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Academics must check contracts' effects on user rights

Gov body reviews copyright and contract laws

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The use of contracts and technologies to bypass copyright law and users' rights must be investigated by academics, a review of contract and copyright law by a government advisory body has said.

The Strategic Advisory Board for Intellectual Property (SABIP) is an independent but publicly funded body overseen by the Intellectual Property Office. It was set up in 2008 to give the government independent, evidence-based advice on intellectual property issues.

A report produced for SABIP has examined the relationship between contract law and copyright law and has said that some areas should be investigated by academics.

In addition to the question of the bypassing of copyright law by certain technologies, it recommended further research into the reversion to a creator of the ownership of copyright material if it has not been exploited by a licensee, into the possibility of a reform of authors' moral rights under copyright law, and into the relationship between copyright law and competition law.

As cultural material such as music and video was released in digital form it became easier to copy without any loss of quality. Companies whose business was based on the sale of this material began, in the late 1990s, to lock down content through copy-prevention technologies on items such as compact discs.

Copyright law prohibits certain copying activities but not others. Users with visual or hearing impairments or researchers, for example, have the right to copy material without copyright owners' permission.

"The theoretically undesirable effects of overriding some or all copyright limits by contract or by technological protection measures (TPMs) need to be assessed by empirical studies," said the SABIP study (pdf). "The effects of imperative limits could be investigated by focussing on differences between countries having imperative exceptions and countries where freedom of contract prevails."

Creators of works can assign their rights to a company, as musicians do to record companies and writers to publishers. The study said that a way to increase the earning power of creators would be for these rights to revert to the creator if they are not exploited.

"Reversing assigned rights to the author (after a fixed period, or because of non-exploitation) is likely to be an effective way of improving the earnings of the author," it said. "Term reversion should also have access benefits to users from opening up archives of back-catalogues."

Under UK copyright law creators have 'moral rights', which guarantee their right to be identified as the creator of a work, regardless of who the financial beneficiary is. The study said that authors would be in a better position to defend themselves against the financial interests of companies if they were unable to waive those rights.

"Contractual waivers of moral rights are inserted frequently into copyright contracts. If these rights were made unwaivable by statute, such a persisting link between author and work might improve the author’s bargaining power," it said.

The study was conducted by four academics – Estelle Derclaye, Marcella Favale, Martin Kretschmer and Richard Watt – because of the fundamental importance of contract and copyright laws in the realm of digitised cultural material.

"A review of the relationship between copyright and contract law has to address both supply- and demand-side issues," the report said. "On the supply side, policy concerns include whether copyright law delivers the often stated aim of securing the financial independence of creators. Particularly acute are the complaints by both creators and producers that they fail to benefit from the exponential increase in the availability of copyright materials on the Internet.

"On the demand side, the issue of copyright exceptions and their policy justification has become central to a number of reviews and consultations dealing with digital content," it said. "Are exceptions based on user needs or market failure? Do exceptions require financial compensation? Can exceptions be contracted out by licence agreements?"

The academics also said that attention should be paid to whether or not some copyright practices breach competition law. It said that this was a subject for regulatory activity, rather than academic research. "Rather than commissioning a study, SABIP could refer the matter to the European Commission and, in the UK, to the OFT," it said.

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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