The Hargreaves Report (2011) on intellectual property and economic growth recommended relaxing limits to copyright which do not prejudice the central objective, namely an incentive to creators. There has now been an expansion of copyright exceptions at UK level to realise opportunities within the EU copyright framework in relation to parody, caricature and pastiche. The three-step test for exceptions set out in the overarching Berne Convention is that: 1) they only apply to special cases; 2) where normal commercial exploitation is not conflicted; and 3) where the legitimate interests of rights-holders are not unreasonably prejudiced. A tension exists between technology and the law in that new technologies have given people new ways to express themselves with low cost creation, editing and dissemination techniques, but copyright law has restricted people's ability to parody the works of others thus limiting freedom of expression, public discourse, creativity and economic growth.
The Copyright and Rights in Performances (Quotation and Parody) Regulations 2014 (SI 2014/2356) came into effect on 1 October 2014 and broaden the Copyright, Designs and Patents Act 1988 to permit quotation from all types of copyright work including film, broadcasts, sound recordings, and photographs as well as traditional text quotation. By virtue of the Directive 2001/29 (InfoSoc Directive) this introduces a new exception in section 30A of the Act to permit fair dealing for the purposes of parody, caricature and pastiche. Of course, fair dealing has a long history in copyright law for purposes of criticism and review provided sufficient acknowledgement is given. The new regulations permit other minor uses of quotation such as use in examination papers and academic citation which do not undermine the commercial exploitation of the work.
Parody will usually involve, almost by definition, some level of copying from another work, so creators of parody have been liable for copyright infringement if they have copied a substantial part of the original work. So even though a parody which uses an idea from an existing work but includes a degree of new skill and labour generates a new copyright in that parody, it might also infringe copyright in the original work. Of course, permissions could be sought, but these might have been time consuming to negotiate and administer, or involve clearance costs (e.g. for legal opinion), failure to secure permission giving a risk of legal action and potential damages.
Put simply, parody may now be practised at lower expense and lower risk. It is the intended consequence of this new legislation to spur innovation and economic growth because of the current market for parody, for example user-generated content delivered through YouTube®, and a government economic assessment suggests a consequential contribution of £250 million to the UK economy over 10 years. There is also recognition of the importance of parodic works as a form of cultural expression.
Copyright owners therefore lose their right to control all uses of their work, and they will lose revenue income from licencing their works for these purposes, though more publicity generally leads to greater sales. In individual cases, the parody might be so successful that it in fact competes with the original work. A further potential problem for copyright holders is that loss of control might lead either to dilution of the work or tarnishment. As an example of dilution, an excerpt of the German film Der Untergang (Downfall) was parodied extensively on the Internet. Constantin Films launched a campaign to have all these parodies (in which a variety of different sub-titles had been placed over the original clip by different parodists) removed from the Internet. The repeated use of viral clips may well have diluted the impact of the scene and jaded current and future consumers of the original work.
It is important to note that the exception is limited to fair dealing. Otherwise the risk would be that unscrupulous artists might simply copy the work, thinly veiled as parody. The doctrine of fair dealing considers how a fair-minded and honest person would deal with the work, and is one of reasonableness and proportionality as to the amount of the work copied. The effect on the market for the original is a primary factor for determining whether use of a copyright work is fair dealing. A judge would also have to determine whether the parody exception is engaged by the new work by evoking the original work (whilst being noticeably different from it) as well as whether the new work is in fact an expression of humour or mockery. Quoting a few lines of a song in parody would appear to fit within the new exception, whereas parodying an entire song might require a copyright licence and royalty to the owner, and using an entire music track on a spoof video would not be fair dealing. So the new legislation does not put parody entirely outside the traditional copyright licencing regime.
Where a licence granted under the old law gives wider permissions than the new law, the scope of the licence will be unaffected. However, where the new law permits more than the licence the licensee will be able to rely on the new law. A licensee cannot be made to comply with any term in so far as it seeks to restrict something that the new law allows because copyright exceptions are protected from being overridden by contract, such terms being unenforceable.
This new exception has no impact on the law of libel or slander, so rights holders would still be able to sue if a parody were defamatory. In addition, copyright law already expressly protects an author’s moral right to be identified as author of the work and to object to derogatory treatment.
In addition to the economic and cultural benefits of the new copyright exception, and bearing in mind challenges to copyright ownership presented, for example, by The Pirate Bay's technique for delivering copyright protected works to file-sharers who download its files, there will be a benefit in respect of the rule of law and respect for the protection of creative output so easily proliferated through the new technologies. Also, there has been a commendable public service in relieving parodists of the fear of infringement.
The central objective of copyright, to reward creators, has been balanced against the interests of society as a whole.