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Copyright Review: Getting The Rights Balance – MusicTank

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Copyright Review: Getting The Rights Balance

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Whether it’s illegal filesharing, copyright term review or CD copy protection, all roads lead to rights. And within this tired metaphor, copyright, first conceived in 1710, risks becoming a quaint cul de sac with a digital bypass running through it.


Copyright Review: Getting The Rights Balance

Event Summary:

Emma Pike – Keynote 1

Professor Martin Kretschmer – Keynote 2

Panel 1 – Copyright Term In Sound Recordings: To Be Continued?

Panel 2 – Copyright Stateside: Has The US Got It Right?

Panel 3 – Private Copying, P2P And Beyond: New Laws For A New Era


1. Crisis?
The digital age has put a spotlight on copyright. Where copyright used to be the preserve of an exclusive and rather small group of specialist lawyers – it’s now a matter for public debate and a lot more people now have a view on copyright than they ever did in the past.

And the debate is becoming polarised. Some think copyright is a barrier to new forms of creativity and a block to innovation. Others say that it is too weak – that in a digital age we need to armour plate copyright via DRM, that we need more enforcement and longer terms. Whatever we think of these views, the emotional level that the copyright debate sometimes reaches seems to suggest that copyright is in some kind of crisis.

But I don’t think it is.

Or at least, if copyright is in crisis now, then it always has been. And perhaps it has! It’s never been perfect and never will be – it will always have anomalies. Let’s take the iPod manual which tells us all how to rip our CDs on to our hard drives ready for transferring on to our iPods. We’re all doing this yet under a strict application of copyright law, Apple is inciting a criminal offence, and we are all committing one. Yet no one is being prosecuted for this heinous crime. So yes, copyright is a very imprecise science and that’s why we all need to apply a healthy dose of common sense to it. After all it’s just a law, and all laws have trouble keeping up with the times.

But as far as laws go, copyright is a survivor. Ever since copyright was invented in this country by the Statute of Anne in 1709 it has been busy surviving advances in technology. Technology has arguably been advancing more quickly in the last half century that ever before – with radio broadcasting and now online and mobile communications. And yet copyright is still doing a reasonable job at keeping pace. How? By adapting. Copyright has in fact already adapted to the online world – the EU copyright directive clarified the making available right, endorsed DRM and paved the way for legitimate online music services. Perhaps it needs to adapt further – the Copyright Directive harmonised the rights and attempted to harmonise exceptions – perhaps we now need to harmonise the exceptions further. And perhaps there’s an argument for looking again at certain exceptions to make sure that they are designed to maximise the cultural and educational power of our creative output without undermining markets or creators’ livelihoods.

2. “What Is Copyright For?”
So copyright is constantly evolving and will continue to do so. And this means that we need to do lots of talking about adaptation and streamlining and making copyright fit better with digital realities. I welcome the various reviews of copyright due to take place next year both at UK and EU level.

But let’s not question the fundamentals of copyright. At the Adelphi Charter launch last month, one of the Charter’s leading lights asked the question “What is copyright for?” “It’s not to incentivise creativity” – they said – “because creativity existed before copyright. Look at these wonderful paintings by James Barry” they said pointing around the ceiling of the RSA theatre in which we were gathered. “He painted these with no copyright system in place.”

3. “Time, Silence And Freedom” For Creativity – Philip Pullman Speech
Of course he did. Copyright doesn’t ”incentivise” creativity in that sense. Being creative is part of being human. You can’t legislate for creativity. And in the words of Philip Pullman – “if someone passed a law against creativity, we’d all go to prison rather than stop”. But what copyright does do, is provide creators with a living. And with that living, they have the “time, the silence and the freedom” to keep creating. And with copyright in place, investors are incentivised to invest in that creativity and distribute it to all of us citizens!

4. Anne of Cleves – Pretty Woman?
Freedom is an important word. Before we hark back to a golden age pre-copyright – let’s not forget that the old system was patronage. Under patronage – people created some amazing things. But creators weren’t free. Creativity was all about pleasing the patron. And that got people into a terrible mess. Just look at Henry VIII’s doomed marriage to his fourth wife, Anne of Cleves! Henry’s courtiers were at the end of their tethers trying to find a new bride for the King. He’d already rejected 5 or so when they heard that the Duke of Cleves had a sister called Anne. So they dispatched Holbein, the court painter off to do a portrait of her to show to Henry. History doesn’t relate exactly what Holbein’s brief was but the painting he did showed quite an attractive young woman – and Henry agreed to marry her.

5. Or Flanders Mare?
Problem was that in Henry’s own words, the lady who actually turned up at the church looked like a “Flanders mare”!

The marriage didn’t last long as Henry refused to perform his husbandly duties and it all ended happily with an annulment. But there is a moral if you look really hard – copyright is a better recipe for blind dates than patronage.

But seriously, there is a reason why copyright has survived for centuries – it’s the best system we’ve found so far for rewarding creativity so that creators can keep creating. So let’s not chuck it out altogether. Let’s not ask what copyright is for. Instead, let’s try and apply some pragmatism and common sense to this debate.

I’ll start.

Let’s take a closer look at the polarised views – not necessarily as they actually are – but as how they are perceived when crudely interpreted by “the other side” – which is what happens when there isn’t enough dialogue. First up – the copyright community.

6 “Tougher”
We want “Tougher rules and better enforcement”. Well, yes. Enforcement is a key element of the copyright system. Without it the rules count for nothing. Government is improving enforcement mechanisms considerably and we are grateful for that. But let‘s be careful how we use enforcement. Let’s not forget that in today’s world, the consumer is king. And in today’s economy, the most successful businesses are those that recognise that consumers buy into an “experience” rather than just a product. Starbucks knows this – that’s how it manages to charge over £2 for a cup of coffee. Apple knows this too. Going in to the Apple store in Regent Street is like entering an exclusive, creative and mildly subversive private club. In this experience economy, is the experience we want to give our consumers really one of a £2,000 fine arriving through their letter box with threat of legal action on non payment? Enforcement has its place for sure but it’s not the only solution. Shouldn’t we be doing more – as industry and as government – to disseminate an appreciation of the value of creativity to our lives, our society and our economy? If we want Britain to be a creative hub in the world shouldn’t we be encouraging more creativity in our schools and universities – and as part of that – shouldn’t we be teaching the rules of the creative game? With press reports of unfettered plagiarism in our schools, there is clearly a need!

7. Longer
What else do we want? Longer terms…Well yes and no. What we really want is an equalisation of term. There is a serious case against our having a lower term of protection than our global competitors particularly if we want to realise James Purnell’s vision of Britain as the world’s creative hub. But what level do you actually set that equalised term at and how exactly do you go about achieving it? That’s a question for the politicians.

8. Barrier
Let’s look at the opposite pole. They say “Copyright has become a barrier to new forms of creativity”. Has it? I don’t see very much evidence of that. UK music has if anything undergone a revival in recent years in terms of new talent coming through. And let’s look at how people are increasingly sharing their work. Look at ‘myspace’, a website allowing people to share all sorts of things – including their own music. And look at artists’ websites. Sri Lankan born rapper M.I.A.’s website has a section called ‘On Line Piracy’, where her fans can legally download her music, remix it and yes, put it back up again on the website so that other people can listen to it, share it, build on it some more. Hers is just one. And there is no Creative Commons licence on any of these websites. Why not? Because actually you can facilitate this kind of sharing and remixing culture without the artists and songwriters having to give away their rights irrevocably.

9. Copyright Locks Up Culture
Next one – “copyright locks up culture.” Really? I thought publishers were in the business of publishing. There’s no value in their copyrights if they don’t.

So how do we get away from these poles and have a rational debate so that together we can work out how best to embrace the opportunities of the digital world, create a positive experience for our consumers and citizens and continue to support and remunerate creativity.

10. Copyright Is Not The Problem
Well we can start by recognising that copyright isn’t really the issue here. Yes, it may need harmonising in some areas – and yes, perhaps we should look again at the exceptions. But we need to recognise that the real problem here is not copyright.

11. Creators Need To Make Money From Creativity – Digital Distributors Of Creativity Don’t
If there is a crisis in the system – its not copyright – it’s the fact that creators need to make money out of their creativity – while the new digital distributors of music do not because they can make money from selling iPods, broadband subscriptions or mobile phones.

So many of the successful business models which provide online music are about discounting the music in order to get consumers to buy something else. What does that mean for the creators of music whose traditional business model is to take a royalty from the music sales?

So we have a situation where creator and creative retailer have completely unaligned business objectives. That’s where the tension is. Some say that the decline in the unit price of music in the digital world won’t matter in the long run because volumes will rise exponentially. But that is a gamble – and a winning result depends on any number of factors – not least our ability to promote legal music over free illegal music. And at the moment it’s the creator that is bearing the load of that gamble!

12. Partnership
So what can we do? Well, we need to create an environment of partnership, not conflict between all the different parts of business and society that make up our creative and cultural world. That means: the creative community, libraries and archives, broadcasters, digital distributors and the search engines, consumers and others I am sure I’ve missed.

For partnership to emerge we need more dialogue.

The Government’s intellectual property forum for the creative industries which has met frequently over the past year or so, has also been incredibly useful in promoting just the kind of dialogue between the copyright sector and its distributors that we need, and it would be very regrettable if bureaucratic rules were to prevent the continuation of this forum in some guise.

It’s not in any of our interests as creative people or as citizens to see the value of music and other creative work devalued by the digital economy. So let’s recognise where the crisis lies – it’s not in copyright.

Copyright gives creators the time, silence and freedom to create. Without it they have to go out and get a proper job – and we’d all be poorer. So let’s work together to find pragmatic solutions to the business challenges and give copyright a break!

Thank you for listening.


Investors and authors have different objectives and needs. They should not be bound together within a one-right-for-all copyright system.

Exclusive copyright benefits the investors in creativity but puts the actual authors at a disadvantage. Exclusivity prevents wider distribution, limits artistic interaction with other works and does not ensure creators a financial reward.

Non-exclusive copyright widens the market, caters to all sections of society, and encourages healthy competition.

Ibuprofen is one example. The patent ran out in the 1980s but Boots the Chemist still market it under the brand name ?Nurofen? ? and it still sells, despite the fact that numerous cheaper versions of ibuprofen are readily available.

Classical music is comparable ? with the copyright expired, the same compositions can be found on budget compilation CDs and high-fidelity painstakingly packaged ?official? releases. When copyright is non-exclusive the market divides into a budget market and an added-value market and the music thereby reaches a wider audience.

The first exclusive copyright on textiles lasted a mere two months because this was a sensible investment horizon ? no one would be interested in investing in two-month old patterns when newer, more fashionable designs were available.

The investment horizon on music could in some cases be as low as three months, so perhaps the period of exclusivity could be three months, six months, a year or even five years. After this short period of exclusivity a compulsory remuneration right should then apply. This would allow anyone to put the music on their digital service as long as they paid a standard fee to reimburse the artist for use of the work.

?The normal exploitation cycle of cultural products supports a short exclusive term.?

(Professor Kretschmer’s keynote was based on the following handout given out on the day).


Proposition 1:
There is no unified category of right owners, covering creators (authors) and investors (publishers/producers). Creators have four main interests:

  1. to see their work widely reproduced and distributed;
  2. to receive credit for it;
  3. to earn a financial reward relative to the commercial value of the work;
  4. to be able to engage creatively with other works (in adaptation, comment, sampling etc).

Regarding the structure of author rights, this leads to three conclusions:

  1. The creator has little to gain from exclusivity –
    it prevents widest distribution; it prevents access to other works; it does not ensure financial reward
  2. The creator has little to gain from transferability –
    under prevalent contractual practices, the creator can be bought out on unfavourable terms
  3. The creator has a lot to gain from the so-called droit moral –
    a kind of creative trade mark, ensuring integrity of origin.

Digital technology offers new possibilities of tracing use and rewarding the creator.

Proposition 2:
Investors want permanent, exclusive and transferable property rights, to extract maximum returns from their investments. Exclusive rights, however, come at a cost to society.

(i) Useful works become more expensive than they would have been (this is a direct consumer loss).
(ii) Works become available for creative engagements only on the terms of the right holder (this is a loss of cultural diversity, innovation and critique).
(iii) Automatic returns from a backcatalogue of works subsidise existing large right holders, creating an entry barrier to the creative industries (this is an anti-competitive effect).

Regarding the structure of copyright, this leads to one conclusion:

Investors should be granted exclusive terms of protection only as a response to market failure: i.e. where without the incentive of exclusivity, a work in the “useful arts” would not be produced at all.

The normal exploitation cycle of cultural products supports a short exclusive term.

Star Creators:
The interests of star creators should be analysed as investor interests, since their bargaining power is sufficient to benefit from exclusive and transferable copyright terms.

These propositions were first advanced in my article:
“Digital Copyright: The end of an era”, European Intellectual Property Review 25/8 (2003).
MK, Professor of Information Jurisprudence, www.cippm.org.uk; mkretsch@bournemouth.ac.uk

PANEL 1 – Copyright Term In Sound Recordings: To Be Continued?

A Summary Of The Introductory Keynote By Peter Jamieson, Executive Chairman, BPI :

In terms of copyright term in sound recordings, Europe – and in particular the UK – lags far behind the rest of the world. The 50-year copyright term which exists here is the lowest you will find anywhere, with the majority of countries respecting a 70 to 95 year term. The BPI is in favour of harmonising copyright so it is more in line with the term held by our international competitors.

Music is in the public domain from almost the moment it is made, available in libraries and via broadcast channels and anyone is free to imitate or re-record a version of it. In this respect the consumer is always guaranteed free access. The only exclusive right granted by copyright is the right to sell a particular recording, and this is in place to cover the considerable costs entailed in creating that recording. The costs of pharmaceutical companies are subsidised by tax credits. But in the music industry companies have to stump up the cost of a recording, which then drives and enables the other non-exclusive uses. The risk/reward ratio in this process is undeniably prohibitive so it is understandable that some companies would look to cut their overheads by exploiting recordings in which the copyright has expired, rather than investing in new music.

It has been suggested, however, that copyright-holders are like home-owners while exploiters of copyright-free material are more akin to lease-holders ?and, ultimately, you take far better care of a house you own than one you lease ? that’s why the government encourage house purchase over house rental.

A premonition illustrating the need to harmonise copyright term:

“2015 ? The current 50 year copyright term has run out on all the early sixties recordings, including The Beatles. Because the copyright-expired music has become so cheap, both to buy and to use in advertising, the UK is stuck in a permanent sixties nostalgia groove. Investing in new music seems too risky, expensive and time consuming. As a result there are over 400 different versions of Sgt. Pepper available. Companies and Trading Standards have given up chasing the difference between second-hand exploitation of 47, 48, 49 or 50 year-old recordings because they simply cannot afford the legal bills.

“The resulting confusion has encouraged a booming black market which trades copyrighted music in the same way consumers have come to expect for copyright-lapsed music ? legitimate retailers are suffering.

“On the plus side, the BPI, AIM and PPL are all now united by adversity ? leading to the humorously unwieldy collective acronym PLIMPIBAP. In collaboration with government consumer groups and retailers the industry is united in calling for a harmonisation of copyright term”.

But if we achieve this now, rather than waiting until 2015, we can ensure the rights of both investors and creators are protected and ?head the bad news off at the pass.


On…Arguments Against Extending Copyright Term:

Cory Doctorow: At the start of the twentieth century many vaudeville performers were reluctant to become involved with new technologies, claiming that they would become mere clerks for the radio and phonogram producers. Seventy years later it is the descendants of these ?clerks? ? totally reliant on sales and airplay ? who are suffering from illegal downloading while the descendants of the independent-minded vaudeville performers are still content to make a healthy living from the booming live sector.

The lesson from history: ?Technology giveth and technology can taketh away.? We should therefore be looking to work with technology and not against it, trying to develop new business models which embrace new ways of sharing music online, not relying on stringent copyright laws.

Rufus Pollock: No company has a 50 year business plan and record companies similarly lack an active plan to exploit copyrighted music for the full 50 year term. But if the push for an extension of copyright term is successful then surely it should be extended in perpetuity ? if the arguments for extension hold fast here and now then why would things change after a further 20, 50, 100 years?

Particularly perverse is the argument for retrospective term extensions. Extending the copyright on recordings by Elvis Presley will not enable him to rise from the grave and produce a string of new hits. It is therefore of no benefit to the consumer.

The use of Shakespeare shows how non-copyright bound works can enrich society by allowing free access for all.

Copyright term should be harmonised down to 14 years with a one-off option to extend for a further 14. This would ensure ample time for record companies to recoup on their investment.

Cory Doctorow: When copyright term is too long it limits access to older works and amounts to burning a library in slow motion.

98% of works which are still in copyright are not commercially available. The Eric Eldred Act in the US is one suggested alternative which has the support over 100,000 public signatures. This would give copyright owners the option, after 50 years, of paying a dollar to extend copyright on works they intended to carry on exploiting commercially. They could then extend copyright after every ten year period for a further dollar. This would be a clear mechanism for rights owners to exploit valued works and let undervalued, underexposed works into the public domain to fend for themselves. A system of registration as easy as setting up a hotmail account could be introduced to manage payment of the dollar extension fees. This would also improve knowledge of who owns what copyrights.

On…Copyright Term and Performance Royalties:

David Stopps: Managers want artists and composers to have parity of term. There’s no reason for the difference in length of term and generally people wanting to exploit these rights, such as film companies, pay the same for the recording as for the publishing. So parity is about right.

50 year copyright term is certainly not long enough from the performers’ point of view. For example, two 17 year-old twins produce a recording: Estelle wrote the song, Susan performed it. Estelle will receive songwriting royalties until the day she dies and her heirs will receive payments for 70 years after that. When the 50 year copyright term on the recording expires, however, Susan ? now 67 ? will cease to receive any remuneration for her performance. And that is precisely when she will need it most.

The remuneration of performers should be extended but assignment to individual record companies should be reduced to a 25 year term or less. In the US, assignment is already limited to 35 years. The copyright could subsequently move around record companies to ensure continued exploitation while also ensuring proper reimbursement for performers. A kind of “Use It Or Lose It” scheme would ensure labels were fully exploiting older works and prevent them from sitting on large amounts of copyrighted back catalogue, refusing to re-release or re-market it.

Peter Jamieson: The days of labels sitting on back catalogue are over. Record companies are no longer limited by retail space in the digital age and regularly voluntarily license older material to those better able to market and exploit it, both in record stores and online.

From the floor (Peter Jenner): The copyright system has allowed artists to make lots and lots of money and to keep on earning throughout their lives, thereby encouraging people to get into music.

As for non-copyright Shakespeare enriching society ? could the opposite not also be true, Shakespeare becoming ubiquitous precisely because he is out of copyright and therefore cheap: giving him an unfair advantage over current, copyrighted playwrights whose works cost more to study and perform?

PANEL 2 – Copyright Stateside: Has The US Got It Right?

On…The DMCA And Suing Filesharers

Darrell Panethiere: The DMCA (Digital Millenium Copyright Act) was instigated in 1998 in order to implement obligations imposed by the 1996 WIPO Treaty. It contains provisions that make it an offence to circumvent manufacturer-imposed usage limitations on CDs, DVDs and video games, including copy protection.

The ongoing suing of filesharers does not stem directly from the DMCA. However, it immunised the intermediaries (the ISPs) who operate the networks. In return they have tended to cooperate, handing over the personal details of filesharers to avoid joint liability.

Olivia Regnier: The EU Copyright Directive is quite similar to the DMCA in that it outlaws technology designed to circumvent copyright restrictions. We are still waiting for France and Spain to implement the directive. Where the EU is significantly ahead of the US is in the provision of a public performance right, enshrined in the Copyright Directive, to ensure that, at a minimum, producers and performers receive royalties from the broadcast of their performances.

On…The Lack Of Performance Rights For Performers In The US:

Fran Nevrkla: While there are many defects in British copyright legislation, it is completely incongruous that there is no performance right for performers and labels in the US and this equates to an enormous loss of income for UK musicians.

As a funded academic the world appears far different to how it is seen by musicians, whose livelihood depends on copyright. It is wrong to divide the creative community from the investors in creativity. The two are inter-dependent and need solutions that pay the optimal share to both parties. Copyright debate must be tempered with realism.

Peter Jenner: Nobody has copyright right yet, the US included. The need to pay ?creators? is often used as a fig leaf for investors’ greed with far too much money still being spent on executives, marketing and unnecessary meetings. There are more rich executives than there are rich artists. A standard remuneration right for artists could rectify the situation and would at least be preferable to a royalty that gets cross-collateralised by labels. It would mean artists were guaranteed to get paid irrespective of what was spent up-front ? much like with the blanket licence from PPL.

The US do not understand performance rights for performers ? LA nursing homes are full of old musicians who played on hit records but are now living in poverty because they did not write the songs and the US lacks a mechanism to reimburse performers’ efforts.

Darrell Panethiere: Some of these artists are now receiving money from PPL in the UK, however, which pays them performance royalties when their recordings are played over here. By championing the Royalties Reunited service online PPL are helping to link up more of these performers with the monies due to them. As this increases we will likely see a groundswell of US artists who realise the importance of a performance right in sound recordings and lobby the US government to introduce one.

We should remember, however, that while US artists have fewer rights, their rights last for longer with US copyright term set at 95 years as opposed to the UK’s 50 years. It is also possible the US will view digital radio, with its more interactive uses, as a new model and demand digital broadcasters pay a performance right to the performers.

Adrian Brazier, DTI (from the floor): Copyright in the UK/US is like “apples and pears” ? you get fewer rights in the US but they last for longer. The question is, which would you prefer, apples or pears?

Peter Jenner: The radio lobby in the US are very powerful meaning that US radio is unlikely to have to pay a decent performance right anytime soon. ?Grandfather rights? may also allow US digital broadcasters to argue the case for new licenses which have the same terms as their analogue predecessors ? i.e. No performance rights for performers.

Dennis Collopy (from the floor): SoundExchange collects performance royalties due for certain digital uses in the US and perhaps has the potential, as awareness of performers’ rights increases, to become the North American equivalent of PPL.

PANEL 3 – Private Copying, P2P And Beyond: New Laws For A New Era

On…Using Technology To Limit Piracy:

Steve Greenfield: Consumers will not engage with any technology that attempts to limit their usage. As proof take the failure of playback-only VHS devices and ITV Digital’s subscription model. We could compare these to ongoing DRM arguments. Instead of falling back on the law and suing filesharers we need more discussion between record labels, artists and downloaders to find mutually acceptable ways of selling music in the future.

Gina Harkell: A forward-thinking solution needs to be found, and quickly. Many of those being served lawsuits are probably parents blissfully unaware of their children’s copyright infringement activities.

*Gina was sued by the BPI for her son’s online copyright infringements

On…Legalising P2P Networks:

Paul Hitchman: In order for the music industry to carry on suing filesharers they need to justify themselves by providing a direct legal alternative that matches the freedom and ease of use which consumers get from illegal P2P. It is not enough to impose new models, such as subscription services, with far more restrictions than filesharers are used to.

Alexander Ross: As soon as a company has the power to control how their network is being used then they can be sued under the concept of authorisation. However, for a completely de-centralised network like BitTorrent this could be extremely hard to prove under UK law. P2P networks, when seen in a positive light, however, offer a new model to sell unreleased live versions and remixes and, potentially, earn artists and record companies extra revenue.

Steve Greenfield: Fear of litigation is causing many P2P providers to go legal but in doing so they usually leave behind a hard-core of consumers who are committed to the underground way of filesharing.

Paul Hitchman: In a few years time a single hard-disk will likely be capable of storing all the recorded music in the world. The raw material of music will then become inherently worthless meaning we should grasp at all opportunities to add extra value to music while we still can. One example is podcasting. If there is a viable model to legally sell music to consumers then it is ridiculous for labels to hold back on licensing their music to this service.

Playlouder MSP charges customers £26.99 a month and allows them to trade any music they want. Labels license their music to Playlouder directly and are reimbursed accordingly but the service cannot, at present, stop non-licensed music from being shared as well. Some labels are nevertheless reluctant to license their content.

Gary McLarnan (from the audience): Maybe it is too late to rein in P2P and the industry should instead concentrate on getting mobile music right. After all, kids don’t own laptops but they do own mobile phones ? they’re the ones who will be swapping music. Proactive involvement in mobile may necessitate tie-ups with the film industry and beyond to ensure rights-holders receive proper payment for the usage of their works.

On…Private Copying

Steve Greenfield: In 1988 the UK government voted against a private copying right. This is something every country bar the UK, Ireland and Luxembourg enjoys and allows individuals to make limited copies of legally purchased music for personal use.

Alexander Ross: The EU Copyright Directive stipulates that where there is a private copying exemption there has to be an appropriate levy on copying devices and materials, even though in some circumstances this levy could be zero. In order to legalise P2P in any real sense the private copying situation in the UK needs to be clarified or revised.