Support for the creative economy

Writte n evidence submitted by Stop43 [SCE 072]

EXECUTIVE SUMMARY

This submission consists of:

· Stop43’s general position statement;

· Elaboration of three recommendations made in the All Party Intellectual Property Group’s recent report;

· Consideration of the inherent problems of the Enterprise and Regulatory Reform Bill’s copyright provisions.

ABOUT STOP43

Stop43 is composed of members of The Association of Photographers [1] , The Britis h Institute of Professional Photography , [2] The British Pr e ss Photographers’ Association , [3] Copyright Action , [4] EP U K , [5] The Natio n al Union of Journalists [6] and Pro-Im a ging ; [7] professionals who were sufficiently concerned and motivated by the threat that Digital Econo m y Bill Clause 43 [8] posed to our livelihoods that we took direct action [9] . We had the support of t he 16,000 members of the ten organisations listed on our website , [10] and that of thousands of photographers , as proven by their direct lobbying action that resulted in Clause 43 being removed from the Digital Economy Bill.

1. The overwhelming majority of commercial creators agree with and wish to retain their moral and property rights granted to them by copyright law.

2. With the Enterprise and Regulatory Reform Bill copyright clauses the executive intends to award itself the power to constrain, diminish and confiscate the human rights and property rights of UK and foreign citizens and relegate the detailed implementation of this power to secondary legislation. Moreover it intends to do this on the basis of inaccurate, incomplete and misleading Impact Assessments [11] which the Intellectual Property Office has left unamended [12] . This is of serious democratic and constitutional concern.

3. It is highly questionable whether the Government's intentions and proposals comply with its obligations under international law and binding treaties. It is also highly questionable whether overall economic growth will result from this legislation, its ostensible purpose, for a very obvious and predictable outcome will be damage to the copyright industries themselves.

4. We believe that market-based licensing solutions to the problem of ‘orphaned’ works and the difficulty of licensing works are preferable to the wholesale erosion of the public’s human rights, moral rights, property rights and economic rights, and should be implemented and properly trialled before these rights are restricted, undermined, and damaged.

5. Stop43 would like to draw the Committee’s attention to our submission to your previous Inquiry into Intellectual Property rights. Our overall stance has changed little since that submission to you.

6. We would also like to draw the Committee’s attention to our submission to the BIS Select Committee Inquiry into the Hargreaves Review of Intellectual Property and the Government’s Implementation of its Recommendations [13] , in which we make clear what we consider to be the conflicts with EU law and international treaty obligations of the IPO’s current proposals for orphan works, Extended Collective Licensing schemes, and expanded exceptions to copyright.

7. We agree with the conclusions and endorse the recommendations made in the recent All Party Intellectual Property Group Inquiry into the role of government in protecting and promoting Intellectual Property [14] .

8. In particular, we support strongly these three recommendations:

· The IPO should revert to seeing IP as a property right;

· The Government should be as concerned to promote the creation of new IP, as how existing IP is accessed;

· The IPO’s oversight of copyright policy should be moved to DCMS.

The IPO should revert to seeing IP as a property right

9. We note and agree with this passage from the APIPG Report: ' We were also concerned that officials from the IPO find it difficult to describe intellectual property as a property right. It was described as a framework by one official which immediately undermines it. If the IPO sees IP as a framework then it suggests they see it as something that can be shaped and altered at will. We question whether such a laissez fair attitude would be taken to other property rights and if they were, whether senior Officials and Ministers would allow such an attitude to pervade. We think that because intellectual property is often a specialised subject, the IPO has been allowed freer rein by senior officials and Ministers within BIS, who would otherwise have taken greater interest. We believe this must change, and the development of policy by the IPO must be given far greater scrutiny by officials within the Department. ' [15]

10. The Report also says: ‘When the officials from the IPO gave evidence, they were very clear that they saw their role as providing balance - they see this balance as ensuring consumers can have access to content. [16]

11. The Berne Convention [17] establishes beyond doubt that copyright is a property right. Article 2(6) states: ‘The works mentioned in this Article shall enjoy protection in all countries of the Union. This protection shall operate for the benefit of the author and his successors in title.’

12. That is the definition of a property right, not a ‘framework’, and has nothing to do with ‘balance’.

13. Article 5 states: ‘(1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.
(2)The enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the work.’

14. Article 9(1) states: ‘Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorizing the reproduction of these works, in any manner or form.’

15. The beauty of these provisions is that ownership of copyright is conferred on the creator automatically and without formality. The result is legal certainty, with no attendant costly, unwieldy and bureaucratic registration process. Ownership of copyright is simple, certain, and cost-free.

16. Exceptions to this right beyond those strictly necessary to ensure freedom of speech and democratic government almost invariably generate legal uncertainty, legal costs, and complex economic externalities.

The Government should be as concerned to promote the creation of new IP, as how existing IP is accessed

17. Recent reports and recommendations, and legislation currently before Parliament, are concerned almost entirely with ‘easing access’ by consumers and ‘users’ to pre-existing copyright materials on the assumption that this will result in economic growth. In order to ‘ease access’, creators rights and with them incentives to create new materials, are to be weakened.

18. According to Oxford Economics [18] the results, rather than creating growth, are likely to include:

· a banal transfer of value from creators to consumers and ‘users’ rather than growth;

· a chilling effect on new professional creation;

· and increased risk for investors in the creative sector, many of whom are the creators themselves in the form of their careers and livelihoods.

19. Many of the ‘users’ pressing for these changes are large foreign-based corporations or their partners and protégés in the Cultural Heritage, Academic, and NGO/lobbying sectors. A number of these corporations have recently been revealed as systematic exploiters of ownership and revenue transfer schemes which minimise or remove their exposure to UK Corporation Tax [19] . Therefore, an additional significant result of the proposed changes to UK copyright law will be an outflow of value from the UK economy.

20. In contrast, China [20] and Germany [21] are strengthening their copyright laws.

21. Calls in submissions by creators to recent inquiries including the Hargreaves Review and the Copyright Consultation for the repair of defects in UK copyright law harmful to them appear largely to have been ignored. The only request of any significance which has been granted is for the Small Claims track in the Patents County Court, which has recently entered effect.

22. Professional creators make their copyright works in order to monetise them. We can only do that if consumers and other ‘users’ have access to them, and it is in our interests to provide such access. We don’t need copyright law to ‘strike a balance’, and there is not one to be struck: copyright is a property right.

23. Rather, we need accessible, easy to use, functioning markets in which to offer our property, with a proper expectation of being paid, and effective, proportionate and dissuasive remedies if we are not .

24. ‘... the role of government begins and ends with protecting the rights of creators, rather than protecting any company or interest group’s business model. Once workable rules are established, the forces of supply and demand will determine the size and scope of any market.’ - Helen Burrows and Kitty Ussher, Risky Business, page 90 [22]

25. It is a property owner’s right not to place his property into a market. It is also that owner’s right to protect his property from devaluation and not to sell or licence it for less than he thinks it to be worth. A properly functioning market will soon adjudge what is sellable and what is not, and at what market rate.

26. We are in favour of easing access to normal primary licences for our works, and secondary licenses for those uses for which primary licences are impractical. We note that digital developments increase the practical scope of primary licences, even for small-value transactions, and tend to reduce the scope of secondary collective licensing.

27. We note that the Copyright Hub, conceptually linked to Stop43’s ‘National Cultural Archive’ proposal to Hargreaves’ Review, is under development. It promises considerably to ease access to existing copyright works, and by acting as a trading platform for creators, stimulate the production and monetisation of new works. This can be expected to generate economic growth.

The IPO’s oversight of copyright policy should be moved to DCMS

28. Patents protect inventions by granting their owners, on payment of a fee to the granting authority, a monopoly right to exploit them for a limited period. They are not automatically granted, because to qualify for patent protection the invention must be deemed ‘novel’ and ‘not obvious’. Almost all patents are dispassionate business assets of one form or another. For this reason it is appropriate that patents policy should reside with BIS and patents be granted by its subsidiary the Patents Office, of which ‘Intellectual Property Office’ is a recently-acquired operating name.

29. In contrast, The European Court of Justice defines a copyright work as ‘the author’s own intellectual creation reflecting his personality [23] . It can be regarded as representing its creator. Copyright is therefore an amalgam of property rights and other rights, which include ‘moral rights’ [24] ; and human rights [25] . The right not to be ‘arbitrarily deprived of your property’ is also a human right [26] .

30. With the possible exception of databases, being ‘ literary and artistic works protected by this Convention’ most copyright artefacts are cultural objects or expressions , for many of which (perhaps the majority) the creator’s expression is of more importance and value to its creator than the artefact’s economic value.

31. For this reason it is fair, reasonable and sensible that responsibility for copyright policy should be vested in the Department of Culture, Media and Sport. The APIPG Report says: ‘...we believe that there is merit in joining together the policy oversight of the creative industries with copyright policy, given how closely interconnected those two are. If the two policy areas have single oversight, we believe that DCMS will be a better promoter of the importance of copyright to the success and future growth of the creative industries. [27]

THE ENTERPRISE AND REGULATORY REFORM BILL COPYRIGHT CLAUSES

32. These consist of clauses conferring powers by regulations to vary copyright exceptions; to alter the duration of copyright in certain unpublished or anonymous or pseudonymous works; and to introduce ‘orphan works’ and Extended Collective Licensing (ECL) schemes.

33. In our view they are premature, ill thought-out, constitutionally improper and in breach of international obligations.

Premature and without proper consultation

34. There has been no consultation on clauses 65-67 and 69 [28] - they are not designed to implement the Hargreaves Report [29] ; Clauses 67, 68 and 69 and Schedule 21 were added by the government at Committee stage in the First House; the proposals in clause 68 on ‘orphan’ works go much further than is necessary to ensure the availability of cultural heritage whereas the EU Orphan Works Directive (2012/28/EU adopted 5th October 2012) strikes the right balance between the rights of copyright owners and the public; and the proposals in clause 68 for extended collective licensing (‘ECL’) are not compatible with the current proposal for an EU Directive (COM-2012-3722_en) on pan-European collective licensing drawn up following extensive consultation and which addresses the market requirement for pan-EU licences.

Ill thought-out

35. Initially, the explanation given for clause 66 was that it was needed to maintain the UK’s higher criminal penalties for copyright infringement if the exceptions to copyright were changed. This would only be relevant if the existing exceptions were to be narrowed (i.e. more acts would infringe copyright) and there are no proposals of which we are aware to do so.

36. Subsequently, clause 69 was introduced to deal with criminal penalties and clause 66 subjected to a badly-drafted and largely incomprehensible amendment. The current justification offered for clause 66 is unclear: the IPO has said that it does not need it as it could introduce any provision it wished to under the provisions of s.2.2 of the European Communities Act 1972 (ECA). This is simply not an adequate justification for a ‘Henry VIII’ clause with potential for such wide-reaching damage to the British economy.

Constitutionally improper

37. Cause 66 gives the power to introduce new exceptions to copyright by secondary legislation. It may not be apparent to the ordinary parliamentarian that this means reducing the scope of copyright protection itself so that the value of copyright to those who earn a living from it will also be reduced. Clause 67 provides for copyright to be withdrawn from works written anonymously or under a pen-name. The confiscation of property rights of British citizens should not take place without a full public debate and parliamentary scrutiny.

Breach of international obligations

38. Additionally, clauses 66-68 by removing property rights of UK citizens and foreigners may breach the UK's obligations under the Berne Convention and TRIPS which is causing extensive concern internationally. These provide that changes to copyright may only be made if they meet the ‘three-step test’ [30] . The Bill may not be Human Rights Act 1998 compliant since it is questionable whether the deprivation of property rights protected under Article 1, Protocol 1 European Convention on Human Rights complies with the proportionality requirement. It is noteworthy that the Minister’s statement that the Bill is so compatible was only given at a very late stage of the progress of the Bill and was given by a very newly-appointed minister.

November 2012


[1] http://home.the-aop.org/

[2] www.bipp.com/

[3] www.thebppa.com/

[4] http://copyrightaction.com/node

[5] www.epuk.org/

[6] www.nuj.org.uk/

[7] www.pro-imaging.org/

[8] www.publications.parliament.uk/pa/cm200910/cmbills/089/10089.49-55.html#j901

[9] www.stop43.org.uk/pages/pages/read_more.html

[10] www.stop43.org.uk/pages/pages/about.html

[11] www.allianceagainstiptheft.co.uk/downloads/consultations/current/Oxford%20Economics%20Consultation%20on%20Copyright.pdf

[12] ‘With regard to our conversation about moral rights, we may have said that moral rights are regarded by some as separate to economic rights but that does not mean that they do not have an economic value.  Of course, legally, one cannot assign one's moral rights to another, so in that sense you cannot sell them.  As I said, many stakeholders told us that they would not even be willing to waive their moral rights at any price.

[12]

[12] In relation to the impact assessments for the implementation of an orphan works scheme and for the implementation of ECL, the economists may be able to acknowledge in future iterations the ways in which value can be attached to moral right.’ - IPO staff to the author of this submission, by email

[13] www.publications.parliament.uk/pa/cm201213/cmselect/cmbis/367/367we11.htm

[14] www.allpartyipgroup.org.uk/pdfs/The%20role%20of%20Government%20in%20promoting%20and%20protecting%20IP.pdf

[15] IBID, page 5

[16] IBID, page 5

[17] www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html

[18] www.allianceagainstiptheft.co.uk/downloads/consultations/current/Oxford%20Economics%20Consultation%20on%20Copyright.pdf

[19] www.bbc.co.uk/news/uk-politics-20211042

[20] http://english.people.com.cn/90882/8002522.html

[21] http://link.ft.com/r/P75VYY/HID8K2/RN9BF/NJ7NFO/Z80BJN/4O/h?

[22] www.demos.co.uk/files/Risky_business_-_web.pdf?1320841913

[23] http://curia.europa.eu/juris/celex.jsf?celex=62010CJ0145&lang1=en&type=NOT&ancre=

[24] www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html#P123_20726

[25] www.un.org/en/documents/udhr/index.shtml#a27

[26] www.un.org/en/documents/udhr/index.shtml#a17

[27] IBID, page 6

[28] Note that the Hargreaves Report only asked general questions and made general recommendations in relation to areas covered by clause 68 so its status as proper consultation on the specific implementation proposed in this clause is open to question.

[29] Hansard 12 July 2012: cols.628-9: Norman Lamb (Minister of State BIS): “Clause 56 is not part of the wider Hargreaves work but arose as a specific consequence of our wanting to keep the strong penalties needed to remove exceptions. The shadow Minister talks about evidence-based policy making, proper consultation and proper consideration of the issues, which is precisely why the Government commissioned Hargreaves to undertake an independent review, during which he talked to many stakeholders representing a wide range of views. The Government will make announcements about the outcome of that review and their response to it in due course, but the review is a proper basis for making policy.”  

[30] Article 9.2 of the Berne Convention and Article 13 of TRIPS (with which the UK must comply as a condition of its membership of WTO) set out the ‘three-step test’. Article 5 of the Berne Convention extends copyright protection in the UK to the works of foreign creators which get the same protection as do the works of UK nationals. That test allows for national legislation to permit exceptions to copyright only: (i) in special cases (ii) provided that it does not conflict with a normal exploitation of the work; and (iii) does not unreasonably prejudice the legitimate interests of the creator.

Prepared 21st November 2012