Issues

Follow up letter to the Creative Economy Programme Publishing Summit on 4 September 2006

11 September 2006

Mr Shaun Woodward MP,
Minister for Creative Industries &Tourism

Dear Minister,

On behalf of the UK Members of the European Publishers Council (full list attached), I would like to confirm and elaborate on the views we expressed from the floor through Laurence Kaye, our legal adviser, at the recent Publishing Summit. These were made following the panel presentations and discussions of the draft reports of the Competition and IP Working Group and the Technology Working Group. Our comments will focus on the copyright aspects of the report of the Competition and IP Working Group.

We were very pleased to hear your opening remarks which emphasised clearly the central importance of the UK Creative Industries, of which publishing is a substantial part. We agree that one of the real values of the Creative Economy Programme is in making the broader community aware of this.

You also expressed the view that "getting away from defending turf" will be a measure of the programme's success. We agree. Too much of the debate about copyright takes place at a doctrinaire level, comparing private rights with the public good. We do not dismiss that distinction. But it must be remembered that, in the private sphere, copyright functions as a means of ensuring a fair economic return for investment in creative goods. It would be a disaster for the UK economy if legitimate concerns about issues of preservation, access and inclusion were allowed to undermine copyright's crucial role in underpinning the UK Creative Industries.

The Report's recommendations

At the Summit, you said that "we are driving at recognising barriers to growth and to removing them." With that in mind, we think the correct test to apply to each of the Report's recommendations is whether it is addressing a real barrier to growth and, if so, whether a regulatory response is needed to remove it.

Management Development

We welcome steps being taken to foster the development of all management and business skills which are appropriate to the publishing sector and which pass the test of 'real business need'.

There are already many industry-specific training programmes run by trade associations within the industry. Accordingly, it is vital that, to achieve the best return on investment, any measures in the field of management development, including the provision of seed funding and incentives, takes full account of what is already available from trade associations and from the private sector generally.

Competition and IP Policy

We have two principal comments to make on this section of the report:

1. We fundamentally disagree with the general comments contained in the Report which, taken together, paint a picture of copyright as being restrictive and the copyright framework as being in need of a complete overhaul.

2. Although we do not disagree with a number of the recommendations (e.g. the further development of standards and promoting sector-specific DRMs) the report fails to make clear that market-based solutions are the answer, not regulatory intervention.

Your own comments about the success of the UK Creative Industries were important and we need to remember and acknowledge that this has been built on our current framework of copyright laws. In any event, these were updated as 2003 by The Copyright and Related Rights Regulations (SI 2003 No.2498) in order to implement the EC's Infosoc Directive. Our existing legal framework is strong and is sufficient to create the market-based solutions we need. This is the view we have expressed to the Gowers Review and we think it is appropriate to repeat it here.

We do not disagree that there are a number of practical solutions needed in the field of standards development and implementation. But we should not try to find solutions to non-existent problems. The problem is not copyright law; the challenge is developing 21st century rights management solutions. This takes time but these solutions can be developed within our existing legal framework.

Furthermore, copyright law and contract should not be confused. Frequently, criticisms are aimed at "copyright" when, if fact, the criticism is directed at contractual terms which govern the downloading and use of content. The appropriate legal framework for dealing with issues about contracts is contract law and competition law and, in the area of 'B2C', consumer protection law. It is not copyright law.

With those comments in mind, we turn to the Report's specific recommendations.

Recommendation

"Standards should be developed for the terminology, management and trading of IP assets (similar to the Spectrum standard for museum artefacts or Copyright law for printed assets)."

• EPC comment: We agree. In the publishing industry, the ONIX Publisher License format will allow any publisher licence to be expressed electronically as a standard XML document. Development of the format is ongoing; and work-in-progress documentation can be found on the EDItEUR website at http://www.editeur.org/onix_licensing.html. But the key point here is that the development of this format based on the ONIX standard does not need any change in copyright law. It is created within that legal framework.

Recommendation:

Create trusted third parties in digital IP ownership and trading to improve liquidity in the markets for digital IP (as has emerged in artefacts and print).

• EPC comment: Trusted third parties may have a particular role to play in certain areas in the public v. private sphere arising from voluntary arrangements e.g. in the field of legal deposit. However, the references to "digital IP ownership" and to "trading" are both unclear. The issue of ownership of the copyright in a work is distinct from ownership or custody of a digital object which may be held by a trusted third party for specific purposes e.g. to allow exercise of a legal exception. Also the reference to "trading" risks blurring the boundary between the public and private spheres. If, for example, a deposit library fulfilled the role of trusted third party, this is nothing to do with "trading." Market solutions will be developed to meet market needs.

Recommendation:

Develop a mechanism to assist SME's in purchasing and using a specific DRM solution (similar to the BBC's use of DRM for its online archive).

• EPC comment: This will be dealt with via market solutions.

Recommendation:

The development of clear standards, accessible trusted third parties and interoperable, transparent DRMs would encourage consumers to take-up legitimate new business models. Enhanced access, supported by the tagging of online content to enable consumers to find material, should help a wider range of business models to flourish and will assist SMEs by allowing them to access consumers directly thereby overcoming some of the competition asymmetry problems that exist in their current relationships with more powerful customers or distribution channels.

• EPC comment: Our general comment is that consumers' take up of legitimate new business models depends, above all, on the market providing products and services that the consumer wants and is prepared to pay for, either directly via subscription or purchase, or indirectly via advertising-based online content which is free to the consumer. Certainly, technical protection measures have a role here and the APIG inquiry made a number of useful observations here.

In conclusion, we think that the following principles represent a fair and appropriate balance between rights holders and users and between the private and public spheres:

'Copyright is crucial'

One of the conclusions of the Creative Economy Conference held in London in 2005 was that: "Copyright is crucial. In this new era, everything becomes a subset of IP. We believe that copyright has been a highly effective mechanism to generate creative wealth in the industrial mechanical age, and the concepts of copyright will continue to do this as they adapt to the online era."

'Fair for all, not free for all'

Publishers' raison d'être is to disseminate content in a variety of formats in print and electronically on digital platforms. Our members favour wide dissemination of their works provided that their rights are respected. In particular, the range of licences available from collecting societies operating in the publishing sector, including scanning licences, continues to grow. Furthermore, we are already in the process of developing a new content access protocol which will allow publishers to express their rights and terms and conditions electronically and be easily readable by search engines and content aggregators. For further information please contact info@the-acap.org

'Responsible Copyright'

Helping consumers to understand the importance of respecting copyright is a key priority as publishers develop more and more electronic content available online or via mobile.

This imposes on businesses the responsibility of making sure that it is easy for consumers to comply with our wishes through fair and transparent licensing terms, clear labelling and explanations of technical protection measures.

'A stable copyright framework is essential'

We are in a transitional phase during which change in the social, cultural, economic and technical spheres is occurring at different speeds. The time taken for the movie and film businesses to develop new business models is an example of this.

Everyone should therefore be wary of rushing to legislate to deal with perceived problems which are being solved through market and other developments. What we need is a stable legal framework and time to work out the business and technical solutions needed to achieve the new copyright compact amongst all players through collaboration and a permission-based framework. This collaboration is already happening in a number of areas, such as with search engines, libraries etc. as mentioned above.

'Machine to machine' solutions

In a networked environment, a key part of the solution has to be 'machine to machine' based on rules, terms and conditions and policies expressed through DRM which must also accommodate legal exceptions. These solutions must be easy for consumers to comply with. In many cases they will be automatic and facilitate easy access and enjoyment of content.

I hope our comments can be taken into consideration as part of your Creative Economy initiative and in relation to the findings of and follow up to the Gowers Review.

With kind regards,

Angela C Mills Wade
Executive Director