For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

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Friday, 3 May 2013

The Enterprise and Regulatory Reform Act: copyright mythology according to UK IPO


As was announed by the BBC last Monday, yesterday the final text of the Enterprise and Regulatory Reform Act (ERR Act) was finally made available to the public (thanks go to Andy J for promptly posting a link to the Act).

This Kat's earlier post on the copyright provision of this new piece of legislation has attracted quite a few interesting comments. While a good number of them has dealt with arguments in favour of or against assimilation of copyright with physical property, some others have raised cross-border issues and questioned whether the peculiar ERR Act provisions might conflict with UK's international obligations, in particular the Berne Convention.

Among other things, a reader (John Walker) raised some intriguing questions which some IPKat readers might also want to address.

In particular, one of his questions read as follows: "What would be the situation when a UK site makes a commercial global web use of a 'orphan' photograph, that turns out to be owned by say the New York Times - whose law would apply?"

... And - believe it or not -
private international law
provisions applied to the internet
can be even more confusing!
Although this Kat believes that the legal scenario is still (sadly and rather confusingly) quite unsettled in this respect, from an EU perspective some hints might be found in the decision of the Court of Justice of the European Union (CJEU) in Case C-173/11 Sportradar. Despite this being a database case, the conclusions of the Court might well apply to copyright cases, as was argued in this Katpost (see some interesting discussion also here).

Other jurisdiction-related responses might come from the (hopefully) forthcoming CJEU decision in Case 
C-170/12 Pinckney, a reference from the French Court of Cassation seeking clarification on the interpretation of the Brussels I Regulation (Regulation 44/2001) as applied to online copyright infringement cases:

Is Article 5(3) of Council Regulation (EC) No 44/2001 ... to be interpreted as meaning that, in the event of an alleged infringement of copyright committed by means of content placed online on a website,

-    the person who considers that his rights have been infringed has the option of bringing an action to establish liability before the courts of each Member State in the territory of which content placed online is or has been accessible, in order to obtain compensation solely in respect of the damage suffered on the territory of the Member State before which the action is brought,

Or

-    does that content also have to be, or to have been, directed at the public located in the territory of that Member State, or must some other clear connecting factor be present?

Is the answer to Question 1 the same if the alleged infringement of copyright results, not from the placing of dematerialised content online, but, as in the present case, from the online sale of a material carrier medium which reproduces that content?

Another case of Myth vs Fact analysis
On a non-judicial tune (which however might be even more controversial), while browsing the UK Intellectual Property Office (IPO) website yesterday morning over breakfast (sigh ...), this Kat found a Myth/Fact-structured note entitled "The Enterprise and Regulatory Reform Act 2013 – Your photos and you".

This note addresses some of the points raised by campaign group Stop43 and their claim that UK photographers should feel "Royally f*cked by the UK Intellectual Property Office and UK Government".

Among other things, the UK IPO rejects the consideration of the ERR Act as an Instagram Act, holding that "given the steps that must be taken before an orphan work can be copied, such as the diligent search, verification of the search and payment of a going rate fee, it is unlikely that the scheme will be attractive in circumstances where a substitute photograph is available. The rate payable for an orphan work will not undercut non-orphans."

Other "myths" according to the UK IPO are:

  • fear that "a company can take [a photographer's] work and then sub-license it without [his/her] knowledge, approval or any payment." As explained in the note, "[t]he licences to use an orphan work will not allow sub-licensing."
  • belief that "the stripping of metadata creates an orphan work", in that "the absence or removal of metadata does not in itself make a work “orphan” or allow its use under the orphan works scheme."
  • that from now on photographers "will have to register [their] photos to claim copyright". As explained by IPO, "[c]opyright will continue to be automatic and there is no need to register a work in order for it to enjoy copyright protection."
  • that "the UK is doing something radical and unprecedented with the Orphan Works powers." According to the IPO, "[t]he UK powers are largely based on what happens in Canada – which has been licensing orphan works since 1990." [yes, says Merpel, but Canada doesn't have to  implement also an Orphan Works Directive by 29 October 2014, as does the UK ... You might want to consider possible overlaps (and points of conflict) between the various provisions, such as permitted uses of orphan works ...]

8 comments:

john walker said...

re "c]opyright will continue to be automatic and there is no need to register a work in order for it to enjoy copyright protection."

Will right-holders who do not wish to be collectively managed have to, in some way, register their work as 'not for collective management'?

' Google image search' seems to work quite well, least for images that have a modicum of frequent presence on the web. Therefore how can the orphans licensing register generate enough fees to cover its fixed operating costs?

john walker said...

for the sake of clarity.

"Anyone wishing to use a work as an orphan must first undertake a diligent search for the rights-holder which is then verified with permission to use the work granted by the Government appointed
independent authorising body. If the work is not genuinely orphan then the rights-holder should be found, if the search is not
properly diligent, no licence will be issued."

How will all this work be paid for and in particular how will the "Government appointed independent authorising body" be paid for?

Anonymous said...

@John Wlker.
Firsly it is not intended that the Government will 'appoint' an indeperndent body, in the snese that this will automatically happen. It is for a body (similar to a current copyright collecting society) to approach the Minister with a request to be authorised to run a scheme. The detail about how this process will operate has yet to be published, but outline rules are contained in Schedule 22 of the ERR Act. The most important points are that a) the licensing body cannot be the same as a body which holds the works which may be orphans, so for instance the British Library cannot authorise the classification of its holdings as orphans, and b) the body must have a comprehensive code of practice which the Minister must approve, and compliance will be monitored by a reviewing panel.
As for how the body will be paid for, it is envisaged that just like normal copyright collecting societies, the running costs could be deducted from the fees charged, although it is far from the only option. At one point during the debates on the Bill the Minister responsible for IP maters, Lord Younger, said "in the event that fees remain unclaimed for the licensed use of an orphan work, a variety of options are possible: for example, unclaimed fees could be used to help creators; subsidise the cost of running the orphan works scheme [...], pay for preservation costs in public institutions,; or pay for [creative] industry training" (Source: Hansard, House of Lords Third Reading 20 March 2013). Bear in mind that his comment was specifically about what might happen to unclaimed fees which will be held in escrow, but if the scheme is operating correctly, this will be majority of the money raised. The Minister then went on to stress that these details would be consulted on before the secondary legislation was drafted.

Andy J said...

Sorry, the reply to John Walker was not supposed to be anon.
Andy J

john walker said...

andy


Real orphans are unlikely to be of much intrinsic individual value , hence a licensing scheme for low value orphans will not be able to pay for it self. Therefore the proposal intrinsically looks like either a covert argument for some sort of compulsory cross-subsidy OR it is not really about licensing orphans.

john walker said...

Eleanora I have heard that there is some sort of UK court action by some big international right-holders about this stuff that means it will go into the unresolved category for some time , is this correct?

Andy J said...

@ John Walker. It should not be forgotten that, despite the justifiable concern of modern photographers, the stated purpose of orphan work licensing was to make available to the public in digital form, the vast stocks (several tens of millions) of works including manuscripts, old picture archives, films, sound recordings and TV programmes held by various museums and other institutions. Whether these items have much commercial value individually is probably less important than the cultural benefits of releasing them to a wider audience. It is worth remembering that many of these works are thought to be still in copyright despite their age because they have never been published hence their copyright term under previous legislation has not yet started.
As you may know, the EU Directive on orphan works (EU 2012/28 (pdf)) only permits cultural institutions to exploit their stocks of orphan works, but it does allow (Art 6.5) those institutions to "generate revenues in the course of such uses, for the exclusive purpose of covering their costs of digitising orphan works and making them available to the public".
The British ERR Act would allow anyone to apply for a licence so that organisations like Google can initiate or collaborate on digitisation projects, and there are no limitations on what revenues may be raised by the commercial exploitation of the works thereafter, so I think it would be premature to conclude that the scheme won't make money.
However, the experience of the Canadian project might tend to support your thesis: for the period 1990 to October 2012, the Copyright Board of Canada only issued 266 licences, with a further 8 applications having been denied.
Where I do agree is that the cost of conducting a diligent search and paying a commercial rate fee for an image which has been appropriated from an internet site is unlikely to be commercially attractive, which means that people and organisations who currently do that will continue to do so without authorisation and won't consider the orphan work system.

john walker said...

andy
"a diligent search and paying a commercial rate fee for an image which has been appropriated from an internet site is unlikely to be commercially attractive, which means that people and organisations who currently do that will continue to do so without authorisation and won't consider the orphan work system.

"
True and therefore any UK commercial user who did use and pay, item by item, for the proposed system would be at a significantcommercial disadvantage,yes?

Registries have significant fixed transaction costs, if the median individual transaction is well below the fixed transaction cost the system will go broke ... unless the system is either making large profits on the compulsory licensing of valuable rights and/or it is simply a fig leaf for the mass digitising of whole collections without proper checks as to 'orphan' status, which was the ambition behind the Google books case in the US.

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