Motion Picture Association – Written Evidence (UST0044) The MPA welcomes UK and US efforts to agree an ambitious and comprehensive free trade agreement (FTA) and the opportunity to respond to the IAC’s call for evidence to inform its inquiry into the UK’s approach to these negotiations. Our response is divided by FTA chapter and touches on a number of cross-cutting themes - such as the importance of maintaining the UK’s strong intellectual property framework - as well as specific questions raised by the call for evidence relating to trade in audio-visual services (Q17); digital trade provisions, including impact on the UK’s proposed online harms regime (Q7, 26 and 28-29); and goods tariffs (Q16). About the MPA 1. On behalf of our member companies - Walt Disney Studios Motion Pictures, Netflix Studios, LLC, Paramount Pictures Corporation, Sony Pictures Entertainment Inc., Universal City Studios LLC, and Warner Bros. Entertainment Inc. - the MPA works globally to advance policies that support creators, protect content and foster a thriving creative economy. 2. As a major part of the audio-visual (AV) sector in the UK, the MPA represents companies that produce and distribute some of the highest quality and most popular creative content. Technological innovation lies at the heart of film and high-end television (HETV) production, from set to screen. The UK boasts some of the world’s most advanced facilities and expertise for digital production and post-production, as well as world-class digital distribution services, from cinemas to a growing wealth of online services, including those of MPA members. 3. MPA member companies are keen to continue working with the UK Government to maintain this country’s status as a world-leading hub for film and television1 beyond the UK’s exit from the European 1Official figures published in January 2020 by the BFI’s Research and Statistics Unit revealed the highest ever spend on film and HETV production in the UK in 2019. These pre-pandemic figures include increased levels of inward investment and co- production (£3.075 billion), underlining the UK’s global reputation as the world- Union (EU) and the EU’s single market in broadcasting. The UK’s success has been achieved to date partly through access to this single market, but also through a highly supportive domestic environment for content production and AV services that combines access to high quality technical skills, targeted fiscal incentives and a robust copyright framework. 4. This last element - a robust copyright framework - is especially critical in creating an environment conducive to investment and growth. The proliferation of illegal and infringing content, particularly that which is available online via the internet, has a significant negative impact on our industry and on UK consumers. Its prevention must therefore be considered as part of any FTA negotiated. Which areas of the UK-US FTA under negotiation are important to MPA members and why? Services 5. International trade in AV services represents a significant growth opportunity for the UK creative sectors. A 2018 study by independent economists Oliver & Ohlbaum Associates2 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. 6. The UK should therefore pursue a strongly export-oriented policy for AV services as a matter of course in trade agreements to help ensure the UK’s continued access to growing and diverse markets. A successful agreement on AV services between the world’s two largest exporters - the US and UK - must set a high standard in this regard. There are particular features of both the US and UK media leading centre for film and TV production. The BFI’s Statistical Yearbook 2019 (p.202) also demonstrates the sector’s significant contribution to jobs, many of which are high-skilled, with around 91,000 people working in the UK film industry in 2018. 2 Oliver and Ohlbaum Associates Ltd (2018), “The contribution of the UK-based film, TV and TV-related industries to the UK economy, and growth prospects to 2025.” https://www.mpaeurope.org/wp-content/uploads/2018/09/OO-UK-AV-sector-economic- contribution-report-FINAL-2018.09.21.pdf. landscapes that each side will normally seek to confirm or clarify as being consistent with the agreement. This includes, for the UK, the public service broadcasting (PSB) model. MPA members benefit from the UK’s existing, open UK AV sector ecosystem and consider the role of UK PSB within that ecosystem to be vitally important3. Indeed, MPA members work in close partnership with UK public service broadcasters. 7. The UK Government has made clear in its negotiating mandate that it aims to ‘protect the right to regulate public services, including…public service broadcasters.’ MPA strongly supports that objective. The appropriate way to confirm this and also advance the UK’s global offensive interests in securing market access for its film and television sector, in the context of an agreement of the kind contemplated with the US, is through the use of so-called “non- conforming measures” (NCMs). 8. We expect that the UK and the US will both wish to schedule NCMs for certain sensitive aspects of AV services and investment regulation, in order to clarify the consistency of their respective policies with the agreement or where they foresee additional regulation. The US has negotiated NCMs related to its AV services and investment policies in the past. The MPA would support appropriately worded NCMs to accommodate distinct UK and US government policies related to the AV sector, including the UK PSB model. Intellectual property (IP) 9. The UK government has prioritised the protection and enforcement of copyright, reflecting the significant contribution of the creative industries to the UK economy. For example, rights distribution of AV content accounted for approximately £1.5 billion in UK exports4. The UK approach to copyright protection and enforcement represents a model that the MPA would hope to see used as a template for future 3 The PACT 2019 Census shows that, over the past decade, the UK PSB networks have consistently accounted for more than 80% of all UK external primary commissions spend. In addition, the 2019 COBA report demonstrates the significant value of investment in UK production by the wider family of UK commercial broadcasters, demonstrating the importance of the UK AV sector’s mixed ecology. 4 Oliver and Ohlbaum Associates Ltd (2018), “The contribution of the UK-based film, TV and TV-related industries to the UK economy, and growth prospects to 2025.” https://www.mpaeurope.org/wp-content/uploads/2018/09/OO-UK-AV-sector-economic- contribution-report-FINAL-2018.09.21.pdf. UK trade agreements. This is particularly the case when it comes to the treatment of IP, including copyright, where we believe the UK is well-positioned to positively influence global standards in the areas of IP protection and enforcement. 10. The production of film and television content and its dissemination to the public through legitimate channels depend on a foundation of adequate and effective copyright protection and enforcement. This foundation is essential to the success of the motion picture and television industry in both the UK and the US, allowing consumers in both countries to enjoy a vast array of film and television content in more diversified ways and with more flexible pricing than at any time in history. A UK-US agreement should therefore include commitments reflecting high standards of copyright protection and enforcement. 11. The most important of these standards today include the following: ● provisions that account for technological changes, including full implementation of the WIPO Copyright Treaty and the WIPO Performances and Phonogram Treaty (jointly referred to as the "Internet Treaties"5), which set out international norms that aim to prevent unauthorised access to, and use of, creative works on the Internet or other digital networks. ● provisions that reflect the global consensus on minimum standards of protection, including, for example, provisions setting out the duration of protection; ● provisions that enshrine the concept that limitations and exceptions to copyright are confined to those that are consistent with the longstanding “3-step test”; ● provisions affording effective legal protection of technological measures elected to be used by copyright owners to control access to and copying of their works (TPMs), such as, for example, the technological measures used to control access to direct-to-consumer services operated by MPA members or licensees; ● comprehensive obligations regarding copyright enforcement with meaningful criminal penalties and civil remedies (including, for example, statutory damages, “secondary infringement” liability, criminal liability for aiding and abetting, criminal remedies for 5 For further information, please visit https://www.wipo.int/copyright/en/activities/internet_treaties.html illegal recording of films in theatres, and remedies addressing pay-TV piracy and signal theft); ● enforcement measures addressing online infringement that mandate deterrent civil and criminal remedies; provide legal incentives for online service providers to cooperate with right holders; and ensure stay-down of pirated content in full respect of relevant rights and the rule of law. 12. Additionally, it has become a common practice in the UK for rights holders to use Section 97A of the Copyright Design and Patents Act to secure court orders requiring internet intermediaries to withdraw services from structurally infringing sites. The MPA first used this mechanism in 2011 to block access to the pirate service Newzbin. Since that time, injunctions have been issued in some 23 cases involving 176 infringing sites spread across more than 2,000 domains. These injunctions have been obtained primarily by the MPA, the BPI (the UK recorded music trade body) and the Premier League, demonstrating that no-fault injunctive relief is an effective tool to reduce online copyright infringement.