Naked Law

“Congratulations and celebrations” for Cliff Richard, and other worried musicians

A couple of weeks ago, the EU Council voted to extend the copyright term for sound recordings from 50 years to 70 years (with composers’ copyright protection already subsisting until 70 years after their death). This is good news for bands such as The Rolling Stones, The Who, and the Beatles, whose copyright protection was about to expire, as it means that they will continue to receive royalties for their songs further into their retirement. But what will the wider impact be?

Once copyright protection comes to an end, anyone can use the songs in any way they like without having to obtain consent from the copyright owner, for example in remixes or spoofs. As Abba star Bjorn Ulvaeus put it, “Now I won’t have to see Abba being used in a TV commercial…” It also means of course that the performer and/or record label fail to receive any further royalty payments.

This is a victory in a long-running campaign by record companies and artists to try and extend the life of copyright protection. This has come about because people are now living a lot longer, and in the case of many famous musicians like Cliff Richard, they are likely to outlive their copyright protection in their earliest hits (which is why the campaign as been called “Cliff’s Law”).

In 2006 and 2008 the UK campaign failed in its attempt to persuade to the government to increase copyright protection to a minimum of 95 years, which would have brought the UK into line with America. Although the Hargreaves Report on IP and Growth (see earlier post on this here) recommended changes to the current system, for much the same reasons as those stated by the Council of the European Union that performers “generally started their careers at a young age”, and as such the 50 years of protection “did not protect their performances for their entire lifetime..” It has not however, received unanimous support from all European governments, with Belgium and Sweden amongst others protesting.

Of course, the EU Council’s ruling will now mean that domestic copyright laws need to be amended to incorporate the modified directive 2006/116/EC by 2014.

Now, while you can’t really argue with the intention here, it has been suggested by critics that the changes will only really benefit a few very successful individuals.  A large amount of sound recordings probably disappear into the mists of time long before the current 50 year protection expires, so a further 20 years of protection is not likely to provide much of an increase in royalties. And of course, record companies are more likely to be receiving the royalties (or a higher percentage at least) than individuals in most cases.

The Beatles will be relieved though, as their first hit single, Love Me Do, will reach its 50th anniversary in 2012. I'm sure they will be looking to renew the lease on their "Yellow Submarine" until 2033!

Hargreaves review: changes recommended to move UK IP laws into the digital age

A high-profile review by Professor Ian Hargreaves has concluded that the UK's current IP framework is falling behind in the current climate of digitalisation and must adapt.  Haven't we heard that somewhere before?

10 recommendations for change were made in the report.  These include the creation of a digital copyright exchange to make simplify procedures for licensing copyright-protected works, the introduction of a general right to use works where the author cannot be found, and limiting the scope of copyright so that activities such as format shifting, parody, non-commercial research and library archiving no longer amount to infringement. 

Permission to format shift (which currently amounts to copyright infringement in the UK) would be particularly useful for those of us who recently been given a new iPod having spent years building up a stellar collection of CDs, and the permission to parody would prevent YouTube followers being denied the delights of classic spoofs such as "Newport State of Mind" (a parody of Jay-Z's "Empire State of Mind") or the law-inspired version, "Through Court: Entire Weight Off Mind" (yet to be written).

This Naked Lawyer was also interested to read Professor Hargreaves' recommendation that the IPO should draw up plans to improve accessibility of the IP systems to smaller companies who will benefit from it, and that this should involve access to lower cost providers of integrated IP legal and commercial advice... Companies requiring good value integrated IP and commercial advice should be looking no further than Mills & Reeve! 

To reassure any copyright holders concerned about the impact of these recommended changes, Vince Cable (Secretary of State for Business, Skills and Innovation) said that the "review isn't about sacrificing the interests of Britain's creative industries to those of Google" but is "about reforming our system to stimulate both technology and content creation". 

There has not yet been a formal response by the Government to the review, but keep your eyes peeled to see whether the Government decides to implement any or all of the recommendations in the review - we'll certainly let you know if they do!

Breaking News - Challenge to the Digital Economy Act is unsuccessful

We mentioned back in December that BT and Talk Talk had been granted a judicial review of the Digital Economy Act.

Well today we’ve heard that the High Court has rejected most of the claims put forward by the ISPs, including that it was ‘rushed through’ Parliament before the election.

The Judge, Mr Justice Parker, did agree that the obligation on ISPs to cover 25% of the costs of enforcing the new regime was unlawful, but this will have little effect on the implementation of the Act in practice. As decision has only just been announced in the High Court we haven’t been able to get a copy of the judgment yet, but see here and here for more information about the ruling.

And don’t forgot of course that this still isn’t the end of the Digital Economy Act saga - Ofcom are currently in the process of reviewing whether the obligations on ISPs to block access to websites involved in copyright infringement are feasible, so there’s still more to come from this yet….

Are copyright laws out of date? The government thinks so…..

Due to the continued evolution of the internet, it seems that many of our existing laws are being adapted to accommodate the unique challenges that the online world presents. Often, this process involves a relaxing of UK laws to increase profitability of online businesses - but when does ‘relaxed’ become 'too relaxed'?

This question is dividing opinion following David Cameron’s announcement earlier this month that IP laws are to be reviewed to make them fit for the internet age.  He suggested that the law could be relaxed to be closer to the laws in the US, and to allow greater use of copyright material without the permission of the owner. He noted that the founders of Google ‘have said that they could never have started their company in Britain.’

Some internet campaigners have welcomed the announcement, saying that it will boost small businesses, whilst the film and music industries are likely to continue to resist reform.

UK law firm Taylor Wessing, meanwhile, has said that it does not believe that the Government can introduce a US-style fair use exemption without renegotiating the text of the European Copyright Directive 2001/29/EC, which sought to harmonise copyright law across Europe.

It remains to be seen whether the Government will achieve the right balance between accessibility and practicality. Professor Ian Hargreaves, the current chair of Digital Economy at the Cardiff School of Journalism, Media and Cultural Studies and Cardiff Business School, will be leading the review.

Will the Digital Economy Act ever be fully implemented?

You may remember back in July that we mentioned the ongoing Digital Economy Act debate.  Well, suffice to say that the discussion on the Act is now turning from a debate into a saga , as TalkTalk and BT have been granted judicial review of the Digital Economy Act by the High Court.

By way of recap, one of the issues that BT and TalkTalk had with the Act was not only its content, but the way in which it had been debated. The companies argued, along with a number of MPs, that the legislation had been ‘rushed through parliament’ before the election, and was debated too briefly for its complex nature, with apparently only 6% of MPs attending the debate.’

Another problem the internet service providers have with the Act is that parts of it require them to take action against suspected illegal file sharers where the ISP has 400,000 or more subscribers. Both BT and TalkTalk were concerned that this would drive their customers to smaller ISPs. Part of the review will consider whether these parts of the Act are in breach of the e-commerce directive, which rules that ISPs cannot be held liable for traffic on their networks.

Now the courts will look at the Act in detail and consider whether it is legal and justifiable.

Andrew Heaney, director of strategy and regulation at TalkTalk, has called on the government to put the legislation on hold pending the enquiry. On the other side are the music industry, who believe the Act is necessary to reduce online copyright infringement by way of file sharing. But is either side going to be satisfied with the judge’s ruling?

We will keep you updated on this…..

Online copyright infringement - both sides of the debate weigh in!

Last week saw some interesting activity in the ongoing debate over the hot topic of online copyright infringement (something we've been blogging about fairly regularly of late - see here).

The ‘Open Rights Group’ (ORG) is a UK-based organisation that, amongst other things, campaigns against digital rights management. They have recently criticised the draft code of conduct that Ofcom recently released. Their criticisms include issues relating to gathering evidence: the Digital Economy Act requires the definition of evidential standards and in their view the code fails to do this. They also cite a number of other perceived deficiencies in the draft code.

Consequently, ORG are concerned about the authenticity and accuracy of any evidence which is gathered under the Act, and are calling for a new code to be published. Ofcom's consultation on the draft code closed on 30 July - although ORG do not appear to be on the list of responses.

An organisation which, predictably, is taking a polar-opposite view of this issue to ORG is the record label ‘Ministry of Sound’. An interview with on of their lawyers confirms they have "decided to take a stand" against file sharers, and have recently sent out letters to (allegedly) guilty parties (of the 40,000 or so illegal up loaders of infringing material they have identified, about 2,000 have been sent letters). The letters themselves set out the evidence that has been gathered, whilst also threatening legal action, before inviting the recipient of the letter to settle the matter for £375.

Before any ISPs will disclose the name and address of an offender, the Ministry of Sound had needed to demonstrate an arguable case to a court, and subsequently obtain a court order. Up to that point, they could only identify people by their IP addresses. If Ofcom gets its way, this information-seeking requirement is set to disappear with ISPs coming under an obligation to gather information on illegal file-sharing activity, and pass such information on to copyright owners when it reaches a certain threshold.

It looks like the debate on this one could run for quite a while yet, although organisations such as the Ministry of Sound are hoping that their actions will encourage file-sharers towards legitimate sources of legal downloads, such as Last.fm or Spotify.

Wait…there’s more! The Digital Economy Act debate rumbles on.

In my most recent post I contrasted the approaches of the UK and Finland towards access to broadband. Whilst reading a little further around the topic, I came across some interesting discussion of the controversy surrounding the Digital Economy Act.

The circumstances in which the Act was passed through Parliament have drawn a lot of criticism, as it was rushed through just before Parliament was dissolved in the run up to the general election this year (the Act was passed on 8th April, and the general election was held on the 6th May). At the time many MPs, including current deputy prime minister Nick Clegg, protested that the complex bill required more debate and scrutiny.

As I mentioned previously, some features of the Digital Economy Act will see persistent illegal file-sharers disconnected from the internet, and the Act also gives copyright owners the right to block access to sites hosting illegal content. Two major ISPs, BT and TalkTalk, are seeking judicial review of the Act to clarify whether this compulsion is a legal one or not. They propose that this Act is in conflict with the EC’s e-commerce directive, which states that ISPs are “mere conduits” of content and should not be held responsible for illegal traffic on their networks unless they are specifically aware of it.

A further point of irritation for ISPs under the new Act is the code of practice which the regulator Ofcom is currently drawing up, which sets out how the legislation will operate.  This code of practice currently only applies to larger ISPs (those with 400,000 or more subscribers). ISPs such as BT and TalkTalk are already anticipating "huge swathes" of their customer base switching to smaller ISPs who fall below this threshold, to avoid the legislation and its potential repercussions for them as internet users.

In spite of the criticism facing this legislation, the Coalition government has so far stood firm, and has no plans to change the Act.  However, one has to question the extent to which access to the internet, something regarded as a human right elsewhere in the world, could be so easily curbed under an Act that appears to have been hastily passed through Parliament despite widespread disapproval - another example of the tension between old school copyright licensing models and modern (albeit infringing) distribution practices.

More Good News for Google

Google’s legal fortunes may be turning round after another favourable judgement, this time from the American courts as a summary judgement was granted against Viacom’s claims of copyright infringement against its video sharing website YouTube.

Everyone is well aware that there is copyrighted material hosted illegally on sites such as YouTube, not least the operators of the site themselves. Films, TV shows and music can all be found by the casual browser, often without the permission of the owner of the copyright. YouTube’s policy has been to remove offending videos once notified of the breach, which was found to be sufficient to meet the safe harbour defence under the US Digital Millennium Copyright Act (similar to the position under our own E-Commerce Regulations). The judge found that despite a general knowledge of the presence of copyrighted material there was no duty on the site to actively seek out individual cases – the duty to remove only arose on specific knowledge of particular material. The judgement is helpfully analysed here.

While this may seem unfair on rights owners who see their work being exploited for free, it is clear that the consequences of a victory for Viacom would have been wide-reaching. In a world of user-generated content and social networking, copyright material can potentially find its way onto countless different sites, from Facebook to EBay and the comments pages of any blog. If this model of the internet is to survive (and it certainly shows no signs of waning) it cannot be the case that the owner of a website is liable, simply by virtue of being its owner, for every copyright infringement carried out by its users. Furthermore, the existing notice and take down procedures generally seem to be working when initiated by rights owners (at least in respect of reputable sites): the judge found that when Viacom submitted a mass takedown notice for around 100,000 videos virtually all had been removed by the next business day.

However, those celebrating Google’s victory might want to bear in mind that Viacom intend to appeal, and Google’s victory in the higher courts is far from assured. An argument that the judge misapplied American copyright law can be found here, and it does appear that the case was less open-and-shut than some would like to think. It will certainly be interesting to see what the higher courts make of the issue.

Perpetual licence terminable

Given that the word "perpetual" can be defined to mean "eternal; permanent; lasting for eternity" it is certainly arguable that a perpetual licence should last forever, but in the recent case of BMS Computer Solutions Limited v AB Agri Limited [2010] EWHC 464 (Ch) it was held that a perpetual software licence was merely a licence "of indefinite duration" and could be terminated in accordance with other provisions of the relevant licence agreement.

The BMS case highlights the need for clear and unambiguous drafting in licence agreements (and in any amendments to licence agreements).  The parties had entered into a software licence agreement in 1994 under which the licensee was granted a non-exclusive licence to use certain software for its business purposes at its premises.  The 1994 agreement required the licensee to enter into a software technical support agreement and to maintain such agreement throughout the duration of the software licence agreement.  It was expressly stated that "In the event that the software technical support agreement is terminated for any reason whatsoever this agreement shall terminate forthwith..." (clause 5.2).

In 2000, the parties agreed to vary the 1994 agreement and entered into a separate variation agreement.  The 2000 variation stated that the licence under the 1994 agreement "...will be extended to be a UK-wide perpetual licence..." and that "...the current Agreements [ie the 1994 agreement and the software technical support agreement] continue in full force and effect subject to these variations until such time as they are amended by any further variation Agreements."

In 2008, the licensee gave notice to terminate the software technical support agreement, and this duly terminated on 31 December 2009.  The licensee then tried to assert that its licence to use the software continued to be effective as it was now a perpetual licence.  "Er no," said the licensor "see clause 5.2 of the 1994 agreement" (this is paraphrased).  The High Court judge agreed with the licensor's interpretation of the contract.

The judge felt that the termination provisions of the 1994 agreement were very important terms of the agreement and that if the parties had intended that those provisions (including clause 5.2) were to be deleted, it was natural to suppose that they would have expressly referred to them in the 2000 variation.

So, if you want your perpetual licence (or even your "irrevocable perpetual licence") to last forever, make sure that it is clearly stated in the licence agreement that the licence will survive any termination of the agreement.

Software developers: who owns your code?

A recent High Court case provides a reminder about the ownership of IP rights in software in an employment context.

A quick recap: software is protected by copyright.  Usually, the software developer will own the copyright in the software unless he is employed, in which case his employer will own it.  Copyright protects the source code; it does not protect the ideas behind the software.

In Burrows v Smith, a computer games designer failed in his claims for copyright infringement and breach of confidence against his former employer.

Mr Burrows was employed as a senior games designer for Circle Studio Ltd when he proposed a game called 'Traktrix' (although he had been working on the idea for years before). Circle liked the idea and the proposal was developed into a design document but the game had to be substantially revised after receiving feedback from distributors. Mr Burrows was involved in the development of the game at both stages.

In using the game, the High Court held that there had been no breach of confidence by Circle because in proposing an idea for a game to his employer, Mr Burrows was doing exactly what he was being paid to do as a games designer. There was also no evidence to show that Circle knew Mr Burrows had been working on the game prior to his employment.

Mr Burrows alleged copyright infringement on the grounds that Circle's design document copied significant sections of an original document setting out the game concept that he had produced before working for Circle. The Court rejected the claim because no-one at Circle had ever seen this original document, and held that the only reason the design document would have incorporated parts of the original document was because Mr Burrows had incorporated those parts himself.

The result is not surprising in these circumstances, but there are a couple of other questions that weren't specifically covered:

• What if Circle had known that Mr Burrows had been working on the idea prior to his employment?

Copyright does not protect an idea.  The fact that Mr Burrows had the idea for the game before meeting Circle is irrelevant.  If he contributed the idea as part of his employment, Circle would be entitled to use it and to write code that implements that idea.  Even if Mr Burrows didn't give Circle the idea as part of his job, if they came across it by some other means then, barring some form of confidentiality arrangement between Circle and Mr Burrows, Circle would be entitled to use it.

If Mr Burrows contributed code for the game that he had written prior to joining Circle, then he would need to look at his employment contract to check what happens to the rights in that game.  In the absence of an assignment of rights to the company, the likelihood is that the company would have some form of (potentially very broad) licence to use the code. 

• What if Mr Burrows wrote the game whilst employed by Circle but wholly in his own time?

Under statute, copyright is only automatically owned by an employer if it is created by the employee in the course of his employment.  On that basis, code written in an employee's spare time and outside of the scope of what he is doing for his job would belong to the developer.  However, many employment contracts (particularly for jobs that are centred around the development of IP for the company to exploit - such as software development) include the transfer of ownership to the company in much broader cases.  This might capture any code developed that relates to the business of the company (eg. any computer games), whether written entirely at home and not using company resources.

The moral for both employers and employees, then, is to check the IP clauses in your contracts very carefully.