Stop43.org.uk stop confiscation of your property and Human Rights in the UK Enterprise and Regulatory Reform Bill






The Government's Response to Hargreaves: still a Digital Land-Grab

On Wednesday 3rd August 2011, Business Secretary Vince Cable announced the Government’s response to the Hargreaves report, ‘Digital Opportunity’. The Government has chosen to accept all 10 of Hargreaves’ recommendations, including the commercial use of orphan works. And so, sadly, we return to the position of February 2010 and must revive our slogan:

You think you own your own photographs? Think again. The UK Government wants to introduce a law to allow anyone to use your photographs commercially, or in ways you might not like, without asking you first.

IN SHORT

  • Digital Copyright Exchange: good and getting much better, so long as works can also be registered solely to prove ownership or for cultural, non-commercial purposes
  • Orphan Works: cultural use potentially excellent; commercial use unworkable, contradictory and illegal under various laws including the Berne Convention Article 9, WTO TRIPS Article 13 and fails the Berne 3-Step Test
  • Extended Collective Licensing: as Hargreaves envisages it, illegal under under various laws including the Berne Convention Article 9, WTO TRIPS Article 13 and fails the Berne 3-Step Test
  • IP Fast Track in the Patents County Court: excellent, and not before time, subject to concerns over costs, accessibility and damages
  • Better remedies for infringement: effective, proportionate and dissuasive' remedies required by EU Directive 2004/48/EC ignored in both Hargreaves’ Report and Government Response
  • Automatic, unwaivable Moral Rights: ignored in both Hargreaves’ Report and Government Response
  • Fair Contract Law for IP: ignored in both Hargreaves’ Report and Government Response
  • IP Ombudsman: ignored in both Hargreaves’ Report and Government Response
  • Parody: highly problematic for photographers and graphic artists; probably of little overall economic value
  • Format Shifting: problematic for photographers but sensible for some other media, of little overall economic value
  • The Intellectual Property Office: its constitution as a quasi-independent, self-supporting, profitable business creates a fatal conflict of interest. It must not become prosecutor, judge and jury in copyright matters.
As usual, the devil is in the detail and the Government’s Response includes some interesting alterations to Hargreaves’ recommendations. Hargreaves’ remit was strictly limited to the economics of IP, and the questions he asked reflected this limited remit. Interesting, then, that as far as copyright is concerned, several of his major recommendations have little to do with economics and will probably be of negligible economic value.

IN DETAIL

DIGITAL COPYRIGHT EXCHANGE

This could potentially be brilliant. Well, we would say that, as it is so clearly based on Stop43's National Cultural Archive proposal. Search the other submissions: there is nothing else like it in any of them. Hargreaves was notably vague on some important details, especially concerning license fees and charges for use. The Government have clarified this, and in the right way; they say the DCE would need to:

  • Allow prices to be set or negotiated by the rights holder, subject to controls on unfair competition (such as the tariffs currently set by the Copyright Tribunal);
  • Serve as a genuine marketplace independent of sellers and purchasers, for example on the model of independent traders using amazon.co.uk to sell goods, rather than simply being an aggregated rights database;
  • Be open to access by individuals and businesses, free at the point of use, to open standards that mean firms can readily write software to automate access and provide services that rely on information gathered or licences purchased via the DCE, to facilitate the development of businesses in the emerging markets supported by the DCE;
  • Be run on a self funding basis, fees being charged on licensing transactions through the exchange rather than the upload of rights data or search of the database.
Stop43 wholeheartedly support these proposals. However:

The Government has been silent on Hargreaves' suggestion that only works registered with the DCE should enjoy the fullest extent of protection available under law. This is surprising, as this proposal clearly breaches the Berne Convention Article 5. An equitable DCE that complies with Berne cannot be based on double legal standards, with one law for works outside the DCE and a better one in.

With reference to compulsory registration, the Response says the DCE must:

  • Be a compelling proposition to rights holders but not compulsory. We believe compulsory participation could be contrary to the Berne Convention and, more importantly, distort the market.
Stop43 disagree. An effective DCE registry must carry out three separate functions:

  1. a copyright and rights registry, to prove ownership and prevent orphaning;
  2. a gallery or repository of appropriate parented and orphaned cultural IP, so that the public can make cultural use of it;
  3. a commercial rights exchange, to create new IP markets and promote growth.
Compulsory registration by publishers on behalf of creators of work submitted to them for publication, solely to prove ownership and prevent orphaning, would not breach international law because it would not conflict with a normal exploitation of the work and would not unreasonably prejudice the legitimate interests of the author. It should be possible simply to register the work for this purpose, with cultural and commercial uses being further options available to rights-holders and their representatives. We believe that making registration compulsory for creators would breach Berne Article 5.

Stop43 maintain that in the networked digital era a machine-searchable rights registry is the only practical defence against orphaning, and Hargreaves agrees, but under no circumstances must lack of DCE registration become a presumption of orphan status. A search of the DCE can never be synonymous with a properly-executed Diligent Search.

Who will provide the DCE launch capital? Hargreaves suggests that the IPO might do this as it currently has an operating surplus of £55 million. This is problematic, as we will see later. Stop43 maintain that launch capital should be made available directly by central Government, and not a quasi-independent government agency such as the IPO with its conflicted interests.

ORPHAN WORKS

The IPO Press Release says:

Among the recommendations that have been accepted are:

  • Establishing licensing and clearance procedures for orphan works (material with unknown copyright owners). This would open up a range of works that are currently locked away in libraries and museums and unavailable for consumer or research purposes.
A model of disingenuousness. If only this were so; if only those poor orphans really were all locked away in dungeons, unseen and unloved.

They are not. It is time to dispel this myth.

When their physical condition permits it, orphan works held in libraries, museums and archives are available for use by consumers and researchers in exactly the same way that they have always been, and parented works are: the general public can visit and view them in person:

‘The whole problem didn’t matter quite so much before digital delivery came around. The problem is that library and museum-users expect stuff to be digital.’ - Toby Bainton, Secretary, Standing Committee on National and University Libraries (SCONUL), quoted in “In from the Cold: An assessment of the scope of ‘Orphan Works’ and its impact on the delivery of services to the public”, page 25

Stop43 advocates reform of CDPA 1988 Section 42 to enable custodians of orphaned works in any medium to digitise them for preservation, and when appropriate to make the digital facsimiles available to the general public for its cultural use, which includes private research, but not commercial use. So does the EU in its proposed Orphan Works Directive.

‘Section 42 of the act [CDPA 1988] restricts use of a preservation copy to preserve a fragile item or to replace a lost item. If Section 42 were extended to cover all types of work, whether orphan or not and in any medium, but these use restrictions continued, libraries and archives should be content.’ - Professor Charles Oppenheim, member of JISC Working Group on Intellectual Property Rights, commenting on Will Gompertz’ blog, 16 May 2011 (our emphasis).

Why, then, the overweening need for commercial use of orphans by the Cultural Heritage Sector? Ah, so that Google can pay for their digitisation! And the British Library can PPP to produce a closed, proprietary-format iPad app! And the Cultural Heritage Sector can flog other commercial stuff, all without payment to rights-holders!

In truth, the larger problem is not yesterday's orphans, but today's and tomorrow’s. Every day the BBC routinely strips identifying metadata from the hundreds of images uploaded to its websites, effectively orphaning most of them, in clear breach of the Copyright, Designs and Patents Act 1988 Section 296ZG. Facebook does it by the tens of thousand. Hargreaves wants these future orphans available for commercial use so that 'innovative startup companies' can offer ‘new services’, without permission of or payment to their copyright holders, and in the Facebook era, anyone with a smartphone is a creator and copyright-holder.

The spread of smartphones and social networks will render photographs and video clips the most orphaned media in the future, with photographs probably being the most orphaned of all.

In a meeting at the House of Commons on May 9th 2011, before Hargreaves published his Report, DCMS Select Committee Chairman John Whittingdale said that the Orphan Works/Extended Collective Licensing Clause 43 had had to be removed from the Digital Economy Bill because it would have harmed photographers unduly: "the Government had simply forgotten about them".

Well, they haven't this time. The campaign against Clause 43, led by Stop43, put photographers firmly centre stage. Since then the entire UK photographic industry has expressed its unanimous opposition to commercial use of orphan photographs and its requirement of automatic, unwaivable Moral Rights in all circumstances as a prerequisite to any kind of orphan works or extended collective licensing scheme involving photographs or graphic works, in a list of six caveats to the British Copyright Council's Orphan Works Proposal (Appendix IV), submitted to Hargreaves and independently to the DCMS, BIS and others.

Searching the Response PDF for the words 'photo' and 'moral' produces no results whatsoever. One can only conclude that this time we have not been forgotten but deliberately ignored, except when our recommendations suit Hargreaves: Stop43 are mentioned by name twice in his Report - the only photographers' representative organisation so mentioned - in support of his Digital Copyright Exchange proposal.

Hargreaves recommends that orphan works should be made available commercially for a nominal fee:

4.58 The system should also not impose inappropriate costs, particularly on use of materials which were not created for commercial purposes, or which might be found to be out of copyright if the rights information were available. Therefore, in most cases the fee for use of orphan works would be nominal, recognising that the works involved represent a national treasure trove.

The Government’s reply states:

The Government will this autumn bring forward proposals for an orphan works scheme that allows for both commercial and cultural uses of orphan works, subject to satisfactory safeguards for the interests of both owners of ‘orphan rights’ and rights holders who could suffer from unfair competition from an orphan works scheme. These would include diligent search for rights owners, licensing at market rates for commercial use and respect for the rights of ‘revenant’ owners that come forward. (our emphasis).

So much for the 'national treasure trove', then. Hargreaves' view of an orphan work is essentially that it has been abandoned and can therefore be considered as having little value to its owner. The Government's response implies its recognition that this is rarely the case and that most works become orphaned without the knowledge or consent of their owners, against their wishes, and thereby invalidates Hargreaves' entire commercial orphan works paradigm and his recommendations based upon it. Unfortunately, the Government still seems not to recognise that there is no safe way to use an orphan photograph commercially, and that there is no such thing as a 'market rate' for an orphan photograph.

Pasted Graphic
Pasted Graphic 1


Those now in Government understood and accepted our arguments last year, when they were in Opposition, and used them to get Clause 43 thrown out by the government of the day. Why, now, do they ignore them?

EXTENDED COLLECTIVE LICENSING

The Berne Convention Article 9 is simple, straightforward and unequivocal:

(1) Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorising the reproduction of these works, in any manner or form.

(2) 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 author.

In its entirety, the Berne Convention guarantees creators the rights to decide whether and where they are going to publish, and in what format(s); freely to negotiate their own publishing contracts and licensing agreements; and to negotiate in person, or through agents of their own choice, as they see fit.

Extended Collective Licensing attempts to redefine copyright from being the right of the creator to control the making of copies to a right to be paid something for the use of that copy, if he or she is lucky. Creators do not want this: they wish to retain the rights Berne confers upon them, to manage their own copyrights, or negotiate with agents of their choice to do it for them. They do not want the whole process taken out of their hands. It disempowers them, and it will undermine what they get paid, and kill this country's cultural industries.

The British Screen Advisory Council's Orphan Works and Orphan Rights paper's Annexe C describes eight possible means by which the commercial use of orphaned works might be legislatively enabled. Of these eight, six definitely breach international law, EU law, or both; one probably breaches Berne; and the remainder only avoids breaking these laws by removing any practical legal remedies against infringement, inviting massive piracy and destroying creators’ and rights-holders’ livelihoods.

The BSAC Working Group has tried hard to be objective, considering that its members include such commercial orphan works enthusiasts as Google’s chief UK lobbyist Sarah Hunter and the British Library’s Head of Intellectual Property, Ben White. Perhaps that is why their paper ignores the evidence it has gathered, as detailed in its Annexes, and nonetheless advocates enacting no less than three of these suggestions, international and EU law notwithstanding.

Strictly speaking, any collective licensing scheme that extends the licensing of works beyond those of authors who have voluntarily placed their work under the control of a collecting society breaches Berne Article 9. WIPO, which is responsible for administering Berne, TRIPS and other international IP treaties, appears to turn a blind eye to existing extended collective licensing schemes such as DACS' photocopying licence and the Nordic Kopinor ECL scheme in which the vast majority of authors can be expected to be professional, aware of the existence and function of the relevant collecting society, be members of that society, and properly receive remuneration from it for secondary uses such as photocopying that cannot practically be licensed in the normal way.

The British Screen Advisory Council's Orphan Works and Orphan Rights paper's Annexe D provides a clear and succinct description of Kopinor ECL, from which it can readily be concluded that the ‘collateral damage’ of illegal orphan works licensing is small, and in practice acceptable in relation to the benefit enjoyed by the vast majority of properly registered authors, as is the ‘collateral damage’ similarly caused by DACS’ schemes.

Hargreaves' Extended Collective Licensing proposal is the diametric opposite of Kopinor: the vast majority of works will be orphan, not registered with the DCE, and collecting society members will be reimbursed disproportionately at the expense of the absent orphan authors. No matter how you try to finesse the argument, this is clearly in breach of both the spirit and the letter of the Berne Convention.

Hargreaves says that Extended Collective Licensing:

4.51 …should not be imposed on a sector as a compulsory measure where there is no call for it, and individual creators should always retain the ability to opt out of ECL arrangements.

Who constitutes a 'sector'? Who will make the call? How will it be made? What happens if aggregators and marketers 'call' for it, but creators and rights-holders do not? Must the call be unanimous, or will large vested interests prevail?


IP FAST TRACK IN THE PATENTS COUNTY COURT

Stop43 wholeheartedly support this proposal, so long as it results in a process that is genuinely of practical use to photographers pursuing infringements of the typical small value of between £50 - £350, and if accompanied by damages provisions that amount to the 'effective, proportionate and dissuasive' remedies required by EU Directive Directive 2004/48/EC, and which UK law patently lacks.

Enact Lord Justice Sir Rupert Jackson's recommendations; give them teeth; and DO IT NOW.

BETTER REMEDIES FOR INFRINGEMENT

In their submissions to Hargreaves’ review, all photographers’ representative organisations called for better remedies for infringement.

EU Directive 2004/48/EC says:

3.5. The compensatory and dissuasive effect of damages

Measures, procedures and remedies provided for by the Directive must be effective, proportionate and dissuasive. At present, damages awarded in intellectual property rights cases remain comparatively low. Only a few Member States have reported an increase in the damages awarded, as a result of implementing the Directive.

According to information received from rightholders, damages awards do not currently appear to effectively dissuade potential infringers from engaging in illegal activities. This is particularly so where damages awarded by the courts fail to match the level of profit made by the infringers.

The main aim of awarding damages is to place the rightholders in the same situation as they would have been in, in the absence of the infringement. Nowadays, however,
infringers' profits (unjust enrichment) often appear to be substantially higher than the actual damage incurred by the rightholder. In such cases, it could be considered whether the courts should have the power to grant damages commensurate with the infringer's unjust enrichment, even if they exceed the actual damage incurred by the rightholder. Equally, there could be a case for making greater use of the possibility to award damages for other economic consequences and moral damages. (our emphasis).

Civil remedies against infringement currently available under UK law are very clearly not effective, proportionate and dissuasive, notwithstanding the blandishments of No. 10 Downing St.

Again, Hargreaves is silent about this save his Berne-breaching proposal that infringement of DCE-registered works might attract enhanced damages:

  • providing that remedies, for example damages, are greater for infringement of rights to works available through the licensing exchange than for other works;
  • making DEA sanctions apply only to infringements involving works available through the exchange

To reiterate: a two-tier copyright system in which it is necessary to register work in order to enjoy the fullest protections and remedies available under law is clearly and obviously in breach of the Berne Convention Article 5.

‘Peter D wants to make it an offence to strip out metadata identifying the owner. it already is illegal under Sections 296ZG and 77 of the [CDPA 1988] Act. At the moment it is just a civil offence, so the aggrieved rights owner has to sue. I would support making it a criminal offence if done recklessly or repeatedly.’ -
Professor Charles Oppenheim, member of JISC Working Group on Intellectual Property Rights, commenting on Will Gompertz’ blog, 16 May 2011

Many UK IP markets are dysfunctional, dominated by oligopsonistic market bullies and riven by piracy and copyright infringement. This state of affairs cannot substantially improve to the benefit of creators and rights-holders, those entities who create the valuable IP upon which the ‘creative industries’ and the wider economy depend, unless creators and rights-holders have the automatic and unwaivable moral right to proclaim our authorship and ownership of our property under all circumstances, Fair Contract law extended to cover IP so that we cannot be coerced out of our rights, and genuinely effective, proportionate and dissuasive remedies.

Both Hargreaves and the Government’s Response are silent on these matters. Why?

MORAL RIGHTS

Despite the limitations of his remit, Hargreaves says:

1.4 Policy should start from careful assessment of these costs and benefits in the light of evidence and accepted economic theory. At the same time, non-economic factors meriting consideration (such as the important moral rights of authors not to have their work misrepresented) can be weighed in the balance.

11.2 We do not propose any diminution of existing non-economic IP rights, as we take the view that rights granted for non-economic purpose, such as the moral rights of creators to prevent usage of their work in unacceptable contexts, are compatible with the economic goals upon which the Review was asked to focus.


How nice of him. Of course, he also says:

2.6 ...There is significantly less empirical evidence on the economic effects of design rights and next to no evidence on copyright policy.

- and on the basis of 'next to no evidence on copyright policy' proposes commercial orphan works and extended collective licensing schemes that in practice would render creators' copyright and moral rights worthless. In this regard his entire Report is one big non-sequitur. He also entirely fails to acknowledge that a market economy can only function properly if participants have the right to assert their ownership of their property under all circumstances, which for IP includes the right to assert authorship, and which the CDPA 1988 Moral Rights Exceptions subvert. Intriguingly, the Government Response says:

The ownership information is clearly a prerequisite for the marketplace and would itself be a powerful tool against infringement (there would be no excuse for not checking a single, publicly accessible register) and a valuable first step in any diligent search for the owner of possible orphan works.

And so the Government recognises that a DCE can only function properly if it is based on an ownership registry, and yet fails to recognise that many authors, notably of photographs used in newspapers, magazines and some books, lack the right to assert their ownership in the first place, and that all authors can be coerced into waiving their Moral Rights and copyright by unfair contracts imposed by oligopsonistic buyers. This contradiction must be addressed and rectified in further consultations.

FAIR CONTRACT LAW FOR IP

Hargreaves and the Government blithely big up the value of IP and the 'creative industries' to the UK economy, and yet remain silent on the anomalous exclusion of IP from Fair Contract legislation. Schedule 1, clause 1(c) of The Unfair Contract Terms Act 1977 (UCTA) states:

Sections 2 to 4 of this Act do not extend to-

(c) any contract so far as it relates to the creation or transfer of a right or interest in any patent, trade mark, copyright [or design right], registered design, technical or commercial information or other intellectual property, or relates to the termination of any such right or interest;


Sections 2 to 4 of the Act deal with Negligence Liability, Liability arising in Contract and Unreasonable Indemnity Clauses. These subjects are the real financial killers for creators on the receiving end of them. Schedule 1, clause 1(c) effectively deprives creators of protection under UCTA and leaves us prey to oligopsonistic market bullies, as detailed in our evidence to the Hargreaves Review.

Stop43 have described how several of the photographic markets have failed as a consequence of endemic predatory contract terms and rights-grabs. This situation can only be improved, and proper, tax-yielding growth stimulated in these markets, by the immediate repeal of Schedule 1, clause 1(c) of The Unfair Contract Terms Act 1977. Hargreaves knows this, because we have told him so. Why the silence?

IP OMBUDSMAN

Contract disputes require a recourse to arbitration. Hargreaves suggests that the IPO could offer 'statutory opinions' or Ofcom might arbitrate:

10. An IP system responsive to change. The IPO should be given the necessary powers and mandate in law to ensure that it focuses on its central task of ensuring that the UK’s IP system promotes innovation and growth through efficient, contestable markets. It should be empowered to issue statutory opinions where these will help clarify copyright law.

4.37 The IPO might take responsibility for oversight of the new Digital Copyright Exchange, as part of its responsibility for copyright policy. An alternative would be to look to Ofcom which already has experience and expertise in issuing and overseeing national and international licensing processes, along with experience and responsibilities in online enforcement. Ofcom also has Competition Act powers, which would enable it to act as an effective first tier watchdog of competition issues in the growing UK digital rights market.


Stop43 are wary of both of these proposals.

We believe that the IPO's constitution creates a conflict of interest, of which more later. Since the appointment of British Library CEO Dame Lynne Brindley to Ofcom we have lost confidence in its impartiality: whenever we find a public sector body promoting extended collective licensing or commercial orphan works usage, we invariably find Brindley or Ben White, her Head of Intellectual Property, in there somewhere, cheerleading:

‘The proposal [Clause 43] was nearly... enacted as part of the Digital Economy Bill for orphan works. It's our view that that was and still remains fit for purpose and should be reintroduced to Parliament, hopefully as part of the Communications Bill planned by the Coalition Government.’ - Dame Lynne Brindley, Chief Executive, The British Library, speaking at the IP for Innovation and Growth event at the RSA, 2nd. March 2011. Speech written by Ben White.

Creators and rights-holders will only have confidence in an arbitrator untainted by commercial orphan works lobbying.

PARODY

Neither Hargreaves' Report nor the Government's Response have explicitly considered the interaction between fair dealing for parody and the Moral Right to object to derogatory treatment of work, one of the IP rights guaranteed as a minimum by our membership of the Berne Union. It can't be repealed.

Tens of millions of people, members of the general public, create works that thanks to Berne are automatically protected by copyright, and have sentimental value to them that cannot be quantified in monetary terms. What if a cherished loved one's image is used in a way offensive to its owner, but nonetheless legally because it qualifies as parody under the proposed exception?

Let’s be clear. It's not that we object to parody in principle; we like a laugh as much as the next person. It's that we must retain our right to object when 'parodic' use becomes derogatory. Parody is alive, well, and shows little sign of being stifled by current copyright law. There have been very, very few cases in which artists have exercised their Moral Right to object to derogatory treatment of work and thereby stifled parody: so few that it rather proves the point that there is no overwhelming need for a parody fair dealing exception. It can therefore be argued that a parody exception would fail the proportionality test:

The European doctrine of proportionality means that, ‘an official measure must not have any greater effect on private interests than is necessary for the attainment of its objective’: Konninlijke Scholton-Honig v Hoofproduktchap voor Akkerbouwprodukten [1978] ECR 1991, 2003.

Moreover, the recommendation for fair dealing in parody does not discriminate between different media, dealing with each appropriately, but it should. In the case of photography, altering a photograph without permission for the purposes of parody infringes the copyright holder's moral right of integrity. This is particularly important as authenticity is the very essence of a photograph, especially a documentary or news photograph, and it is fundamental to an author's reputation. Furthermore, a photograph incorporated unaltered into a work of parody should command a reproduction fee in the normal way.

Introducing a parody exception is likely to be of little growth-stimulating economic benefit, except of course to our old friends Google, the 2.4% UK corporation-tax-paying US corporation whose advertising revenue will increase with every virally-popular 'parodic' work posted to YouTube.

FORMAT-SHIFTING


There are at least three separate issues hiding under this umbrella: digitisation for preservation, non-commercial home copying, and home copying that would supplant sales.

Digitisation for preservation

The Cultural Heritage Sector likes to plead that current law prevents it from digitising cultural artefacts rotting in its basements, and that they will be lost forever. In fact they won't; the CDPA 1988 already allows copying for preservation purposes of most kinds of media. As we have said earlier on the subject of Orphan Works, and as Professor Charles Oppenheim advocates, Stop43 recommend that CDPA 1988 Section 42 be rationalised as a matter of urgency to allow the digitisation of any work strictly to preserve it, and where appropriate make it available for cultural use.

Home copying

Most of the argument around home copying appears to concern itself with the transfer of IP from legitimately-bought CDs, DVDs, etc. to devices such as iPods. It seems to us that this problem is largely the result of the music and film industries allowing the public to labour under the misapprehension that they have "bought" and "own" their music and films, whereas in fact they have bought a License to Use conferring the right to enjoy these works domestically but not to copy them. Probably these industries thought the public too stupid to understand the difference. Perhaps so, but no wonder the public is confused. The film industry is now taking steps to put this right, and its UltraViolet scheme intends to replace the "sale" of films with a more rational, general License to Use that allows for format-shifting, use on multiple devices, and physical backups.

Home copying that would supplant sales

Many social and wedding photographers and portrait houses base their businesses on print and album sales. In doing so they guarantee quality products for their clients and maintain their professional reputations. A general Home Copying exception would not only endanger a major income stream, but also catastrophically undermine reputations for quality. While Stop43 are careful to avoid special pleading, any proposed Home Copying Exception must take particular note of these consequences and include appropriate and effective safeguards.

THE INTELLECTUAL PROPERTY OFFICE

Throughout this commentary we have referred to Hargreaves' proposals as if they emanate exclusively from the man himself. But this is obviously not the case, as he admits:

'I would like to conclude by thanking the team, based in the Intellectual Property Office, which has worked with me to deliver this independent review. Because it is independent, I bear responsibility for its content, but I have relied very heavily upon the expertise and unstinting hard work of the IPO team.'

Let us take a look at the IPO, because its attitudes towards creators, rights-holders and copyright have remained remarkably consistent for the past decade, despite the change of Government:

  • It is an Executive Agency, rather than a department of the Civil Service. It is a self-supporting business, and run as such. Its charter, revised Feb 2011, states:
When running our business, we will do the following:

  • Achieve a return on capital employed of 4%.
  • Achieve the savings target set by BIS of £6.3m for 2010/11.
  • Demonstrate improvement in our people’s perceptions of leadership and change management capability at all levels of the IPO compared with 2009.
  • 90% of IPO customers will be satisfied with the service they receive.

  • It makes its income out of registering patents, trademarks and design rights: Our main business is to grant patents and register designs and trade marks in the UK. We also handle applications for European Patents, Community Trade Marks (CTMs), Registered Community Designs (RCDs) and international patent and trade mark applications for the World Intellectual Property Organisation (WIPO).' - IPO charter
Note: the IPO is responsible for copyright but makes nothing from it. It is always bad business to be responsible for something but make no money from it.

  • It currently runs at a surplus. Hargreaves says: ‘The IPO’s reserves stood at £55m at the end of March 2010.'

  • The IPO charter goes on to say: 'We are the Intellectual Property Office. As an Executive Agency of the Department for Business Innovation and Skills (BIS) we promote innovation by providing a clear, accessible and widely understood intellectual property (IP) framework, to enable creators, users and consumers to benefit from knowledge and ideas. A key component of this framework is the granting of intellectual property rights (IPR)... We develop UK law on copyright, which includes unregistered design rights and rights of performers.'

  • This history of the IPO says: 'The Intellectual Property Office became an operating name of The Patent Office on 2 April 2007. The Patent Office was set up in 1852 to act as the United Kingdom's sole office for the granting of patents, although the origins of the patent system stretch back at least a further 400 years. The Designs Registry was set up in 1839 to protect industrial designs and its responsibilities transferred to The Patent Office in 1875. The registration of Trademarks became a Patent Office function in 1876.'

  • It is not clear at what point the Patent Office was put in charge of copyright law. On its website the IPO describes its own role as follows: 'We are the official government body responsible for granting Intellectual Property (IP) rights in the United Kingdom.'
This statement is highly revealing, because of course the IPO does not 'grant' copyright, which is an automatic right conferred upon creators by the Berne Convention. Moreover, the nature and definition of IP rights in law is for Parliament to decide, within what is permissible by EU and international law, and not a quango such as the IPO. The IPO clearly has ideas and ambitions beyond its station.

  • 'Innovation' has been the IPO buzzword from the start: 'The nifty new logo incorporates the slogan 'For Creativity and Innovation'.' - IPKat blog
Let us repeat what Hargreaves says in the foreword to his report:

'Because it is independent, I bear responsibility for its content, but I have relied very heavily upon the expertise and unstinting hard work of the IPO team.'

The picture clearly painted is of an Executive Agency run as a self-supporting business
charged with achieving a return on capital employed of 4%, which at some indeterminate point was made responsible for developing UK copyright law but makes no money from copyright, has offered the use of its £55 million surplus as seed capital for the establishment of the DCE (and presumably requires a 4% return on it), and wishes to be the source of 'statutory opinion' on copyright matters. It intends to be the prosecutor, judge, jury and financial beneficiary of all things copyright. How innovative.

Such an entity cannot by any stretch of the imagination be considered disinterested or impartial. It is riven with conflict of interest and Stop43 has little faith in it. Hargreaves' proposed DCE Champion had better be entirely detached from it or he will utterly lack credibility with creators.

FINALLY…

A great deal of what is proposed by Hargreaves and endorsed by the Government's Response is moot, as the Response makes clear:

'The UK must work within international agreements and European law as well making the case with international partners for changes to meet the challenges of the future.'

The Government is restricted by international treaties to which it is signatory such as the Berne Convention and WIPO TRIPS, and also subject to compliance with EU Directives such as the 2001 copyright Directive and proposed Orphan Works Directive, both of which severely limit exceptions to copyright and what may be permissible with orphaned works.

So Hargreaves’ Report and the Government’s Response are mostly just posturing, then. Let's see what can really be done.

Article updated 2011/09/01, adding reference to the European legal doctrine of proportionality with regard to a parody exception)