Copyright In The Digital Age :: Laurence Kaye

COPYRIGHT IN THE DIGITAL AGE Alive, Well and Ready for the Digital Upturn While voices continue to be raised questioning the future of copyright in a digital age, Laurence Kaye argues that EU and member state law, at least, is in place to provide a framework within which digital business can be done. In this article, he examines the impacts and main provisions of the EU Copyright Directive, how it has been brought into law by member states and what it means for publishers. Copyright is not the dodo that cyberspacers first thought. It is proving itself to be a real Darwinian specie, well able to adapt to the challenges of the digital world. This is not really surprising. When Mozart first „heard‟ one of his symphonies in his head, before one note was committed to paper, it was already a copyright work. It is true that in many countries, such as the UK, copyright protection only comes into effect once a work is recorded. But its status as a copyright work remains independent of the distribution medium. Copyright‟s starting point is the message, not the medium. The new European Union (EU) Copyright Directive, adopted in 2001, reflects this http://www.patent.gov.uk/about/consultations/eccopyright/index. It adapts copyright to the digital age and takes a „medium neutral‟ approach to the cornerstone rights of copyright – copying and communication to the public, covering broadcasting and on-demand. It also provides the legal underpinning for digital rights management. Re-defining boundaries It is, of course, still early days. The courts are still struggling to define the boundaries of copyright in the digital age. For example, there are conflicting cases in Europe on the scope of the database right, introduced by the 1996 Directive for the Legal Protection of Databases - http://europa.eu.int/. Some courts have decided that, in particular circumstances, „deep linking‟ is an infringement of the database right (e.g. affirmed this year by a German appellate court in the Mainpresse case). Other courts have reached contrary decisions. But it is fair to say that the legal structure is in place, even if there is much building work still to be done. And for publishers with digital aspirations, whose copyright rights are tradable goods, understanding the scope and limit of those rights is a vital element in shaping their digital business models. Dust off those contracts One theme recurs throughout – the need for publishers and other rights owners to find voluntary measures to deal with issues such as copyright exceptions in the digital environment. For this reason, and in order to „stock take‟ for the digital upturn, publishers need to re-visit and update their contracts for both the acquisition and exploitation of their rights. The international copyright framework Within the EU, the process of updating copyright law began in 1988 with a European Commission Green Paper, even before the „information superhighway‟ (remember that?) was common currency in the online world. There have been seven EU Directives since 1991, most of which have been part of the European Commission‟s digital agenda. The EU Copyright Directive was adopted in May 2001 and is due to be implemented by member states by 22 December 2002. It is likely that most member states will be late in implementation. However, the UK is on track to be a notable exception. The approach generally taken by member states is to make the minimum changes necessary to its national copyright law to bring it into line with the Directive.

Page 2 2002 Implementation of the Directive is also significant for international copyright protection. It will allow the EU and member states to ratify the World Intellectual Property Organisation (WIPO) 1996 Treaties, the „WIPO Copyright Treaty‟ and „WIPO Performance & Phonograms Treaty‟. WIPO administers the Berne convention which is the main route by which copyright owners obtain copyright protection outside their home state. So ratification of those WIPO Treaties is a „digital upgrade‟ of international copyright protection http://www.wipo.org/copyright/en/index.html. EU Copyright Directive: rights and exceptions There are six components in the Directive. They are 

a re-statement of the broadcast right in medium-neutral terms as the right of „communication to the public‟;



significantly, the new „making available right‟ to cover on-demand services, expressed as as a distinct subset of the „communication to the public‟ right;



a broad re-statement of the reproduction right;



the distribution right governing works in physical form, print or electronic;



a shopping list of up to twenty exceptions to some or all of these rights and



the legal framework to protect digital rights management systems.

But does it change things? In several respects, the answer is „no‟. For example, existing UK copyright law has a broad, medium-neutral definition of the reproduction right. The act of distribution is also already covered. But the Directive does give clarity and consistency to all member states laws in the all-important area of on-demand services (especially the internet, mobile or otherwise) and to introduce or broaden the legal protection for digital rights management systems. In addition, it updates exceptions to copyright in the digital world. It does, therefore, play a vital role in giving international consistency to the copyright legal framework, essential to a global environment. Communication to the public, including making works available The Directive gives a broad definition to broadcasting as “any communication to the public by wire or wireless means.” So this covers broadcasting in the conventional sense but also includes „push services‟ such as a webcast from a publisher‟s site or broadcast to a mobile device. In the digital environment, online, on-demand services are typically user-driven. One of the key provisions of the Directive, consistent with the WIPO Copyright Treaty, is to give rights owners a clear legal basis for permitting works being made available “….in such a way that members of the public may access them from a place and at a time individually chosen by them.” This will probably be translated into UK copyright law by incorporating that language into a definition of „ondemand service‟. It is this right that controls the inclusion of a copyright work into an on-demand service. As a result, the act of uploading an article or a photograph onto a web server without the owner‟s permission is an infringement of copyright, regardless of whether the work is subsequently accessed or downloaded. The „ondemand right‟ will belong to the author. As with other rights, it will, therefore, need to be expressly covered by a licence granted to the publisher except in those cases where the work is produced for the publisher by an employee and, as in the case of the UK, the publisher is deemed to be the first owner of copyright. Unlike the distribution of copyright works in physical form, the concept of „exhaustion of rights‟ does not apply to works made available on demand. In plain English, this means that the fact that a work has been included once

Page 3 2002 in an on-demand service does not mean that the owner of the service thereby loses the right to control that work‟s subsequent electronic re-distribution outside the scope of the licence. For example, a work that is licensed for use on a corporate intranet only cannot be made available by the licensee on a public web site unless the contract permits this. So, at least from a rights and contractual viewpoint, a copyright owner retains greater control than over the physical distribution of books from one EU territory to another. Reproduction right It was that guru of publishing law, Charles Clarke, who was among the first to observe that the internet is the world‟s largest copying machine. Copying („reproduction‟ in copyright speak) is at copyright‟s core. All forms of copying, including temporary electronic copying are covered. The position of internet service providers in regard to this is dealt with by the only mandatory exception in the Directive (the “ISP exception”). Under this exception, temporary, electronic copies that result from the operation of routers and other equipment as an automatic result of carrying traffic within networks, including copies that are cached on a computer as part such process, are totally excluded from the reproduction right. Other temporary copies, such as those that result from the way a CD player caches copies, are also excluded provided they are lawful copies. If a publisher discovers illegal copies of its materials on a web site, the Directive requires member states to ensure that their laws enable rights owners to apply for an injunction against the ISP that is carrying that material, even though the ISP is exempted for any exposure to copyright infringement. The position is different if the ISP is hosting the infringing material. In order to get the full picture on the extent of ISP liability for carrying and hosting content, it is also necessary to refer to the recent E-Commerce Directive, recently implemented into UK law by Regulations. Distribution The right to authorise the physical distribution of copyright works already exists in UK copyright law. No surprises here! It is described as the right to authorise the “issue copies to the public.” As a result, no change will be made to existing UK copyright law. The exception proves the rule In terms of creating a level playing field across the EU for copyright exceptions, the Directive has not really helped. This is because apart from the mandatory „ISP exception, member states can incorporate all or any of the other nineteen exceptions! The general message is that member states do not intend to eliminate any existing exceptions in their national copyright laws unless they are inconsistent with the Directive. So existing differences will be perpetuated. But member states‟ courts will face some common problems. In a networked environment, the boundary between commercial and non-commercial use of a work is difficult. Users can go use online services offered by libraries for a mix of private and business uses. Educational institutions may be offering commercial as well as educational services. However, exceptions are subject to an overriding test in the Directive that requires, amongst other things, that they “..do not unreasonably prejudice the legitimate interests of the right holder.” Furthermore, many exceptions expressly exclude reliance on an exception for “direct or indirect commercial advantage” (that language comes from the exception for libraries, educational institutions and museums that allows specific acts of reproduction). The real solution to re-drawing that boundary will lie in the ways in which rights owners and users re-shape their contractual relationships, with the courts as a last resort. A case in point is the exception that allows libraries, educational institutions and museums to make works available on-demand within their premises for research or private study. This is, of course, precisely the type of use that content owners expect to licence. The exception

Page 4 2002 goes on to say that it does not apply where the works are subject to licence terms! This sounds somewhat „chicken and egg‟. But the message to publishers is clear – take a close look at the scope of your licensing contracts. Digital rights management These provisions, together with the shopping list of exemptions, were the most hotly contested part of the Directive. Rights management through individual and collective licences is the lifeblood of the creative and information industries. Whether digital rights management (DRM) will prove to be the lock and key to paid-for content delivered online remains to be seen. But the legal framework is, or soon will be, in place. In some member states, existing copyright laws already have provisions whereas others do not. As far as existing DRMrelated provisions go, it is generally fair to say that none are as extensive as the provisions in the Directive. The two basic elements of DRM are 

identification of works through standards and systems for identifying or watermarking works and



technical measures for the enforcement of usage restrictions through encryption and digital signatures.

The basis of the Directive‟s approach is to create legal sanctions against the circumvention of these systems. The Directive has no impact on the issue of defining which standards are to be followed in the use of these systems nor their interoperability. The provisions are detailed. They cover the act of deliberate circumvention of „effective technological measures‟ as well as the manufacture, sale and distribution of both equipment and services which are designed or promoted with circumvention as its primary purpose or where the equipment only has a limited business purpose apart from its use to circumvent. There are similar provisions dealing with the unauthorised removal or alteration of rights management information. The most difficult area is the relationship between these measures designed to give legal protection to DRM systems and the ability of users to gain access and use works under one of the many exceptions, e.g. for noncommercial research. Users‟ advocates have raised the spectrum of the incarceration of knowledge within the walls of DRM! The Directive takes a „carrot and stick‟ approach. It is up to rights owners to use voluntary measures to enable users to access encrypted works for the purpose of specific exceptions. If not, member states are required to introduce some form of compulsory licensing. As regards the vexed question of digital private copying (e.g. copying an album from hard disk to MP3 player), the position will vary between member states. Currently, there is no such exception under UK copyright law nor is there an intention to introduce this exception. In contrast, many other member states do have such an exception, together with a levy system on CDs and other recording media. If they continue with such an exception in the digital environment, rights owners must voluntarily allow access to encrypted works for private copying or face compulsory measures. Even then, rights owners will be able to use DRM to limit the number of copies that the user can make. Laurence Kaye Laurence Kaye Solicitors © Laurence Kaye 2002 T: 01923 352 117 E: [email protected] www.laurencekaye.com http://laurencekaye.typepad.com/

Page 5 2002

This article is not intended to be exhaustive and it does not constitute or substitute legal advice, which should be sought on a case by case basis. Please feel free to copy or make available this article without modification in print or electronic form for noncommercial purposes. If you do so, please include this disclaimer and copyright wording with attribution. If you want to re-publish or make the whole or part of this article available in a commercial service or publication, please contact the author at [email protected].