The move was recommended by the recent Treasury-commissioned
Gowers Report on Intellectual Property, and was also backed by a
report by the Parliamentary Select Committee on culture, media and
sport.
"The Government will undertake a public consultation this Autumn
about making an exception to copyright legislation to allow
format-shifting for private use," said the Government's response to
the Select Committee's report. "This first consultation will allow
us to gauge opinions of both rights holders and copyright users
before deciding what legislative amendments are required. A second
consultation on the draft legislation will then be carried
out."
Users of MP3 players such as the iPod are, the Select Committee
said, very often not aware that transferring music from CDs that
they own on to MP3 players or their own computers is a breach of
copyright law.
"Many users in particular are not aware of what the law actually
says and, of those who are, many simply do not care," said the
Government response. "We therefore believe that the recommendation
which the Gowers report made, to introduce a limited
format-shifting exception applicable only for personal use, will
help improve the position."
Record companies have said that they will not prosecute users
for format shifting, but the Committee said that putting users at
the mercy of private companies was not acceptable.
"We do not believe that it is satisfactory that consumers should
be advised by the industry that they can ignore certain provisions
of the existing law and not others, and we believe that this must
contribute towards a general lack of understanding and respect for
copyright law," it said in its report, published earlier this
year.
The Gowers Report was produced by former Financial Times editor
Andrew Gowers and published late last year. It recommended an
exemption for private copying that would bring the law into line
with extremely widespread behaviour.
Many other European countries balance a private right to copy
with a levy on blank media such as compact discs and MP3 players,
with the money gathered going to artists. Gowers and the Government
have rejected the levy as a method of compensating artists. The
Committee endorsed Gowers' description of the levy as "a blunt
instrument".
However, the Government does not suggest an alternative form of
compensation in its paper.
Struan Robertson, editor of OUT-LAW and a technology lawyer with
Pinsent Masons, said this could upset the music industry.
"The Copyright Directive, passed in 2001, gave each Member State
an option, to either ban private copying or to allow private,
non-commercial copying, 'provided that the rightholders receive
fair compensation'," he said. "The UK kept its ban in place. Gowers
wanted to change that and suggested a system for fair compensation.
Now the Committee wants to change it too, but it has glossed over
the compensation challenge."
Gowers suggested that record companies could reflect the cost of
copying in the sale price of CDs and downloads. His report
stated:
"If rightholders know in advance of a sale
of a particular work that limited copying of that work can take
place, the economic cost of the right to copy can be included in
the sale price. The 'fair compensation' required by the Directive
can be included in the normal sale price. This means, however, that
any private right to copy cannot be extended retrospectively as
copies of works already sold would not include this 'fair
compensation'. Therefore, collecting societies may wish to consider
making a single block licence available to allow consumers to
format shift their back catalogues legitimately."
Though the recommendations of the Gowers report were accepted by
the Government, this is the first time that a private right to copy
has been explicitly promoted by the Government. But a system of
compensation is not discussed.
"Maybe the Committee is waiting for the consultation to address
this tricky issue, or maybe hoping that the issue won't get raised
at all, though I think it's impossible to ignore," said Robertson.
"Fair compensation will surely be controversial, especially Gowers'
idea of charging consumers a block licence fee for their back
catalogues. If you were asked to cough up, say, £200 for the right
to keep all the music that's already on your iPod, music that
you've already paid for on CD, would you pay up?"
The Committee response also rejected the idea of pressurising
the European Commission into extending the life of copyright for
sound recordings. The record industry has been lobbying for an
extension from 50 to 70 years for sound recordings.
The Committee agreed and recommended the change, but the
Government has said that the Gowers Report and a University of
Amsterdam report both said that there were not sufficient grounds
for extension.
"Taking account of the findings of these reports, which
carefully considered the impact on the economy as a whole, and
without further substantive evidence to the contrary, it does not
seem appropriate for the Government to press the Commission for
action at this stage," it said.
Gowers exclusively revealed to OUT-LAW
Radio earlier this year that, far from leaning towards
extension, he almost recommended shortening the term of
copyright.
"I could have made a case for reducing it based on the economic
arguments," he said. "We certainly considered it, and if you look
at the report that came from the academics that we commissioned to
examine the arguments and examine the evidence they also argued
very robustly that 50 years could be arguably more than
enough."
"In the end we took the politically prudent course. To be
honest, reducing it in any case would be a very big international
debate. It would stand very little chance of making headway in
Europe," said Gowers.
