For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Wednesday, 30 July 2014

From 1 October UK will have exceptions for private copying, broader quotation and parody

Following some fear [here and herethat UK Government could have decided not to introduce exceptions for private copying, broader quotation and parody into UK copyright after all, last month this blog reported that the "missing" exceptions were back with new [well, not so new as they were basically unchanged] draft Statutory Instruments (SIs) [here and here].

Following approval in the House of Commons earlier this month, yesterday at around 6:15 pm [as the illustrious and learned Katfriend who told this Kat specified] the House of Lords also approved the draft SIs [you can read an early statement from the Open Rights Group here].

This means that, following the bunch of other exceptions [research, education, libraries and archives; disability; and public administration] that entered into force on 1 June last, also these new exceptions are now scheduled for entry into force. This will be on 1 October 2014.

The official report from yesterday's discussion in the House of Lords makes an engaging reading. New IP Minister Baroness Neville-Rolfe said pretty interesting things not only about these exceptions, but more in general about the role of copyright and how UK Government intends it. 


Strong and (clearly) respected
She started by saying that "[c]opyright legislation needs to be strong and respected to keep up with the pace of innovation and the digital revolution." To this end, "[t]he Government are committed to raising awareness and understanding of IP across all businesses large and small in order to protect innovation and originality and meet changing consumer needs."

Among the initiatives promoted by UK Government, she mentioned extending copyright protection for sound recordings and performances [by the way: did you know that apparently France, Poland and Romania have yet to transpose Directive 2011/77/EU into their national laws?], setting up the Police Intellectual Property Crime Unit [see the "This website has been reported to the police" initiative described by Jeremy here], supporting the industry-led Copyright Hub and educational campaign Creative Content UK [also mentioned in the Australian Government Discussion Paper on Online Copyright Infringement, which has just been released].

Personal copies for private use do not come with a levy

With regard to this exception, the IP Minister started by saying that "[c]opyright law should not stand in the way of people being able to use and enjoy their own property.

However, compared to private copying in other EU Member States, the forthcoming UK exception for "personal copies for private use" will be narrower. 


Kat-cloud
In particular "it will not allow someone to give or sell a copy they have made to someone else, or share copies from their personal cloud; it will not allow someone to obtain a copy from sources they do not own, such as rented copies, broadcasts or on-demand services; it will not prevent copyright owners from using technology to guard against copyright piracy, such as the copy protection for films found on DVDs and Blu-ray discs; and it will not prevent copyright owners from licensing additional services, such as cloud services which allow shared access to content."

Because of its narrow scope, UK Government decided against the introduction of private copying levies [which, for instance, have been recently at the centre of heated discussions in Italy], also on consideration that British consumers would not tolerate them. 

"They are inefficient, bureaucratic and unfair, and disadvantage people who pay for content", said the Minister, who added that the InfoSoc Directive leaves Member States free not to provide compensation where an exception is likely to cause minimal or no harm, or where appropriate payment has already been made. This view is also supported by UK-based IP profs. In any case, as readers might probably remember, the de minimis rule as per Recital 35 to the Directive is among the issues at stake in the pending Copydan reference [Merpel, who likes drama, says: it would be fun if the Court of Justice had a different opinion from UK Government and IP profs ...].


Parody caricature and pastiche will have to be fair dealing

As regards the parody/caricature/pastiche exception, the Minister observed that "we need to protect the right to mock the high and mighty". Above all, "[c]opyright should incentivise creation, not obstruct it. It should allow people to voice their opinions, not stifle them."

Fair (dealing) enough, but you better not think that this does give you carte blanche to do whatever crosses your mind. 

This is because UK Government deemed appropriate to frame the parody/caricature/pastiche exception within fair dealing. So, "fair dealing will mean that copying a whole work without changing it will not be allowed. For example, it would not be considered “fair” to use an entire musical track on a spoof video. This will mean the market for the original work should be unaffected."

This Kat has already criticised the move of framing parody within fair dealing, on fear that in practice UK exception might end up being a pretty narrow defence, especially when it comes to artistic works. 

As regards music tracks, Merpel wonders how this could affect the market for this ... Yet, "At present, when a whole work, such as a musical track, is used in a parody the copyright owner will often allow this in exchange for appropriate remuneration. The fair dealing exception means that such licensing will still be possible." 

This new exception leaves unaffected "tough laws on libel".


Random quotes will be OK
Quotation beyond criticism or review

Finally, with regard to quotation, broadening its scope was deemed necessary because "UK copyright legislation currently allows quotations and extracts only for the purpose of “criticism or review”. So a whole range of activities which the average person is likely to consider reasonable risk infringing copyright because they fall outside the current “criticism and review” exception. An academic paper or student essay which quotes a title of a journal, book or film, or uses a short extract to ensure proper citation, although likely to be considered fair by a court, is likely to fall outside the current “criticism and review” exemption. Small theatres and record companies have complained that they are often prevented from using quotes from newspaper reviews in their own promotional material."

The changes "will remove this limitation and permit all types of fair quotation, as long as there is acknowledgement of the source of the quotation. There should be no obstacle to fair and honest quotation. British citizens should have no less a right to it than those of other democratic nations."

15 comments:

Anonymous said...

Well done HMG. A very fair and balanced implementation, as well as some nice beacons for the courts to follow, by way of the quoted examples which fall inside and outside the exceptions, and a legislative update that was well overdue.

Andy J said...

Thanks Eleonora,
As I'm sure you are aware, there's a much simpler and more targeted method of linking to specific Parliamentary business, than referring to the pdf for the whole of the day's business.
For instance, here is a link to the relevant part of yesterday's debate in the Lords on the new copyright exceptions.

Eleonora Rosati said...

Thanks Andy J, I just assumed people would have liked to read everything that was discussed yesterday :-)

I have now replaced the link with the one you provided, thanks!

Anonymous said...

The debate is also available on the excellent TheyWorkForYou site, which also allows notes and annotations to be added.

http://www.theyworkforyou.com/lords/?id=2014-07-29a.1553.2

It's rather depressing to read lord after lord -- including frontbench Labour and Lib-Dems, and ex-minister Estelle Morris -- standing up to berate the government for not allowing the industry a "golden opportunity" to gouge consumers again for the privilege of using "cloud lockers" to hold and access the content they have already bought.

Who knew that these party spokesmen were such bought-and-paid-for shills? Or that this government, of all people, were such defenders of the individual?

Thank goodness for a lone voice of sense from the Earl of Erroll.

Truly, a shocker of a debate.



Ron said...

I do wonder whether the IPO's (a.k.a. Patent Office's) funding of non-IPO activities such as the Police Intellectual Property Crime Unit is ultra vires the terms of the IPO's trading fund order (SI 1991 No. 1796).

It may be recalled that all the IPO's income comes form the fees paid by its users, and the operations to be funded by the trading fund are set out in the SI, which says :

"The operations to be funded by the fund are all the operations of the Patent Office relating to

(a) copyright,
(b) design right,
(c) patents,
(d) patent and trade mark agents,
(e) registered designs,
(f) rights in performances,
(g) trade marks and service marks,

including, without prejudice to the generality of the foregoing

1. operations concerning the promotion and administration of legislation relating to the foregoing,

2. operations arising out of ( European Community Activities etc.) in relation to or in connection with the foregoing,

3. the provision and dissemination of information and the procurement of publicity and advertising relating to the foregoing,

4. operations incidental, conducive or ancillary to the operations described above. "


My understanding is that the Patent Office's only significant statutory involvement in copyright is in connection with the "promotion and administration of legislation" and the activities of the PAT, in connection with establishing royalty rates (Schedule 1 item 1), and "information, advertising and publicity" (item 3 of schedule 1).

Copyright enforcement is surely a matter for the owner of the copyright. Enforcement is not something that the Patent Office gets involved in, and so is hardly an "operation of the Patent Office". Funding the London Police Force 's IP crime prevention unit is I am sure a very laudable thing and arguably in the public interest, but it is difficult to see how it falls under any of the "operations o the Patent Office" set out in the schedule. It is clearly an activity of the Police force, and not and "Operation of the Patent Office". It is not as if the owners of copyright are contributing anything to the IPO's income, since no fees are payable to get copyright. The owners of paid-for IPR are subsidising the enforcement of copyright-owners rights.

Eleonora Rosati said...

Hi Ron, yours is a very interesting point. Would you be interested in letting us know more? If so, do please drop me an email. Thanks!

Freddie Noble said...

I don't know the answer as to the legality of UK IPO funding the Police IP Crime Unit, but from what I understand of the IPO accounts (http://www.ipo.gov.uk/about-anrep1213.pdf) the trading fund pays the Treasury a dividend of around £3m per year, so holders of registered rights in principle might be said to be subsidising all kinds of Government activities which have nothing to do with IP at all.

Lots of money comes from renewal fees on EP(GB) patents - it makes the difference between a rather disastrous loss and a healthy profit in the patents department. In 2012-13 trade marks made a loss of £2.3m, but that was more than covered by the profit on the patents side.

Ron said...

It may be significant that the minutes of the IPO's steering board show that the vires of certain items of the IPO's proposed expenditure have been raised over a period of several years by various board members . Someone is actioned to investigate, but the outcome of any such investigations has not (yet) appeared in the minutes. As has been announced in the IPO's corporate plan and elsewhere, the BIS is proposing to syphon of some £25,000,000 to fund projects not directly connected with "operations of the office" , justification apparently being that, as the BIS is effectively the sole shareholder of the IPO's business, it can withdraw it as a special "dividend", since the IPO has managed to accumulate a substantial profit as a consequence of operating to ministerial targets. I thought that the original intention of the establishment of the trading fund was that the office should only cover its operating costs and not be used as a profit centre to fund BIS projects not directly related with the activities of the patent office.

You can find the steering board minutes on the IPO's web site if you delve deeply enough.

Eleonora Rosati said...

Thahks Freddie and Ron for your thoughtful comments!

Freddie Noble said...

>> I thought that the original intention of the establishment of the trading fund was that the office should only cover its operating costs and not be used as a profit centre to fund BIS projects not directly related with the activities of the patent office.

I'm not sure that's right. The IPO target is to make a profit - although it is currently exceeding that target so it could be said that it is making "too much" money and should reduce fees...

I think the point of a trading fund is more about a degree of independence in terms of its financial management - it does not have to ask the treasury to approve spending all the time as long as it has the money to spend. s1. of the Act talks about "improved efficiency and effectiveness of the management...". Whether or not you believe that it really is more efficient, it doesn't seem to be primarily about ringfencing profits.

Andy J said...

At the risk of bringing these comments back on topic, I would like to draw attention to Francis Davey's thoughtful piece on how the private copying exception might work in practice.

Anonymous said...

the movie "Strong and (clearly) respected" has been shortened -- where have the push-ups gone? The GIF is now only about 2MB, but it was 3MB.

Best wishes,

George Brock-Nannestad

Eleonora Rosati said...

Hi George, I can still see the push-ups! Check it out again ;-)

Ron said...

Back numbers of the CIPA Journal and the Internet produced the following:

CIPA July 1993 pages 233 to 237 published correspondence about the PO's surplus between Michael Burnside and Paul Hartnack, the then-comptroller of the Patent Office. Paul was in no doubt as to what the surplus could be used for, explicitly not copyright, saying:

"...As the corporate plan makes clear, the "surplus" is, however, on deposit and is available for use if as it seems likely we have to make a major IT investment towards the end of the century in order to match investments made by the EPO and other major offices. Alternatively it could be used for other purposes unconnected with day-to-day running costs such as publicity and marketing.

......... The only real pressure is copyright where I depend on the DTI (since copyright is not fee-earning and under the statutes cannot be subvented from Patent Office revenue) and even on copyright we are able to cope at least for the time being. ...."


The Comptroller clearly believed that there were legal constraints on the use of the PO's income from official fees (which constitutes virtually all of its income) and includes EP renewal fees.

The Comptroller's belief is prima facie consistent with information buried in the 102-page "Guide to the establishment and operation of trading funds ", Financial Reporting Team, HM Treasury, May 2004 (Updated August 2006)

12.5.2 For legal reasons, the price of a statutory service should never be set deliberately to generate a surplus above the agreed return on capital employed (3.5 per cent in the SR2002 and SR2004 periods), unless the statute specifically provides for this. A planned surplus would be interpreted as illegal taxation. [emphasis added]

12.5.3 As is made clear in the Fees and Charges Guide, the treatment of surplus receipts and deficits of a trading fund needs to be considered in the light of a trading fund’s financial objectives. Where, inadvertently, a trading fund earns surplus receipts, they may be used to mitigate or eliminate increases in charges, reduce charges, cover any planned loss in the following year or be used to finance capital expenditure, subject to the agreement of the sponsoring department and resource budgeting requirements. ....


From the 2005 Comptroller's report to parliament

Objectives and strategy
The DTI Innovation Report released in 2003 gave us the job of helping business to understand how to create and use intellectual property effectively. The same report also charged the Patent Office with improving the regime for enforcing IP rights and counteracting counterfeiting and piracy. In parallel with the Innovation Report, the Lambert Review highlighted the need to provide an effective framework to facilitate technology transfer from publicly funded research, including university research to the market place.

Statutory Background
The operating surplus on ordinary activities was £8 million. ......A special dividend of £40 million was also paid in year from reserves to the DTI to support innovation. This was the final tranche of a £100 million special dividend over three years.


The principles set out in 12.5.2 of the treasury guide that surpluses should not intentionally be generated from activities paid for by statutory fees were evidently overlooked, or perhaps the wording of the trading orders had been stretched by considering that promoting innovation in general fell under paragraph 4 "operations incidental, conducive or ancillary to the operations described above".

Whatever the reason, creaming off those hundred millions had such a disastrous impact on the Patent Office's 5 year budget that 15 examiners were "offered" voluntary early retirement in 2003 to make the books balance over the 5 year cycle. They have been struggling to catch up ever since.

Anonymous said...

Thank you Ron for the exhaustive treatment - I am bookmarking the page!

What I would love to see (but outside the purr-view here, methinks) is an equivalent treatment of the USPTO and their recently enlarged power to set fees.

That fee setting power came with a rather large string attached: the fees must balance in the aggregate. However, given as the fees were raised across the board, notwithstanding the additional reductions for universities and other new micro entities, I have never seen - and truly doubt it exists - ANY attempt at the "aggregate" picture.

A power granted that runs so complicated - and so unchecked - is a power that will be abused. That is just human nature, and to expect otherwise is more than merely foolish - it is complicit.

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