The media landscape in 2013
Lorna Caddy and Adam Rendle set out below some predictions on how the media landscape is likely to change and develop during the course of 2013.
Contents of this article
On 29 November 2012, Lord Justice Leveson's much awaited report "An Inquiry into the Culture, Practice and Ethics of the Press" was published. 2013 will see continued debate as to how the press should be regulated going forward, and the extent to which that regulation should be underpinned by legislation. Leveson explains that his vision is for the press to achieve "voluntary independent self-regulation".
Leveson recommends that an independent regulatory body should be established, with the dual roles of promoting high standards of journalism and protecting the rights of individuals. That body should set standards, both through a code and in relation to governance and compliance. The body should hear individual complaints against its members about breach of its standards and other appropriate redress while encouraging individual newspapers to embrace a more rigorous process for dealing with complaints internally. It should also provide a quick and inexpensive arbitration service to deal with any civil law claims based upon its members' publications. View a chart illustrating Leveson's proposed system.
The Lord Justice writes that the new body must have the power to offer meaningful remedies and apply effective sanctions to those who continue to breach standards. It must be adequately financed but be sufficiently independent from its funding body to operate independently. Both Leveson and many who gave evidence to him are clear that the new system must include everyone. The challenge is going to be how to deliver this goal without laying down a requirement in statute that the press be regulated.
The main focus of the debate, since 29 November 2012, has been to what extent if any, regulation should be underpinned by legislation. We look at what Leveson is proposing and what that legislation might look like. At the time of writing, it looks like the press will now work together to try and structure an alternative structure which is independent from Government but which sufficiently addresses the criticisms levelled at it in the Leveson report.
The Defamation Bill has been working its way through Parliament during the course of 2012 and is now being debated in the House of Lords. Assuming that the Lords do not seek to make any substantive changes to the Bill, it is likely to get Royal Assent in the first part of 2012.
The stated aim of the Bill is to reform the law of defamation to ensure that a fair balance is struck between the right to freedom of expression and the protection of reputation. This stated aim suggests that there is not currently a fair balance. Key parts of the Bill are as follows:
- Introduction of a requirement for claimants to show that they have suffered serious harm before suing for defamation;
- Removal of the current presumption in favour of a jury trial;
- Statutory codification of Reynolds Qualified Privilege (a public interest defence developed through case law, where the defendant can demonstrate responsible journalism), described in the bill as “responsible publication on matters of public interest”;
- Increased certainty/protection for operators of websites that host user-generated content, providing they comply with the procedure to enable the complainant to resolve disputes directly with the author of the material concerned;
- Introduction of new statutory defences of truth and honest opinion to replace the common law defences of justification and fair comment; and
- Introduction of a single publication rule, meaning that broadly, claims can only be brought in the period of 12 months from the first date of publication. Currently, the 12 month period renews each time there is a fresh publication, meaning the limitation period is in reality, much longer than 12 months.
Lord McNally (Minister of State, Ministry of Justice and Deputy Leader of the House of Lords) has recently stated that, while he believes that it is important to wait for the outcome of the Leveson inquiry with respect to the procedural aspects of defamation reform, that process should not be allowed to impact on the content or the timescale of the reforms to the substantive law contained in the Bill.
Lord Justice Leveson has since made in clear in his report that his Inquiry did not consider in any detail the substantive laws of defamation. He explains that he does not seek to emulate the pre-legislative scrutiny of the Defamation Bill which is already under way.
In April 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will bring into force a number of changes regarding costs management and litigation funding. These changes will impact significantly on the conduct of contentious media matters. We will see the abolition of the winning litigant’s ability to recover success fees under conditional fee agreements (sometimes known as no win, no fee agreements) and also after the event insurance premiums from the losing party. Success fees for policies entered into prior to 1 April 2013 will continue to be recoverable after that date. Equally, the new provisions will only apply to ATE policies taken out after 1 April 2013, so premiums for policies taken out before 1 April will continue to be recoverable after that date.
It remains to be seen how these changes will affect the number of defamation actions in the coming months. We may see a proliferation of cases being brought prior to 1 April 2013, in order to ensure recovery of success fees and ATE insurance premiums.
2013 is likely to witness libel actions being brought against individuals publishing their views on Twitter. Whether we like it or not, the legal position of an individual who posts content online is clear. When individuals post material online, they act as publishers and those publications are subject to the same laws as those of professional publishers, such as newspapers. This includes publications made by way of a tweet. Read more discussion of this topic..
We may also see the Attorney General being more willing to bring actions for civil contempt of court for breaches of court orders (e.g. injunctions preventing the disclosure of private information and also the naming of the applicant for such an injunction) through use of Twitter and other social media.
While 2012 has seen a proliferation of prosecutions under section 127 of the Communications Act 2003, we may see a change in policy during 2013. Section 127 makes it a criminal offence to send by means of public electronic communications network (e.g. via Twitter) a message or other matter that is grossly offensive or of an indecent, obscene or menacing character. The Director of Public Prosecutions has recently announced a review in the law governing the use of social media, in the light of the recent criminal prosecutions. The Crown Prosecution Service has since invited lawyers, academics and representatives from social media companies to be part of the discussion. New guidelines on prosecutions are expected before the end of 2012.
The DPP has recently stated that if a large number of criminal prosecutions are brought, this is going to start having a chilling effect on free speech. He has also said that social media companies have a responsibility to take offensive material down quickly once they are aware of it. We may see the DPP and Government putting greater pressure on Facebook and Twitter to do this.
While retailers and service providers increasingly embrace ecommerce, selling outside the country in which they are based, we are seeing increasing confusion about where any activity which infringes intellectual property rights actually takes place. Does it take place in the country where goods and services are received, in the country from where those goods and services were dispatched (assuming the laws of that country classify those activities as infringing) or in both countries? Where, if at all, can the retailer or service provider be sued?
In October 2012, the European Court of Justice (ECJ) found that when sending data from web-servers in Member State A to a person in Member State B, any database right infringement takes place in at least Member State B (the country in which the data is received). This judgment threatens the business model of potential infringers, who may have hoped that they could avoid legal liability within the EU simply by locating their servers or operations in a favourable jurisdiction, while providing their services/goods into EU countries.
While the ruling in Football Dataco v Sportradar related to database rights, the principle is likely to be followed in copyright cases. It would be very surprising if the ECJ were to come to a different finding when interpreting the “making available” right. We will find out in the second half of 2013 when the ECJ will hopefully give rulings in two copyright cases regarding jurisdiction 1.
The key legislative development awaiting the creative industries is the somewhat confusingly and unpromisingly named Enterprise and Regulatory Reform Bill (ERRB). The ERRB is currently in its Committee Stage in the House of Lords. The Bill contains the first concrete legislative proposals to come out of the government’s response to the Hargreaves Review:
- Collecting Society Reform: it grants the government a "backstop power" to impose on collecting societies a code of conduct if they fail to adopt the minimum standards set by the government. Those minimum standards were published in October 2012 and collecting societies have a year to adopt them if they wish to avoid the government imposing a code of conduct. Read more coverage.
- Extended Collective Licensing: certain collecting societies will be able to apply to the government for the power to grant extended collective licences which cover works outside the express mandate from their members. A statutory instrument will follow the primary legislation and will contain the detail for how such schemes will operate. Read more coverage.
- Orphan Works Licensing: the government proposes to give powers to an authorising body to grant licences to use orphan works. It will grant licences only if, following a diligent search, the would-be licensee cannot trace the copyright owner. Again, a statutory instrument is needed to provide the detail. These proposals run in parallel to the EU's Orphan Works Directive, which requires Member States to provide for licensing of orphan works for non-commercial purposes by educational and cultural institutions and which must be implemented by November 2014. Read more coverage.
While the legislative process of passing the necessary statutory instruments giving effect to the licensing reforms may start in 2013 (including more consultations on their detail), it is unlikely in our view that they will be in force before 2014.
Now that the industry-funded office to carry on Richard Hooper's work on implementing his proposed "Copyright Hub" and the Copyright Licensing Steering Group have been formed and their leaders appointed, we can expect to hear a range of proposals for how the Copyright Hub will look and operate. The Steering Group will oversee the various work-streams identified by Hooper's Copyright Works report (such as data building blocks, rights registries and IT systems). A Copyright Hub Launch Group (chaired by Hooper) will steer the development and operation of the Hub. The government will be expecting a progress report towards the end of 2013. Read more coverage of the Copyright Hub.
The ERRB also contains the power to enable the Secretary of State to introduce amendments to copyright exceptions by way of statutory instrument, rather than by primary legislation, where those changes are to implement EU laws (i.e. under the European Communities Act 1972, the "ECA"). The Hargreaves Review recommended the adoption of all of the exceptions permitted in the EU Information Society Directive so this power could be used to introduce sweeping reforms to UK copyright law.
In July 2012, the government announced that it would set out its "policy decisions" on changes to copyright exceptions "later this year". At the time of writing, it has not done so. Our prediction is that the proposals will include some form of private copying and parody, caricature and pastiche exceptions, given the apparent political will behind them. The scope of such exceptions will be hotly contested when the government launches its consultation.
In light of the compromises that will inevitably have to be reached, we would tentatively predict that a proposed private copying exception might have the following features:
- Natural persons would be able to make reproductions of music, words with music and audio-visual works (and other works contained in such works) for their own private and personal use provided that the person seeking the benefit of the exception has lawfully acquired the original, keeps the copies only for as long as they are lawfully able to retain the original, the copies are made onto devices within the physical control of the person, the original access to the work was not through a communication to the public and the purpose of the copy was neither directly or indirectly commercial. It seems unlikely the government will propose an accompanying levy but the exception should be kept under review, in particular whether fair compensation would be necessary in light of the market effects of the exception.
We would also tentatively predict that a proposed parody, caricature and pastiche exception would have the following features:
- Fair dealing with a work for the purpose of parody, caricature and pastiche would not infringe any copyright in the work. A court in deciding whether the exception applies would be able to take into account all relevant factors, including: the commercial nature of the use; the dominant impression; the transformative nature of the use, including the amount independent creative input or commentary or criticism, whether of the work or otherwise; the necessity to use the work; the extent of market substitution caused; the proportion of the work taken compared to the transformative nature of the use; and any reputational damage to the author.
The predicted exceptions may go some way to reflect an appropriate balance between the respective interests at stake but it is unlikely that it is possible to address fully the interests of all interested parties. The debate is about to enter its most crucial stage.
Two important judgments are eagerly awaited:
- The UK Supreme Court will hear and rule on the "temporary copies exception" part of the NLA v PRCA/ Meltwater case (see our previous coverage from 2011 and 2010). The scope of this defence is important in determining what non-permanent electronic copies of copyright works can be made without needing a licence from the copyright owner. The principles behind the case will be relevant to the lawfulness of accessing content online, streaming content and receipt of broadcasts into decoder boxes. Inconsistencies have arisen in the European Court of Justice’s (ECJ) decisions on this exception (compare Infopaq with FAPL/Murphy and Infopaq2), reflecting a potential broadening of the exception, so it will be revealing to see how broad a view the Supreme Court takes or whether it thinks it needs to refer questions to the ECJ.
- The ECJ should give its ruling in the ITV v TV Catch Up case, which will provide more guidance on the scope of the communication to the public right. UK broadcasters have sued a UK service which provides online simulcasting of their broadcasts (e.g. via mobile phones). Earlier ECJ cases such as Rafael Hoteles, FAPL/Murphy and Airfield have suggested that the ECJ takes a wide view of what is covered by the communication to the public right so it would be swimming against that tide if it decides that TV Catch Up's service is not infringing the broadcasters' copyrights. The decision will help determine whether making works available to an audience that can lawfully access those works (i.e. as licence-fee payers) but in a different way to that envisaged by the rights owner (i.e. digital streaming rather than analogue broadcast) is a copyright infringement. The decision may also go some way to determining whether linking to copyright material is a communication to the public, which the ECJ will have to decide in the next couple of years (see the Retriever Sverige AB referral).
The implementation of the ISP subscriber notification obligations parts of the Digital Economy Act will finally start to gather momentum, ahead of the first notifications arriving in the middle of 2014. The Initial Obligations Code which will regulate this process should be in final form by the middle of 2013. After this, rights owners who want to make use of the process will have to commit to their expected use of the system, pay the requisite fees and seek approval of their evidence gathering procedures. The qualifying ISPs will also have to set up the systems necessary to process, record and make the notifications. Read more on the DEA.
Rights holders' efforts to force ISPs to block access to websites which infringe content will continue (three websites are reportedly subject of the BPI's attentions at the moment). ISPs are unlikely to agree to block access without a court having found that the websites do infringe copyright (one of the pre-conditions for the grant of these injunctions). It will therefore be interesting to observe how quickly courts can decide whether or not the website is infringing copyright and what third party representation (eg from the websites) they will require. In the meantime, the ECJ will hear a case referred from the Supreme Court of Austria requesting a ruling on the scope of such injunctions and their compatibility with fundamental rights, particularly whether they strike the right balance between the rights of users, ISPs, service providers and rights holders.
Political pressure will continue to mount on online intermediaries to provide even more support to rights owners' anti-piracy efforts. Intermediaries who will be the focus of such pressure include search engines, payment service providers, advertisers and advertising intermediaries. If the government (particularly the DCMS) is not convinced that enough is being done by these intermediaries, it may well propose legislation.
The Commission is taking an increasingly active role in shaping copyright policy, spearheaded by Commissioners Neelie Kroes and Michel Barnier. Their public statements express a desire to modernise copyright and ensure it creates the right conditions for development of innovative European content platforms (see, for example, here and here).
The Commission as a whole has now taken up the copyright reform agenda, announcing that it has agreed a “way forward for modernising copyright in the digital economy”. Work will start in 2013 to address six issues where the Commission believes “rapid progress is needed”: cross-border portability of content, user-generated content, data and text mining, private copy levies, access to audio visual works and cultural heritage.
We are likely to see further pressure on the creative industries to improve pan-EU and cross border access to online works in all sectors, along the lines of the Parliament's Report on online distribution of audiovisual works. 2013 is likely to see the development of more initiatives along the lines of Armonia, which describes itself as the "first pan-European hub for licensing of online [music] services". To this end, progress with the proposed Collecting Societies Directive is anticipated to be relatively swift and may be finalised by the start of 2014 (see our summary of the draft Directive). While market led solutions are the Commission’s perference more radical proposals may include further harmonisation, additional exceptions and limitations and reductions of territorial restrictions.
"The Steering Group will oversee the various work-streams identified by Hooper's Copyright Works report (such as data building blocks, rights registries and IT systems). A Copyright Hub Launch Group (chaired by Hooper) will steer the development and operation of the Hub. The government will be expecting a progress report towards the end of 2013."