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UK government may be underestimating 'economic impact' of copyright reforms on creators, warns Peers

The UK government may have underestimated the "economic impact" that changes to copyright laws will have on the country's creative industries, a parliamentary committee has said.09 May 2014

The House of Lords' Secondary Legislation Scrutiny Committee (LSLC) stopped short of calling for reform plans to be shelved but said the government should closely monitor the impact that the changes have as soon as they are introduced and "respond effectively" if the changes do have a negative effect.

The LSLC said it had noted "concerns" with the planned copyright reforms among some stakeholder groups. It also questioned the UK's intellectual property minister Viscount Younger's assertion that the changes to the law were "relatively minor" given the government's claim that the changes stand to bring benefits worth £500 million to the UK economy over the next decade.

"We were struck, in particular, by the strength of concern expressed by some interested parties about the issues of compensation and of 'contract override'," the LSLC said in a new report. "While the government have presented their justification for the approach being taken on these issues, as set out in Viscount Younger's evidence to us, we flag up the possibility that the changes will have a greater economic impact on producers and creators than the government have so far envisaged."

"We see the changes proposed in these regulations as undoubtedly significant, for example in their positive potential for the research sector, and in their negative potential, conversely, for rights holders in the music sector and elsewhere. [The government has said] that the instruments are to be reviewed by the Intellectual Property Office no later than April 2019. We would urge the government to monitor the impact of the changes from the point of implementation, and in particular to respond effectively if it becomes clear that any negative potential is being realised," it said.

In March the UK government laid out draft regulations that would, if backed by the parliament, update existing rules on exceptions to copyright from 1 June this year. The changes, which are contained in five separate statutory instruments (SIs), would introduce new rights to copy copyrighted works for private use, related to archiving of copyrighted material and the use of such works in non-commercial research and educational settings, and to use copyright material in works of parody and in quotations, among other reforms.

The proposals include wording which mean that the new copyright exception rights cannot be overridden by terms that rights holders put in their contracts, although some of the plans do give rights holders freedom to deploy "restrictive measures" to prevent copying of their works, such as is the case in the draft regulations on private copying.

On Thursday, however, the government confirmed that another parliamentary committee, the Joint Committee on Statutory Instruments (JCSI), had asked for more time to scrutinise two of the five SIs and admitted that there is now a doubt whether those two SIs, which contain draft regulations on private copying and on parody and quotation rights, will be approved in time for them to be brought into force on 1 June.

Separately, the BBC has reported that rights holder groups and some UK internet service providers (ISPs) are on the verge of finalising a voluntary framework under which the ISPs would help the rights holders combat online copyright infringement.

According to the report, rights holders appear to have backed down from more extensive proposals previously tabled on how the voluntary regime should work.

Record label and film industry bosses have sought the voluntary assistance of ISPs to help tackle online copyright infringement after growing frustrated by delays to the introduction of a statutory framework under the Digital Economy Act (DEA). Under plans reportedly under consideration last year, rights holders wanted ISPs to log details of customers' alleged illegal file-sharing and create a database of suspected infringers that they could refer to so as to pursue infringement proceedings against those individuals.

However, according to the BBC's report, ISPs would start sending out letters to customers suspected of infringing copyright to inform them about the illegality of their activities and direct them to legal sources for downloading copyrighted content on the internet.

ISPs would keep a record of the number of letters sent to individuals for up to a year and would inform rights holders monthly of how many letters they had sent out. However, rights holders would not be privy to the identity of those individuals, meaning they would in all likelihood require a court to issue a 'Norwich Pharmacal Order' requiring the ISPs to disclose those individuals' details if they wished to pursue those individuals over infringement.

Expertise in Copyright

Copyright is an extremely valuable, often unrecognised or misunderstood right which protects a whole range of original materials including written materials, software, artistic materials, music and dramatic works. It arises automatically without the need for registration in most countries and protects these materials from unauthorised copying. It is essential in business to identify such rights, ensure they are owned by the correct entity, properly protected, enforced and exploited.

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