We previously reported in May that the Digital Economy Bill in the Queen's Speech included proposals:
- to increase the maximum custodial sentence for online copyright infringement to 10 years; and
- to allow design owners to mark products with a website address containing details of a registered design ("web marking") in order to provide notice of such rights to potential infringers.
Last month the Bill was published and it also included (at clause 28) a proposal to repeal section 73 of the Copyright, Designs and Patents Act 1988 ("CDPA"). This provides that copyright in a Public Service Broadcast (PSB) that is retransmitted via cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, this means that cable platforms are not currently required to provide copyright/ retransmisison fees in relation to the core PSB channels.
TV Catchup Litigation
This defence has been the focus of litigation between a number of national TV broadcasters and TV Catchup over the online provider’s interception and near-live internet streaming of public broadcasts (see our previous blogpost here). Back in June 2011, Floyd J ruled that the section 73 defence applied in relation to retransmission of broadcasts by TV Catchup via the Internet to end users. However, it excluded transmission via any mobile phone network for reception by mobile phones. On appeal, Kitchin LJ sought a reference from the CJEU on the scope of the defence. Around the same time, the European Commission sent a formal notice to the UK contending that section 73 is incompatible with EU law. Whilst the Government denies this, the Department for Culture, Media and Sport expressed a view that the section 73 exception is outdated and should be removed. It noted that section 73 was introduced to support the development of analogue cable infrastructure in the 1980s/90s (ie to facilitate retransmission of PSB broadcasts in areas where aerial reception was poor). As this is no longer relevant in today’s multi-platform/channel environment, it launched a public consultation on the proposed repeal.
Consultation response
The Government published the results of the consultation in July 2016, concluding that section 73 should be repealed. The Government's view is that section 73 is no longer required because we have already achieved the objective of ensuring that PSB services are available throughout the UK. In addition, the section is harming PSBs through the revenue lost when internet-based companies exploit their content without paying them a copyright fee. The Government does not think that internet based streaming services should be able to exploit PSB content without any benefit flowing back to the PSBs and the repeal is intended to close this loophole. Not surprisingly, all PSBs were in favour of the repeal. On the other hand, concerns were raised that the repeal would result in PSBs seeking retransmission fees from Virgin Media, which would in turn be passed onto cable customers in price rises. However, the Government has stated that the underlying regulatory framework should continue to ensure a zero net fee position between the commercial broadcasters and Virgin Media and this should not be affected by the repeal.
Next steps
The Government hopes that the repeal will create a new market in copyright where one did not exist before in that rights holders can claim copyright fees for the retransmission of their work in a PSB channel. Underlying rights-holders, PSBs and Virgin Media will therefore need to reconsider their current copyright arrangements.
The Digital Economy Bill had its first reading in the House of Commons on 5 July. The UK IPO will also conduct a further technical consultation on what, if any, transitional arrangements are needed to allow all parties to manage the change smoothly. We will keep you posted on further developments.