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Publishing eBulletin: Summer 2019

11 July 2019

Welcome to the summer edition of the Publishing eBulletin. In this edition we’ll be looking back at the copyright and data protection issues that dominated the first half of the year and looking ahead to a potential future of computer-authored books and second-hand ebooks.

The EU Copyright Directive: Finally finalised

After more than two years of intense negotiations and lobbying which pitted the creative and content industries against the tech industry and digital rights advocates, the new EU Copyright Directive has finally been approved and published in the Official Journal of the European Union. Member States will have until 7 June 2021 to implement the Directive into their national laws.

The final text of the Directive contains the same key provisions, namely a mandatory non-commercial exception for text and data mining by research organisations and cultural heritage institutions (Article 3); a non-mandatory exception to enable text and data mining of the open web (Article 4); a new press publishers’ right (which does not apply to scientific or academic journals) (Article 15); measures to address the ‘value gap’ created by the availability of user uploaded copyright works on online platforms (Article 17); and rights for authors to receive appropriate and proportionate remuneration (Articles 18 to 23). The final text of the Directive also reflects the changes made in the final stage of negotiations, such as the clarification that the press publishers’ right does not apply to hyperlinking or the re-use of “individual words or very short extracts”; the introduction of a lighter regime for start-up platforms that will be subject to Article 17; and the introduction of a right for authors to revoke an exclusive licence for non-use (Article 22). Going forwards, all eyes will be on how the Directive is implemented across the EU and any guidance issued by the European Commission.

With the current uncertainty surrounding Brexit, it remains unclear whether the UK will implement the Directive if/when it leaves the EU. If the UK leaves the EU before the implementation deadline, then (subject to any deal reached) it will not be obliged to implement the Directive. However, the UK may elect to adopt the terms of the Directive as national law in order to maintain equivalence alignment with EU copyright legislation and jurisprudence. More coverage on the Copyright Directive from our media industry experts is available here and here.

GDPR: One year on

The last twelve months have been a long teething period for compliance with the General Data Protection Regulation (GDPR).

Companies across the publishing sector took herculean efforts to update their policies and practices in time for the GDPR implementation date. Those who breathed a sigh of relief when 25 May 2018 came and went without the earth opening up under them should be mindful that compliance is an ongoing process, and that non-compliance can have serious reputational and financial consequences.

The figures we have seen reveal interesting trends in consumer and business attitudes towards the GDPR, and data protection authorities’ use of their new enforcement powers. You can read the article in full here.

This week also saw the UK regulator the ICO publish details of its first two major potential fines in the UK under the GDPR and UK Data Protection Act 2018. It announced intention to fine British Airways (BA) £183.39m for the cyber breach it reported in autumn last year (full article here). They also announced their intentions to fine Marriott International £99,200,936 for infringements of the General Data Protection Regulation (full article here).

Digital exhaustion: Second-hand ebooks and controlled digital lending

Thanks to a legal principle known as ‘exhaustion’ here in the UK and as the ‘first sale doctrine’ in the US, any of us can distribute a physical book that we own without the consent of the rights-holder, we can lend it to friends, give it to a charity shop, or even sell it. Two cases, one in Europe and the other in the United States, may determine whether the same can be done for ebooks and other digital content. The US case of Redigi was decided at the end of last year, whereas the Dutch case which concerns the second-hand ebook platform Tom Kabinet, is ongoing. The European Court of Justice is expected to give its opinion on the Tom Kabinet case in September. Publishing lawyer Zoey Forbes discussed the issues arising from these cases in an article for Bookbrunch recently.

Exhaustion  is also an issue in the developing movement of ‘controlled digital lending’. This is a quasi-legal theory which argues that librarians should be able to scan physical books and make those scans available for e-lending without the rights-holders authorisation. Earlier this year, the Association of American Publishers issued a statement rejecting the theory and stating that copying physical books and making those copies available online is not permitted by exhaustion (or the first sale doctrine) and in fact amounts to copyright infringement.

The theory of controlled digital lending is supported by The Open Library and other public and private institutions. The Open Library is an internet archive which provides a free digital lending library from its catalogue of over two million ebooks which can either be read in a browser or downloaded for reading offline. These ebooks are in fact scanned images of physical books contributed mainly by libraries who have either scanned the work themselves or sent it to Open Library for scanning. As the Open Library’s catalogue include works owned or controlled by UK publishers, we are watching this space with interest.

Contracting with personal service companies: Preparing for 2020

It is common for many service providers across the publishing industry, such as freelancers or consultants, to contract for their work via a limited company. If the relationship between the individual and the client publisher would – but for the presence of the limited company – be one of employment, the limited company must pay employer’s national insurance and deduct income tax and employee’s NI via the PAYE system on the entirety of the individual’s earnings from the provision of the services.

From 2020, it is proposed that these payment and deduction obligations will be placed on the client, a significant change for publishers using the services of individuals who trade in this way. Publishers should be reviewing their contracts with these companies to assess their exposure as well as reviewing their payment processing systems. More information and tips are provided by our Employment specialist Yvonne Gallagher, here.

AI in Publishing

Artificial intelligence (the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as decision making) has long been a component of the publishing industry. Text and editing software, purchase recommendation functions and business process systems all employ AI functionality. However, it is only recently that we have seen AI “authored” works. “Superhuman Innovation” by Chris Duffey and “Lithium Ion Batteries: A Machine Generated Summary of Current Research” published by Springer both employed AI functionality such as sentiment mining, natural language processing and auto-summarisation and were published earlier this year. UK copyright law does not recognise a computer programme as an author per se so issues of copyright ownership in the resulting work, and in the large data sets of existing works used to ‘train’ the programme, can arise. We are consulting on such issues this year and Alex Hardy will be speaking as part of a panel of experts about ‘Machine Thinking: How is AI Impacting the Creative Industries?’ at Byte the Book on 4 November.

Upcoming conferences and events

Harbottle & Lewis will be at the ALPSP Conference and Awards 11-13 September. Please email Alex Hardy if you would like to arrange a meeting at the conference.

Harbottle & Lewis will be at the Frankfurt Book Fair 16-18 October. Please email Alex Hardy or Zoey Forbes if you would like to arrange a meeting at the Fair.

Harbottle & Lewis are sponsoring Byte the Book’s November networking event. Alex Hardy will be speaking as part of a panel of experts about ‘Machine Thinking: How is AI Impacting the Creative Industries?’ 25 November, 6:30pm in Covent Garden.

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