Alliance for Intellectual Property – Written Evidence (JTN0027)

UK-Japan Trade Negotiations

1. The Alliance for Intellectual Property is pleased to provide written evidence to the Lords EU Select Committee International Agreement’s Sub-Committee in relation to its inquiry into UK-Japan Trade Negotiations.

2. The Alliance for Intellectual Property is a unique association of 20 organisations representing IP rich businesses and creators – sectors that continue to grow and outperform the wider economy. Our members include representatives of the audio-visual, music, toy and games, business software, sports rights, branded manufactured goods, publishing, retailing, art, and design sectors. They share a collective interest in ensuring that Intellectual Property (IP) rights are valued in the UK and around the world and that legislative regimes exist that enable the value and contribution of those rights to be fully realised.

IP and Trade

3. The UK has one of the best developed and applied IP regimes in the world. Creators and businesses have been able to use that framework to develop exciting and innovative products, designs and content using the latest technology and manufacturing techniques.  This current advantage must not be jeopardised as we seek to develop new trading relationships.

4. It is vital therefore that the protection and promotion of IP is at the heart of trade policy, ensuring that everything we create in the UK has the potential to achieve its maximum value and that creators are properly rewarded. The opportunities provided by new trade relationships should not threaten the UK’s world leading regime, but rather be used to raise standards in the jurisdictions with which we negotiate. This will not only protect and promote British IP but provide opportunities for creators and rights holders worldwide to benefit socially, culturally and economically in the same way that the UK has.

Principles for Free Trade Agreements (FTAs)

5. The Alliance has some high level principles in relation to IP that we believe should be the basis of any FTA.

6. Provisions within IP Chapters of future FTAs should promote both ratification and adherence to the terms of the International Treaty provisions for recognition and enforcement of copyright, trade mark, design and other intellectual property rights, which provide the foundations for development of the businesses represented by members of the Alliance.

7. We therefore want the negotiations to encourage national reform where current practice falls short of standards which UK legislation has already recognised are necessary for the effective development of intellectual property laws. We also would like to ensure that these principles should apply equally to online as to offline so that tackling infringements can be equally effective.

8. Specifically:

(a) defending standards, such as the Three Step Test for defining the scope of exceptions and limitations to copyright against efforts for “watered down” or overly vague descriptions that require litigation to interpret, alongside detrimental costs to businesses. Such defence also means taking into account the huge importance of the UK design sector and the central role that IP rights play in allowing designers to contribute to the UK both culturally and economically.

(b) allowing flexibility for higher levels of protection to be applied, whilst pushing for new standard levels of protection when international norms have already moved beyond minimum levels established under International Treaty provisions (for example on the terms of protection for copyright and building on recent UK changes to registered design rights, recognising the further steps needed to bring parity with the current European system).

(c) promoting recognition at international level of rights such as the Artists’ Resale Right, when International Treaty provisions have yet to be adopted at global level;

(d) making provision for effective enforcement of rights, including in a digital environment through concepts of civil liability for secondary infringement, application of systems of good practice developed between traditional and new platforms, particularly linked to updated provisions for  injunctive relief while addressing outmoded aspects of systems for right owners serving notices on platforms covering notice and take down;  

(e) sustaining the UK’s trade mark exhaustion regime, ensuring that no trade agreement is inconsistent with or undermines UK’s regional exhaustion approach resulting from current EU status.

IP rich industries and Japan

9. Japan is a key market for IP rich industries. In 2016, Japan accounted for £325 million of the UK’s creative industry exports, while creative industry export goods were worth £155 million.  Japan is also a key market for many British branded goods and design-led products.

10.                     The Economic Partnership Agreement (EPA) between the EU and Japan that came into force in February 2019 is still in its infancy.  It has brought some benefits in relation to IP, for example as a result, the level of term for copyright works has increased from 50 to 70 years.  A major omission from the EPA is that it does not include audio-visual services, which offer a significant growth opportunity for the UK creative industries.  We therefore believe any future UK-Japan FTA should pursue an ambitious, strongly export-oriented policy that includes audio-visual services.

IP issues in Japan

Website Blocking

11.                     Japan is considering multiple approaches to tackle its piracy problems, and website blocking remains on the agenda. Historically, some commentators and government agencies have taken the view that site blocking violates the Telecommunications Business Act and the Japanese Constitution guarantee of secrecy of communications. This view is now evolving based on the latest scholarship and data showing that website blocking is effective and need not impinge on privacy rights.

12.                     In this regard, the Japanese government took the significant step on 5 June 2020, enacting legislation to Revise Part of the “Copyright Law” and the “Law Concerning Special Provisions on the Registration of Program Works”. The law clarifies liability against link sites, as well as prohibiting the unauthorised downloading of still images, with the former entering into force 1 October 2020 and the latter on 1 January 2021. Specifically on link site liability, the law amends Articles 113 and 119 of the Copyright Law of Japan to provide civil and criminal remedies against facilitation of piracy through link sites. Article 113 provides for civil remedies, including injunctive relief, against those who facilitate infringement through use of a website or computer program.

13.                     Other remedies, such as the voluntary establishment of an “infringing website list” (IWL) to choke digital advertising revenues, have had some ameliorative effect. Both of these steps are seen as less restrictive means to website block so must be tried. However, it is clear they are not a substitute for more stringent measures to deal with largely foreign-based and operated piracy sites harming the industry in Japan. The UK should therefore use any future UK-Japan trade agreement to encourage progress towards site blocking, and other commitments reflecting the UK’s own high standards of copyright protection and enforcement.

Public Performance Rights

14.                     Public Performance Rights remain a music industry priority globally and, when effectively implemented, can substantially enhance the Japanese music ecosystem. Globally, performance income (including both broadcast and public performance) provides around 14% of global music revenue. In Europe public performance provides more revenue than for radio, TV and cable retransmission. Moreover, there are good international precedents of effective collections and marketing of public performance licenses. 

15.                     These rights were not included in the EPA but the Japanese Government has committed to continue to discuss this issue. We would urge the UK Government to encourage the Japanese Government to introduce public performance rights during its discussions on a future FTA.

Artist Resale Right (ARR)

16.                     The Artist’s Resale Right (introduced in the UK in 2006) entitles artists to a royalty when their work is resold by an art market professional. ARR royalties are a much needed income to sustain artists in their practice, with 81 per cent using their ARR for living expenses and art materials. Currently, Japan does not have ARR, meaning that UK artists and their estates are unable to receive royalties when their works are sold on the secondary market in Japan.

17.                     In the EPA, the Japanese Government stated its willingness to co-operate on matters of ARR, and we would urge the UK Government to recommend an ARR law which would allow reciprocity with other countries. As Japan has a lot of contemporary artists, this would provide an incentive for them to ensure Japanese artists can get the royalty when they sell in the UK also.

Audio-visual services: an opportunity

18.                     Chapter 8 (Trade in Services) of the EPA does not include audiovisual (AV) services in its scope. However, international trade in AV services represents a significant growth opportunity for the UK creative sectors. A 2018 study by independent economists Oliver & Ohlbaum Associates[1] found that, while the UK domestic market is maturing, fast rising international sales could more than double the sector’s overall rate of GVA growth, hitting as much as 8 per cent a year by 2025, with employment growing at similar levels. The UK should therefore pursue an ambitious, export-oriented policy for AV services in any future trade agreement with Japan that not only builds on, but improves the current EPA. This will help ensure the UK’s continued access to this, and other growing and diverse markets.[2] 

7 September 2020