UK copyright system set for massive overhaul

CD-ripping, non-commercial text mining and parodies of creative works are all set to become legal, as part of sweeping reforms to the UK copyright regime.

The government has come out in favour of the recommendations on IP reform outlined in Ian Hargreaves's copyright report in May.

On Wednesday, the government issued its belated response (PDF) to Ian Hargreaves's intellectual property (IP) review, saying it broadly accepted every one of the recommendations in that report. In addition to the limited copyright exceptions, this will lead to the creation of a national clearing house to make it easier for people and organisations to get permission to use copyrighted material.

The response also suggested the government will resist the introduction of software patents without clear evidence that they would benefit innovation and growth. Hargreaves had recommended this course as a way of avoiding 'patent thickets'.

"[Hargreaves's] review paints a picture of an IP system that is the foundation for a substantial proportion of the UK's innovation and economic growth but which needs to adapt to meet the challenge of new technologies," said the response, signed by business secretary Vince Cable, culture secretary Jeremy Hunt and chancellor George Osborne. "The government believes this is fundamentally the right view."

The government agreed with Hargreaves that intellectual property reform could add between £5bn and £8bn to the UK economy by 2020, while cutting "deadweight costs in the economy" by over £750m. Some of the recommendations will be carried out this year, while a white paper in spring 2012 will aim to see legislation enacted before the next general election.

Hargreaves told ZDNet UK on Wednesday that the government's response was better than he had expected.

"The government is to be congratulated for breaking a reform logjam which stretches back more than a decade," Hargreaves said in an email. "There is still much to do in terms of preparing for legislation, but this really does represent a change of direction which will be good for business and for consumers."

Copyright exceptions

The introduction of new limited copyright exceptions will be one of the first recommendations to be carried out, with proposals set to be brought forward to the autumn.

One of these proposals will address limited private copying. As things stand, 90 percent of the country is — mostly unwittingly — breaking the law by ripping music files from CDs and copying them to devices such as the iPod. The government said in its response that this situation "brings the law into disrepute".

"It is not appropriate simply to tolerate unlawful private copying where it is not commercially damaging," the government said. It will now not only legalise limited private copying, but also block any attempts in licensing contracts to undermine this new exception.

The content industry has long held out on the issue of private copying because it wanted to get compensation for such activity, in the form of so-called copyright levies. These are surcharges added to the price of certain devices and recordable media to compensate rights holders because the items may be used for copying things. This is why a printer is more expensive in Belgium, where such copyright levies exist, than in the UK, where they do not.

In its response on Wednesday, the government nixed the introduction of copyright levies to the UK. The private-copying exception will be introduced in a way that ensures "the amount of harm to rights holders that would result in 'fair compensation' under EU law is minimal, and hence the amount of fair compensation provided would be zero", the government said.

"This avoids market distortion and the need for a copyright levy system, which the government opposes on the basis that it is likely to have adverse impacts on growth and [would be] inconsistent with its wider policy on tax," the response added.

Data mining

The creation of parody works will be another key exception, as will data mining for research purposes. Hargreaves had pointed out that academic institutions are frequently hamstrung by copyright restrictions on the data they need to analyse. The government agreed and said it will "widen the exception for non-commercial research, which should also cover both text- and data-mining to the extent permissible under EU law".

The government sees the areas where copyright restricts activity to no direct commercial benefit as doubly wasteful.

– Government response

"The government sees the areas where copyright restricts activity to no direct commercial benefit as doubly wasteful: neither new opportunities nor incentive to invest in copyright works result from them," the response read.

"Nor does the government regard it as 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," it continued.

Digital Copyright Exchange

The introduction of what the government referred to as "a Digital Copyright Exchange (DCE), or something like it", will also see a crucial Hargreaves recommendation carried out. This will provide a clearing house for rights holders and people who want to use copyrighted material, to make it easier for payments for usage to take place.

This publicly accessible register should make it easier to avoid copyright infringement, and therefore make sure there is "no excuse for not checking", the government noted. It added that the clearing house will provide "a valuable first step in any diligent search for the owner of possible orphan works".

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The relaxation of copyright restrictions will also allow libraries to archive orphan works, which are pieces of content for whom the creator has not been identified.

Companies must be able to write software to automate access to the DCE, so they can sell services that rely on information from the database, the government added. It also suggested the DCE should "serve as a genuine marketplace independent of sellers and purchasers, for example on the model of independent traders using amazon.co.uk to sell goods, rather than simply being an aggregated rights database".

One of Hargreaves's recommendations was that the government "ensure patents are not extended into sectors, such as non-technical computer programs and business methods, which they do not currently cover, without clear evidence of benefit".

The response steered clear of specifically mentioning software patents, but it did say that the government would "resist extensions of patents into sectors which are currently excluded unless there is clear evidence of a benefit to innovation and growth from such extension".

Fundamental change

Much of the government's response to Hargreaves addressed even more fundamental change in the way IP law is formulated and enforced. Crucially, the response attacked previous governments' failure to use verifiable evidence to reform the IP regime.

"Too many past decisions on IP have been supported by poor evidence, or indeed poorly supported by evidence. This is true at an international level as well as domestically," the response read. "The government will in future give limited weight in IP policymaking to evidence that is not sufficiently open and transparent in its approach and methodology, and we will make it clear where we are taking this view."

The government has asked the Intellectual Property Office (IPO) to carry out more economic research. In addition, the IPO will set out guidance in the autumn as to what constitutes open and transparent evidence.

The response included information about the next steps in UK copyright enforcement. The government has decided not to use the Digital Economy Act's powers to block copyright-infringing websites at source, and it has said that ISPs will not have to contribute money towards the appeals process for people accused of infringement.