| Chapter I - Towards the
Information Superhighway
1.1 Introduction
"... within the foreseeable
future we will have computer systems in which thousands or
even millions of authors' works - books, articles, pictorial
works, maps, music, plays, recordings, motion pictures, and
other forms of artistic expression - are permanently stored in
a single copy. These computer systems will be linked, by wire
or laser beams or communications satellites or some other
method, with other computers throughout the world. These in
turn will be linked with viewing screens in public
institutions and in private homes and businesses. Any work
from this great body of authorship could instantly be
inspected by anyone in reach of a viewing screen, and that
person could obtain a copy of any or all of the works merely
by pressing buttons. In many cases the demand and need for
printed copies will completely disappear".[2]
More than 25 years have passed
since Barbara Ringer predicted the advent of the digital
networked environment and the profound impact this would have on
the law of copyright. In 1994 much of Barbara Ringer's
prediction has materialised. Today, more than 25 million
computer owners are linked on a global scale by the INTERNET,
the forerunner of the information superhighway. INTERNET users
all over the world have direct access to vast quantities of
text, data, maps, photographs, computer games, still and moving
images, and sound recordings. Spectacular advances in network
fidelity, data compression and storage capacity will enable the
INTERNET (or any other computerised telecommunication network)
to eventually carry the complete Berne Convention catalogue of
works. Moreover, the digital environment will allow
traditionally distinct categories of works to merge into new
breeds of works containing information in a plurality of
"modes", so-called multimedia programmes.
Indeed, the coming of the
information superhighway has not taken the copyright community
entirely by surprise. The copyright problems of computerised
information storage and retrieval systems have been studied ever
since the early 1970's.[3]
Problems relating to the dissemination of copyrighted works
through cable networks are equally well researched. Moreover,
"multimedia" works have been in existence, albeit in a somewhat
primitive form, for many years. Computer games (combining text,
sound and images with a measure of interactivity) have been
awarded copyright protection, either as audio-visual works or
computer programs, ever since the early 1980's.
So, one might conclude, we have
seen it all before: the arrival of the information superhighway
is an evolutionary, not a revolutionary development. The
existing copyright system has proven to be flexible enough in
the past. There is no need for radical changes in the future;
never change a winning team.
The replies to the
Superhighways questionnaire, prepared by the European Commission
for the hearing of 7-8 July 1994, seem to indicate that this -
rather optimistic - view is shared by many players in the
information industry. Arguably, this conservative approach would
make a sensible and pragmatic short-term solution. In the long
run, however, the industry position will difficult to maintain.
The development of the information superhighway is, admittedly,
a gradual process. But the combined effects of mass
digitalization, networking on a global scale and information
delivery on demand, radically affect the economic underpinnings
of the present copyright system. In the long run, a thorough
rethinking of the copyright paradigm will be inevitable.[4]
The Commission of the European
Communities (DG XV) has asked the Institute for Information Law
of the University of Amsterdam to conduct a short-term study of
intellectual property issues relating to the information
superhighway. The specifications of the study, as defined by the
European Commission, are reproduced in Annex I. Even though the
all-encompassing and pervasive nature of the information
superhighway would merit a broad reevaluation of the present
system of intellectual property law, for practical reasons this
study will concentrate on a limited number of issues, mainly
relating to copyright law. Chapter II of the study will deal
with problems of authorship and ownership of rights. Chapter III
will focus on the scope and definition of the exclusive rights.
Chapter IV concludes with a number of recommendations for
action.
1.2 Definitions
No attempt shall be made to
precisely define either the "superhighway" or "multimedia".
superhighway
In this study, the term
superhighway shall be short-hand for the digital networked
environment of the future. The superhighway is neither a new
product, nor a new service, nor a new type of network. It
represents the integrated, broad-band, high-speed,
general-purpose telecommunications network of the coming
century. The superhighway is not a single physical network, but
a conglomerate of local, regional, national and transnational
telecommunications infrastructures, interlinked to form a global
information superhighway.
From a technical perspective,
the superhighway is not homogenous. The necessary physical links
will be provided by copper wires, optical fibres, radio links
and satellites, or a combination thereof. In the superhighway a
variety of existing telecommunications infrastructures, such as
the telephone network, cable networks, satellite networks and
broadcasting stations will converge.
The superhighway will be a
broad-band network, permitting communication of data, text,
audio, video and images at high speed and high fidelity. As an
integrated "network of existing networks", the superhighway will
carry both digital and analogue signals. In contrast to most
existing cable networks, the superhighway will permit
interactive, two-way communication on the network. Information
can be uploaded and downloaded to and from any point in the
network; consumers will be able to receive information on
individual demand. Conversely, information users may become
information providers as well.
The superhighway will not be
operated by a single, monopolistic telecommunications operator.
It will not be a monolithic network; parts of it will be
controlled by operators under a state monopoly, other parts by
private companies. The status under telecommunications law of
the superhighway is currently debated. Will universal service
obligations apply? If so, this may affect the liability of
network operators for cases of copyright infringement.
multimedia
The superhighway will carry a
lot of multimedia programmes. Understandably, this has led many
people to believe that the notions of "superhighway" and
"multimedia" refer to the same innovative phenomenon. Of course,
this isn't true. The superhighway is short-hand for the
telecommunications infrastructure of the future. The term
"multimedia" denotes a category of programmes or information
products, that may - or may not - be delivered through the
superhighway. The superhighway is the medium, multimedia the
message. The copyright problems of multimedia are quite
different from the copyright issues relating to the
superhighway. In this study, multimedia-related problems shall
be discussed only insofar as they relate directly to the digital
networked environment.
Adding to this terminological
confusion, the notion of multimedia all but eludes definition.
The term implies the delivery of digitalized information in
mixed mode multimedia information products combine text, sound
and visual (still or moving) data. Another characteristic
feature of multimedia is interactivity: users may interact with
the information stored in the multimedia programme.
Multimedia programmes are
distributed either off-line, i.e. on physical carriers (CD-I,
CD-ROM, software diskette), or on-line, i.e. via cable, LAN or
other telecommunication networks.
What distinguishes multimedia
programmes from traditional information products is a much
richer variety of underlying works. The typical multimedia
programme contains graphics, film, video, music, photographs,
paintings, animation, text, data, maps, games, and multimedia
software. The typical multimedia programme is a blend of all
categories of works protected by copyright law.
As has been observed before,
the term "multimedia" is a misnomer. The very essence of a
multimedia programme is that is carries a multiplicity of works
in a variety of modes on a single medium.
1.3 Convergence
The emerging superhighway and
the multimedia programmes it will distribute, exemplify the
general trend towards convergence in the telecommunications and
information industry. This tendency can be perceived on
different levels.
Convergence of
infrastructure and media
In analogue times, different
modes of telecommunications required specific "dedicated"
infrastructures. Person-to-person voice telecommunications
required a copper wire, narrow-band (telephone) network,
traditionally operated by state-controlled PTT's. Radio and
television programmes were distributed by radio transmitters
using hertzian waves as a means of propagating
information-carrying signals. In a later stage, broad-band cable
networks were put to a similar use.
Similarly, for off-line
communication "dedicated" mode-specific media were employed.
Printed paper carried text, vinyl records carried sound,
celluloid film rolls carried moving pictures. The digitalization
of telecommunication networks and information carriers has
"liberated" the medium from the message. Networks and media are
becoming "content neutral". PTT-operated telephone networks will
soon carry full-motion video programmes. Compact discs already
carry all sorts of multimedia programming.
The convergence of
infrastructures and media requires a rethinking of the
fundamentals of telecommunications law. Will the superhighway,
incorporating public (PTT-operated) and private
telecommunication networks, be considered a "common carrier"?
The answer is directly relevant to the difficult issues of
copyright liability in the digital networked environment.
The convergence of
infrastructures and media also directly affects the structure of
the present copyright system. The catalogue of protected work
categories, defined in the Berne Convention, is either mode or
media specific. In the digital environment the borderlines
between the different work categories are becoming blurred and
hard to maintain; see § 2.2. Similarly, the copyright owner's
exclusive rights are presently defined in mode or media specific
terms. This convergence calls for a re-examination (and,
perhaps, redefinition) of the catalogue of exclusive rights; see
chapter III. Even more urgent are the convergency problems in
respect of the present set of copyright limitations and
exemptions. With few exceptions, national legislators have
defined these provisions in a highly mode or media specific
fashion. New technologies defy the existing definitions of
current limitations. A reappraisal of the present set of
limitations and exemptions in the light of the superhighway must
be placed high on the agenda of national and European
legislators; see § 3.3.
Convergence of roles
One of many critical copyright
issues of the future is the convergence of roles in the digital
network environment. Historically, the information and
entertainment industries are structured according to the
specific media (platforms) employed to deliver the information
or entertainment product. Superhighways and multimedia transcend
these technology-inspired borderlines. Thus, players from all
branches of the information and entertainment industries will be
competing in the information marketplace of the future: print
media, electronic publishers, software producers, film
producers, music industry, broadcasters, PTT's, cable-operators,
hardware manufacturers, etc. This development is exemplified by
a growing number of cross-industry alliances and mergers. In
many cases, these alliances involve software or entertainment
companies linking up with telecommunications or cable-operators,
thus providing right owners with access to and control over
multimedia delivery channels.
As market players from very
different backgrounds merge into a homogenous multimedia
programmes and services industry, typical problems of
convergence become apparent. Over the years, each traditional
branch of the industry has developed its own specific trade
customs and practices. Licensing structures and practices have
become highly branch specific. In some areas, such as the film
and software industries, licenses are granted on an individual
basis. In other areas, such as the music industry, collective
licensing and administration of rights play an essential role.
Licensing practices are equally divergent. In the film and book
publishing industries, primary modes of exploitation are
protected by designating specific "windows" - periods of
exclusive exploitation. In other industries, such as the music
industry, new products or programmes are immediately put onto
the market in different modes.
As the INTERNET experience
clearly demonstrates, traditional actors in the communications
process (information producer, provider, publisher,
intermediary, user) will take on new roles in the digital
network environment. The INTERNET enables authors to freely
disseminate their works without the intervention of a
traditional publisher: authors are becoming "publishers".
Moreover, digital technology enables users to actively search
and manipulate information available on the network: users are
becoming authors. Furthermore, traditional intermediaries, such
as university libraries, may take on new roles as information
providers: intermediaries are becoming publishers as well.
This convergence of roles
undermines the existing system of rights allocation in copyright
and neighbouring rights legislation. See § 2.3 sub b.
1.4 Communicating on the
superhighway: a change of paradigms?
The digital networked
environment of the superhighway represents a change of paradigms
for the traditional copyright industries. Mass circulation of
copies carrying identical information products is replaced by
transmission of customised information on demand. In this
process, the "public sphere" between information provider and
information user is gradually dissolving.[5]
The act of "publishing" thereby loses much of its original
connotation. The increasingly "private" nature of information
distribution on the superhighway is amplified by the increasing
use of encryption techniques.
Information on demand
The superhighway infrastructure
enables users to actively communicate with information
providers: interactivity . Users can retrieve information
of their choice from information banks at many points on the
network. Conversely, publishers and other information providers
will "customise" information to accommodate specific user
demands, employing detailed "user profiles" drawn up from
previous usage patterns. In this process of interactive and
customised information usage, the information product will
gradually lose its "concrete" form of expression. Instead, the
product will merely serve as a source file for an infinite
variety of derivative information products on demand.
Interactivity and customisation
combined will make existing (or future) legal distinctions
between "stand-alone" and collective works (such as audiovisual
works and databases) difficult to maintain. On the superhighway,
the collective work will rarely be consumed in its entirety.
Instead, the interactive user will use only the most useful
(customised) "bits and pieces" - the "nuggets" of the treasure
trove. For this reason, creating a separate "multimedia" work
category would be ill advised.
It is expected delivery on
demand will gradually replace "broadcasting" - simulcasting of
information to a passive audience - as the principal
communication pattern of the superhighway. In the future, unlike
today's INTERNET, proprietary information will probably no
longer "roam around freely over the net".[6]
Metering
The intelligence built into the
superhighway will enable information providers to precisely
monitor and control the individual user's information
consumption. Whereas in the present world of physical copies,
royalties are calculated on a per-copy basis, on the
superhighway royalties can be charged per actual use . A
per-use ("pay-as-you-go") royalty scheme may be either
time-based or volume-based; of course, flat rate schemes are
possible as well.
Direct licensing
Many right holders believe (or
wish to believe) that the built-in intelligence of the
superhighway will enable them to grant and administrate licenses
to individual users themselves. Works disseminated over the
superhighway will carry identifying "tags", inviting prospective
users to (automatically) contact right owners, or "permission
headers", pre-determined licensing conditions to which users may
agree in real time. "Self-administration of rights" would
gradually replace collective licensing or collective
administration of rights. Thus, the digital networked would
bring back to right holders what they (nearly) lost in the age
of mass copying: the power to transact directly with information
users.
Other commentators are less
optimistic; they fear that the digital networked environment
will, instead, only worsen the possibilities of arriving at
individual contractual solutions. According to Goldstein:
"Many of the policy factors
pertinent to photocopying are also relevant to digital
technology: widely available means of reproduction; diffuse user
community; high costs for enforcing rights against infringers;
and high transaction costs for negotiating individual licenses."[7]
Encryption
Encryption of
information-carrying signals is already customary in some
branches of the information industry: satellite-to-cable
broadcasting, subscription television, pay television, etc. To
other branches, such as the book trade and the press, encryption
is totally alien. The computer software industry retains painful
memories of the market failure of the "copy protection" schemes
applied in the 1980's. Consumers simply refused to buy computer
programs containing anti-copying algorithms or devices. At
present, copy protection has become all but extinct.
The information industry
generally expects that encryption (on various levels) will
replace copyright law as the principal means of protection on
the superhighway. According to the oft-cited Charles Clark, "the
answer to the machine is in the machine". However, the recent
experiences of the software industry indicate that, perhaps, it
would be imprudent to solely rely on technical solutions.
Ironically, the implementation
of encryption technology is being hampered, in some Member
States, by existing or proposed restrictions under public
telecommunications law - for reasons of public security - to use
encryption hardware devices or encoding software.
1.5 The diminishing role
of copyright
The role of copyright will
probably diminish in the digital networked environment of the
future. Copyright has always been - and still is - the principal
legal instrument in controlling the mass distribution of
information products and services. The economic function of
copyright is to substitute for the information provider's lack
of power to conduct individual transactions with individual
information users. Even though mass distribution and
"broadcasting" of information will remain possible on the
superhighway, mass distribution will gradually be replaced by
delivery on individual demand. In this process contractual ties
(licenses) between information providers and users will
gradually supersede the "rough justice" of copyright law. Again,
the experiences of the computer software industry serve as an
example of what the future may bring. The widespread practice of
licensing software to individual users has diminished the
practical importance of software legislation.
On the superhighway, copyright
law will, perhaps, no longer be the legal cornerstone of the
information trade. Rather, the future role of copyright will be
to act as a legal "safety net" whenever technical or contractual
protection schemes would fail.
Moreover, copyright will lose
ground to the right of privacy. As information transactions
gradually disappear from the public sphere, the right of privacy
will serve as an important non-contractual vehicle of
protection. The same is true for a wide variety of secrecy
provisions of an administrative or criminal nature based on
national and international telecommunications law or special
laws aimed at preventing "computer crime".
Chapter II - Authorship
and ownership issues
2.1 Introduction
The superhighway will affect
the copyright system on many different levels: subject matter,
authorship, ownership of rights, scope of protection and
limitations, moral rights, et cetera. While this study shall
focus on the scope of protection (i.e. the catalogue of
restricted acts), relevant issues of authorship and ownership
shall be briefly discussed in this chapter.
2.2 Protected subject
matter
No radically new types of
intellectual creations are expected to flow on the superhighway.
The products and services offered on the superhighway will
initially resemble existing formats. Information providers on
the superhighway will deliberately concentrate on delivering
"old-style" information products through the new medium. Only
after information users have become accustomed to the net, will
innovative information products and services have any chance of
succeeding.
This is not to say that the
superhighway will be without its share of "subject matter"
related copyright issues. Many of the most pressing copyright
problems of today will be amplified in the context of the
superhighway.
databases
This is especially true for the
protection of databases. The need for adequate protection of the
(uncopyrightable) contents of a database will become even more
urgent than it is today in the digital networked environment of
the future. In its proposal for a Council Directive on the
protection of databases, the European Commission has correctly
assumed that traditional notions of (continental European)
copyright are inadequate in dealing with the growing needs of
the information industry. Due to the proliferation of digital
technology, the economic value of data compilations is,
increasingly, in the information as such, rather than in the way
the data are presented.
The superhighway infrastructure
of the future will enhance the need for protection of pure
"contents" (information) per se. In view of the net's capability
of carrying images as well as text and data, producers of
"non-original" imagery, such as satellite photographs, will be
claiming protection on equal footing as "traditional" database
producers.
The globalisation of the
information market demands that theDatabase
Directive be followed, as soon as possible, by a global
solution along similar lines.
multimedia
Opinions differ as to whether
multimedia programmes are to be considered a new type of
intellectual creation, or merely a (admittedly "high-tech") type
of derivative work. Multimedia programmes are certainly
difficult to fit into the existing categories of works.
According to the European Commission, multimedia programmes
qualify as "databases" under the proposed Directive. As
explained in the explanatory memorandum, "...the term 'database'
is to be taken to include collections of any types of materials
in the literary, artistic or musical field such as text, images,
sounds, and also numbers, data, facts and pieces of information
and the like" (§ 1.1. of the Expl. Mem.).
Moreover, many multimedia
programs, containing sound and moving images, will qualify as
"cinematographic works" (cf. Article 14bis of the Berne
Convention), "films" (cf. Article 2 § 1 of theEC
Directive on Rental and Lending Rights) or "audiovisual
works" (as defined in various national copyright laws).
Additionally, many multimedia programmes will be regarded as
collective works.
Of course, problems of
categorisation do not necessarily affect the level of
(copyright) protection. Courts in all member states of the
European Union are flexible in awarding copyright protection to
intellectual creations that do not fit nicely in existing,
statutorily defined categories. An impressive body of case law
on the protection of computer programs, predating the EuropeanSoftware
Directive, illustrates this point. It is, therefore,
unlikely, that multimedia programs would remain unprotected for
reasons of "categorisation".
2.2 Authorship
The digital networked
environment of the future will make it easier to become an
author. Lowering the threshold of creation is what the INTERNET
- the superhighway prototype - is all about. The superhighway
will enable users to retrieve "raw" or edited information from a
variety of sources and rework the information retrieved into a
customised information product. Digital technology will make it
easy for information users and prospective authors to reshape
and manipulate pre-existing information products. Moreover, the
digital network greatly facilitates co-operative creation;
authors can work together on a single information product, even
though they are physically located in different cities or
countries.
"Digital plasticity" combined
with interactive or co-operative creation will result in a
spectacular growth of derivative works being circulated on the
information superhighway. Each act of user-produced
customisation will add an extra layer of copyright protection.
Eventually, as the INTERNET example already demonstrates, the
network will be polluted with endless varieties of the same
underlying work, each subject to a cumulation of derivative
copyrights.[8]
Does this development merit any
kind of legislative intervention, such as compulsory licensing
of underlying works? Hardly. The same technology that enables
users to become co-authors (by adding value to the pre-existing
information product), facilitates the removal of
protective layers of information. As the Explanatory Memorandum
to the proposed Database Directive explains, the digital
environment enables users to quite easily extract the
unprotected contents from the copyright protected work
("filtering").
2.3 Ownership
Multimedia programmes raise a
number of difficult issues of ownership. If multimedia works
were to be considered "cinematographic works", special national
ownership provisions, as allowed under article 14 bis of the
Berne Convention, would apply. If a multimedia product would be
qualified as a "database" different ownership rules might be
applicable by virtue of Article 3 of the proposed Database
Directive.
Who owns electronic rights?
A crucial problem for
multimedia producers is to identify the party that holds the
electronic rights in a particular work to be included in a
multimedia production. This is especially problematic in cases
of grants of rights or transfers predating the computer age. How
should a broad transfer of rights executed in analogue times be
interpreted in the light of multimedia exploitation? In some
countries (notably Germany and the Netherlands) such a transfer
will be narrowly construed in favour of the original grantor or
licensor. Thus, a transfer of "all copyrights" to a book
publisher will probably not include electronic rights, if
publishing in electronic form was not originally intended. In
other countries (notably France) the original grantor has a
right to receive a "proportional" remuneration from the
copyright owner for unforeseen forms of exploitation. The
problem of residual rights - rights that have remained
with the original author of the work - appears to be a major
obstacle in many multimedia deals.
Multimedia licensing
problems
Typically, multimedia products
are made from a multitude of pre-existing works, owned by a
multitude of copyright owners, exercising a multitude of
(sometimes overlapping) rights. Adding to the producer's
difficulties, right owners will belong to different segments of
the entertainment and information industry (music, cinema,
software, education), applying different licensing practises.
Multimedia publishers wishing to acquire rights by the book
might end up negotiating with hundreds or even thousands of
right holders for one single multimedia product. From time to
time, multimedia program developers run into licensing problems
so complex that further development of the product is aborted.
Of course, to a certain extent,
the copyright problems of the multimedia industry are growing
pains. The emergence of every new medium necessarily involves
the development of new licensing practises. We have seen similar
problems before, notably in film and television production.
However, the endless possibilities of combining pre-existing
works of any type or form into a single multimedia programme
might merit the conclusion that multimedia, indeed, represents a
radical - rather than an evolutionary - development. Even so, it
would be unwise to rush into any kind of non-voluntary solution[9]
even before the multimedia programme market has had a chance of
developing in a non-regulated environment.
Chapter III - Protected
rights on the superhighway
3.1 Introduction
Copyright owners are protected
by a bundle of exclusive exploitation rights. National
legislators have applied different methods in defining the
catalogue of exclusive rights, enumerating the various
"restricted acts". In some European Union member states,
copyright laws provide for rather detailed, media-specific
definitions of the restricted acts. In other member states,
broader - and more abstract - notions of "reproduction",
"distribution" and "communication to the public" are employed.
There is a general consensus
that the existing catalogue of exclusive rights, as they are
defined on the national or international level, do not
adequately reflect the manner in which protected works are
communicated in the digital networked environment. Most
restricted acts are definitionally linked to traditional modes
of exploitation: publication in book form, public performance,
broadcasting, etc. The advent of the superhighway, therefore,
presents legislators with a choice: either expand existing "old
media notions"[10] or
redefine the catalogue of restricted acts, taking into account
the peculiarities of the digital networked environment.
In this chapter, the different
acts involved in disseminating protected works via the
superhighway will be analyzed and tested against current
copyright notions (§ 3.2). Next, the problems of applying the
existing set of copyright limitations and exemptions to the
digital networked environment will be briefly discussed (§ 3.3).
Finally, a possible model for future legislation, inspired by
the exhaustion principle and the recent Satellite and Cable
Directive, is critically examined (§ 3.4). In view of the
limited scope of this study, no long term solutions will be
presented.
In describing the scope and
limitations of the exclusive rights, this chapter will focus on
copyright law. Since most neighbouring rights (or related
rights) regimes apply copyright notions in defining the scope of
the exclusive rights, no separate treatment of neighbouring or
related rights in this chapter is considered necessary.
3.2 Restricted acts
Communicating copyrighted works
on the superhighway may involve one or more of the following
acts:
* digitalization: storing the
work in a digital medium
* digital reproduction
* data compression and
encryption
* temporary (ephemeral)
storage
* point-to-point transmission
* point-to-multipoint
transmission
* providing on-line access
* customising
* uploading and downloading
* decoding
* screen display/use
In the process of communicating
works on the superhighway different actors are involved: the
author or producer of the information, the information provider
or publisher, the provider of "host" or "server" facilities, the
operator(s) of the telecommunications network, intermediaries,
end users.
3.2.1 Digitalization,
conversion, encryption
There is general agreement that
the storage of a protected work in a digital medium amounts to a
reproduction (copy) within the meaning of article 9 § 1
of the Berne Convention. The words "in any manner or form" in
this provision are clearly meant to cover all methods of
reproduction, including storage in electronic digital form.
[11] Of course, any
duplication of the digitally stored work will be considered a
subsequent act of reproduction.
Under normal circumstances,
converting a work into a digital format does not result in an
adaptation or other alteration . The conversion
process does not alter the composition or form of expression of
the work; the converted file is a reproduction - not an
adaptation, translation or transformation. Arguably, the same is
true for any comparable act of data compression, decompression,
encoding or decoding.
Of course, the digital
environment allows for all sorts of digital reworking and
manipulation of the electronically stored work. Insofar as this
process results in an alteration of the composition or form of
expression of the work, the manipulated work will, indeed,
qualify as an (unauthorized) adaptation. Clearly, digital
manipulation bears the risk of infringing moral rights as well;
see Chapter IV.
3.2.2 Temporary storage
In various stages of its
journey through the digital network the work will be temporarily
stored, either in whole or in part. Every act of transmission
(from producer to provider, from provider to host, from host to
intermediary to user) will involve one or more acts of loading
the work in a (volatile) computer memory. In the process of
being digitally transmitted, the work is disassembled into small
digital "packets" which will be temporarily stored at different
"nodes" before being routed through the network. At its final
destination, the information will be reassembled with no loss of
quality or fidelity of the signal. Furthermore, the acts of
downloading and screen display may involve temporary storage of
(parts of) the protected work.
Opinions differ as to whether
temporary storage qualifies as an act of reproduction. Article
4(a) of the Software Directive and article 6(a) of the proposed
Database Directive (amended proposal) both refer to "temporary
reproduction". In respect of computer software, the Software
Directive seems to take a very broad view of the reproduction
right. According to Article 4 (a) of the Directive, the
protected acts include:
"... the permanent or
temporarily reproduction of computer program by any means and
in any form, in part or in whole. In so far as loading,
displaying, running, transmission or storage of the computer
program necessitates such reproduction, such acts shall be
subject to authorization of the right holder."[12]
However, under close scrutiny
Article 4 (a) of the Directive does not guarantee an exclusive
right of loading, displaying or running the protected program;
these acts must " necessitate such reproduction". This
definition leaves a certain latitude to national courts and
legislators in determining the scope of the notion of
"reproduction".[13]
At present, in many Member
States the copyright status of temporary storage is unclear. An
important exception is the United Kingdom; under Section 17 § 6
"[c]opying in relation to any description of work includes the
making of copies which are transient or are incidental to some
other use of the work." In contrast, Section 101 of the United
States Copyright Act distinguishes between merely "transitory"
storage and more permanent or stable forms of reproduction. This
follows from the definition of the term "fixed" used in the
definition of "copies" in section 101 USCA:
"A work is 'fixed' is a
tangible medium of expression when its embodiment in a copy or
phonorecord, by or under the authority of the author, is
sufficiently permanent or stable to permitted to be perceived,
reproduced, or otherwise communicated for a period of more
than transitory duration."
Arguably, the mere act of data
processing per se is not a "fixation".[14]
Perhaps, not all forms of
temporary storage should be treated equally under copyright law.
Acts of short-lived copying as mere byproducts of a technical
communication process, such as "packet-switching", should not be
qualified as acts of reproduction. See the discussion of screen
display (§ 3.2.9 below).
3.2.3 Point-to-point
transmission
The act of transmitting a
protected work (either via cable or wireless means) does not as
such amount to a restricted act, unless the point-to-point
transmission is part of a broader process involving
communication to the public (such as broadcasting or cable
distribution). "One-on-one" transmission of a protected work
(e.g. involving two computer users connected by a modem or
exchanging a message via e-mail) is no different from sending a
letter by ordinary mail ("snail-mail"). Neither of these acts of
private communication is considered a restricted act.
Of course, in many instances a
digital transmission will eventually result in a (further)
reproduction of the work at the receiver end (by the host or
server, intermediary or end user). Such acts of reproduction
should not, however, be confused with the act of transmission as
such.
3.2.4 Point-to-multipoint
transmission (broadcasting)
Even though delivery-on-demand
will be the preferred communication pattern on the superhighway,
acts of "broadcasting" information will still be common in the
digital networked environment. Broadcasting is a common
phenomenon on the INTERNET; electronic mail boxes are filled
each day with unsolicited information simulcast from a single
source to a plurality of users.
In this context the notion of
public is critical. According to the Berne Convention
Protocol Memorandum (§ 153) "the principle is increasingly
accepted that every use should be considered 'public' (rather
than 'private') that goes beyond the circle of family members
and close social acquaintances of a family or an individually
person."
National copyright laws do not
apply the notion of "public" in a uniform manner.[15]
The copyright status of secondary cable distribution
serves as an important example. In some countries, such as The
Netherlands[16] ,
all forms of cable distribution beyond the circle of family and
friends are considered restricted acts. On the other hand,
legislators in Austria and Denmark have expressly exempted small
community antenna television networks (involving user groups up
to 500 or 25 users respectively) from the secondary broadcasting
right.
In respect of alphanumerical
data and texts, acts of "superhighway" broadcasting are probably
not covered by any specific Berne Convention minimum right.
Article 11 BC is applicable only to dramatic, dramatico-musical
and musical works. Article 11bis BC concerns either primary
over-the-air broadcasting or secondary wireless or cable
distribution. Article 11ter BC refers to "recitations"; article
14 § 1 (ii) BC to cinematographic adaptations.
Even so, superhighway
broadcasts will, in most cases, be considered acts of
broadcasting, cable distribution, public performance or
communication to the public by wire protected under national
copyright laws. The same is not true for existing
neighbouring rights regimes. The Rome Conventions does not
protect against unauthorized communication by wire. Even though
many national laws grant protection in excess of the Rome
Convention minimum, phonogram producers in most countries do
not, at present, enjoy exclusive rights of broadcasting or
distribution by wire. In view of the superhighway's capacity to
deliver a multitude of audio channels at compact disk quality,
there are compelling arguments in favour of granting an
exclusive, broadly defined, exclusive broadcasting and
cablecasting right to phonogram producers.
distribution
Broadcasting (or any other way
of disseminating) a work over the information superhighway will
probably not qualify as an act of distribution.
Distribution implies the putting into circulation of physical
copies of the work. According to the European Commission's
interpretation of the Directive on rental and lending rights the
delivery-on-demand in a networked environment would amount to an
act of "rental" or "lending". From an economic perspective, this
broad interpretation of the rental right is understandable.[17]
For similar reasons, phonogram producers convincingly argue for
exclusive electronic delivery rights. Indeed, the superhighway
has the capability of substituting the distribution of physical
copies by on-line delivery on demand.
However, from a systematic
point of view, the Commission's interpretation is somewhat
dubious. The special regime for rental and lending rights
contained in the Directive has its origins in the exhaustion
doctrine, which is merely applicable to the distribution of
physical copies. The Directive's purpose is to "correct" the
exhaustion rule as far as rental and lending are concerned. In
the networked environment no exhaustion rule currently applies
(see § 3.5 below). Therefore, application of the Directive to
electronic delivery-on-demand would not appear justified.
3.2.5 Providing on-line
access to the public
What makes the superhighway
infrastructure really different from existing broadcasting or
cable systems is its capacity for two-way communication. This
facility enables the information provider to provide access to a
body of works to the (general) public without actual mass
transmission of the work.
By linking an existing
information bank to a publicly accessible host or server, the
information contained in the information bank becomes instantly
available to the (general) public. Does this amount to a
restricted act? Probably not under the Berne Convention. The
Convention does not provide for a general "right of
communication to the public" such as the Dutch recht van
openbaarmaking or the droit de représentation in
France.
The Berne Protocol Memorandum
(§ 156-158) proposes to define a "communication to the public"
as:
"the transmission by
electronic, or similar means (either by wire or without wire)
of the image or sound or both of the work or the sound of the
sound recording (including the display of the work and the
performance or broadcast of a work or a sound recording) in a
way that the said image or sound can be perceived by any
person on the same conditions at a place or places whose
distance from the place where the transmission is started is
such that without the electronic, electric or similar means
the images or sound would not be perceivable at the said place
or places."[18]
Interestingly enough, by
concentrating on the act of transmission the Protocol
proposal does not deal with the mere act of making the work
accessible (by whatever means) to the public, such as
covered by Article 20 § 2 (h) of the Spanish Copyright Act:
(1) Communication to the
public shall be taken to mean any act whereby two or more
persons may have access to the work without prior distribution
of copies to each of them. [...]
(2) The following in
particular shall be considered acts of communication to the
public:
[...]
h. public access to computer
data bases by means of telecommunication, where such data
bases incorporate or constitute protected works.
Encrypted signals can be
"communicated to the public", assuming the codes are made
available to a user group that is sufficiently "public" (see
§ 157 of the Berne Protocol Memorandum). Compare Article 1 § 2
(c) of the Satellite and Cable Directive (Council Directive
93/83/EEC):
"if the programme-carrying
signals are encrypted, then there is communication to the public
by satellite on condition that the means for decrypting the
broadcast are provided to the public by the broadcasting
organization or with its consent."[19]
3.2.6 Customizing
Of course, customizing
information delivered to individual users qualifies as acts of
adaptation or alteration of the protected work, assuming
copyright protected elements (composition, selection or
arrangement) of the original work are copied. The same is true
for any such acts committed by the end user. Unauthorised
customisation of protected works may infringe on authors' moral
rights as well.
3.2.7 Decoding
Decoding encrypted information
will, under normal circumstances, amount to a restricted act. By
decoding, a reproduction of the encrypted work is made (see §
3.2.1), unless the decoding is achieved in real-time, e.g. by
using special decoding hardware, and the decoded file is not
(temporarily) stored in or after the process.
The mere act of decoding as
such is not a restricted act, either under the Berne Convention
or under national copyright laws. A notable exception is the
Software Directive; article 4 (b), read in conjunction with
article 6, provides for a (conditional) right to prevent
decompilation.
Moreover, Article 7(1)(c)
prohibits the unauthorized possession of or trade in computer
software decoding devices. Similar prohibitions, aimed at
preserving telecommunications secrecy or preventing computer
crime, exist in national telecommunications or computer crime
laws. Arguably, copyright law is not the appropriate vehicle for
such provisions; the trade in decoding devices is not an act of
exploitation or use of the protected work.
Needless to say, the absence
of encryption in a disseminated work should not, under normal
circumstances, be regarded as a forfeiture of copyright
protection or an implied license to redistribute or reproduce
the work.[20]
3.2.8 Uploading or
downloading
A further act of reproduction
takes place whenever a protected work, stored in digital form,
is "uploaded" or "downloaded" to or from a host computer or
server. Uploading and downloading will result in copies of the
work being permanently stored in the server's or end user's
computers.
3.2.9 Screen display
In the "paper" world, the act
of reading a document or viewing a television programme does not
qualify as a restricted act. This may be different in the
digital networked environment. By displaying an electronically
delivered document on a user terminal, part of the document is
temporarily stored in the RAM memory of the user's computer,
unless the user is equipped with a "dumb" terminal, lacking
memory facilities. Thus, screen display might be considered a
(partial) reproduction of the work. Moreover, screen display
might qualify as a "public display", "communication to the
public" or comparable act, whenever a plurality of users look at
the same computer terminal or television screen.
Whether or not screen display
amounts to a (partial) reproduction of the work displayed, is a
contested issue. Arguably, qualifying screen display as
reproduction would be a - technologically inspired -
overstretching of the reproduction right. The mere reception or
consumption of information by the end user has traditionally
remained outside the scope of the copyright monopoly. The
transition into the digital networked environment does not, as
such, seem to justify such a radical extension of the exclusive
right. Arguably, the freedom of reception guaranteed in Article
10 § 1 of the European Convention on Human Rights would be
unduly restricted by such an all-encompassing right.
On the other hand, proponents
of an exclusive right of screen display, argue that the screen
display of a protected work is comparable to an act of
"printing" in the paper world.
[21] Indeed, a work
partially displayed on screen can be permanently stored or
printed; thus the display would serve as a source file for
subsequent (unauthorized) acts of copying.
The copyright status of screen
display is a crucial question. Should the copyright monopoly
include a use right in the digital networked environment?
For computer programs, article 4 (a) of the Software Directive
seems to point in this direction (see § 3.2.2). Arguably, this
rule should not be automatically extended to all
categories of works in the digital networked environment.
Freedom of reception considerations may, perhaps, not carry much
weight in respect of computer programs; the superhighway will
eventually carry the very works (political and literary
commentary, journalistic expression, et cetera) for which
Article 10 ECHR was written.
3.3 Limitations and
exemptions
National copyright regimes vary
in the way the statutory limitations or exemptions to the
restricted acts are defined and interpreted. Some laws provide
for lengthy, hard-to read and hard-to-apply, detailed sets of
copyright privileges. Other laws contain only minimal
exemptions, employing general notions of "private use". Most
European copyright laws contain at least the following
limitations:
* copying for personal
(scientific, educational or private) use
* library privileges
* educational and scientific
exemptions
* special rules for
reprographic reproduction
* freedom of quotation
* freedom of news reporting
The existing system of
copyright limitations presents users of copyrighted works with a
bewildering array of detailed rules and regulations, many of
which were written in a pre-electronic era. The existing
exemptions are mostly defined in media-specific ways, making it
difficult for users or providers of information services to
benefit from existing copyright exemptions. Adding to this,
information providers offering transnational services are
insecure as to whether exemptions may be "exported". Can an
electronic document delivery service operating under a national
statutory license be stopped at national borders by local right
holders? European case law seems to answer in the affirmative.[22]
The Berne Convention expressly
limits the scope of any statutory limitations of the
reproduction right. According to Article 9 (2) BC
"[i]t shall be a matter for
legislation in the countries of the Union to permit the
reproduction of such [literary and artistic] works in certain
special cases, provided that such reproduction does not
conflict with a normal exploitation of the work and does not
unreasonably prejudice the legitimate interests of the
author".
Assuming that delivery on
demand will become the principle method of exploiting
information on the superhighway, Article 9 (2) of the Berne
Convention is a convincing argument against applying existing
"old media" copyright limitations to the digital networked
environment. Every single unauthorized reproduction would,
arguably, "conflict with a normal exploitation of the work".
Moreover, the possibility of acquiring licensed (authorized)
copies of a work will probably be greater in the digital
networked environment than in the "paper world". Even so, there
will certainly remain "certain special cases" in which
limitations are justified. The freedom of expression and
information rationale of many statutory limitations must not be
overlooked.
The NII Green Paper mirrors
concern over the continued existence of the general "fair use"
exemption in the digital networked environment:
"As more and more works are
available primarily or exclusively on-line, it is critical that
researchers, students and other members of the general public
have opportunities on-line equivalent to their current
opportunities off-line to browse through copyrighted
works in their schools and public libraries."[23]
This view reflects a more
nuanced approach than the quite radical position taken by the
WIPO bureau; under the Berne Protocol proposals most existing
limitations would effectively be abolished.[24]
The scope of existing
limitations and exemptions in respect of electronic delivery
systems is currently being studied in the context of the
MULTILEGAL study commissioned by the European Commission (DG
XIII).
3.4 Redefining the
catalogue of exclusive rights
The previous discussion has
demonstrated that applying "old media" notions to the new
environment does not always yield satisfactory results. The
replies to the Commission's questionnaire on the information
superhighway (in preparation of the hearing of 7-8 July 1994 in
Brussels) indicate that (organisations of) right holders prefer
to make only piecemeal changes to the copyright system.
Respondents have suggested to "clarify" the existing catalogue
of restricted acts so as to include the acts of transmission,
uploading, downloading, public display and access. A similar
approach is evident in the Berne Protocol proposals.
This "minimalistic" approach is
not favourably looked upon by legal doctrine. According to
Geller[25] the advent of the
superhighway calls for more radical changes to the present
copyright system. Geller does not subscribe to the view that
current copyright notions are adequate or would need only
piecemeal amending:
"I therefore question the
ultimate wisdom of trying to adapt Berne provisions to
networked archives by giving definitional first-aid to such
basic, but limited notions."
Geller convincingly argues that
the emerging digital networked environment must lead to a
redefinition of many of the acts currently protected under
copyright.[26] Indeed, it
seems inevitable that the digital network environment will
eventually necessitate fundamental changes in the copyright
system. A thorough revision of the copyright system is necessary
not only to insure adequate protection to right holders, but
also to balance the scope of the copyright monopoly in the
digital networked environment against the legitimate interests
of users of protected works. Overstretching "old media notions",
such as the right of reproduction or display, bears the risk of
overprotection.
Any overall revision of the
copyright system must take into account the specific nature of
the communication process of the digital networked environment,
as well as the peculiar economics of providing, distributing and
using information on the network. Arguably, exclusive rights on
the superhighway must no longer be (solely) based on expanded
notions of copying and reproduction, but be redefined so as to
become "network-oriented".[27]
3.5 Exhaustion
Of course, no radical revision
of the copyright system can be achieved within a limited time
frame. No such revision will, therefore, be investigated in the
present study. Any short-term solution to the copyright problems
of the superhighway will necessarily involve only minor changes
to the existing legal and conceptual framework.
One of the most pressing
problems to emerge from the previous paragraphs is the potential
proliferation of exclusive rights pertaining to acts of
communicating works via the superhighway. Applying a broad
notion of "reproduction", every such act - including
transmission, reception and use - would be restricted.
Copyrights of such an all-encompassing nature would be
counterproductive and unduly restrictive to the information
trade.
Moreover, an "all-inclusive"
copyright will run counter to basic communitary freedoms. The
dissemination of information through the superhighway will not
stop at national boundaries. In many cases the information
provider will be located in one Member State, whereas the end
user is located in another Member State. In addition, the server
or host might be be located in a third Member State. If every
act of disseminating a protected work through the network would
qualify as a restricted act, the freedom to provide transborder
information services might be severely hampered by exclusive IP
rights exercised on a national territorial basis. This would
undermine the creation of a European information market.
In reshaping the exclusive
right, we should first take a close look at the "exhaustion"
principle: does it apply in the digital networked environment?
At present, copyright laws in
many Member States provide for a right of distribution in
respect of material copies of the protected work. Once
these copies have been brought into circulation by or under
license of the copyright owner, subsequent (secondary) acts of
distribution - rental not included - fall outside the scope of
the copyright monopoly ( national exhaustion ).
A similar exhaustion rule has
been developed by the European Court of Justice in respect of
transnational distribution of goods protected by intellectual
property rights ( European exhaustion ). According to the
Court's interpretation of Articles 30 and 36 of the Treaty,
absent harmonisation of IP rights on the community level, the
"specific subject-matter" of intellectual property does not
allow for exercising distribution rights on a per-country basis.
Thus, the distribution right is exhausted in the entire
Community, whenever a product is put on the market in a Member
State by or under license of the right holder. In other words,
the distribution right can be exercised only once - in the
Member State where the copies are first circulated ("country of
origin").
3.5.1 Exhaustion theories
Should the exhaustion principle
be applied in a similar manner in the digital networked
environment? Prior to answering this question, we shall take a
brief look at the rational underpinnings of the exhaustion rule:[28]
Ownership theory
According to this theory, the
exhaustion principle reflects a trade-off between rights of
intellectual property and property rights in physical goods.
Property rights in IP protected goods would be unduly restricted
if distribution rights were to remain intact after the goods are
put on the market with the copyright owner's consent.
Commerce theory
By the same token, commerce
would be excessively restricted if no exhaustion principle
applied. This is essentially the reasoning underlying the
European exhaustion rule developed by the Court of Justice.
Legal security
Market players have a
legitimate interest in knowing the copyright status of goods
being traded on the market. Since no public record of valid
copyrights presently exists, legal security requires exhaustion
after the initial licensed transaction.
Remuneration theory
Under this theory copyright
owners are adequately compensated for the initial act of putting
the protected goods on the market. Copyright owners do not
"deserve" additional compensation for any subsequent acts of
distribution.[29]
Many scholars do not consider
the exhaustion principle a "principle" at all. Exhaustion is
merely a legislative tool - an easy and elegant way of
restricting the exclusive right of distribution in the general
interest. Instead of applying a general exhaustion rule,
legislators would be free to opt for more specific instruments
in curtailing the distribution right.
Without assessing the relative
value of the various exhaustion "theories" described above, it
is obvious that not all theories are equally relevant to the
digital networked environment. Clearly, the (prevailing)
property theory cannot serve as a reference point; on the
superhighway the exercise of intellectual property rights in
respect of secondary "distribution" does not directly affect any
property rights in physical goods.
On the other hand, the
"commerce theory" offers a strong argument for extending the
exhaustion rule to the digital networked environment. In the
(not too distant) future, much of the national and
intra-community "physical" information trade will we replaced by
information exchanges over the superhighway.
Arguably, the "legal security"
argument carries relatively little weight in respect of digital
distribution of works. The digital environment facilitates the
identification of disseminated works - and their copyright
status. Status information, possibly including licensing
conditions, can be carried by the work itself in so-called
permission headers or software envelopes.[30]
The true value of all these
arguments, as they relate to the digital networked environment,
will become clear only after generally accepted trade customs
have developed. If the present, rather anarchistic etiquette of
the INTERNET would become the prevailing norm on the information
superhighway, the commerce theory and the legal security
argument would make a strong case in favour of applying the
exhaustion principle in the digital networked environment. On
the other hand, if the superhighway were to conform to the
emerging trade customs of the electronic publishing industry,
these arguments would carry little weight.
Not surprisingly,
representatives of right holders responding to the Superhighways
questionnaire are unanimous in rejecting the idea of applying
the exhaustion principle to the digital network. Similarly, the
NII Green Paper - without giving too much thought to the
economics of exhaustion - flatly rejects extension of the "first
sale doctrine" (as the exhaustion principle is labelled in the
U.S.) to the superhighway. The NII Working Group proposes to
expressly clarify (in Section 109 of the US Copyright Act) that
the first sale doctrine does not apply to transmission.[31]
3.5.2 Exhaustion of the
broadcasting right
Most national copyright laws in
EU Member States limit application of the exhaustion doctrine to
acts of physical distribution. Germany is a notable
exception; according to the Bundesgerichtshof, the exhaustion
rule is a fundamental principle of copyright law that applies to
all exploitation rights. Accordingly, the (immaterial)
broadcasting right is exhausted by secondary cable distribution
under certain specific circumstances. In its decision of 7
November 1980 (Gema/Deutsche Bundespost) the BGH decided that
copyright owners may not exercise their broadcasting rights in
respect of cable transmissions in "shadow areas", where the
initial hertzian broadcast cannot be received because of
physical impediments. The decision of the Bundesgerichtshof has
been harshly criticized in German literature; many scholars
believe it to be in conflict with article 11bis of the Berne
Convention.
On the European level, the
Court of Justice has refused to apply the well-established
European exhaustion rule to secondary cable transmission. In its
decision in the Le Boucher case[32],
the Court considered that the broadcasting right of a film
producer was not exhausted by the licensed primary broadcast in
a Member State. The right holder in the neighbouring Member
State could therefore legitimately oppose the unauthorized
retransmission of the film via cable networks. The Court of
Justice observed that "the right of a copyright owner and his
assigns to require fees for any showing of a film is part of the
essential function of copyright in this type of literary and
artistic work".
It is important to note that
the Court in Le Boucher focused on the economics of
exploiting the work at issue (i.e. film). Films are exploited on
a per-performance basis; therefore, application of the
exhaustion rule would effectively destroy the copyright. Even
though Le Boucher does not take into account alternative
modes of exploitation of cinematographic works (video, rental,
pay-per-view), the decision contains a strong argument against
extending the exhaustion rule - either on a national or a
European level - to the digital networked environment.
Presumably, the prevailing mode of exploitation on the
superhighway will be delivery on demand; copyright owners will
be remunerated per use ("pay-as-you-go"). If exhaustion
would be applied, on-demand delivery services would not be
copyright protected after the initial act of making the entire
information bank (containing a dynamic collection of protected
works) publicly available.
3.6 The European
Satellite and Cable Directive: a model for the superhighway?
In its Council Directive of 27
September 1993[33] the
Council of the European Communities has presented a reference
model for future regulation of the information superhighway. In
the Explanatory Memorandum the following reasons (among many
others) for Community intervention are given:[34]
* national copyright laws
differ from country to country in respect of transfrontier
satellite broadcasting and cable retransmission;
* legal uncertainty
constitutes an obstacle to the free circulation of television
programmes within the Community and threatens the interest of
right owners;
* individual holders of
exclusive rights in various Member States may block the
exploitation of the copyrights and related rights;
* the cumulative application
of several national laws to one single act of broadcasting
must be avoided.
Many of these arguments are
equally relevant to the digital networked environment. The
Directive applies different legal instruments in dealing with
satellite broadcasting and cable distribution respectively. The
copyright problems of satellite broadcasting are solved by
granting a right of injection - right of communication to
the public by satellite - to the copyright owner in the Member
State where the relevant act of "injection" (uplink) occurs. No
national broadcasting rights (or other rights) may be invoked by
right holders in the countries where the broadcast signal can be
directly received. Thus, by applying the country-of-origin
principle, the unitary act of (licensed) satellite broadcasting
effectively exhausts any national rights existing under the
"Bogsch theory".
The problems of cable
retransmission are solved along very different lines. Here, the
blanket license schemes developed in negotiations between
organisations of right holders and cable operators, are taken as
a starting point. Community intervention is limited to
strengthening the position of organizations of right holders; no
secondary cable rights may be exercised by individual right
holders (with the exception of broadcasting organisations).
National rights of cable retransmissions are expressly
guaranteed; no compulsory or statutory licensing is allowed. In
respect of cable retransmission, exhaustion of the broadcasting
right is effectively prohibited.
Thus, the Satellite and Cable
Directive presents two possible models for European regulation
of the superhighway. Of these two, the cable model does not, at
present, seem workable in the digital networked environment. No
general mechanism for licensing and administrating secondary
digital transmission rights is currently in place. Many right
holders, such as film producers and publishers, are vehemently
opposed to collective licensing and administration of electronic
rights. Right holders take the view that digital transmission
rights are of a "primary" rather than a "secondary" nature;
right holders, therefore, prefer to stay in direct control of
these rights. Moreover, it is widely believed that the built-in
intelligence of the digital network will facilitate various
forms of direct licensing of protected works to
intermediaries and end users. No (mandatory) intervention by
collecting societies would, therefore, be necessary.
Assuming the superhighway would
not be subjected to any form of (mandatory) collective licensing
or administration of rights, the problems of applying
(cumulatively) different national laws to a single act of
network communication remain unsolved; these problems might
become major obstacles to offering transfrontier information
services over the superhighway. If, for instance, both the
transmission and the screen display directly resulting from an
act of "network communication" would be considered separate
restricted acts, an authorized communication originating from
one Member State might be prevented - by exercising "local" IP
rights - from reaching its intended user group.
In this respect, the satellite
broadcasting model applied in Directive 93/83/EEC merits serious
consideration. Applying this model, "injecting" a work in the
network - either by an act of "broadcasting" or by making the
work available through a host or server - would be considered an
act of communication to the public only in the
country-of-origin, i.e. the Member State where the information
provider who introduced (uploaded) the work into the network, is
located. "Local" right holders could, thereafter, not prevent
the "injected" work from being made available - and transmitted
- to the public in other Member States. Thus, for instance, a
video-on-demand operator based in the United Kingdom could offer
its services to customers in the entire European Union, without
having to acquire national rights of communication to the
public, broadcasting, cable distribution, transmission,
reproduction, screen display or any other (potentially)
applicable rights in all countries concerned. Following the
example of the Satellite and Cable Directive, the operator would
have to secure permission from the U.K. right holder(s) only.
Of course, any subsequent acts
of communication to the public, transmission or reproduction,
not directly related to the initial act of "network
communication", would not be exhausted. Users of the service
would not be allowed to reproduce downloaded films for further
distribution; nor would the server or host have the right to
sublicense the digital diffusion right without authorization.
The satellite broadcasting
model appears attractive prima facie. However, under close
scrutiny it has severe shortcomings.
In the first place, it will be
difficult to precisely define the act of communicating a work to
the public via the superhighway as a unitary act. Unlike
distribution of goods or broadcasting, acts of "superhighway
communication" are not naturally limited in time or place.
Communication in the digital networked environment is
"ubiquitous"; the work is immediately available anytime,
anyplace, anywhere - for an unlimited length of time. For
instance, applying (European) exhaustion to an act of uploading
a work to a publicly accesible server, might result in the work
being perpetually available to the public all over Europe -
without any further authorization. Arguably, this would unfairly
reduce the scope of the exclusive right.
In the second place, assuming
the superhighway would eventually become the principal delivery
medium for many information products, exhaustion would make
copyrights (or related rights) very difficult to exploit. Right
owners would have only a single opportunity to exercise their
exclusive right in toto . Copyright licenses or transfers
would necessarily imply a total buy-out for all further
networked distribution in the entire European market.
Of course, the drawbacks of
this "one-shot" copyright might be mitigated by complex
contractual relations between right holders, service providers,
servers and end users. Perhaps, by applying contractual
protection reinforced by encryption techniques, the loss of
copyright protection "down-stream" would not have a detrimental
effect on the information trade. Even so, applying the
exhaustion rule to the superhighway would probably destabilize
the copyright system. Instead, more subtle instruments should be
considered to balance the interests of right owners and users.
alternatives
Instead of the all-or-nothing
solution of the exhaustion rule, two alternative approaches are
possible. One is to accept that most communication on the
superhighway involves one or more restricted acts. The interests
of right owners and users would, then, be accommodated by
carving out broadly defined limitations and exemptions.
Proliferation of exclusive rights would be offset by expanding
the existing set of limitations. Insofar as these limitations
would directly concern acts of intended "consumption" of
information, these exemptions might not be contractually
overrided. The legitimate software user's right to produce a
back-up copy of the program (Article 5 (2) of the Software
Directive) may serve as an example.
Alternatively, one might decide
to directly curtail the exclusive right, for instance by
excluding various acts of usage from the reproduction right, so
as to avoid unwanted overprotection in the digital environment.
From a systematic perspective, the latter solution is more
attractive - and certainly more elegant.
Chapter IV - Conclusions
"Humans have not inhabited cyberspace long enough or in
sufficient diversity to have developed a Social Contract which
conforms to the strange new conditions of that world. Laws
developed prior to consensus usually favor the already
established few who can get them passed and not society as a
whole."
John Perry Barlow
All in all, a clear picture of
copyright in the digital networked environment does not emerge
from the previous discussions. This should come as no surprise.
The superhighway is a multipurpose, multi-user, multimedia
environment, capable of delivering in a variety of ways almost
the complete Berne Convention catalogue of works. The copyright
problems of the superhighway, then, are the problems of the
entire information and entertainment industry. To these there
are no quick and easy answers. In the context of this study,
only a few of these problems have been addressed, with a view to
offering short-term solutions to the European legislator.
Moreover, one important fact
should not be overlooked. Even though the superhighway has
become the buzz-word of the nineties, it does not, as yet,
exist. The closest thing to the superhighway presently in
existence is the INTERNET - hardly a suitable laboratory for
studying copyright in the digital environment. Since copyright
problems are directly related to market conditions, it would be
simply premature to propose more than minor changes to the
present copyright system.
As the initial reaction by
industry representatives to the Superhighways questionnaire
seems to confirm, the time isn't ripe for action. On the other
hand, a Commission initiative might serve as a catalyst in
raising industry awareness.
If a European "superhighways"
initiative were contemplated at this point in time, the
following short-term proposals might be contained therein:
* Grant to owners of
copyrights and related rights a broadly defined exclusive
right of communication to the public (by any means now
known or to be developed) in respect of all categories of
works. This right should include, inter alia, the following
restricted acts:
- "broadcasting", i.e.
simulcasting to the public via wire or wireless means; and
- making a work publicly
available on demand, by wired or wireless means.
* Grant to owners of
coprights and related rights an exclusive right to encode and
decode.
* The act of screen display
and related acts of temporary storage may not be regarded as
restricted, insofar as these acts are necessary for private
viewing or use by authorized individuals, and the act does not
qualify as a communication to the public. This provision may
not be overrided by contract.
* Acts of temporary storage
necessary for transmitting a work or information product may
not be regarded as restricted acts.
Other issues
At least three other copyright
issues merit further study in the superhighway context: moral
rights, liability and copyright contracts.
A recent study by the Tokyo
Institute of Intellectual Property, commissioned by the Ministry
of Intellectual Property of Japan (MITI), identifies the
moral rights problem as one of the critical legal issues in
developing multimedia products.[35]
It is suggested the validity of a waiver of the right of
integrity must be established in Japanese law - consistent with
the situation in the United States and the United Kingdom.
Moreover, the study proposes to restrict the right of integrity
to acts which are prejudicial to the author's honor or
reputation.
The liability question
is directly related to questions of public telecommunications
law. Should the operator of the superhighway have the legal
status of a common carrier? If so, does this status make the
operator immune from copyright liability?
It is generally believed that
copyright contracts will be a main source of legal
protection in the future digital networked environment. Many of
these "superhighway contracts" will be standard transactions
that will take place more or less automatically. Is there a need
to create a European legal framework for (electronic) copyright
contracts?
* * * * *
Amsterdam, 15
August 1994 |
