<http://www.allpartyipgroup.org.uk/pdfs/APIP%20group%20announce%20new%20inquiry.pdf>

 There has been increasing disquiet amongst the IP community at what some have seen as the IPO’s apparent enthusiasm for implementing Professor Hargreaves’ recommendations regardless of the impact on the rights of copyright owners. Even though there are good bits – like the support for the creation of digital copyright exchanges and the tweaking of the fair use for private copying exemption to reflect current real world use (such as copying lawfully-acquired music from one format to another)  both the orphan works proposals and the extended collective licensing ones would see swathes of UK and foreign creators lose the right to control and in some cases receive any reward for use of their work.

 Quite separately, there is a question to be addressed about the proper role of the IPO. Is there a tension between its function as the independent validator and granter of legal registered IP rights, its current activity in developing and implementing IP policy, its provision of commercial IP services in competition with the private sector and/or its enthusiasm to take on (per Hargreaves recommendation) the issue of statutory opinions on copyright issues? Some of us were brought up on a doctrine of the British constitution that relied on the separation of executive, legislative and judicial powers. Is that doctrine still applicable today? 

This is an opportunity for the legal IP community to express any concerns at a level where they will be heard. Although the current major programmes in the IPO relate to copyright and designs, those whose major interests are patents and trade marks might want to bear in mind that they could be nex

This investigation is working to a very tight timetable because it wants to feed its findings into the White Paper due in early summer. Submissions responding to the following six questions must be submitted by 30th March. There is a limit of four pages so massive detail is not required but examples or evidence supporting comments will be helpful.

 1) What should the objective of IP policy be?

 2) How well co-ordinated is the development of IP policy across Government? Is IP policy

functioning effectively on a cross departmental basis? What changes to the machinery of

government do you believe would deliver better IP policy outcomes?

3) There have been numerous attempts to update the IP framework in the light of changes

brought about by the digital environment. How successful have these been and what

lessons can be learnt from these for policy developments?

4) How effective is the Intellectual Property Office and what should its priorities be?

5) UK IP policy sits within European and supranational agreements. How should the UK

government co-ordinate its policy at an international level and what should it do to promote

IP abroad to encourage economic growth? Do you have examples of good and poor practice

in this area?

6) Protecting, and enforcement of, the IP framework often sits in very different departments to

those that develop IP policy and those that have responsibility for the industries most

affected. What impact does this have and how can it be improved?

(Access Copyright provides some background to this dispute here.)

Recently, the matter went to the Copyright Board of Canada, which ruled that the pay-per-use transactional model that the post-secondaries wanted to adopt is in fact inappropriate in the digital age. Here is the report that Access Copyright sent to the Writers’ Guild of Alberta:

Dear Member Organizations,

I wish to update you on a very positive decision by the Copyright Board regarding transactional licences (granting one-time, pay for use permission to use one of your works). But first, a little background:

As you know, when the Association of Universities and Colleges of Canada (AUCC) failed to come to the negotiation table (or as the Copyright Board said, it takes two to tango and in this case the Institutions did not even come to the dance floor), Access Copyright filed a proposed tariff to cover the photocopy and digital use of published works by post-secondary institutions.

Access Copyright’s Proposed Tariff is based on a Flat Fee for All Uses

Today’s digital technologies have placed powerful tools for secondary uses of copyright-protected works in the hands of anyone with a laptop and access to the Internet. In the past, a large proportion of copying was made up of centrally produced paper coursepacks. Now, digital technology allows for the decentralized copying and delivery of a rapidly growing proportion of secondary uses. In a university or college setting, these uses can occur in a professor’s office, the student’s dorm, or any coffee house with a WiFi hotspot.

Transactional licences for secondary uses of works are often not suited to the demands of the new digital economy. Impractical to implement and costly to administer, they have the added weakness of being unable to capture uses that should be compensated. They do not ensure that all secondary uses are legal. On the contrary, their very impracticality is an incentive to infringe.

This is why the proposed tariff filed by Access Copyright is a blanket or comprehensive tariff that covers all reproductions (paper and digital, coursepack and non-coursepack uses) for a single flat FTE rate. There is no pay-per-use or transactional component under the proposed tariff. Access Copyright believes that the transactional model for secondary uses is unsuited to the new, digital economy. A comprehensive or blanket licence is the only way to capture the greatest number of uses that would otherwise be infringing.

 The Copyright Board’s Decision on Transactionals

Given that tariffs take years to get certified by the Copyright Board, Access Copyright asked the Copyright Board to issue an Interim tariff that essentially extends the old photocopy licence to cover the period until the certification of the final tariff. In December 2010, the Copyright Board issued the interim tariff and added an optional digital uses licence. Unfortunately, a great number of post-secondary educational institutions have decided to operate without the need of the interim tariff. But in order to do so, they needed to replace the interim tariff with transactional licences and in June 2011 asked the Copyright Board to force Access Copyright to clear works on a transactional basis.

On September 23rd, 2011, the Copyright Board issued its decision on transactionals. The Board refused to force Access Copyright to clear works on a one-off, transactional basis. The Copyright Board agreed with Access Copyright that transactional licences are not well suited to a digital environment. The Board stated that “based on the information available, in this market and for the time being, a digital transactional business model does not ensure that rights holders get paid for the uses of their works.”

The Copyright Board also recognized the high-transaction costs of transactionals and highlighted the inconsistencies in the educational institutions’ arguments with respect to the need for an Access Copyright licence.

What if you get a permission request from an educational institution?

Some universities and colleges, hoping to circumvent the Access Copyright Interim Post-Secondary Educational Institution Tariff, 2011-2013 (Interim Tariff), may be contacting you directly for a transactional licence. The permission request could be as simple as an email request or a telephone call.

If you do not want to grant transactional licences, you are free to let the educational institution know that your preferred business model for secondary copying is to have your works covered by the Access Copyright Interim Tariff.

If you decide to offer a transactional licence you should set a fee for the use at a rate that reflects the value you put on your work and your time. The rate charged by Access Copyright has been 10 cents per page but you may judge your work and the time you need to take to manage these clearances to be more valuable than that. Also, you are entitled to let the university or college know that once the Tariff is certified by the Copyright Board, you will not grant transactional licences to use your works as they will be available under the terms of the tariff.

If there are any questions that you feel you cannot answer, have the institution contact Access Copyright at 416-868-1620 for more information.

You can access the entire decision here.

http://www.cb-cda.gc.ca/decisions/2011/20110923.pdf.

February 18^th 2011 marks one year since the Amended Google Books Settlement (AGBS) fairness hearing, with Judge Denny Chin yet to issue a ruling. Though the Google Book Search program cannot be implemented without Judge Chin’s approval, both academy and industry are prodigiously analysing its potential ramifications. Establishing a collective management organisation (CMO) called the Book Rights Registry is one of the AGBS’s more provocative features. Very simply, the Book Rights Registry would collect and distribute revenues from the Google Books program to the rightsholders of digitised texts. As the specific issues generated by the AGBS fall to redoubled investigation, so do their corollaries for the institution of copyright. Accordingly, on January 28^th 2011, the Kernochan Centre at Columbia University Law School in New York held its annual symposium on CMOs and their role in new licensing regimes. By way of introduction, June Besek, Director of the Kernochan Centre, noted the AGBS was one of the two fundamental reasons why CMOs are receiving more attention (the other being that collective management is a lesser institution in the US than the rest of the world), making the symposium extremely timely.

Google’s inclusion of collective management in the AGBS has reinvigorated the analysis of CMOs, as collective management may play a part in the AGBS’ controversial rights clearing process. To briefly summarise – Google began digitising the collections of major US university libraries, making available snippets of text for search engine enquiries. The US Authors Guild and Association of American Publishers brought a class action lawsuit against Google, claiming copyright infringement on behalf of rightsholders of the texts scanned and digitised. Google originally asserted a fair use defence based on the limited quantity of text displayed as search results, however the parties eventually settled, authorising Google to engage in activities more expansive than those inducing the original action. Google would be permitted to make available full, digitised texts on private and institutional bases, with revenues distributed to rightsholders through the Book Rights Registry. Controversially, the settlement used the ‘opt-out’ mechanism of class-action procedure to subvert the traditional requirement of permission from rightsholders. This clever piece of litigation strategy may enable Google to digitise and commercialise (actions within the rights reserved by copyright) the legacy of western publishing without undergoing the otherwise impossible task of clearing rights. Remarkably, this inversion of the default copyright position for a massive canon of information is achieved through private (settlement) action rather than legislative reform.

Many are familiar with the function of CMOs, such as APRIA in Australia, who license music performance rights from its repertory to users of all kinds. For example, if you operate a bar, you pay a fee to APRIA to lawfully play music to the public. The CMO determines the fee, then distributes revenues to rightsholders based on its usage data. While APRIA has its equivalent in the US, CMOs in other categories of rights are far less prolific. Perhaps this paucity is linked to the poisonous connotations of the term ‘collective’ amidst an American environment of strict economic rationality. Indeed the keynote speaker at the conference, Daniel Gervais, argued a purely economic approach to collective rights management makes those agencies’ role less compelling. He argued, in Europe comparatively, collective management is considered a preferred system rather than a necessary evil.

Gervais highlighted some central features of collective management including the lack of excludability. Any user may access any work within the CMO repertoire provided they pay the licensing fee. This reduces transaction costs, and highlights how, while industry actors often have a program of saying ‘no’, CMOs generally say ‘yes’. In this sense, CMOs may facilitate movement away from the permission culture that accentuates the conflicts of copyright in the internet age.

Schott Hemphill, an anti-trust and IP professor at Columbia Law School, discussed the competition issues regarding collective management – generally, and in reference to the AGBS. He highlighted the fundamental concern emanating from the horizontal relationship amongst rightsholders that enables setting higher licensing prices than if rightsholders were acting individually. The original Google Books settlement entitled the CMO to establish a profit maximising price. Of course, this smacks of cartelisation. However, the amended agreement clarified that the pricing algorithm enables individuals to price their works severally. Orphan works issues also emerge in an anti-trust analysis of the AGBS, with the US Justice Department contending that later entrants to the ‘ebook’ market will struggle to replicate access to orphan texts as those rightsholders (by definition) cannot opt-in. Naturally, within the massive envelope of materials digitised by Google, many rightsholders are not identified or located. By requiring absent authors to ‘opt-out’, the settlement grants Google a de facto monopoly over those works. However, Hemphill remarked Google’s substantial risks in commencing digitisation would increase access to orphan works from effectively zero, thereby obviating anti-trust liability because the cost of the product is not increased. Apart from contending the anti-trust complaint is not made out, Hemphill also declared problematic the inclusion of competition issues in Judge Chin’s fairness determination as Chin’s mandate considers legitimacy for settlement class-members only, not the public at large.

As a CMO, the Book Rights Registry utilises extended collective licensing (ECL) machinery. ECL operates by extending the relationship between rightsholders and CMOs, by virtue of law, to all individuals within that class of rightsholder. Consequently, as pointed out by Alain Strowel from the Facultés Universitaires Saint-Louis in Brussels, this model has vast utility in licensing mass digitisation projects (and orphan works). Extended collective licences are already legislatively prescribed in Europe for cable television transmissions and other communications, while Nordic ECL law has omnibus provisions facilitating application to all categories of rights (including those necessary for the Norwegian National Digital Library). Uniquely to the AGBS, the legal extension to ‘outsiders’ is by virtue of private law, not legislation, and the benefits flow to only one user – Google.

Berkeley Law School professor Pamela Samuelson objected to the AGBS for precisely those reasons, stating her preference that other parties also have access to the mass digitisation. She argued for legislation establishing a CMO with extended collective licensing of orphan works and out of print books only (although she cites preference for the limited liability model of the proposed US orphan works legislation). Rather than vesting this resource in a private company like Google, Samuelson endorses creating a national Digital Public Library along the lines of the Europeana project.

Finally, the last speaker at the Symposium, Séverine Dusollier from the University of Namur succinctly highlighted the spectrum of licensing options from individual management of rights to compulsory licensing, and canvassed the various legislative proposals including levies on internet use and devices, and commandeering ISPs as collection agencies, licensors and enforcers.

The collective licensing options discussed at the conference have been subject to varying amounts of analysis and implementation. Clearly, the importance of developing adequate and appropriate licensing regimes is not escaping academics or policy makers, and the quantity and complexity of those options is only expanding. However, convincing established content industries continues to suffer for their preference of Digital Rights Management technologies over licensing innovation. For that reason, many eagerly await Judge Chin’s determination. Those opposed to the AGBS often cite Google’s ‘end-run’ around copyright law and the danger in privatising of such a phenomenal resource. However, considering US Congress’ inability to even pass necessary orphan works legislation, it is questionable whether the US Government has the political, let alone technical means to bring such a valuable public asset into fruition. In addition, recent US copyright reform focuses predominantly on term extension and fiercer enforcement, leading some to prefer Google’s vision of copyright to that of the US Government. No doubt whether or not the AGBS is approved, the concept will remain a substantial influence on the progress of digital licensing in times to come.

Video of the symposium is available on the Kernochan Centre’s website here.

Jake Goldenfein is a PhD candidate in Law at the University of Melbourne

(return to the top of this edition)

"The collective licensing revenue streams, they are a-changin'."

Controversy broke out this week when Nialler9, an influential Irish music blogger, publicised IMRO’s demand that music bloggers pay for a Online Exploitation Licence. [Update: a group of Irish music bloggers met with IMRO on 6 May 2010 to discuss their concerns. Read about the meeting here.]

Like many blogs, most Irish music blogs are run at no, or very little, profit. Comments on the main posts about the issue generally share a sense of outrage and a belief that IMRO’s demands will damage new Irish music.

Incredulity is also expressed that the bands involved generally provide the music to the bloggers in the hope that it will be promoted online. The Guardian sums up the issue as follows:

If IMRO goes ahead with its plan, targeting music blogs around the world, there will soon be legions of frustrated bloggers. And it will be much worse if other regional publishers follow suit. While the organisations’ hearts may be in the right place – looking to buoy a flagging industry – we just hope they are going about it the right way. Will forcing the closure amateur music blogs make songwriters richer? Or precisely the reverse?

Collective licensing is a somewhat complicated area but it is reasonably certain that, whatever enforcement steps IMRO might or might not take against individual bloggers that refuse to buy a licence, it is highly unlikely that any agreement will be reached to exclude blogs from the licensing regime. [Update: However, it appears from the meeting between music bloggers and IMRO, mentioned above, that a new form of non-commercial licence might be considered.]

Collective copyright licensing

Individual collection of royalties from music users by music owners is extremely impractical. Therefore, a system of collective licensing has been established where by a licensing society can be set up, with rights to grant licences to play music on behalf of a class of copyright owners. The Copyright and Related Rights Act 2000 provides that music can be played in public or broadcast if the appropriate fees have been paid to the relevant licensing society.

The most well-known such society in Ireland is IMRO, which collectively licenses the performance rights of copyright musical material (ie. the part of a musician’s copyright relating to the public performance of their work). It collects over €30 million in royalties annually, which are distributed to its members.

There are other collecting societies that license other copyright works, such as the Newspaper Licensing Agency and the Irish Visual Artists’ Rights Organisation. IRMA is an association of record labels and is not a collecting society.

Comments on the blog posts already mentioned point to the fact that the musicians involved authorise the use of their music on a particular music blog. Nialler9 refers to his understanding of the situation, prior to hearing from IMRO.

Like many I thought that MP3s which were cleared by bands and labels for promo were provided as is – gratis and without any attachments or additional requirements other than to promote the band and song. Y’know, the same way an entire music blogosphere and a digital PR industry has been allowed to grow up over the course of the last 10 years thinking the same.

However, musicians can only licence the rights which they retain. If they have joined IMRO, they have entered into an agreement with the organisation. The first substantive clause (clause 2) of that agreement provides that the musician is assigning (ie. transferring) all their performing rights to IMRO.

Accordingly, IMRO members cannot grant a blogger a licence to the performing right in their music because they no longer own that right.

Controversy

The collective licensing system has not been uncontroversial. Similar arguments to those now raised by music bloggers were aired over a decade ago by independent retailers and coffee shop owners who felt that they should not have to pay an IMRO licence fee to promote new and local musicians in their premises.

One might wonder why IMRO has begun to target bloggers now; the answer probably lies in the comment quoted above from the Guardian. As music use changes, collecting societies are tracking new and increasing sources of revenue from such use.

In 2004, the European Commission warned sixteen collecting bodies that an agreement between them was potentially in breach of competition law on the basis that it proposed to carve up online music licensing on a national basis. The Commission published a recommendation in 2005 which said that the industry should be free to set up EU-wide collecting societies or to allow national societies to licence on an EU-wide basis.

Disputes

In Ireland, the Controller of Patents, Designs and Trade Marks deals with disputes regarding royalty rates charged by collecting societies.

[A]nyone who considers that they have unreasonably been refused a licence by a collecting society or considers the terms of an offered licence to be unreasonable may refer the matter to the Controller.

The terms of an offered licence include the proposed royalties or licence fees.

IMRO is not a one-stop shop

So: permission from a musician does not necessarily extend to a licence to use music online; neither does an IMRO licence give a full licence to use the music.

This is a common misunderstanding. Different venues and uses may require a combination of licences from IMRO/MCPSI, PPI, the record label responsible for the recording and/or the songwriter. For certain commercial uses of specific pieces of music, a licence from all of these parties might be required. Therefore, it is important to check with IMRO or a professional adviser as to what licences are necessary.

What about film?

Increasingly, P2P is used for unlawful film and TV show  downloads as well as music. Most of this poll evidence relates to music, but as bandwidth increases, using P2P for film will become easier and therefore more widespread.  The economics of film are quite different  from those of music, and it’s not just about scale. One significant difference is that people tend to listen to music over and over again, but only watch a film once.  Film and music will probably need quite different solutions, but they will both need solutions.

포괄 라이센싱이란 P2P서비스 이용자들이 매월 일정액의 금원을 저작권관리기관에 지급하면, 이용자들은 자신이 원하는 P2P서비스를 이용하여 무제한적으로 음악을 다운로드 받을 수 있게 되고, 저작권관리기관은 이용자들이 지급한 금원을 각 저작권자에게 분배하는 구도를 말합니다.  워너 뮤직측과 대학들은 ‘Choruss’라는 이름의 서비스를 통해 위와 같은 매월 이용료의 수금과 분배를 담당하고, 월이용료는 5달러 수준이 얘기되고 있다고 하는데요, 아직 아무 것도 확정된 것은 없습니다.

포괄 라이센싱은 P2P서비스를 새로운 ‘저비용 고효율’의 음원 유통/배급 방식으로 합법화하는 것을 핵심으로 하여, 저작권자들에게는 그에 따른 정당한 몫을 제공하고 그 이용자들은 소송의 위험으로부터 해방시키는 것을 목표로 하고 있습니다.  “자유로운 정보의 소통”이라는 인터넷 본래의 기능을 최대한 살리자는 취지도 들어 있습니다.

iTunes 같은 합법적인 유료 다운로드 서비스가 있기는 하지만, ‘포괄 라이센싱’ 방식을 통하면 소비자들은 무제한적으로 음악을 다운로드 받을 수 있는 것은 물론이거니와 DRM과 같은 이용제한으로부터도 자유로워지는 장점이 있고, 음반회사 입장에서도 iTunes에 지급하는 높은 비율의 수수료를 더 이상 지급하지 않게 되는 장점이 있다고 합니다.

포괄 라이센싱은 그 동안 줄기차게 제기되어 왔지만, 음반사들은 이에 시큰둥한 반응이었지요.  전통적으로 음악저작물의 배급에 관한 통제권을 잃고 싶지 않았기 때문입니다.  음반사들은 Napster 판결을 위대한 승리라며 자축하고 이후 P2P서비스업체들과 불법 음원유통자들을 상대로 법적 소송을 줄기차게 제기해 왔습니다(우리나라 역시 비슷한 양상이지요).  하지만 그렇다고 불법 음원 공유가 줄고 있는 것도 아니고, 기존 CD의 매출이 늘고 있는 것도 아닙니다.  그와 같은 상황에서 저작물의 권리자, P2P서비스와 같은 새로운 프로그램/서비스 제공자 및 일반 소비자들 모두가 합적적으로 이익을 볼 수 있는 솔루션을 제공하기 위해 주장되고 있는 것 중의 하나가 바로 포괄 라이센싱이지요.

돌이켜 보면 라디오라는 매체가 처음으로 나와 음악을 방송하기 시작했을 때, 음반사들과 라디오 방송국은 지금 못지 않은 격심한 저작권 분쟁을 치뤘지만 결국에는 ASCAP나 BMI같은 저작권관리기관을 설립하여 라디오 방송국에 라이센싱을 부여하고 그에 따른 수입을 분배받는 구조를 택하지 않았습니까?  P2P서비스에 대한 포괄 라이센싱을 주장하는 사람들도 P2P서비스 역시 과거 라디오 방송이 그랬던 것처럼 포괄 라이센싱을 통해 합법화될 수 있고, 음반회사 역시 그와 같은 새로운 비즈니스 모델을 통해 더 많은 이익을 얻을 수 있다는 점을 인식해야 한다고 주장하고 있습니다.

음반사들이 이번에 대학들과의 논의를 시작하게 되었다는 것은 음반사들 역시 그와 같은 상황 인식에 어느 정도 공감하게 되었음을 보여주는 것으로서 큰 의미가 있다고 생각됩니다.  포괄 라이센싱이라는 것이 실현되기까지는 이해당사자들 간에 풀어야 할 이슈들이 한 둘이 아니겠습니다만, 적어도 음반사들이 그와 같은 논의에 동참하기로 결정했다는 사실은 그 동안 소송으로 얼룩진 관계를 넘어 향후 인터넷을 통한 음원 유통 문제에 있어 서로 Win-Win할 수 있는 관계로 나갈 수 있는 아주 중요한 전환점이 될 수 있을 것이라는 생각입니다.

© 2008 정원일 변호사. All rights reserved. Some copyrights, photos, icons, trademarks, trade dress, or other commercial symbols that appear on this post are the property of the respective owners.

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