Action on Authors' Rights

Digital Economy Bill and Extended Licensing: 2

It is known that one of the principal lobbyists for extended licensing is the BBC. An extended licensing scheme would assist it in putting its archives of programmes online without its having to track down each individual rights-holder. However, industry representatives consider that there are no grounds for believing that orphan works are a problem in the area of TV drama, comedy and feature films, and that extended licensing would compromise the legitimate interests of authors and other creators in negotiating a fair system of payments. Under collective licensing, fees are paid at a flat rate and terms of use are identical in every case; yet not all rights are of equal value, even where they pertain to works of a similar kind. It is essential that creators are rewarded in a way that takes into account the demand for their work. Moreover, authors and other creators working in television depend on income from repeats and other commercial uses. If this revenue stream is undermined, creative talent will no longer be able to afford to work in the UK.

There is a danger … that without thorough study of potential new business models the demands of public access as regards, for example, the BBC’s archive, will trample too heavily on either artistic integrity or the rights of creators to be rewarded for their work and their consequent ability to produce new work. – Personal Managers Association (PMA), evidence to the Gowers Review

There are some resemblances between extended collective licensing schemes and the scheme proposed in the Google Book Settlement agreement, under which Google would market digitized editions of previously published books, but rights-holders would have the right to remove books from sale. Payments would be channelled through a registry; only registered rights-holders would receive payment for the exploitation of their works, or be permitted to control the uses made of them. The settlement has been heavily criticized, not least by the US Department of Justice.

[The settlement] essentially … turn[s] copyright law on its head because it eviscerates the requirement of prior approval from the copyright holder. … It is the right to control one’s work that creates the incentive to produce it. – William Cavanaugh, Deputy Assistant Attorney General, US Department of Justice, at the Fairness Hearing for the Google Book Settlement

Most professional authors, authors’ agents and intellectual property lawyers who have looked closely into the settlement agreement have been appalled by it. A large number of well-known UK authors took the opportunity to opt out of the settlement before the deadline on 28 January.

It is a matter of concern and anger to authors that the government has refused to take up the challenge of defending our rights. Instead, it has been showing a troubling fascination with the deeply flawed model of rights clearance exemplified in the settlement: to wit, appropriating rights en masse, decreeing the terms for use, and leaving it to the authors to opt out.

There have been rumours that Google has been one of the parties lobbying for clause 43, and indications that one of the extended licensing schemes envisaged is a UK Google Books-style operation. There are many problems with the Google Book Settlement, but one of the biggest is that the project would corner, and stifle, an important emerging market for digital books. The settlement is now awaiting judgement in a New York court; there is no knowing how matters will turn out, but many commentators think it unlikely that it will go through in its present form, given the opposition expressed by the Department of Justice. The DoJ has called, at a minimum, for the default opt-in arrangement to be dropped, and for authors to be given a choice whether or not to opt in. It would be sad, to say the least, if the UK were to adopt a version of a flawed system devised across the Atlantic that the US, following careful scrutiny, found to be unwise and unacceptable.

The right to issue a work in a digital edition, including any reissue of a work that has been published in print, has to be regarded as a primary right, like the right to publish a work as a printed book. In a world in which digital publishing has a growing share of the market, it cannot be viewed in any other light. The right to license photocopying is an example of a secondary right. Existing collective licensing schemes in the UK apply to secondary rights. Any proposal to apply extended collective licensing to primary rights (such as book digitization) is a matter of special concern.

There are very sound reasons why primary rights are licensed on the basis of contracts that are negotiated on an individual basis between the author and the publisher (or other licensee):

  • This allows the author to make the best agreement he or she can for the exploitation of the work, based on the known or likely demand.
  • It gives the author control over where the work will appear, and in what form and context, which are matters in which every author has a legitimate interest.

This clause could potentially destroy the principle of direct licensing, which is the most efficient means of ensuring that a rights holder is remunerated exactly and properly for the use of their work, and lose creators the right to control their own economic and moral rights. – Paul Brown, Chairman of the British Association of Picture Libraries and Agencies (BAPLA)

Collective licensing run on a mass basis for fixed-rate fees will not remunerate freelance authors at a level that will sustain high-quality work, nor reward the most popular authors on a basis proportionate to the revenue earned by their work. If primary rights were licensed collectively, many of the authors who currently make all or part of their living by writing would be unable to continue doing so.

Primary rights are always, or nearly always, licensed on an exclusive basis. This guarantees best return to the licensee on the resources invested in developing and exploiting the work, and the author, in turn, is remunerated appropriately.

Collective licensing schemes issue licenses on a non-exclusive basis. In clause 43 this is prescribed, or seems to be, under 116A.3 (which also governs the provisions in 116B):  ‘An authorisation or licence under the regulations in favour of any person must not preclude any authorisation or licence in favour of another person.’

This is another very important reason why extended collective licensing is not an appropriate way to license primary rights. The licensing body has no way of knowing what exclusive agreements may be in force, or in process of negotiation. The rights-holder has no necessary knowledge of the licenses issued by the licensing body. If an extended licensing scheme is instituted in respect of primary rights, this will break the system of licensing rights on an exclusive basis and compromise the normal exploitation of published works.

The Google Book Settlement agreement tries to deal with this problem by restricting Google’s right to exploit books commercially to books not in print. However, it has been demonstrated that Google’s database is highly unreliable when it comes to marking books as unavailable. There is no mechanism for linking different editions of the same work (which may have different ISBN numbers, publishers and even titles), so that older editions are marked as available for commercial exploitation by Google at the same time as newer editions are on sale from booksellers. The potential losses to rights-holders  are enormous, from damage to the value of rights and undermined sales. It is impossible that this problem can be avoided under any system by which works are opted in as the default, with the user, or licensing body, having no direct knowledge of the publishing history of any of them. (Under the proposed settlement agreement,  Google is not liable for damages for such mistakes; the onus is on the rights-holders to spot them and flag them up: just one of many reasons why it is an abysmal deal for authors.)

It should also be noted that in some cases there are good reasons why certain books should not be reissued: notably books that have been the subject of successful libel suits, or prosecutions under the Official Secrets Act. This the Google Book Settlement agreement fails to consider, and it is hard to see how any extended collective licensing scheme could easily take account of such issues.

Under extended licensing, authors would be co-opted into schemes without their explicit consent, and in many cases without their knowledge. Any system under which rights were licensed over the heads of the authors would conflict with the moral rights legislation in the Copyright, Designs and Patents Bill 1988: in particular, with the right of authors to object to distortion, mutilation or other derogatory treatment of their work. This is an important right because it protects authors’ reputations. It depends on the author, and the work, as to what might constitute ‘derogatory treatment ‘: it cannot be dealt with on a mass basis. Moral rights may be waived by the author, but according to the Intellectual Property Office (IPO), only in writing. Research published by IPO last autumn found that authors value their moral rights and would like to see them strengthened.

March 24, 2010 - Posted by | Uncategorized |

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