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UK.gov makes total pig's ear of attempt to legalise home CD ripping

Failure to cough up gets new law torn apart in court

How did we get here?

The idea that compensation should accompany any format-shifting exception is based on the idea that the producer sells fewer copies. Not that many fewer copies, but fewer all the same.

However, when Professor Ian Hargreaves produced his infamous report for the IPO he decided that harm to the producer was either minimal or non-existent. Hargreaves relied on two reports in reaching this conclusion: one from Google economist Hal Varian and one from the taxpayer-funded quango Consumer Focus, produced shortly before it was abolished - both arguing that there was no economic harm to the producer.

After Hargreaves, further work was commissioned: one report from researchers at Sussex University, as well as contributions from Martin Kretschmer, an academic who now occupies a post created for him, and funded by, the IPO.

The UK government then argued two things to justify the no-compensation exception: either that harm was minimal or non-existent; and if there was harm, when you bought a CD, any harm was "priced in" at the point of first sale.

But Mr Justice Green said the government's justifications were "tentative", and that it hadn't provided any decent empirical evidence of "pricing in".

At the judicial review, the IPO's man, Robin Stout, admitted the evidence base was ropey, even saying that he'd raised internal concerns about one particularly "serious error" in the research, which assumed that CDs were "uncopyable" — all had TPM, which prevented anyone in Britain from format shifting.

In the Sussex study commissioned by the IPO, the report itself concluded that its own results for music were "puzzling” and “ambiguous".

It's bizarre that the UK authorities should choose to pick a fight on such flimsy evidence, then run up a huge legal bill defending it.

The whole debate would be moot if format shifting rights had simply been bundled with CDs, as they are with services today. The iTunes Store has since its launch in 2003 given the music buyer the ability to "format shift" to a CD, albeit a limited number of times, and an Amazon MP3 purchased gives you unlimited copies for private use.

How so? The digital music services innovated and reached a mutual agreement with the rights holders, which is largely the point of strong and simple copyright law: to encourage licensing.

The puzzle is why the music industry in the 1990s never found a good time to introduce CDs with the sticker "You Can Home Tape Me", and once the InfoSoc Directive enshrined the right to chase compensation, most were mollified by chasing a levy.

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