CLA Open Meeting 2: "Intellectual Property Will Save the British Economy"

A stud muffin (see report on
James McConnachie, below)

In this, the second of two reports, lawyer and blogger Rebecca Dimaridis, who attended last Wednesday afternoon's Open Meeting, hosted by the Copyright Licensing Agency at The Royal Geographical Society in Kensington, London, tells us what happens at the second session, strikingly entitled "Intellectual Property Will Save the British Economy".

After a half hour tea break Session Two was introduced by BBC broadcaster Peter Day. The panel two consisted of Benjamin Mitra-Kahn from the UK IPO, Louise Starr from CBI, Dr M F Makeen from the School of Oriental and African Studies (SOAS), author James McConnachie and Stevie Spring (CEO, Future Publishing).

Benjamin Mitra-Kahn, Economic Advisor of the UK IPO, began with some slides and statistics, noting that the world is already changing and that in the past 10 years China and India have grown faster than many have wanted them to. Ben says that since the '90s, UK firms have invested much more in IP (ideas), not machines (bricks and mortar). After the meeting, he was kind enough to provide me with his powerpoint presentation, which is attached.

Louise Starr, an Advisor for the CBI, spoke next. She said that IP is the lifeblood of the creative industries and it is important that businesses were in the right business conditions and environment in order to produce. Creative industries cannot compete on cost and are dependent on IP laws. They need copyright framework facilities for the online environment and these need to cover creation, exploitation and protection - not just one or two of these. Issues include educating consumers and recognising the great role that creative industries have.

Dr. Makeen F Makeen, a Senior Lecturer at SOAS, said he planned to show a comparison between the UK, Europe and the US of revenues brought in by creative industries. Dr Makeen noted that, to present a comparison, one needs accurate data -- which he didn't currently have. He was in possession of eight or nine different reports, two of which were from the UK IPO, one from the Chamber of Commerce and one from the DCMS.  Trying to find a common theme, he found that the UK ranked second  in the world for the culture industry (though "culture" has different meanings in the US & Germany). The US was responsible for $890 billion "core" products (??), 6.4% GDP amd 5.6% of the employed workforce. For the UK the total value of "core" culture is EUR €113 billion with 1.6 million people employed, representing 5.4% of the workforce. Germany and France were third and fourth.  There was debate as to which countries was which, but Germany's "core" culture was worth €105 billion.

Dr. Makeen said there are a number of threats to the creative industries:

1. The English language. Why: because the UK always competes with the US - although over the last 30-35 years, Britain has started penetrating the US market.
2. Lack of international boundaries.
3. Users have developed the belief they have the right to have free access to copyright works. There is a need to start educating that this belief is a threat - not only in the UK but all over the world.
4. Newcomers coming to the creative industry - not only China, Brazil, India but Dubai. The next 15-20 years will be the centre of the creative industry
5. Us. We have really been too slow to react to new technology. Reference was made to the Napster being closed down, but then iTunes was allowed to take off.

Despite these threats, there are opportunities, said Dr. Makeen. For example there are at least five or six countries whose economy is doing well, and which have strong historical links with the UK and which the UK is not taking advantage of (e.g. the UAE). There is a market ready and waiting for UK industries. The only problem was how the licences would work.

Next to speak was James McConnachie who, amongst other things, is the author & co-author of several Rough Guides (including the Rough Guide to Sex, which led to the Guardian calling James a "stud muffin" - poor James was very embarrassed when Peter Day announced this). James said that he feels like he is a very small part of the GDP referred to earlier by Ben. In order to share his personal perspective and, being a writer, James told us three stories:

1. Google Books and the possibility of authors works being available for free on the internet. Hearing about this, James searched Google and, lo and behold, found his books. He found it astonishing that he had to tell Google that he didn't want this to happen.
2. Book Reviews. He used to write reviews, for example, in the Sunday Times. He would receive feedback texts from friends, for example "I hated that". Then one day, James realised that he was not receiving texts. His reviews began to be available online for free - which James does not get paid for.
3. Travel Guidebooks - a story of change. James has been approached by people who no longer purchase guidebooks.  Instead they rely on the information found on the internet. James has a very strong opinion that most of the information found on the internet is "crap", being either dated, wrong or highly personal (e.g. Trip Advisor). Yet James is able to be paid by Rough Guides to do things like visit 20 bedrooms in Paris to compare them, check if the English credit card works in various places and various other things. James feels that the quality he gives is because he can be paid for his work. James says that payment for authorship is not only a right, but a guarantee of quality to the reader (does that sound familiar, trade mark people?).

After James' three interesting (and moving, to this author at least) stories was Stevie Spring from Future Publishing. Readers might recall Stevie's comments from the report on Session 1. Stevie said that they are facing massive challenges, not in respect of copyright protection per say, but in respect of the cost to enforce protection for small IP piracy. Future Publishing produces 150 products every month and creates and commissions from hundreds of contributors annually. Future is unable to enforce copyright protection, because it is not affordable. Take for example, Future's T3 magazine (website here) their largest circulated magazine with 23 international licences (70,000 copies sold in the UK). Stevie's recent quick look showed that the magazine is all over file sharing sites, with complete copies (downloadable and readable) being available. There were 51 file sharing sites Stevie found - and just one of those was responsible for an astonishing 9,000 downloads!

Stevie mentioned that Future once used an "army of lawyers" to shut down "Mygazines" (on which free downloads were available - Future's website is http://www.myfavouritemagazines.co.uk/) and the total cost of doing so was US$2 million. This is not small change for a company like Future. If Future is going to protect its revenue streams so it can pay its authors, the enforcement of the laws need to be affordable. Otherwise, Stevie says, the publishing industry will go the same way as the music industry.

Stevie mentioned a truism, and a basic law of marketing - "if I can get an alternative for a lower price (viz. free) then I'm going to do it". Stevie says that Dr. Makeen said that "free" to Joe Public doesn't mean not paid for - "Joe Public" believe they have paid for the material via the broadband connection. Pipeowners and Gatekeepers (e.g. Google, which obtains revenue from Adwords) need to share responsibility. Otherwise we will lose professional production. Profit-based businesses just can't compete with business such as Skype, YouTube and Facebook - which all run on a "Pre-Revenue" model.

James seemed to agree with all this and noted that the music business appears to be giving up on Digital Rights Management. Louise said she was on a similar wavelength in terms of online protection and agreed that it is not sustainable to compete with Pre-Revenue models. Dr. Makeen said he believes the next step might be for authors and copyright owners to agree to a social contract, in which exclusive rights are given up in return for guaranteed remuneration. He also wondered whether a global licensing scheme should be considered, as well as whether the notion of exclusive rights is a myth (because public performance rights cannot be exercised individually and is collected collectively).

Peter Day put a question to the panel as to whether there are protectable rights any more. If so, are they enforceable insofar as they are affordable? Peter noted Stevie's point that enforcement is a lot trickier now. Stevie responded to say that she believes there needs to be a balance between opportunities and threats, and that Future doesn't operate in the "general use" category, but more in the "extreme hobby-ists" category.

Following a comment that rights clearance should be simplified, Louse said care would need to be taken to ensure the process of simplification does not in fact complicate things. Following a further question as to whether 70 year copyright protection is too long, and whether the duration of protection for copyright and patents should be rethought, Louise said that if the market is looking at that, then it would be something CBI would look at.

Around this stage, Peter Day noted that the meeting had run over time and there was no more time for questions. Which meant, whilst furiously scribbling down notes of the meeting (some of which I still can't read!) I had also lost track of time. This meant that I suddenly realised that the question emailed (prior to the meeting) on behalf of the 1709 Copyright Blog, was not answered. The question was:

"On the issue of ‘IP will save the British Economy’, the big question is how. If the rights are well-protected but are in the hands of non-UK owners who choose not to manufacture in the UK but merely license the sale or use of their rights, won’t we see a huge net outflow of funds from the UK through royalties repatriated to other economies and/or tax havens?".

Perhaps some of the participants at the meeting will offer some comments to the question instead.

CLA open meeting 1: How International Content Creates Value

Lawyer and blogger Rebecca Dimaridis, who attended last Wednesday afternoon's Open Meeting, hosted by the Copyright Licensing Agency (CLA) at The Royal Geographical Society in Kensington, London, has kindly sent us this very full report on the event.  Part 1 appears below; Part 2 will follow tomorrow.

After a warm welcome by Kevin Fitzgerald, the Chief Executive of the CLA, who wrote an article on the new website "Copyright in the Digital Age" the agenda was split into two sessions. The first session discussed "How International Content Creates Value", the second session being "Intellectual Property Will Save the British Economy".

The first session kicked off with CLA's International Manager Madeleine Pow, who explained that CLA has reciprocal agreements with overseas Reproduction Rights Organisations (RROs), and showed us a neat flowchart showing how the CLA distributes money taken on behalf of rights holders through their RROs. Through these agreements, Madeleine said, overseas repertoire included in CLA licences generates value. Further information, including the types of agreements can be found on this page of the CLA website.

Emma House, the International Director for The Publishers Association, the next speaker, said that these agreements benefit UK publishers. Emma mentioned that international repetoire included in licences in the book publishing industry as a whole brought £22 million to the British economy and that in 2009 Britain was the largest exporter in the industry with £1.2 billion worth of books exported from the UK. Therefore much-needed protection is being provided such as through anti-piracy campaigns. Emma says that the CLA licensing system, if controlled and policed properly, provides income for activity that is already happening illegally. Also, an added benefit of the RROs collecting money is that an RRO can collect money coming through in very small amounts whereas a publisher can't collect such small amounts (or may be unwilling to do so).

Emma continued to praise the CLA agreements because they bring cultural benefits to the UK, i.e. providing access to UK content will contribute to the education and development of a society, contribute to a good cultural exchange cross borders and provide good lobbying messages.

Comments were then invited from the panel of CLA licensees, to describe how their licences are used in practice. On the panel was Philip Ditchfield of Glaxo Smith Kline PLC (GSK); Vanessa Marsland of Clifford Chance LLP (CC); Dr Jane Secker of The London School of Economics (LSE); Emma House of The Publishers Association (TPA) and Georgina Bentliff of the CLA.

Philip Ditchfield explained that GSK's business is built on IP. GSK subscribes to 1000s of journals via direct licences with publishers, and buys articles from a number of sources such as the British Library. GSK relies on blanket licences in the subscriptions. Philip mentioned that although GSK is a global company, they see themselves as one entity, with lots of people working together across the globe. So it's important that GSK has the same rights for all colleagues for example, a colleague in one country can copy something that a colleague in another country cannot and this is ridiculous. Philip wants a multinational licence that is easy to understand, user-friendly, up-to-date, comprehensive and includes all publishers (big and small) and all countries. What a fantastic wish list!

Vanessa Marsland said CC have a similar setup to GSK and that they are also a global organisation with direct publisher licences. Vanessa agreed that licensing needs need to be adminstered on a multinational basis, because sometimes information may be needed that wouldn't be covered within the mainstream direct licences. CC has some experience of country differences and says that this is an issue "when all we have to sell is our time" (!)

Dr. Secker was next to speak, and said that the LSE is an international university, with 50% of students coming from another country. The services are provided on campus, so the LSE is not looking to deliver content to students overseas. What she found  very helpful to students (who need to read a lot during times of the year) was multiple copies of books and electronic journal subscriptions. Dr. Secker mentioned that a "paper coursepack service", provided under a CLA blanket licence was also very useful, as is the electronic coursepack service (which used to be provided on a transactional basis for key courses making the costs associated with that service huge). Dr Secker is thus very pleased to have a blanket licence now to cover the LSE's e-learning system.

Kevin Fitzgerald, moderating the panelist discussion, asked the audience about whether they have any questions as to the current licences operate. Kevin noted Philip Ditchfield's comment that they need to be easy to understand and wondered if the audience felt the same way. An audience member from the University of Buckingham said that in addition to wanting the licences to be easy to understand, they wanted them to be easy to administer. At present, there is so much administration involved, for example, in providing the number of pages to be digitised, the number of students on the course and a whole host of other administration. The comment was answered by Georgina Bentliff who said that they do need to know what is copied and the other information; however, if there are ways to simplify and improve the technology in the future in order to make the administrative side of things easier, then the CLA will do so.

Philip Ditchfield then commented that the CLA licence is difficult to understand. Although there is an explanatory document that goes with the licence and there is now a third licence, ultimately a document is needed that is able to be explained across the whole of the business, so as to ensure all at GSK understand it.

Kevin then asked about future licence developments. Emma House said that in an increasingly digital world, publishers are adapting to different business models. The landscape is changing and more going global. She has found that publishers are willing to work with the CLA to satisfy the needs of rights holders and licensees. Georgina Bentliff commented that she can report that rightsholders have approved multinational licences. From a digital point of view, the licence is an opt-in licence and covers copying and scanning. The Publishers Association has started getting Opt-In licences drafted, and the plan is for them to be available in January.

Kevin then asked the audience whether there were any comments on multinational licences. A comment from University College London was that there are areas where the CLA can't offer coverage, as there was a lack of RRO's available in countries of interest. UCL wants to start a dialogue in those countries so that the licence is truly global. Plus UCL would like to see the licence being available in countries other than English. This is a huge issue for UCL.

Georgina Bentliff responded to say that the CLA can only deal with countries in which there exists an organisation that can represent its rights holders. RRO countries signed up are those with such representation, and the CLA does what it can to support the development of new RROs. including acting as mentor and providing advice.

After a comment by Emma House about countries in the Middle East, Kevin noted that he is aware of a number of difficulties for Central and Eastern European countries but that there were discussions with the International Federation of Reproduction Rights Organisations (IFRRO) regarding this. Since the meeting, I found a page entitled "IFRRO Development Committee for Africa and the Middle East" on the IFRRO website which has details about the Mandate for that Committee.

Kevin's next panel question was what use the CLA licence is put to in the licencees' organisation, and whether there were any difficulties with what the organisation should be doing with it or in getting colleagues to do the right thing with it? Finally, whether the licencee's want the CLA to do anything about these issues.

Dr. Secker said the LSE had no problem with knowing what to do and that generally, the guidance she gives is that website content should be linked to and not copied. Vanessa mentioned there were some odd questions that would sometimes crop up, such as whether information can be included in a prospectus, but that while there was massive use of websites, website content is mainly used to read and keep a copy for the file. Philip mentioned GSK generally needs to sign three requests for information. If authorisation is not given by the third request GSK doesn't bother. This is a shame and GSK hopes the process of authorisation will be simplified in the future.

A audience comment from a representative of Loghborough university then came in to say that the CLA is "barking up the wrong tree" and that there are only very minor problems in accessing material through websites and that generally material is available. If there is a barrier, then material could be found somewhere else, or the search for it be abandoned. According to the audience member, the CLA shouldn't be wasting its efforts on RRO's. Georgina's response was, as you might expect, that the CLA did a lot of surveys in sectors and the impression they got was that people would like to have these licences and that liking to have was different to there being a problem.

The next question Kevin put was how to define the amount of a website which could be "copy-able". First to comment was Chief Executive of Future Publishing Stevie Spring. Stevie said that so far, the only person making any sense was the person fron Loughborough university, and that she thinks the licences are a waste of time and will complicate things. Stevie noted that CLA licences are not primary licences but merely licences for secondary use and for a limited amount.

The discussion swivelled around to Georgina talking about the CLA's Schools licence, which launched on Friday 1 October, which would allow for the photocopy, scan and re-use of material. Such use could be made of one article or chapter or up to 5% of material - I think the actual amount is still to be determined. There is little additional information about these licences available on the CLA website; however, the appropriate link is here.

The first session ended with Kevin asking the panel to list "Fantasy website" links which he would like to see incorporated into the licence. Dr. Secker would like to see Disney while Philip wants Wikipedia, The Daily Telegraph and other newspapers and CC and Emma House preferred not to comment.