British Music Industry

British Music Rights
14 November 2002
http://www.bmr.org/html/submissions/submission77.htm

The Commission on Intellectual Property Rights 'Integrating Intellectual Property Rights and Development Policy' - British Music Rights' comments

British Music Rights is the consensus voice of Britain's 34,500 composers and songwriters, 2,500 music publishers and their collecting societies (1).

The report published recently by the Commission on Intellectual Property Rights, which was an initiative set up by the Department for International Development, raises serious concerns for us. We do not agree with the general conclusion that the global extension of Intellectual Property Rights (IPRs) will not benefit developing countries at different stages of development. Neither do we agree with its specific conclusions on copyright.

We urge the Government to reject this report and to distance itself from the conclusions which, if followed through, could be damaging for both developing and developed countries. The adoption of any of the recommendations would represent a U-turn by the UK Government in its policy on IPRs (2).

The report addresses economic problems in developing countries. Development programmes are desperately needed for developing countries, but to drive this through concessions on IPRs is the wrong solution. The emergence of a solid IPR framework in developed countries has enabled intellectual endeavour and creativity to be harnessed and turned to economic advantage with the result that IPRs now account for a significant proportion of their GDP and also provide much needed employment. Rather than enabling and encouraging developing countries to achieve similar objectives, the recommendations of the report would ultimately hinder developing countries' ability to build their own economies founded on IPRs. Assistance should instead come through properly targeted financial assistance.

We focus on three main points:

Policy needs to differentiate between copyright, a right granted to individuals to reward their creativity, and industrial property rights such as patents and trade marks.
Copyright as an incentive for investment in local markets. Policy should take account of the way copyright can promote economic and cultural development and poverty reduction.
The criticism of the adoption of measures to protect technology and rights management information, such as those in the WIPO Copyright Treaty and EU Copyright Directive, is based on a misunderstanding of the liberalising effect that technology will have on the dissemination of copyright works.

1. The difference between copyright and IPRs with an industrial application

The report does not differentiate in its conclusions between IPRs, lumping together both the creations of individuals protected by copyright and inventions and devices protected by patents and trade marks which are applied industrially. This leads to misleading generalisations and inaccurate forecasting of the effect of IPR policy on developing countries. It will also aggravate the confusion that already exists between creative and industrial IPRs.

Copyright grants an economic right to an individual in the first instance rather than a company. Though companies such as music publishers and record companies do take an interest in the copyright for the exploitation of the copyright in music, there is always an individual composer at the start of the value chain who depends on royalties to earn his or her living. This is in contrast to the normal practice in the case of industrial property where the first owner of the rights is generally a company that pays its staff a salary to come up with new products.

Copyright is also very important to the interests of small and medium enterprises (SMEs) which in turn are vital contributors to the economy and employment, certainly in the UK and presumably therefore in other developed countries. Over 90% of the music publishers represented by British Music Rights are SMEs. It is misleading of the report to suggest that copyright-based industries have "generated millions of high-paying jobs". Whilst some individuals have been fortunate to achieve notable success in the music business through producing music that happens to appeal to a very large market, the vast majority of people working in the music business earn less than those employed in most other non-creative sectors (according to figures collected by PRS for 2000, only 5% of their writer members receive a substantial income (i.e. more than £10,000 per annum) for the public performance of their works.

We are also concerned that the report does not take into account the existence of different kinds of copyright works. We agree with the report insofar as it states that easy and cheap access to information is a necessity for developing countries, but stress that musical works with their cultural focus involve very different considerations from, for instance, works that are information based. A "One size fits it all" approach in the area of copyright, will not deliver adequate solutions for this complex area.

The report promotes almost unrestricted exceptions to copyright for educational use and preferential pricing for libraries in stocking copyright materials. It is in our interest that UK music is disseminated throughout the world, but there is no justification for it being freely or even too cheaply available at the expense of individuals and SMEs in developed and developing countries for all the reasons we have said above.

By failing to take a differentiated approach and failing to take into account the intricate and specific nature of copyright, the recommendations of the report are flawed.

2. IPR as the incentive for investment in local markets

The development of local markets is crucial for the development of local economies in developing countries. In the long term, only a vibrant and independent local economy will enable developing countries to thrive. A genuine local market however will only develop if there is sufficient incentive for companies to invest in local enterprise. An adequate legislative framework protecting their investments is therefore an indispensable requirement.

In the case of publishers, protection of copyright is an essential requirement for any activity. Copyright also benefits local authors and composers. Under the Berne Convention, authors and composers of music in developing countries will have their rights protected in developed countries. It would be a nonsense in such circumstances that their rights would not be protected fully in their own countries, especially since the likely result would be to encourage the creation in those countries of unlicensed copies which may find their way to developed countries and ironically deprive the authors and composers of the developing countries of their royalties in the developed countries.

We have talked above about the importance of copyright to SMEs. SMEs are recognised as a driving force for local economic development but they would be undermined if developing countries felt they could have a lower standard of protection than the international conventions on copyright. The WIPO press release of 8th November 2002 on their work with IP Wales states "The value of intellectual property amongst the SME community is often not adequately appreciated and its potential for providing opportunities for future profit is widely underestimated. In a market place driven by demand for IP-protected products and services IP becomes a valuable business asset". This is something the creative industries have known and relied upon for many years - their businesses are built on the exploitation of rights and the payment of royalties to the creators of the original works.

It is of utmost importance for the confidence and identity of developing countries to establish their own creative industries, instead of simply importing "western" culture. Moreover, the recent world-wide success of "World Music" proves that the cultural contributions of developing countries can compete on a global level. The worldwide appreciation of Jamaican music, for instance, provides a significant source of income for Jamaica's music and tourism sector. A sine qua non for this economical and cultural success story had been the adequate protection of copyright in Jamaica.

Under this aspect, it seems rather short sighted to lessen the legal protection at this stage. The report itself states on page 99 that "in the long term, stronger copyright protection may help to stimulate local cultural industries in developing countries if other conditions affecting the success of such industries are also met. But in the short to medium term, it is likely to reduce the ability of developing countries and poor people to close this gap by getting the textbooks, scientific information and computer software they need at affordable cost." It is illogical to address short term issues by cutting off the key to long term success, but in any event the argument simply does not work when it comes to other cultural works such as musical works. With the rich musical traditions of these developing countries, how will it help them to get free or reduced price Western music?

Without protection of creations by individuals, traditional indigenous art and culture will die out and traditional skills will sink into oblivion. The likely evaporation of cultural diversity is not in the interest of developing countries, neither is it the purpose of the Commission's report.

We agree that developing countries need assistance but this cannot be done without an assessment of the repercussions on the development of a viable local market as well as on the interests of music creators and publishers in the UK. The effect of the report's recommendations would be to prevent the natural development of a market in the long term, and unintentionally damage music creators and publishers around the world.

3. TRIPS standard laws and protection of technological measures

The report's statement that it would be premature for developing countries to sign the WIPO "Internet" Treaties and should not consider equivalent legislation to DMCA and the EU directive is based on two separate misunderstandings.

First, countries with lower standard of protection for rights will merely become piracy havens, to which illegal operators move, forcing out legitimate businesses who do pay rewards to creators. This would be true for both physical businesses and internet operators who can operate in a borderless environment. The Government is aware of the links between organised crime and counterfeiting and piracy. The Government needs to be aware that encouraging piracy in developing countries will have a potentially disastrous knock-on effect on the economies of developed countries: once unlicensed free copies are available on-line in a copyright unfriendly country the dissemination throughout the world is inevitable, and the Napster case shows how difficult in practice it is to prevent such copies being used.

Secondly, the DMCA and the Directive protect both the technology that will be used to secure modes of distribution on the internet (DRM) and the rights management information which links works in digital form to information about their owners, their terms of usage etc. The full potential of technological protection measures such as these in the long term will be to promote access to copyright material. Copyright owners who are confident of secure distribution will be able to make works available on differential terms i.e. could themselves distinguish between certain purposes and developing country destinations. Countries with no protection for DRM technology risk copyright owners being reluctant to distribute their works there because there is insufficient protection to protect the investment.

We urge the Government not to accept the recommendations in the Commission's report on copyright law. Any IPR policy for developing countries should take a differentiated and specific approach to copyright. Many developing countries have their own very strong musical culture and so this is the one area which they could develop, through copyright, into a business which could contribute to their own economic development (without the requirement of a high technological standard).

More research is needed regarding other tools to enable developing countries to take advantage of their own resources without damaging the whole creative sector.

Notes

1. The members of British Music Rights are the British Academy of Composers and Songwriters, the Music Publishers Association, the Mechanical-Copyright Protection Society and the Performing Right Society.
2. As an illustration, on 8th November 2002, WIPO reported on a meeting with IP Wales, the UK's first custom-made intellectual property business support initiative 'to exchange ideas and explore areas for future co-operation with a view to strengthening use of intellectual property by small and medium enterprises. The global SME sector which is highly dynamic and employs large numbers of people is the backbone of many economies.'

COMMISSION ON INTELLECTUAL PROPERTY RIGHTS

		British Music Rights 14 November 2002 http://www.bmr.org/html/submissions/submission77.htm The Commission on Intellectual Property Rights 'Integrating Intellectual Property Rights and Development Policy' - British Music Rights' comments British Music Rights is the consensus voice of Britain's 34,500 composers and songwriters, 2,500 music publishers and their collecting societies (1). The report published recently by the Commission on Intellectual Property Rights, which was an initiative set up by the Department for International Development, raises serious concerns for us. We do not agree with the general conclusion that the global extension of Intellectual Property Rights (IPRs) will not benefit developing countries at different stages of development. Neither do we agree with its specific conclusions on copyright. We urge the Government to reject this report and to distance itself from the conclusions which, if followed through, could be damaging for both developing and developed countries. The adoption of any of the recommendations would represent a U-turn by the UK Government in its policy on IPRs (2). The report addresses economic problems in developing countries. Development programmes are desperately needed for developing countries, but to drive this through concessions on IPRs is the wrong solution. The emergence of a solid IPR framework in developed countries has enabled intellectual endeavour and creativity to be harnessed and turned to economic advantage with the result that IPRs now account for a significant proportion of their GDP and also provide much needed employment. Rather than enabling and encouraging developing countries to achieve similar objectives, the recommendations of the report would ultimately hinder developing countries' ability to build their own economies founded on IPRs. Assistance should instead come through properly targeted financial assistance. We focus on three main points: Policy needs to differentiate between copyright, a right granted to individuals to reward their creativity, and industrial property rights such as patents and trade marks. Copyright as an incentive for investment in local markets. Policy should take account of the way copyright can promote economic and cultural development and poverty reduction. The criticism of the adoption of measures to protect technology and rights management information, such as those in the WIPO Copyright Treaty and EU Copyright Directive, is based on a misunderstanding of the liberalising effect that technology will have on the dissemination of copyright works. 1. The difference between copyright and IPRs with an industrial application The report does not differentiate in its conclusions between IPRs, lumping together both the creations of individuals protected by copyright and inventions and devices protected by patents and trade marks which are applied industrially. This leads to misleading generalisations and inaccurate forecasting of the effect of IPR policy on developing countries. It will also aggravate the confusion that already exists between creative and industrial IPRs. Copyright grants an economic right to an individual in the first instance rather than a company. Though companies such as music publishers and record companies do take an interest in the copyright for the exploitation of the copyright in music, there is always an individual composer at the start of the value chain who depends on royalties to earn his or her living. This is in contrast to the normal practice in the case of industrial property where the first owner of the rights is generally a company that pays its staff a salary to come up with new products. Copyright is also very important to the interests of small and medium enterprises (SMEs) which in turn are vital contributors to the economy and employment, certainly in the UK and presumably therefore in other developed countries. Over 90% of the music publishers represented by British Music Rights are SMEs. It is misleading of the report to suggest that copyright-based industries have "generated millions of high-paying jobs". Whilst some individuals have been fortunate to achieve notable success in the music business through producing music that happens to appeal to a very large market, the vast majority of people working in the music business earn less than those employed in most other non-creative sectors (according to figures collected by PRS for 2000, only 5% of their writer members receive a substantial income (i.e. more than £10,000 per annum) for the public performance of their works. We are also concerned that the report does not take into account the existence of different kinds of copyright works. We agree with the report insofar as it states that easy and cheap access to information is a necessity for developing countries, but stress that musical works with their cultural focus involve very different considerations from, for instance, works that are information based. A "One size fits it all" approach in the area of copyright, will not deliver adequate solutions for this complex area. The report promotes almost unrestricted exceptions to copyright for educational use and preferential pricing for libraries in stocking copyright materials. It is in our interest that UK music is disseminated throughout the world, but there is no justification for it being freely or even too cheaply available at the expense of individuals and SMEs in developed and developing countries for all the reasons we have said above. By failing to take a differentiated approach and failing to take into account the intricate and specific nature of copyright, the recommendations of the report are flawed. 2. IPR as the incentive for investment in local markets The development of local markets is crucial for the development of local economies in developing countries. In the long term, only a vibrant and independent local economy will enable developing countries to thrive. A genuine local market however will only develop if there is sufficient incentive for companies to invest in local enterprise. An adequate legislative framework protecting their investments is therefore an indispensable requirement. In the case of publishers, protection of copyright is an essential requirement for any activity. Copyright also benefits local authors and composers. Under the Berne Convention, authors and composers of music in developing countries will have their rights protected in developed countries. It would be a nonsense in such circumstances that their rights would not be protected fully in their own countries, especially since the likely result would be to encourage the creation in those countries of unlicensed copies which may find their way to developed countries and ironically deprive the authors and composers of the developing countries of their royalties in the developed countries. We have talked above about the importance of copyright to SMEs. SMEs are recognised as a driving force for local economic development but they would be undermined if developing countries felt they could have a lower standard of protection than the international conventions on copyright. The WIPO press release of 8th November 2002 on their work with IP Wales states "The value of intellectual property amongst the SME community is often not adequately appreciated and its potential for providing opportunities for future profit is widely underestimated. In a market place driven by demand for IP-protected products and services IP becomes a valuable business asset". This is something the creative industries have known and relied upon for many years - their businesses are built on the exploitation of rights and the payment of royalties to the creators of the original works. It is of utmost importance for the confidence and identity of developing countries to establish their own creative industries, instead of simply importing "western" culture. Moreover, the recent world-wide success of "World Music" proves that the cultural contributions of developing countries can compete on a global level. The worldwide appreciation of Jamaican music, for instance, provides a significant source of income for Jamaica's music and tourism sector. A sine qua non for this economical and cultural success story had been the adequate protection of copyright in Jamaica. Under this aspect, it seems rather short sighted to lessen the legal protection at this stage. The report itself states on page 99 that "in the long term, stronger copyright protection may help to stimulate local cultural industries in developing countries if other conditions affecting the success of such industries are also met. But in the short to medium term, it is likely to reduce the ability of developing countries and poor people to close this gap by getting the textbooks, scientific information and computer software they need at affordable cost." It is illogical to address short term issues by cutting off the key to long term success, but in any event the argument simply does not work when it comes to other cultural works such as musical works. With the rich musical traditions of these developing countries, how will it help them to get free or reduced price Western music? Without protection of creations by individuals, traditional indigenous art and culture will die out and traditional skills will sink into oblivion. The likely evaporation of cultural diversity is not in the interest of developing countries, neither is it the purpose of the Commission's report. We agree that developing countries need assistance but this cannot be done without an assessment of the repercussions on the development of a viable local market as well as on the interests of music creators and publishers in the UK. The effect of the report's recommendations would be to prevent the natural development of a market in the long term, and unintentionally damage music creators and publishers around the world. 3. TRIPS standard laws and protection of technological measures The report's statement that it would be premature for developing countries to sign the WIPO "Internet" Treaties and should not consider equivalent legislation to DMCA and the EU directive is based on two separate misunderstandings. First, countries with lower standard of protection for rights will merely become piracy havens, to which illegal operators move, forcing out legitimate businesses who do pay rewards to creators. This would be true for both physical businesses and internet operators who can operate in a borderless environment. The Government is aware of the links between organised crime and counterfeiting and piracy. The Government needs to be aware that encouraging piracy in developing countries will have a potentially disastrous knock-on effect on the economies of developed countries: once unlicensed free copies are available on-line in a copyright unfriendly country the dissemination throughout the world is inevitable, and the Napster case shows how difficult in practice it is to prevent such copies being used. Secondly, the DMCA and the Directive protect both the technology that will be used to secure modes of distribution on the internet (DRM) and the rights management information which links works in digital form to information about their owners, their terms of usage etc. The full potential of technological protection measures such as these in the long term will be to promote access to copyright material. Copyright owners who are confident of secure distribution will be able to make works available on differential terms i.e. could themselves distinguish between certain purposes and developing country destinations. Countries with no protection for DRM technology risk copyright owners being reluctant to distribute their works there because there is insufficient protection to protect the investment. We urge the Government not to accept the recommendations in the Commission's report on copyright law. Any IPR policy for developing countries should take a differentiated and specific approach to copyright. Many developing countries have their own very strong musical culture and so this is the one area which they could develop, through copyright, into a business which could contribute to their own economic development (without the requirement of a high technological standard). More research is needed regarding other tools to enable developing countries to take advantage of their own resources without damaging the whole creative sector. Notes 1. The members of British Music Rights are the British Academy of Composers and Songwriters, the Music Publishers Association, the Mechanical-Copyright Protection Society and the Performing Right Society. 2. As an illustration, on 8th November 2002, WIPO reported on a meeting with IP Wales, the UK's first custom-made intellectual property business support initiative 'to exchange ideas and explore areas for future co-operation with a view to strengthening use of intellectual property by small and medium enterprises. The global SME sector which is highly dynamic and employs large numbers of people is the backbone of many economies.'