most importantly,
the UK-IPO provides the Tribunal with the benefit of the expertise
it has acquired as a result of operating other similar Tribunals
concerned with intellectual property issues, such as the Trade
Marks Tribunal. The UK-IPO also receives income from the tribunal,
from fees and charges for copies of previous decisions, at present
this income is around £2,000 per annum, as with the expenditure
this varies with case volume.
RECENT UK-IPO CONSIDERATION
OF THE
COPYRIGHT TRIBUNAL
22. We recently commissioned two experienced
Trade Marks inter partes hearing officers to review the Copyright
Tribunal, largely focussing on operating practices. The report
of this review was published in May 2007, and made 30 recommendations.
These broadly focussed on improving the efficiency of the tribunal
through practice changes, regulatory changes and resources provided
to the Tribunal. The UK-IPO consulted publicly on the recommendations
made. That consultation closed on 31 August 2007. Twenty responses
were received, mostly from the collecting or licensing societies
and copyright user groups. Respondents to the consultation generally
split between user representatives and rights holder representatives.
Most on both sides accepted the operational recommendations and
welcomed changes that would increase the efficiency of the Tribunal.
Many respondents on both sides were also in support of legislative
changes such as the adoption of CPR and practice directions to
replace the Copyright Tribunal Rules.
23. But there have been other developments
in intellectual property (such as the formation of our strategic
response to the Gowers Report), and some other issues involving
copyright specifically, which now suggest that there are questions
to be answered about the role and scope of the Tribunal, that
go beyond the scope of the 2007 Review, which primarily focussed
on improving the efficiency of the Tribunal's operation rather
than considering in detail its scope.
24. The UK's intellectual property framework
is set within the bounds of numerous international conventions
and directives, but there is some scope within that for the UK
to develop certain aspects to suit its own needs. The Gowers Review
of Intellectual Property, although recognising that the framework
was broadly satisfactory, made various recommendations to improve
it. Although none of these relate specifically to the operation
of the Copyright Tribunal, those relating to orphan works may
have a bearing on it, specifically the recommendation to make
a proposal to the European Commission to introduce a provision
for orphan works. Such a provision may give rise to the need for
a mechanism to resolve disputes or otherwise grant consent to
use orphan works. As the Review of the Copyright Tribunal notes,
the Copyright Tribunal may be an appropriate location for such
a function.
25. We note that the Gowers Review takes
a different approach to that within the EU which suggests that
this is primarily an issue for member states to address on an
individual basis. Such work is continuing through the coordinated
efforts of the Digital Libraries initiative, which is part of
DG Information Society's "i2010" programme. This work
focuses on an approach more in line with Gowers other recommendations
in this area, such as the production of guidelines. This work
will move forward in parallel with the work of UK-IPO and will
be invaluable to the work in the UK. But the different stances
taken by the EU and Gowers mean that UK-IPO needs to assess very
carefully how to take this forward. UK-IPO is currently gathering
information from various stakeholders before drawing up plans
for a consultation on the best way of proceeding.
NEXT STEPS
26. Having recently discussed the results
of the summer 2007 review and public consultation, UK-IPO is currently
concluding how to follow up the recommendations. But UK-IPO has
not lost sight of the need for more radical change to the Tribunal,
and UK-IPO recognises that until this question is resolved it
may not be appropriate, or the best use of Tribunal or UK-IPO
resources, to press on with some of the recommendations. UK-IPO
expects to have reached a view on these strategic Copyright questions
in time to publicly consult on options in the summer.
27. This memorandum has been cleared by
departmental lawyers and seen by the Ministry of Justice.
January 2008
Annex A
The CT was set up by the Copyright, Designs
and Patents Act 1988 (CDPA). The jurisdiction of the CT under
Part 1 of the CDPA is set out in section 149 CDPA and under Part
2 in section 205B CDPA. The authors of Copinger and Skone James
on Copyright (Fifteenth edition) conveniently list the jurisdiction
of the CT (footnotes excluded).
"Specifically it now has jurisdiction to
hear and determine:
(1) Jurisdiction under Part I of the 1988
Act
(a) applications to determine the royalty
or other remuneration to be paid to a copyright owner with respect
to the cable re-transmission in certain circumstances of a wireless
broadcast including a work owned by him;
(b) applications to determine the amount
of equitable remuneration payable to authors of literary, dramatic,
musical and artistic works and principal directors of films where
their rental right concerning a sound recording or film has been
transferred to the producer of the sound recording or film;
(c) references of proposed or existing licensing
schemes dealing with copyright licences;
(d) applications with respect to entitlement
to a copyright licence under a licensing scheme;
(e) references or applications with respect
to licensing by a licensing body dealing with copyright licences;
(f) references by the Secretary of State
of licences or licensing schemes in relation to the playing of
sound recordings under section 128A of the 1988 Act;
(g) applications to settle the terms of payment
or as to the reasonableness of any condition in relation to the
use as of right of sound recordings in broadcasts;
(h) appeals against an order by the Secretary
of State as to the coverage of a licensing scheme or licence in
respect of reprographic copying by an educational establishment;
(i) applications to settle a royalty or other
sum payable for lending of certain works to the public;
(j) applications to settle the terms of a
copyright licence available as of right consequent on the exercise
of their powers by the Secretary of State, the Office of Fair
Trading and the Competition Commission;
k) applications to settle the terms of payment under
a compulsory licence inrespect of information about a programme
service;
(2) Jurisdiction under Part II of the 1988
Act
(l) applications to determine the amount
of equitable remuneration payable to performers where commercially
published sound recordings of their performances are played in
public or communicated to the public;
(m) applications to give consent to the making
of a recording of a performance on behalf of a performer who cannot
be traced;
(n) applications to determine the amount
of equitable remuneration payable to performers where their rental
right concerning a sound recording or film has been transferred
to the producer of the sound recording or film;
(o) applications to determine the royalty
or other remuneration to be paid to the owners of the rights conferred
by Part II of the 1988 Act in relation to a performance or recording
of a performance with respect to the re-transmission by cable
of a wireless broadcast including the performance or recording;
(p) references of proposed or existing licensing
schemes relating to performers' property right licences, namely
for copying a recording of a performance or renting or lending
of copies of such a recording to the public;
(q) applications with respect to entitlement
to a licence under a licensing scheme relating to performers'
property right licences;
(r) references and applications with respect
to licensing by a licensing body dealing with performers' property
right licences;
(s) applications to settle the royalty or
other sum payable for the lending of certain recordings treated
as licensed by performers by virtue of an order of the Secretary
of State;
(t) applications to settle the terms of licences
in respect of performers' property rights available as of right
consequent on the exercise of their powers by the Secretary of
State, the Office of Fair Trading and the Competition Commission;
(3) Other jurisdiction
(u) applications to settle the royalty or
other remuneration payable in respect of the use as of right of
works in which revived copyright subsists;
(v) applications to settle the remuneration
payable in respect of the doing as of right with regard to performances
in which revived performance right subsists of any acts which
require the consent of the owner of such rights;
(w) references and applications with respect
to licensing schemes, licences and licensing bodies relating to
licences in respect of the database right conferred in respect
of the contents of databases ("database right licences")
and in particular:
(i) references of proposed or existing licensing
schemes relating to database right licences;
(ii) applications with respect to entitlement
to licences under a licensing scheme relating to database right
licences;
(iii) references or applications with respect
to licensing by a licensing body dealing with database right licences;
(iv) applications to settle the terms of
a database right licence available as of right consequent on the
exercise of their powers by the Secretary of State, the Office
of Fair Trading and the Competition Commission;
(x) equivalent references and applications
with respect to licensing schemes, licences and licensing bodies
relating to licences in respect of the publication right conferred
on publishers of previously unpublished works in which copyright
has expired;
(y) applications to determine the royalty
or other remuneration payable to the trustees for the Hospital
for Sick Children in respect of the use of the play "Peter
Pan" by Sir James Matthew Barrie".
18 Bulletin on the creative industries economic estimates
2007: http://www.culture.gov.uk/Reference_library/rands/statistics/creative_industries_eco_est.htm Back
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