As the representative body of composers, songwriters, music publishers and their collecting societies in the UK, British Music Rights welcomes the opportunity to comment on the DTI Consultation on the UK implementation of the Directive on the enforcement of intellectual property rights (2004/48/EC). Without effective enforcement powers in place substantive rights are undermined and rendered valueless for our members. Composers and songwriters rely on the protection provided by copyright to earn their living and thereby to continue creating music. Music publishers, most of whom are SMEs, re-invest a significant part of their copyright income in new creative talent. The creative industries, the intended beneficiary of the implementation of the Directive, contribute some 8.4% to the UK Gross Domestic Product and are the main driver of the knowledge economy in the UK.

We particularly welcome the over-arching principle expressed in the clear wording of Article 3, i.e. that enforcement measures "shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays." This broad principle needs to be taken into account in all aspects of the implementation.

Whilst we whole-heartedly welcome the advanced approach of the UK Government expressed in the IP Crime Strategy of August 2004 and subsequent activities, we stress that it is fundamental that policy makers continuously review their enforcement policies so as to be responsive to the ever-developing practices of criminals infringing the copyright of our members. The UK should also engage and collaborate with its international partners to share its positive experiences and knowledge. In this response we highlight our specific concerns, including:

• Article 4 - The Directive requires some implementing measures to ensure that all collecting societies are in a position to bring actions in their own name.
• Article 5 - We seek express clarification that the presumption of authorship in Section 104 (2) CDPA 1988 includes a presumption of subsistence. The implementation of the Enforcement Directive also provides a good opportunity to reverse the burden proof regarding the existence of proof of a licence.
• Article 7 - We support the provision of further protection for whistleblowers under para 5; equally such protection should extend expressly to our Anti Piracy investigators.
• Article 10 - We submit that the wording of sections 99 and 100 CDPA need to be amended to reflect the broader scope of goods in the Enforcement Directive.
• Article 13 - We submit that in view of Article 3 para 2, UK judges should be encouraged by the Government to award damages which are dissuasive and a deterrent.
• Article 16 - We welcome the reference to criminal sanctions which together with the two recent Commission proposals will take into account the criminal nature of infringement.

Our comments are based on the experience of the MCPS Anti-Piracy Unit, the music industry organisation that investigates the illegal use of the works on behalf of creators and publishers in the UK. In our industry the main products affected by counterfeiting and piracy are compact discs and DVDs. Most infringing products are in the form of recordable CDs (CD-Rs) and DVDs (DVD-Rs) i.e. direct copies of legitimately produced recorded products sometimes sold as compressed file (e.g. MP3) products. These products are in the main produced in the UK, mainly from 'home factories'. Regarding these acts of copyright infringement the most harmful cases relate to:

• "Traditional" infringement: Production of multiple copies through CD-R/ DVD-R burning on a commercial scale
• Online infringement: Downloading from illegitimate websites etc

I. Introduction

The experience of the MCPS Anti-Piracy Unit is that the latest tendency in piracy is for counterfeit CDs, DVDs and MP3s to be copied and sold using the Internet as a shop window to advertise and sell product. "Shop-window piracy" is more attractive for all kinds of infringers than conventional piracy as they can manufacture to order, conceal their identity over the internet and reach a far greater public than by selling to the local public at a car boot sale or a market; this form of piracy is also harder to track down than piracy that relies on traditional illegal pressing plants. A variation of this unlicensed "business model" involves weekly/monthly subscriptions to newly released products.

Evidence suggests that the operations for counterfeiting and pirating products are often self-contained criminal enterprises. Workers paid on a daily rate are engaged to copy, print artwork and package counterfeit goods which are then distributed by wholesalers to gang masters responsible for supervising market stalls or operating the markets themselves at rented premises, fields or sites such as airfields etc.

The ease with which shop-window piracy can be committed has tempted many otherwise law-abiding members of society, some in very respectable professions, into criminal activity for the first time. Specific practical enforcement powers, are required to tackle this type of crime.

A number of factors exacerbate the problem for the creative industries and we urge Government to these will address in the course of the implementation of the Enforcement Directive and subsequent activities. These factors include:

• Lack of international enforcement standards in the Information Society; even within the European Union there are considerable differences in the means of enforcement;
• Whilst the UK provides by and large adequate enforcement rules, some provisions are still yet to be implemented, for instance section 107A of the CDPA 1988 to empower Trading Standards officers in their anti piracy activities and provide adequate funding;
• Not a high priority for police;
• Lack of exchanged information on an international level;
• The damages provided (and applied in practice) in cases of infringement do not constitute a dissuasive deterrent;
• Consistently low sentencing based on specimen charges alone;
• The rise of internet 'shop window piracy' and the easy exchange of master recordings (in the form of MP3 files) via the internet;
• Reduction in the cost and size of blank media and duplicating equipment;
• Increased storage capacity of optical disc media;
• In the UK, there is a problem with the burden of proof in criminal proceedings.

II. Detailed comments:

Article 4 section (c) of the Enforcement Directive requires changes to expressly enable collective rights management bodies to clarify that they are in a position to bring action in their own name.

Whilst in the UK, the Performing Right Society is the holder of Intellectual Property rights and so comes within section 96 CDPA 1988, the Mechanical-Copyright Protection Society exercises Intellectual Property rights only as agent for its members. Representative claims covered in Part 19 of the Civil Procedure Rules do not provide a sufficient basis for an MCPS right of action since they still require at least one MCPS member to put forward its name which they can be reluctant to do for fear of potential public relations repercussions.

We suggest an amendment to Part 19 Civil Procedure Rules expressly referring to duly mandated collective rights management bodies as having the right to bring or defend claims in the same way as original right holders.

Article 5 - UK law provides a limited presumption of authorship in section 104 CDPA - this implicitly extends to the subsistence of copyright since logically without subsistence of a work the presumption of authorship is without object and hence nonsensical. The implementation of Article 5 provides a good opportunity to clarify this point in UK law (in line with the Irish Act, section 139).

We submit that the burden of proof for the existence of a licence should be on the defendant in copyright infringement proceedings (this would be consistent with TV licences and driving licences where the holder of the licence has to prove he has a licence) in order to reflect the general obligation under Article 3 that enforcement procedures are not unnecessarily complicated or costly.

We also urge Government to extend the civil presumptions to criminal proceedings. The practical experience of the MCPS Anti-Piracy Unit is that copyright infringers often raise spurious arguments about authorship, title and lack of licence in order to cause delay and to frustrate prosecution. Moreover, they hope to cause difficulties by insisting on the requirement that the author (often from a foreign country) has to come personally to give evidence. Additionally, this might result in prosecutors with tight budgets having to drop a prosecution. Whilst we appreciate that the Enforcement Directive does not expressly provide for criminal sanctions; in our view the Enforcement Directive does offer an opportunity to reverse the burden of proof based on Articles 5 and 16.

Article 7 - in our view the general framework on the protection of witnesses is too limited in only providing protection if legal action has been taken. It is equally important to protect the identity of witnesses who provide information in the preparatory stages such as measures taken to preserve evidence (c.f. the model provided by section 132 (4) of the Irish Copyright Act). Based on our experience this protection should also be extended to protect the identity of persons who are continually involved in the pursuit of infringers, e.g. the investigators of the MCPS Anti Piracy Unit who have been subjected to actual physical threats.

Article 10 - The wording of sections 99 and 100 CDPA 1988 on delivery up and seizure is limited to the infringing copy and "articles specifically designed or adapted for making copies of a particular work"; Para 1 of Article 10 is broader, also providing for the possibility in appropriate cases for appropriate measures to be taken "with regard to materials and implements principally used in the creation or manufacture of those goods". The ambit of sections 99 and 100 must be extended in order to properly implement Article 10.

Article 12 - Under current UK law, the power of the court to order damages in lieu of an injunction is unfettered. Under the Directive, this discretion is fettered by 4 preconditions: intention, negligence, proportionality and reasonableness. In our view, judicial discretion under UK law must be similarly limited in relation to copyright infringement in order to properly reflect the Directive.

Article 13 - We submit that statutory intervention is required to ensure that the additional and aggravated damages formerly available under UK law are properly applied by the courts. It is apparent that the utilisation of these provisions is hampered by the judicial misconception that copyright damages can never be penal. The Government has a duty to rectify this misconception in legislation in order to properly implement its obligations under the Directive.

If damages are limited to a set amount reflecting the normal licence fee or the loss suffered by the right holder, this enables a potential infringer to calculate damages as part of a business model. Again, this is not conducive to encouraging honest business practices, and will take away from the right holders the ultimate decision as to whether to license or not, effectively establishing a de facto statutory licence for pirates. In this complicated area we encourage Government to consult with stakeholders with the relevant practical experience.

Article 16 - We welcome this reference to criminal sanctions which will take into account the criminal nature of the activities of the people engaging in copyright infringements. We are also pleased that the question of criminal sanctions is being addressed at European level by the recent Commission proposal for a Directive on criminal measures aimed at ensuring the enforcement of Intellectual Property rights, supplemented by its proposal for a Framework decision to strengthen the criminal law framework to combat Intellectual Property offences, thereby complementing the provisions of the Enforcement Directive.

In this context it is noteworthy that the European Court of Justice established the competence of the European Commission to prescribe criminal penalties in a recent decision concerning a framework decision regulating a number of environmental offences (Case -176/03).

III. Additional matters

The spread of piracy recognised in the proposal causes substantial harm not only to the creative and business community (UK losses through counterfeiting and piracy are estimated conservatively by the Alliance Against IP Theft at £9 bn annually) (see note 1) but also to consumers who in addition to the obvious dangers of fake food, drinks and clothing suffer from the funding of organised crime and lost tax revenues (in the UK an estimated £1.7 bn on VAT alone).

The AAIPT report "Proving the Connection" (available through their website: http://www.allianceagainstiptheft.co.uk) shows the links between intellectual property theft and organised crime. Piracy also leads to reduced choice and quality and a decrease in cultural diversity.

We are delighted that the UK Government took up the opportunity to progress their policy thinking through the IP Crime Strategy of August 2004 promoting further co-operation between public and private enforcement entities and the acknowledgement of the impact of IP theft on the UK economy and society by addressing some of the deficiencies in UK law. We are also a member of the Alliance Against IP Theft and support the submission of this coalition of British trade associations and industry enforcement organisations with a combined turnover of over £250 billion.

Notes

1. The Alliance is a unique coalition of British trade associations and industry enforcement organisations with a combined turnover of over £250 billion. (http://www.allianceagainstiptheft.co.uk)