The private copying exemption permitting copying of copyright protected content, including music, which was introduced into English law on 1 October 2014, has come under attack in judicial review proceedings brought before the High Court.
A narrow exemption
The British Academy of Songwriters, Composers and Musicians, together with the Musicians Union and UK Music 2009 Limited, has successfully brought an application for judicial review against the decision of the Secretary of State for Business to introduce the new copyright exemption into English law.
The new exemption set out at section 28B of the Copyright Designs and Patents Act 1988, was one of several introduced in 2014, including exemptions for parody and quotation. The private copying exemption permits individuals to make copies of content that they have purchased for their own private use. Prior to the introduction of the exemption, even copying a downloaded music file onto a CD was copyright infringement. The exemption and its definition of 'personal use' is very narrow however and even an individual burning a copy of an album for a friend would still be committing an act of infringement.
The applicants in the case for judicial review represent musicians, composers, and songwriters, all of whom, they argued, stood to lose out financially as a result of the new exemption. Whereas in the past a consumer would have to purchase a new copy of any musical work in order to avoid infringing copyright, under the new exemption individuals can legally copy content to the same or different media, a practice known as 'format shifting'.
The government had the right under European Directive to introduce an exemption for private copying provided that, if the newly permitted acts would cause more that minimal harm to copyright owners, compensation would have to be payable in some form. In 21 out of 28 EC Member States, a levy of some sort has been introduced to compensate for the introduction of a private copying exemption. In the majority of cases the levy is charged on blank media (CDs for example) or equipment (such as computers and MP3 players).
The government consulted extensively on the introduction of the private copying and other exemptions in copyright law. In a March 2014 'Impact Assessment', the Secretary of State sought to explain the decision to introduce the exemption without compensation for copyright holders on the basis that any losses that would occur under the new exception had already been taken into account in the market and would in the future be built into the initial price for sale of the content. Therefore it was concluded that no material harm would be suffered by copyright holders.
The applicants raised a number of arguments against the introduction of the exemption without a compensatory scheme attached, each of which are considered carefully by the Judge, Mr Justice Green, in his 107 page judgment. The Judge found in favour of the Secretary of State in respect of all of the applicant's arguments, with one exception.
The Judge accepted the applicants' assertion that the evidence relied upon by the government to conclude that the introduction of the exemption would cause little or no harm to the content owners (in this case musicians and song writers), could not possibly have been sufficient to draw such a conclusion. Therefore the decision to introduce the private copying exemption without compensation was not made in accordance with legal requirements for the exercise of the government's discretion.
So what happens now?
As the government's right to introduce the private copying exemption derived from the a Directive of the European Community, the judge will now hear submissions from the parties on whether he should refer any questions to the Court of Justice of the European Union. He will also decide what relief, if any to grant the applicants. The decision does not however strike down the exemption. It is likely that the Secretary of State will conduct further investigations into the impact of introducing the exemption upon copyright owners. He may decide that further evidence supports his original position but it may also be the case that section 28B is repealed and a new version put in its place with a compensatory mechanism included.
This case could prove to be highly significant - the introduction of the private copying exemption was seen as an important step in modernising English copyright law, the government may now need to go back to the drawing board to ensure that copyright law remains compatible with the 21st Century.
The judgment in BASCA v The Secretary of State for Business, Innovation and Skills can be read here.