Memorandum 17
Submission from the British Copyright
Council
1. INTRODUCTION
1.1 The British Copyright Council is an
association of bodies representing those who create, hold interests
or manage rights in literary, dramatic, musical and artistic works,
films, sound recordings, broadcasts and other material in which
rights of copyright or related rights subsist under the United
Kingdom's copyright law (Copyright, Designs and Patents Act 1988
as amended) and those who perform such works (see the attached
list at Appendix I).
1.2 Our members include professional associations,
industry bodies and trade unions representing hundreds of thousands
of authors, creators, performers, publishers and producers. These
rights holders include many sole traders and SMEs as well as some
larger corporations. Members of the Council also include the collecting
societies, the majority of whose members are individuals or SMEs.
The collecting societies license and manage the rights in copyright
works on behalf of their members and represent their interests.
As licensing bodies they are subject to supervision by the Copyright
Tribunal.
1.3 The British Copyright Council strongly
supports the reform of the Copyright Tribunal and has, over several
years, commented extensively on its work and operation, both in
an informal context at meetings with Government representatives
and in response to various reviews, including most recently in
response to the UK Intellectual Property Office (then known as
the Patent Office) Review of the Copyright Tribunal (our papers
dated 31 May 2006 and 31 August 2007 attached at Appendix II and
III).
1.4 Among the many omissions in the Gowers
Review was a lack of recognition of the crucial role now played
by the Copyright Tribunal and the need for reform to meet the
challenges of the digital age. However, the IP Office independently
conducted its own review of the Copyright Tribunal and produced
a report which was thorough, rigorous and pragmatic.
1.5 Our greatest concern now is to see the
recommendations of the IP Office's Review of the Copyright Tribunal
implemented promptly, efficiently and fully, and with this in
mind, we welcome the Select Committee's interest in the work and
operation of The Copyright Tribunal.
2. EXECUTIVE
SUMMARY
2.1 As stated we, along with a number of
our members, have worked on previous papers and submissions on
the Tribunal making it difficult to provide the Select Committee
with evidence which is new or original.
2.2 This submission addresses:
— Concerns with the Tribunal in its
present form.
— Support for Recommendations of the
UK Intellectual Property Office.
— Implementation of those Recommendations—practical
and legislative.
— Developments since the Review.
— Comment in relation to the Gowers
Review of Intellectual Property.
— Nature of collecting societies.
3. COMMENTS ON
THE TRIBUNAL
IN ITS
PRESENT FORM
3.1 In March 2003, the Council presented
a paper outlining its concerns with the Tribunal, with positive
suggestions for change, to representatives of the UK Intellectual
Property Office, at one of our regular Joint Consultative Meetings.
In preparing our response to the UK Intellectual Property Office
Review of the Tribunal in 2006 we felt that little had changed
and that in fact, during the intervening period, cases involving
our members which had passed through the Tribunal reinforced our
original views. We identified the following major issues:
— Cost and time involved in cases.
— Lack of even-handed approach as between
right holders and users.
— Tribunal membership—improvement
to expertise and balance of interests represented.
— Need to improve understanding and
raise awareness of the individual interests represented by collecting
societies.
4. SUPPORT FOR
RECOMMENDATIONS OF
THE UK INTELLECTUAL
PROPERTY OFFICE
"Reform of the Copyright Tribunal is a long
standing concern for the British Copyright Council and we are
pleased that it is now being addressed in the recommendations
put forward in the report. Our main concern now relates to the
timely implementation of these recommendations and we look forward
to seeing a timetable for implementation. The British Copyright
Council would be very pleased to assist the Intellectual Property
Office with implementation in any way it can.
Following our detailed contribution to the consultation
in 2006, we welcome the Review which we feel is thorough and support
the recommendation which will achieve a great many of our original
objectives".
BCC response to Recommendation arising from the
review of the Copyright Tribunal, 31.08.07
4.1 In our response to the Review we suggested
a number of possible solutions including review of Tribunal procedures;
some form of mediation either as a solution to certain cases or
at the preliminary stage of others; reduction in costs; changes
to the composition of the Tribunal's membership and the need for
guidance and training for its members; review of the Tribunal's
responsibilities taking into consideration the impact of their
decisions on the individual members of the collecting societies
and the possibility of extending the Tribunal's powers over users
of licensing schemes.
4.2 The Recommendations addressed the majority
of our concerns, either directly, for example, changes to the
Copyright Tribunal procedures in line with the Civil Procedure
Rules, or indirectly, for example, simplification of procedure
which will result in reductions in cost and time. We very strongly
support the Recommendation that the Tribunal should be properly
resourced along with those Recommendations which will promote
a better understanding of the nature of collecting societies and
copyright licensing by Tribunal members.
5. DEVELOPMENTS
SINCE THE
UK INTELLECTUAL PROPERTY
OFFICE REVIEW
5.1 There is a greater urgency than ever
before for societies to be able to refer their schemes to the
Tribunal for approval as there is increasing reluctance by users
to take out a licence in the online environment. Recommendation
9.7, which is entirely new and other related Recommendations,
should be implemented without further delay. We believe that proper
implementation of its Recommendations will increase user respect
for the Copyright Tribunal.
5.2 The IP Office's Review of the Copyright
Tribunal was published in May 2007. The BCC, along with many other
users of the Tribunal, welcomed the Report.
6. IMPLEMENTATION
OF THE
UK INTELLECTUAL PROPERTY
OFFICE RECOMMENDATIONS
6.1 We understand that one of the main aims
of the Review was to provide the Copyright Tribunal "with
the resource and independence appropriate to the new creative
economy". Copyright licensing through collecting societies
provides an efficient and economic means of rights clearance for
both copyright owners and users, particularly in the case of online
usage of rights. It is often the only practicable means of legitimising
certain types of content use. Where disputes arise between societies
and users these should, for the good of the creative economy,
be dealt with in a speedy, fair and cost efficient way. Implementation
of the Review Recommendations will contribute significantly towards
providing such a service.
6.2 The Recommendations of the UK Intellectual
Property Office Review Team were published in May 2007 and were
welcomed by those who responded to the original consultation.
The majority of those Recommendations require only practical implementation
and do not involve any major legislative change. With the involvement
and co-operation of copyright interests, these changes should
be relatively easy to achieve. Swift implementation is needed
and as a first step we would like to see or be involved in the
development of a timetable for implementation of the Recommendations.
6.3 While we support the recommendation
that the Copyright Tribunal should be properly resourced and housed
within the UK Intellectual Property Office, we note the Review
Team's observation that the Tribunal should function independently
of the UK Intellectual Property Office. We would welcome further
consideration of whether the proper place for the Tribunal is
within the Department for Constitutional Affairs.
6.4 We support the recommendation that S128A
and 128B of the Copyright Designs and Patents Act 1988 (as amended)
be reviewed. This is a matter of particular interest to our member,
Phonographic Performance Limited and we refer the Select Committee
to their submission for more detailed views on this recommendation.
7. COMMENTS IN
RELATION TO
THE GOWERS
REVIEW OF
INTELLECTUAL PROPERTY
7.1 The Gowers Review of Intellectual Property
makes only three references to the Copyright Tribunal. The first
in its call for evidence, the second in a flow chart showing the
current IP litigation system and the third by an incomplete definition
in the Glossary.
7.2 In the section of the Gowers Review
report which reviewed the IP Litigation System, Gowers acknowledged
that the cost of IP litigation was high. This is particularly
true for those individuals and SMEs whose works circulate in the
Creative Economy.
7.3 As far as the Copyright Tribunal is
concerned, this is recognised and will be dealt with through the
Recommendations resulting from the UK Intellectual Property Office
Review. However, this still leaves individual copyright owners,
whether individual creators or performers or SMEs involved in
publishing, producing or distributing copyright works without
an affordable alternative to costly litigation. UK-IPO now offers
a Mediation service but as we said in our response to the Patent
Office consultation on Innovation: a Strategy for Support (13.08.06):
"We have expressed our strong support for
the Office's proposal to provide Mediation Services. However,
the Council and its individual members are confused about the
extent to which the Mediation Service is intended to apply to
the copyright community".
BCC response to Patent Office consultation on
its Innovation Support Strategy (13.08.06)
7.4 We understand that the Mediation Service
has not yet dealt with any copyright related cases and literature
explaining the Service is patent and trade-mark centric. Members
of the Council are still seeking clarification on whether the
Mediation Service is intended for cases involving copyright, particularly
where it involves infringement of the works of individual creators,
performers and other copyright owners.
7.5 Though we believe it is too early to
act and while we also have some reservations, we look forward
to participating in future discussions on the potential widening
of the role of the Tribunal and in the context of orphan works.
For example, we note that section 190 Copyright, Designs and Patents
Act 1988 (as amended), which already provides for the Tribunal
to give consent to the making of recordings of a performance in
cases where the identity or whereabouts of the person entitled
to the reproduction right cannot be ascertained by reasonable
enquiry, has been little used in practice. Our members BPI, BECS,
Equity and the Musicians' Union can provide further information.
In our view, this matter requires the fullest discussion with
all stakeholders and it must be recognised that a "one size
fits all" solution is not appropriate for all categories
of works or right owners.
7.6 Furthermore, with the Tribunal's current
lack of resources and the failings identified by the Review, we
believe it would be dangerous to load more work and responsibilities
on the Tribunal at this time. Any discussion on the widening of
the Tribunal's responsibilities must wait until it is in a position
to demonstrate that it can function in a proper and timely way
with its primary workload.
8. NATURE OF
COLLECTING SOCIETIES
8.1 Collecting societies exist because right
holders (individual creators, SMEs and major companies) want to
license their repertoire simply and efficiently. This mechanism
provides users with a single licence for a multiplicity of repertoire
and uses, a facility which is becoming increasingly valuable in
the online environment. The system relies on right holders being
able to receive a fair reward for uses of their creative work
through a collecting society. The Copyright Tribunal plays a crucial
role in this as it is the principal means by which disputes between
collecting societies and users are resolved.
8.2 At present, the Copyright Tribunal does
not deal even-handedly with collecting societies and users. The
Review of the Copyright Tribunal identified a number of areas
where the two sides in a dispute are treated differently and made
Recommendations to address these. For example, a user may refer
a proposed licence to the Tribunal whereas a collecting society
may not.
8.3 As there are frequent misunderstandings
about the nature and function of such societies, we believe it
is worth repeating the point made in our original submission to
the Review team.
"As mentioned in the introduction to this
submission, our membership includes those who are represented
by collecting societies as well as collecting societies themselves.
They are individual rights owners who choose
to license their rights or certain of their rights, collectively
through their collecting societies which are, in the main, not
for profit companies limited by guarantee wholly owned and governed
by those members. Collecting societies are not large commercial
companies.
It is vital that this is understood when considering
matters relating to the de facto monopolistic nature of such societies.
It is why Tribunal panel members should have a proper understanding
of the role of collecting societies and copyright licensing. It
is also why the Tribunal should better understand the commercial
aspects of negotiations between collecting societies and commercial
users. Finally, it is why there is a need for greater clarity
and differentiation between the roles and responsibilities of
the Copyright Tribunal and the Office of Fair Trading".
BCC response to the consultation on the Review
of the Copyright Tribunal, 31.05.06
8.4 As representatives of individual creators,
performers, publishers and producers we wish to emphasise that
the decisions of the Copyright Tribunal have a direct impact on
the level of royalty that is paid to each of these individuals,
via their collecting society, for the use of his or her work and
their ability to earn a living from their creativity.
January 2008
APPENDIX I
The following organisations are members of the
British Copyright Council:
Association of Authors' Agents
Association of Illustrators
Association of Learned and Professional Society
Publishers
Association of Photographers
Authors' Licensing and Collecting Society
BPI (British Recorded Music Industry) Limited
British Academy of Composers and Songwriters
British Association of Picture Libraries and Agencies
British Computer Society
British Equity Collecting Society
British Institute of Professional Photography
Broadcasting Entertainment Cinematograph and Theatre
Union
Chartered Institute of Journalists
Copyright Licensing Agency
Design and Artists' Copyright Society
Directors' and Producers' Rights Society
Equity
Educational Recording Agency
Mechanical Copyright Protection Society
Music Managers' Forum
Music Publishers' Association
Musicians' Union
National Union of Journalists
Performing Right Society
Periodical Publishers' Association
Phonographic Performance Limited
Publishers Association
Publishers' Licensing Society
Royal Photographic Society
Society of Authors
Writers' Guild of Great Britain
APPENDIX II
REVIEW OF
THE COPYRIGHT
TRIBUNAL, 31 MAY
2006
The British Copyright Council is an association
of bodies representing those who create, or hold interests or
rights in, literary, dramatic, musical and artistic works in which
rights of copyright subsist under the United Kingdom's copyright
law (Copyright, Designs and Patents Act 1988 as amended), and
those who perform such works (see the attached list).
Members of the Council include a number of the
UK's collecting societies which are subject to the Copyright Tribunal.
The Review is also of interest to the many thousands of individual
creators, performers and publishers represented by the professional
associations, industry bodies and trade unions which make up the
remainder of our membership. These individuals and SMEs are members
of the collecting societies which license their works and represent
their interests.
The Council welcomes this review of the Tribunal.
We believe that improvements could be made to the way in which
it works and we have raised the need to reform the Tribunal with
Patent Office officials on a number of occasions in the past.
In March 2003 at its regular consultation meeting with officials
the Council made a presentation on the subject and proposed a
number of possible solutions. The views expressed by Council members
at that time remain largely unchanged.
The Council notes the appointment of Judge Michael
Fysh, QC as the new Chairman of the Tribunal. Judge Fysh combines
expertise in copyright with a knowledge of dispute resolution
procedures from the Patents County Court. We hope he will play
an active part in this consultation and welcome his appointment.
OBJECTIVES
In proposing changes to the Copyright Tribunal,
the Council's objectives are to:
— Reduce the cost and time involved
in cases laid before the Copyright Tribunal.
— Lessen the adversarial nature of
the Tribunal by simplifying procedures.
— Improve the expertise and balance
of interests represented by Tribunal members.
— Raise awareness of authors' interests,
as members of collecting societies, and as distinct from the collecting
society itself.
— Consider potential issues for the
future, such as the [potentially] increasing numbers of challenges
on the scope of licences.
The Council believes that existing Tribunal
procedures contribute to many of the problems which both rights
owners and user interests experience during Tribunal cases. For
example, the very high cost, both in terms of finance and of time,
of Tribunal cases is in part due to extensive paperwork, preparation
of evidence and of witnesses, etc. Its procedures also encourage
an adversarial approach and inhibit speedy resolution of conflicts.
The Council would prefer to see a Tribunal which
is led by a desire for dispute resolution ie solution led, rather
than being led by procedure. It is with this in mind that we suggest
the following:
POSSIBLE SOLUTIONS
Review Tribunal procedures to achieve a less adversarial
approach
We believe the Tribunal should introduce a mediation
or conciliation or other active dispute resolution element into
its work on a range of levels.
This could take the form of an automatic first
stage meeting or preliminary hearing between the Tribunal Chairman
and representatives of each side in a case aimed at isolating
and identifying the issues in dispute. This would be akin to the
case management role of the civil courts under the Civil Procedure
Rules.
We note that issues initially cited by users
in Tribunal cases do not always turn out to be the main issue
on which the case ultimately turns. Identification of the main
issues at an early stage would reduce the length of time which
cases currently take, as well as the evidential workload thereby
reducing the resulting costs for both parties.
This preliminary stage of a reference could
be fairly flexible with a general aim of settling disputes in
the most appropriate way. Therefore it may be that some issues
could be dealt with in a more informal manner such as in a voluntary
committee for dispute resolution. The Tribunal and the collecting
societies could work together through a code of practice to introduce
such a voluntary committee which obviously would not make decisions
but would explore the possibility of consensus on appropriate
issues. The Committee could include representatives of both rights
owners and users. Such a committee would go some way in reducing
costs. More complex issues may, however, be more appropriately
considered in a more formal dispute resolution framework.
Obligation to use mediation
In order for such a procedure to be effective
a method of encouraging the use of mediation if the Chairman of
the Tribunal felt the matter appeared appropriate for mediation
and also to use his discretion in the matter of costs in the event
of a party's unreasonable non compliance with that recommendation.
This procedure would again be similar to the civil procedure process
where a judge can use his discretion in this area, perhaps reflecting
any lack of cooperation in the award of costs.
We note the recent introduction of The Patent
Office Mediation Service which though aimed at all forms of IP
appears to anticipate a much greater take up by Patent and Trade
Mark interests. We feel that such a service could provide an appropriate
service for smaller users, in most cases individuals and SMEs.
In addition we wonder whether the Patent Office
Mediation Service could play a useful role in the preliminary
stages of Tribunal cases.
Reducing costs
As already stated, a preliminary hearing as
an automatic first stage may go some way to reducing costs for
all concerned.
However, BCC members feel that there are some
cases where a hearing akin to a summary judgment proceeding would
be appropriate. For example, where a challenge by a user is based
on a previous Tribunal decision and no new issues arise in the
reference, the Chairman of the Tribunal should be in a position
to state that the case is inadmissible.
In addition, where there is no pre-existing
decision, but the reference is clearly mischievous or spurious
or even wholly premature in the light of on-going negotiations
or market developments, the Chairman should be in a position to
reject the reference at an early point.
Composition of the Tribunal
The BCC members feel that the effectiveness
of the Tribunal could be greatly improved by a review of the composition
and expertise of the Tribunal panel, as suggested in the British
Music Rights response to the Leggatt Review.
One option might be to retain a legally qualified
Chairman (with two deputies). However, the current panel of between
two and eight ordinary members could be replaced with two people
with industry expertise, one appointed for their appropriate expertise
for each side of the case and selected by the parties to the referral.
An alternative solution, if the ordinary members do not have industry
expertise, would be to provide thorough training in copyright
and copyright licensing to ensure a proper understanding of the
role and function of collecting societies. Our members would be
very pleased to work with the Tribunal to provide information
on the way in which such Societies operate.
Such training could follow the pattern already
established by the Patent Office which, we understand, trains
its Hearing Officers.
We also strongly agree with the point made by British
Music Rights in their submission to this current review, that
transparency in the appointment of Tribunal members is essential.
Responsibilities of the Tribunal
The duties of the Tribunal should take into
account the position of the members of the collecting society
and not just the collecting society itself. Ordinary members of
the Tribunal and users sometimes have difficulty in recognising
that individual authors, publishers and creators are affected
by decisions of the Tribunal rather than the collecting societies
which represent them.
At present the Tribunal has some guidance as regards
factors to be taken into consideration when making its decision
(section 129 CDPA). It would be helpful to the parties of Tribunal
references if there were more certainty in the factors to be considered.
In the area of setting tariffs, for example it would be useful
if there were an obligation on the Tribunal to give detailed consideration
to the commercial reality of negotiations between collecting societies
and commercial users.
The Tribunal has powers over licensing schemes
but what about powers over users of licensing schemes?
The Tribunal's powers could be extended to allow
it to make orders over users on certain issues eg refusal to take
a licence, under-licensing, order to make a non-copying declaration,
orders to third parties for disclosure.
Note on the nature of collecting societies
As mentioned in the introduction to this submission,
our membership includes those who are represented by collecting
societies as well as collecting societies themselves.
They are individual rights owners who choose
to license their rights or certain of their rights, collectively
through their collecting societies which are, in the main, not
for profit companies limited by guarantee wholly owned and governed
by those members. Collecting societies are not large commercial
companies.
It is vital that this is understood when considering
matters relating to the de facto monopolistic nature of such societies.
It is why Tribunal panel members should have a proper understanding
of the role of collecting societies and copyright licensing. It
is also why the Tribunal should better understand the commercial
aspects of negotiations between collecting societies and commercial
users. Finally, it is why there is a need for greater clarity
and differentiation between the roles and responsibilities of
the Copyright Tribunal and the Office of Fair Trading.
APPENDIX III
COPYRIGHT TRIBUNAL
COMMENTS ON
RECOMMENDATIONS ARISING
FROM THE
REVIEW, 31 AUGUST
2007
The British Copyright Council is an association
of bodies representing those who create, or hold interests or
rights in, literary, dramatic, musical and artistic works in which
rights of copyright subsist under the United Kingdom's copyright
law (Copyright, Designs and Patents Act 1988 as amended), and
those who perform such works (see the attached list).
Some of our collecting societies members were
involved in the principal disputes brought before the Tribunal
in recent years (cf DACS, as intervener in the case of Universities
UK Ltd v Copyright Licensing Agency Ltd [2002] RPC 36, and
MCPS- PRS Music Alliance). The Review is of key interest to the
many thousands of individual creators, performers and publishers
represented by the professional associations, industry bodies
and trade unions which make up the remainder of our membership
and who rely on rewards for their creativity to ensure their livelihood.
Collecting societies broadly represent the economic interests
on their behalf in negotiations with commercial users and any
dispute between them has a direct impact on individual creators,
performers and publishers. In the case of publisher, the vast
majority comprise SMEs for whom collective representation provides
additional value in similar ways as for individuals.
Reform of the Copyright Tribunal is a long standing
concern for the British Copyright Council and we are pleased that
it is now being addressed in the recommendations put forward in
the report. Our main concern now relates to the timely implementation
of these recommendations and we look forward to seeing a timetable
for implementation. The British Copyright Council would be very
pleased to assist the Intellectual Property Office with implementation
in any way it can.
Following our detailed contribution to the consultation
in 2006, we welcome the Review which we feel is thorough and support
the recommendations which will achieve a great many of our original
objectives. These were to:
Reduce the cost and time involved in cases laid
before the Copyright Tribunal thus increasing its overall efficiency
We welcome the recommendations which will ensure
a more cost and time efficient procedure, in particular governance
linked to the well established Civil Procedure Rules (CPR) (Recommendation
2). We welcome the repeal of the Copyright Tribunal Rules 1989
and look forward to further co-operation with all stakeholders
on the details of the adaptation of the CPR to be applicable to
the Copyright Tribunal.
In conjunction with a proficient and pro-active
case management (Recommendations 8 to 15) through the president
of the Copyright Tribunal the implementation of these recommendations
will improve the operations in particular by focussing the parties
on:
— the real factual issues of the dispute
(Recommendation 6);
— the limitation of evidence to relevant
facts of the dispute (Recommendations 11, 12, 14); and
— a stringent timeline (Recommendation
13).
Improve the expertise and balance of interests
represented by Tribunal members
Balance: We welcome the first recommendation
of the review which transposes the overriding objective of the
Civil Procedure Rules to the operations of the Copyright Tribunal.
The Copyright Tribunal has in the past often been perceived as
a regulatory restriction on the operation of collecting societies
and has approached the disputes correspondingly. This recommendation
addresses the concern that the tariffs put forward by collecting
societies are presumed unfair by virtue of the quasi monopolistic
position of the latter. The scope of the Copyright Tribunal is
to judge impartially on a commercial dispute without any regulatory
considerations.
Expertise: We are confident that an adequately
staffed and funded body will benefit all parties of a dispute.
We believe a better resourced Tribunal and more expert Tribunal
membership will improve awareness of authors' interests in their
collecting societies and bring about a greater understanding of
function and purpose of those societies.
We are particularly pleased that that the recommendations
state that the Copyright Tribunal should be properly resourced
and London based and its status given proper recognition (Recommendations
17 and 18).
Consider potential issues for the future, such
as the [potentially] increasing numbers of challenges on the scope
of licences
Formulation of licensing methodologies: Whilst
guidelines for the methodology are certainly welcome in the spirit
of transparency (Recommendation 7), any further active role of
the Copyright Tribunal needs careful consideration in view of
the multiplicity of licenses available for the variety of licensees
and the complexities of the tariff structure. Eg a photocopying
licence for a copy shop in Manchester will be based on different
criteria from a blanket music licensing to a big national broadcaster.
Considering licensing methodologies will be a useful aspect part
of the case management conference to identify the real issue of
the dispute.
Transparency: It should be remembered that most
collecting societies (eg CLA and MCPS-PRS Music Alliance) already
provide detailed information of their licenses on their website.
Collecting societies to make references: We
welcome the ability of collecting societies to make references
(Recommendation 25) which is appropriate ensuring a more balanced
approach to be taken by the reformed Copyright Tribunal.
Provisions of sections 128A and 128B of the
CDPA: We agree with the need to reform of sections 128A and 128B
CDPA (Recommendation 26) and support the detailed points raised
by PPL in their response to this consultation.
Orphan works: the suggestions that it should
be the Copyright Tribunal which itself should be responsible for
more proactive granting of licences for the use of orphan works
seems premature in view of the ready availability of databases
and licensing structures through the relevant collecting societies.
In addition we support the submissions made
by British Music Rights and by our colleagues at Phonographic
Performance Limited and the Copyright Licensing Agency on those
areas which require further thought before implementation.
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