Out-Law News | 27 Nov 2014 | 10:21 am | 3 min. read
The application by the Musicians’ Union (MU), the British Academy of Songwriters, Composers and Authors (BASCA) and UK Music for a judicial review of the copyright rules, which came into force in October, is based on their belief that the government was wrong not to include a mechanism for compensating rights holders for the act of private copying as part of the new regime.
The three bodies said they welcomed the purpose behind the new framework which they said namely permits consumers "to make a copy of their legally acquired music". However, they said the Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 was "a bad piece of legislation". "It incorrectly implements the law by failing to include fair compensation for musicians, composers and rights holders," the groups said.
Under the UK's private copying exception, individuals in the UK have a new right to make a copy of copyrighted material they have lawfully and permanently acquired for their own private use, provided it is not for commercial ends. Making a private copy of the material in these circumstances is no longer an act of copyright infringement, although making a private copy of a computer program is still be prohibited under the new framework.
EU copyright laws require EU countries that elect to introduce a new private copying exception into national copyright laws to ensure that rights holders receive 'fair compensation' for that activity. However, the EU rules allow countries introducing such an exception into national laws to do so without an associated mechanism for compensating rights holders where only minimal harm to rights holders would arise as a result of private copying activities.
The UK government has said it does not believe the private copying exception will result in lost sales for rights holders, a view which has been challenged by the music industry bodies.
Intellectual property law expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said: "The government was given complete freedom by the European legislation to determine what compensation should be payable when it introduced the private copying exception. At the time, it took the view that as this exception only gave effect to the commercial reality of what had happened in households up and down the land for decades, there was no requirement to separately compensate the creative industry."
"This decision will obviously be put under severe scrutiny now and comparisons will be drawn as to how equivalent legislation has been adopted by our European neighbours which generally took a contrary view and imposed levies on hardware so as to provide ‘fair compensation’ for the copying," he said.
"The music industry bodies face an uphill struggle, not for a lack of sympathy with their cause, because the judicial review process focuses on the decision making process rather than the ultimate outcome. This means that provided the process was not ‘perverse’ and could have been one outcome of many possible outcomes following a reasonable decision making process, then the decision will stand," Connor said.
The music bodies said they hoped their judicial review challenge would "lead to the decision [on fair compensation] being re-made properly, with the [UK] legislation amended appropriately".
In a statement, Jo Dipple, chief executive of UK Music, said: "Licensing is the business model for the UK music industry’s success in the digital age. However, where the right to licence is removed rights holders should be compensated. Copyright enables people to earn a living out of their creativity and sustains jobs. The government has made a serious error with regards to private copying. The legislative framework must guarantee musicians and composers are fairly compensated."
John Smith, MU general secretary and president of the International Federation of Musicians (FIM), said: "Most musicians now accept that their income will increasingly be made up of micro payments from collective licensing agreements and royalties from PPL or PRS. In order to survive on these multiple smaller amounts, however, performers need to be getting the money that they are owed from every possible revenue stream. Private copying should be one of these streams, as it is in most of Europe."
"The government has not adequately justified why they are bringing forward an exception without compensation. We believe there is strong evidence to suggest musicians will suffer harm under the proposal. This is why we are seeking a judicial review of their decision. This is surely wrong and the government should reconsider this ill thought out legislation," Smith said.