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The following is the text spoken by OUT-LAW journalist Matthew Magee.
Hello and welcome to OUT-LAW Radio, where we hope to keep you up to date with the latest news and the most fascinating features from the world of technology law.
My name is Matthew Magee, and this week we look at a successful new industry built on ideas that succeeded despite having scant protection from intellectual property laws.
But first, here are some of the top stories from OUT-LAW.COM, where you can read breaking technology law news throughout the week.
Pirate Bay to go legit
Government creates cybercrime fighting bodies
The world's biggest distributor of links to copyright infringing material is to be bought by a software entrepreneur and turned into a legitimate business, the site has announced. The Pirate Bay has agreed to be acquired for £4.8 million.
Swedish company Global Gaming Factory has agreed to buy the site, which has been at the centre of political, legal and cultural storms all its life. It was the biggest repository of links to pirated content, though it hosted none itself. Its founders were found guilty earlier this year of facilitating copyright infringement in Sweden.
GGF said that it wanted to use its software and the Pirate Bay's millions of users to establish a new, legal peer to peer file sharing network that could help to ease traffic pressure on internet service providers.
The government will create two new public bodies to help protect government and citizens from digital security threats. It will set up one strategy body and one operations centre to increase the UK's cyber security, it said.
The government has published a cyber security strategy in which it promises to set up the Office of Cyber Security and the UK Cyber Security Operations Centre. They will be functional by March 2010, it said.
It said that the OCS would "provide strategic leadership for and coherence across government" and that the CSOC would "actively monitor the health of cyber space and co-ordinate incident response; enable better understanding of attacks against UK networks and users and provide better advice and information about the risks to business and the public".
Those were some of the top stories from this week's OUT-LAW News.
What business could possibly bring the headline-grabbing retail tycoon and the famously acerbic reality show impresario together? When Topshop and BHS owner Philip Green and pop contest producer Simon Cowell's business plans leaked last week they were splashed not just on the business pages but on the news pages as well, such is the clout and fame enjoyed by the unlikely pairing.
The business that brought them together was television – they have announced they will set up an entertainment agency focusing particularly on TV formats. They will come up with new TV ideas and sell the format all around the world, as Cowell has already done with the X-factor.
A TV format is essentially one good idea stretched over an hour once a week for up to months at a time. Like any business based on ideas in which shrewd investors like Green are prepared to invest millions, you would imagine that it must be protected by strong intellectual property rights.
In fact, TV formats are barely protected at all. Yet Green and Cowell have not lost their heads – this is one of the biggest growth areas in entertainment and has already made the fortunes of Cowell and former Spice Girl manager and Pop Idol inventor Simon Fuller.
TV formats earn their crust through a seemingly magical mix of reputation, speed, efficiency, a small amount of legal protection and, oddly, peer pressure.
We know this because a team at Bournemouth University’s intellectual property centre has just done a study on how the business works. Jonathan Wardle and Sukhpreet Singh conducted the research with team leader Martin Kretschmer, a professor at the university.
Kretschmer and his team went back through trade press archives and charted disputes in the TV industry over formats, then conducted industry interviews and produced case studies to get an in-depth picture of how the format industry really works.
What emerged first of all was the scale of the business and its importance to Britain. This, it seems, is a game at which we excel.
Martin Kretschmer: So during the last decade Britain accounted for about 20% to 50% of all format hours broadcast annually worldwide. It varies each year depending on which format is successful but Britain has become the major program developer for formats worldwide. So our research category was how that is possible. It is a question of great commercial relevance; it may help program developers and the British creative industries. If they have a greater awareness of how they do this.
Copyright cannot protect ideas, though, so what legal rights to format developers actually have? The answer is: very few.
Martin Kretschmer: In the UK the lead case is a 1989 decision by the Privy Council and it involves Hughie Green who was one of the most popular presenters on UK television on the game show Opportunity Knocks, and in that decision the Privy Council held that the format and structure on the package of the game show were insufficiently united to be capable of a performance so copyright law did not protect the loose language, the ideas behind the program. Other routes of protection would be unfair competition law which has been used in civil law jurisdictions and something like passing off in the UK which involves an element of deception which is very hard to prove. The third major action relates to confidentiality because a lot of the preliminary work relating to format will rely on negotiations in exchange of information about programme ideas and they are often covered by a non disclosure agreement.
Yet the world is not full, thank goodness, of knock-off Pop Idols and counterfeit Countdowns: so in the absence of cast iron legal protection, how do companies go about protecting their ideas? Kretschmer has the full gamut of strategies.
Martin Kretschmer: Well the phrase we encounter many times from program developers is that we supply knowledge, we transmit knowledge you cannot see from watching the show. It may be how source contestants, how you involve the audience, how you structure the program, how you do the lighting and they would do that through formalising the elements of the claimed format in a so called production bible. A production bible can be 300 pages long and the production bible would then be supplied under a confidentiality agreement and it will be supported in implementation through a system of flying producers. So a producer which was part of the original development process or has been closely briefed will then fly out to the country where, let’s say Who Wants To Be A Millionaire or Pop Idol will be produced and will supervise that the customisation, localisation of the product will cover the essential elements of the format.
There are some intellectual property rights at work, he said, as well as an unusual business tool: peer pressure.
Martin Kretschmer: The second strategy we found was a fairly sophisticated use of brand management which combines creating an image, particularly through trade marks and logos and a range of images surrounding the program and then continuously moving the brand along so that it is very hard for competitors to catch up with the image which is embodied in the mark and the logo, and the third strategy we found was relating to the strength of the distribution networks and social networks within the industry. There is a social element to this that if one has a strong distribution network then there are means of retaliation so if there is a deviant producer who copies a format and does not play ball by the unwritten rules of the industry there are informal means of retaliation, so it may involve that other programmes will not supply it to a deviant producer or copycat producer.
Music, film and book rights holders have been talking for ten years about how their businesses are threatened and how they need more control over their material. Yet here is an industry that has exploded and become highly profitable and has had to look after itself without the kind of legal protection songs and films enjoy.
The industry wasn't always so blasé, though. In the 1990s it, too, looked to the law, said Kretschmer.
Martin Kretschmer: During the 1990s there were, there was great concern within the industry that formats were being copied. There was lobbying to introduce something such as a television format right. It was thought that the television format industry could only thrive if it had a right of that type. As it turned out attempts to introduce a right like that were unsuccessful but despite this lack of copyright protection the industry thrived. It grew dramatically and it became one of the major exports of the British creative industry.
Now, of course, music and films are directly copied by end users, whereas you and I would have little use for a pirated TV format. But this is still an industry that seems to be inventing its way out of a lack of legal protection. The fashion industry used to be the main example of a business that created and innovated its way through the knock-off and piracy quagmire, but it looks as though the TV formats business is another one to add to the list.
It is, says Kretschmer, an industry that, when it lost its battle for legal rights, just got on with it and showed, ironically, that they were not really needed in the first place.
Martin Kretschmer: The copycat activity seems to be contained and seems to have not affected the ability of the industry to grow and to become a major success story. The industry has found an informal way of rolling out and exploiting formats which doesn’t need formal legal protection.
That's all we have time for this week, thanks for listening. Why not get in touch with us here at OUT-LAW Radio? Do you know of a story you think we should be covering or if you just have some comments on the show we would love to hear from you on email@example.com. Make sure you tune in next week; for now, goodbye.