As we explain in our linked piece (here), with content such as music, video and games being consumed across a range of devices, private copying is a common feature of the connected consumer. The law needs to strike a balance between those consumers’ rights and expectations and the rights of intellectual property rightsholders to be properly compensated.
In 2014 the UK Government attempted to reform the scope of the private copying exception, but failed to legislate effectively, with the result that the position has changed twice within the last year. The current position is that private copies made for the purpose of shifting content between formats – from CD to smartphone, for instance – would be an infringement of UK copyright law.
Time-shifting and format-shifting: Keeping pace with change
Until recently, under UK law there has been no exception to copyright infringement for private copying i.e. copying by individuals for their own personal use. As such, creating an additional copy of a protected work, such as creating a digital copy of a CD for use on a laptop or to play on a mobile device would be an infringement of the copyright in the work. Previously, the only exception that individual users might be able to rely on was the exception for “time-shifting” which enabled the “making in domestic premises for private and domestic use of a recording of a broadcast solely for the purpose of enabling it to be viewed or listened to at a more convenient time” (s70 Copyright, Designs and Patents Act 1988(CDPA)) . The exception for time shifting was introduced to ensure that the law was up to date with technological advances at the time, namely the development of video recording devices in order to record television broadcasts to watch later.
Format-shifting: One step forwards, two steps back
With the same desire to bring the law up to date, the UK government recently introduced new legislation to legalise private copying to allow for format-shifting, between devices. The private copying exception came into force in October 2014, as an exception in s28B CDPA applying only to copies made for private use.
However, the legality of the new private copying exception was examined, and found wanting, in a judicial review claim brought by the British Academy of Songwriters, Composers and Authors, the Musicians’ Union and UK Music 2009 Limited. The Claimants argued that the new exception in s28B CDPA was incompatible with Article 5(2)(b) of the Copyright Directive, which required that where a Member State provides such a copyright exception it must also provide fair compensation for rights. The UK had relied upon the proviso under that Directive that compensation is not due where private copying causes no or minimal harm to rights holders. The UK exception introduced in 2014 provided for no compensation on that basis.
In a High Court decision in June this year, Green J held that the decision to enact the private copying exception was flawed and therefore unlawful. This was on the basis that the evidence relied upon to justify the conclusion that no compensation scheme (or levying system) was required (since the harm to rights owners would be minimal or non-existent) did not in fact support this conclusion.
The Judge noted that the legal issue which the Secretary of State ought to have considered is whether “pricing-in” (i.e. that no levying system is required since rightsholders can adjust the price of products to account for the fact that personal copies are made) will lead to “minimal or zero” harm since if it does not then, in law, a compensation scheme must be introduced. As such, the evidence accepted by the Secretary of State must be sufficient to enable a reasonable inference to be drawn from it that this de minimis threshold has been met.
The Judge then went on to assess the process which the Secretary of State went through in reach the decision that no harm would be caused. The Judge accepted that the Secretary of State was entitled to draw inferences from the facts about the operation of the market. The inferences which were drawn were that:
- not every consumer who engaged in unlawful copying would have purchased a duplicate copy of the copyright work absent that copying; and
- pricing-in is a rational and normal pricing strategy for vendors, producers and suppliers to adopt in circumstances, such as the present, where there is uncontrollable copying of the product being sold and where the market has evolved upon that basis.
The Judge held that the evidence did not in fact support these inferences. For example, the Secretary of State reviewed and relied on the example of iTunes. Here, the Secretary of State relied on the fact that upon introduction downloads were priced at a higher price than content which could be copied to a more limited extent due to digital rights management. The Secretary of State concluded that this showed strong evidence of pricing-in. However, subsequently the differential pricing-in exercise was abandoned by iTunes. Therefore Judge held that it did not provide more than the “faintest of support” for the strong proposition that pricing-in is endemic.
In addition, the Judge held that a number of factors which should have been considered were not and that important evidence was not in fact obtained. For example, one of the pieces of evidence proposed to be relied upon was an analysis of comparative prices between Member States of the EU with different private copying exceptions. However, the Secretary of State simply stated its view that this analysis would not be very useful and so this was not in fact carried out.
Although fatal to the Government’s first attempt, this ruling does not mean that a private copying exception cannot be introduced, but that the way in which the Government introduced this private copying exception was improper.
In July this year, the High Court made a number of consequential rulings including an order to quash the new private copying exception. As a consequence, the law has reverted to its previous position: copying any work for private use into another format is once again an infringement of copyright law.
What next for format shifting in the UK?
Most other EU Member States use a system of copyright levies to provide for compensation to rights holders. This is usually in the form of a surcharge on equipment or blank media that can be used for private copying. It remains to be seen whether the UK will also decide to follow this course, particularly given that such systems have not been without problems elsewhere.
It seems likely that the private copying exception will eventually be back in the UK in some form, since its introduction was long overdue and out of touch with progress in technology, but it may be some time before it next reaches the top of the agenda for UK Government, let alone the EU.
In the meantime, the law in the UK is left out of step with ordinary users’ expectations, with unknowing infringement most likely continuing on a daily basis. At an EU level, the headache is for rightsholders, who need to keep on top of a varied and shifting picture across different Member States in order to know how to protect their rights and when enforcement might be called for.