Protecting IP: Striking a balance

By Mike Weatherley MP, Intellectual Property Advisor to the UK Prime Minister

After working for 10 years in the music and film industries, in 2010, I was elected as a Member of the UK Parliament. I have since spearheaded many initiatives in Parliament to educate colleagues and stimulate debate about the importance of protecting intellectual property (IP) rights. This work led me to my most recent appointment as the IP advisor to the UK's Prime Minister, David Cameron.

In this newly-created role, I face a key question: what is the right approach to maintaining IP rights and how should this be enforced? Does it require government involvement, industry involvement or a mixture of both? A first step in addressing the issue is to examine the implications of both domestic and European reforms to licensing legislation. This is a very complex matter encompassing many creative sectors, all with unique market issues, most of which are characterized by inadequate rights databases (even by the standards of an analogue age, let alone a highly digitized one) and different policies arising from conflicting European national interests.

Proposals for domestic reform

In recent years, the UK Government has commissioned the Hargreaves Review (WIPO Magazine 6/2011) and the subsequent Hooper Report on the Digital Economy and the Digital Copyright Exchange - or 'Copyright Hub'.

With the Hargreaves Review, many industry experts, commenting on its recommendations for exceptions, felt too much ground was unilaterally granted to consumer advocacy or open rights groups in the name of compromise. For example, parody, classified as qualifying for exemption under the Hargreaves Review, is one example that experts thought perhaps should be reconsidered. IP in both reports was confirmed as an important property right and Richard Hooper's Digital Copyright Exchange feasibility study further advanced the debate with its focus on how an industry-led solution might work.

Failure to move with the times

At the end of the day, the creative industry must take responsibility for its failure to keep pace with the digital age. Technology will always open up new ways to access content. If creators do not begin to embrace these technologies they will lose out, and by default, the market will be dictated by 'open rights' interest groups. The creative industry alone is responsible for not evolving fast enough. The music industry, for example, has spent years saying 'no' instead of 'how?'

The slow uptake of technology is just one area where the creative industry needs to re-examine its policies and beliefs. The creative industry also needs to advocate more aggressively for IP rights. In 2010, at the UN Worldwide Internet Governance Forum in Vilnius (Lithuania) it was shocking to see that no one from either industry or government was present to make a case for supporting the protection of IP rights. The Pirate Party, however, was there in full force arguing that all content should be made available for free.

Rightholders have a key role

Rightholders from across the industry need to wake up to the fact that they have a responsibility and a key role to play in shaping the on-going copyright debate. The industry talks to itself repeatedly and very effectively, but often fails to engage an outside audience. Some initiatives flourish – including Parliamentary initiatives such as the Rock the House (see box), Film the House and House the House competition projects – but industry does little to “educate’” the general public about the advantages of IP protection. Industry has been losing the propaganda war and has allowed the exceptions outlined in the Hargreaves Review to gain currency. Industry tells itself it doesn’t like these exceptions, but the public thinks otherwise and their message is the one that is being heard.

Creation of an industry-led Copyright Hub

A key recommendation of the Hooper Report is the creation of "a not-for-profit, industry-led Copyright Hub that links inter-operably and scalably to the growing national and international network of private and public sector digital copyright exchanges and rights registries...using agreed cross-sectoral and cross-border data building blocks and standards based on voluntary, opt-in, non-exclusive and pro-competitive principles."

Such an approach promises to be far more efficient and effective than one legislated by the academic policy writers of either Westminster or the European Union because it is industry led and therefore has goodwill ‘buy-in’ of those involved.

Other solutions

The Motion Picture Licensing Corporation, for example, recognized that the expensive and bureaucratic title-by-title film licensing model for non-theatrical viewing was failing across Europe. Users were bypassing the process, choosing to show videos illegally and thus undermining filmmakers’ revenues. To ensure that a reasonable fee was collected, it joined forces with the film industry, to develop and introduce a flat annual fee model which is proving successful. While it is tailored to each territory, it has been applied in many different countries.

However, given the territorial nature of IP law – an IP right having a legal effect only in the country in which it is granted - a central database that directs users to licensing solutions and that provides information such as streaming language, taxes and applicable rules, would be extremely useful. Such a database, however, can never be a compulsory centrally directed licensing solution that takes pricing away from the rights holder. The best way forward is an industry solution with strong government backing.

Relevance beyond the UK?

How, you may ask, is this relevant beyond the UK? Can UK policy be used and applied more broadly within the European Union? As the world leader in the e-world of digital services (ahead of the Republic of Korea, China, Japan and the USA) and one of three net exporters of music in the world (along with Sweden and the USA), the UK is amply qualified to take a lead position in shaping this area of European policy.

While some may believe, wrongly, that the exceptions outlined in the Hargreaves Report, are an indication that the UK is seeking to weaken copyright law, these exceptions should not overshadow the fact that the report as a whole is a ringing endorsement of IP. There should be no confusion. The UK government recognizes the merits of, and is very much committed to, a balanced system of copyright. My appointment is evidence of this.

The European Union is currently asking the creative industries to come up with short-term solutions and the European Parliament is debating medium- to long-term legislation to update copyright law. If, however, as suggested by the Hooper Report, industry can streamline and unify copyright licensing, to reduce the complexity and expense so often used to justify piracy, then the need for legislation and the argument for 'exceptions' are nullified.

Rather than continuing to add to a string of exceptions, a more efficient and plausible way forward would be to encourage the industry to provide simple, affordable and legal access to copyright-protected works. The argument for legislation to enforce copyright protection is still there, but in discussing and implementing future EU directives the focus should be on how to protect copyright holders and their property, not on how to undermine output by increasing exceptions or by granting free access as advocated by some of the more extreme opposing views. This is the delicate balance that any good legislation must reach.

How then can we ensure that legislative and industry approaches strike an appropriate balance between the interests of rights holders and those of consumers? In my view, the way forward is to adopt a "three pronged approach'' to IP: education, the carrot and the stick.

Education

It is the job of industry and government to educate consumers about the importance of supporting IP rights. By not paying for content, we simply encourage the production of poor quality content and help destroy a marketplace filled with a wide choice of diversified products. In such a scenario everyone loses. So winning this argument through "education" is a critical first step.

The “carrot”

When it comes to the "carrot", industry must change the way it makes its products available to ensure that consumers can easily access content legally. Proponents of piracy say downloading content legally is too complicated. Industry, therefore, needs to find innovative ways to ensure that content is easily available and in so doing make piracy a less attractive option. We need to let go of old dogma and identify and further develop new, workable solutions. The Film Industry’s multi-format license option for home use, for example, is an innovative compromise. We need to start embracing solutions like Spotify and Bloom.fm, both of which have a one-off licensing model which is proving popular.

The “stick”

If neither “education” nor “the carrot” works, then there needs to be a “stick”. Government must back up industry by putting the necessary enforcement mechanisms into place. This would include holding Internet Service Providers responsible if they knowingly facilitate illegal downloading practices and do not take steps to stop this form of piracy.

The creative sector in all countries is a significant contributor to GDP. To flourish society needs to reward those who create. The public needs to get behind the message that getting something for free (or below suitable price) for short-term personal gain, results in innovation and creativity floundering to the detriment of all. So it all starts with effective messages and education about industry’s position and the consequences of not getting the copyright policy framework right. Industry then needs to take a lead and give consumers what they want in a rapidly changing market. Industry needs to make sure the ‘carrot’ is attractive. And then, if all else fails, there needs to be legal support from legislators.

The creative sector needs to show greater flexibility and to be part of the solution.