7 Term of copyright protection
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12217/08
+ ADDs 1-2
COM(08) 464
| Draft Directive amending Directive 2006/116/EC on the term of protection of copyright and certain related rights
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| Legal base | Article 47(2), 55 and 95 EC; co-decision; QMV
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| Department | Innovation, Universities and Skills
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| Basis of consideration | Minister's letters of 26 March and 2 June 2009
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| Previous Committee Report | HC 16-xxxiv (2007-08), chapter 6 (5 November 2008)
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| To be discussed in Council | 10 June 2009
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
7.1 Council Directive 932/98/EC harmonised the term of protection
for sound recordings and performers' rights at 50 years. The proposal
of the Commission would extend it to 95 years. The Commission
explains that its objective is to improve the position of musicians,
the majority of whom cannot make a living from their performances.
Performers who were active in the 50s and 60s now face the prospect
of losing a source of income as the 50-year period expires. Record
producers would also benefit from an extended period of protection
for their recordings.
7.2 This is a difficult policy issue with arguments
finely balanced. In the UK the Gowers Review concluded that there
should be no change to the term of copyright protection, and this
seems to have been the conclusion of the Commission's own expert
study, the Hugenholtz report .[31]
However, the Commission has taken a different view.
7.3 The second significant proposal in the draft
Directive is to extend the term of protection for a "musical
composition with words" (also known as co-written works)
so that copyright would expire 70 years after the death of the
composer or of the writer of the lyrics, whichever is the later.
This is in conflict with UK law, which treats such works separately:
copyright in the musical composition expires 70 years after the
death of the composer; copyright in the lyrics expires 70 years
after the lyric writer's death. Although the situation in the
UK can produce some odd results (some of which are set out in
the Commission's proposal), it has long been the law in the UK
and many other Member States. Again, the Gowers review recommended
no change to this practice. The Commission's own study recommended
that, if there were to be any change, it should apply to the whole
range of co-written works, not just musical composition with words.
Previous scrutiny
7.4 We considered the draft Directive on 5 November
last year.[32] We inferred
from the Minster's Explanatory Memorandum of 27 October that the
Government did not support the majority of these proposals, but
asked whether it had more sympathy for the extension of the term
of performers' rights. We also asked for an assessment of the
weight of opinions expressed during the consultation that was
then underway. Finally, we asked the Minister if he would comment
further on the Government's attitude to the creation of a fund
for session artists and the adoption of the proposed "use
it or lose it" provision in relation to sound recordings
which have remained unpublished.
The Minister's Letter of 26 March 2009
CONSULTATION
7.5 With reference to the consultation process, the
Minster states that the Intellectual Property Office had received
80 comments at the time of writing. Approximately 80% of these
were opposed to any extension in the term of copyright protection.
Three record companies responded to oppose the proposals, in addition
to organisations representing libraries, archives and museums.
However, the Phonographic Performance Limited (PPL) encouraged
their performer members to write in support of the proposal. In
addition, British Music Rights, British Phonographic Industry
and PPL all pressed the Government to support an extension. In
December, PPL launched a campaign to lobby the Government through
Members of Parliament.
7.6 This lobby has continued since December, the
Minster writes. Since then, there has been significant lobbying
by large sectors of the music industry to have the term of protection
for copyright for sound recordings extended and many more members
of PPL have written to Ministers on the issue. They suggest that
it is unfair to provide a shorter term of protection for performers
than for lyricists and composers (who are entitled to copyright
protection during their lives and for 70 years after death). However,
some other sectors of the industry do not support these calls.
In particular, sectors of the industry that specialise in the
re-release of older works, particularly of classical music which
is out of copyright, oppose the extension.
EXTENSION OF COPYRIGHT TERM FOR PERFORMERS
7.7 The Minister writes that the Government believes
that "there are moral arguments, as well as economic arguments,
in relation to performers' rights, and can see that there is some
justification in providing protection for performers that lasts,
at least in the majority of cases, for their lifetime". However,
the original proposed 45-year extension from 50 to 95 years went
beyond what the Government considered necessary to achieve this
objective: "if we accept the argument that performers should
receive royalties throughout their lifetime, a term of 70 years
ought to be sufficient."
7.8 The current Presidency draft of the proposed
Directive has now fixed the extension at 70 years (although the
draft is subject to a blocking minority). But the Minister argues
that any extension must be part of a package which delivers additional
permanent benefits to performers. He comments that the proposal
currently on the table is still someway short of this goal. The
following improvements would ensure that the package delivers
the right level of benefit to performers:
- "Measures to assist performers
being made permanent features of the Directive, and not purely
transitional as in the current proposal. If this is not
the case, the Directive will not benefit any performers of the
future as the clauses aimed at improving the financial situation
of performers will apply only to those whose performances were
recorded or released prior to the adoption of the proposed Directive.
- "It is possible that an artist who features
on a recording released the day after the Directive comes into
force may not benefit from any of the additional sources of revenue
the Directive is supposed to create.
- "A 'clean slate' provision to ensure that,
after the original 50-year term, record labels are no longer permitted
to enforce contracts that provide for royalty payments to go to
the label to repay initial costs in producing the recording instead
of to the performer.
- "According to the Commission's impact assessment
only 1 in 8 recordings actually recovers its costs. Without this
clause, 7 out of 8 featured artists will see no benefits at all
from a term extension, as all their royalties will be paid to
their record labels to repay the costs of making the recording.
- "Such a clause has already been proposed
in the European Parliament, it has also been included in the most
recent Presidency compromise proposal, but not yet on a permanent
basis.
- "More workable mechanism to ensure that
all musicians, both session and featured, benefit from any extension.
The clause requiring record companies to set aside a percentage
of revenue in the extended term for session artists is complex
and we have been consulting with industry and performers on how
it can best be improved.
- "A workable form of the use-it-or-lose-it
clause. Only a small number of recordings are available to the
public towards the end of the current 50-year term. As record
labels own the copyright in the sound recording no third party
is able to release the recording, even if the performers wish
them to do so. If term is extended further even more recordings
may be locked away. This includes many recordings that are not
of commercial value but are of cultural or historic interest.
A mechanism must be found to ensure that recordings which are
not being made available by right holders can be released commercially.
Copyright users need to be able to easily identify which recordings
are still protected and which are free to use under a
use-it-or-lose-it clause. The latest Presidency compromise proposal
has a form of use-it-or-lose it provision which would be permanent.
The UK will be pressing to ensure that the arrangements in the
Directive are workable."
CO-WRITTEN WORKS
7.9 The Minister comments that the issue of co-written
works was added to the draft proposal at the last minute and is
a very technical issue in copyright law. The UK, along with the
other Member States affected by this proposal, has requested further
information on what is meant by 'co-written' in this context and
asked that the Commission produce an impact assessment on this
measure. However, no information has been provided to date. The
Minister refers to the Hugenholtz report,[33]
which concludes that the measure is disproportionate, as it would
not respect the integrity of Member States' legal systems. He
further comments that it is doubtful that this measure will produce
harmonisation as national law will determine what constitutes
a co-written work and Member States have varying definitions.
The proposal will also result in some works which are currently
out of copyright in the United Kingdom coming back into copyright.
Consequently, the Government is supporting proposals by other
Member States to have this provision deleted. These comments confirm
the Minister's initial reservations, set out in paragraphs 25-28
of his Explanatory Memorandum of 27 October 2008.
RATIONAL FOR CHANGING THE CURRENT PERIODS OF PROTECTION
7.10 The Minister also explains the rationale behind
the current periods of protection as follows.
"This is an historic position with the periods
being harmonised over the years. The rights of record producers
and performers are largely governed at an international level
by the Rome Convention as supplemented by the WIPO Performances
and Phonograms Treaty, while the rights of composers and lyricists
are set out in the Berne Convention, as supplemented by the WIPO
Copyright Treaty. EU Directive 2006/116/EC on the term of protection
of copyright and certain related rights is consistent with these
international obligations. In general terms composers' and lyricists'
rights derive from the Berne Convention and they receive copyright
protection for their life and a period of 70 years after their
death. Performers' rights and rights in sound recordings derive
from the Rome Convention. Most rights governed by Rome are first
owned by companies that commercialise copyright and they are given
a shorter period of protection of 50 years. Performers have this
shorter term but it is considered that their work is more closely
allied to that of composers and lyricists and so should attract
the longer term of protection."
The Minister concludes that the proposed Directive
goes some way to correct this perceived imbalance.
The Minister's Letter of 2 June 2009
7.11 The Minister wrote again on 2 June 2009 to update
the Committee on the progress of the draft Directive and to ask
it to consider the revised draft urgently in light of a possible
and imminent first reading agreement with the European Parliament.
The letter attaches the Council text discussed in COREPER in March
and the text adopted by the European Parliament in April.
7.12 The Minister explains that the Government has
been working hard since March to garner support for a compromise
text with 70 years as the period of extension. Some Member States
were opposed to any extension while others, such as the UK, wanted
permanent benefits for performers included in the text. He reports
that much progress was made although there still remains a blocking
minority within the Council on the COREPER text attached to his
letter.
7.13 On 23 April, however, a plenary vote took place
in the Parliament, in which members adopted a text in favour of
an extension to 70 years. The text agreed by the European Parliament
also includes the following benefits for performers, largely adopting
amendments requested and drafted by the UK: —
- "A permanent fund for
session artists, setting aside a sum corresponding to 20% of all
sales revenue during the extended term, to provide a guaranteed
income for those who often receive very little in the way of royalties
(Article 3(2) and Recital 11).
- "A permanent clean slate provision making
sure that, after the original 50 year term, record labels are
no longer permitted to enforce contracts that provide for royalty
payments to go to the label to repay the initial costs in producing
the recording instead of to the performer (Article 10a(1) and
Recital 8/9). This applies to all contracts, not just those concluded
before the Directive comes into force.
- "A permanent use-it-or-lose-it clause, ensuring
that recordings, which are not made available by right holders
(following the original 50 year term) can be released by the performer
(Article 3(2a) and Recital 7a)."
7.14 The Minister states that "the text agreed
in the European Parliament is predominantly compatible with the
UK position, although the harmonisation of co-written works remains
in the text". He informs us that there is a possibility of
the text being adopted at first reading. This is because the Parliament
"unusually voted through a text that is almost identical
to the compromise text that narrowly failed to get an indicative
qualified majority in COREPER. For the text to be adopted, one
or more opposing Member States needs to change its position and
leave the blocking minority. As the current Parliament text is
a substantial improvement on both the Commission's original proposal
and the Parliament's earlier position as expressed by the JURI
Committee, it now meets the UK's key concerns and we should support
it."
7.15 If the proposal does not go through at first
reading, the Minister reports that the Council will start discussions
in order to agree a common position in preparation for a second
reading. This common position would not be expected to be agreed
until the Spanish Presidency in the first half of 2010, and discussions
would not normally continue in the Parliament before the Council
agrees that common position. It is also possible that, following
the European elections, the new Parliament will re-start a first
reading in September this year.
7.16 In light of a vote in COREPER on a possible
first reading agreement on 10 June, the Minister asks for the
Committee's urgent consideration of the draft text.
Conclusion
7.17 We note that negotiations appear to have
gone favourably for the Government (although a blocking minority
in Council may still exist) and that the European Parliament has
adopted many of the provisions that the Government had proposed
within the Council. Most important of these is an extension of
the term of copyright protection for record producers and performers
from 50 to 70 years (but down from the Commission's proposal of
95 years), allied with the introduction of new and permanent benefits
for performers such as a fund for session artists.
7.18 The Minister's second letter asks us to consider
the latest proposal urgently with, it can be inferred, a view
to clearing it from parliamentary scrutiny in the event that a
first reading deal is voted on in COREPER on 10 June. Whilst we
commend the Government's efforts in working to find an acceptable
compromise on an important proposal, we are concerned that the
proposal still contains provisions (on co-written works) that
the Minister described in his letter of 26 March as unclear, lacking
an impact assessment, a disproportionate interference with national
legislation, unworkable, and therefore subject to a proposal from
several Member States for deletion from the draft (see paragraph
7.9 above).
7.19 It may be that the Government takes the view
that it has achieved its negotiating objectives and should, therefore,
agree to the revised text at COREPER on 10 June because there
is no realistic prospect of securing the deletion of the provisions
on co-written works as well. Against that contingency, we exercise
the discretion given us by paragraph 3(b) of the Scrutiny Resolution
and do not ask the Government to withhold its support on 10 June.
We would be grateful for an account of the outcome of that meeting.
However, we shall keep the document under scrutiny pending an
explanation from the Minister of the justification for agreeing
to the revised text despite the inclusion in it of the provisions
on co-written works.
7.20 We also take the opportunity to remind the
Minister that the prospect of a first reading deal should not
have the consequence of limiting the Committee's effective scrutiny
of a proposal. The Minster's letter was sent one day before the
relevant Committee meeting. This is insufficient time for the
Committee to give proper consideration to a revised Council proposal
together with European Parliament first reading amendments. We
note, however, that the European Parliament voted on first reading
amendments to the Council's text on 23 April. We therefore ask
the Minister to explain why the results of these amendments, as
outlined in the Minster's letter of 2nd June, were not communicated
to the Committee much earlier, and in good time for effective
scrutiny, in accordance with paragraph 3.5.2 of the Cabinet Office's
Guidelines for Departments on Parliamentary Scrutiny of EU
Documents.
7.21 We will consider the draft Directive again
after we have received a response form the Minister on the above
points.
31 http://www.ivir.nl/publications/other/IViR_Recast_Final_Report_2006.pdf
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32
See headnote. Back
33
See footnote 31. Back
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