As we mentioned briefly in our previous article on the key actions for the future of intellectual property, one of the proposed actions to take intellectual property to the 21^st century regards copyright. It has been recommended in the review of the intellectual property that, the government establishes a Digital Copyright Exchange (Exchange) to allow potential licensees quickly to identify and contact the relevant intellectual property owners, automating the licensing process as much as possible. It is also anticipated that, the UK should also support the European Commission's proposals to establish a framework for cross-border licensing.

The government will:

·         Progress this and it will report on progress by the end of 2011.

·         Work to ensure that Crown copyright materials are available via the Exchange.

·         Publish minimum standards for voluntary codes for collecting societies and consult with collecting societies on the implementation of such voluntary codes, in autumn 2011.

·         Draw up proposals for a power that allows a statutory code to be put in place for a collecting society, where evidence shows that it has failed to introduce or adhere to a voluntary code incorporating the minimum standards.

The government will work with UK interests and the European Commission to develop proposals that are compatible with current effective licensing models in the diverse industries affected.

It is forecasted that the establishment of the Exchange would add up to £2.2 billion a year to the UK economy by 2020. However, for a potential Exchange to be successful and contribute to economic growth, it must create value for both sellers and purchasers of intellectual property rights. It is proposed that, the Exchange must meet the following requirements:

1) Attract relevant material that is available and readily licensable. The government will work to ensure that Crown copyright materials are available via the Exchange from day one, or as soon as possible thereafter, and will encourage public bodies to do likewise.

2) Be a compelling proposition to owners of intellectual property rights, but not compulsory and allow for fees to be set or negotiated by the owners of intellectual property rights, subject to controls on unfair competition.                                                                                                            

3) Be open to access by individuals and businesses, free at the point of use.                                  

 4) Be self-funded.

In order to make the Exchange a reality, industry partners and sectors of the creative world must be brought together, to create availability of reasons and rights and the necessary supporting systems, to allow the Exchange to operate a functioning licensing system by the end of 2012.

A licensing system for orphan works should be established to extend collective licensing for mass licensing of orphan works and a clearance procedure for use of individual works should also be established.

The government will also publish minimum standards for voluntary codes for collecting societies in early 2012 and will consult with collecting societies on their implementation. It will also draw up proposals for a backstop power that allows a statutory code to be put in place for a collecting society that has failed to introduce or adhere to a voluntary code incorporating the minimum standards.

The government takes the view that it benefits no-one to have a wealth of copyright works that cannot be used, because the owner of one or more intellectual property rights in the work cannot be contacted. This means that, potentially valuable intangible assets are being wasted.

Therefore, the government says that, in autumn 2011, we should expect proposals for:

·         An orphan-works scheme that allows for both commercial and cultural uses of orphan works and for intellectual property rights owners, who could suffer from unfair competition from an orphan-works scheme. These would include diligent search for intellectual property rights owners, licensing at market rates for commercial use and respect for the rights of relevant owners that come forward.

·         Extended collective licensing to benefit sectors that choose to adopt it.

 In this regard, it is being recognised that, copyright collecting societies play a major role in copyright licensing.

The government wishes to build on the valuable work done by collecting societies to adopt codes of conduct and the development of a model code under the aegis of the British Copyright Council, to obtain demonstrably effective, they will need to become more robust with enforceable codes and independent review mechanisms. Therefore, the government proposes to publish minimum standards for voluntary codes in early 2012 and consult with collecting societies on their implementation.

Government plan to introduce new copyright exceptions to cover: format-shifting, parody, non-commercial research and library archiving. It also plans to legislate to ensure that copyright exceptions are protected from being overridden by contract.

It is, therefore, expected for the government to:

(i) bring forward proposals for a substantial opening up of the UK’s copyright exceptions regime, including a wide non-commercial research exception covering text and data mining, limited private-copying exception, parody and library archiving in autumn 2011 and                  

(ii) aim to secure further flexibilities at EU level that enable greater adaptability to new technologies.  

While copyright has a fundamental role in providing appropriate incentives for the creation of valuable works, the government nonetheless believes that the review is right to identify activities that copyright currently over-regulates to the detriment of the UK and to propose changes to tackle the problem.

The government says that, it is also not appropriate for certain activities of public benefit, such as medical research obtained through text mining, to be, in effect, subject to veto by the owners of copyrights in the reports of such research, where access to the reports was obtained lawfully. While some publishers view licensing of text mining as a legitimate commercial opportunity, the government is not persuaded that restricting this transformative use of copyright is necessary or in the UK's overall economic interest.

In achieving all the above, it is expected that: (i) the amount of potential harm to intellectual property rights owners that would result in "fair compensation" under EU law is minimal, and hence the amount of fair compensation provided would be zero; (ii) adherence with EU law; and (iii) unnecessary restrictions removed by copyright exceptions are not re-imposed by other means, such as contractual terms.

This will include proposals:

·         For a limited digital private-copying exception, to bring copyright law into line with the real world, and with consumers' reasonable expectations, since thousands of people copy legitimately-purchased content, such as a CD, to a computer or portable device such as an MP3 player, assuming it is legal.

·         To widen the exception for non-commercial research, to cover "text- and data-mining" to the extent permissible under EU law. To widen the exception for library archiving.

·         To introduce an exception for parody. It would enable UK production companies to create programmes that could play to their creative strengths and create a range of content for broadcasters.

The government will aim to secure further flexibilities at EU level that enable greater adaptability to new technologies including use of data for research.