Brexit, copyright and liminality

Dear reader

I've always liked the word "liminality' - a threshold that marks the boundary between two phases. If nothing else, Brexit presents an opportunity for its appropriate use. The UK's current state, where we are still in the EU but apparently heading somewhere else, does feel liminal, with its quality (to quote Wikipedia) of ambiguity or disorientation.

You can sense this in the way the Commission's significant proposals for copyright reform have been greeted in the UK. The Proposals for a Digital Copyright Directive (more on which below) and Regulation on rights clearance for online TV programming, if adopted, represent significant modifications to European copyright law. But the response in the UK seems muted, reflecting an uncertainty about their applicability to a post Brexit UK, a sense in which they seem both relevant and irrelevant to the UK.

I'm going to stick my neck out: whatever the nature of the UK's exit from membership of the European Union and our subsequent relationship with the EU as a third country, EU copyright law will remain central to UK digital business. I believe the same is true of other key EU regulations which apply to the digital market, especially the forthcoming General Data Protection Regulation.

I say that for the following reasons:-

  • The EU currently accounts for 50%+ of UK exports. Whatever new markets beyond the EU are available to the UK in the 'brave new world'  post Brexit, the UK will have to safeguard this existing market.
     
  • A 'hard Brexit', with nothing to replace our membership other than relying on the World Trade Organisation rules is a non-runner. According to the CBI, the 'WTO option' would see new tariffs imposed of around 90% by value of UK goods exported to to the EU.
     
  • This means that, following the UK's exit from EU membership, it will need an association agreement (probably several, and by whatever name called) with the EU.
     
  • Whilst agreements on tariffs will be an important element of any such agreement, a cursory glance at any Free Trade Agreement shows that a substantial component are common rules on intellectual property, data protection and competition.
     
  • That being the case, it is in my view highly unlikely, and more probably impossible, for UK rules in these areas to diverge to any significant extent to the corresponding EU rules in these areas.
     
  • In the specific case of Data Protection, we will have to have rules corresponding to the GDPR if the UK post Brexit, as a third country, wishes to export personal data to the EU.

Here is a very short summary of some key provisions of the Proposal for the Digital Copyright Directive, from which you will readily see that there are some extremely important developments in EU Copyright law:-

  • A new 20 year right for publishers of press publications to authorise the reproduction and "making available by wireless means" for digital use of their press publications. This does not detract from authors' rights in the works included in press publications. It does not constitute a law on hyperlinking. What it would do is allow the press which invest substantially in their publications to get a fair return on digital re-use.
     
  • A framework for legal agreements between content owners and "information society service providers (i.e. ISPs, platforms & hosts), including a requirement for a more active role by the latter to deal with infringing content by more effective use of content recognition technologies.
     
  • New mandatory copyright exceptions covering text and data mining, the use of works and other subject matter in digital and cross-border teaching activities and the preservation of cultural heritage. 
     
  • Provision for licensing agreements between collective societies and cultural heritage institutions to cover 'out of commerce' works and also provisions to deal wit the cross border licensing of out of commerce works. 
     
  • Provisions dealing with fair remuneration in contacts of authors and performers.

So we need to shake of our 'liminal blues', pay active attention to this spate of new regulations and make our voice heard.

Have a good week

Laurie Kaye

p.s. as some of you will know, at the beginning of 2016 I launched a new IP and Digital Strategy consultancy. You can see more details here.

Brexlections

Brexlections

Dear reader

First, apologies for my fairly lengthy radio silence in the blogosphere. I have been focused on my new strategic IP and digital media consultancy which I launched at the beginning of the year. More on that to follow when I launch my new site shortly.

Meanwhile, like fellow Remainers, I'm rapidly moving through the five stages of Brexit grief - denial, anger (mostly) and now moving to bargaining. Which brings me to Article 50 of the Lisbon Treaty which, as I'm sure you know, requires the UK as the departing member state to trigger the procedure by giving notice to the European Council.

I can't help thinking that whoever drafted that Article probably thought it was the last treaty provision ever to be scrutinised. Any decent termination clause in a commercial contract would  build in some provisions for consultation etc. prior to formal termination. There's already a lot out there in the blogosphere about this but it's worth reiterating a few points about Article as it provides context for upcoming UK/EU exit negotiations:

Whilst Article 50.2 provides that the EU shall negotiate an exit agreement following notification by the departing state, the effect of Article 50.3 is that the departing member state leaves the EU within two years of notification if no withdrawal agreement is negotiated before that period expires.

So the UK's bargaining position starts to erode from the moment it serves the exit notice, as the UK's negotiators would sit at the negotiating table watching the clock tick towards exit, with their EU counterparts telling them that if they don't like the ideal on offer, they can have no deal. Sure, there are motivations on the continuing EU side to do a deal of some sort, but they will want to drive a hard bargain.

Hence the reluctance on the part of the PM, Johnson et al to rush into giving a notice. Even if the current PM or his successor was minded to do so, in response perhaps to the EU's current stance of 'no negotiations until you give us notice', there are domestic constitutional arguments that no PM has the authority to give a notice without first being authorised to do so by authority of Parliament. See the excellent post here from Adam Tucker for the UK Constitutional Law Association which argues that without such authority in the form of a Statutory Instrument or primary legislation, there may have to be a General Election.

So with so much at stake, and with such legal complexity, we have a Mexican standoff between the UK and the EU. Who will blink first? As the EU as well as UK Remainers move into the third stage of grief and start to focus on bargaining, logic - OK, so when did logic, evidence-based decision making or the like ever come into Brexit? - suggests that some outside event or agency makes possible some a resolution of the standoff. Sounds like a good job for a mediator (Hey, I'm a mediator and I'm available!).

But seriously, with so much at stake for both sides in social, economic, political and legal terms, some facilitation is needed here.

That takes us to the kind of relationship that both parties can agree or, as a mediator might put it, is the least worst outcome which both parties will accept having regard to the alternatives to a negotiated deal. Much has been written and will be written about the known options, including UK membership of EFTA or a bilateral agreement of the kind Switzerland and Canada have each negotiated. 

The first principle of negotiation I learned was 'you don't ask, you don't get. The UK creative industries need to take a lead here. We have amongst our midst some of the most creative and innovative minds in the world. We need to start with a vision, which reflects the borderless, global, services-orientated, interconnected world in which we work and live. We need to ask ourselves the big questions about what we want, both with the EU and beyond and make sure that our voice is heard. Let's get cracking.

Have a good week,
Laurie

The Implications for Publishers of the Decision of the CJEU in Hewlett-Packard vs Reprobel

Dear reader

Yes, it's been a while since I last posted but all that will change in the New Year! Meanwhile, I wanted to share with you a piece I wrote recently for Lexis-Nexis analysing the decision in Hewlett-Packard vs Reprobel which is important for publishers, especially with the upcoming review of copyright by the European Commission next year. You can find it here:  Download Examining Fair Compensation.

I'd also like to take this opportunity to wish you a wonderful Christmas break and a great New Year, and I look forward to being in more regular touch with year next year.

Kind regards,
Laurie

Creativity, Internet and Politics - Biggest Opportunities and Threats

Dear reader

I recently took part in a session at the London Book Fair organised by the Publishers Association on 'Creativity, Internet and Politics'. Chaired by the Publisher Association's CEO Richard Mollett, the panel - me, Simon Milner from Facebook and Tony Burke from Unite - answered two questions: what is the single most exciting opportunity and the single greatest concern posed by the development of the digital economy?"

Reading David Cameron's paeans of praise this week to UK small businesses, and with the forthcoming Election in mind, I thought I'd share my answers with you.

Biggest opportunity?

The European Commission is certainly excited about the digital economy's potential. Its recent Factsheet quoted 350b euros of additional growth in the digital economy. In the UK, we have huge talent and skills in the creative industries as well as global demand for English language content and services.

Notwithstanding the dominance of major platforms, I think the single most exciting opportunity in the UK is for authors, artists, performers and small businesses (SMEs) in the creative industries to exploit the potential of the internet, web and mobile products and services.

Why such potential in the SME sector? At the start of 2014, small firms accounted for 99.3% of all private sector businesses in the UK, 47.8% of private sector employment and 33.2% of private sector turnover. Small and medium sized enterprises employed 15.2million people and had a combined turnover of £1.6 trillion. Of all businesses, 62% (3.3.million) were sole proprietorships, 29% (15 million) were companies and 9% (460,000) were partnerships. (source: Dept. for Business Innovation & Skills).

But what makes the new ecosystem for digital works and content is an attractive environment for the SME sector? I think there are five factors which illustrate why.

  • In an intellectual property-centric world, small enterprises with the necessary skills to commercialise creativity through financing, partnering and marketing in an agile way can thrive - think, for instance, of new ways of financing such as crowd funding.
  • The Cloud and collaborative technologies enable small businesses to scale up without large scale internal infrastructure.
  • SME's can engage directly with consumers and be discovered via social media platforms.
  • The new ecosystem is made up of partnerships and collaborations, often between the large platform at one end of the spectrum and individual creators and small businesses at the other end.
  • Small businesses can go direct to consumer via platforms.

None of this is easy, but the opportunities are there to be grasped.

Biggest threat? 

My single biggest concern is that we do not invest enough in developing the infrastructure and skills needed to realise this potential and, instead, look for solutions to non-existent or exaggerated problems and barriers.

The key to unlocking the digital economy's is having the necessary infrastructure and business skills. The greatest needs are in digital marketing, technology, data analysis, financing and the ability to create and implement innovative business models and deals based on intellectual property. Building these skills requires investment in education and training.

Instead, transforming copyright is often presented as the 'magic bullet' to realising the market's potential. That is not to say that some adaptation may be needed provided it is evidence-based. The most frequently cited charges against copyright, at least in the UK and Europe, are:

  • It locks up ideas and so inhibits innovation, creativity and sharing.
  • The 'Fair use' defence in US copyright law, especially the notion of 'transformative use,' has allowed new digital businesses to flourish n the US in ways that European copyright law does not.
  • Copyright law is based on territoriality whereas the Internet is a global medium, and as a consequence is inherently unable to adapt.
  • Copyright is simply to complex in a 'B2C' and 'C2C' world.

Each charge raises a number of complex issues but time and space only allows a 'top line' response to each. In short, I think copyright is 'not guilty on the first three charges but does have a case to answer on the 4th charge.

As regards the first, the 2010 case of Allen vs Bloomsbury & J K Rowling shows that, in the Court's words, "[Copyright] does not extend to clothing information, facts, ideas, theories and themes with exclusive property rights."

On count 2, the differences between the US 'fair use' defence, and, taken as a whole, the various individual copyright exceptions found in European copyright law, are much smaller than may appear. It is true that the first 'fair use' factor, which relates to the purpose and character of the use, including whether the use is 'transformational' in creating something new, does give the US courts flexibility. But to make a fair comparison one must compare that with numerous EU exceptions, including for parody, as well as the extensive rulings of the European Court of Justice on the issue of exceptions.

On count 3, there are books on this subject. Suffice to say that global licensing solutions are perfectly feasible within the existing framework and, in any event, a global copyright law would not, of itself, prevent licensing by territory. Furthermore, legal principles on free movement of  goods and services provide a legal check on copyright.

On count 4, there is a case to answer. Copyright law is complex and the management of copyright, including gaining permissions to re-use, is not easy. But there are ways in which technology can hide copyright's complexity and automate rights management. That  brings us back to the importance of investment in the infrastructure. In that context, the work of the Copyright Hub is important, about which more soon.

From me and my colleagues at Shoosmiths, @shoocreative, enjoy your Bank Holiday weekend.

Regards

Laurie Kaye