Government May Have To Dance To The Music Industry's Tune As The 'Format Shifting' Saga Plays On

Top IP Lawyer Gives Her View On Latest Developments

17.07.2015

The High Court has today quashed regulations which allow members of the public to move their music and other copyright material between devices, in what is a boost to the music industry but a huge setback to the government.
 
In October 2014 the government had introduced rules, through the Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014, which made it lawful to “format-shift” music between their personal devices. Prior to this date it was unlawful to e.g. copy tracks from a CD to a laptop or MP3 player.
 
The Musicians’ Union, UK Music and the British Academy of Songwriters had complained that the new regulations did not contain a compensation scheme for their members, and as such would result in a loss of revenue to rights owners to the tune of £58 million a year. The Department of Business, Innovation and Skills had argued that the introduction of the new regulations would result in “zero or insignificant harm”, and as such compensation was unjustified.
 
Mr Justice Green last month ruled that the legislation was unlawful, on the basis that the evidence available did not support the government’s position and that harm to rights-holders could be significant.  Today, ruling that the regulations could not remain as drafted, he stated: “It is clear that I should quash the regulations. I make clear this covers the entirety of the regulations and all the rights and obligations contained therein.”
 
The government will now need to re-draft the regulations in order to contain a compensation element.

Expert Opinion
“The stakes for this battle were always going to be high and any decision would be wide-ranging. The EU Copyright Directive, on which the UK legislation is based, made it clear that right-holders would need to be compensated where more than minimal harm is suffered. The two parties, however, disagreed on what exactly “minimal harm” entailed.

On the one hand, the British music industry is worth £3.8 billion a year, and right-holders have always maintained that any changes to laws in which the creative industries are affected would result in harm, and any argument to the contrary would need to be backed by robust evidence. Here they argued that such evidence didn’t exist.

On the other hand the government has always maintained that the 2014 regulations were essentially closing a legal loophole; it is well-known that members of the public have been format-shifting since the days of cassette tape recorders, and legislation was needed to bring the legal position in line with the societal one. Therefore the new regulations were not resulting in any harm whatsoever.

The judge has clearly agreed with the right-holders, and the government is now left with unlawful regulations on the statute books. The music industry has said it is open to meaningful talks to resolve the issue; how much these talks will end up costing the government remains to be seen.”
Georgie Collins, Partner