“How do changes to IP and copyright law affect British businesses?"

The Government issued a white paper intellectual property and copyright. James O’Flinn examines the changes

On 20 December 2012, the Business Secretary, Vince Cable announced a series of changes to the UK copyright framework as part of the Government’s response to the May 2011 Hargreaves Review.

The Government white paper proposes the expansion of copyright exemptions within the jurisdiction of England and Wales to make use of existing EU exemptions which Hargreaves concluded are under-used. Cable comments that “making the intellectual property framework fit for the 21st century is not only common sense but good business sense.” The paper itself makes the bold claim that the proposed changes could contribute over £500m to the UK economy over 10 years, with likely additional benefits of around £290m each year.

The headline proposal is to permit private copying by users of all types of lawfully-held copyright works strictly limited to personal use, for example, copying the music from a CD to a digital music player. Unlike in other EU states, there will be no levy or charge on such copying, but only personal use of copies will be permitted; it will not be possible to lend copies to a friend or relative. The exemption is therefore likely to be of limited direct use to businesses, and companies will still need to hold appropriate licences for software shared around the office. However, those in the digital solution sector may make use of the exception in the promotion of their goods and services.

The proposals also include the introduction of a limited exception for parody, caricature and pastiche of copyright works without the right holder’s permission. Such use must be “fair”, although commercial use is not expressly ruled out, this means that in the future it may be possible for a business to parody a popular song or film in their own communications without fear of infringing copyright. However, it will be necessary to await implementation of the proposals(due later this year) to determine what is considered “fair”, although for the moment the Government comment that it depends on how much of the original material is used and how close the imitation is to the original. The extent to which, for example, advertisers may be able to make use of this exemption therefore remains to be seen.

Another proposal which may benefit businesses is the change to how copyrighted works are quoted. Currently, there is a ‘current affairs reporting’ exemption, which permits news agencies and other reporters to quote copyright works without the right holder’s permission strictly for the purpose of reporting on current affairs. This latest proposal will extend this permission much wider - permitting the quotation of copyright works for any “fair” purpose, provided the quotation is accompanied by a “sufficient” acknowledgment.

This is a significant step for businesses and presents considerable opportunities to companies producing advertisements and other promotional material - for instance, a famous phrase from a book could be reproduced in full in these communications, provided that it is properly attributed. Although again the reality of implementation, bearing in mind guidance on what constitutes “fair”, is awaited.

With these proposals, the Government aims to create a flexible, modern and robust copyright framework, striving to strike a balance between the removal of barriers to competition, growth and innovation and the need to protect the interests of right holders. Whether it can achieve that remains to be seen, although plainly the specific proposals represent a significant relaxation of existing restrictions to be taken advantage of by business and public alike.

James O’Flinn is a partner and Alex Hall a solicitor in the Dispute Resolution department at Mundays LLP. James is the contact partner for matters of Intellectual Property.