Out-Law News 5 min. read

Peers take issue with Government proposals on orphan works, collective licensing and copyright exceptions

Members of the House of Lords have criticised proposed new legislation which would enable the Government to make changes to the UK's copyright law framework.

In a debate last week several members of the House said that the proposals contained in the draft Enterprise and Regulatory Reform Bill (ERR) risk disadvantaging rights holders and damaging organisations in the creative industries.

Baroness Buscombe said that Government plans to reform the collective licensing regime in the UK would disadvantage individual rights holders. Collecting societies should not have the right to automatically gather royalties on behalf of rights holders that are not their members, she said.

"The proposals here for extended collective licensing will mean all rights can be taken from rights holders," the Baroness said in a House of Lords debate on the Enterprise and Regulatory Reform Bill earlier this week. "Bodies will spring up to license copyright material on behalf of content creators without their consent. These bodies will set financial and commercial terms for that content."

"The system is being called voluntary, but I fear that that is disingenuous. This is the nub: it is an opt-out system and there is little or no detail as yet to explain important factors such as which companies will be set up to conduct extended collective licensing for a particular sector, how a rights holder can find out which companies have been created to license copyright material from their sector so that the rights holder can opt out and whether the rights holder can opt out all content in perpetuity or whether they have to opt out each piece," she said.

"For companies such as ITN, Reuters, Associated Press and Getty, this would be vital as they make thousands of pieces of content every day," the Baroness added.

The Government's power to draft new regulations on extended collective licensing is set out in the draft ERR Bill. Under the Bill the Government could set statutory codes of conduct that collecting societies would have to adhere to, but the Intellectual Property Office (IPO) has said it would only use the "backstop" powers to do so if voluntary rules do not solve concerns about the existing regime.

Under the Government's plans collecting societies will be able to collect royalties on behalf of rights holders that were not its members, although rights holders would have the right to opt out of such a system. Minimum standards for the voluntary regime were outlined by the IPO in October.

"Any new system should be opt in only - if the Government have confidence in this, why not make it opt in? – or limited to a specific remit such as extended collective licensing for non-commercial use of orphan works," Baroness Buscombe said. "The industry concerns and economic ramifications being raised are that content will be licensed by ill-regulated bodies that can undercut prices, be ignorant of any exclusive licensing agreements or license sensitive material for usage that the creator would not otherwise grant."

"The Intellectual Property Office has stated that extended collective licensing will bring no economic benefit to the UK, but industry tells us that it will do great damage to burgeoning creative industry sectors and that the aim of making licensing simpler is being achieved by industry innovation to make content available online. I fear that we tinker with this at our peril," the Baroness added.

Lord Stevenson of Balmacara added support to those views. He said that the creation of a new 'Copyright Hub', as suggested following a Government-commissioned review of the UK's copyright licensing framework, could provide a solution to the perceived complexities in the existing extended collective licensing regime.

In addition, Lord Stevenson said that Parliament "may need to be convinced" about Government plans to liberalise the use of so-called 'orphan' works for commercial purposes.

Orphan works are copyrighted material, such as books, films and music, which have no identified owner. At the moment many orphan works lie in storage in libraries and other institutions and because of copyright law cannot be digitised or used without permission until the term of copyright expires.

Both the EU and the UK have separately outlined a framework through which orphan works could be utilised. However, whilst the EU laws, finalised last month, only permit the non-commercial exploitation of orphan works, the UK Government has outlined plans whereby organisations could make use the material for commercial purposes.

However, whilst Baroness Warwick of Undercliffe said that the Government's proposals around both extended collective licensing and orphan works were "badly needed", Lord Grade of Yarmouth described the plans as both "economically damaging and morally wrong".

Lord Clement-Jones added that although the EU plans "may not be ... perfect" he said the UK "should surely be building on it, not building an alternative." He said it plans to allow commercial use of orphan works is "a matter of real concern to many, particularly the creators of images where the metadata has been stripped and attribution lost."

However, Baroness Brinton said that the users of orphan works material also had to be considered and that what was planned would "make it easier" fir universities, museums and libraries to "trace the copyright holders-and to create a system of extended collective licensing."

She said that she hoped a consensus on the proposals could reached during the committee stage, during which Peers will further scrutinise the Bill and report on their recommendations.

"I hope that the Minister can either make it clear that the safety net for authors and creators who cannot be identified has been covered by the creation of the body for orphan works, or will be  prepared to consider amendments that would enable genuinely orphan works to be regulated but used and give authors the reassurance that they need that that cannot be abused," she said. "We need to ensure that diligent research has been carried out by any proposed user. Payment can be made once an author has been identified, or held by this body until one is."

Lord Grade raised further concerns about provisions contained within the ERR Bill which would allow the Business Secretary to add or remove exceptions to copyright and add or remove exceptions to rights in performances by introducing new regulations. The regulations would be contained in a statutory instrument, a draft of which would need to be "laid before and approved by resolution of each House of Parliament" before it could come into force.

The Government has previously indicated its willingness to introduce further exceptions to copyright following a review of the UK's intellectual property framework last year. However, during a House of Commons debate in June, Business Secretary Vince Cable failed to provide assurances sought by Ministers that the reforms would be introduced through an Act of Parliament – something which would guarantee full Parliamentary scrutiny and debate of the plans.

"It seems to me that the Department for Business, Innovation and Skills has neglected its remit for business in favour of pursuing fashionable and ill founded innovation," Lord Grade said. "The beneficiaries are likely to be companies such as Google and other international corporations that live off the backs of British creative industries on the internet."

Lord Clement-Jones said that the copyright provisions in the ERR Bill represent a "very flimsy set of ill thought-through clauses" that "risk confusion and litigation on a huge scale and risk the UK being shunned as a country to license to, produce in or license from."

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