The UK Government yesterday announced its formal acceptance of the recommendations of the Hargreaves Review of intellectual property, and will now set about introducing these major reforms in the UK.

According to the UK’s Intellectual Property Office, the recommendations endorsed by Government include the following [1]:

• A Digital Copyright Exchange for the UK – a digital market place where licences in copyright content can be readily bought and sold. A feasibility study will begin immediately and the Government will announce arrangements for how the system will be driven forward later in the year.

• Copyright exceptions covering limited private copying (e.g. format-shifting).

• Copyright exceptions to make it legal to parody someone else's work without seeking permission from the copyright holder.

• The introduction of an exception to copyright for search and analysis techniques known as 'text and data mining'.

• Establishing licensing and clearance procedures for orphan works.

• That evidence should drive future policy – the Government has strengthened the Intellectual Property Office's economics team and has begun a programme of research to highlight growth opportunities.

These changes were recommended in the report produced by Professor Ian Hargreaves (Digital Opportunity: A Review of Intellectual Property and Growth), which was released in May this year and has won a substantial level of support from both the technology sector and copyright owner groups in the UK.

Some of the legislative changes are a non-event from Australia’s perspective, as they are already enshrined in its national copyright legislation (e.g. format-shifting for personal use; an exception for parody). Others, such as the Digital Copyright Exchange and orphan works legislation, break new ground.

[1] To see the full Government response go to: http://www.ipo.gov.uk/ipresponse.htm

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For some years now, the focus of copyright owners and policy makers has been on online infringement of copyright materials – making it easy to lose sight of the problem still posed by infringement in the hard copy environment. The Intellectual Property Laws Amendment (Raising the Bar) Bill 2011, which was introduced into Parliament on 22 June, seeks to deal with enforcement problems that continue to exist in the physical realm.

It is common for counterfeit products imported into Australia to include infringing copyright material (e.g. brochures accompanying counterfeit sunglasses are likely to infringe copyright). The Copyright Act 1968 includes provisions that enable a copyright owner to file a notice of objection with the Australian Customs and order Protection Service to prevent goods infringing their copyright from entering the local market. [1]

As part of Raising the Bar, the Government has moved to close loopholes in the current customs seizure provisions in both the Copyright Act and the Trade Marks Act 1995.

According to Senator Carr: “The Bill improves the existing arrangements by permitting Customs officials to provide more information to copyright and trade mark owners about goods that are seized at the border. The Bill also requires that Customs only release seized goods if the importer lodges a claim for return, which must include the identity and address of the importer and be filed within a specified time period. These changes will help rights owners in deciding whether or not to commence an infringement action. And then they will also help in the commencement of infringement proceedings.” [2]

It is also interesting to note that the bill proposes amendments that will bring enforcement measures in the Trade Marks Act more in line with those in the Copyright Act. This includes allowing for additional damages and introducing a tiered system of offences into the Trade Marks regime.

To view the full text of the Bill and the Explanatory Memorandum, Click here.

[1] See Part V Division 7 Seizure of imported copies of infringing copyright material.

[2] Second Reading Speech 22 June 2011, to view link Click here

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The largest internet service providers (ISPs) in the US have reached an historic agreement with the music and the film industries to establish a Copyright Alert System for US internet users found to be distributing infringing material online. The privately negotiated agreement was announced on 7th July 2011, and is expected to be in operation from the end of 2011.

The announcement comes at a time when legislated ‘graduated response’ schemes to combat illegal filesharing are being adopted in a range of countries, including France, the UK, South Korea and New Zealand. The issue is also gathering momentum at the international level, with the European Commission’s Intellectual Property Rights strategy (May 2011) and the OECD’s Communiqué on Principles for Internet Policy-Making (June 2011) advocating stronger protection of intellectual property online, within a context of more flexible cross-border copyright licensing.

Under the privately negotiated US graduated response scheme, which has been termed the Copyright Alert System, rights holders inform ISPs of infringing users’ IP addresses and ISPs then issue copyright alert notices to the relevant users. These notices can be sent out up to six times, with each notice heralding a different stage in the process:

• The first two notices contain information about copyright infringement and legitimate sources for content, and do not require any response or action from the user;

• The third and fourth notices contain similar information but require some action on the part of the user to acknowledge receipt (such as clicking a button or ticking a box);

• If a fifth notice is issued, the ISP has the discretion to implement a “mitigation measure” for that user (e.g. slowing down the internet connection);

• On receipt of a sixth notice, the ISP is obliged to implement a mitigation measure.

Details identifying users are not passed on to rights holders by ISPs and termination of internet access is not a sanction under the scheme. Instead, the focus is on notification acting as a deterrent to further infringing activity and on the belief that most internet users will cease such activity once aware of its negative consequences or that their conduct is actually illegal.

Whereas most graduated response schemes operating outside the US have been brought into effect by legislation and remain government-administered, the US scheme is a private arrangement between rights holders and ISPs (with the US Government announcing its support of the scheme).

Legislated schemes have not been without problems. The French scheme saw a court challenge that led to significant amendment of its operations, while a High Court challenge in the UK went largely in favour of the scheme, requiring only minor modifications.

The Australian Government has indicated a preference for an industry-negotiated scheme and the US agreement will provide an interesting window onto how this may work in practice.

Manager of rock band U2, Paul McGuinness, who has campaigned internationally against illegal downloading, said that while the US development had been “agonisingly slow”, it was an important step forward: “The idea of ISPs taking on obligations to stop copyright theft on their networks is moving into the mainstream…ISPs need to be active partners, not bystanders, in shaping a legitimate internet where artists and creators can be sustained by their work. In the US they have made a welcome voluntary step in that direction. Similar results are needed elsewhere.” [1]

Details about the US scheme can be found at: http://www.copyrightinformation.org/alerts

[1] The Australian, 16.7.11, p.40.

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The big-picture, economic-based approach taken by Professor Ian Hargreaves in Digital Opportunity: A Review of Intellectual Property and Growth has won a substantial level of support from both the technology sector and copyright owner groups in the UK.

In an open letter to British PM David Cameron [1], a coalition of technology and interactive media organisations urged the Government to swiftly implement various “straightforward” Hargreaves recommendations. These were:

• “Adopting exceptions to copyright for format-shifting, parody, non-commercial research and library archiving;

• Prohibiting copyright exceptions being overridden by contract;

• Enabling licensing of orphan works;

• Giving the Intellectual Property Office (IPO) the power to issue statutory opinions to help clarify copyright law and take other measures to help ensure that Britain’s IP system remains focused on promoting innovation and growth;

• Causing the IPO to improve the accessibility of the IP system to smaller companies.” [2]

The letter also called for the Government to work diligently at EU level on the “complex” recommendations in the report, including: the creation of a comprehensive Digital Copyright Exchange, a new exception at EU level for text and data analytics, and the inclusion in the EU framework of a mechanism for adapting copyright exceptions to new technologies as they arise.

But it was not only technology groups that supported Hargreaves’ outlook for the future. The chairman of the Creative Coalition Campaign, Christine Payne, and the head of the music industry trade body BPI, Geoff Taylor, both championed Hargreaves’ acknowledgement of the economic value of the creative industries and his finding that implementation of US-style ‘fair use’ provisions would not benefit the UK. [3]

Payne said there was much to consider in the report, adding that her constituency was “keen to work with the government to ensure that any changes are business led not regulatory fixes”. [4] Taylor supported the proposals on format-shifting, adding that other proposed exceptions and the digital copyright exchange proposal would require “close scrutiny”. [5]

The shadow culture secretary, Ivan Lewis, also urged the Government to act to implement the recommendations of the report, including those on format-shifting, parody and orphan works. Lewis agreed with Hargreaves’ finding that a US-style ‘fair use’ system was not appropriate for the UK. [6]

[1-2] Coalition for a Digital Economy at: http://www.coadec.com/?p=556

[3-6] Guardian.co.uk at: http://www.guardian.co.uk/law/2011/may/18/ian-hargreaves-report-reaction

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In what the Wall Street Journal describes as a “landmark deal” between the record industry and search giant Baidu, Chinese consumers will soon be able to download more than 500,000 songs from the catalogues of Universal, Sony and Warner – for free. [1]

Not that they aren’t downloading for free at the moment, in fact, that is the problem. Chinese consumers are quite open about the fact that they generally don’t want to pay for music when they can find free (infringing) sources in abundance. The new service will begin what is seen as a process of re-education by offering songs marked clearly as “licensed copy”. This represents a major expansion of the offer Baidu users already enjoy with licensed Mp3s from smaller, regional labels and EMI.

This strategic attempt to bring Chinese consumers into the fold of legitimate music sources will start with free access in the hope that users in the giant market will pay for premium features like cloud storage and sharing playlists. According to the Wall Street Journal, there are some indications that users are willing to pay, particularly when services are related to mobile devices: “Of the 64 million in estimated recording industry revenue in China last year, the International Federation of the Phonographic Industry…estimates that most came from mobile music.” [2]

[1-2] Loretta Chao, Wall Street Journal, Technology, 19 July, 2011.

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By Fiona James

Australian Copyright Council

Almost every medium-to-large business has a website and even smaller businesses are likely to have some presence online, whether it be a basic one-page website or a Facebook page. Protecting your intellectual property online, and knowing what you can and can’t do with materials you find on the internet, can seem like a daunting task for any business. To help sort the facts from the misconceptions, this month’s feature provides some tips about copyright for businesses.

The Forum of Private Business in the UK recently reported a significant increase in phone calls to its helpline about alleged copyright infringements. In particular, it noted that numerous businesses were receiving demands for payment after having inadvertently used images that didn’t belong to them. The best solution to the problem, the Forum urged, was to double-check the rights before using third-party images [1].

General incidences of copyright infringement by businesses – such as using an unlicensed photo on a website or reproducing part of someone else’s article without permission – occur frequently. One of the reasons for this is the common misconception that material which can be accessed on the internet is free, or in the ‘public domain’. This is simply not the case. In Australia, copyright protection is free and automatic, so as soon as you create something sufficiently original that it falls within one of the categories of material protected by copyright, it will be protected. There is no requirement to mark the material with a copyright notice, nor is there any registration process. Unless the copyright owner makes a clear statement to the contrary, businesses should always assume that material on the internet is protected and that permission will generally be needed to use it.

Another factor contributing to online infringement is that material can easily be displaced from its owner. Particularly in the case of images, all it takes is a right-click here or a screen grab there and copyright materials can be lifted from the original source. It might be argued that a lot of unauthorised use of copyright material occurring on the internet is harmless, but it’s also easy to see how so-called ‘harmless’ uses can get out of hand. Take for example someone who grabs a photo they like from a website and posts it to their Facebook page. Imagine that person’s sister sees the image and uses it in an e-invitation for her upcoming birthday party; then one of the sister’s friends decides the image would look great as an artwork on his blog. The more this goes on, the harder it is to work out who the real owner is and the image gets ‘lost’. Once it reaches a site like Twitpics, which reserves the rights to distribute to third parties, the photo could easily end up being used in a commercial context – with no permission from the copyright owner.

Displacement of copyright material on the internet is not only a problem for copyright owners, but also for copyright users. The more copyright material gets lost online, the more difficult it is to ascertain that the person purporting to grant you a licence to use the material actually has the right to do so. Businesses should be very careful about who they licence material from because if there is an infringement, the copyright owner can generally pursue any of the parties involved – regardless of their intentions – and the fact is, it’s generally businesses, rather than individuals, that have the most money to pay in damages and the most to lose in terms of reputation.

In our March issue, we reported on a case where the parent company of fashion chain Zara was forced to remove a line of t-shirts from stores because the images on the t-shirts were infringing copyright in photos posted on the internet by several well-known fashion bloggers. The company claimed not to be aware of the infringements, having commissioned a freelance designer to create the t-shirts, but nevertheless found itself in the firing line. As well as having to remove the range of t-shirts from stores, it copped some bad publicity and, according to news reports at the time, was also in settlement talks with the copyright owners [2].

A recent high profile dispute involving Virgin Mobile Australia shows just how easily taking materials from the internet can became a headache in a commercial context. It involved a photograph of an American teenager by the name of Alison Chang, which Virgin Mobile Australia sourced for free from the photo-sharing site Flickr for use in an advertising campaign. The photo was snapped at a church event by Alison’s youth counsellor, who then posted it on Flickr. Without realising the implications of his decision, he posted it under a Creative Commons licence that allowed the photo to be used by anyone as long as the work was attributed. Alison and her family were understandably disturbed when they discovered, through social networking, that the photo of Alison was plastered all over bus stops in Australia in a campaign for Virgin Mobile. They tried to sue Virgin in a Texas court, for libel and invasion of privacy under US law, but the case was eventually dismissed due to lack of jurisdiction. The photographer was also shocked that his copyright work had ended up being used in this fashion, having given little attention to the terms of the Creative Commons licence he had accepted with a click. Fortunately for Virgin, he had actually taken the photograph himself, as the decision to use a Flickr photo could have been costly for the company if the young man had posted a photo taken by someone else [3]. While sites like Flickr generally ask users to post only material in which they own the rights, this is not always the case in practice.

How can you minimise risk when using copyright material online?

So how can potentially costly scenarios be avoided? Mistakes do happen but there are steps you can take to minimise risk and awareness of the issues is half the battle. A key strategy is to be discerning about those you choose to work with. With smaller businesses in particular, there’s generally a desire to keep costs down so it can be tempting to take advantage of the vast amount of material that’s made available on the internet ‘for free’, or under very broad licenses. Making a decision to engage a reputable graphic designer to create your logo, rather than relying on a statement posted by some unknown third-party on a website, is undoubtedly a less risky option.

Developing good relationships with the designers, photographers, writers and other creatives who supply you with copyright material should help to minimise risk. Speak to those you commission, so that you can get a sense of whether they have a strong awareness of copyright or not.

Another very common misconception is that you can avoid copyright infringement by making a few changes to someone else’s work. The reality is that you can infringe if you reproduce any part of someone else’s work where the part you use is an important or distinct part of the original – however big or small, and regardless of what contribution that part makes in the context of your new work. Don’t assume that everyone is across these issues; it’s always best to double check.

Another good idea is to put the onus on anyone you commission to get things right, which will make them likely to take extra care. Have those you commission sign a warranty and an indemnity – essentially to promise that they won’t infringe copyright and will agree to cover you for any damage you might suffer if they do so. This can give you an added layer of protection, although it won’t completely cover you: in the event that you get sued and your designer has no money, a promise to cover the costs will be of limited use. Also, even if your designer has the resources to cover the costs, this still won’t save you from potential public embarrassment, or the cost of developing something that had to be scrapped.

If you do want to cut corners and use material from unknowns, then at least do some research: research the person, research the website, or even do some quick searches on the material you end up with. There are websites that house unauthorised material and pass it off as being for “free use”, but by undertaking a few general searches you should at least be able to rule out those which are obviously infringing.

The risk of an unlicensed image being found on a physical advertising flyer is arguably far less than if the same flyer is digitised and put on the internet for all the world to see. When it comes to searching out words, just inserting a few sentences into Google can give you a good idea whether or not your material is being used without permission. Images are also fairly easily located on the net. The stock photography giant Getty Images is ferociously protective of its images: if you google “Getty Images and copyright”, you’ll pull up several stories of people being served with cease and desist letters and claims for sometimes thousands of dollars for unauthorised use of its images. Getty uses (and as of 2011, owns) [4] a service called PicScout to monitor the use of its images online. PicScout technology can compare images on the web to images stored in a database and notify owners when matches are discovered [5].

The use of image-search technology is not just limited to large, profitable organisations. Google Goggles, for example, is an application that can be downloaded to your average Smartphone and can search out any image that you photograph with your phone. Furthermore, it doesn’t just stop at searching for the entire image: if elements of the image – a segment or piece of art or design – have been copied on the internet, Google Goggles can pick that up too [6]. In this day and age, it is pretty difficult to hide.

How can you protect your own copyright material?

The fact that copyright materials are now so searchable online has a positive side for businesses in that it means they can check, periodically, to see if others are using their materials without permission. Of course a search and litigate model isn’t always the best approach to protecting your material. So what other steps can you take to protect the valuable copyright assets you own?

The first and most obvious step is to educate your audience. Put plain, easy-to-read statements on your website explaining the basics, as well as the fact that you intend to assert your rights. Also offer clear avenues for users to contact you should they wish to do the right thing and seek your permission.

Secondly, identify what material is of most value to you and be careful about how you release that material. If you want to release it on a website, there are steps you can take to minimise re-use by others: you might consider mechanisms that limit access to the material to certain user groups through password protection or geo-blocking. In the case of images, consider using low resolutions or mark your copyright material with electronic rights information such as a watermark. That way, at least if someone takes your material from your website, it can still be traced back to you.

A large part of keeping on top of copyright in your business is understanding what copyright material you own (so that you can make decisions about what is most valuable and what steps you’ll take to protect that material) and what copyright material belongs to others (so that you can get the right permissions and take steps to avoid mistakes). Get familiar with the basics and make sure your staff are up to speed too. Most people want to do the right thing and education is key to making sure common mistakes are avoided.

The Copyright Council is running seminars on copyright for businesses in Sydney (August), Melbourne (October) and Brisbane (November). For more seminar information, Click here. Or to Pre-Order our Copyright for Businesses book which will be available late 2011, Click here.

[1] http://www.freshbusinessthinking.com/news.php?CID=&NID=8728&PGID=1

[2] http://www.copyright.org.au/news-and-policy/details/id/1892/

[3] http://www.smh.com.au/news/technology/virgin-sued-for-using-teens-photo/2007/09/21/1189881735928.html

[4] http://www.picscout.com/about-us/company-profile.html

[5] http://picscout.com/faq/imagetracker-faq.html

[6] http://www.google.com/support/mobile/bin/answer.py?hl=en&answer=166331

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