Page 151 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

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inquired into whether the user has paid the customary price for the work. The line between
commercial/non-commercial use has become even more blurred in the UGC age, because of
the increasing commercialisation of UGCs, the wide availability of electronic payment and
micro payment, and the unlimited scope of potential users. It is easy for UGC creators to
cross from the non-commercial side to the commercial side, just as how they cross from the
private side to the public side, from the user side to the creator side. 136
However, following the requirement of Berne Convention, this thesis argues that the
basic principle in defining a leviable non-commercial UGC is to ensure that the UGC
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would not conflict with the normal exploitation of copyrighted works. As the courts
have pointed out, the focus should be on whether the UGC creator ‘capture[s] significant
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revenues as a direct consequence of copying the original work’. Gaining profits or having
the intention to gain profits alone would not exclude UGC creators from the levy scheme.
Courts have even noted that ‘many, if not most, secondary users seek at least some measure
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of commercial gain from their use’. Even the illustrative uses listed in the fair use and fair
dealing provisions, such as news reporting, comment, criticsism and research, are ultimately
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conducted for profit. Many UGC platforms also provide various ways to encourage UGC
creators to monetise their UGCs. Because of the prosperous business model of C2C
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(customer-to-customer) and the popularity of electronic payment, UGC creators can earn
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profits much easier than users in the pre-Internet age. For example, any UGC creator with
an Apple pay or Alipay account can earn profits in various forms such as through advertising
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fees and fans’ rewards. As no service fees are charged, the profits can be in a small
amount, which in turn encourages micro payment. UGC commercialisation is not only a

135 Commercial use would be found if the user "profit[ed] from the exploitation of the copyrighted work without paying the
customary prices." Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 562, 105 S. Ct. 2218, 2231 (1985);
Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 612 (2d Cir. 2006); Cambridge Univ. Press v. Patton, 769 F.3d
1232, 1265 (11th Cir. 2014).
136 Gervais, ‘The Tangled Web of UGC’ (n 10) 845.
137 Arista Records v. Myxer, NO. CV 08-03935 GAF (JCx), *7; Sony BMG Music Entertainment v. Tenenbaum, 660 F.3d 487,
st
498 (1 Cir. 2011).
138 American Geophysical Union v. Texaco, 60 F.3d 913, 922 (2d Cir. 1995); Blanch v. Koons, 467 F.3d 244, 253 (2d Cir. 2006);
Cariou v. Prince, 714 F.3d 694, 708 (2d Cir. 2013); Graham v. Prince, 265 F. Supp. 3d 366, 382 (S.D.N.Y. 2017).
139 Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 921 (2d Cir. 1994); see also Campbell v. Acuff-Rose Music, Inc., 510 U.S.
569, 571, 114 S.Ct. 1164, 1174 (1994); Maxtone–Graham v. Burtchaell, 803 F.2d 1253, 1262 (2d Cir.1986).
140 Harper & Row v. Nation Enterprises, 471 U.S 539, 592 (1985); Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 571, 114
S.Ct. 1164, 1174 (1994).
141 Lizzie Davey, ‘Everything You Need to Know About Monetizing User-Generated-Content’ (Tine, 25 October 2016) <https://
www.tintup.com/blog/user-generated-content-monetization/> accessed 10 July 2019. The online survey I conducted shows
that more than 10% of UGC creators have made profits from their UGC. Question 13 and 27 in Appendix 1.
142 Andreas Rivera, ‘What is C2C?’ (Business News Daily, 20 July 2018) <https://www.businessnewsdaily.com/5084-what-is-
c2c.html> accessed 12 July 2019. (‘Consumer to consumer, or C2C, is the business model that facilitates commerce between
private individuals.’).
143 Sharon Kinder, ‘8 Ways to Encourage More User-Generated-Content’ (Single Grain) <https://www.singlegrain.com/content-
marketing-strategy-2/8-ways-to-encourage-more-user-generated-content-ugc/> accessed 12 July 2019.

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