Legal Updates - Format Shifting

Intellectual Property – Format Shifting – Possible Legislation – Media & Entertainment

A recent report funded by the Treasury grants approval to limited circumstances of music copying between formats where no fees are charged. It is likely that legislation in this area is to follow this development. In the wake of this report, a number of independent record labels in the UK are preparing to take their cases to the European Commission.

The report recommends that consumers should be allowed limited copying rights so that they can copy music from one format to another, without having to pay any additional costs for these rights. The Association of Independent Music (“AIM”) believes that if these plans were to go ahead, they would cause irreparable damage to the UK's creative industries by potentially opening the floodgates and allowing similar copying rights to take hold across other media.

The report justifies format shifting on the grounds that everyone does it regardless of the law. AIM has a problem with this as there is no fair compensation for such activities. The report allows for limited format shifting under fairly strict parameters. It recommends that rights owners should be rewarded in the sale price. However, AIM argues that this compensation is not enough. They believe that there should be a hardware levy or a similar kind of blank media levy.

AIM believed that the allowance of format shifting in this way is:

“…not in accordance with international law, and does not comply with the Copyright Directive, which, using the three-step test, places limitations on exclusive copyrights in certain special circumstances only, and only when they do not conflict with the 'normal exploitation of the work and do not unreasonably prejudice the legitimate' rights of the author”.

However, it is believed that it is possible that similar rights may be accorded to copying other media such as talking books, or films via the Internet. Some commentators believe the concerns as raised by AIM are legitimate, and that there is a danger that copyright law will be weakened in the same way as rental and lending rights (which involved provision for equitable remuneration to interested parties), but in practice, no one pays anything and receives anything.

The report recommends that costs should be included in the sale price, considering the fact that most people format shift, a person may buy a CD, copy it onto their PC and then burn a copy for use in their car. However, it would be difficult to extrapolate the effect an additional cost, such as a blank recording medium levy, would have in practice.

There is currently a lot of governmental interest in intellectual property matters, and there is certainly a possibility that the government will draft new legislation in relation to this area. The report picked out a number of issues and proposed a number of recommendations for change.

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© RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.



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