This page contains material regarding the proposed copyright term extension for sound recordings.
Martin Kretschmer: Comment on copyright term extension.
The deed is done. Copyright term extension for sound recordings from 50 to 70 years was adopted yesterday (12 September 2011) by qualified majority in the European Council. The remaining opposition came from Belgium, the Czech Republic, Luxembourg, the Netherlands, Romania, Slovakia, Slovenia and Sweden. Austria and Estonia abstained.
The chorus of approval has been led by aging artists, masking the fact that for more than a decade the lobby for copyright extension has been resourced by the multinational record industry. Labels do not want to lose the revenues of the classic recordings of the 1960s which are reaching the end of their current 50 year term. Rather than innovating, right holders find it much easier to exclude competition. Europe is in danger of locking away her music heritage just as digital technology is enabling the opening of the archives.
It is not surprising that many performers’ organisations and collecting societies support the Directive. They do not have to carry the costs – which will exceed EURO 1 billion to the general public (based on the Commission’s own figures – see calculations in Joint Academic Statement issued by Centre for Intellectual Property Policy & Management (CIPPM, Bournemouth University), the Centre for Intellectual Property & Information Law (CIPIL, Cambridge University), the Institute the Institute for Information Law (IViR, University of Amsterdam), and the Max Planck Competition and Tax Law (Munich) [Joint statement (PDF – 281kb) >>].
72 percent of the financial benefits from term extension will accrue to record labels. Of the 28 percent that will go to artists, most of the money will go to superstar acts, with only 4 percent benefiting those musicians mentioned in the European Council press release as facing an "income gap at the end of their life times". Many performers also do not appear to understand that the proposal would lead to a redistribution of income from living to dead artists.
In an interview with the NY Times yesterday, I said: "This is a dreadful day for musicians and consumers. Policymakers are schizophrenic, speaking a language of change and innovation, but then respond to lobbying by extending the right which gave rise to the problem in the first place. This only entrenches a cynical attitude toward copyright law and brings it into further disrepute." http://www.nytimes.com/2011/09/13/arts/music/european-union-extends-copyright-on-recordings.html.
Sweden and Belgium issued dissents after the vote in the Council. They are worth quoting in full: Interinstitutional File: 2008/0157 (COD)
Throughout the negotiations, Sweden has had strong reservations regarding the commission’s proposal to extend the term of protection for sound recordings.
As regards copyright regulation in general Sweden has always stressed the importance of taking all relevant aspects and involved interests into account, in order to maintain a fair balance in the copyright system. We believe this to be essential if we are to successfully uphold respect for the copyright system in the future.
Extending the term of protection for sound recordings as proposed is neither fair nor balanced. It therefore risks undermining the respect for copyright in general even further. Such a development is very unfortunate for all those who depend on copyright protection to make a living.
Sweden believes there to be good reasons for measures aiming at improving the situation for those professional musicians and other artists who often operate under economically difficult conditions. Extending the term of protection will however not primarily be of benefit to this group.
Against this background Sweden regrets the decision to adopt the proposal amending Directive 2006/116/EC of the European Parliament and of the Council on the term of protection of copyright and certain related rights.
With regard to the proposal for a directive on the term of protection of copyright and certain related rights, Belgium believes that a term extension is not an appropriate measure to improve the situation of the performing artists. Furthermore, we believe that the negative consequences the proposal entails do not outweigh the advantages it brings. We can therefore not support this proposal.
It seems that the measure will mainly benefit record producers and not performing artists, will only have a very limited effect for most of the performing artists, will have a negative impact on the accessibility of cultural material such as those contained in libraries and archives, and will create supplementary financial and administrative burdens to enterprises, broadcasting organisations and consumers. Therefore, the overall package of the proposal appears, as demonstrated by a large amount of academic studies , unbalanced.
Finally, one has to observe that several initiatives which have clear links with and impact on the proposal, have recently been adopted or announced by the Commission in its Communication of 24 May 2011 . These initiatives include for example a proposal for a directive on orphan works, a new initiative on collective management, and a new initiative on online distribution of audiovisual works. Taking into account this global approach of copyright issues in the internal market, we think that it would only be reasonable to re-examine the merits of this proposal in the context of this global approach.
 See e.g. "The Proposed Directive for a Copyright Term Extension – A backward-looking package" Centre for Intellectual Property Policy & Management (CIPPM, Bournemouth University), the Centre for Intellectual Property & Information Law (CIPIL, Cambridge University), the Institute the Institute for Information Law (IViR, University of Amsterdam), and the Max Planck Competition and Tax Law (Munich); N. HELBERGER, N. DUFFT, S. VAN GOMPEL, B. HUGENHOLTZ, ’Never forever: why extending the term of protection for sound recordings is a bad idea’, EIPR 2008, 174; S. DUSOLLIER, ‘Les artistes-interprètes pris en otage’, Auteurs & Media 2008, 426.
 Communication from the Commission of 24 May 2011, A Single Market for Intellectual Property Rights Boosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe, COM (2011) 287.
Term Extension will come to Europe in September, unless...
The Proposed Directive (COM(2008) 464/3) extending the copyright term for sound recordings from 50 to 70 years is now on the agenda of the European Council (meeting of permanent representatives: COREPER) of 7 September 2011.
There is no longer a blocking minority against the Commission’s proposal. The blocking minority had prevented adoption for two years since the first reading vote in the European Parliament on 23 April 2009. Portugal and Denmark have now officially dropped their reservations (even though the Czechs held on).
At the last meeting of the Council Working Group a straw poll was conducted. The Member States that currently oppose the proposal are: Austria, Belgium, Czech Republic, Luxembourg, Romania, Slovakia, Slovenia, Sweden, and The Netherlands. That is five votes short of a blocking minority.
Despite the Hargreaves Review of Intellectual Property and Growth (which criticised retrospective term extension in scathing terms) the UK government appears to have given clearance to vote for the Directive.
2.16 The Review has found that IP policy has not always been developed in a way consistent with the economic evidence. We give two examples below. [...]
Copyright Term Extension
Economic evidence is clear that the likely deadweight loss to the economy exceeds any additional incentivising effect which might result from the extension of copyright term beyond its present levels. This is doubly clear for retrospective extension to copyright term, given the impossibility of incentivising the creation of already existing works, or work from artists already dead. Despite this, there are frequent proposals to increase term, such as the current proposal to extend protection for sound recordings in Europe from 50 to 70 or even 95 years. The UK Government assessment found it to be economically detrimental. An international study found term extension to have no impact on output.
2.17 Economic evidence is not, of course, the sole driver of IP policy. Legitimate questions of culture, fairness and "just reward" for creators also arise, and have tended to dominate the debate on copyright issues. Indeed, they were explicitly cited by the previous Government as justification for extension of copyright term, despite the economic evidence. These questions are clearly significant, and it is not part of the Review’s task to determine how they should be resolved. We simply invite Government to consider that as copyright becomes increasingly economically important, it is vital that economic considerations are fully weighed in the balance. This is especially so given the role, noted in the previous chapter, that copyright is acquiring of regulating the permissibility of technologies, such as consumer recording devices and web search engines. If the current imbalance in the debate on copyright is allowed to continue, the economic price will be high.
10.12 A prominent and persistent example of the lobbying problem concerns the duration of copyright protection, which has been periodically extended in recent decades. In spite of clear evidence that this cannot be justified in terms of the core IP argument that copyright exists to provide economic incentives to creators to produce new works. As has been noted by a number of commentators,7 no one has yet discovered a mechanism for incentivising the deceased.
The most recent example of such extensions involved a UK decision to support a still incomplete EU process to extend the rights of owners of sound recordings from 50 years to 70 years. Such an extension was opposed by the Gowers Review and by published studies commissioned by the European Commission. A decision in favour of the change was, nonetheless, announced by the Secretary of State for Culture, Andy Burnham, in December 2008. The Government’s own economic impact assessment subsequently estimated that extension would cost the UK economy up to £100m over the extended term. One justification for extension might be that Ministers wished to afford extended copyright as a mark of respect and gratitude to artists and their families – a perfectly legitimate argument, though one that ignores the fact that very often artists’ rights are owned by corporations. Independent research commissioned for the Gowers Review suggested that the benefits to individual artists would be highly skewed to a relatively small number of performers.
Copyright term extension: Back from the grave
Two years ago, on 23 April 2009, the last European Parliament voted in first reading for a proposed Directive, extending the term of copyright for sound recordings from currently 50 to 70 years. The Directive was then blocked on the Council of the European Union by a coalition of Benelux, and some Scandinavian and East European countries that took note of the empirical evidence mustered by independent academics from across Europe.
Since 2009, the world has changed. A new European Parliament and Commission are in place, and a focus of recent copyright initiatives has been on the opportunities offered by digitisation for cultural, social, commercial innovation, and economic growth. As Neelie Kroes, European Commission Vice–President for the Digital Agenda said in speech at Avignon on 5 November 2010: "Instead of a dysfunctional [copyright] system based on a series of cultural Berlin walls, I want a return to sense. A system where there is scope to create new opportunities for artists and creators, and new business models that better fit the digital age. We want to help you seize the opportunities of this age."
So why has the Copyright Term Extension Directive suddenly re–appeared on the Agenda of the Legal Affairs Committee of the European Parliament (JURI), as a late addendum (at no. 31, and as of Monday 11 April, not on the website of the JURI committee)? http://christianengstrom.wordpress.com/2011/04/10/copyright-term-extension-will-be-voted-this-week/
Music industry lobbyists have succeeded in overturning Danish and Czech opposition, picking off key members of parliament in these countries. The Danish government has now notified the Commission that it support term extension, breaking the blocking minority on the Council. See press release of 24 February: http://kum.dk/nyheder-og-presse/pressemeddelelser/2011/februar/langere-beskyttelse-af-musikeres-ophavsrettigheder/
Prompted by the Internal Market Directorate of the Commission, the current Hungarian presidency of the European Union is now looking for a fast track of this stale piece of legislation through Parliament while preparing the Council for a vote before the end of its presidency in June.
The Directors of four leading European intellectual property research institutes have just written an open letter in order to raise attention of this matter. It is still possible that the European Parliament will ask for a proper second reading of the text, or that other countries on the Council will reform a blocking minority (including the UK which is currently reviewing her intellectual property laws for their contribution to innovation and growth: Hargreaves Review, due to report at the end of April – http://www.ipo.gov.uk/ipreview.htm).
One of the worst policies left by the last government was a decision to support a proposed EU Directive, extending the copyright term for sound recordings from currently 50 years to 70 years. If there was a policy designed to suppress social and commercial innovation, retrospective term extension would be your choice. The goods have already been produced, investments recouped.
On the European Commission’s own figures, 96% of the gains from extension will be a windfall to the major record companies and the best–selling performers. The results of extension are simply less competition, higher costs to consumers, and removing access to archive material.
After a two year period in which the Directive was blocked on the Council of the European Union by a minority of countries (including the Benelux, and several Scandinavian and East European countries), the legislation has now made a surprising return. On Tuesday 12 April, a fast track procedure through the European Parliament will begin with a vote in the legal affairs committee (JURI). Thus the UK’s position once again will become crucial.
The government has commissioned an Independent Review of Intellectual Property and Growth which is due to report at the end of April [Hargreaves Review, as reported on these pages, consultation period closed 4 March – http://www.ipo.gov.uk/ipreview.htm]. This is an opportunity to show how seriously the UK is taking evidence–based policy.
Professor Martin Kretschmer, Director, Centre for Intellectual Property Policy & Management, Bournemouth University Professor Lionel Bently, Director, Centre for Intellectual Property and Information Law, University of Cambridge Professor Bernt Hugenholtz, Director, Institute for Information Law, University of Amsterdam Prof. Dr. Reto Hilty, Director, Max Planck Institute for Intellectual Property and Competition Law, Munich.
Joint academic statement examining the Commission’s Impact Assessment of the Directive 2008. It was signed by 80 eminent academics, including several Nobel Laureates (27 October 2008). Joint statement (PDF – 281kb) >>
Professor Hugenholtz’s recent comments and links:
The Cambridge study of economic evidence is here: The Review of the Economic Evidence Relating to an Extension of the Term of Copyright in Sound Recordings; http://www.cipil.law.cam.ac.uk/policy_documents/
Opinions by the Max Planck Institute for IP & Competition Law: http://www.ip.mpg.de/ww/en/pub/research/stellungnahmen_des_instituts.cfm
CIPPM Director, Professor Martin Kretschmer, recently stood in as guest blogger for Telegraph.co.uk. Taking over from technology expert, Shane Richmond, Martin used his blog to open up the debate on the proposed copyright extension. Posts covered the following topics:
Copyright extension debate: Coming next week
Copyright extension debate: Redistributing from the living to the dead
Copyright extension debate: ‘What have you got against Cliff Richard’?
Copyright extension debate: It’s time performers’ moral rights were strengthened
Copyright extension debate: Musicians should see themselves as part of a continuum of creative endeavour
On 23 March 2009, the European Parliament is due to vote on a Directive, extending the term of copyright for sound recordings. Such an extension, from 50 to 95 years (or perhaps 70 years), will harm Europe’s culture and economy.
A signed press release from key European experts opposing the extension has been released, including: the Centre for Intellectual Property Policy & Management (CIPPM), Bournemouth University; Centre for Intellectual Property & Information Law (CIPIL), University of Cambridge; Center in IT and Law (CRID), Universitaires Notre–Dame de la Paix de Namur; Centre for International Intellectual Property Studies (CEIPI), University of Strasbourg; Max–Planck–Institute for Intellectual Property, Competition and Tax Law, Munich; Institute for Information Law, University of Amsterdam; Centre for Intellectual Property Rights, Catholic University Leuven; NEXA Center for Internet & Society, Politecnico di Torino.
View the Joint Press Release by European Academics – 11 March 2009 (PDF – 319kb) press release.
Additionally, a list of independent studies and the key signatories opposing the proposed Copyright Term Extension is now available.
Download Independent Studies of Copyright Term Extension (PDF – 150kb)
The UK government has changed its policy on the copyright term, overturning evidence–based recommendations. The letter below, signed by some of the most eminent economists and intellectual property scholars in the UK, voices strong concern about a lack of public legitimacy, and calls on the Government to present any evidence that has led to this change of policy.
Open Letter re. Proposed Copyright Term Extension for Sound Recordings
We are writing because of the sudden, and unexplained, change of Government position in relation to copyright term extension for sound recordings.
In 2006, the Government received the recommendations of an independent and comprehensive review of intellectual property policy, commissioned by the then Chancellor Gordon Brown. The review, led by Andrew Gowers (a former editor of the Financial Times) took "an evidence–based approach to its policy analysis", supplementing a formal call for evidence with commissioned external expertise.
The review examined several extension options, including the increase to 70 years, and explicitly rejected extension as being a bad deal for the UK in cultural and economic terms. The Government, led by the Treasury which was then headed by Gordon Brown, clearly supported this view.
What then occasions a sudden volte–face two years later and only a few weeks after statements from the Department for Innovation, Universities and Skills (DIUS) indicating support for the original decision? We are not aware of any new evidence that has come to light, and the only independent study available since then, that of Professor Hugenholtz at the University of Amsterdam, has also been highly critical of extension.
There has been some talk of ‘moral arguments’ for extension but it is hard to discern a compelling ‘moral’ case for a proposal whose prime effect is to benefit major label shareholders and a few, already highly successful, artists while imposing significantly greater costs on new creators, the general listening public and the custodians of our cultural heritage.
As Gowers concluded, and the Government has until now consistently reaffirmed, policy–making in this area should be evidence–based and designed to promote the broader welfare of society as a whole. Policies that appear to reflect nothing more than lobbying will only perpetuate the "marked lack of public legitimacy" which the Gowers report lamented and discourage those who wish to contribute constructively to future Government policy–making in these areas. We therefore call on the Government to present any evidence that has led to this change of policy.
Professor Lionel Bently, and Dr Rufus Pollock, Centre for Intellectual Property and Information Law, University of Cambridge
Professor Martin Kretschmer, and Professor Ruth Towse, Centre for Intellectual Property Policy & Management, Bournemouth University
Professor Nicholas Cook, AHRC Research Centre for the History and Analysis of Recorded Music, Royal Holloway, University of London
Professor P.A. David, Emeritus Professor of Economics and Economic History, University of Oxford
Professor Graeme Dinwoodie, Chair in Intellectual Property Law, Queen Mary College, University of London
Professor Johanna Gibson, Director Queen Mary Intellectual Property Research Institute, Queen Mary College, University of London
Professor John Kay, Chair, British Academy Copyright Review
Professor Paul Klemperer, Edgeworth Professor of Economics, University of Oxford
Professor Hector MacQueen, and Professor Charlotte Waelde, SCRIPT/AHRC Centre Intellectual Property & Technology Law, University of Edinburgh
Professor David M Newbery, Professor of Economics, University of Cambridge
Dr Mark Percival, Queen Margaret University, Edinburgh, Chair, International Association for the Study of Popular Music (UK/IRL)
Dr Martin Cloonan, Senior Lecturer, University of Glasgow, ex–Chair, International Association for the Study of Popular Music (UK/IRL)
Professor Danny Quah, Professor of Economics, London School of Economics
Professor David Vaver, former Reuters Professor of IP and IP Law and Director of the Intellectual Property Research Centre, University of Oxford
Richard Chesser, Chair, Trade and Copyright Committee, International Association of Music Librarians (UK/IRL)
In order to assist public debate of the Commission’s proposed directive "amending the term of protection of copyright and certain related rights" (COM(2008) 464/3, European academics have prepared another joint open statement. It has been sent to Members of the European Parliament who are currently considering the proposal.
The Proposed Directive for a Copyright Term Extension
We are independent lawyers, economists and music researchers, representing the leading European intellectual property research centres. We unanimously condemn the Commission’s proposed directive "amending the term of protection of copyright and certain related rights" (COM(2008) 464/3) as one of the worst examples of special interest pleading. The proposed directive will seriously damage European innovation and creative endeavour.
The Commission is trying to persuade policy makers that copyright extension is cost free. In its Impact Assessment [IA] the Commission claims that consumer prices for sound recordings will not increase, nor will licence fees paid by broadcasters, clubs and restaurants for so–called "air play" [IA, p. 40].
At the same time the Commission claims that extension will deliver benefits to the music industry between "€ 44 million and € 843 million" [IA, p. 60]. Where is that money coming from? The costs have to be borne somewhere. It is shocking that the Commission can fail to acknowledge this basic economic truth. Any serious impact assessment should at least have to answer the simple question: Who is going to pay?
Instead of doing their economic homework, the Commission offers a misleading story about performers facing "an income gap at the end of their lifetimes" [Explanatory Memorandum to Proposed Directive, p. 4; Press releases 14 February 2008 and 16 July 2008]. The language of "artists who lose their pension when they need it most" is copied directly from lobby documents supplied to the Commission by the record industry. Extension is then dressed up as a "social measure".
The most cursory analysis will show that nothing could be further from the truth. Under the current 50 year term, a track recorded when a performer was 25 will be protected until age 75. If the artist continued recording throughout her performing life, the current term will most likely outlast the performer’s lifespan. Not a single artist has a life expectancy of 45 years at age 75 – yet this is the extension the Commission proposes. If the Commission really wanted to help performers, it would (i) limit the term to the artist’s life, (ii) make such a term not available to record producers (labels), and (iii) look at recording contracts during the existing term. Any independent assessment will show the "ageing performers" argument as a smoke screen.
The chief beneficiaries from extension are:
1. Major rightholder who control a back catalogue of records that reaches back further than 50 years. The four major multinational record companies Universal, Sony BMG, Warner Music and EMI own almost all the key records that would benefit from retrospective extension.
2. Best–selling artists such as Cliff Richard, Johnny Hallyday, and their future estates. Is channelling money to estates a productive measure?
3. Collecting societies who will process increased income either from airplay or a social fund (and take a commission for it).
4. Minor beneficiaries are ordinary working performers. The bottom 80% of performers would each receive between € 4 and € 58 a year (calculation based on Commission’s own figures). Some of these benefits however come at the costs of younger performers just entering the profession, as the same pot of money will have to be shared by more artists, many of whom are or will be dead.
The contrast between marginal benefits to ordinary performers, and huge benefits to multinational producers is stark. The costs of copyright extension will be borne by European society as a whole through higher prices and licence fees, stymied innovation, and hindered diversity.
In order to facilitate informed democratic debate, we have prepared
– specific independent responses to the Commission’s Frequently Asked Questions template
– 4 page analysis of key economic data
– a list of academic submissions opposing term extension
On behalf of the signatories given below:
Professor Martin Kretschmer, Centre for Intellectual Property Policy & Management (CIPPM), Bournemouth University
Professor Lionel Bently and Dr Rufus Pollock, Centre for Intellectual Property & Information Law (CIPIL), University of Cambridge
Professor Reto Hilty, Max Planck Institute for Intellectual Property, Competition and Tax Law, Munich
Professor Bernt Hugenholtz, Institute for Information Law, University of Amsterdam
EU internal market commissioner Charlie McCreevy has announced his intention to extend the European copyright term for sound recordings from 50 to 95 years. Leading European academics have reviewed the empirical evidence on copyright extension, and ask the European Commission: How could locking up recorded music for another 45 years possibly benefit a creative and innovative society?
Following a meeting at Bournemouth University in May 2008, key research centres signed a joined open statement, opposing extension: