Earlier this month several music industry organizations in the UK won a judicial review which renders the Government's decision to allow copying for personal use unlawful. Following this unexpected decision are UK citizens now breaking the law if they copy their own CDs? How will the fate of the legislation be determined?

The recent BASCA case has raised some interesting questions about the legal status of the private copying exception to UK copyright law introduced in 2014.

Broadly speaking, the new law is found in s28B of the Copyright, Design and Patents Act 1988, and introduced a limited defense to a copyright infringement claim where an individual makes a copy of a work he legitimately already owns, for example for the purpose of format shifting. Ripping a music file from a CD to .MP3 format for playing on a smartphone or tablet being one typical example.

This exception does not allow copying of copyright protected material for family and friends, neither does it legitimize downloading files from the Internet, as in most cases the downloader will not already own a legitimate licensed copy.

So really, you might well think, “that is a pretty limited situation, why all the fuss?”

Why indeed.

The issue turns around the meaning of “fair compensation”. BASCA and the other claimants claim they are due some fair compensation for this as required by EU Directive 2001/29 which UK law has to comply with. The UK Government contended, in this particular instance, that no compensation is fair compensation.

The agenda for the claimant is that if they succeed, a blank media levy on storage would likely be introduced to provide their fair compensation, which already exists in many other European Countries. This will of course increase costs for consumers, and profits for copyright owners.

It is therefore a quite high stakes game, and means that immediate settlement in this case (the government lost a judicial review earlier this month) is probably quite unlikely. The key issues are whether the UK’s new private copying exception was itself legal under EU law and secondly, whether the process it was adopted under was procedurally legal.

The case can hardly be touted as a victory for the Claimants – BASCA et al. Of several grounds put forward by the claimants regarding the compliance with EU law, the judge rejected each in turn, not one being upheld. The only ground of the claimant’s case which was upheld, was that the Secretary of State for Business, Innovation and Skills, in introducing section 28B had not taken all relevant evidence and information into account before introducing this section.

So what happens now?

For the time being at least s28B remains with its limited format shifting defense. We are, for the moment, still free to format shift.

The Secretary of State could merely carry out the review in the proper manner identified by the court, gather sufficient evidence supporting s28B and that would satisfy the procedural requirement.

Either party could also appeal, the Claimant against the judge’s ruling against them on several points of law, or the defendant against the judge’s finding against the Secretary of State that insufficient evidence had been gathered or taken into account.

If this were to occur, it would be to the Court of Appeal, and possibly from there to the Supreme Court. For such appeals timescales of years rather than months are usually appropriate.

The other option which exists, which is not an appeal as such, is the court could refer the matter to the Court of Justice of the European Union (CJEU) for a ruling on a point of Law. As the UK law in dispute is derived from EU Law, it is the CJEU who has the ultimate say on what the EU law means in those circumstances.

Here the UK court would ask a specific set of questions as to what the correct interpretation of the law is, but the CJEU does not strictly speaking decide for the claimant or defendant, though in effect the ruling will usually strongly be favorable to one of the parties. This process will often take at least three or more years.

What might appeal courts or the CJEU rule ? Impossible to say with any certainty, but the CJEU has said in the recent Copydan case that in circumstances where there is minimal prejudice to the copyright owner, no compensation can indeed be fair compensation.

In this instance, as the user has already paid a copyright license fee when buying the original CD from which files are ripped, do the copyright owners suffer anything more than minor prejudice? I would suggest not, and it is apparent that this is the opinion of the judge Mr Justice Green, in BASCA. The claimants in BASCA of course contend differently, but well they would wouldn’t they?

A final parting point. If it were the case that through a CJEU ruling against format shifting a blank media levy was introduced (and this can be compelled by the EU, although this would be a long several year process of CJEU Ruling, UK failure to comply, negotiations, warnings etc before any action was taken by the Commission) the UK Government could quite legitimately contend that since many other EU countries which allow private copying with such levies also allow private copies for family members, the UK should now do the same.

This would widen the ambit of the current s28B a significant amount, and would to some extent offset increased costs to consumers of a blank media levy.

—

About the author: Camden is an IP lawyer practicing in the UK