Copyright protection in information society in the European Union: initiatives, results and lessons

Ioannis Iglezakis
Assistant Professor, Faculty of Law,
Thessaloniki, Greece

I. Introduction to Directive 2001/29

In the information society, new challenges for copyright appear. To address the issues posed, Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society was adopted. With the adoption of the Directive one of the priority objectives is fulfilled, which is set by the Lisbon European Council as part of the process to preparing the transition to a competitive, dynamic and knowledge-based economy in the EU. The final outcome is a result of over three years of thorough discussion and a fine example of co-decision making where the European Parliament, the Council and the Commission have all had a decisive input. The Directive entered into force on 22 June 2001 and has been implemented by all EU Member States.

The objectives of the Directive were to adapt legislation on copyright and related rights to reflect technological developments, and transpose into Community law the main international obligations arising from the two treaties on copyright and related rights adopted within the framework of the World Intellectual Property Organisation (WIPO) in December 1996.

The Directive was enacted in order to adjust and complement the existing framework so as to ensure the smooth functioning of the internal market and bring about a favourable environment which protects and stimulates creativity and innovative activities within the Community. It addresses the need to take into account the new digital environment and in more particular, the ability to produce, copy, manipulate and distribute works in digital form over the Internet. The easiness of the production and dissemination of digital works comes, however, together with the practical difficulties of exercising control over the dissemination of works without consent of the copyright owner and/or obtaining redress for the unauthorised reproduction, due to the existence of multiple jurisdictions and divergence of laws to be applied for unauthorised reproduction. Thus, the harmonization of national legislation on the basis of the Directive is a great change for the protection and stimulation of development and marketing of digital content.

II. Overview of the Directive

The Directive harmonizes the right to reproduction, communication and distribution. It also includes limitations to the aforementioned rights and regulations on the protection of technological measures, and on rights management. The reproduction right gives authors the exclusive right to authorise or prohibit direct, indirect, temporary or permanent reproduction by any means and in any form, in whole or in part. Similar rights are provided for performers of fixations, for record producers, film makers and broadcasters of fixations of their broadcasts. The communication right requires authors to be provided with the exclusive right to authorise or prohibit any communication to the public of originals and copies of their works, by wire or wireless means, including the making available to the public of their works in such a way that member of the public may access them from a place and at a time individually chosen by them. Similar rights are also provided for the aforementioned categories of right holders. Authors are granted the exclusive right of distribution to the public of their works or copies thereof. This right is exhausted where the first sale or first other transfer of ownership in the Community of a copy is made by the right holder or with his consent.

The Directive lays down a number of exceptions to the right of reproduction and the right of communication. A mandatory exception to the right of reproduction is introduced in respect of certain temporary acts of reproduction which are integral to a technological process, the purpose of which is to enable the lawful use or transmission in a network between third parties by an intermediary of a work or other subject-matter and which has no separate economic significance. The Directive also makes provision for other non-mandatory exceptions to the rights of reproduction or communication. These are optional and particularly concern the “public” domain. For three of these exceptions – reprography, private use and broadcasts made by social institutions – the right holders are to receive fair compensation.

Furthermore, the Directive provides for legal protection of technological measures and in more particular, it requires Member States to provide adequate legal protection against the manufacture, import, distribution, sale, rental, advertisement for sale or rental, or possession for commercial purposes of devices, products or components or the provision of services for the circumvention of any effective technological measures. It also provides for the protection of rights-management information. Member States are obliged to provide for legal protection against any person knowingly performing without authority any of the following acts: the removal or alteration of any electronic rights-management information; the distribution, broadcasting, communication or making available to the public of works or other protected subject matter from which electronic rights-management information has been removed.

III. News challenges for copyright in the knowledge economy

Internet and digitisation technologies are opening up new possibilities for the distribution on creative content online. Consumers are thus enabled to access creative content online at any place in the EU internal market. The availability of creative content can be a key driver in the take-up of new technologies, such as broadband Internet, digital television and mobile communication.

New regulative initiatives are required, however, in this new environment, since obstacles still stand in the way of free movement of creative people, cultural activities and of the digital distribution of products and services, and since illegal downloads on a large scale can jeopardize the development of an economically viable single market for digital content. The new millennium has seen the spectacular rise, both in popularity and in performance, of online business models offering vast amounts of copyrighted content (music, video, software, images and even books).

The European Digital Agenda presented by the Commission President Barroso in September 2009 set the objective of creating in Europe a modern, pro-competitive and consumer friendly legal framework for a genuine single market for creative content online. This requires creating a favourable environment for creators and right holders by ensuring appropriate remuneration for their creative works, encouraging the provision of attractive legal offers to consumers with transparent pricing and terms of use and promoting a level playing field for new business models and innovative solutions for the distribution of creative content.

As a prerequisite for any future action of the EU, the evolution of technology and content markets should be taken into account. Today, there is a co-existence of two types of content, i.e. professionally produced content and user-created content. So, a new framework is needed to guarantee freedom of expression and an appropriate remuneration for professional creators, who play an essential role for cultural diversity. Furthermore, traditional practices for licensing rights are not always adapted for digital distribution, as new actors and new roles are brought into the value chain and previously separate services are converging and thus change conditions for the distribution of digital content.

The biggest challenges with regard to online licensing are caused by the online dissemination of music, which is characterised by multiple layers of ownership. Rights of authors are administered by authors’ societies and music publishers, while rights performers and record producers are related rights administered by collective rights management organisations (CMOs). In the digital distribution of music two sets of rights have to be cleared, the right to reproduction and communication to the public. A certain difficulty is that public performance of music works is licensed on a national basis.

Another issue concerns the online distribution of literary works and e-books. The mass digitization of out-of-print books or orphan books creates insurmountable problems with regard to licensing, since the owner of the digital rights is unknown or is difficult to locate. In the audiovisual sector there are problems concerning the clearance of rights and particularly, the new video-on-demand (VOD) services, as statutory and contractual provisions concerning release windows for VOD may act as a barrier to the availability of digital content across borders.

It is notable that problems in the digital market are created despite the absence of technical barriers to the circulation of content online, due to territorial licensing, which is prevalent with respect to performance rights in some sectors in Europe, mainly music. Territorial restrictions are the result of commercial decisions by right holders and providers of audiovisual services.

Possible actions on EU level to address the challenges in the digital market include the following :

1. Extended collective licensing

This is one of the options proposed to tackle with the issue of orphan works and also out-of-print works . In this system, a rights manager is deemed to represent “outsiders” – right holders not formally members of the clearing system – in respect of certain forms of digitisation and online usage could create easier access to creative content for consumers. However, it is required that orphan works could only be included in such a scheme after a diligent search has confirmed their orphan status.

The High Level Expert Group on Digital Libraries adopted a Final report on Digital Preservation, Orphan Works and out-of-print works and a memorandum of understanding on orphan works, which contains a set of guidelines on diligent search for right holders and general principles concerning databases of orphan works and rights clearance mechanisms.

2. Further harmonisation of copyright laws in Europe.

The regulations of Directive 2001/29 harmonised the exclusive rights, but without providing clear boundaries for those rights by means of uniform exceptions. The harmonisation of the different and optional limitations and exceptions would create more certainty for consumers about their rights.

3. Internet licensing

Commercial users’ access to diverse creative content on a multi-territory basis with legal certainty and fair tariffs would be beneficial for the development of online services. The objective is to simplify the cross-border management of rights for online uses, such as online music services (e.g., iTunes) and video services (e.g. user generated services on YouTube) and on-demand TV programmes as well as film services.

Possible solutions: a) consolidation of the digital right of reproduction and the digital performance right (making available right) in a unitary licence, b) creating a “one-stop shop”, which implies the re-aggregating of manifold layers of different rights and right holders that are contained in a particular work or sound recording and integrating them into a single licence, c) freely accessible ownership and licence information on world repertoire would ease the operation of multi-territory and multi-repertoire licensing and thus help overcome market fragmentation.

A different approach would be the introduction of alternative forms of remuneration, alongside the copyright licences given to operators of legal services. Accordingly, ISPs would owe right holders a form of compensation for mass reproductions and dissemination of copyright protected works undertaken by their customers and would concern only unauthorised file-sharing and reproductions.

4. Protection of right holders

New media offer right holders the opportunity for disseminating their works across different platforms and to a larger audience. Easier access to creative content will have to be combined with adequate protection of right holders. This would include certain options: a) an extended or mandatory collective management system for the administration of the making available right and the right to remuneration, b) measures for the governance and transparency of collective rights management organisations, so that the interests of creators are administered in the most efficient manner, c) more collaboration with ISPs and other companies providing access technologies, and introduction of new business models based on access subscription rather than payment fro every single work, together with advertising-supported or feels-like-free services, and d) financial incentives for online multi-territory offers of audiovisual works.

5. Limitations and exceptions

Certain questions arise with regard to possible copyright limitations and exceptions .

Firstly, it is considered to amend the existing regime concerning the production of digital copies of materials held in libraries’ collection for preservation purposes and the electronic dissemination of these copies to users . Currently, libraries and archives do not enjoy a blanket exception to digitise their collections and thus, such act requires prior authorisation from the right holders. Libraries argue that the system of prior authorisation entails considerable transactional burdens, while publishers and collecting societies do not see any justification to broaden the current exceptions on preservation and making available for libraries and archives. The EU Commission aims at adopting a sustainable system of prior authorisation for library initiatives and a cost efficient rights clearance system.

Teaching, learning and research in the modern information society acquires international and cross-border dimensions, as access and use of information is not limited to physical space. Problems arise in this area with regard to licensing agreements for the publishing of digital research material. Libraries and universities assert that it would be more practical to have one central organisation to grant a wide range of online rights with respect to digital material. They also call for mandatory teaching and research exceptions .

As for copyright exceptions for persons with disabilities, a degree of legal uncertainty remains, as the existing exceptions are not fully harmonised and most importantly, the cross-border transfer of the already limited supply of material is hampered by the territorial limitation of exceptions under national laws. To export a converted work to another country, an organisation needs to buy the rights in the destination country. The EU Commission undertakes to encourage publishers to make more works in accessible formats available to disabled persons. TPMs should prevent the conversion of legally acquired works into accessible formats. And also, contractual licensing should respect statutory exceptions for persons with disabilities including visually impaired persons .

Finally, no consensus exists as far as user-created content (UCC) is concerned . Namely, Internet users are able to produce and share text, video and pictures with application of Web 2.0, such as blogs, podcasts, wiki, file or video sharing, thus becoming creators of content, while occasionally other copyright-protected material is used as a basis. In the Green Paper it is ascertained that the Directive 2001/29 does not include any exception that would allow the use of existing copyrighted works fro creating new or derivative works. It was further examined if a new exception would be necessary to make available “creative, transformative or derivate works”. Such an exception would need the amendment of the Directive and it supported that it would favour innovative uses of works and stimulate the production of added value .

After consultation on this issue, it has been considered that it is too early to regulate UCC, as the scope of UCC is still uncertain and it is not clear whether amateurs and professionals should benefit from special rules on UCC or how such rules would relate to existing limitations .