Two copyright exceptions missing: did the Scrutiny Committee know?

Even though such a long time has passed in investigating digital opportunities, writing reviews, rethinking intellectual property and debating how to foster growth, the last word has apparently not been said on the new UK exceptions to copyright infringement. Late this afternoon, Labour MP Iain Wright tweeted:

In response to a question from Katfriend Emily Goodhand [twitterly known as copyrightgirl], Wright replied that "Committee was due to consider 5 copyright exceptions on Monday. The 2 were pulled this afternoon, no explanation yet".

While anxiously waiting for Eleonora's take on this, some deductions as to what is actually happening might be inferred from this report from Catherine Pocock (Assistant Editor, QM Journal of Intellectual Property and LLM Candidate at Queen Mary University of London, right) on the Lords Secondary Legislation Scrutiny Committee that took place yesterday, at which the proposed new UK exceptions were debated. Here's what Catherine says:
"This IP enthusiast took a leisurely break from revision yesterday afternoon to listen in to the Lords Secondary Legislation Scrutiny Committee discuss the Statutory Instruments implementing the Hargreaves Review. Following this evening’s rather surprising news of the withdrawal by the Government of the exceptions on parody and private copying, it seems that only the remaining provisions of Statutory Instruments (copyright exceptions regarding regulation on access by individuals with a disability, on research, education, libraries and archives (here) and on public administration) will be going to Parliament for their implementation in June. While no mention was made of it during the Committee, the exception for quotation and parody has been pulled.  
Led by Viscount Younger of Leckie, yesterday’s debate saw witnesses Charlotte Heyes (Deputy Director, Hargreaves Review Implementation) and Robin Stout (Deputy Director, Copyright Policy and Deputy Director) answer a number of questions with a single line of argument: the wording of the exceptions is appropriate to its objectives of enhancing economic growth. Much emphasis was placed on enhancing economic growth at both ends of the spectrum, highlighting benefits for the consumer (end users, libraries), the UK economy (supposedly £500 million over 10 years) and stating the existence of benefits to the right holders and creative industries (giving no example or evidence of such benefits, although maybe it is an implicit invitation to consult the impact assessments again). It is suggested that the scales weigh a little heavy on the ‘benefits to users’ side – and wonders whether this indirectly include commercial users). The three elements which were most interesting in this session were those concerning the absence of a compensation mechanism in the private copying exception, the inclusion of dumb-locker cloud services and the contractual overrides. All three relate to the private copying exception which, as mentioned in the introduction, have been pulled.
1. Fair compensation of right holders – or lack thereof – for the exception for ‘personal copies for private use’ under the new Section 28B CDPA
Having had regard to the levy systems in other EU countries Robin Stout mentioned the list of permissible and non-mandatory exceptions under Article 5 of Directive 2001/29 on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society (the 'Infosoc Directive').His understanding seemed to be that, since the scope of these exceptions is not defined by EU law, as the continental countries have provided for wide exceptions they have needed to implement a levy system to compensate rightholders. This guest blogger would argue that EU law does in fact regulate the breadth of the exceptions -- at least through case law [where have I already heard that, Merpel wonders?] -- and that it is only the choice of exception and implementation mechanism which is left to Member State discretion. Indeed, in the case of private copying Infosoc 5(2)(b) reads: 
“Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 … in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the right holders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned”. 
However, Robin Stout continued, the Statutory Instruments as they now stand have drafted this provision so narrowly that no harm – or no more than minimal harm – is caused and there is no need for compensation that is not already provided for in the price of sale. This guest blogger wonders whether any evidence could have been mentioned to back this up, and whether news of the CJEU findings in Case C-467/08 SGAE [on which see here] of a presumption of harm for private copying exceptions had in fact travelled this far -- the witnesses did seem somewhat confused when addressing these questions.
Fourth image result when
you google "farcical"
More questions from the floor as to whether there would be an increase of the sale price of CDs/DVDs to compensate the creators were raised (but not answered). The ‘narrow drafting’ card was again pulled out, as only the private copy for personal use is excused from being an infringing act. The main argument of the Intellectual Property Office (IPO) for its narrow drafting relies upon the exclusion of illegitimate copies from the private copying exception, however this is not much narrower than the ‘harmonised’ EU scope of the exception as clarified in the recent CJEU decision in Case C-435/12 ACI Adam [on which see Katnote here] where it was said that any private copying exception only applies to legitimate copies. Further questions as to enforcement arose and remained largely unanswered – it was suggested by one member that private copies will de facto be shared (and this sounds like the gospel truth). 

2. Cloud services under new Section 28B(5)(c)   
The committee also touched upon the legislation enabling cloud services to benefit from this exception. The growth agenda was mentioned again since the inclusion of cloud services within the exception will allow for them to develop and thrive. Further, the position of the witnesses was that having to pay for acquisition of the content and then a second time for storage of that content would be unfair. It was stated that the exception is drafted narrowly so as to only include ‘dumb lockers’ (i.e.: cloud services used solely for storage and not as a sharing platform, hence the IPO’s analogy to a shed). However, this guest blogger would argue that, although that may be the policy intention, it is not reflected within the wording and should be clarified in statute. There are also questions of enforcement and monitoring. In the same way as it seems difficult to enforce the private copies so that they stay private, such policing could be rather difficult even though Robin Stout believes it to be easier in the light of the tracing available with online activities (the government may be giving this exception to the consumer with one hand but suggesting to take it back with the other by enforcing it with closer monitoring of their activities).

3. Invalidity of contractual overrides in new Section 28B(10)  
This last part shed light on the general principle of English law of sanctity of contract (the ability ‘to enter into whatever type of legally binding agreement one wishes with no legal limitations other than being of legal age to do so’ as per Black’s online dictionary here). However, new Section 28B(10) CDPA currently provides that any contractual clause overriding the exceptions will be void as it would undermine Government’s authority to legislate.The witnesses’ position seems to be that there is no potential for conflict of law: the new provisions will override the conflicting clauses but uphold the remaining contractual clauses. Mention was also made of the ‘chilling effect’ of the licensing process. 
This guest blogger suggests that the Government may have approached this exercise of ‘balance of rights’ thinking that the copyright owner is the stronger bargaining party. As Robin Stout pointed out, yet as the digital environment currently stands these copying and storing (sharing?) activities are already taking place (and this guest blogger would add – without any compensation for the rightholder). To use La Fontaine’s evocative fable, the right owner is rather more the Grasshopper grappling with the Ants for a little subsistence." 
Two copyright exceptions missing: did the Scrutiny Committee know? Two copyright exceptions missing: did the Scrutiny Committee know? Reviewed by Alberto Bellan on Thursday, May 08, 2014 Rating: 5


  1. There is not - and never has been - a general principle of English law that Parliament cannot legislate to prevent the enforcement of contractual provisions with certain effects. Not only that, such legislative provisions are very common. They have been well known in the law of real property for a long time and are commonplace in other areas of law (eg in settling employment disputes).

    So the objections - which aren't new - to the contractual override in the proposed rules seem to me to be both incoherent and baffling (in the sense that I am baffled that a lawyer would put forward such an argument). Anyone who thinks this is a serious runner should spend some time in areas of English law outside IP to get a sense of perspective.

    Clearly without a contractual override it will be relatively simple to neuter the provisions by competent drafting.

    Most people - by which I mean the overwhelming majority of people in the UK - see nothing wrong with privately copying and in particular with format shifting their works from one device to another. In fact I suspect that most people would be surprised to discover that there was anything unlawful about format shifting at all.

    Given that the law as written on the one hand and the prevailing social norms and practice on the other are so very much at odds with one another, does it really make sense to hold the line here? If EU law or international treaties prevent common-sense then we should give serious thought to reforming them.

    As to parody and pastiche, many entirely successful European nations seem to be able to maintain vibrant creative industries while possessing exceptions for parody and pastiche (eg France) and I don't see anyone seriously arguing that the US's creative industries are stifled by being unable to enforce against parodies, so what is going on here?

  2. It seems to me that Francis has mis-understood the bloggers comments at point 3. Have another read, Francis.

    I agree that format shfting for personal use should be allowable, but as for 'private copying', I suggest that you need to define a few boundaries. The fact that most people in the UK would see nothing wrong with copying works and sharing with their friends, or posting on the web to share with the world, does not mean it is justifiable, either morally or economically.

    Copyright statutes are written for the benefits of major rights-holders as it is they who have the resources to lobby efficiently. You don't have to spend much time within the lowly world of IP law to appreciate this.

  3. Francis there is already provision in the CDPS for parody and pastiche (thought not explicitly) under the exception for criticism. In case you have not noticed the UK has been quite successful in producing such works In spite of the inherent difficulty in exporting humorous works I feel confident that the UK can stand head and shoulders above all nations in the world in taking the proverbial piss.

  4. @Anonymous of 9:54 - it is entirely possible I have mis-understood the commonets at point 3, but re-reading leaves me none the wiser. Can you perhaps explain them to me?

    @Alan Gallery - parody and pastiche are different categories of exception to criticism and review. Some parodies and pastiches may be aimed at criticism or review of a work, but others won't be. Many of the Downfall pastiches would not amount to criticism or review of any work.

  5. In my view, it is settled that the Copyright Directive authorizes Member States not only for the possibility of providing certain exceptions or limitations, but also for the possibility of providing those in narrower terms than those authorized by the Directive. In other words, they cannot go beyond the limits of the exceptions authorized under Art. 5(2) and (3) but they can provide for narrower terms (see Opinion AG Sharpston delivered on 24 January 2013, paragraph 37). And this is what the UK proposal reflects, authorizing the making of private copies in narrower terms than those provided under Article 5.2.b of the Directive (e.g. by excluding private copies made from originals owned by friends or relatives).

    Also, copyright levies are not mandatory. The Member States may choose for alternative means of fair compensation (e.g. this is the option followed by Norway and Spain, which is compensating the private copying exception by mean of public budget allocation; also Estonia for the reprographic exception). And the impact assessment produced by the IPO seems to reflect that compensation can be established as part of the price of the original work when it is sold to consumers. This seems a very sensitive point: inasmuch as users are authorized to make private only of original works they own, then it seems possible that such compensation is paid through the price of the original work.

    And Recital 35 of the Directive also provides for the non-double payment and the “de-minimis” rule, which are also acknowledged in the Impact Assessment produced by the IPO.

    Therefore, current UK proposal seems to me to be perfectly aligned with EU law.

  6. the commentator ponted out that any 'legally binding' agreement may be entered into in ENglish law - ie parties are free to agree whatever they like subject to an act not being criminal or subject to statutory exclusion. IP statutes also frequently refer to the effect (or non-effect) of contractual overides. I do not read any objection to the the statutory term referred to in the blog. It appears to be a statement of fact, not opinion.

    The commentator also appears to me to be simply of the opinion that the government has introduced this particular contractual override clause to protect little people from powerful companies.

    Francis' comments appear to be an unwarranted criticism of a person based on their legal background. i.e. IP and not proper law, because clearly IP attorneys and their ilk are not proper lawyers bla bla.

  7. I think that Francis's criticisms are not of the blogger but of the House of Lords Committee. For example, reading the uncorrected transcript of the meeting, Lord Scott has some seemingly strong things to say about the contractual override violating sanctity of contract (e.g. top of page 20), even though the idea of law overriding contract is far from new (as you'd hope a former member of the Lords of Appeal in Ordinary would know).

    Some of the Lords' other points seem to be based on flawed assumptions such as that there are two separate kinds of people; copyright owners and users, even though we know most of us are both, or that format-shifting and private copying aren't already being done on a vast scale, even if illegal.

  8. @Anonymous of 12:50 today:

    I was assuming that point 3 was Catherine's report not her own views and so I had no intention of criticising her.

    However I presumed that the view that the presence of contractual overrides is "unconstitutional" (a view I have seen quoted) was what lay behind what she was reporting. It was that rather silly view I was reacting against.

    (I accept that there's a more careful argument that could be made as to whether the instrument is intra vires, not that I agree with it, but that is a different matter).

    I don't think it would be unfair to criticise any lawyer for overly parochial views, whether due to a focus on a particularly narrow field of law or for some other reason - eg jurisdiction. At least if that lawyer were attempting to make policy arguments that affect the law of the UK. I think it is fair enough to ask that lawyers do a reality check against other areas of law from time to time.

    It's easy enough to think that because your patch of law works a particular way, that's how it has to be. Experience suggests otherwise.

    My exasperation stands. The proposed exception for private copying was really very narrow and yet we aren't to have even that yet.

  9. "the impact assessment produced by the IPO..."

    Back in the Ed Quilty era.

    As a study in bending the meaning of words, selective citation, and other semantic tortures, the comments by ORG activists Ruiz and Davey on this blog post are fascinating. But rather beside the point.

    The law is very clear, and there is no ambiguity over the meaning. No private copying exception will be introduced without compensation.

    Sorry, guys - but deal with it.

  10. I'm actually working on this right now so if anyone would like to point me at a principled reason as to why the proposed exceptions should not be implemented I would be interested to read them (though time is short).

    NB I'm interested in principles not law at this point - there may be legal arguments as to why these regulations cannot be passed under the ECA or are in conflict with EU law - that's an interesting question but not what I'm asking.

  11. Apologies for such a delayed response –

    I’m sorry my formulation of point 3 has caused you such misunderstandings, however I would like to thank Anonymous at 12.50 for their clarification: I was indeed merely reporting Lord Scott’s concerns. Also if my speculation on the reason for the inclusion of the contractual override clause has offended any I do apologise.

    On the point of private copying I understand that it is a widely exercised practice; I was pointing out here that the lack of fair compensation (as discussed p16 of the transcript) might be problematic in the light of recent CJEU clarifications.

    As to the point on parody and pastiche, as currently decided under s30 CDPA (criticism and review) parodies do not benefit from any special treatment (20th Century Fox; Schweppes v Wellingtons) and (in my opinion) a specific parody exception might allow for better handling of such cases. However questions as to the scope of the exception and definitions (in law) of the terms ‘parody’ and ‘pastiche’ might be the reasons stake holders expressed concern, but again, I am speculating.

  12. Thank you Catherine, and no worries: no one gets offended here, the IPKat readership is just passionated -- and we love it!


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