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PA's PA 9th September 2016

PA's PA 9th September 2016

Welcome to this week’s PA’s PA in a week in which Theresa May announced plans to reverse the “arbitrary” ban on new grammar schools, triggering a row over whether grammars offer a way out of poverty for clever students or are a social mobility disaster. This week there was also news that MPs and peers might have to vacate both Houses of Parliament for six years for urgent repair work, and the announcement that Chancellor Philip Hammond will deliver his first Autumn statement on Wednesday 23 November.

In this edition:

Brexit update

The Publishers Association has set out the publishing industry’s key priorities for negotiations on the UK’s new relationship with the European Union, calling on the government to keep barriers to trade with the EU to an absolute minimum and to publish a clear plan to minimise business uncertainty. The PA is also calling for the government to:

  • Legislate to create stronger copyright rules to      encourage investment in the UK and to protect creators
  • Ensure the UK research community remains a global      leader by developing new strategies for domestic investment
  • Ensure publishers and businesses have access to the      people and skills they need, whilst taking into account the public’s      concerns about immigration

The priorities reflect the main concerns the publishing industry highlighted in a survey conducted by the PA, which was responded to by major publishers across trade, education and academic publishing as well as many independent publishing houses. This document form part of our discussions when we meet with key figures in the new government over the coming months. 

The Prime Minister also addressed Brexit in her statement to the House of Commons following her attendance at the G20 Summit in China.  With a not so subtle nod to the upcoming trade negotiations the UK will find itself in, she reported that there was widespread agreement to resist a retreat to protectionism, including a specific agreement to extend the rollback of protectionist measures until at least the end of 2018.  Specifically, she said: “But as we leave the EU, we will also forge our own new trade deals. And I am pleased to say that just as the UK is keen to seize the opportunities that leaving the EU presents, so too are many of our international partners, who recognise the attractiveness of doing business with the UK. The leaders from India, Mexico, South Korea and Singapore said that they would welcome talks on removing the barriers to trade between our countries. The Australian trade minister visited the UK yesterday to take part in exploratory discussions on the shape of a UK-Australia trade deal. And in our bilateral at the end of the summit, President Xi also made clear that China would welcome discussions on a bilateral trade arrangement with the UK.” 

Digital Single Market update

Following the leaked draft Directive and accompanying impact assessment (reported in last week’s PA’s PA) the PA met this week, as part of an FEP delegation, with Jurgen Gren from Vice President Ansip’s Cabinet, Szabolcs Horvath from Commissioner Navracsics’ Cabinet (DG Education and Culture) and Nele Eichhorn from Commissioner Malmström's cabinet (DG Trade).  The main points we raised were:

  • The impact of the Ulmer v Darmstadt case where the CJEU deemed gaining access to content under one exception sufficient to permit the user to make a copy under another exception.  We stressed to all three the importance of the Commission being extremely clear that this is not permitted and clarify, in legislation if necessary, that exceptions cannot be “strung together” – that  the accessing of content under one exception does not then give the user the right to make further use of that content under another exception; each exception stands alone.
  • The importance of prevalence of licensing.  While the proposed new illustration for teaching exception does allow the UK system to remain intact it could be improved upon for other countries and is, anyway, an important general principle to stress. This is an important principle for TDM as well. 
  • The three important principles of legal access, non-commercial use and publisher control of networks, which underpin the UK TDM exception.  While the Commission’s focus has been much more on the beneficiaries of the exception, and to this end they have sought to tighten the definition of public interest research organisation, it was still important to make the point that really the exception should only cover non-commercial use.  However, what is proposed (as currently drafted) is considerably better than we originally could have hoped for and we will be working with colleagues to make it even better.  To note, DG Trade has obviously been a stringer supporter for us in the Commission discussions and were clear in the meeting that they still do not see the need for the exception. 
  • That we believed the author remuneration requirements were unnecessary and did not take into account the different contractual agreements which underpinned payment – notably those authors which receive royalty payments (and therefore share the risk with the publisher) and those which receive a one-off lump sum payment. 
  • Whether it was possible for the Article dealing with the Reprobel ‘fix’ to be more explicit that a transfer of rights includes all forms of legal transfer including licence agreements with authors and include wording which makes clear that publishers are considered rights holders by virtue of the transfer/licence of the right by the authors. This would help to re-establish coherence with regard to e.g. the CMO Directive which clearly pre-supposes publishers to be rights holders by virtue of contract.

It has been widely reported that publication of the copyright package might take place as early as 14 September.

While it is unlikely that these requests will be acted upon immediately, they were positively received and so gives us a good basis for future discussions with the Commission, and importantly the Council of Ministers when further amendments can be made.  Once the text of the directive is formally adopted by the Commission it will pass to the Parliament for discussion, deliberation and approval. 

Matt Hancock: first speech on the creative industries

The Minister for Digital and Creative Industries Matt Hancock has said the creative industries will be “absolutely central” to the UK’s post-Brexit future, noting that they consistently outperform the rest of the economy. In a speech at the Creative Industries Federation, he promised that he will fight to ensure the creative and digital industries are at the heart of the Government’s industrial strategy with a tax, regulatory and public investment framework to support their growth. As well as stating his commitment to back the success of the creative industries, he also set out two further priorities: improving diversity and access and synthesising the cultural and digital economy. On the latter point he said that enforcement and the fair treatment of rights holders was “critical” to the health of the creative industries, and said his task was to ensure content and distribution grow together. But he stressed that creativity must “benefit all” and not just the privileged few.

UK Research and Innovation (UKRI)

The House of Commons Science and Technology Committee has announced it an inquiry into the role and priorities of the interim chair of UK Research and Innovation, the single strategic body proposed in the Higher Education and Research Bill, to bring together the seven Research Councils, Innovate UK, and Research England.  The Committee will be holding an introductory evidence session with Sir John Kingman, the interim Chair responsible for establishing UKRI in shadow form, on 12th October and is inviting written evidence on issues to be put to Sir John as he begins this task.  These could include:

  • the role and objectives of the interim Chair of UKRI, including any research or other input from UKRI on the content of the Bill.
  • the timetable for establishing UKRI, and early priorities for action.
  • the governance of UKRI.
  • the appointment of a Chief Executive of UKRI.

Written submissions should be received by 3 October 2016.

VAT on ebooks

Advocate General Kokott of the CJEU has expressed her opinion on a case brought by the Polish Constitutional Court.  The AG stated that the exclusion of electronically supplied digital books, newspapers and periodicals from the reduced rate of VAT is compatible with the principle of equal treatmentas electronically supplied digital books and print books are not so similar. We are still waiting for the actual ruling from the CJEU in particular in light of earlier decisions as regards the interpretation of the VAT Directive when the CJEU decided that France and Luxembourg cannot apply a reduced rate of VAT to the supply of electronic books, in contrast with paper books under the VAT Directive (cases C 479/13 and 502/13).  On a related note the Commission’s consultation on reduced VAT rates for electronically supplied publications closes on 19th September. 

CJEU on hyperlinking

In a further case on the categorisation of hyperlinking as communication to the public (following decisions in Svensson, Bestwater and C Entertainment respectively reported earlier), the Court of Justice of the European Union decided on Thursday that hyperlinking to a website does not constitute a communication to the public when the person who posts that link does not seek financial gain and acts without knowledge that those works have been published illegally (GS Media v Sanoma Media Case C 160/15). It depends on the facts of the individual case; in the present case it was undisputed that GS Media provided the hyperlinks to the files containing the photos for profit and that Sanoma had not authorised the publication of those photos on the internet.  By way of background, GS Media published a hyperlink directing viewers to an Australian website where photos of a Dutch model were made available without the consent of Sanoma, which holds the copyright to the photos at issue.  IPKat has a quick summary here.

Section 52 update

As reported in previous editions of PA’s PA, the repeal of Section 52 came into effect on 28th July, with publishers having until 28th January 2017 to ensure that images of works of artistic craftsmanship in books contracted prior to October 28th 2015 are fully compliant with the new law.  We had been engaging with the Intellectual Property Office over the guidance they published to accompany the revised legislation and submitted, before the summer, a note outlining suggested amendments designed to bring greater clarity to what even constitutes a ‘work of artistic craftsmanship’.  Yesterday  the Government has published updated guidance which has taken into account a number of our recommendations, particularly providing more information on court cases where the concept of ‘artistic craftsmanship was considered and expanding the information on authorship and rights holders. 

International Literacy Day

To mark International Literacy Day, Baroness Gail Rebuck used a debate in the House of Lords to talk about the importance of 100% literacy and reading for pleasure. She said that both were an “essential ingredient in our democracy”, highlighting the role played by charities and trade unions in helping to fight against illiteracy. Responding to a debate on civil society and lobbying, she urged the Government to focus on the lack of literacy, which she said was “at the heart” of the “burning injustices” Theresa May talked about in her first speech in Downing Street. “If we want to compete in the digital world and the knowledge economy we need to lead in literacy not trail in it,” she said, noting that 100% literacy for all adults would boost the economy by £80m a year. She ended her speech with a plea for Government to ensure charities are well funded, ensure the most effective literacy pilot schemes are adopted and scaled up and to allow charities to challenge and lobby government for change.

This week we have:

Briefed the Lib Dem Creative Industries Team (including Baroness Bonham Carter, Lord Clement-Jones and Lord Foster) on the impact of Brexit on the publishing industry; met with senior Commission officials to discuss the planned copyright reform package; met with officials from the new Department for International Trade; updated the creative industries team at the Department for Culture, Media and Sport on PA activity and issues of concern; discussed potential research projects for 2017 with the Publishing Research Consortium; attended the IPO’s Copyright Education and Awareness Group meeting.

Waiting for the publication of the Commission’s copyright reform package; meeting with FEP colleagues in Brussels (and discussing what activity is needed in relation to copyright reform package); meeting with the association of European National Libraries (CENL); meeting with Iain Wright MP, Chair of the Publishing APPG and Chair of the Business Select Committee; meeting with the UK IP Attaché for South East Asia and discussing, amongst other things, the proposed Singapore copyright law reforms; presenting at Techshare and at theNAG Conference 2016: Public and Academic Libraries Learning and Working in Partnership.