2 Copyright |
13. Copyright is a property right, created by
statute. It gives to the authors of various types of workincluding
literary, musical and artistic worksthe exclusive right
to their exploitation. Broadly speaking the term of copyright
runs for the life of the author plus a further 70 years. To qualify
for copyright, a work must be original. Furthermore, copyright
does not protect ideas, but only their particular expression.
Thus, a modern-day John Bunyan writing the story of a pilgrim's
progress for the first time would have exclusive rights in the
text of the story and be able to prevent copying of anything more
than an insubstantial extract, but he would not be able to prevent
someone writing a different version of a story about a pilgrim's
spiritual journey. There would, however, certainly be a point
at which a somewhat different but too similar version would infringe
copyright in the original tale.
14. Likewise, copyright does not protect facts,
even if they are newly discovered. The data in a scientific article
is therefore not protected by copyright, although the way in which
it is presented and edited will prevent copying of the article
15. The Berne Convention of 1886 introduced substantial
uniformity to the international copyright system, providing for
reciprocal recognition of copyright between signatory countries.
Notably, it required copyright to arise automatically, without
the need for registration, although when the United States joined
the Convention in 1988 the US retained the right to restrict damages
and attorney fees to parties who had registered their copyright;
a noteworthy precedent for incentives toward registration in the
form of differing remedies, and one which will be relevant to
the discussion of the proposed Digital Copyright Exchange.
16. The Berne Convention contains the so-called
'Three-Step Test' for defining permissible copyright exceptions:
It shall be a matter for legislation in the countries
of the Union to permit the reproduction of such works in certain
special cases, provided that such reproduction does not
conflict with a normal exploitation of the work and does
not unreasonably prejudice the legitimate interests of the
17. The three tests are therefore: (i) that exceptions
should be special; (ii) that reproduction does not conflict with
a normal exploitation of the work; and (iii) that it does not
unreasonably prejudice the legitimate interests of the author.
18. The current principal UK copyright statute
is the Copyright, Designs and Patents Act 1988, which replaced
the Copyright Act 1956. This Act has been amended substantively
on at least three occasions.
It was amended in 2003
to cover the so-called Infosoc Directive, an EU directive which
came into force in 2001 and was designed to update copyright for
the digital era.
Notably, the Infosoc Directive allows for copyright exceptions
covering parody, certain temporary electronic copies, and (with
certain provisos) private use format shifting (such as copying
from CD to PC). Whether
and how to introduce these exceptions into UK law was a major
part of Professor Hargreaves' deliberations, which we consider
in the following sections.
19. Moral rights are a form of right broadly
related to copyright and introduced into UK law for the first
time in the 1988 Act. They include the right to be identified
as an author, unless that right is waived, and the right to object
to derogatory treatment of a work.
20. A feature of intellectual property is that
the creation of a new work, while it may well give rise to an
independent new IP right, does not negate the rights in any work
from which the new work draws inspiration. Where there is a very
long gap between original work and secondary work, that is not
necessarily a problem. On the other hand, works drawing heavily
albeit with fresh creative input on several layers of copyright
material can require multiple consents for that material's use.
21. Finally, the US concept of 'fair use' of
copyright allows for use of works without permission of the author
depending on various factors, broadly including: the nature and
character of the use including whether it is commercial; the nature
of the work; the proportion of the copied material to the whole;
and the effect of use on the potential market for and value of
the work. Examples of fair use include commentary, criticism,
news reporting, research, teaching, library archiving and scholarship.
The exception was previously one of US common law but became statutory
with the US Copyright Act of 1976. Somewhat similar if narrower
UK copyright law exceptions exist,
but they are essentially limited to the exact terms of the exception
rather than being capable of judicial development.
Proposals for new copyright exceptions
22. Format shifting is about transferring copyright
works between different media, such as from a CD to a personal
computer, from a PC to an mp3 player, or from a DVD to a tablet
device. Currently, such transfers generally infringe copyright
through the making of copies without authorisation. Deletion of
the original copy is not a defence.
23. The old practice of transferring vinyl recordings
to cassette tape was another form of format shifting but it was
limited by the need to create a physical copy. There was much
talk in the 70s and 80s of imposing a levy on either cassette
recorders or cassette tapes to compensate for such copying, but
the House of Lords case of CBS v Amstrad
established that the sale of a cassette recorder did not of itself
constitute infringement even when the recorder was designed to
record a playing cassette onto a blank cassette, and levies were
24. Technology has clearly advanced considerably
since the era when making a home-use copy involved an hour of
time spent with a turntable and a cassette recorder. Digital copying
can now be accomplished at very high speed and multiple copies
can be created and transmitted almost instantaneously. There is
a widespread perception that purchase of a recording should at
least carry the right to use that recording in typical environments
and through commonly used outlets such as in family cars, on personal
music players and computers, and through different media around
the home. This may partly be a reflection of the fact that many
consumers invested considerable amounts in re-establishing their
music collections in CD form when CD replaced vinyl. The music
publishing industry benefited substantially from that, and customers
obtained the benefit of a much more durable format. However, customers
do not necessarily feel that they should have to pay again so
soon, particularly given the pricing of CDs at the time when collections
were being replaced. In any event, according to the Consultation
A recent Consumer Focus survey found only 15% of
consumers knew that copying a CD that they had bought onto their
mp3 player was illegal, and only 9% thought it should be.
25. The Hargreaves Review reasoned thus on why
an exception should be created:
Digital technology has enabled use and reuse of material
by private individuals in ways that they do not feel are wrongsuch
as sharing music tracks with immediate family members, or transferring
a track from a CD to play in the car. It is difficult for anyone
to understand why it is legal to lend a friend a book, but not
a digital music file. The picture is confused by the way some
online content is now sold with permissions to format shift (iTunes
tracks) or to "lend" files (Amazon ebooks) at no extra
cost. This puts the law into confusion and disrepute. It is not
a tenable state of affairs.
26. We accept the main thrust of this argument
although we disagree with Professor Hargreaves on the distinction
between lending of books and music. We suspect most people do
grasp the difference between the lending of a book, with its intrinsically
limited capacity for being circulated and copied, and the lending
of a music file which can be copied to hundreds of people within
seconds. In oral evidence to us, Sir Robin Jacob agreed, saying
that there was "a huge difference between the two."
THE LEGAL POSITION ON A COPYRIGHT
EXCEPTION FOR FORMAT SHIFTING
27. The Infosoc Directive permits copyright exceptions
for format shifting, but provides that where an exception is created,
rightsholders should receive fair compensation, depending on the
circumstances of the individual case.
According to judicial interpretation of the Directive, however,
compensation should be assessed on the basis of whether there
has been actual harm, rather than, for instance, a lost opportunity
for further revenue. This permits the argument that private copying,
while it might in theory undermine the opportunity for a further
sale, does not merit compensation, because no such actual further
sale would have been made in the majority of cases, and/or because
the pricing of the content already builds in the expectation of
a certain amount of copying. The 'no additional sale' argument
applies most strongly to copying for personal use. It applies
progressively less strongly to copying within the private sphere
and unrestricted private copying.
28. Nevertheless, it is true that the majority
of EU countries impose some kind of levy with the intention of
compensating for such copying. One problem with these levies,
however, is that there is no consensus on the appropriate levy
rate, so levies are inconsistent between member states, leading
to a risk of skewed markets.
EVIDENCE FROM THE MUSIC INDUSTRY
AND OPEN RIGHTS GROUPS
29. Nevertheless, Pete Wishart MP, who gave evidence
to us in his capacity as a former professional musician and as
Vice-Chair of the All Party Group on IP, was strongly of the view
that an exception should give rise to levies:
In 22 out of 27 European states we do have an exception
for format shifting, often a levy on the hardware, for the musicians.
Again, it is the musicians that this levy goes to. What is going
to happen when this exception goes through is there may be the
arrival of all these new hardware devices, which are going to
be playing this music, which are going to be playing this content.
What would be wrong, if there is going to be a growth in this
type of equipment, with some of that money going back to musicians?
30. Jim Killock of Open Rights Group put the
Of course they are getting something back in the
payment for the original music.
31. Mr Wishart has a valid argument; notwithstanding
CBS v Amstrad, it would be disingenuous to suggest that mp3
players (and indeed cassette players before them) have not been
used frequently as a means of copying copyrighted content. On
the other hand, it is probably a fair point that pricing of content
now includes an expectation of personal use extending beyond the
original medium, for very practical reasons. Robert Ashcroft of
PRS for Music pointed out one such reason, namely that without
format shifting it is becoming impossible to play certain content
at least through certain (portable) media:
You can barely go into an electronics shop and buy
a portable CD player these days. You cannot make it illegal for
people to go and buy a CD and then get it on to the only device
that they have that plays music. Where you draw the line is the
OPTIONS PROPOSED BY THE INTELLECTUAL
32. In the Consultation on Copyright the IPO
is proposing a number of options for changing the law to provide
for a copyright exception. These are:
i. unrestricted private copying, covering copying
of loaned works (this occurs in a number of European states although
accompanied by a levy; it is not the Department's proposed choice);
ii. copying within the private sphere (including
the family and social circle);
iii. copying for personal use (covering individual
personal use only);
iv. copying only when the harm caused is minimal.
33. The Department's preferred option is the
narrow one of personal use, but it is also examining the evidence
on whether creative content is, or could be, priced to take account
of use in a wider sphere and has solicited views on this option
in the Consultation on Copyright. The consultation also invited
views on the fourth option although, as it conceded, the difficulty
with that option is in defining 'minimal'. To be workable, this
option would need to be applicable by a simple test that users
could apply themselves.
34. One way of embodying the 'private sphere'
option in a workable form would be to put a numerical limit on
the permitted number of copies, to reflect typical shared family
use. Apple Corporation already permits use of apps on up to five
devices, and an exception that mirrors commercial practice and
accords with the reality of actual usage of would appear sensible.
35. We have previously expressed our support
for the creative industries in our reports Rebalancing the
Economy: Trade and Investment
and Government Assistance to Industry.
If the recent consultation produces real evidence of actual lost
sales then policy should be determined accordingly. However, there
needs to be pragmatism about both the pricing of content and the
reality of expectations of personal use. On balance, we believe
that the options of permitting personal use or use within the
personal sphere are the most realistic.
36. We endorse the approach
taken in the Consultation on Copyright to the issue of format
shifting. We expect this issue to be an early opportunity for
a greater degree of evidence-based policy-making in the intellectual
property area. Without wishing to anticipate the outcome of that
process, we suspect that a copyright exception based on personal
use or use within the private sphere might prove most practicable
37. The introductory section of this report referred
to the US doctrine of fair use of copyright. One area in which
this concept has produced divergence between UK and US copyright
law is with works which are 'transformative' of earlier worksexamples
of which include numerous episodes of 'The Simpsons' such as those
which parodied 'Citizen Kane', 'Psycho' and 'The Longest Day'.
An entirely different type of transformative work is David Hockney's
re-rendering in modern form of Claude Lorrain's 'Sermon on the
Mount', (although in that case, since the original work was created
in the mid-17th century, any copyright in the painting
itself is long expired). A blog with the title 'Remake/Submissions'
features similar sometimes tongue-in-cheek reworkings of artworks
such as, for example, a Mondrian reinterpreted as the contents
of a suitcase in primary colours.
This illustrates the depth and extent to which those in the creative
sector are constantly borrowing from and reusing works that already
exist; a process that is a vital element in creativity and not
necessarily harmful to the overall cultural landscape. As a Guardian
piece on the 'Remake/Submissions' blog observed:
Artists have played this game for centuries because
it is one of the most intimate relationships you can have with
a work of art. That was why again and again Picasso travestied
Manet's Déjeuner sur l'herbe, which is itself a playful,
mocking restaging of Titian's (or maybe Giorgione's) Concert champêtre.
38. Fair use takes a liberal view of on how copyright
applies to such works, whereas UK law would often require the
user to obtain a licence from the owner of any extant copyright.
This carries with it transaction costs, and probably inhibits
a certain amount of creative activity.
39. There is value in encouraging creativity
drawing inspiration from the world's cultural heritage,
but three questions arise: to what extent the resulting works
may harm the reputation of or cause offence to the original owner,
whether the copyright owner should retain an ultimate right of
objection to subsidiary use, and whether money should change hands.
Of relevance to the latter issue is that derivative or transformative
works may in certain cases result in increased revenue for the
owner of the original copyright, such as when a music sample used
in a remix revives interest in the original track.
COMPARISON WITH SAMPLING
40. A solution to these questions has evolved
with music sampling (that is, the use of small fragments of existing
music in a new track). It involves payment of royalties for use
of samples through collecting societies, a situation which came
about largely because of a shift in the US law of fair use in
1991, when Bridgeport Music Inc v Dimension decided that
samples rising to a level of "legally cognizable appropriation"
needed to be licensed, although de minimis sampling remained
within fair use. There are arguments, however, that this decision
closed down the level of creativity in, for instance, the hip-hop
genre after the early 90s.
HARGREAVES ON PARODY
41. The Hargreaves Review has been criticised
for lack of robust economic analysis on the advantages and disadvantages
of creating an exception in this area. The Review acknowledged
that certain issues such as parody as a satirical instrument were
outside its terms of reference, but nevertheless recommended an
exception, as permitted by the Infosoc Directive, on the basis
of the potential economic benefits. However, both UK Music and
the Authors' Licensing and Collecting Society were among those
pointing to lack of precision in the impact assessment.
42. Given the consensus that
policy in the area of intellectual property should move forward
on the basis of a better evidence base, we believe that before
proceeding with a potential policy exception for parody there
should be a closer examination of certain economic issues including,
possibly: (i) the actual transactional costs involved in negotiating
licences; (ii) the comparison between those costs and the anticipated
benefits; (iii) how much creative activity is actually stifled
by the current legal situation; and (iv) what proportion of parody
cases might lead to an allegation of moral rights infraction,
and what the costs of resulting disputes would be.
43. In its review of responses
to the Consultation on Copyright, we recommend that the Government
give due weight to economic data on the potential benefits and
disadvantages of implementing a parody exception and take such
data into account in its eventual decision.
RELEVANCE OF MORAL RIGHTS AND REPUTATION
44. Creation of an exception for parody would
remove the right of authors to refuse licence permission but need
not leave copyright owners entirely unprotected with respect to
reputational damage. Moral rights exist precisely to afford protection
in this area; as the Consultation states, "Moral rights therefore
clearly place limits on the extent of any parody exception."
However, the relevant rightthe integrity rightallows
objection only to treatment which "amounts to distortion
or mutilation or is otherwise prejudicial to the honour or reputation
of the author".
There is a high threshold for meeting this test, as demonstrated
in the case of Confetti Records v Warner Music UK Ltd,
 which failed
to find infraction of the integrity right even though the original
version of a music track had been overlain with rap words containing
repeated references to violence and drugs. Furthermore, we would
be concerned if a change in the law merely shifted the focus of
dispute from one potentially expensive IP issue (infringement)
to another (infraction of moral rights).
FREE SPEECH ARGUMENTS
45. Those favouring a parody exception cite its
important role in supporting free speech, and the potential reluctance
of copyright owners to give permission to satirists. Citing the
case of campaigning action groups, Jim Killock argued that effective
deployment of free speech sometimes necessitates the use of copyright
That is what they [parodists] do: they parody [corporations]
in order to show the brand up for not living up to the values
it espouses. In doing that, they are going to breach the copyright
ownerships of those corporations and that puts them in legal jeopardy.
The result is that lots of these campaign organisations have to
take legal risks in order to challenge those brands, and that
is a serious impediment, to my mind, to their freedom of expression
and on political dialogue. That is ultimately why the parody exception
is extremely important.
INTELLECTUAL PROPERTY OFFICE PROPOSALS
46. The Consultation on Copyright observes that
UK law previously "provided greater flexibility for works
of this nature" but that "by the 1980s this parody defence
had been extinguished."
The Government has indicated that its preferred route forwards
is to implement a "fair dealing" exception to cover
parody, meaning that "commercially competing uses of copyright
material (those capable of substituting for the original) are
not allowed." The Consultation clarified this:
The use of the parody exception to make a straightforward
cover version would be ruled out. A parody that is likely to unfairly
damage the reputation of a creator would also be ruled out by
a fair dealing exception."
CONCLUSION ON PARODY
47. On a possible exemption
for parody, we are inclined to agree with the Government's proposal
for a fair dealing exception, but with disapplication of the exception
where there is reputational damage and subject to a robust assessment
of the economic benefits. We recommend that the definition of
unfair reputational damage should make provision to protect (within
the exemption) genuine political and satirical comment supportive
of free speech.
WHAT IS CONTENT MINING?
48. The Consultation on Copyright defined content
Automated analytical techniques such as text and
data mining work by copying existing electronic information, for
instance articles in scientific journals and other works, and
analysing the data they contain for patterns, trends and other
49. By facilitating the very rapid automated
trawling and cross-referencing of scientific papers, content mining
has already led to successful advances in areas such as Alzheimer
's disease research.
THE LEGAL ISSUE
50. Because such techniques involve the making
of electronic copieseven though such copies may on occasion
be temporaryunder the current law they infringe the copyright
in the trawled articles including the publishers' copyright deriving
from their editorial input into the publication process.
51. The Berne Convention permits copyright exceptions
consistent with the three-step test and, pursuant to that, the
Infosoc Directive authorises Member States to legislate for exceptions
to permit non-commercial, scientific research.
The Hargreaves Review recommended implementing such permission
but went further, recommending extension to commercial use:
We therefore recommend [
] that the Government
should press at EU level for the introduction of an exception
allowing uses of a work enabled by technology which do not directly
trade on the underlying creative and expressive purpose of the
work (this has been referred to as "non-consumptive"
52. The Consultation proposes introduction of
an exception applying "only to uses of technology that do
not unduly prejudice the primary market for or value of the copyright
works being copied."
Given the constraints of the Infosoc Directive, it would apply
initially only to non-commercial use, but negotiations at EU level
to permit extension into commercial use is contemplatedindeed,
THE ARGUMENTS FOR AND AGAINST
53. One argument in favour of less restricted
content mining is the "non-consumptive use" argument,
which is that automated copying does no more than could be done
lawfully by an army of readers working on individual papers. As
Professor Hargreaves put it:
The idea is to encompass the uses of copyright works
where copying is really only carried out as part of the way the
technology works. For instance, in data mining or search engine
indexing, copies need to be created for the computer to be able
to analyse; the technology provides a substitute for someone reading
all the documents. This is not about overriding the aim of copyright
- these uses do not compete with the normal exploitation of the
work itself - indeed, they may facilitate it. Nor is copyright
intended to restrict use of facts.
54. This is an enticing approach, although it
is arguable that if content mining is to become a widespread tool
for research, it will become a form of normal exploitation in
itself, and hence protected by the Berne Convention. Furthermore,
the assertion that copyright does not restrict the use of facts
overlooks the point that scientific papers are not merely presentations
of fact; they are interpretations of fact which have typically
been peer reviewed and edited, with a substantial contribution
to the editing process usually deriving from publishers. On the
other hand, content mining at least at present appears to search
within the factual realm of publications rather than in their
expressive realm and to that extent appears concerned more with
the researchers' original work rather than the publishers edited
55. Other areas of argument include the scope
of existing licences and the technical demands imposed by unrestricted
content mining. Thus, universities and libraries argue that they
already have licences to read scientific papers. However, historically
such licences have assumed human readership. Publishers have a
legitimate argument that a licence for human readership is a different
legal and technical animal from one that permits wholesale computerised
reading, not least because a degree of investment may be needed
to support the data-feed for computerised trawling or the extra
downloading demand. Richard Mollet of the Publishers Association
summed up the publishers' overall position, beginning by stating
that the publishing industry recognises the value of content mining:
Content mining is something that publishers wholeheartedly
and fully support, and indeed we are fundamental to the development
of the technology. It is still a very nascent technology, and
88% of large publishers across Europe take only about 10 mining
requests a year. This is still something that is in its infancy.
What is vital to acknowledge here is the investment that goes
on from publishers in the development of infrastructure and ongoing
support to allow mining to happen. It is not just the case of
having the data out there and letting a crawler go and look at
it; it has to be prepared in a way that crawling tools can understand.
56. He pointed to the risks associated with unrestricted
access. We set out his arguments at some length because, while
complex, they were well expressed:
There are a number of risks if one were to take
away the management of that access, as Hargreaves suggests, and
say, "Well, let us just have an exception." [
One is the technical risk that such untrammelled mining would,
to the publishers' platforms, look like a denialofservice
attack. All of the technologists who work in the publishing companies
will tell you their systems would fall over; they just would not
be able to cope, rather like a broadband connection being overwhelmed
or the degradation of use by overuse. There is a technical risk,
which means that access needs to be managed, but there is a commercial
risk too. Publishers have to know that the person who says they
want to come mining are who they say they are, and that they are
going to use it for noncompeting use. Of course, there is
no way of managing that if you have taken away any need for managing
Finally, there is a competitive risk to the UK because
if, as Hargreaves suggests, we were the only country in Europe
and, indeed, the world that did not have any management of access,
you are basically saying to anybody, "Come on in and get
our data. Get our text. You can do what you want," there
will be no revenues going to anybody at all. Of course, in every
other country in the world there will be. If you are a publisher,
why would you want to come to a country where you are exposing
yourself to technical and commercial risks; you would go to a
country that did not have an exception. That is why we support
mining but think that access needs to be managed.
57. Ed Quilty of the IPO acknowledged that this
commercial risk could be a problem if access became a free-for-all:
We have heard people say that the opening up of their
databases to the access required to do data and text mining will
overload the servers and make it impossible to operate. At the
moment I do not know how far that is true or not, but it does
suggest that there may be costs associated with opening a service.
That is something we need to look at.
There is certainly also this question about abuse:
how do you arrange things so that the copies in question that
are made do not find their way into other areas. That is something
that we would have to consult people on and I think the publishers
have views on that, and we will have to take their views in designing
58. Reed Elseveier's evidence picked up on the
point that publishers' servers cannot currently handle uncontrolled
data trawling, and explained that the current solution is to permit
wholesale temporary downloads of data to licensed users.
However, this highlights the risk that might apply in the event
of unrestricted downloading; unscrupulous downloaders might find
means to override usage restrictions and obtain permanent access
to the data, or use it for onward transmission to third parties.
If such third parties were situated outside of UK jurisdiction
there could be significant problems in enforcing copyright.
59. We believe that the solution on costs should
take account of the publishers' contribution and increased burden
of technical support while recognising also that the core creative
content in scientific publications derives from academic and other
researchers whose principal form of recompense is recognition.
Such a solution should probably therefore be based on reasonable
recompense for investment either by way of negotiated licence
fees or fees set by an external body such as the Copyright Tribunal.
60. The licence option is the one currently being
developed by publishers. The Association of Learned and Professional
Society Publishers and Reed Elseveier made this point, the latter
referring to its substantial ongoing investment in developing
new systems. The
Publishers Association pointed also to current developments in
creating model licences.
This suggests that the market might not yet be considered as having
61. Publishers have argued that they can play
a crucial facilitative "maitre d'" role in the content
mining process. On
the other hand, there was anecdotal evidence that publishers struggle
to handle the volume of requests for conventional access let alone
for data mining, which raises the question whether they have,
or will have, adequate resources to cope with a further influx
of requests. The Consultation on Copyright referred to the potential
difficulties of handling large volumes of such requests.
If publishers want to be able to claim to offer the sophisticated,
facilitative "maitre d'" service to which they referred,
they will need to divert adequate resources from revenue to support
that service. Any extra licence fee payable for content mining
needs to be seen to have a tangible benefit in facilitating access.
The alternative would be a royalty rate set by the Copyright Tribunal.
PUBLIC ACCESS TO PUBLICLY FUNDED
62. In May 2012, the Minister of State for Universities
and Science highlighted
the success of the UK scientific publishing industry which publishes
5,000 of the world's 23,000 peer-reviewed journals, and set out
the Coalition's commitment to public access to publicly funded
The evidence underpinning our ambition for public
access is compelling. For example, publicly funded and freely
available information from the Human Genome Project led to greater
take up of knowledge and commercialisation than from earlier protected
data. To date, in fact, every dollar of federal investment in
the Human Genome Project has helped generate $141 for the US economy.
63. The Minister challenged the industry to adopt
I realise this move to open access presents a challenge
and opportunity for your industry, as you have historically received
funding by charging for access to a publication. Nevertheless
that funding model is surely going to have to change even beyond
the positive transition to open access and hybrid journals that's
already underway. To try to preserve the old model is the wrong
battle to fight. Look at how the music industry lost out by trying
to criminalise a generation of young people for file sharing.
It was companies outside the music business such as Spotify and
Apple, with iTunes, that worked out a viable business model for
access to music over the web. None of us want to see that fate
overtake the publishing industry.
64. It seems to us that the Minister was making
a valid argument. Content mining is essentially about a desirable
widening of access to the factual element of scientific literature
rather than the edited contribution, although publishers have
an important potential role to play in enhancing the search process.
There are issues around technical feasibility and security which
need to be resolved, but we believe that content mining should
be opened up by way of managed but nevertheless readily accessible
65. We believe that policy on
content mining should have regard to potential risks. Revenue
might not provide the necessary investment to support data access
and the successful UK scientific publishing business might be
disadvantaged. However, policy should also recognise the potential
benefits of content mining, the core contribution of researchers
and the need for ready access. We believe that publishers should
seek rapidly to offer models in which licences are readily available
at realistic rates to all bona fide licensees and we encourage
the Department to promote early development of such models.
66. Orphan works can be defined as works in which
copyright subsists but which do not have an identified author
or creator. Unlike familial orphans, however, they can reacquire
a parent if their creator is identified, such works being described
as 'revenant works'. A large quantity of orphan works exists for
which the prospects of reidentification are slim, however, and
the Hargreaves Review pointed to the creative opportunities that
would arise were such works to become available for use. Current
copyright law prevents their exploitation because of the lack
of legal sanction for their use from an identified or identifiable
rights holder. Archives
can therefore be required to preserve works which they cannot
actually use to recoup the costs of preservation. 20 to 30% of
material in archives is estimated to be orphan material.
In evidence, the British Library went further, claiming that some
"43% of books from 1870 to 2010 were orphan works" and
arguing that the "economic benefits of mass digitisation
67. Bodies representing rights holders, however,
particularly those in the photographic sector such as Stop43,
have argued vociferously against wide-ranging orphan works provisions
on the basis that they would not comply with the three-step test,
and in particular step threeunreasonable prejudice to the
legitimate interests of the rights holder.
68. There were some radically different perspectives
on how to resolve the tension between the rights of revenant orphan
works owners and those wishing to exploit the relevant works.
Arguing from a pragmatic approach to the scope of the legal remedies
that should apply, Sir Robin Jacob told us:
I think we do need a reasonably good orphan work
provision that says something along the lines of, "All right,
you didn't look after it. You can't expect an injunction now and
all you can have is reasonable compensation, and since you have
basically abandoned it we are not going to give you a lot.
69. Not surprisingly, Stop 43 disagreed, arguing:
Most orphans are the result of illegal digital copies
or scans of prints and postcards. [...] I think you will find
that most rights holders have a pretty clear idea of where their
property is; they do not know that illegal copies have been made.
That is where I would dispute Sir Robin's opinion of what orphans
We suspect that Stop43 has a point in terms of the
underlying position on awareness and custodianship, in particular
where photographs are concerned. Equally, we agree with Sir Robin's
pragmatic approach to the application of legal remedies where
there is proof that an owner failed to prevent loss of their work
and/or that they would suffer no real harm in the absence of an
THE ISSUE OF MISIDENTIFYING WORKS
70. The photographic industry has been particularly
exercised about orphan works provisions for two reasons: first,
the potential competition from a sudden release of previously
unavailable photographic material; and secondly the ease with
which ownership data (metadata) could be stripped away from a
digital photograph to give it the appearance of being an orphan
work, which could facilitate its illegitimate use.
71. The Consultation on Copyright acknowledged
the different circumstances that might apply to photographs:
The Government also recognises that photographs often
lack any information about rights holders or about the photograph's
age, original purpose, subject matter or country of origin.
72. However, Ed Quilty of the IPO explained how
an orphan works registry could address concerns about works being
wrongly designated as orphan:
Today, their photographs are often routinely infringed,
metadata stripped off, etc and people sell them masquerading as
orphan works on websites. There is very little they can do about
it. At least if you had an orphan works registry, they would be
able to go to the registry and if they could find a licence there
for the use of the orphan works they could say to the person,
"Why aren't you selling this in accordance with the regime
we have devised?
One of the anxieties that I have heard expressed
by photographers frequently seems to me to be based on the notion
that as soon as we put this orphan works system in place there
will be widespread and complete abuse and infringement of it.
I do not think that is going to be the case. There will be some,
but it should be controllable and we have to build the system
to avoid it. 
73. Ben White of the British Library told us
why the material available in a registry need not itself present
You are not putting 50megabyte images up on
the web; you are putting up things that are a hundred times smaller,
which pixelate if blown up.
74. The Government is proposing to define orphan
works in a way that requires a diligent search to be conducted
before a work is identified as 'orphan' and therefore available
for use. The Consultation on Copyright set out various options
on this, and in evidence
to us Ben White of the British Library neatly articulated a common-sense
approach to defining due diligence:
I do not think there is a "one size fits all",
but there is an understanding of what "diligent" and
"reasonable" mean. What we are envisaging here is always
thirdparty oversight of that process, whether that is by
Government, of the library directly or, for example, the collecting
society again being monitored by Government to see if they have
actually done a diligent search.
A NEW COPYRIGHT STATUTE
75. It is important to note that it is already
unlawful to remove metadata.
However, the fact that knowledge of removal and intention to make
commercial gain are requirements to establish an offence might
make prosecution difficult. Furthermore, the relevant statutory
provisions are overlaid on a 24-year old Act of Parliament and
demonstrate the lack of transparency consequent on a statute of
that age that having been amended so significantly.
They do not lend themselves to ready application.
76. The Hargreaves Review endorsed the submission
made by the patent judges, which recommended a comprehensive review
and redrafting of the Copyright Act 1988 on the basis that "it
is not an overstatement to say that the period since [the 1988]
Act has coincided with a revolution in the way that literary,
artistic and musical and other works are created and exploited.
Both technology and business models have changed radically during
this period. It would therefore be surprising if the legislation
was still framed in terms which are appropriate to this era. We
do not think it is."
77. We did not hear any arguments
in favour of retaining the UK's copyright statute in its current
form. This legislation was enacted before computers became commonplace,
and needs rewriting. We recommend that the Government put measures
in place for bringing up to date and consolidating the UK's principal
copyright statute and related legislation at the earliest opportunity
notwithstanding the likely need for earlier measures to reflect
the recommendations of the Hargreaves Review.
78. The Enterprise and Regulatory
Reform Bill paves the way for certain reforms to copyright including
through secondary legislation. We understand that there is also
a possibility of further measures requiring primary legislation
being introduced in this parliamentary session, but that others
might be delayed. We urge the Government to press ahead as soon
as possible with measures to reform copyright where the case is
made out for urgent change to support growth in the economy. We
recommend that the Government set out a clear timetable for all
such measures covering both primary and secondary legislation.
EU DRAFT DIRECTIVE
79. Ed Quilty of the IPO explained what was happening
on orphan works at EU level:
The European community is looking at an orphan works
scheme. If that orphan works scheme does introduce a new exception,
then we would be able to use that exception, provided it goes
far enough. From the signs of what is happening at the moment
in Brussels, the sort of exception that they may be using for
orphan works may be quite narrow and restricted to culturalonly
uses, which may mean it is not possible to use it beyond some
fairly limited ways. It is an evolving picture at the moment;
we have to wait and see how that all shakes out.
80. Stop 43 liked the approach taken by the draft
Directive but had its own concept which it termed the National
We could envisage an online gallery, in which orphans
could be presented simply for people to look at, in the way that
you go and have a look at a painting on a wall in an art gallery,
or indeed that painting on the wall in this room. I can sit here
and look at it, but I cannot copy it, take it away or scribble
on it. That is our concept of cultural use.
INTELLECTUAL PROPERTY OFFICE PROPOSALS
81. The Consultation on Copyright invited views
on how broadly the proposed provisions should be expressed and
canvassed the option of confining the proposed scheme to published
and broadcast works.
It also mooted the idea of giving the Copyright Tribunal jurisdiction
over authorising use, subject to increasing the tribunal's resources
to allow it to meet the task.
82. Stop43 argued against intervention of that
sort, suggesting that appropriate compensation required a face-to-face
The commercial use of an orphan in which the rights
holder is not present of course cannot compensate for that lack
of primary negotiation.
However, on balance the weight of evidence suggested
that the Copyright Tribunal has a good reputation in similar areas
already within its purview, and that a solution employing Copyright
Tribunal might therefore be sensible.
83. We recognise that industry bodies such as
those representing photographers have legitimate concerns on licensing
of orphan works. On the other hand, the problem of stripping ownership
data from photographs already exists. A properly run orphan works
scheme has the capacity to improve matters by requiring due diligence
searches and by pointing potential users to legitimate sources.
Combined with sanctions (preferably strengthened ones) against
stripping of data we believe that such a scheme has the potential
to be workable and beneficial.
84. We remain concerned, however, that there
are a few places in which difficulties are being glossed over.
This is illustrated by passages in the Consultation, referring
to the permitted use of an orphan work by an authorising body:
What can a user of an orphan work do with the work
once it has been authorised?
The use will be circumscribed by the authorising
body. It will not interfere with any future uses that the revenant
owner may make, even while they do not know of its orphan status
85. This statement that there is no possibility
of interference with the future wish of a revenant owner to use
their work as they wish is presented without justification. We
believe this might need reconsidering, and one way to address
it might be to give the Copyright Tribunal discretion to refuse
licences in instances where there might be particular harm to
the revenant owner or potential (that is, yet to be identified)
86. We support the development
of an orphan works scheme provided that appropriate protection
for rights holders is included. We agree that the Copyright Tribunal
should have jurisdiction over licensing but we recommend that
it, or an alternative body with appropriate powers, be given authority
to block usage in instances of particular potential harm to rights
holders or where monetary compensation might not suffice.
ORPHAN WORKS AND MORAL RIGHTS
87. The concept of moral rights was outlined
in paragraph 19. The Consultation on Copyright stated that there
was no need to alter the UK's moral rights regime to accommodate
an orphan works scheme.
However, Paul Ellis of Stop43 argued:
Under the CDPA, our moral rights are not automatic;
they must be asserted. This gives rise to the situation in which
someone wishing to use an orphaned work can assume that the author
did not assert their moral rights. We need the law changed so
that moral rights are automatic and unwaivable. Such rights are
automatic and unwaivable in Germany and, notably, Germany has
a thriving publishing sector. It seems not to be suffering from
88. We think there is a point that needs addressing
here. When authors sign a contractual waiver they are not necessarily
envisaging what might happen if their work later appears on an
orphan works registry and they subsequently wish to re-identify
themselves on that registry for purposes that might be entirely
different from that envisaged by the waiver. In principle, contractual
waiving of moral rights therefore should not conflict with an
author's right to be identified on an orphan works registry.
89. We recommend that evaluation
of a potential orphan works registry include consideration of
the need for author's rights of identification to persist over
and against any waiver that has previously been made contractually.
This might take the form of a presumed right of identification
on the registry (notwithstanding any previous waiver) unless other
factors apply such as the scope of the waiver itself.
The proposed Digital Copyright
90. The Hargreaves Review focused strongly on
recent failings in, for instance, the sphere of music commercialisation
where changes in market dynamics have overtaken the industry and
produced a collapse in value. The Review argued that although
part of the solution lay with enforcement (to which we return
below), there was an additional need for new models of copyright
licensing and marketing. The Review noted that the technological
and market challenges were not confined to the music industry
but extended to newspaper publishing and book publishing, commenting
Television, film and video games have suffered less
disruption to date only because broadband speeds and earlier generations
of mobile phones were not hospitable to large video files, but
this too is rapidly changing, as the internet matures as an audio
91. The Review argued convincingly that there
were problems not only with models of supply but also with the
complexity of obtaining copyright clearances:
The BBC has said that it took nearly five years to
assemble the rights necessary to launch its popular iPlayer service.
Among a group of young technology SMEs the Review met at a meeting
at TechHub, half claimed to have had difficulty licensing others'
IP across all rights. One SME, providing on demand streaming of
radio shows and DJ mixes, reported it took about nine months of
lobbying music collecting societies to make any headway on licensing.
92. As a solution, Professor Hargreaves offered
the concept of a Digital Copyright Exchange, which he compared
Where very large numbers of different merchants sell
goods through an electronic trading system, where it is quick
and easy to pay, and quick and easy to get delivery of the goods.
93. Ed Quilty of the IPO used the analogy of
telephone directories with bodies such as the Performing Rights
Society as the provider of one directory:
In a sense, what the DCE would do is first of all
bring all these digital telephone directories together so they
would be interlinked and you would have a better chance of finding
the rights you want.
94. There have been three main criticisms of
the Digital Copyright Exchange proposal, however:
- That the potential benefits claimed by the Hargreaves
Review were overstated;
- That it might be unnecessarily bureaucratic or
might replicate other structures wastefully; and
- That if it were made compulsory it would contravene
the Berne Convention and lose credibility. (Equally, there was
a counter-argument that if there were no incentives to participate
it could lose credibility in that way too.)
95. On the first of these, that benefits have
been overstated, Professor Hargreaves believed that if anything
the opposite might be the case.
When asked about the potential benefits, the Minister and the
IPO were equivocal, believing it was too early to say.
Ed Quilty saw the main potential benefit as a reduction in transactional
The advantage of that is that you should not need
a lawyer for every single transaction and every single rights
holder. That would be the benefit of the DCE.
96. He stressed that the model need not be complex,
universal and bureaucratic:
Some people, for example, assume that the exchange
must mean one single, vast database that spans the globe. There
is no reason why it necessarily should be like that; it could
be an interlinking of databases. It might even just be a protocol
that regulates the way the databases interact.
97. Professor Hargreaves likewise did not believe
that costs should be excessive:
There is no reason why this should be frighteningly
expensive. This is not setting up the NHS patient records system;
this is about securing agreement and technical capability of interoperability
between systems that are currently not interoperable.
98. There was dispute as to whether there was
market failure from existing provision, with Creative Coalition
Campaign citing a recent example to support its position that
the situation is not broken:
We worked recently with Microsoft Networks when they
launched their own videoondemand service. It was not
about licensing. What they wanted to do was come up with a pro
forma standard licence to reduce transaction costs, which we did
with them and that was made available to every single independent
production company in the UK to sell their works at minimal transaction
cost to MSN.
99. But Jim Killock of Open Rights Group argued:
The market is not entirely functional and that is
why the Digital Copyright Exchange has been suggested. There is
absolutely no question but that content is being licensed; the
question is whether it is being licensed sufficiently and quickly
100. Pete Wishart summed up some of the concerns
on potential compulsion to participate:
I think it is right that we do have a look at what
is going on, in terms of what already exists. If the Digital Copyright
Exchange is to be successful, a) it has to be voluntary, b) it
has to be businessled or interestled, and c) we have
to see what is going on already. The first step going towards
creating that Digital Copyright Exchange is to have a proper audit
of all the databases that exist across all sectors to see what
is actually required in order to try to deliver a proper Digital
101. The Minister and the Department confirmed
that participation in the DCE would not be compulsory.As
Ed Quilty put it:
It is something that people could use if they want
to, in the same way as if you wanted to put your works on Amazon
to sell them or if you wanted to sell them through a distributor,
you are not forced to do it, but you can use it as a mechanism;
that is how we should look at it.
102. Despite its misgivings about other aspects
of Hargreaves Review, Stop43 was enthusiastic about the DCE:
To overcome the problem of digital copyright infringement,
which is of course a problem with machines, the solution must
in large part rely on machines. That implies a rights registry.
This is of course where we are all in agreement.
103. This might well have been because, as was
pointed out by the IPO, the DCE could operate as a very effective
part of the due diligence checks for orphan works.
Ed Quilty told us:
It may be that we have that happy coincidence of
legal progress or change in this area accompanied by the technical
ability to do something about it. If, for example, we had an orphan
works registry, then every photograph and any other work could
be put up on the registry and it would enable people who were
photographers, for example, to look at what is there and see if
they think their stuff is there even if it had been stripped of
metadata, which it should not be. It would also mean that you
could use technical abilities to find the stuff.
OVERVIEW AND STATUS
104. The Digital Copyright Exchange was among
the proposals which Professor Hargreaves envisaged as particularly
The Review's judgment is that the Government has
a severely time limited opportunity to bring about in the UK the
best copyright licensing system in the world. To achieve this
will require firm, even inspirational leadership, given the high
commercial stakes for a large number of competing firms. The prize
is to build on the UK's current competitive advantage in creative
content to become a leader in licensing services for global content
markets; in short to make the UK the best place in the world to
do business in digital content. It is not fanciful to suggest
that such a development would be of comparable importance over
time to the UK's position as the leading service support centre
in the European time zone in financial services.
105. On 22 November 2011, the Department announced
the appointment of Richard Hooper, former Deputy Chairman of Ofcom,
to lead on the digital copyright exchange project. In January
2012, a feasibility study was launched to consider options and
recommendations "for a workable licensing solution by 2012
summer parliamentary recess".
There was a call for evidence by 10 February 2012 on two questions:
whether respondents agreed with the Hargreaves hypothesis that
the current copyright licensing system was fit for purpose, and
whether respondents agreed with the proposed definitions including
market definitions. Richard Hooper has stressed the need for hard
evidence. An interim report has been published following the collection
of evidence. 
It remains the expectation that a further phase will be completed
before the summer parliamentary recess.
106. On the claimed potential benefits of the
DCE, it will be important for Richard Hooper's review to consider
the potential costs and benefits of new copyright licensing models
to a greater extent than was possible in the time available to
Professor Hargreaves. Any new systems need to be demonstrably
financially sustainable in order to achieve buy-in from the relevant
107. The principal incentive to participate in
a digital copyright exchange should lie in the scope for greater
commercialisation of copyright works together with the creative
opportunities that an exchange may offer. It might also be that
some legal incentive is appropriate in the form of greater availability
of legal remedies to those participating in the network. This
may require negotiation to fit within the constraints of Berne
and may indeed at a future stage require participation of foreign
partners. However, Sir Robin Jacob, a former Court of Appeal of
judge with decades of experience in IP, was among those who believed
that incentives to participation might validly include restricting
injunctive relief to participants in a scheme, with others receiving
This might be an area where again an appropriately resourced Copyright
Tribunal could intervene in cases where real harm from lack of
an injunction is demonstrable.
108. We can see many potential
benefits in principle to a digital copyright exchange provided
that it makes best use of technology to avoid bureaucracy and
the replication of existing systems. We conclude that Richard
Hooper's review of copyright licensing options and a possible
digital copyright exchange is an important stage in policy development
and it is critical for that review to examine the costs and benefits
of the possible models fully so that policy proposals are credible.
109. Collecting societies act as brokers between
users of copyright material and rights owners, collecting standard
royalty payments which permit the right to use, for example, recorded
music in shops. This system has the benefit of simplicity for
the user and a guaranteed royalty stream for rights holders. As
the controllers licensing of vast collections of works, however,
the societies are in a powerful position.
110. The UK is one of only three EU member states
that do not regulate royalty collecting societies; the others
being Ireland and Poland. All other member states have a system
of regulation by licence, codes of practice or ongoing scrutiny.
Evidence to the Hargreaves Review revealed issues regarding fair
treatment and lack of transparency on costs.
Open Rights Group summarised some of these grievances:
We were talking earlier about the rights of artists
and the importance of artists to this debate. A lot of artists
feel they do not get enough information about how their royalties
are calculated, what percentage of the fees that they get has
been deducted for administration and so on.
111. In contrast, Mr Wishart had no complaints
about the societies:
I have to say that I have never had one issue when
it has come to understanding and appreciating where these royalty
payments come from. If I ever have any difficulty, it is very
easy to get in touch with PRS for Music.
112. The societies have accepted need for change,
however. The PRS acknowledged that its monopoly position produced
We are deeply concerned and respectful of the fact
that, in that part of our business, we are a monopoly. We are
very concerned to be efficient, fair and transparent and, frankly,
we welcome the oversight by the Copyright Tribunal.
113. The Consultation on Copyright pointed to
the need for collecting societies to retain credibility on regulation
if they were to be involved in making the Digital Copyright Exchange
a success, setting out a plan of action with possible legislative
action as an incentive toward better compliance:
The Government has therefore proposed that collecting
societies self-regulate by way of voluntary codes for the time
being, with an Ombudsman to regulate the codes and the prospect
of legislative action as a long stop. The Government has proposed
an implementation timescale for the voluntary codes of a year
114. We agree that statutory
regulation of collecting societies should be a last resort. The
collecting societies have accepted the need for change. We support
the proposal to introduce regulation by way of a voluntary code
backed up by the establishment of an ombudsman.
14 New facts with a useful application might well,
however, be the basis of a valid patent application Back
In relation to the Database Directive, the Term (i.e. copyright
duration) Directive , and the Infosoc Directive Back
By the Copyright and Related Rights Regulations 2003 Back
See Glossary in Annex Back
Infosoc Directive, Article 5 Back
These include an exception for acts done for the purposes of parliamentary
proceedings; section 45 CDPA 1988 Back
 AC 1013 Back
Paragraph 7.24 Back
Paragraph 5.10 Back
Q 77 Back
Infosoc Directive Article 5(b) Back
Q 210 [Wishart] Back
Ibid. [Killock] Back
Ibid. [Ashcroft] Back
Consultation on Copyright, paragraph 7.39ff Back
Seventh Report of 2010-12, HC 735-I, paragraph 41 Back
Third Report of 2010-12, HC 561-1, paragraph 123. Back
with red, blue and yellow' by Katie Jackson based on the Mondrian
work of the same name. Back
Guardian, 17 January 2012, 'The art of the remake' Back
Mr Wishart agreed, saying: "I think there is nothing wrong
at all with building on the works of others. I remember sitting
with my old S-500 Akai sampler doing that very same thing a number
of years ago." See Q200 [Wishart] Back
Ev w14; Ev w168 Back
Consultation on Copyright, paragraph 7.105 Back
CDPA section 80(2) Back
 EWHC 1724 (Ch) Back
Q 202 Back
Paragraph 7.102 Back
Paragraph 7.121 Back
Paragraph 7.84 Back
Article 5(3)(a) Back
Paragraph 5.24 Back
Paragraph 7.97 Back
Paragraph 5.24 Back
Q 185 Back
Q 185 Back
Q 250 [Quilty] Back
Ev w143 Back
Ev w142 Back
Ev 86 Back
Ev 88 Back
Paragraph 7.93 Back
Ev 88 Back
There is a limited exception for copies of performances sanctioned
by the Copyright Tribunal; section 190 CDPA. Back
Consultation on Copyright, paragraph 4.5 Back
Q 161 [White] Back
Ev 95 Back
Q 117 Back
Q 159 Back
Consultation on Copyright, paragraph 4.15 Back
Q 245 Back
Q 176 [White] Back
Paragraphs 4.36ff Back
Q 172 Back
See Consultation on Copyright, paragraph 4.48; section 296ZG,
CDPA 1988 Back
We heard strong support for a new statute: see for example Ev
72 and Ev w97 Back
Report paragraph 10.26; Patents Judges response, paragraph 4 Back
Q 240 Back
Q 168 Back
Consultation question 7 Back
Paragraph 4.34 Back
Q 164 Back
Qq 97, 98, 118, 120; 207 [Ashcroft] Back
Consultation on Copyright, paragraphs 4.52-4.54 Back
Paragraph 4.51 Back
Q 177 Back
Review, paragraph 4.14 Back
Review, paragraph 4.17 Back
Q 15 Back
Q 231 Back
Q 20 Back
Q 233 Back
Q 231 Back
Q 236 Back
Q 24 Back
Q 205 [McVay] Back
Q 205 [Killock] Back
Q 205 Back
Q 235 Back
Q 238 Back
Q 168 Back
Q 237 Back
Q 245 Back
Paragraph 4.29 Back
Q 101 Back
Hargreaves Review, paragraphs 4.42, 4.44ff, 10.6 Back
Q 207 [Killock] Back
Q 208 [Wishart] Back
Q 207 [Ashcroft] Back