My Lords, I move this amendment on the basis that noble Lords wish to carry on beyond eight o’clock. As I say, my speech will last seven or eight minutes. This group is entirely devoted to the issue of extended collective licensing and seeks to amend Clause 68. First, I will deal with Amendments 28T to 28Y and 52 to 56. Then I will speak to Amendments 28SA and 28AA.
Extended collective licensing is a system whereby a collecting society can extend its licences to include the works of non-members. Non-members will be able to opt out of the licence if they choose. There are mixed views ranging from tepid to hostile in the creative industries. Nevertheless, all see the following safeguards as crucial in any ECL system that is introduced. Extended collective licences must be permitted only in certain strictly controlled circumstances. For example, a collecting society that grants them must be representative of rights owners in the field. Licences must be granted on a scheme-by-scheme basis and the mechanics of opting out should be clearly prescribed. Although the Government’s policy documents and verbal assurances have indicated that such strict conditions will be imposed, they have not been placed in the Bill. This is alarming for rights holders as they therefore do not have a cast-iron, future-proofed assurance that the power in the Bill will not at some indefinite point be used in a way that results in secondary legislation unfairly interfering with their exclusive rights, which are the preserve of primary legislation.
Extended collective licensing allows for collective licences to be granted by a collecting society in respect of all works of the type for which it is authorised whether or not it has the mandate with respect to each individual work. So, for example, a collecting society for publishers could be granted the ability to license literary works by publishers with whom it did not have a direct relationship. ECL schemes would also allow collecting societies to issue non-exclusive licences for
particular uses of works beyond the uses covered by the scope of its rights holder mandate. So, for example, a society could issue a licence to a third party to allow the digital reproduction of works by a member publisher even where its mandate did not provide for this use. As such, ECL can potentially deprive rights holders of the ability to make a choice as to how their work is exploited. Collecting societies are permitted to go beyond the scope of mandated agreements and therefore act without the direct permission, and perhaps without the direct knowledge, of the rights holder. The rights holder who wishes at the outset not to be subject to such treatment would be required to opt out of the licensing scheme—the direct opposite of the present situation whereby they opt in. This important shift of onus on rights holders is a serious inversion of their position and requires a greater level of vigilance and monitoring. For many smaller rights holders this may well prove a very onerous burden.
If ECL is to be introduced, the creative industries therefore believe it is vital that additional safeguards are set out in the Bill to protect rights holders as much as possible from unauthorised and undesired use of their works. The Publishers Association, UK Music and many others believe that a licensing body should be granted an extended collective licence only if the following conditions are satisfied. First, the licensing body is significantly representative of UK rights holders in the field concerned. Secondly, the authorised licensing body has adopted a code of practice which gives members and non-members equal rights. Thirdly, an application has been made and a separate licence granted for different uses of works. Fourthly, the Secretary of State is satisfied that the licensing body is acting with the approval of its membership. Fifthly, members and other interested parties have had the opportunity to comment on ECL applications under consideration by the Secretary of State.
Amendment 28SA adds necessary safeguards to the ECL provisions in new Section 116B. A licence limited to the provisions as drafted could breach the requirements of the Berne Convention and TRIPS agreement in relation to non-UK works. This is inherent in ECL and cannot be cured. Nevertheless, this amendment gives extra protection to right holders if ECL is introduced. It is argued that copyright licensing is administratively burdensome on those who wish to use copyright works and should be streamlined. ECL is presented as the means by which the Government can sort out this situation. However, the industry is rapidly bringing its own digital solutions to the marketplace.
A collective licensing scheme is a voluntary arrangement in which owners of a particular kind of copyright authorise a collecting society to enforce those copyrights on their behalf. Yet the scheme proposed in Clause 68 resembles a form of compulsory licensing under which the Government will authorise a licensing body to grant licences for works which neither it, nor anyone who has authorised it, owns. ECL is stated to be voluntary on the part of a rights owner in that he can opt out of the scheme after it has come into being.
However, opting out is possible only if a rights owner knows about the scheme and how it may license its works. Those unlikely to know about ECL schemes
licensing their works will include amateur creators whose works are on the internet, although they are not published commercially, and foreign rights holders. In the view of many, the existence of such a body will artificially distort the market for rights, as its rates would become the de facto standard against which negotiations would take place.
Properly, ECL refers to a statutory scheme that extends the collective licence to those rights owners who have chosen not to join the scheme. It is impossible to extend a collective licence that does not exist. Several economically significant sectors within the current creative industries have no collective licensing scheme at all. That includes news clips, films, photographs and illustrations. Those who have argued for ECL point to the Nordic countries, where there are ECL schemes. However, those schemes are very limited in their type of work and rights licence, and there are major differences between the small Nordic and large UK copyright markets.
The Nordic collecting societies are well regulated, and the extended collective licence schemes are narrowly limited in scope and subject to strict parliamentary scrutiny. Cinematographic and dramatic works, as well as computer programs, all of which are types of work of which minor use has great commercial value to the copyright owner, are generally excluded. However, the UK proposal is not limited in scope with respect to either use or types of work.
Any introduction of an ECL scheme must be compliant with the UK's international obligations, including the three-step test. The proposals are not compliant in special cases, the first step; can conflict with normal exploitation of the work, the second step; and can unreasonably prejudice the legitimate expectations of creators, the third step. It is inevitable that, if passed the provisions will be challenged in the courts.
Finally, ECL is proposed to solve perceived copyright licensing problems, which the copyright hub, to which I and many other noble Lords referred, is intended to solve on the basis of voluntary participation without confiscation of property rights by secondary legislation or any legislation. If ECL is proposed again, surely the primary legislation must contain the minimum safeguards to comply with international norms.
I apologise for the length of my speech, but I did warn noble Lords. Amendment 28AA was proposed by the Artists’ Agents Association, which is a voluntary trade association whose membership comprises 102 British literary agencies. It suggests that there should be a requirement in the Bill that customary warranties be made to any users being granted licences to use works under an ECL scheme. In a publishing contract, an author usually makes the following warranties to the publisher: that he has full right to enter into the agreement; that the work is an original work written by the author; that the work in no way infringes any existing copyright; that the work contains nothing unlawful, indecent or libellous; that it does not infringe any right of privacy, confidentiality or intellectual property rights; and that any recipe, formula or instruction contained in the work is accurate and is not injurious to the user.
Without those warranties, it is difficult for works to be exploited commercially. There needs to be some provision for at least the basic warranties to be provided under an ECL scheme.
Finally—as your Lordships will be pleased to hear—on Amendment 20AB, the schedule sets out some welcome provisions for any orphaned works or extended collective licensing schemes that come into force. However, as Sections 116A and 116B make clear, orphaned works and ECL are two quite separate licensing schemes governed by different qualifying criteria, authorisation processes and provisions. The schemes are not interdependent in any way. For the avoidance of doubt and to reinforce the distinction between the two schemes I have tabled Amendment 20AB. I beg to move.
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