EFF's Fred von Lohmann has a very nice analysis of the copyright law quagmire caused by President Obama's gift of an iPod with 40 show tunes to the Queen of England.
I am not a copyright scholar, but I think Fred may have left out one aspect of the issue which I think means that the Queen can enjoy her iPod in peace: sovereign immunity.
In the US “sovereign immunity” is something that keeps you and me from suing the government for certain classes of misdeeds. But, as I understand it, in the UK sovereign immunity means…sovereign immunity. The Queen IS the THE sovereign. She has immunity. It's really pretty much that simple.
The government in the UK doesn't have “sovereign” immunity because it's not sovereign. Sovereigns have two legs. The UK government just has “government” immunity. In practice that works like our sovereign immunity, so no one minds. But the distinction matters when you are thinking about the Queen's legal exposure in what are “her own courts.” And although I don't know UK copyright law, I'm guessing she didn't waive anything….
(As Fred noted when I sent him an earlier draft of the above, Obama's import to the UK is likely protected by diplomatic immunity. So the issues, whatever they are, are US law issues.)