Ripping yarns

Copyright The British government on Wednesday released its long-awaited set of proposals for updating U.K. copyright law for the twenty-first century. Sort of.

The actual report (PDF) might best be described as notional, or perhaps aspirational — a set of ideas the government is publicly endorsing but with formal legislative language to follow later, sometimes much later. In some critical areas, in fact, the report manages to raise more questions than it answers.

One such area concerns format-shifting, or what the report calls “private copying.” Here’s what the report has to say on the matter:

We also share the [Hargreaves] Review’s concern that a widespread flouting of copyright through private copying in particular brings the law into disrepute: it is not appropriate simply to tolerate unlawful private copying where it is not commercially damaging. For these reasons, the Government agrees with the Review’s central thesis that the widest possible exceptions to copyright within the existing EU framework are likely to be beneficial to the UK, subject to three important factors:

  • That the amount of harm to rights holders that would result in “fair compensation” under EU law is minimal, and hence the amount of fair compensation provided would be zero. This avoids market distortion and the need for a copyright levy system, which the Government opposes on the basis that it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax.
  • Adherence with EU law and international treaties.
  • That unnecessary restrictions removed by copyright exceptions are not re-imposed by other means, such as contractual terms, in such a way as to undermine the benefits of the exception.

The Government will therefore bring forward proposals in autumn 2011 for a substantial opening up of the UK’s copyright exceptions regime on this basis. This will include proposals for a limited private copying exception [emphasis in the original].

In a press release from the Intellectual Property Office, the government makes it clear that the forthcoming proposal will call for legalization of CD ripping to iPods, computers and other digital storage devices, which is common but technically illegal in the U.K. at the moment:

Copyright exceptions covering limited private copying should be introduced to realise growth opportunities. Thousands of people copy legitimately purchased content, such as a CD to a computer or portable device such as an IPod, assuming it is legal. This move will bring copyright law into line with the real world, and with consumers’ reasonable expectations.

Many press reports have read that as an endorsement of DVD ripping as well, although the government did not confirm that in any official communique. On the other hand, it didn’t exactly go out of its way to knock down the widely circulated notion, either.

Yet if DVDs (and Blu-ray Discs) are to be included the government also would have to address the critical question of circumvention of copy-control on movie discs. If consumers have the right to make a personal-use copy of a DVD or Blu-ray, does that mean they also have the right to circumvent the copy-control measures?

The report is silent on the issue, as were government officials, leaving the question hanging.

While the thought of legalizing circumvention is bound to send a chill down the spines of content owners, as a practical matter, any move to allow DVD ripping, would need to be reconciled with current British law implementing the 1996 WIPO Copyright Treaties. That law bans the “manufacturing for sale or hire, importation, advertising or marketing a service the purposes of which is to enable or facilitate the circumvention of technical measures.”

Any change in that law, moreover, would need to be squared with the U.K.’s obligations under the EU Copyright Directive, which itself is scheduled to undergo review next year with an eye toward possible changes.

Any private copying exception for DVDs and Blu-rays, therefore, is subject to a process that would likely drag on for years and could still, ultimately, be derailed by political and legal forces outside the control of the British Parliament. So if I were living in the U.K. right now, I wouldn’t be firing up my AnyDVD just yet.

If I were running a studio, I’d be much more concerned about that last bullet point in the excerpt above, the one that says that “unnecessary restrictions removed by copyright exceptions [should] not [be] re-imposed by other means, such as contractual terms, in such a way as to undermine the benefits of the exception.”

Controlling the downstream use of content through contractual language in licensing agreements is a foundation stone of a lot of studio business models. Building a functional DVD player or disc drive, for instance, requires the manufacturer to secure a license from the studios (technically the DVD Copy Control Association) to decrypt CSS-encoded DVD content. While CSS was hacked early on, the licensing scheme in supported allowed the studios to control enough of the design and functionality of DVD players to build a highly scalable, hugely profitable business for themselves on top of it.

Back here in the U.S., the studios are still pursuing their seven-year old lawsuit against Kaleidescape for allegedly violating the terms of the CSS license agreement by enabling personal use copying of DVDs, not because anyone in Hollywood really cares about Kaleidescape per se anymore but because the studios are keen to preserve their continued ability to control the use of their content through licensing irrespective of the balance of rights enshrined in copyright law.

With the industry today on the cusp of a new era of cloud-based storage and distribution, the studios’ ability to license certain uses but not others will likely prove critical to any plausible business model. If that sort of restrictive licensing scheme were to become illegal or unenforceable in major markets like the U.K., the cloud could turn out to be a very dark place indeed for the studios.