Examination of Witnesses (Questions 20-39)
MR DOMINIC
MCGONIGAL,
MR RICHARD
COMBES, MR
NIGEL WARBURTON
AND MR
TIM PADFIELD
28 JANUARY 2008
Q20 Chairman: Richard, would you
go along with Dominic to some extent, would you?
Mr Combes: To address Phil's original
point about how we move from an analogue age into a digital based
age and move the structures that worked in one era into the next,
it is probably worth noting that this is not taking place in terms
of copyright policies in a vacuum. There is a detailed report
in the last 18 months, the Gowers Review of Intellectual Property
which, to a certain extent, has looked at addressing areas where
there is now a need for the existing structures of collective
licensing in the case of the type of fees that ALCS receive for
writers, a large portion of this comes from the CLA and Educational
Recording Agency schemes—that are designed to find a way
of making work available to students in education in return for
a fair fee. Of course the repertoire of work that is available
is incredibly broad and offers the facility of a licence at a
single point. What Gowers has done has really put the onus on
licensing societies and users—in this case education—to
find ways of crossing over from the previous models into delivering
so-called e-learning solutions so that copies of works are now
available on school course intranets and on websites for students.
The thrust of that really is developing the existing structures
rather than saying that technology has overtaken us and there
is nothing we can do about it. I think that there are initiatives
in train and now the onus is on the existing licensing partners
to actually work those through and deliver them.
Q21 Dr Iddon: I think there were
30 recommendations in the IPO 2007 Review of the Copyright
Tribunal; I just want to examine one or two of those. The
first one is that the reasoning behind licences and tariffs should
be clearly shown and "this must be based on hard facts and
figures, actuarial calculations and projections". If fees
are based on what the market will bear, do you believe that this
recommendation can be achieved? In other words, is it capable
of real implementation?
Mr McGonigal: Yes. In all our
negotiations we absolutely take that approach. What you are trying
to do to find the value—in our case of music—to that
business, whether it is a pub or a broadcaster. It is no accident
that most of the commercial radio stations play music. In fact
about 70 per cent of their programming is music. Ofcom, when they
were looking at radio, wanted to find out what people liked about
radio and number one was music; that is the main reason for choosing
a particular station and presenters come in at number two. Using
choice analysis and economic modelling you can actually come up
with at least value ranges for the music element within a lot
of businesses. A couple of years ago it was very interesting when
we revised all our tariffs for the pubs playing background music.
There is a very famous pub chain which does not play music but
all the others play music and they play it for a very good reason.
The publican had a front page outburst at PPL putting up its fees
and then had quotes from three landlords, all of which basically
said, "This is outrageous, how can they charge £300
for the music; if we turn the music off we'd have no customers".
I think that is an illustration of the value.
Q22 Chairman: It is cheap at the
price.
Mr McGonigal: Yes, that is £300
a year. That is less than £1 a day. The job of the Tribunal
then is if there is a dispute over whether it should be £300
or £350 and the Tribunal has to look at where the value is
and where to split that effectively between the creators and the
users.
Q23 Dr Iddon: The Review also envisaged
that the Copyright Tribunal, with the extra resources the Review
recommended, should take an active part in formulating criteria
for the objectification of the criteria for the conditions of
licensing schemes or licences. With the two staff recommended
by the Review, is that possible? What level of expertise would
those staff require?
Mr McGonigal: We agreed with this
recommendation with an important qualification that the Tribunal
should look at those factors that were relevant in a particular
case, but we did not think it was appropriate—or a good
use of public money actually—for the Tribunal to look at
every single licensing scheme that might come up. The reality
is that we are licensing several hundred thousand sites across
a whole range of different tariffs for different types of businesses
using music in a different context and we have a team of rights
negotiators who work on that day in day out. Most of them never
go anywhere near the Copyright Tribunal. It is really only in
those cases where there is a Tribunal in the offing where it would
be useful for the Tribunal to say those kinds of factors they
were looking at for a valuation.
Mr Combes: The Review referred
to building up a bank of knowledge—and clearly that would
not be something that could not happen instantly—but once
these two additional staff members were in place I think it would
certainly be valuable to understand the differences between the
types of collective licensing schemes that are available and likely
to become the subject of references to the Tribunal. A rolling
level of expertise would be valuable in that regard.
Q24 Dr Iddon: Both the rightsholders
and the users, of course, have opinions, but the 2007 Review is
recommending the use of only one single expert unless there are
compelling reasons not to go down that route. Is that reasonable?
Mr Padfield: It would be difficult
to find one, to find an expert who is able and willing to be expert
for both sides,
Q25 Dr Iddon: Could you elaborate
on what the real problem is behind that?
Mr Padfield: I would say that
part of the problem is the interpretation of the law. The statute
involves interpretation; it lays down areas where there is protection
and areas where there are exceptions and limitations but it does
not say precisely what the boundaries of those areas are. For
example, a user may use material for non-commercial research but
it does not say what non-commercial research is and that is a
matter for interpretation and ultimately, when it comes to it,
only the court can decide whether what is being done is research
in this particular context at this particular time.
Q26 Dr Iddon: In the case of a dispute
between rightsholders and users, where both sides would want to
produce an expert witness and they were available, do you think
that is feasible under this recommendation? Would the Tribunal
accept that? Is that a compelling reason?
Mr McGonigal: We considered this
and our view was that it is desirable to have a single expert
witness in the case of a specific point. That really comes back
to the case management that if the judge or whoever it is hearing
the case has a specific point they want to look at and a single
expert is appointed for that, then we think that could work. However,
you are absolutely right that in the lead up to the Tribunal—you
have to remember there is an awful lot goes on before anything
reaches the Tribunal—there will probably be months and months
of negotiation, both sides would have prepared their own view
of the economics of the situation and the financial value of what
they are dealing with and both sides would want to put that to
the Tribunal.
Q27 Chairman: Why does it have to
be an expert? Why not a lay assessor of some kind? A man or woman
off the street who has a brain and knows a bit of ethics and morality
when they see it?
Mr Padfield: Or indeed a lay member
of the Tribunal. I sympathise with that view; I find it odd that
the Review has recommended removing the lay members.
Chairman: I think that as soon as you
say "expert" it sounds like bias in some sense.
Q28 Mr Boswell: I would like to add
something here too but I ought to declare the interest as an ex-lay
member—a specialist lay member—of a tribunal which
I left some 25 years ago, not in this field. I would like to hear
the Panel's view as to the existence of laity, they are going
to be pretty expert by the time they have had a couple of hearings.
Does that add value? Is that the best way of adding expert value
or, as it were, a degree of independence from this specifically
legal input? Does it complicate things by making it even more
ponderous? I think that may be one of the factors behind the recommendations
to move it.
Mr Padfield: I cannot pretend
to have any experience of lay members, but I would have thought
it would give you the experience of a practitioner, a person who
is actually or potentially involved at an active level. I hate
to say that judges are aloof but they cannot know the details
of what life is like at a practical level.
Q29 Mr Boswell: Would you like to
say a work or two about the interaction between the Tribunal recommendation
and the Department of Justice? There is the Intellectual Property
Office who are sort of the sponsors and oddly enough the tribunal
I was on was actually sponsored by a government department and
administered by it. The move, which I suspect may have a tidiness
in recommendation to move to the Department of Justice where most
tribunals are in modern conditions, is that sensible? If so, could
the Tribunal continue to be resourced by the IPO and how would
it work?
Mr McGonigal: We have certainly
been recommending a move just as a matter of propriety to separate
the policy making functions of the IP Office—which is obviously
a very important role—from the court function of the Tribunal.
Q30 Mr Boswell: Of course the budget
would transfer as well.
Mr McGonigal: I would presume
so.
Q31 Mr Boswell: Can I ask something
about orphan works? The one thing I really want to get out of
this is the handle on orphan works. I think it would be terribly
handy if you could give us an example of an orphan work and tell
us the sort of operational difficulties that arise? Are we talking
mainly literary copy or conceivably recordings? That is one thing.
What is the best solution, a licensing system or an exception
solution? If it is going to be exception who is going to handle
it? If you are going around licensing people by exception as it
were, do you have a chance of recovering some resource from that
as against going to the author? If there is an orphan could you
have a system whereby you collected fees for the exceptional licences
and you paid them either to persons when they were able assert
their rights which they could not initially, and/or to help run
the system?
Mr Warburton: I think there is
a prior question of what exactly an orphan work is, exactly what
process has been undergone before it is declared an orphan. A
suspicion that a work is orphaned should not be enough.
Q32 Mr Boswell: To put it another
way, if somebody is a publisher and not the author, how on earth
are they going to know? Is this an orphan work, we do not know?
Is it Anon who has written it or is someone under a pseudonym?
Does it actually mean you are stopped from publishing quite a
good piece of literature or music because you do not know who
it is and you might be attacked if you did?
Mr Padfield: I would suggest that
there are some categories of work where you might almost say it
is obvious they are orphan works. If your grandmother had written
to the Department of Health 60 years ago and that letter survived,
that is a copyright work. I think it might be difficult to identify
the owner of the rights in your grandmother's letter. Speaking
as an archivist, there are record offices round the country with
hundreds of thousands of works of that sort, almost all of which
are orphan works effectively when you look at them.
Q33 Mr Boswell: Does that give rise
to any practical difficulties?
Mr Padfield: Absolutely. I can
give one other very common example which is true in libraries
as well as archives, that is documentary photographs. The vast
majority of documentary photographs have no identification of
the author or the press agency or something of that sort; you
simply have a photograph of a city street which lots of people
want to print but there is no way of identifying the rightsholder.
Q34 Dr Iddon: Does that mean that
there are pots of money lying around that have not been transferred
to the copyright owners? Have you got bank accounts with unclaimed
money in them?
Mr Combes: Part of the process
of a society such as ours giving a broad mandate to the licensing
agencies and giving, as I described earlier, a blanket mandate
for the broadest possible repertoire, to a certain extent we are
giving a mandate on behalf of all writers of works who are not
explicitly excluded from the scheme. The challenge that we have
before us then is having received information that a certain work
has been subject to a licensed act such as copying within an institution,
if they are not already part of the organisation—we have
60,000 writers on our database—then we do have dedicated
staff who put in train a process of tracing that member. At any
given time certain sums may be unattached to a particular writer,
although it is part of the function of a collecting society to
do the necessary research to ensure that they are paid.
Q35 Mr Boswell: If they are never
claimed what happens to them?
Mr Combes: To a certain extent,
because we are a society of members, our ultimate responsibility
in setting policy for anything and particularly something as serious
as dealing with money, is always a matter for our members. We
are governed in terms of distribution rules and distribution policy
by the writers we represent so if we were to take a decision to
apply money for a course for writers, for example, then clearly
that would be something that the executives of the organisation
would take a view on taking out to the membership.
Q36 Mr Boswell: Just to be clear,
if you have not actually been able to pay it out because you do
not know who it is, the income has arisen and it is then in your
reserves and you might be able to use a discretion on behalf of
your known members.
Mr Combes: Subject to it being
a prudent use as agreed by our members.
Q37 Chairman: Are places like Kew
Gardens full of material like this?
Mr Padfield: Yes, there are hundreds
of thousands of such works. May I just answer one question which
you raised as to whether it should be a licensing or exception
solution, my answer would be both. In many cases there will be
a licensing solution; libraries and archives would certainly welcome
that.
Q38 Chairman: If I go to Kew Gardens
to look at some drawing of some scientific thing I would have
to pay for it; I would have to pay for looking at it.
Mr Padfield: You have to pay to
get a copy of it from the archives but if you want to publish
it you would probably have to go to DACS (Design and Artist Copyright
Society) to get a licence to publish it.
Q39 Chairman: Who fixes the fee?
Mr Padfield: DACS does. The difficulty—which
is why I say the answer is both—is that there are many types
of work where there is no society to represent the writer, like
your grandmother; there is no-one to represent the author of an
unpublished letter.
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