Legislative Scrutiny: Digital Economy Bill - Human Rights Joint Committee Contents


Memorandum submitted jointly by the Department of Culture, Media and Sport and the Department for Business, Innovation and Skills

Introduction

1. This memorandum is provided jointly by the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills in respect of the Digital Economy Bill. This memorandum sets out the reasons why the Departments consider that the Bill is compatible with the European Convention on Human Rights. A declaration of compatibility has been made by Lord Mandelson in respect of the Bill.

General Assessment of compatibility with Convention rights potentially engaged by the Bill

2. The Committee is provided, with this Memorandum, with a copy of the Explanatory Notes to the Bill, which set out the Departments' analysis of the individual clauses, and also give details of the Departments' analysis of the overall compatibility of the Bill with the European Convention on Human Rights.

3. The Departments have considered the compatibility of all the clauses of the Bill with the European Convention on Human Rights. Only those clauses which raise any potential compatibility issues are referred to below. The Departments are satisfied that there are no Convention rights potentially engaged by the remainder of the clauses.

Detailed Assessment of compatibility with Convention rights potentially engaged by the Bill

Power for Ofcom to require information from network providers (clause 2)

4. The clause gives Ofcom additional power to require certain information to be provided to it under the existing power given to Ofcom in section 135 of the Communications Act 2003. Article 8 is potentially engaged by this provision but whether the exercise of such a power breaches the Convention would depend on the circumstances and use of the power.

5. The power to require additional information is necessary to enable Ofcom to fulfil its new reporting duties under this clause in relation to the resilience of the United Kingdom's communications infrastructure and to internet domain names. It is possible that some of that information may constitute commercially confidential information. Such information supplied by network providers is capable of being information which would engage Article 8.

6. Ofcom is a public authority for the purposes of section 6 of the Human Rights Act and will and must therefore exercise any power compatibly with Convention rights. Sections 137 and 393 of the Communications Act 2003 places restrictions on the gathering and disclosure of information gathered under powers under that Act. The Departments do not therefore consider that conferring this power on Ofcom breaches Article 8.

7. Whilst the Departments do not consider that Article 6 of the Convention is engaged in relation to these provisions, the Departments note that the Joint Committee was concerned about the information gathering powers given to Ofcom under what became section 135 of the Communications Act 2003 and drew Parliament's attention to these powers in relation to Article 6 of the Convention. However, the Departments would note that the Joint Committee was concerned in relation to the power then taken because it considered that there was a risk of self-incrimination contrary to Article 6 of the Convention. The purpose of the present provision, whilst it does entail the provision of information, is not of the same nature as that which caused the Committee concern during the passage of the Communications Bill. In particular, the concern of the Committee during the passage of the Communications Bill was because the information would be expected to be used in the context of the application of penalties to network providers. However, the present provisions are not akin, insofar as the information supplied will be used for the purposes of informing government policy and not for the purpose of incrimination, and Article 6 of the Convention is not therefore engaged in relation to the provisions of this Bill.

Online infringement of copyright (clauses 4 - 17)

Notification provisions

8. The Articles which are potentially engaged by this provision are Article 8 and Article 1 of the First Protocol.

9. Article 8 and Article 1 of the First Protocol are potentially engaged as follows. The Bill will place requirements on internet service providers (ISPs) to comply with two initial obligations; to send notifications to subscribers who have been identified by rights holders in relation to alleged infringements of copyright, and to maintain internal records of the number of times an individual subscriber has been identified and to maintain lists of those most frequently identified.

10. The sending of letters to internet subscribers notifying them of their alleged copyright infringements does not engage either Article 8 or Article 1 of the First Protocol, as the procedure merely constitutes a deterrent, and does not affect subscribers' rights at all, since they will continue to receive the services they contracted for from ISPs.

Additional technical measures

11. The Articles which are potentially engaged by this provision are Article 6, Article 8, Article 10 and Article 1 of the First Protocol.

12. Once the notification provisions set out in paragraph 5 have been operative for a certain period of time, the Secretary of State will have the power to direct ISPs to impose technical measures on internet subscribers which may include temporary suspension, bandwidth capping and bandwidth shaping. Ofcom will adopt a code of practice setting out all the necessary procedural aspects to enable ISPs to give effect to these measures.

13. Articles 8 and 10 and Article 1 of the First Protocol are potentially engaged as follows. When following the rules specified by the Secretary of State and the procedural provisions specified by Ofcom in a code for giving effect to the technical measures (as set out at paragraph 8) in respect of a subscriber's internet account, ISPs will potentially be hindering subscribers from accessing the internet (and hence their e-correspondence), or from having the broadband connection speed/content they contracted for. These measures may amount to interferences in the right to respect for private life, the right to freedom of expression and the right to peaceful possession of property. The rights are engaged because affecting the ability of a subscriber to access the internet at a given speed, or, potentially, at all, will tend to affect their ability to communicate with others by on-line methods (by email, and through instant messaging, and contributions to internet discussions). This would tend to affect their private and family life in the widest sense, but also Article 10 rights to freedom of expression and freedom of information. Such interference does not render the provisions incompatible with the Convention, however for the reasons set out in paragraph 10.

14. Both Article 8 and Article 1 of the First Protocol are qualified rights. It is acceptable under the Convention to interfere with such rights provided that the interference is in the public interest and in accordance with the law. Article 10 is likewise a qualified right, and it is acceptable under the Convention to interfere with this right in the interests of a democratic society and in accordance with the law. This provision represents an acceptable balance between subscribers' rights and the public interest in the protection of the copyright of third parties. In particular, the qualifications to Article 8 and Article 1 of the First Protocol require consideration of the rights of others. Copyright holders have limited methods of protecting that copyright, which may be less effective across national boundaries, and accordingly, therefore, where it is infringed on the internet. Moreover, subscribers may be infringing the rights of more than one copyright holder at a time, and these provisions permit action on behalf of many copyright holders. By warning subscribers that they are infringing the rights of others, and permitting them to rebut the assumptions underlying that warning, and only when a warning is not heeded by imposing technical measures, these provisions strike the balance appropriately between the rights of subscribers and the rights of copyright holders. The case of Promusicae Telefonica de España[68]recognised that the effective protection of copyright constituted a legitimate interest, and provided guidance on the criteria to be followed to strike a fair balance between the various fundamental rights (see in particular paragraphs 57 to 70 of the judgment).

15. Article 6 is potentially engaged as follows. A determination by ISPs when applying the rules made by the Secretary of State for the imposition of technical measures is likely to amount to a determination of a civil right or obligation within the meaning of Article 6 of the Convention. The legislation provides for appropriate review mechanisms by an independent and impartial tribunal, and these mechanisms render the provisions compatible with the Convention. Effectively, the subscriber will be able to seek a review of the decision of the ISP, in the first instance by an independent tribunal, as set out by Statutory Instrument (at the same time as Ofcom adopts a code of practice). Appeals to decisions of that tribunal will be to the first-tier tribunal. Both appeals to decisions of the independent tribunal and the first-tier tribunal may have the effect of suspending the application of the technical measure, until independent tribunal or first-tier tribunal resolves the appeal.

16. Accordingly, the legislation is consistent with the Convention, insofar as the proposed technical measures are designed to pursue the protection of a legitimate interest (i.e. protection of copyright), are appropriately targeted, proportionate for the purposes of safeguarding the legitimate interest they are designed to protect, and subscribers will have access to a review by an impartial tribunal and an appeal to the first tier tribunal to challenge the ISP's decision to impose technical measures on them.

17. As set out in paragraph 15, the legislation provides for subscribers to be able to appeal the ISP's decisions on the imposition of technical measures in the first instance, to an impartial tribunal set out in legislation made by Ofcom. Subsequently, subscribers will have a right to appeal that tribunal's decision to the first-tier tribunal. With reference to any decision in respect of technical measures, the legislation provides that the imposition of those technical measures may be postponed pending the determination of an appeal by the impartial tribunal and/or the first-tier tribunal.

Power to amend copyright provisions

18. No Articles are engaged by the provision itself as the provision only contains a power and has no immediate substantive effect.

19. Clause 17 inserts a new section 302A into the Copyright, Designs and Patents Act 1988. It enables the Secretary of State to make provision by order to amend Part 1 or Part 7 of that Act for the purpose of preventing or reducing online copyright infringement, if it appears to the Secretary of State appropriate to do so having regard to technological developments that have occurred or are likely to occur.

20. Articles may be engaged by an exercise of the power but the power will have to be exercised in a manner which is compatible with Convention rights as section 3 of the Human Rights Act 1998 requires powers to be exercised in a manner that is compatible with those rights.

Power in relation to domain name registries (clauses 18 - 20)

21. The Articles which are potentially engaged by these provisions are Article 1 of the First Protocol and Article 6.

22. The provisions amend the Communications Act 2003 in order to regulate internet domain name registries. They are the entities that allocate internet domain names to end users. Internet domain names (such as www.google.co.uk) underpin the addressing system for the Internet. The provisions give certain powers to the Secretary of State in circumstances where there has been a serious failure of a registry because either: (a) the registry itself, its end-users (owners of or applicants for domain names) or registrars (agents of end-users) have been engaging in unfair practices (such as cyber-squatting or registering misleading domain names); or (b) the registry does not have adequate arrangements for dealing with complaints in connection with domain names.

23. In either case the Secretary of State may only act if the failure has (a) adversely affected or is likely adversely to affect the reputation or availability of electronic communications networks or services provided in the UK, or the interests of consumers or the public in the UK, and (b) if the registry has been allowed a reasonable period for making representations (and that period has expired). In those circumstances, the Secretary of State may appoint a manager in respect of the property and affairs of the registry to secure that appropriate steps are taken to remedy the failure or the consequences of the failure, and/or the Secretary of State may apply to the court to seek an order making such alterations to that registry's constitution as are necessary to secure that appropriate steps are taken to remedy the failure or the consequences of the failure. The registries will have a right of appeal on both the facts and the law to the Competition Appeal Tribunal, an independent body, from a decision to appoint a manager (and thence to the Court of Appeal on a point of law), and the registry will have a right of appeal to a higher court in respect of a court decision to alter its constitution.

24. Rights under Article 1 of the First Protocol are qualified rights. It is acceptable under the Convention to interfere with such rights provided that the interference is in accordance with law and is necessary in the public interest. The measures to be taken by the Secretary of State are only to be taken in circumscribed circumstances, to secure specified aims, following adequate opportunity for the registry to make representations. The registries will be able to appeal the decision thereafter. Therefore, although the appointment of a manager and/or the alteration of a registry's constitution may amount to interference in the property rights relating to a particular registry, these provisions nonetheless represent an appropriate balance between the private rights of registries and their owners to conduct their businesses freely and the public interest in ensuring that the entities which register internet domain names do not operate in a manner which impacts negatively upon consumers, the general public, or the reputation of the UK's internet economy.

25. Alteration of the constitution of a registry and the appointment of a manager also arguably engage the determination of civil rights and/or obligations pursuant to Article 6 of the Convention. However, with regard to the proposed right for a court to alter the constitution of a registry, Article 6 rights are secured by the fact that (a) alteration can only take place after the Secretary of State has applied to the court for an order to alter the constitution of a designated registry, and (b) that the court's decision will itself be appealable to a higher court. Furthermore, the alteration the court may make is limited to the changes that are necessary for securing that the registry rectifies a relevant failure or remedies the consequences of such a failure. With regard to the appointment of a manager over the affairs and property of the registry, Article 6 rights are secured by the fact that (a) the powers of the manager are limited by the provision that the sole purpose of the appointment is to secure that the registry rectifies the relevant failure or to remedy the consequences of the failure, and (b) that the decision is appealable on both the facts and the law to the Competition Appeal Tribunal (and thereafter to the Court of Appeal on a point of law).

26. In those circumstances, the provisions relating to the possible alteration of the constitution of a registry or the appointment of a manager do not amount to a breach of Article 6 of the Convention.

Power for the Secretary of State to re-impose conditions under the regulatory regime for Channel 3 and Channel 5 licence holders (clause 37)

27. The Article which is potentially engaged by this provision is Article 1 of the First Protocol.

28. Article 1 of the First Protocol is potentially engaged as follows. The Secretary of State currently has the power under section 263 of the Communications Act 2003 to provide that conditions which are included as part of the regulatory regime for any service should cease to be so included, whether permanently or on a temporary basis. Those conditions include, for example, programming quotas, and conditions in relation to news and current affairs programming. The power is being extended to provide that the Secretary of State has power to re-impose conditions which were previously excluded by an order made under section 263. This may adversely affect the rights of licence holders if conditions are re-imposed on the licences which they hold.

29. Rights under Article 1 of the First Protocol are qualified rights. It is acceptable under the Convention to interfere with such rights provided that the interference is in accordance with law and is necessary in the public interest. The regulatory regime at Part 3 of the Communications Act 2003 is applicable to public service broadcasters. Those broadcasters apply for licences on the basis that they wish to be public service broadcasters, and with the expectation that conditions will be placed upon their licences to secure compliance with a regime designed to protect the public service nature of their broadcasting output. This provision strikes an appropriate balance between the rights of broadcasters and the general public interest in securing a robust regulatory regime for public service broadcasting.

30. Furthermore, during the licence application procedure, broadcasters will have structured their businesses to meet the conditions which Ofcom would impose on that licence as part of the regulatory regime. It is those conditions which would potentially be removed and reimposed. As no orders have been yet made removing conditions, broadcasters will take the advantage of any measures which remove conditions, but will also have structured their businesses in the expectation that they would have to accommodate those conditions which currently form part of the regulatory regime applicable to them.

Power to allow Ofcom to levy penalties for failure to meet licence conditions (clause 38)

31. The articles which are potentially engaged by this provision are Articles 6 and Article 1 of the First Protocol.

32. Article 6 is potentially engaged as follows. Ofcom may impose a penalty on a licence holder who fails to comply with particular provisions of a licence which was granted as the result of an auction following a direction given by the Secretary of State. The imposition of this penalty will be a determination of civil rights under Article 6. However, the procedures involved in determining those civil rights are not such as to amount to a breach of Article 6 for the reasons set out in paragraph 33.

33. Ofcom is a statutory body, established under the Communications Act 2003, and is required to act in a proportionate and reasonable manner itself in accordance with section 6 of the Human Rights Act. Moreover, an appeal against a decision to levy such a penalty will lie to the Competition Appeal Tribunal, an independently constituted body. The availability of such an appeal secures compliance with Article 6 of the Convention.

34. Article 1 of the First Protocol is potentially engaged because the levying of a penalty arguably amounts to a deprivation of licence holders' possessions. However, Article 1 of the First Protocol is a qualified right, and interference is permitted by the Convention if prescribed by law and in the public interest. This provision strikes an appropriate balance between the rights of individual licence holders and the public interest in the opening up of spectrum to further competition in the field of mobile broadband, and ensuring that those who use spectrum are properly regulated. Safeguards against the disproportionate exercise of this power include a ceiling on the amount of the penalty, the requirement that the amount be appropriate and proportionate and the duty of Ofcom to give reasons regarding the imposition of a penalty.

Provisions in relation to video games classification (clauses 40 - 41 and Schedule 1)

35. The Articles which are potentially engaged by these provisions are Article 6, Article 8, Article 10, and Article 1 of the First Protocol.

36. The Bill will amend the VRA to extend the statutory classification requirement to cover all video games that are suitable to be viewed by persons aged 12 or over. The provisions implement the recommendations of Professor Tanya Byron's review, Safer Children in a Digital World. Currently video games are exempted from classification unless they contain gross violence, human sexual activity or other matters of concern listed in sections 2(2) and 2(3) of the VRA. Video games will now only be exempt from the statutory classification requirement if i) they fall within the existing exemptions set out in section 2(1) of the VRA (namely, they are designed to inform, educate or instruct, or they are concerned with sport, religion or music), ii) they are arcade games, iii) they do not meet certain threshold criteria listed in new subsection 2A, or iv) they are considered suitable to be viewed by persons under 12 years and this has been confirmed in writing by the designated authority.

37. The Bill will also amend the VRA to allow more than one designated authority to make arrangements under section 4 of that Act. There will be an authority designated for video games and another separate authority designated with respect to other video works.

Classification of video games

38. Article 10 is potentially engaged as follows. The right protected by Article 10 encompasses the freedom to receive and/or impart information and ideas (including negative or offensive information[69]). Article 10 affords the opportunity to take part in the public exchange of cultural, political and social information and ideas of all kinds. The designated body is concerned with classifying video works, which includes the provision of age ratings to apply to those works and advice on what is contained within the work. The amendments to be made to the VRA by these provisions with respect to video games mean that more of those games fall within the ambit of the Act and hence are subject to a classification requirement. It is arguable that the classification requirement interferes with the Article 10 rights of producers and publishers to impart information to the public.

39. Article 10 is a qualified right, and interference with this right is compatible with the Convention if prescribed by law and necessary in a democratic society in the interests of a legitimate aim (for example the protection of health or morals and/or the prevention of crime and disorder). The system of regulation and control provided by the VRA and the amendments to it to be made by these provisions form a range of domestic standards which represent an acceptable balance between the rights of producers and publishers to distribute their work and the legitimate interest in the protection of health or morals, and the prevention of crime or disorder. One of the purposes of the classification of video games is to better protect children from the impact of age-inappropriate material and thus to protect the health and morals of those children. The VRA and the changes to it made by these provisions do not amount to a breach of the rights enshrined by Article 10 of the Convention.

40. The changes to be made to the VRA potentially engage Article 1 of the First Protocol. The measures may affect the profitability or viability of the producers and publishers of video works and games, and therefore their economic interests connected with the running of those businesses.

41. Article 1 of the First Protocol is a qualified right, and interference with that right is compatible with the Convention if in accordance with the law and necessary in the public interest. This measure strikes an appropriate balance between the rights of businesses to operate freely, and the need to protect public health and morals. The impact of the VRA and these changes is not to prevent businesses from operating freely, but to ensure that they operate freely within a system of regulation that is aimed at better informing parents and consumers about what they will be viewing, having special regard to the ready availability of video recordings and video games to children and young adults. The public interest lies in the protection of children and young adults from viewing games or other video recordings which may be unsuitable for their age or stage of development.

Appeals from classification decisions

42. Article 6 is potentially engaged as follows. It is proposed that the designated persons who make decisions on classification will be the principal office holders of the Video Standards Council. In designating those persons, the Secretary of State must be satisfied that adequate arrangements will be made for an appeal from classification decisions. The Secretary of State will require that the appeal body that will hear such appeals will be structurally independent of that organisation, in that no members of the Video Standards Council will sit on the appeal body. An appeal from a determination as to whether a video game is suitable for classification and if so, the determination of the classification (age rating) that applies to it, is arguably a civil right for the purposes of Article 6.

43. The Departments have considered whether the appeal system to be set up falls within the category examined by the European Court of Human Rights in Tsfayo v United Kingdom[70]. If it were to fall within that category, notwithstanding the availability of judicial review against the determination of the appeal body, it is possible that the system would amount to a breach of Article 6. However, the system to be set up in this case can properly be distinguished from Tsfayo. This is primarily because the appeal body is structurally independent from the designated persons who will make the initial decision as to classification. However, the Departments also note that the ECtHR made the distinction[71] between processes where the issues to be determined required a degree of professional knowledge where a decision is made as a result of discretion in the wider policy framework from a decision solely on a question of fact. The appeal right to be created will operate along the lines of the former, and therefore there will be no breach of Article 6, when considering that judicial review will also be available against the decision of the appellate body.

Offences

44. Article 6 of the Convention is engaged as follows.

45. The structure of offences under the Video Recordings Act, which will apply to the classification regime by virtue of the amendments made by these provisions, provides for a series of offences. Under those offences the primary burden of proof rests with the prosecution to establish all the elements of each offence. Defences are available to an accused requiring the defendant to prove on reasonable grounds his knowledge or belief of certain facts or circumstances pertaining at the time of the offence.

46. The Departments have carefully considered these provisions, bearing in mind that the Video Recordings Act was enacted in 1984, prior to the Human Rights Act 1998. The Departments have considered, in particular, whether the offences to be applied to video games by virtue of the amendments made by this Bill infringe against the presumption of innocence enshrined in Article 6(2) of the Convention. As part of this consideration, the Departments recall that it is established by Strasbourg and domestic jurisprudence that Member States are permitted to "penalise a simple or objective fact as such, irrespective of whether it results from criminal intent or from negligence"[72], and thus Article 6(2) does not create an absolute prohibition against burdens of proof being placed on an accused.

47. The gravamen of the offences (the prevention of the supply and distribution of works, including video games, in breach of classification systems set up for the protection of the public, particularly children) is such that it is reasonable to provide a defence to those offences that rests on the knowledge of a particular accused at the time he committed the offence. As such, these provisions do not breach the presumption of innocence set out at Article 6(2) of the Convention. The following paragraphs are included, however, to show that, even if it is considered that the defences are in fact a constituent mental element of the offence itself that the provisions remain compliant with the Convention.

48. Rights under Article 6(2) are, notwithstanding their importance, qualified rights, and it is acceptable under the Convention to make provisions which might infringe those rights were they not justified and proportionate. Placing a burden of proof on an accused to prove his state of knowledge is such a justified and proportionate measure. An accused charged with an offence under the Video Recordings Act has a full opportunity to demonstrate his belief or knowledge at the time of the commission of the offence. It is reasonable and proportionate to place this burden upon the accused, given that those matters are within the accused's knowledge, or are matters to which he, more than the prosecution, has access. Further, given the legitimate aim being pursued, the general public interest in maintaining the robustness of the classification system particularly to protect children from access to inappropriate material, and the nature of the penalties to which a person convicted of one of the offences would be subject, placing a burden of proof on an accused as to his reasonable belief is proportionate. For these reasons, these provisions do not amount to a breach of the presumption of innocence set out at Article 6(2) of the Convention.

Enforcement of classification provisions

49. Article 8 is potentially engaged as follows. Section 17 of the VRA sets out entry, search and seizure provisions. These measures would arguably amount to interferences with the right to respect for private life.

50. Article 8 is a qualified right. It is acceptable under the Convention to interfere with such rights provided that the interference is in the public interest and in accordance with the law. The purpose of these provisions is to prevent crime and/or to protect the rights of others. Judicial authorisation governs the use of the powers set out in section 17 of the VRA; a justice of the peace must authorise a constable to enter and search premises and he can only do so if he is satisfied on oath that there are reasonable grounds for suspecting that an offence under the Act is being committed, and that there is evidence that the offence is or has been committed are on those premises. A constable may only seize property in these circumstances if he has reasonable grounds to believe that that property may be required as evidence in relation to criminal proceedings under the Act. The VRA sets out adequate and effective safeguards to ensure that there is no abuse of the powers, and that the law governing the searches and subsequent seizure of property is clear, accessible and subject to judicial oversight. In those circumstances, the provisions amount to an acceptable balance between Article 8 rights, and the public interest in upholding, by criminal sanction if appropriate, the classification system.

51. Article 1 of the First Protocol is potentially engaged as follows. Section 21 of the VRA provides for the forfeiture of any video recording where a person is convicted of any offence under the Act and a court orders that the goods are to be forfeited. The forfeiture of goods would arguably amount to an interference with the rights enshrined by Article 1 of the First Protocol.

52. Rights under Article 1 of the First Protocol are qualified rights. It is acceptable under the Convention to interfere with such rights provided that the interference is prescribed by law and is necessary in the public interest. Where a criminal offence has been committed and goods seized that were the subject of those proceedings, it is in the public interest to dispose of such property to further prevent the commission of offences and the spread of illegal material. The court cannot make a forfeiture order unless it gives the owner of the goods (or any person with an interest in the goods) an opportunity to be heard or to say why the order should not be made. An order cannot be made until after the time to appeal against a conviction has expired and, if an appeal has been instituted, that appeal has been determined. This provision represents an acceptable balance between the private rights of persons adversely affected by the loss of their possessions through forfeiture and the public interest in the proper operation of the classification system and the enforcement of that system.

Copyright licensing (clauses 42 and 43 and Schedule 2)

The granting of licences in relation to orphan works and rights

53. The Article which is potentially engaged by this measure is Article 1 of the First Protocol.

54. Article 1 of the First Protocol is potentially engaged as follows. Section 116A of and paragraph 1A of Schedule 2A to the Copyright Designs and Patents Act 1988 (CDPA) which will be introduced by clause 42 and Part 2 of Schedule 2 will allow the Secretary of State to make regulations for the authorisation of licensing bodies and other bodies to license the use of orphan works or rights (which will be defined in Regulations, see below). The compulsory licensing of an orphan work or right is potentially an interference with the rights of the unidentified or untraced right holder.

55. To the extent that Article 1 of the First Protocol is engaged, it is a qualified right, and interference with this right is compatible with the Convention if prescribed by law and necessary in the public interest. This measure strikes an appropriate balance between the private interests of right holders in controlling use of their works or rights, and the public interest in allowing the use of works or rights where consent cannot be obtained because the right holder cannot be identified or traced. Section 116A(6), also introduced into the CDPA by clause 42, gives the Secretary of State power to make regulations determining when a work is classified as an orphan work and when it ceases to be so. Paragraph 1A(6) of Schedule 2A, introduced by clause 42(2) and Part 2 of Schedule 2, gives the Secretary of State power to make regulations determining when performers' rights are classified as orphan rights and when they cease to be so. It is intended that such regulations will impose adequate checks to ensure that works or rights are not so classified when the right holder can be identified and contacted and so is capable of giving consent to the use of their work or rights. Secondly, the Secretary of State may by regulations made under section 116A(3) of and paragraph 1A(3) of Schedule 2A to the CPDA introduced by clause 42 and Part 2 of Schedule 2 provide for the treatment of royalties collected, including holding money for the owner of the orphan work or rights, should they subsequently be identified, allowing compensation for use which they have not authorised. Finally, the Secretary of State has powers under section 116A(4) of and paragraph 1A(4) of Schedule 2A to the CDPA introduced by clause 42 and Part 2 of Schedule 2 to determine through regulations the rights and obligations in respect of an orphan work or rights if the owner of the work is subsequently identified. It is in the public interest that orphan works and rights should be available to the public, subject to safeguards for that owner should he subsequently be identified, which can be provided by regulations.

Extended licensing

56. Section 116B of and paragraph 1B of Schedule 2A which is introduced into the CDPA by clause 42 and Part 2 of Schedule 2 provides for the Secretary of State to authorise extended licensing schemes. It is doubtful that Article 1 of the First Protocol is engaged in relation to the rights of a non-member of a licensing body whose works are licensed by that body under an extended licensing scheme because that right holder can opt out of the scheme. If Article 1 of the First Protocol is engaged, the measure is compatible with the Convention because it strikes an appropriate balance between the interests of the right holder in controlling use of their works, and the public interest in users having access to simplified licensing systems for use of copyright works and performers' rights.

The regulation of licensing bodies and bodies that are licensed to use and authorise the use of orphan works and rights

57. The Articles which are potentially engaged by this measure are Article 6 and Article 1 of the First Protocol.

58. Licensing bodies license the use of copyright or performers' rights owned by their members, collect in royalties and distribute these to members after deducting the expenses of collection. The Secretary of State will have powers under section 116C , Schedule 1A and paragraph 1C of Schedule 2A to the CDPA all introduced by clause 42 and Part 2 of Schedule 2 to make regulations requiring licensing bodies to adopt a code of practice if they are authorised to license orphan works or rights or to carry out extended licensing or where it appears to the Secretary of State that their self-regulation fails to protect the interests of right owners, licensees, prospective licensees or members of the public.

59. The Secretary of State will also have powers to determine through regulations made under section 116A(5) of and paragraph 1A(5) of Schedule 2A to the CDPA, again introduced by clause 42 and Part 2 of Schedule 2, that a person shall cease to be authorised to license the use of orphan works or rights or a licensing body shall cease to be authorised to carry on extended licensing where it has failed to comply with requirements in those regulations. The Secretary of State will have powers under paragraph 2(2) of Schedule 1A, introduced by clause 42(2) and Part 1 of Schedule 2, to make regulations determining when the regulatory requirements cease to apply to a licensing body that is not authorising use of orphan works or rights or carrying on extended licensing. There is nothing inherent in the powers introduced by this clause that could be challenged as a breach of the Convention. Compatibility with the Convention will depend on the circumstances and use of the powers.

60. Article 6 and Article 1 of the First Protocol are potentially engaged as follows. The imposition of regulatory requirements on a licensing body so that it is not able to continue with its licensing activities unless it complies with that regulation may be a determination of civil rights and obligations within the meaning of Article 6. Similarly, where a licensing body has been authorised to license the use of orphan works or rights or to carry on extended licensing, the removal of that authorisation and the rights attaching to it may be a determination of civil rights and obligations. The requirements of Article 6 are met because a licensing body will be able to apply for judicial review of any decision to impose regulation or to remove authorisation. The same considerations apply to the powers under regulations to remove an authorisation from a body other than a licensing body to use or to authorise the use or orphan works. That is, such a body will be able to apply for judicial review of any decision to remove authorisation.

61. Article 1 of the First Protocol is a qualified right. Interference with the right is compatible with the Convention if in accordance with the law and necessary in the public interest. This measure strikes an appropriate balance between the rights of licensing bodies to operate freely and the public interest in ensuring that their business practices are transparent and take proper account of the interests of licensees and, where relevant, the members they represent and the general public.

62. The removal of the right to license the use of orphan works or rights or to operate an extended licensing scheme would similarly amount to an interference with rights conferred by Article 1 of the First Protocol. Those rights will be established in detail in regulations, which will set out the circumstances under which the rights can be exercised. The jurisprudence of the European Court of Human Rights has made clear that, where a right is granted, it does not amount to a deprivation of that right if it is withdrawn when exercised in a manner which is inconsistent with conditions which made the exercise of that right possible[73].

Imposition of penalties

63. Paragraph 3 of Schedule 1A which is introduced into the CDPA by clause 42(2) and Part 1 of Schedule 2 will allow the Secretary of State to make regulations to impose penalties, including financial penalties, on a licensing body if it fails to comply with a Code of Practice imposed under the Schedule. Any such penalty may amount to a determination of civil rights or a criminal charge under Article 6 of the Convention. The nature of the penalty will be determined by the regulations made by the Secretary of State in exercise of the power taken. At that time, it will be necessary to consider whether the extra protections in article 6(2) and 6(3) of the Convention apply, and how they are met when the Regulations are made. These Regulations may provide for a right of appeal to the Copyright Tribunal against the imposition of a penalty; an appeal to such an independent and impartial tribunal is compliant with Article 6. There is nothing inherent in the powers introduced by this clause that could be challenged as a breach of the Convention. Compatibility with the Convention will depend on the circumstances and use of the powers.

Provisions in relation to Public Lending Right (clause 44)

64. The Article which is potentially engaged by this measure is Article 1 of the First Protocol.

65. Article 1 of the First Protocol is potentially engaged as follows. The measure amends the Secretary of State's power under the Public Lending Right Act 1979 (PLRA) to make Regulations determining works to be included under the Public Lending Right Scheme, with the effect that such Regulations can include non-print works. Expansion of eligibility under that Scheme will involve the inclusion of works not otherwise included. Interference with copyright holders' rights will potentially occur because copyright holders newly included in the Scheme will no longer be able to prohibit or licence the lending (and in the case of soft-copy works, the limited non-permanent electronic copying necessary for that lending) of such works by libraries. Article 1 of the First Protocol will not be engaged until any Scheme amendments are made by Regulations under the expanded power, but paragraph 63 is included to demonstrate that, at the time at which the power would be used, it is assessed that no breach of Article 1 of the First Protocol will in fact take place.

66. Article 1 of the First Protocol is a qualified right, and interference with that right is compatible with the Convention if in accordance with the law and necessary in the public interest. The exercise of this measure strikes an appropriate balance between the private interests of copyright holders, and the public interest in permitting the extension of the works covered by the Scheme at a time when there is an increasing demand for the lending of books in formats other than in printed and bound format (audio books, for example). Furthermore, the Scheme provides that copyright holders will be compensated for the loss of the power to contract individually with public lending libraries for remuneration on a "rate per loan" basis.

Conclusion

67. In view of these considerations, it is considered that the Digital Economy Bill is compatible with the Convention.

November 2009


68   Case C-275/06, http://curia.europa.eu/jurisp/cgi-in/gettext.pl?where_&lang_en&num=79919870C19060275&doc=T&ouvert=T&seance=ARRET Back

69   Handside v UK (1979) 1 EHRR 737. Back

70   [2007] LGR 1. Back

71   In paragraph 46 of its judgment. Back

72   Salabiaku v France (1988) 13 EHRR 379, at paragraph 27. Back

73   See, for example, Gudmundsson v Iceland, (1996) 21 EHRR CD89. Back


 
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