paperwork and regulations

Intellectual Property and Copyright Law

Intellectual property is the term that refers to a range of different creations of the mind/intellect, such as artistic works or inventions. There are a number of different statutory instruments which aim to protect the creator and owner of intellectual property (IP), for example, Copyright, Designs and Patents Act 1988 etc. One of the areas which will be discussed is the law around file sharing and the debate as to whether sharing or downloading amounts to theft. Another area which will be covered is whether music and other forms of modern artistic expression are adequately protected under copyright laws.

The debate around file sharing reached a peak in 1999 when an organisation called Napster[1] created software which allowed internet users to connect with each other and share/copy files stored on each other’s hard drives. This gave rise to a large amount of controversy regarding file sharing and whether it should amount to a theft.

A problem arose with artistic works which were protected by copyrights, such as musical compositions etc, as under the Copyright, Designs and Patents Act 1988, material transferred via an internet connection should be treated and protected in the same way as other media; CDs, DVDs etc. It also states that copying should be defined as “reproducing…work in any material form”[2]. The internet, as a whole, requires the storage of data via its RAM memory in order for it to be functional. Kabushiki Kaisha Sony Computer Entertainment Inc, Laddie J held that loading software or the content of a page of a website into the RAM memory of the computer involves the act of copying even if only done transiently[3]. The Digital Economy Act 2010[4] came into full force in June 2010 after receiving royal assent in April. The Act aimed to increase the ease of tracking down and suing persistent infringers; however, it gave rise to a number of other issues, one being the lack of presumption of innocence. In Polydor Ltd v Brown, it was held that innocence, or ignorance of copyright law can be no defence to an infringement[5]. Where a person may be innocently browsing the net and come across a file which is copyright protected, due to it being stored on the internal RAM memory of the computer, that person may be seen to be infringing copyright legislation and face prosecution and termination of their internet connection indefinitely. This can be seen as extremely unjustified as the person has not intended to duplicate such file, and yet will still be considered guilty without the presumption of innocence. In MGM v Grokster, the US Supreme court held that “[any person] who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps for fostering infringement, is liable for the resulting acts of infringement by third parties”[6]. This in itself can be seen as unjust as anyone who then obtains the device would not be considered liable by the state as the infringement would not have occurred had the device not been distributed illegally in first instance; furthermore, the person distributing the device first would feel the burden of all subsequent infringements.

            Now, can duplicating/copying a file be considered a theft under the law of copyright? Under the Theft Act 1986[7] the basic definition of theft is that “a person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it…” Being technical, due to the nature of file sharing, the act of making a duplicate of something cannot amount to a theft as it has not deprived the owner of the original thing. It can be argued that there is an element of theft regarding the deprivation of profits; however this would require the act to be taken broadly to allow such monetary value to be considered as property. Stuart P. Green, an expert in the field of theft, stated that “yes, one might try to argue that people who use intellectual property without paying for it steal the money they would have owed had they bought it lawfully. But there are two basic problems with this contention. First, we ordinarily can’t know whether the downloader would have paid the purchase price had he not misappropriated the property. Second, the argument assumes the conclusion that is being argued for — that it is theft.”[8]. In A&M Records Inc v Napster[9], it was held that the infringement by Napster amounted to an assault on the recording industry in the form of loss of profits. Due to the large amount of confusion and controversy in this area, it is necessary that the Digital Economy Act 2010 be reformed or amended to confirm whether this type of infringement should be considered as theft, or a separate offence as a whole.

            Next, we move on to a very complex matter: are modern forms of artistic creation protected under copyright law? The rights given to the creator of the intellectual property are in compliance with the Information Society Directive, which requires EU states to give authors of original works and owners of neighbouring rights the reproduction right, communication right and distribution right. The Copyright, Designs and Patents Act creates two types of infringement; primary and secondary, both of which it aims to protect the creator from. Primary acts include copying, issuing to the public, performing or showing the work in public, communicating to the public, making an adaption and rental or lending the work. Secondary acts require activity in relation to an infringing copy of a work i.e. selling copies of the works, possessing in the course of trade, offering or exposing for sale, importing etc[10].

The general principle is that, when an artist creates intellectual work, for example a composition of music, which isn’t immediately paid for due to broadcasting or replaying, the originator should generally receive the return of profits for that work unless otherwise agreed, i.e. for charitable cause. F A. Harper once stated that the right to create something and the right of ownership over the thing are inextricably bound. The coupling of these two principles is essential. This would act in favour of the Act as it seeks to protect the creators of the artistic expression. However, many make a fundamental error – How can a person own an arrangement of words in language, or an arrangement of musical notes? It is essential to recognise such thing but it is somewhat impossible to own such thing as a proprietary right. Also, owning a thing, and owning that thing’s economic value are often confused, or mistaken. When a piece of music is originally created, it will be at its peak value in the media, the same would apply to a house that has just been bought. If the value of that house depletes due to market price changes, a person will not be able to claim for its economic value loss; price values will naturally fluctuate, if the market price of something changes, a person cannot argue they are a victim of theft as they own only the property and not its economic value. However, with regards to music, many artists are claiming for the economic value lost due to the reproduction or sharing of the music without directly benefitting from its sale. The significant difference here is the loss of economic value due to the reproduction of the work, which is what copyright law aims to prevent and protect the creator from. Copyright law aims to prevent people from gaining from something that in theory, does not belong to them i.e. it was obtained via peer-to-peer file sharing. This can be considered as protection for the owner against the unlawful sale of the creation however, it may not necessarily provide such protection where the creation is reproduced without a return of profit, and subsequently the market value of the creation depletes. Under section 20 of the Copyright, Design and Patents Act, there may be infringement by simply “making available” to the public, therefore it is difficult to say whether the creator is protected in all.

One final issue would be, for example, a person has bought a CD of a musician’s album, and uploaded it to their personal computer for personal use. They will be allowed to rely on a defence of private use under Section 28B of the Act for the copying and uploading onto their hard drive. However, where does the law stand when that person sells the CD on at a boot sale or online, and what about the person actually purchasing the CD rather than from the artist directly? Would they then be bound by copyright laws and owe to the creator for any losses suffered due to the infringement?

            It is clear that the law is in need of vast clarification and amendment if not reform. The presumption of innocence is non-existent, as in Polydor; whether the peer-to-peer sharing and downloading of data amounts to a theft is unclear and causes confusion when interpreting copyright laws; and finally, the Copyright, Design and Patents Act does not adequately protect the creator of a work where the work is not physical. And although it protects artists against unlawful copying and unlawful communication of the work to the public, it does not necessarily protect the creator against subsequent economic loss due to market demands after the creator has already been subject to copyright infringement. The Digital Opportunities Report of 2011 recommends the implementation of an efficient copyright licensing system. Under section 4.8 of the review it states that “The review agrees with the Plan for Growth when it says that the creative industries ‘rely on a strong intellectual property (IP) regime’ but also when it adds: ‘the interests of IP holders need to be balanced against those of potential innovators, protecting incentives to invest in content, without damaging innovation and opportunities for new entrants’. Copyright seeks to achieve this by giving creators temporary exclusive rights (life plus 70 years for most works) to their original creators enabling them to exploit them economically or to license them to others”[11]. It is now clear to everyone that digital technology is transforming copyright, for better and for worse. Infringement is widespread; understanding of the law is poor; millions of works cannot be digitised for conservation of accessed at all and content industry business models are under strain, prompting companies to look to Government for vigorous enforcement action against consumers and suppliers of “pirate” content[12]. It is clear that the Review has recognised a number of the above issues stated within their scope of recommendations and therefore, due to the ever improving and developing intellectual property laws, it is without doubt that change will be in the near future and will seek to clarify the law and improve the rights of the creators and the owners of intellectual property. The result, we shall see.

Emma Brown

[1] A & M Records, Inc v Napster, Inc (2001) 239 F.3d 1004

[2] Copyright, Design and Patents Act 1988 Section 17(2)

[3] Kabushiki Kaisha Sony Entertainment [2005] HCA 58

[4] Digital Economy Act 2010

[5] Polydor & Others v Brown & Others [2005] EWHC 3191 (Ch)

[6] MGM v Grokster [2005] 545 U.S. 913

[7] Theft Act 1986 Section 1(1)

[8] ‘Theft’ Law in the 21st Century, ‘When Stealing isn’t Stealing’ (New York Times, 28th March 2012) <http://www.nytimes.com/2012/03/29/opinion/theft-law-in-the-21st-century.html?_r=0> Accessed 24th August 2015

[9] A & M Records, Inc v Napster, Inc (2001) 239 F.3d 1004

[10] Tim Press, Concentrate Intellectual Property (2nd ed, OUP 2015)

[11] An Independent Report, Digital Opportunity: A review of Intellectual Property and Growth (Professor Ian Hargreaves, May 2011) Para 4.8

[12] [12] An Independent Report, Digital Opportunity: A review of Intellectual Property and Growth (Professor Ian Hargreaves, May 2011) Para 4.2