May 23, 2014

Government may be underestimating ‘economic impact’ of copyright reforms

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.

Concerns with the planned copyright reforms had been noted by the LSLC 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 ten years.

"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 recent 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.

The government proposed draft regulations back in March that would, if backed by parliament, update existing rules on exceptions to copyright from 1 June 2014. The changes 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 wording of the proposals 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.

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

Royds can provide comprehensive advice on many areas of copyright law, including any legislative changes which may come onto force. For more information please visit our website or contact Stephen Welfare and John North.

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