stop confiscation of your property and Human Rights in the UK Enterprise and Regulatory Reform Bill

Stop43's reply to Professor Hargreaves, Part Two

In further response to Professor Hargreaves’ comments on the IPO blog:


Professor Hargreaves says:

‘[Paul] thinks that it [the Digital Copyright Exchange] will breach the Berne Convention by making copyright protection conditional on participation. The report is clear that rights holders should have all the protections they have now, whether participating in the DCE or not. As a benefit it suggests that DCE participation should bring ADDITIONAL entitlements for rights holders, as well as the greater access to, and thus potential to license, their works.’

His report suggests on Page 33:

  • providing that remedies, for example damages, are greater for infringement of rights to works available through the licensing exchange than for other works;
  • making DEA sanctions apply only to infringements involving works available through the exchange

Article 5 of The Berne Convention, to which the UK is signatory, states:

(1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.

(2) The enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the work. Consequently, apart from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.

(3) Protection in the country of origin is governed by domestic law. However, when the author is not a national of the country of origin of the work for which he is protected under this Convention, he shall enjoy in that country the same rights as national authors.

The central ideas in Article 5 are that you can't treat people from other countries worse than you treat your own, and this equality of treatment must not be subject to formality.

Berne says nothing about allowing foreigners only some of the rights that nationals have, because nationals must register to gain further rights such as greater damages for infringement: Berne 5 merely says ‘the rights’, which must be accorded ‘without formality’.

That DCE registration would offer important benefits - among them guaranteed parentage - in practice is in no doubt, but It follows that under his proposal, foreigners will have to register in order to enjoy the same levels of protection in law as UK nationals, and registration is a ‘formality’. Professor Hargreaves’ coercive legal proposals would therefore discriminate against foreign rights-holders, and in so doing breach Berne Article 5.

It could be argued that DCE registration would not discriminate against foreigners if, without formality, they are accorded the right to register. Informed legal opinion appears to be divided, which is why there is no legal consensus about whether the statutory damages available for infringed works registered with the US Copyright Office breach Berne or not, and there is no international case law to settle this matter.

The intention and spirit of the Berne Convention is that creators must hold their rights ‘without formality’. Two-tier copyright systems based upon registration clearly go against the intention and spirit of Berne.

The USA, which signed the Treaty in 1988, is the only Berne signatory that has a two-tier copyright system. Stop43 has been informed by international IP lawyers that the continuation of the USA’s existing registration system was the political price paid by WIPO to gain the USA’s signature to the Treaty. The UK is already signatory and bound by its Terms, and can be expected to pay a political price for breaching them.

Given this uncertainty over the legality in international law of two-tier copyright systems, the UK should err on the side of caution and not deliberately create one here.

Stop43's reply to Professor Hargreaves, Part One

Stop43 are flattered that Professor Hargreaves has chosen directly to respond to us on the IPO blog.

Stop43’s initial response to his Report is the collated, consensus opinion of all of our members who were available to read it on its day of publication, and not just the opinion or misreading of one member. If we have all misapprehended its meaning, this can only be a result of vital, key points being omitted or buried among details. How, otherwise, did we all miss them? Our starting point was one of optimism.

Having been badly misrepresented ourselves, Stop43 have no wish deliberately to misrepresent others. However, we reserve the right to base our analysis on POSIWID.

POSIWID: The Purpose Of a System Is What It Does.

“The purpose of a system is what it does. This is a basic dictum. It stands for bald fact, which makes a better starting point in seeking understanding than the familiar attributions of good intention, prejudices about expectations, moral judgment or sheer ignorance of circumstances." - Stafford Beer

‘POSIWID refers to the commonly observed phenomenon that the de facto purpose of a system is often at odds with its official purpose... [and] is generally invoked to counter the notion that the purpose of a system can be read from the intentions of those who design, operate or promote it’ - Wikipedia


Professor Hargreaves says:

‘Paul says the Digital Copyright Exchange will breach the law if it sets prices. But the report makes it quite clear the exchange won’t do that. It says that pricing is a judgement for licensors.’

We are grateful for this clarification and glad that this is his intention.

However, given that pricing is a crucial function of the Digital Copyright Exchange, and not a minor detail, we are surprised that we all missed this in our initial reading of the Report and have been unable to find explicit mention of it in the text. Such a crucial characteristic should not be hidden in detail or left to be inferred; it must be stated unambiguously and explicitly. We would be grateful to Professor Hargreaves if he would quote the relevant text to us, please.

Other crucial characteristics of the Digital Copyright Exchange appear to remain undefined. We have tried and failed to find explicit answers in the Report’s text to the following questions. We have placed Stop43’s National Cultural Archive proposal’s answer in parenthesis:

  • Will there be a registration fee to join the DCE? (NCA: No. Any registration fee would preclude mass participation.)
  • Will the DCE be entirely free to submit to and to use non-commercially? (NCA: Yes. Again, fees for non-commercial use would preclude mass participation.)
  • Will commercial submissions and searches be chargeable? (NCA: No. Search fees would burden businesses small and large with substantial and onerous additional costs.)
  • Will submissions be automatic, compulsory for publishers and voluntary for creators? (NCA: Yes. This is the only way to guarantee mass participation and create a genuine de-orphaning system.)
  • Will it efficiently allow creators, rights-holders and users to negotiate usage fees in the normal way? (NCA: Yes. A properly functioning market depends on the ability of buyers and sellers individually to agree prices via negotiation.)
  • Will it create a two-tier copyright system, with only registered users enjoying the maximum protection of their IP rights that the law provides? (NCA: No. Apart from moral and ethical concerns, Stop43 believes this to be a mechanism of market distortion, as Simon Crofts argues.)

Again, we would be grateful to Professor Hargreaves if he would quote to us his Report’s text in which these questions are answered explicitly.


We will respond to Professor Hargreaves’ remarks in a subsequent post.


International lawyer-turned-photographer Simon Crofts has dealt with this clearly and succinctly on his blog. His verdict: “Hargreaves orphan works proposals couldn’t work”. Stop43 agrees with his opinion and the reasoning behind it.


Professor Hargreaves says:

‘Paul has also suggested in the Stop 43 response that anything not registered with the DCE will become orphan. That’s the opposite of what the review says. I have proposed a means of guaranteeing against orphaning. Nobody would be obliged to take it up, but it’s simply perverse to construe this as Paul does.’

Whilst the DCE will in practice guarantee against orphaning, it will foster the idea that any IP not registered can be assumed to be orphan, and even if it is not can be treated as such, as Simon Crofts says:

‘Yes, I know that strictly speaking, unregistered works would still have copyright attached to them. But that right would be worth little. A copyright owner would only be able to enforce copyright protections where they could prove that the person wanting to use the work knew who the owner of the image was and went ahead anyway. Otherwise, that person would be fully entitled to pay £1 and use the image as they wished. If the owner of the image found out, they could claim no damages at all for the use up to that date (except, perhaps, for claiming the £1). Yes, they would then be entitled to negotiate a licence for future use, in practise that would very rarely happen. The state sponsored copyright thief would simply move on to the next £1 image.’

‘The real practical effect of Hargreaves’ proposals would be to remove copyright for unregistered works as far as UK law is concerned in all but name, except in the few cases where the copyright owner could really and positively prove that the person using the image couldn’t possibly have not known their identity.’

This is the case in the USA, where few lawyers will consider taking on a case in which the infringed IP is not registered.

Stop43’s National Cultural Archive proposal would circumvent these problems by not allowing commercial use of orphan works, which removes the expense of administering commercial orphan works licences; and by having no submission or research fees, encouraging the maximum participation. The NCA would be effective in reuniting parents and orphans, and in generating licensing transactions, but it would not be not essential to take part for the purposes of copyright protection and so would not discriminate against creators outside the UK or those in the UK whose work is not part of the NCA. Therefore, the NCA as we envisage it would not breach Berne, or TRIPS, or cause market distortion.

POSIWID. The Purpose Of a System Is What It Does.

Using POSIWID analysis the purpose of Professor Hargreaves’ combined DCE, ECL and orphan works proposal appears to be to create a relatively small, legitimate gulag of professional, registered work in the DCE and turn the uncountable billions of unregistered amateur and user-generated works into dirt-cheap fodder for the wider economy. Of course, that is exactly what he was asked to do: fuel the Government’s Plan for Growth by the massive and wholesale transfer of property rights from individual creators - which in the Facebook era means almost everyone - to private enterprise and the Cultural Heritage Sector, which is the POSIWID purpose of Fair Use. It would result in the biggest transfer of value in the UK from the weak to the strong since The Enclosures.

Oh, and because DCE-unregistered foreign-owned IP will essentially become regarded as orphan under his proposed system, his purpose is also potentially to expose any orphan work licensee to the wrath of US Copyright Office-registered rights-holders:

‘So, you’ve bought your £1 licence to use an image, and stick it in your ad campaign. You then discover that the image comes from the US, and it was registered for copyright protection there. You have perhaps a $150,000 law suit on your hands for each image used. The £1 license that you bought from your UK licensing authority turns out to be worthless. If this scenario seems fanciful, then ask the Daily Mail, who are currently being sued for $1,000,000 in the US for using several images without permission (they’re being sued for $150,000 per image). If those images had been UK images, they would have got away with it, and could only have been sued for peanuts even if they had been caught. If they had been unregistered in the UK, the Daily Mail could have happily paid £1 per image to make it all right under UK law. And then of course been sued for $1,000,000 in the US.’ - Simon Crofts

Hargreaves - our initial response

We are still digesting this complex document with its interlinked proposals and dependencies. It is precise in places but apparently intentionally vague in others, and raises as many questions as it answers.



  • If the answers are yes, then the Digital Copyright Exchange has Stop43’s wholehearted support. If the answers are no, or it will be used to impose automated and standardised pricing, commoditising our IP, or its purpose is simply to enable the commercial use of orphan works, then we are implacably opposed to it.


  • No Strengthening of Moral Rights: this is absurd. How are we supposed to trade our property if we lack the right to assert our authorship of it? The Moral Rights exceptions are obsolete. We are amazed that Hargreaves has chosen to duck this issue, hiding behind his “hard economics” remit. The Digital Copyright Exchange cannot function properly without automatic and unwaivable moral rights.

  • No Fair Contract Law for IP: another serious omission. Involving Ofcom in IP disputes is a good step, but the number of such disputes can only significantly be reduced by fair contract law. Germany has Fair Contract Law for IP; it is a larger economy than ours, is growing faster, and has thriving publishing and IP markets. There’s your evidence, Professor Hargreaves. Bring it here.

  • Extended Collective Licensing and commercial use of Orphan Works: this is disastrous; Clause 43 with knobs on. There is not even any attempt to charge a “market rate”; orphan works are to be licensed for a nominal fee. Clearly a sop to Big Culture, the BBC and those “internet entrepreneurs” we hear so much about, it is also the Big Stick to force everyone’s IP into the Digital Copyright Exchange.

The practical result will be to orphan anything not registered with the Digital Copyright Exchange, including the uncountable billions of amateur images, and thereby massively expand the number of orphan works. Rather than turning off the orphan works tap, this proposal turns it into a fire-hose. It is also massively in breach of the Berne Convention and TRIPS international copyright treaties, to which the UK is signatory.

Professor Hargreaves has adroitly dealt with the poison chalice he was handed in this Review by pouring the poison all over creators:

‘The British Film Institute estimates that if legal provisions enabled it to trade in orphan works it might generate an additional annual gross income for itself of more than £500,000.’

That is little more than half the annual turnover of a single top-end advertising photographer. We thought this Review intended to stimulate growth! Commercial orphan works licensing will trash this photographic business sector in the UK and drastically reduce its tax contribution, and all to give the BFI half a million quid?

‘4.54 ...It is very possible that some real discoveries are hidden in these archives and it is certain that new generations of creators will use some of these works in new ways – just as Romeo and Juliet led to West Side Story and scores of other adaptations – allowing new economic value to be realised. Opening up orphan works is a move to which there is no national economic downside.’

Pure James Boyle, and as disingenuous as it comes. Romeo & Juliet has been out of copyright and in the public domain for centuries. Of course there is a national economic downside - loss of income from commercial uses of their work by the “orphan” rights-holders, severe disruption to the market for new works, and consequent loss of UK tax revenue from creators who pay far higher effective rates of tax than “entrepreneurs” and global corporations. Paragraph 4.54 is an absolute disgrace.

Hargreaves rejects Fair Use as being incompatible with EU law, and instead advocates Extended Collective Licensing, commercial Orphan Works use and (perhaps, we don’t know; Hargreaves doesn’t say) a Digital Copyright Exchange automated and standardised pricing system, all of which are incompatible with EU law.

On top of this he insists on registration with the Digital Copyright Exchange as a prerequisite to full legal IP protection, an absolute breach of Berne’s “without formality” principle that will create a two-tier copyright system.

If access to and registration with the Digital Copyright Exchange is not free of charge, this is probably also in breach of Human Rights legislation: one must not be required to pay to enjoy the full protection of the law.

The key to this report lies in these two statements:

2.6 ...There is significantly less empirical evidence on the economic effects of design rights and next to no evidence on copyright policy. The lack of economic evidence on copyright may reflect a public debate shaped by a desire to provide creators with a “just reward” rather than by hard economics...

4.58 most cases the fee for use of orphan works would be nominal, recognising that the works involved represent a national treasure trove. We recognise that there will be concerns from some rights holders who fear that a growing resource of almost free to use orphan works could injure markets for other works. This is a good example of a case where wider economic interest outweighs the perceived risk to rights holders.

Hargreaves’ evidence-based Review proposes to deprive us of our rights and trash our businesses in the ‘wider economic interest’ on next to no evidence.

I’m a creator. Inevitably, despite my best efforts, some of my work has been or will become orphaned. Just when did my property suddenly become part of a “national treasure trove”? When did amateur work, not created for commercial gain, suddenly become fair commercial game for resellers and users without payment to its owners? If this was suggested for physical property it would rightly be regarded as outrageous.

Where’s Lewis Carroll when you need him?

article last updated 2011/05/19 16:30

Hargreaves' Review of Intellectual Property and Growth published

The Review Report has been published. It’s no light snack, and we’re busy reading and digesting now.