‘New business models, new legal issues’

London Book Fair

April 12th 2011

Laurie Kaye & Mailin Bala

Laurence Kaye Solicitors
 ‘Digital Shift’

Agenda

1. ‘Digital Shift’

2. Legal landscape in publishing

3. Successful digital projects

4. Top 10 Points

Laurence Kaye Solicitors LBF. 12.04.11

 ‘Digital Shift’

1980’s? 2011? 2020?

Networked
Analogue / Transitional
Digital
Pre-Internet Period
Society

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 ‘Digital Shift’

Technology

Law

Business Models

“Social norms”

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 ‘Digital Shift’

Social
Norms

Tech Law

Biz
Models

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 ‘Digital Shift’

Creative sector, represents some 8.2% of the UK economy

Employs 2.28m people in the UK

The publishing sector is a major UK strength, worth £22bn

Exports more than any other media sector

Book publishing alone reported exports of £1.2bn in 2009

That export market depends critically on copyright.

Laurence Kaye Solicitors LBF. 12.04.11
 ‘Digital Shift’

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 DPF: “Hot Legal Issues”
Big Themes
’

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 ‘Digital Shift’

Enhanced
Edition

App ‘Work’ Book

E-book

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 ‘Digital Shift’

Author

Search Publisher

Community Developer

Distributor

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 Legal landscape

“The copyright system will

never work on the Internet”
Professor Lawrence Lessig (Nov 2011)

v.

“Let’s innovatively adapt”

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 DPF: “Hot Legal Issues”
Digital Rights

‘1 to many’
– comm to
‘1 to 1’ –
the public
making
Copy available
on demand
on the
internet

Laurence Kaye Solicitors LBF. 12.04.11

 Legal landscape

While the digitization of books and the creation of a universal digital

library would benefit many, the ASA would go too far. It would
permit this class action – which was brought against Google to
challenge its scanning of books and display of “snippets” for on-line
searching – to implement a forward-looking business arrangement
that would grant Google significant rights to exploit entire books,
without permission of the copyright owners. Indeed, the ASA would
give Google significant advantages over competitors, rewarding it
for engaging in wholesale copying of copyrighted works without
permission, while releasing claims well beyond those presented in
this case”
Judge Denny Chin

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 DPF: “Hot Legal Issues”
Digital shift

Amended Google Settlement

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 Legal landscape

“Many of the concerns would be ameliorated in

the ASA was converted from an “opt-out”
settlement to an “opt-in settlement”

Judge Denny Chin

Laurence Kaye Solicitors LBF. 12.04.11

 Legal landscape

Hargreaves Review
• No.10 initiative – seeking hard evidence
 
• “obstructing growth?” – barriers to new internet-based business
models (including permissions)
 
• Cost and complexity of enforcing IP rights – UK and abroad
 
• Interaction between IP and Competition frameworks

• Cost and complexity for SMEs

Laurence Kaye Solicitors LBF. 12.04.11

 Legal landscape

Gowers: o/s exceptions to copyright

• Gowers 2006 and ‘Taking Forward’ 2008
 
• Dropped: personal copying, research and private study, parody
 
• 2 left: ss. 35/6 – education via distance learning (nb licensing
proviso)
 
• Libraries and archives: s42 – copying for preservation and archiving
to be extended to sound recordings, films etc

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 Legal landscape

The International agenda 2011: EU

• WIPO – copyright exceptions?
 
• Treaty (or Stakeholder forum) on VIPs?
 
• EU – Impact Assessment on Orphan Works
 
• ‘Out of Commerce’ – Stakeholder Forum
 
• Framework Directive on Collective Management

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 Simplicity

Transparency

Ease of use

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 :

What are the top 5 issues to focus on in contract?

• The Licence
• What about the technology?
• It’s a commercial term!
• New IP?
• Plan for exit…

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 :

The Licence (permission to use the work)

• Exclusive or non-exclusive?

• Territory?
• off line
• on line
• Delivery?
• What medium?
• What platform?
• Permitted acts?
• Is it sub-licensable?

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 :

What about the technology?

• Understand the process

• Think about the related issues e.g.

 Enhancements
 Bug Fixes
 Backups
 Access to source code

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 :

Don’t mistake a commercial term for a legal term

E.g. exclusion and/or limitation of

liability clauses

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 :

Any new IP?

• Who is the owner?

• Include an assignment

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 :

Plan for the exit?

• What are the rights of termination

• What is the effect of termination?

 What happens to content on
termination?
 Revenues
 Any other provisions to continue post
termination? (e.g. audit, access to
licensee’s proprietary code)

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 :

What are the top 5 mistakes in a contract

negotiation?

1. Don’t start work before the contract has

been negotiated.
2. Don’t negotiate the commercials in
tandem with the legal negotiation of the
contract
3. Remember to consider the presentation
and tone of your contract
4. Don’t reinvent the wheel
5. Involve your lawyer early

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 :

Starting work before the contract has been

negotiated

• Exposure if things go wrong

• Solution: agree one page term

sheet

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 :

Negotiating the commercials in tandem with the

drafting of the contract

• Negotiate commercials first

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 :

Consider the presentation and tone of your

contract

• Plain English

• User friendly format

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 :

Don’t reinvent the wheel

• Working with what you’re given

= speedier resolution

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 :

Involve your lawyer early

• Ask them to identify:

 Key issues
 Ways in which you can manage
your risk

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 10 PRINCIPLES OF DIGITAL MEDIA LAW

• There’s always a solution

• Online rules = offline rules (mostly)
• Living with uncertainty, so manage your risk
• Value your IP
• Copyright: permissions first, restrictions last
• Think privacy
• Collaboration’s the name of the digital media game
• Make it simple(r)
• Do the deal but allow for the exit
• What are the things you don’t know you don’t know?

Laurence Kaye Solicitors

 Laurence Kaye is an expert lawyer in the fields of digital law, intellectual property and media law. He
is recognised in “Chambers Guide to the UK Legal Profession, 2011” as a leader in the fields of Media
Entertainment & Information Technology law.
Laurence was one of the first lawyers in the UK to advise on Internet law. He combines cutting-edge
legal work on digital media projects with strategic and policy-related work in the field of copyright and
online law. He is Copyright Adviser to the European Publishers Council for whom he has worked closely
on a number of key EU Directives, including the Copyright, Database and E-Commerce Directives, and
on many copyright strategy papers.

Laurence also served as a member of the Copyright Expert Panel from 2008-10 which advised UK
Strategic Advisory Board for Intellectual Property Policy (SABIP.

Laurence founded Laurence Kaye Solicitors in 2002. The firm’s mantra is “legal solutions for the digital
age”, with a proven track record for combining innovation with practical legal advice.
Laurie is also a regular blogger at ‘Laurence Kaye on Digital Media Law’.

Contact details:
laurie@laurencekaye.com