The High Court has quashed the Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (SI 2014/2361) (2014 Regulations).
EU member states may allow the private copying of copyright works provided that there is fair compensation for rights holders (Article 5(2)(b), Copyright Directive (2001/29/EC)) (the Directive) (Article 5(2)(b)). However, the Directive provides that compensation is not due where the private copying causes no or minimal harm to rights holders. The UK has implemented Article 5(2)(b).
Following the 2010 Hargreaves review and consultation by the Secretary of State for Business, Innovation & Skills (S), section 28 of the Copyright, Designs and Patents Act 1988 was amended to permit the making of personal copies of copyright works for private use (section 28B). Under section 28B, the making of a copy of a work, other than a computer program, by an individual does not infringe copyright in the work provided that the copy is of the individual’s own copy of the work, or a personal copy of the work made by the individual. The copy must be made for the individual’s private use, and not for commercial purposes.
R, representing copyright owners, applied for judicial review of section 28B, arguing that it was incompatible with Article 5(2)(b) as it did not provide fair compensation for rights.
The court held that, due to a defect in the process by which evidence was collected and evaluated during the consultation process leading up to the adoption of the 2014 Regulations, the decision to adopt the new private copying exception was unlawful.
The court then invited R and S to make submissions so that it could determine whether:
- The 2014 Regulations should be quashed and, if so, whether this should have prospective or retrospective effect.
- A reference should be made to the European Court of Justice (ECJ) about the meaning of the concept of “harm”.
The court held that the entirety of the 2014 Regulations and all of the rights and obligations contained within them should be quashed, with prospective effect only.
Quashing the 2014 Regulations would give the government the opportunity to decide whether, and in what form, any further factual enquiries should be carried out and whether a new private copying exception should be introduced.
Future proceedings between a specific right holder and an alleged infringer could raise potentially complex and far-reaching issues, including whether the fact that they relied at the time on section 28B created some kind of estoppel, legitimate expectation or fair use defence in private law. Also, private right holders did not in practice bring proceedings against infringers in this situation and this strengthened the court’s conclusion not to address this issue now. An important and unusual characteristic of this case was that a major impetus for change, which had led to the adoption of the 2014 Regulations, was widespread acceptance that the law had fallen into disrepute.
There should be no reference to the ECJ at present because, as the 2014 Regulations had been quashed, the essence of the case had disappeared. The court would be at risk of sending a hypothetical reference to the ECJ and of the ECJ declining to answer the question posed.
However, the court left open the possibility of a reference at some future point in the proceedings by including liberty to apply into the final order. This would avoid the costs and effort of commencing fresh judicial review proceedings if S’s ongoing reconsideration crystallised into a dispute between the parties which raised questions as to the meaning of “harm”.
This decision marks a significant reverse for the government. The introduction of a private copying exception had been under debate for many years, and was recommended by both the Gowers and Hargreaves reviews. The clock is now turned back to the unsatisfactory position where private copying will no doubt continue, but will again infringe. It seems unlikely that rights holders will change their previous policy of not, in practice, seeking to enforce their rights in those circumstances, but either way copyright is brought further into disrepute.
The future of the private copying exception in the UK is unlikely to be resolved in the near future. It is unclear whether the government will seek to reintroduce the exception and, if so, whether it will now include a compensation mechanism. The court strongly criticised the government’s reasoning in introducing the exception, so if the government does wish to try again then it will likely have to conduct a new impact assessment and evidence-gathering exercise before deciding whether or not a new version of the exception would require a compensation mechanism or instead meets the no or minimal harm test. So it is very unlikely that a new exception will be introduced in the near future.
A further unresolved question is whether rights holders will seek compensation from the government for copies made under the exception to date.
Rights holders and infringers are left with continued uncertainty and with a law that, as the court acknowledged, has fallen into disrepute.
Case: R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills  EWHC 2041 (Admin).
First published in the September 2015 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.