Out-Law / Your Daily Need-To-Know

UK government scraps plans to legalise private copying

Out-Law News | 18 Nov 2015 | 4:57 pm | 3 min. read

The UK government has scrapped plans to legalise private copying in the UK, Out-Law.com has learned.

The announcement was confirmed in a statement issued by the Intellectual Property Office (IPO).

"The government is currently focussing its resources on the upcoming European copyright reforms, and does not intend to take further action on private copying at this time," a spokesperson for the Intellectual Property Office (IPO) told Out-Law.com.

New legislation passed by the UK parliament in 2014 made it legal for people to make personal copies of legal copyrighted works they had acquired. However, earlier this year the High Court in London ruled that the legislation was unlawful.

The High Court's ruling came after a judicial review challenge against the legislation was made by music industry bodies. They had challenged the fact the private copying regulations had been introduced without an associated mechanism included for compensating rights holders for the private copying the rules legalised.

Prior to introducing the private copying exception, the UK government argued that it did not believe the private copying exception would result in lost sales for rights holders. The High Court did not offer a view on the government's conclusions on the harm private copying would cause to rights holders but instead rebuked it for failing to show sufficient evidence for that view. Judge in the case Mr Justice Green said the decision to introduce the private copying exception without a compensation mechanism "was nowhere near to being justified by the evidence that the [government] specifically accepted and endorsed".

EU copyright laws require EU countries that elect to introduce a 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.

At the time of the High Court's ruling a UK government spokesperson said the government was "disappointed by the ruling" and that it was "considering the implications of the ruling and the available options". The government has now confirmed that it does not intend to table new proposals to legalise private copying.

The government's announcement follows a ruling last week by the EU's highest court which offered guidance on how national private copying laws should be drafted.

In a case involving computing giant Hewlett-Packard and Belgian collective rights body Reprobel, the Court of Justice of the EU (CJEU) said that what constitutes "fair compensation" for rights holders will depend on what harm is caused to rights holders as a result of the reproduction of their copyrighted material.

The CJEU said it is "necessary to draw a distinction" between cases where reproductions of their work were "for private use and for ends that are neither directly nor indirectly commercial" and other examples of reproductions where fair compensation is payable when determining the level of compensation rights holders are owed.

The Court said compensation mechanisms can consist of a combined "lump-sum remuneration" and "proportional remuneration" model, subject to conditions.

The lump-sum remuneration, which is paid to rights holders in advance of copying, cannot be "calculated solely by reference to the speed at which the device concerned is capable of producing copies", the CJEU said. It said the proportional remuneration, which is recovered after copying takes place and is calculated "by means of a unit price multiplied by the number of copies produced", cannot be varied to account for whether companies owing compensation have "cooperated in the recovery of that remuneration".

The CJEU said that the combined compensation model must "not include mechanisms, in particular for reimbursement, which allow the complementary application of the criterion of actual harm suffered and the criterion of harm established as a lump sum in respect of different categories of users", it said.

"Existing EU copyright laws have been implemented in an inconsistent basis throughout member states," intellectual property law expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said. "Many EU countries have a private copying exception in place and implement an associated financial levy on storage media and other technology to ensure rights holders are fairly compensated for private copying activities. Tech suppliers will welcome the fact that the UK government has no immediate plans to implement new private copying laws, but they should monitor how the copyright modernisation agenda develops within the EU."

"The European Commission intends to reform copyright laws to make them more harmonised. If that happens, particularly via a new EU copyright regulation, then that might shift the goalposts on how the issue of private copying has to be considered. In those circumstances, the CJEU's guidance on calculating 'fair compensation' will become relevant. The issue may be further muddied if things such as an IP law opt out are argued for as part of David Cameron's EU membership renegotiations," he said.

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