The core ethos, and success, of the internet to date lies in its ability to stimulate shared ideas and content. It also promotes participation, pro-activity and creativity. But there is a tension between providing reasonable rewards for creativity, which have historically required a measure of protection for the creator’s rights, and the freedom to allow that content to be used to permit further innovation and creativity. In the new digital world, the ability to share content legally, becomes ever more important and necessary. Traditional mechanisms to identify rights-holders and acquire legal consent to share often need radical updating to meet the near-instant demands of this new world. There is a clear and unambiguous distinction between the legal and illegal sharing of content which we must urgently address. But, we need to do so in a way that recognises that when there is very widespread behaviour and social acceptability of such behaviour that is at odds with the rules, then the rules, the business models that the rules have underpinned and the behaviour itself may all need to change.
Across both old and new media, if we have an ambition to be the leading international destination for creative businesses, we need to combine an environment where opportunities abound for rights holders and digital distributors to develop exciting new ways to package and sell the content that people want. It must have a digital content protection framework in which such international businesses can have confidence. This will be increasingly vital in a Digital Britain where everyone has access to video capable broadband and many have access to much higher bandwidths. We must make sure that together we address the threats. But at the same time we must not lose sight of the fact that a truly broadband Britain promises huge opportunities for digital content producers.
The Intellectual Property Office (IPO). The Intellectual Property Office has launched a debate on the future of copyright building on the recommendations of the Gowers Review, which we will consider as part of our final report. This work aims to build a long term vision for copyright, considering what changes may be required domestically, at EU level and internationally. Although the IPO’s work is not limited to digital issues, most of the key issues are highly relevant to the digital environment.
Copyright is vital for our content and communications industries. It is the framework through which people can protect their creations and seek reward. Our aim, in the rapidly changing digital world is a framework that is effective and enforceable, both nationally and across borders. But it must be one which also allows for innovation in platforms, devices and applications that make use of content and that respond to consumers’ desire to access content in the time and manner they want, allowing them to use it how they want, and at a price they are willing to pay.
Already the UK has achieved a world-first in this regard: the Memorandum of Understanding between the Internet Service Providers (ISPs) and rights holders to tackle unlawful file-sharing by consumers – it has shown that these two groups with very different agendas can engage in an intelligent conversation about how to secure action in respect of legal offerings, education and enforcement. We need to ensure that all the work, and the increased understanding it has engendered, is not wasted. Quite apart from the specific work on unlawful file-sharing we need to make sure that there continues to be a space where different interests can come together and talk. If that helps develop new legitimate offerings (being careful to avoid any possibility of anything anti-competitive being discussed) then that is something that Government should be willing to facilitate. It’s clearly for industry to do the commercial deals – but Government should smooth the path where it can.
Of course much of the digital content sector still depends on non-digital and long-established business models for the bulk of its revenue, and we should not pretend that adapting to a digital environment will be easy or simple. But there can be little doubt about where the future lies, as an increasing range of content becomes digitised, for example e-books becoming part of the mainstream. What worked in the physical world will often not work online, and rights holders must find new partners, and new ways of creating value from their Intellectual Property.
We need to support rights holders as they adapt their way of thinking and working. This is not to support business models that will become increasingly obsolete, and nor do we want to try and pick the new business model – in any case there will almost certainly be many competing ones. But we should look at the environment within which they operate, and for rights holders that means the sea of unlawful activity within which they have to swim.
As well as the Government support for rights holders we need to acknowledge the issues which their customers are raising. Businesses need to understand the best ways of responding to the changing demands and behaviour of potential customers, winning their trust and securing income. Winning the trust of customers will be vital to the success of the sector as it finds a way to seize the opportunities the internet has to offer.
An effective enforcement framework must address both criminal and civil law infringements. In terms of criminal enforcement the Government is already taking a leading role, one that is recognised internationally. Since the launch of the National IP Crime Strategy in 2004 we have continued to increase our capability to rise to the challenges of criminal piracy. The Intellectual Property Office sits at the core of this initiative, leading a co-ordinated response to improve awareness and expertise on IP crime issues within our enforcement agencies and facilitating the sharing of best practice and intelligence. The Creative Britain Report published in February 2008 heralded the creation of a new National Centre for IP Crime to help drive further improvements – which will be up and running later this year. The benefits of this co-ordinated approach are recognised internationally.
More directly, funding has been provided to help trading standards officers tackle IP crime at the local level. In 2008 this funding was over £7million with similar funding for 2009 and 2010. This work is delivering real results.
But it is not only criminal scale copying that poses a threat to our digital future. The copying and sharing of content online has become a commonplace activity for many consumers. Where such activity is unlawful, the tackling of such infringement raises clear challenges, both in terms of the scale of such activity and in the kinds of responses that may be appropriate in respect of individual consumers. We must rise to this challenge and consider what role there is for government in helping industry to address civil infringement in the online world.
The copying of content without permission by consumers is not new – it’s been an unwanted companion of creative goods for as long as there have been means of copying material without paying. In the analogue world, though, it is a manageable problem, both in the control of such copies and in terms of consumer demand: there is usually a detectable deterioration of quality – video tapes were never as good as the original, and taping music from vinyl or the radio was a poor substitute. The digital world changes all that: copies are near-perfect and can be shared widely with the online community. Entirely legitimate technologies such as file-sharing can be abused such that millions of people can access material, unlawfully but for free.
This has led to a fundamental change in consumer expectations, particularly among the young. There is now a growing expectation that content can be found and shared for free. There is a corresponding resistance to paying for content, or accepting that an inability to pay means an inability to access the content. The collective impact of small scale individual infringement is considered to be significant while recourse for such infringement is delivered through individual civil court actions which can be costly and time consuming for the rights holder and which are perceived as disproportionate by consumers. This has affected different sectors to different extents; music is most exposed. Film, games, broadcasters and the publishing industry are also increasingly being affected. Indeed, it is a phenomenon all the digital content sectors will have to face sooner or later.
It is clearly in the interests of rights holders to produce the creative products that people actively want to buy in the way they want to buy them, and to ensure people are educated about how digital products can be used and why there may be limitations, we also need to work together to find ways to prevent such infringement and to enable action to be taken against those who insist on infringing copyright. If, we expect the whole value chain to benefit from new ways legitimate content can be accessed and consumed then it is reasonable to expect the whole value chain to work together to tackle unlawful activity.
What will help to deter copyright infringement online by consumers in both the short and longer term is a combination of things. A strong message is needed about the importance of respecting copyright as a necessary part of creating new high quality content. There must be a more intelligent and nuanced appeal to what consumers value – the on-going availability of compelling content.
This needs to be backed up by a substantially higher chance of repeat infringers getting caught. The University of Hertfordshire[2] research into attitudes towards music and copyright by young people showed that only 10% of those surveyed are currently deterred from file-sharing by a fear of being caught. The current approach to civil enforcement is not working as well as it needs to. This may be due to a lack of resource – although many rights holders assign significant sums to tackling copyright infringement. The issue may be one of spending more but it may also be one of working smarter. While there is little if any evidence that the remedies against infringement are themselves outdated, the processes by which those remedies can be reached are the product of the analogue age. They need up-dating to be workable in a digital world; and to enable new business models to get enough financial air to breathe and survive. [2. 42% of those surveyed admitted to uploading. Of the 68% who did not, only 15% said this was because of the fear of being caught. www.ukmusic.org/cms/uploads/files/UoH%20Reseach%202008.pdf]
Perhaps most importantly the availability of legal content in the forms that consumers want is crucial. In the short and long term, the rights holders must find the innovations that once again enable them and their customers to respect each other’s point of view. These are businesses where the customers and content creators alike have been used to paying for and rewarding emotional commitment, enjoyment and admiration. This has been an historic strength and one that businesses need successfully to innovate to recover.
ACTION 11
By the time the final Digital Britain report is published the Government will have explored with interested parties the potential for a Rights Agency to bring industry together to agree how to provide incentives for legal use of copyright material; work together to prevent unlawful use by consumers which infringes civil copyright law; and enable technical copyright-support solutions that work for both consumers and content creators. The Government also welcomes other suggestions on how these objectives should be achieved.
Such an approach would need rights-holders and distributors of all digital material (e.g. music, film, television and radio, software, computer games, e-books) to work together to develop ways of making this kind of piracy more difficult to do and easier to trace and prevent. This could involve working with authorities in other countries to act against damaging sources of infringing material. It could also include the exploration of new technical approaches to the content itself or its transmission, including common standards.
This body could carry on the work started by the Memorandum of Understanding on unlawful file-sharing. It should provide the forum within which all elements in the value chain – content creators, initial aggregators (e.g. studios or broadcasters), theatrical distributors (e.g. cinema chains), networks, ISPs and other parts of the chain – could come together. Within the boundaries of competition law, this could lead to the development of models that provide incentives for all for legitimate downloading and use, a framework of common responsibility to discourage and prevent illicit use, and to support and legitimise technical solutions that can achieve both. Developing new business models is primarily for industry to do, not for Government or any new body. But working together on enforcement and education mean there needs to be clear advantages to all sides – a win/win/win for rights holders, intermediaries and consumers. Rights holders and intermediaries should each reap the economic benefits of delivering a better service to consumers.
Possible technical solutions. Automated Content Access Protocol is one example of a technical solution. Digital Rights Management (DRM), properly applied, also has a role (i.e. where it allows users to access content on any device that they own, rather than being device limited – which is the paradigm that the film industry has encouraged and one that, in music, Apple’s iTunes has now embraced, in a welcome recent co-operation between rights-owners and a device/ distributor). Both can work when they are technical-enabling solutions that match market trends and go with the grain of the market and legitimate consumer demand. But they have yet to command the assent, let alone active support, of all the necessary players along the internet value-chain.
It may be that such an independent, objective body may be better able to surmount the mutual tension between rights-holders, publishers, search engines and other content aggregators, the ISPs and the underlying communications network operators and instead broker technical solutions that can command widespread adoption and support. We also recognise that, while industry co-operation should be at the core of this, such a ‘Rights Agency’ may need to have the power to act to ensure that enforcement measures are effective and proportionate.
If the UK can develop such a working forum, we will have an advantage over most other countries.
Action 12
Before the full Digital Britain Report is published we will explore with both distributors and rights-holders their willingness to fund, through a modest and proportionate contribution, such a new approach to civil enforcement of copyright within the legal frameworks applying to electronic commerce, copyright, data protection and privacy to facilitate and co-ordinate an industry response to this challenge. It will be important to ensure that this approach covers the need for innovative legitimate services to meet consumer demand, and education and information activity to educate consumers in fair and appropriate uses of copyrighted material as well as enforcement and prevention work.
The Government also recognises that there is a more specific problem that needs addressing on unlawful file-sharing, where we have been clear in the Creative Britain paper and elsewhere that we would legislate if necessary.
The consultation on how we might tackle this issue closed at the end of October. We have today published a Response to that consultation which can be found on the BERR website, which sets out our analysis of the responses and how we intend to proceed. None of the options highlighted in the consultation attracted widespread support. Rather there was a marked polarisation of views between the rights holder community, consumers and the ISPs over what action should be taken.
A number of key issues were identified by respondents including copyright protection, protections afforded under eCommerce legislation and the impact on the wider economy. Consumers (individuals and consumer organisations) in particular highlighted concerns over data protection and privacy. The role of technology was addressed by most respondents but there were conflicting views as to whether it could offer all or part of any solution. For almost all the options, questions were raised as to their legality under the existing legal frameworks and again, views varied.
Our preferred option of co-regulation did not attract widespread support. The key problem highlighted was the lack of certainty over the nature of the obligation on ISPs and the resulting legal uncertainty this would create for all parties. There remained major concerns how consumer protection would be properly addressed, while developing the self-regulatory aspect through a code of practice raised significant questions on how to accommodate other rights holders, the smaller ISPs and consumer bodies. This was borne out by the experience of the current Memorandum of Understanding group which showed that despite the best endeavours of all concerned, reaching voluntary agreement where there is little perceived common interest between the various participants is extremely hard.
There was, however, a degree of consensus that any solution must involve the provision of new legal sources of attractive content, and that there is a need for education on the importance of copyright in the wider economy.
ACTION 13
Our response to the consultation on peer-to-peer file sharing sets out our intention to legislate, requiring ISPs to notify alleged infringers of rights (subject to reasonable levels of proof from rights- holders) that their conduct is unlawful. We also intend to require ISPs to collect anonymised information on serious repeat infringers (derived from their notification activities), to be made available to rights-holders together with personal details on receipt of a court order. We intend to consult on this approach shortly, setting out our proposals in detail.
This should provide a good evidence base, to make it significantly easier for rights-holders to take targeted legal action against the most significant infringers. International experience of action of this sort suggests that more than two thirds of infringers change their behaviour when receiving notification. These obligations will form the central elements of a Code on unlawful file-sharing which Industry would be required to have in place, supported by backstop powers overseen by Ofcom. The Code would cover among other issues practical supporting measures, including appeals and standards of evidence. It would also cover cost-sharing.
We think the concept of a new Rights Agency and legislative action aimed specifically at addressing unlawful peer-to-peer file-sharing could be major steps forward. But this is new and difficult territory, and we want to get it right. So we will review the impact of any new measures, and will not hesitate to examine other options if these do not prove to be effective.
