Welcome to this week’s PA’s PA which saw *yawn
* debates about debates once again dominate the headlines…
VAT and ebooks
The CJEU (Court of Justice of the European Union) decided that France has failed to fulfil its obligations under the European VAT regime. France had applied a reduced rate of VAT (5.5%) to the supply of electronic books since 2012. The Commission challenged this behaviour and the CJEU today upheld this challenge based on existing VAT rules; lest we forget, Luxembourg did the same (reduced VAT to 3%) and received the same verdict. The CJEU amongst others argued that the EU decided to exclude any possibility of a reduced rate of VAT being applied ti ‘electronically supplied services’ and that the supply of electronic books constitutes such a ‘electronically supplied service…’ within the meaning of Article 98(2) of the VAT Directive – for those interested, this is found in paras 33 and 34 of the decision. PA Presidents, including The PA’s Dominic Knight, from across Europe issued the following statement in support of France “Today's judgment by the CJEU against France and Luxembourg would have been avoided were a discriminatory regime not in place which requires Member States to apply much higher VAT rates to digital publications than print. We, the representatives of the book value chain, strongly believe that the value of a book does not depend on its format or the way it is accessed by readers. Therefore, we urge the Commission to take swift action to amend the relevant legislation to ensure it reflects technological progress and remove a serious hindrance to the development of the e-book market. This will fit neatly into its Work Programme, which states that "Barriers to digital are barriers to jobs, prosperity and progress". This was retweeted by European Parliament President Martin Schultz.
Private copying and compensation
The CJEU has also decided on a further case many have long waiting been for. Case C-463/12 Copydan Bandkopi v Nokia relates to the scope of compensation for private copying and concerned the scope of levy in Denmark and specifically whether external memory cards for mobile telephones can be subject to private copying levies (in particular in view of the multi-functionary character of such memory cards). The CJEU was asked to address a variety of issues surrounding the relevant provisions in the Information Society Directive, Article 5 (2b) and Recital 35; and found that, amongst others:
· Member states are allowed to introduce fair compensation as regards multifunctional media such as mobile telephone memory cards, irrespective of whether the private copying function of such device is only ancillary. The ancillary nature of the function however should be considered when determining the amount of the compensation (i.e. levy) payable.
· If the harm in certain cases covered by the exception is minimal member states can provide for an exemption from the requirement under that exception to pay fair compensation (and they have discretion to set a threshold for when the prejudice is minimal). The parameters of such certain cases have not been elaborated.
· The application of technological protection measures has no effect on the requirement to pay fair compensation but should be considered when determining the level of compensation due.
· As has been stated before in Case C- 435/12 ACI Adam private copies from illegitimate sources are not covered by the exception and thus are not to be included in the compensation scheme.
This decision, part of a variety of recent decisions and pending references concerning private copying in Europe, is currently of limited direct impact in the UK given the Government’s decision to introduce a private copying exception without any compensation in October 2014. We note however, that the UK music industry has challenged this decision with a Judicial Review arguing that fair compensation is required under mandatory European law. We will report on further developments at UK level if and when they arise. Read The Register’s report of the decision here.
Using the occasion of World Book Day, the Government launched a new action plan to improve reading levels in primary schools. Mirroring, in some respects, The PA’s manifesto recommendations, Reading: the next steps outlines new measures, including a new programme to support up to 200 primary schools, where reading attainment at Key Stage 2 is currently low, to set up book clubs and promote library membership, to inspire thousands more pupils to develop a love of literature. It also calls on all primary schools to arrange library membership for all their year 3 pupils (age 7-8). Commenting, PA Chief Executive, Richard Mollet, said: “It is great to see our strong belief in the importance of libraries in driving literacy mirrored in today’s Government announcement. Greater engagement between schools and local authority and community libraries will go some way to achieving this, but we repeat our call that it should be made a statutory requirement for every school to have a library. Only then can we ensure that every child in Britain, wherever they live and whatever their background, has access to a good range of reading materials.” A nod was also given to the Read On Get On campaign, leaving Labour still as the only major party yet to endorse the initiative.
A long running sore for many in the content industries has been the discrepancy between the maximum criminal penalty available for physical copyright infringement and that for online copyright infringement – it being 10 years for the former while only two years for the latter. Given this situation simply occurred because of when and how certain pieces of legislation were introduced, increasing the penalty available for online criminal offences has made sense - it’s the same crime and therefore the penalty should be the same. After much pressure from industry during the passage of the recent IP Bill, the IPO committed to conducting research into this matter. This report, ‘Penalty Fair?’, has now been published with some welcome conclusions, including:
- There is a case for increasing sanctions relating to online offences, and that this might help facilitate domestic and international action – but that safeguards should be put in place so that “ordinary” members of the public aren’t caught up in any changes, and that there should a “proportionate” approach to “legitimate experimentation”
- There is no basis to conclude that the level of penalties for physical infringement is inappropriate
- There is logic to placing serious online copyright offences into a more serious category which soundings taken for this study equate with a maximum sentence of at least five years. The precedents within the IP landscape are either to leave offences outside the criminal justice system altogether (as in the case of patents) or to set a maximum offence on conviction at ten years.
We will be discussing next steps with parliamentarians.
HEPI Hustings 2 March 2015
Politicians from the three main parties went head to head over tuition fees and funding, migration and international students and research at the Higher Education Policy Institute hustings held at Church House in London. Speakers Liam Byrne, Shadow Minister for Universities, Science & Skills, Julian Huppert, Lib Dem science spokesman and former OU tutor, and Minister for Universities, Science & Cities, Greg Clark clashed over funding and the net migration target. Byrne said it would be criminally naïve to ignore the funding time bomb about to go off, and that making the system more affordable would make it more sustainable. Clark argued that universities have benefitted from the stability the current system has given. Byrne’s vow to take students out of the net migration target drew applause, Huppert disagreed with the net migration target itself and Clark said the numbers of overseas students under the present system pointed to growth. The parties did however agree on maintaining a dual funding system (from both Funding and Research Councils) and promoting interdisciplinary collaboration, and held out hope for a rational outline of priorities for the research councils from the Nurse review. The audience split over who had the best educational policies at the beginning of the debate but were on Labour’s side by the end, though their initial feeling that another coalition government is on the cards didn’t change. Chair Martha Lane Fox expressed a new respect for the Dimblebys after her exhausting time keeping the politicians to time – and to the point.
The Guardian has run a question and answer session for its readers with Liberal Democrat Schools Minister, David Laws MP. In response to a question about Lib Dem ‘red line’ education policies in any future coalition negotiations, Laws stressed that the number one priorty would be protect education budgets. He said that it is impossible to raise standards, recruit teachers and help more children success of the education system is “starved of funds”.
This week saw Universities, Science and Cities Minister Greg Clark MP address an audience at the UKTI Education reception at the Foreign Office. The proceedings were opened by the UK's Education champion Sir Eric Thomas, followed by UKTI Education MD Emily Ashwell who highlighted the priority markets for high value opportunities that the team were pursuing on behalf of UK businesses. Greg Clark then gave a speech extolling the excellence of the UK's Education Sector and praising the work of UKTI Education which has helped win over £1 billion worth of business for the UK. More information can be found on the UKTI website at www.gov.uk/ukti-education.
Pupils taking science GCSE will no longer be assessed on practical work, Ofqual has confirmed. It claims this move will liberate teachers and offer more variety to pupils. The move has been met with criticism from the science community and the Education Secretary herself leading to The Guardian to report that relations between that Government and the exams regulator have reached “rock bottom”.
This week we have:
Presented our publishing manifesto to the Labour DCMS team in the House of Lords, attended a UKTI education stakeholder reception with Greg Clark MP, met with Shadow Culture Minister Chris Bryant MP, discussed tactics around upcoming CJEU judgments with colleagues from the Music Publishers Association and attended an All Party Group meeting on Prisons Libraries.
Next week we are:
Attending the inaugural meeting of the GREAT campaign advisory board, meeting Tim Higginson, the new Open Access advisor in BIS, attending a dinner to mark John Whittingdale’s chairmanship of the Culture Select Committee, meeting with MEPs and other stakeholders in Brussels to discuss responses to the Reda Report, attending a reception in parliament for the Creative Industries, meeting with communication leads from the Read On Get On campaign, meeting with the PPA, attending the BBC Learning stakeholder day, speaking at The Booksellers’ Academic, Professional and Specialist Booksellers Annual Conference, meeting with Lord Clement-Jones (postponed from this week) and attending the Riyadh Book Fair.