Copyright in the Digital Age

Still the bedrock of creativity and the creative industries

Choose a subject

●     Why Europe’s New Copyright Proposals Are Bad News for the Internet

●     ‘EU copyright legislation will not change in UK after Brexit’ argues Kaye

●     EU copyright reform proposals “sensible” say publishers

●     Publishers stress importance of Robust Copyright Regime Post Brexit

●     Congratulations to Dr. Aislinn O’Connell

●     Fit for Change? Copyright for Publishers in the Digital Age – Abstract/Intro

●     Copyright thesis – Chapter 1 Literature Review

●     Copyright thesis Chapter 2 – A Historical investigation of copyright

●     Copyright Thesis Chapter 3 – Legal Investigation

●     Copyright thesis Chapter 4 – Blocking initiatives

●     Copyright thesis Chapter 5 – Copyright and the UK Economy

●     Copyright thesis Chapter 6 – The Hargreaves Exceptions

●     Copyright thesis Chapter 7 – Alternative approaches

●     Copyright thesis – Conclusions

●     Index, List of Abbreviations, Tables of Cases & Legislation, Bibliography, Appendices 1&2

●     World Book and Copyright Day

●     EU’s new action plan for copyright and digital platforms

●     Google News Leaves Spain

●     Exceptions impact on business: air your views on 20 October 2014

●     Last Copyright Exceptions Come Into Force Today

●     Copyright and the UK Economy

●     Copyright Briefing – July 14

●     Culture of the Public Domain – A Good Thing?

●     An Employment Focus on the Creative Industries

●     Copyright exceptions back on track

●     Exceptions Update

●     LBF14 – Day 2

●     LBF14 – Day 1

●     New Director for Copyright and Enforcement Speaks

●     Copyright and the Future of Global Content Industries

●     Commons Committee warns against diluting IP rights

●     CLSG Launch Report: Streamlining Copyright Licensing for the Digital Age

●     IPso FACTo debate at Stationers Company

●     Publishers Launch Global Exchange on Copyright

●     Funding given to kick-start Copyright Hub

●     IPO thoughts on copyright and the economic effects of parody

●     Modernising copyright – February 2013

●     Stationers and UCL in joint copyright research initiative for communications and content industries

●     Government publishes proposals for changes to UK copyright

●     Stationers offer bursary to copyright research student

●     Hooper recommends UK Copyright Hub

●     Copyright adds extra £3 billion to national accounts

●     Hargreaves warned on damaging UK creative industries

●     PPA pushes for simplified IP rights exchange

●     NLA v Meltwater: a victory for content owners

●     How US publishers pirated Dickens’ works

●     Consultation on legal deposit

●     Minister says search engines must help stop pirates

●     EU votes through the Copyright Term Directive

●     Government backs Hargreaves Review

Copyright
and the
Information
Explosion:
an Overview

By Clive Bradley

Abstract: The problem of how to reward and secure a livelihood for authors and other creative workers, and the producers who develop and put their often speculative products on the market, when the output is ephemeral and easily copied without reward or compensation, is of fundamental importance as societies develop and rely more and more on creative input for their economic and social growth.  The established system, copyright, accepted internationally, enables rights in creative works to be traded profitably and with proper returns to their creators by providing that the creator has the exclusive right to make or authorise the making of copies.

The digital revolution, with its ease of collecting vast archives of content which can be readily accessed and copied in quantity without loss of quality, in private and outside the control of the originator, has put the copyright system in doubt, making it difficult to enforce and encouraging wholesale illegal access and copying.  How to develop the system to meet the new challenges is a matter of considerable controversy.

In this article, Clive Bradley gives an overview of the role and scope of copyright and discusses the main issues which arise in the digital environment, as an introduction to the contributions from leading experts.

1. The creative dilemma

Over the centuries, society has tried to find effective ways of rewarding its creative workers (‘creators’) – writers, visual artists, composers, performers, film makers, broadcasters, designers, writers of software, and the producers who develop creative works for the market – as deserving of proper return for the use of their talent, labour and investment, and to encourage them to make their output (‘works’) available to potential users for communal benefit.  In this way, one person’s creativity, knowledge, skill and investment foster new creativity, knowledge, skill and investment in creative works, the growth of human knowledge. The problem is that by its nature, creative output is ephemeral, easily copied and plagiarised by others, and so difficult to ‘trade’ on a viable basis of proper return to the creator.  Copyright – the tradable right to control and ‘sell’ the authority to make copies of works originated by the creator -  is the internationally accepted means of engineering this – a form of ‘intellectual property’ vested in the creator, along with patents and trademarks – an asset accruing to the creator.

The economic and social value of this output is immense, though insufficiently recognised.  It is estimated that, in the UK at the beginning of the 21st century, the creative industries, including publishing, broadcasting, music, film, design and software, contribute something of the order of £150bn to the UK economy annually – approaching 10% of total GDP.  They also offer the best prospect of any UK industry for future growth and have significant export markets – a world leader.

This enterprise has been thrown into sharp relief over the past 20 years by the dramatic emergence of sophisticated digital information technology and the internet, creating vastly more powerful means of storing, accessing and copying creative works, enabling accurate and multiple copies of creative works to be made outside the control of their creators, providing significant benefits in terms of access to information, but threatening the ability of creators to obtain a fair return from their work and the viability of the systems which produce valuable creative works for the benefit of users. For many parts of the creative sector, these developments are seen as threatening their future existence, and at the very least they involve massive changes in the ways in which vital creative materials become available to users and by which creative workers are able to maintain their livelihood.

These developments, often described as a paradigm shift in the production and use of creative works, has been the subject of intense worldwide study, broadly concluding that the protection of the intellectual property which underlies creative endeavour is vital and itself confers major benefits, but not offering clear ways forward.

This ‘digital revolution’ has resulted in a major division of opinion about the future of the systems to protect and support the exercise of creative rights in copyright.  One school of thought, primarily represented by the creative community, argues that copyright remains a sustainable regime for the future, needing only some tweaking to deal with new issues and effective enforcement, while another argues that copyright as it has existed is unworkable in the new, consumer-led, digital environment, standing in the way of digital technology and the ability of users to benefit from the technology.  Both sides accept that new ‘business models’ have to be developed by the creative community if it is to have a sustainable future:  the argument is how best to make these new models work. While the latter argument has the advantage of seeming ‘modern’ and on the side of new technologies, and the former can seem luddite, the creative industries are not trying to destroy the uses of the digital technology, but to find ways of maintaining viable systems using the technology, with copyright, which has regularly developed over the years to meet modern needs, providing a sound base.

A new paradigm shift

If the technological developments over the past 20 years have been dramatic, a further paradigm shift is now in progress.  Before the 21st century, the basic use of new digital technology was dependent on the personal computer, with the user able to access creative content from new digital media, such as discs and then the internet, and to exchange information through computer networks.  This was revolutionary enough, but the 21st century has seen the development of complex but inexpensive devices, initially in 2001 the IPod (a hand-held device loaded through the PC), providing access to music through the Apple  ITunes store, revolutionising the music market.  ITunes and similar systems generally operate within established copyright law, but run alongside illicit file-sharing services enabling massive unpaid-for copying between users.  Then in 2009 came new wireless devices which enabled users to download content, in particular e-books and e-periodicals, and potentially newspapers and much more, into increasingly attractive hand-held devices, with formats similar to those of the ‘old’ technology, without the mediation of a PC, wherever they happened to be – e-readers.

Potentially this latest development may mark the next stage of the digital revolution, enabling producers – not just the established media – to dispense with the expensive ‘old’ technology of printing presses and physical distribution and publish only digital works distributed digitally.  This throws into relief the need to ensure effective trading mechanisms of the kind protected by copyright.  Unfortunately, perhaps, many producers of content in all parts of the creative industries were slow to establish such mechanisms, partly because the new systems needed to operate alongside the old, but also because the new systems were perceived as offering promotional benefits for the ‘old’ products which made charging for digital content unnecessary.  This created an expectation on the part of the market that much content would be free (or largely paid for by advertisement revenue, not at the point of use), and it is only in the past few years that producers of many content products have adopted new, commercial, policies of charging for content on the internet.  Even this is subject to well-informed doubters who do not accept that these new policies can be made to work.

The most recent example of a change in policy is the decision by News International to charge for access to its newspapers in digital form, initially The Times and The Sunday Times, either on the basis of weekly, monthly or annual subscriptions, or by bundling digital access in with subscriptions to the printed newspapers.

The development of digital, especially mobile, technology has also released a stampede of potential information providers, many of them less concerned with investing in creating content than in distributing information produced by others, creating a plethora of potential suppliers who expect to be able to distribute information without having to pay for the use of it and without having to charge for its use (gaining their own revenues from e.g.  subscriptions to their own services or from advertisements displayed alongside the content), so creating an ‘unlevel playing field’ for fair competition.

Combined with  the growth of social networks and blogs, enabling almost anyone to publish information and opinion, not all soundly based, and with well-resourced companies like Google operating vast search engines and seeking to digitise ‘the whole of human knowledge’,  effectively becoming publishers of material they digitise, and with national libraries’, often in partnership with these commercial organisations, digitising their stocks and wanting to make their digital archive available, and with public libraries lending e-books as part of their free lending service, we face a situation of intense and often chaotic competition which raises important questions about the future of information and creative provision – not just systems of reward, but issues of privacy of personal data, quality and integrity of information and market dominance as well.

In April 2009, just before the General Election, Parliament passed the Digital Economy Act, after intense debate in the House of Lords (but because of the Dissolution of Parliament without time in the House of Commons), providing tools which had been negotiated over many years to restrict illicit access over the internet to works in copyright and illicit file-sharing.  In the USA the courts are considering an agreement between Google and the American publishing industry on a collective arrangement to permit Google to digitise in-copyright but out-of-print books which has raised concerns about the market power of Google and the position of authors, especially those based outside the USA.

The Stationers’ Company Project

The Stationers’ Company project, celebrating the tercentenary of the UK’s first significant Copyright Act, the Act of Anne, 1709 (in force in 1710), gathers together the analysis and opinions of authoritative experts on many of these new issues, and on the future of copyright law and creative industry practice, to create greater understanding and, hopefully, point towards effective solutions.

This prefatory article for the project seeks to give background to the role of copyright in our economic and social environment and to the issues that arise, and identifies some of the principal questions that are being debated.  It is not a complete legal analysis but a guide to the operation of a system which has been seen as vital to the creative industries and the effectiveness of ‘information provision’ generally.

2. Underlying problem of creative works

Over the ages, the problem has been that creative works are ephemeral and can be easily copied by persons other than their creator, without reward, and are of highly speculative value in the marketplace. Different models of reward have been used to support the makers of creative works in this uncertain segment of the economy, including, for creative workers, direct sale of copies, sale or licensing of the right to make copies, employment of the creator for salary or hire, and patronage, and for producers, sale, subscription and advertising revenue.  Where private sector activity has led to market deficiencies, these can be remedied by public funds, for example, the licence fee for the BBC (initially perhaps seen a means of maintaining control of a new medium, but now as a means of sustaining public service programming), the public and national library system, (initially to improve social mobility and now, like the NHS, often free for all at the point of use), and subsidy by, e.g. the Arts Council.  Currently there is public discussion about how to overcome a newly perceived market deficiency, the continued provision of regional and local news which public funds may have to support.

The copyright solution

These models, important in themselves, need to be underwritten by law to sustain the vast variety of creative output that occurs and for which there is a market.  For markets to work, there must be a viable commodity which can be traded.  When a particular commodity, in this case creative works, can be readily copied and put on the market by parties who have not invested their skill and resources in it, the drive to generate creative works for the market becomes exhausted.  Copyright makes creative works into a tradable commodity by giving the creator an exclusive right, enforceable at law, to make copies and trade in those copies: ‘the trading system of works of the mind’.

This is generally accepted as a vital part of an effective society, as a matter of fact.  How copyright is exercised may be debated, but that a creators’ right in their original creations should exist is not.  The only obvious alternative would be for the public sector to take financial responsibility for the creative sector, which is clearly unacceptable. Given the importance of creative works in economic and social society, it is imperative to have such a comprehensive system to enable fair rewards, reflecting the extent of use and the perceived value of the work, and giving creators the opportunity of earning a livelihood .  The copyright owner may not need or wish to achieve financial reward:  many works are created for purposes other than reward (for example this article), but the market option is available. It enables creative workers to prevent unauthorised people making copies of their works and   to obtain reward from people authorised to make copies, or to assign or license the right to make copies to somebody else to exercise on their behalf, typically a publisher or producer (in this article referred to as the ‘producer’) who adds value to and markets the work.

Early origins of copyright

This necessity was recognised relatively crudely in Roman law and practice and in different forms of common law over the ages.  In the UK, an embryonic right was introduced by the charter to the Stationers’ Company in 1557, under which the Company (basically a guild of stationers, booksellers and printers) was granted the right (and duty) to seize unauthorised copies of books which its members had the sole right to print (and which were listed in its Register).  Not surprisingly, the system also supported censorship and Guild monopoly which did not meet the needs of an emerging democratic society.  However, the regime did point the way to a market- rather than paternalist-based economy for books, and began the growth of a competitive and innovative publishing industry, finding new authors and new markets at a time when the UK itself was undergoing enormous democratic and economic changes.

This system was augmented in 1709 by the Statute of Anne, which conferred limited exclusive rights on authors, through their printers, to print their books, and imposed penalties on persons who printed copies of books without authority. The Act was stated to be ‘for the encouragement of learned men to compose and write useful books’. The new system stimulated a growing market and was developed and expanded over the years.  More recently, the economic right was extended in the UK to include statutory authors’ ‘moral rights’, basically the right to maintain integrity against distortion or false claims of authorship. The economic right can be separately traded for periods of time, type of reproduction (e.g. different editions of a book), and territory (usually different sovereign states), which enables authors and their publishers to optimise the exercise of their copyrights and to find innovative ways of taking creative works to market, including international markets.

The current statute in the UK is the Copyright, Designs and Patents Act 1988, which since then has been amended by Regulations, usually consequent upon EU or international directives or treaties.

Copyright law has been subject to many reports and reviews in recent years, to recommend changes needed to cope with new technologies, for example in the 1970s with widespread photocopying of books, periodicals and journals, and more recently, with the introduction of digital production and distribution of text, music, video, software and games.  The most recent authoritative report is the Gowers Review of Intellectual Property (2006), which is still in the process of consultation and implementation, and which concluded that the copyright system basically worked well, and remained appropriate to the digital environment subject to various minor amendments.  Gowers led to the creation of a Strategic Advisory Board for Intellectual Property (SABIP), which undertakes more fundamental, long term, reviews of the system.  Selected changes are in the course of being implemented through the Digital Economy Bill [Act], notably proposals for a new procedure to inhibit illegal file-to-file copying through the internet and to create a new regime for so-called ‘orphan works’ – works for which potential digitisers (mainly libraries) are unable to find the copyright owner to authorise the copying they wish to undertake.

Not a monopoly or restrictive practice

The copyright system, conferring an exclusive right to make and issue copies of an original work on the creator, is sometimes stigmatised as a monopoly or restrictive practice, so impacting itself on the rights of consumers.  In law and practice, however, this is a misunderstanding of the nature of copyright.  Copyright is an exclusive property right in a particular original work, no more a monopoly than other rights to property, and not preventing competition from similar but different original products aimed at the same market. ‘Monopoly’ only arises if a single producer has an over-dominant share of a market, as defined.  Thus, it is possible to conceive of a monopoly in e.g. the market for children’s books, but not in the market for Enid Blyton books, any more than the producer of other products, e.g. toothpaste, has a monopoly by being the only supplier of its brand.

Nor are the limits specified for the licensed exercise of a copyright, by reference to period, type or territory, ‘restrictive practices’.  The licence merely sets out the scope of a positive placement of a product on the market which otherwise, without that definition, could only be licensed in its entirety, permitting only the one licensing of the product, not an innovative range.

3. The scope of copyright

Copyright now extends to cover the following types of creative works:

  • Text: authors’ rights in their original writing (which may be fiction, non-fiction or e.g educational, academic, scientific writing) reproduced in books, periodicals, newspapers, letters, documents, electronic formats and other publications, together with i) publishers’ rights in published editions and ii) database makers’ rights in databases, reinforced by a separate database right.
  • Music: composers’ and songwriters’ rights in a musical work, performance rights, recording rights, rights in a recording, and performers’ rights.
  • Graphics, pictures, designs and games: artists’, photographers’, designers’ and producers’ rights.
  • Broadcasting, film and video: Producers’ rights in a broadcast film or video, directors’ rights, performers’ rights.
  • Software: producers’ and writers’ rights

In general, the author or actual creator, including of a work made for hire, is the first copyright owner, but rights to works made in the course of employment are owned by the employer.


Duration of copyright

The initial creator’s right within the EU is for the life of the creator plus 70 years.  This relatively long term is designed to enable a work which does not originally find a significant market (e.g. new forms of musical composition or painting) to enjoy protection at a later time when it achieves recognition, or is republished, and to give creative workers an estate which can be of value to their inheritors.  Other rights (for example the producer’s rights in a published edition or recording) are of shorter duration, usually commencing from the date of publication.

A new right has recently been introduced by the EU to enable artists who have sold their pictures to claim a share of the increased value of their paintings in subsequent sale, when, e.g. the artist has become famous:  droit de suite. The UK has opted out of this right on the grounds that it might damage the international competitiveness of UK salesrooms.

International system

Internationally, the copyright system is enforced through the Berne Convention for the Protection of Literary and Artistic Works (the ‘International Copyright Convention’ or ICC), administered by the UN World Intellectual Property Organisation (WIPO), of which most sovereign states are signatories, supported by the Universal Copyright Convention, administered by UNESCO, which incorporates special provisions for developing countries, now also included in the ICC.  Other international conventions enforce protection for other forms of copyright and works. These conventions typically establish minimum standards of protection to be accorded by signatory states to works emanating from other sovereign states, and require states to accord the same protection to foreign works as they accord to their own nationals.

More recently, to combat the growing threat of copyright piracy (commercial exploitation without the licence of the copyright owner) the World Trade Organisation established an agreement to strengthen international sanctions against piracy and to encourage greater protection of intellectual property generally, a treaty entitled Trade Related aspects of International Property Rights (TRIPs).

Exceptions to copyright

Copyright law, nationally and internationally, provides for various exceptions to the right to make copies, typically designed to permit uses which are within the contemplation of the parties when a work is made available, for example ‘fair dealing’ (UK) or ‘fair use’ (USA), permitting the reproduction of small parts of a work for research (non-commercial) or private study, or for criticism, reporting or review, or limited copying for education or libraries, on strict conditions.  The US ‘fair use’ doctrine permits more copying for educational purposes than UK ‘fair dealing’. Copying for private use is not a permitted exception.  The ICC provides that statutory exceptions must not infringe the ‘three step test’ set out in the Convention:  i) the reproduction must be a ’special case’; ii) the reproduction must not conflict with a normal exploitation of the work and iii) the reproduction must not unreasonably prejudice the legitimate interests of the author.

In certain cases of multiple but small-scale copying, e.g. performance of musical recordings on radio or limited photocopying in schools and colleges, systems of collective licensing, subject to public regulation, and usually involving the consent (or not opting out) of the copyright owner, may apply.   If operated too liberally, collective licensing can undermine the working of the competitive market, and is generally most suitable for uses involving many ‘small-scale’ reproductions which cannot readily be controlled by the copyright owner but which have social value, in return for payments from the user distributed by collecting societies between qualifying  copyright owners.  It is not a portmanteau solution to the problems of commercial digital delivery in core markets.  It remains an issue as to whether use of ‘orphan works’ (works for which the copyright owner is unknown or cannot be traced) in certain circumstances should be controlled by a collective licensing system.

Infringements of copyright

In law, infringement of copyright (making or selling copies without legal authorisation) for commercial purposes is described as piracy, and is subject to criminal penalties.  Infringement for non-commercial purposes is a civil tort, subject to damages, statements of account, injunctions, and, for distributors given notice that a work infringes copyright, withdrawal from distribution.

It has now become common practice to describe the vast amount of illegal copying and file-sharing facilitated by the internet as ‘piracy’, to emphasise the damage that this does to the legitimate property of creative workers and treating it as a moral theft.  In law, however, unless it is done for commercial purposes, the illegal copying is a civil tort, not a crime, and it is wrong to describe attempts to prevent illegal copying through the courts as ‘criminalising’ the perpetrators (let alone ‘criminalising’  seven million people who, in the UK, are thought to engage in this ‘piracy’).  In practice, legal action against private infringers is taken to establish the principle and serve as a warning to others.

In this context, the arguments are made by those who believe that copyright should not be used to prevent such activity i) that action against illegal copying of e.g. music is a luddite denial by the producers of the optimum uses of the new technology by consumers;  ii) that illegal copying is often a demonstration against excessive prices charged by producers;  and iii) that systems (as provided in the Digital Economy Act) to cut frequent users off from access to the internet by termination of broadband accounts are breaches of human rights of the perpetrator or of others using the same accounts.  These arguments ignore the facts that most such illegal acts of copying are made in private to avoid legitimate payment, in self-interest, so are scarcely public campaigning against producer prices, and that the human rights of creative workers to protect and earn income from their creations are surely at least as important as the human rights of illegal copiers.

European Union

The EU has established legal competence in many areas of copyright, similar to that of WIPO and UNESCO internationally, but there is no comprehensive EU copyright statute or (yet, at least) a true ‘single market’ in copyright works, given problems of language and legal tradition.  Establishing a single market involves considerable commercial and legal difficulties.

There are however copyright directives imposing minimum common standards, in particular the Information Society Directive, but the copyright statutes of member states can still have considerable differences of approach.  This makes it unacceptable that copies of works made taking advantage of lower-standards should be freely imported into member states with higher standards of protection (this is known as the application of the law of the country of destination, not that of the country of origin, itself an important source of controversy for different uses of a product).

The EU situation highlights two different copyright cultures.  In the UK and Republic of Ireland, the culture is based more on facilitating commercial ‘exploitation’ of a work.  In continental Europe, it is based more on the Roman/Napoleonic tradition, protecting the rights of the author (droit d’auteur).  In practice, the differences have been minimised, but are demonstrated by the UK standard for attracting the protection of copyright being based on ‘originality’ (not copying the work of a previous author), while the continental tradition requires a display of creativity.  This basically affects works such as lists or low-level directories which involve compilation rather than creative input:  originality is more a question of fact, creativity more a qualitative judgement.  The difference has resulted in a new right being accorded by the EU to factual databases which might or might not meet higher standards of originality or creativity:  the Database Right, not quite copyright but similar, running parallel to copyright in databases which are creative in their form.

Market or territorial rights

Copyrights, like other intellectual property rights (patents and trademarks) can be exercised separately in different sovereign states, in accordance with local law meeting the requirements of the international conventions.  This may be by licences (usually exclusive) for local production and distribution for the territory, or by importing copies made in the originating territory.  These territorial rights are especially important for physical products such as books, records or video, and their digital derivatives.

There is a continuing and important legal dispute over what is known as parallel importation or international exhaustion of rights.  Briefly stated, this is whether the original copyright owner who has authorised the making of copies in one territory can control the future sale of those copies into other territories (parallel importation) or has ‘exhausted the right’ in those copies by putting them on the market in the first place, so enabling an importer in a territory to import copies which otherwise would be an infringement of a separate exclusive licence for that territory.

The trade-related aspects of intellectual property rights (TRIPs) agreement addressed this problem of international trade but failed to resolve it.

The argument revolves around the balance between encouraging production and stockholding of e.g. books or other physical copyright products in separate sovereign states, so also supporting a local producing industry and providing opportunities for indigenous creative workers, through enforceable exclusive licences for the territory, or providing consumers with access to cheaper (and possibly earlier) products from other countries – the effects of globalisation which, however, can polarise creative output in dominant trading countries such as the USA, to the detriment of innovative local enterprise and, typically, to concentration on the most popular international works.  In the case of creative works, the problem is aggravated by the ability of a producer in the larger trading country to ‘run on’ production at marginal cost for export markets, so selling products at an artificially low price.  The economies this affords can be of value for providing products at affordable prices for poorer developing countries; it is questionable whether the short-term financial benefits to consumers in developed countries of parallel importation outweigh the alternative benefits of strong local creative industries.

The arrival of international suppliers like Amazon adds a further level of complexity.  Efficient logistics enable such firms to supply a vast range of products to consumers world-wide, so combating some of the polarising effects of globalisation.  But the consequences for local creators, producers and retailers – and in the longer term consumers – can be profound.

Parallel importation in the US and EU

In the US, the general provision is that the copyright owner for the US cannot prevent the re-importation of copies initially sold in the US and then exported (‘grey market’), but can prevent the importation of copies made elsewhere and not licensed for the US, so protecting US producers from parallel importation by foreign producers.

Within the EU, there are additional complications arising from the ‘free movement of goods’ and ‘restrictive practices’ provisions of the European treaties, whereby if copies can be lawfully sold in one member state, they cannot be prevented from importation into another.  This has profound implications for English-language products, with the competition between UK and US producers, who may be separately licensed for the English language countries (UK and Republic of Ireland), and for non-English language countries in which there is nevertheless a market for English language products (the other member states).  Thus, there can be parallel importation between EU member states, but the EU prohibits the importation of copies made outside the EU and not licensed for anywhere in the EU, so rejecting the concept of international exhaustion of rights.

The free movement of goods provisions in the EU are only applied to physical goods, such as books or records, and not e.g. digital products or broadcasts, which are subject to different provisions.  With the international embrace of the internet, it could be difficult to enforce territorial rights for digital products, though given that internet traders are able to target advertisements to potential customers based on individual profiles, they are technologically capable of determining where a given customer is located, so that it is increasingly possible to protect territorial rights even for digital products.

4. Impact of digital technology and the internet

The effectiveness of the copyright system is seriously challenged by the invention and rapid growth of digital technology, in particular by the internet as a new means of access and distribution to copyright works.  Digital technology enables accurate copies to be made of digitised copyright works by a user and to be copied onto any number of other discs or computers, sometimes on a commercial scale, but including many acts of copying in private or between individuals, outside the control of the copyright owner.  These copies substitute for an authorised copy and threaten the ability of the copyright owner(s) to sell or license the authorised copies.

The Internet extends this problem by facilitating access to a vast volume of digitised datafiles, enabling file sharing between different users who can use the net to obtain copies held on one computer or database to any number of others, outside the conditions of licensed copying, and by the development of browsers or search engines which can cruise the net to compile vast and comprehensive lists of topics in digitised documents on websites which can then be accessed instantaneously by a single click. The ability of copyright owners to obtain a reward for such uses of their property is limited by the practicality of systems of payment, and by the ability of the user to obtain access through alternative channels of availability, avoiding payment mechanisms.

The problem has initially been most evident for software and recorded music, but is rapidly expanding to cover films and video, books, newspapers and periodicals, and games, causing major alarm to creative workers and their producers and likely threatening the viability of systematic production of works with established content-integrity, and so the ability of creative workers to obtain the returns contemplated by the copyright system.

Numerous international, EU and national studies have been made of this problem, usually acknowledging the importance of the copyright system, but wrestling with just how to adjust the system to cope with the digital revolution.  On the one hand, some argue that

  • the ability of the ‘consumer’ or ‘user’ to have greatly  improved access to creative works through digital technology should not be compromised by artificial restrictions imposed by copyright on that access, and that creative workers and their producers should develop new business models that take account of the new ease of access (and, by extension, that the copyright system has become impractical anyway and should not be pursued), and that to deny this is to deny the social value of new digital technology.  This view has been forcefully expressed by contributors to a Guardian symposium:

There are a few things that are on their way out, and that includes monopolies that have outlived their usefulness, the concept of ‘selling copies’ as a business model, ‘protecting rights’ as the way of making money, and using friction to get payments. (Gerd Leonhard).

We propose that those concerned about the viability of their current operating models should first build their understanding of how their customers prefer to use their content and services, and then redesign their monetisation accordingly. (Nick Appleyard)

while others argue that

  • the supposed alternative models contemplated have hardly been visualised let alone implemented, and seem to present equal problems of lack of effectiveness, so that the future of a sensibly ordered system of creativity is threatened, and that, while the creative industries certainly need to develop new business models appropriate for digital commerce, it requires the strong support of the authorities with an appropriate legal infrastructure to enforce new models. A view perhaps well expressed by the authors of the Google share prospectus:

Our patents, trademarks, trade secrets, copyrights and all of other intellectual property rights are important assets for us . . . any significant impairment of our intellectual property rights would harm our business or our ability to compete.

The creative industries are engaged in seeking business and licensing practices which meet the demands of the marketplace in the new digital environment but which at the same time produce a proper return on investment, including returns geared to the success of a product, so encouraging investment in new and innovative products.  These business models may involve subscriptions giving rights to different levels of digital usage, trial use, payment per use (possibly accumulated through a phone or service-provider bill), or e.g. online access bundled with another purchase, such as a newspaper subscription or purchase of a book or periodical. In some cases they may be operated technically through the computer or online service requiring accompanying software:  ‘the answer to the machine is in the machine’. One frequently-cited proposal is for producers to develop new ‘value-added’ digital products, e.g. with valuable added features that cannot readily be replicated and so require potential users to access the producer’s website and pay whatever is required by its ‘paywalls’:  this may not be practicable for all types of works. These innovative new models cannot be imposed by Government or industry standard practices, but need to be tested in the market place.  They need, however, to be supported by the legal infrastructure afforded by copyright that enables conditions of access to be enforced.

Libraries and agglomerators

Two special problems arise in the context of the digital market.

The first involves libraries, which traditionally have the role of holding stocks of books for consultation and lending, neither of which involve breaches of copyright per se (note Public Lending Right, a separate right to provide compensation for the authors of loaned books).  Libraries may be:

  • national libraries, or libraries of equivalent significance, which are entitled by law to claim free deposit copies of all publications, which they hold as a national archive and make available to the public at their premises.  There are six such libraries in the UK and Republic of Ireland.
  • Public libraries, usually provided by local authorities, and providing resources for study, reference and loan
  • University, school and college libraries
  • Libraries, for example research libraries, in other institutions and commercial firms

‘Prescribed libraries’, principally non-profit libraries in the public sector, are permitted by a copyright exception to make: i) single copies of a part of a published edition (literary, dramatic or musical), or ii) a copy of an article in a periodical, for persons satisfying the librarian that they require the article for purposes of (non-commercial) research or private study and who pay the library the costs of the copying.

Deposit libraries such as the British Library provide a sophisticated service to the research community by supplying single copies of journal articles for a fee. They do not usually use deposit copies as a source of such copies, but make copies from periodicals they have purchased.

However, in the new digital environment, in which deposit libraries are archiving electronic digital materials as well as printed copies, and are digitising out-of-copyright printed texts, the libraries wish to ensure that their digital collections are as available to researchers as their archive of printed deposit copies. Initially, the US Library of Congress accepted a protocol which sought to make electronic deposit copies of works in copyright available on similar terms to printed materials, i.e. by access at a work station located in the library building.  Now, however, deposit libraries are seeking to broaden this access.   For out-of-copyright, public domain, materials, this is unobjectionable.  More controversially, they are seeking a simple solution to enable them to make digital copies of works in copyright for which they cannot identify or find the copyright owner, so-called orphan works.  The Digital Economy Act attempted to make some provision for a system enabling this, but this was dropped before enactment.

At the same time, organisations such as Microsoft and Google are aggregating vast arrays of content available on websites on the internet, with i) search engines and browsers which give users instant access to the content at source, ii) making their own digital copies of vast arrays of published materials, and iii) publishing their own materials, for example maps.  The search function provided by these aggregators, while directing users to information they require, causes problems for the original content providers in that, they argue, the aggregators are getting income from their sites (principally from advertising revenue) by making available information published by the content providers without providing any income for the latter.

While the aggregators accept that they cannot digitise and make available content which is in copyright without the consent of the copyright owner, aggregators such as Google wish to include out-of-print materials, in copyright, in their archives under a form of collective agreement.

At the same time, public libraries, already enabled (with the consent of publishers) through the ‘People’s Network’ to provide access for library users to a number of digital reference works either at a PC in the library premises or, by use of a library PIN, on personal computers at home, are now beginning to lend e-readers loaded with e-books.  The Digital Economy Act provides that such lending of e-books should not be an infringement of copyright, but that only e-books loaded into the e-reader on the library premises should be covered by this provision.

5. Conclusion

At this time, then, we have many conflicting interests engaged in the digital market, expressing conflicting opinions and with conflicting interests on the role of copyright and the means of rewarding and stimulating the creative works so essential to the future.

In conclusion, this article seeks to set out some of the questions that arise for the effective operation of the copyright sector, for overall fairness between ‘suppliers’ and ‘users’, and for the future development either of copyright or of effective alternative systems for the new generation of digital technology.  The contributions that follow address the major issues from the viewpoint of different parties engaged in the debate.

Appendix: Copyright issues for debate in the digital age

As seen above, the rapid growth of digital technology in the information society raises some major problems for the future of creativity and effective information provision, which the Stationers’ Company project seeks to address.  These are some of the questions which arise relevant to the current debate;

  • Is enforcement of rights in copyright possible when users can access copies of copyright works from the net on their own PCs and electronic readers, share the downloads with colleagues, and access works by alternative routes, e.g. avoiding pay walls?
  • If so, what is needed on the part of i) copyright holders and ii) the authorities, to support viable markets?  What are appropriate penalties and sanctions against commercial piracy and private infringement?
  • If not, what alternative systems can be put in place to protect and reward creative enterprise?  And how should they be enforced?
  • Copyright prevents the making of copies of works without the authority of the copyright owner.  Is it reasonable to prevent owners of physical copies of works, e.g. deposit libraries, from making digital copies to maintain their archive and make it more accessible to researchers?  If so, what restrictions should be placed on access to the digitised copies?  Should copyright owners be entitled to compensation for this use?
  • Similarly, is it acceptable for people who own copyright works in one format, e.g. musical recordings on disc, to reformat them for use on other media?  What are the limits for such reformatting?
  • Is it acceptable for compilers of digital libraries to make digital copies of works for which they cannot find the copyright owner to give the appropriate authority, and if so on what terms?
  • Is there room for more collective licensing of the making of digital copies to avoid cumbersome procedures, and on what terms?
  • Is it acceptable for agglomerators to digitise copies of works not available on the market (e.g. out of print) and if so on what terms?  Is there room for a collective licence for such works?
  • Given the variety of channels now engaged in making digital copies, e.g. copyright owners going to market, deposit libraries, public libraries, agglomerators, special agencies, retailers and distributors, each offering different terms for access, from zero to full commercial value, how can a fair market be established?
  • How far is it appropriate to widen ‘exceptions’ to the rights of copyright holders for public service activities such as libraries and education?
  • How far should it be possible to enforce territorial rights enabling separate marketing in the face of growing globalisation?
  • Is the current duration of creators’ copyright at ‘life plus 70 years’ appropriate for the digital age?  Would many problems, e.g. of orphan and out-of-print works, be reduced by a shorter period, e.g. the longer of ‘life’ or 50 years from publication?
  • Would it be practicable to aid identification of works protected by copyright through a system of public registration, as with patents and trademarks (currently forbidden by the international copyright conventions)?

Clive Bradley

Clive Bradley started his career as a broadcaster and journalist, after reading for the bar (called 1961) at Cambridge and Yale.  He was broadcasting officer for the Labour Party and broadcasting adviser to Harold Wilson for the 1964 General Election, and after periods as a producer at the BBC and as a political journalist, he became a Group Labour Adviser to IPC, then the largest publishing and printing company in the western world, Deputy General Manager of the Daily and Sunday Mirror and then a director of The Observer, responsible for establishing new in-house production arrangements after the termination of the printing contract with The Times and for securing cost-effective manning levels.

After compiling the Newspaper Publishers Association’s evidence to the Royal Commission on the Press in 1976, he held the appointment of Chief Executive of The Publishers Association for 21 years, supervising the association’s work on promoting the market for books in domestic and export markets, the introduction of new publishing, production and distribution technologies, the enforcement and development of copyright and other legal issues, relationships with the European Commission, etc.  In 1984, at the invitation of the Cabinet Office, he helped establish a new informal grouping (the Confederation of Information Communication Industries, or CICI) to give the leading content industries in broadcasting, publishing, music, video and software a more united and effective voice to the authorities in the digital age.  He currently continues to convene CICI and arrange meetings with ministers and other authorities on convergency issues.  He is a specialist in copyright and employment law.

 
© Copyright in the Digital Age