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Digital Britain - coming ready or not

8 July 2009

The Digital Britain final report was published on 16 June 2009. In order to keep pace and prepare for future technological developments, the government has established a set of key objectives to make Britain a global centre for the creative industries.

These aims include the upgrade and modernisation of our digital networks, the creation of a dynamic investment climate for UK digital content, universal and impartial access to broadband, education programmes to equip a highly skilled creative workforce and the renovation of digital content-rights. Sarah Fellows takes a closer look at the challenges surrounding digital content and what this means for intellectual property practitioners and rights-holders.

Digital content challenges

The models of distribution, monetisation and participation in the creative sector have rapidly and vastly changed over the last ten years and are set to continue to do so.

New challenges, such as the production of limitless perfect digital copies and intense new competition for advertising, mean a new framework needs to be established to encourage investment in the creative industries and provide just rewards for content-creators. However, this needs to be balanced with consumers demand for highly affordable and easily accessible content.

Currently, a significant proportion of consumers choose to access digital content unlawfully, principally through peer-to-peer (P2P) file-sharing. It is estimated that this causes losses of around £180m pa[1] in the music industry and £152m pa[2] across the TV and film industry. Clearly the current scale of unlawful activity hinders investment in innovative content models that rely on any form of payment.

Proposed solutions

Consumers need educating as to the copyright dos and donts and those that persist in unlawful activity should be appropriately sanctioned.

To reduce this civil form of theft, the government proposes to legislate to give Ofcom a duty to take steps aimed at reducing copyright infringement. More specifically, Ofcom will oblige Internet Service Providers (ISPs) to:

  • notify alleged infringers that their conduct is unlawful
  • collect anonymised data on serious repeat infringers, to be made available to rights-holders, together with personal details on receipt of a court order

If, after 12 months, these measures do not reduce unlawful file-sharing by an ambitious 70, Ofcom may invoke its backstop powers (through an Order in Parliament) to use technical measures, such as blocking (Site, IP, URL), protocol blocking, port blocking, bandwidth capping/shaping and content identification and filtering.

The government recommends that an independent body (the Rights Agency) should be created in the UK to collaborate with rights-holders and ISPs to create a code of practice to underpin these obligations and to be responsible for copyright education and enforcement online.


The government supports recommendation 36 of the Gowers Review to match penalties for online and physical copyright infringement and intends to introduce an exceptional statutory maximum penalty of £50,000 for all intellectual property offences.

Other rights issues

Fair use

The fair use doctrine allows limited use of copyrighted material without requiring permission from the rights-holders. The scope for modernisation of the fair use exception is heavily constrained within the EU copyright framework. However, the government is considering extending the exemption in areas such as distance learning and the preservation of archive material.

Copyright Strategy

The government reiterated its intention to implement the Gowers recommendations to enable the UKs copyright system for the digital age and, with the assistance of the IPO, to develop the Copyright Strategy to guide the long-term and global development of copyright.

Orphan works

Orphan works are works that remain in copyright where, even after a diligent search, the owner cannot be identified or found. Both the BBC and British Library have commented on the problem of orphan works preventing public access to such materials and thwarting mass digitisation projects. Therefore, the government proposes to introduce legislation to enable commercial schemes for dealing with orphan works (without the consent of the rights-holder), perhaps through collecting societies, on a regulated and appropriately safeguarded basis.

Funding mechanisms

Content providers are experimenting with a wide range of business models, from embedded and behavioural/targeted advertising, pay-per-use and freemium models (initial supply for free with tiered pricing structure for premium use).

The proposals regarding charging consumers to record/reuse content and charging cable broadcasters to retransmit have been shelved for the moment, owing to an acknowledgement by the government of the difficulties already facing consumers in the current economic climate and scepticism over whether charging for retransmission would create a significant revenue.

A budget of £10m has been allocated to research and trial new business models through Digital Test Beds throughout the UK in order to find the most appropriate and profitable business structures for exploitation of IP rights in the digital age.


Although rights-holders have welcomed the governments clear intention to reduce copyright infringement, much of the detail is yet to be finalised and some are sceptical as to whether the proposed measures go far enough. Moreover, by prescribing specific technical approaches to tackling piracy, the authorities risk being outpaced by technology once again.

However, the governments timid approach should perhaps be seen in the context of the recent decision of the French Constitutional Council to strike down the law, enabling the French government to deny access to anyone downloading copyright material more than three times, describing "free access to public communications services online" as a human right.

Gordon Brown seems to certainly share this view, describing a fast internet connection as "an essential service, as indispensable as electricity, gas and water"[3].

[1] BPI figures in 2008 [2] IPSOS figures for 2007 [3] The Times, 16 June 2009

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Mark Daniels

Mark Daniels

Partner and Head of Business Services

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