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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 thatEU 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 beenbrought 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, wellable 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 truethat in many countries, such as the UK, copyright protection only comes into effect once a work is recorded. Butits 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 thishttp://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 thelegal underpinning for digital rights management.

Re-defining boundariesIt is, of course, still early days. The courts are still struggling to define the boundaries of copyright in the digitalage. For example, there are conflicting cases in Europe on the scope of the database right, introduced by the1996 Directive for the Legal Protection of Databases - http://europa.eu.int/. Some courts have decided that, inparticular circumstances, „deep linking‟ is an infringement of the database right (e.g. affirmed this year by aGerman 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. Andfor publishers with digital aspirations, whose copyright rights are tradable goods, understanding the scope andlimit 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 todeal 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. Therehave been seven EU Directives since 1991, most of which have been part of the European Commission‟s digitalagenda.

The EU Copyright Directive was adopted in May 2001 and is due to be implemented by member states by 22December 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 changesnecessary to its national copyright law to bring it into line with the Directive.

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in an on-demand service does not mean that the owner of the service thereby loses the right to control thatwork‟s subsequent electronic re-distribution outside the scope of the licence. For example, a work that is licensedfor 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 greatercontrol 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 theworld‟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 regardto 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 resultof carrying traffic within networks, including copies that are cached on a computer as part such process, aretotally excluded from the reproduction right. Other temporary copies, such as those that result from the way aCD 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 toensure that their laws enable rights owners to apply for an injunction against the ISP that is carrying thatmaterial, 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 carryingand hosting content, it is also necessary to refer to the recent E-Commerce Directive, recently implemented intoUK law by Regulations.

Distribution

The right to authorise the physical distribution of copyright works already exists in UK copyright law. No surpriseshere! 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 reallyhelped. This is because apart from the mandatory „ISP exception, member states can incorporate all or any of theother 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 boundarybetween 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 aseducational 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 commercialadvantage” (that language comes from the exception for libraries, educational institutions and museums thatallows 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 theircontractual 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 orprivate study. This is, of course, precisely the type of use that content owners expect to licence. The exception

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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 licensingcontracts.

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 andinformation industries. Whether digital rights management (DRM) will prove to be the lock and key to paid-forcontent delivered online remains to be seen. But the legal framework is, or soon will be, in place. In somemember states, existing copyright laws already have provisions whereas others do not. As far as existing DRM-related 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. TheDirective has no impact on the issue of defining which standards are to be followed in the use of these systemsnor 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 whichare designed or promoted with circumvention as its primary purpose or where the equipment only has a limitedbusiness purpose apart from its use to circumvent. There are similar provisions dealing with the unauthorisedremoval or alteration of rights management information.

The most difficult area is the relationship between these measures designed to give legal protection to DRMsystems and the ability of users to gain access and use works under one of the many exceptions, e.g. for non-

commercial research. Users‟ advocates have raised the spectrum of the incarceration of knowledge within thewalls 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 tointroduce 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, thereis 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 recordingmedia. If they continue with such an exception in the digital environment, rights owners must voluntarily allowaccess to encrypted works for private copying or face compulsory measures. Even then, rights owners will beable to use DRM to limit the number of copies that the user can make.

Laurence Kaye

Laurence Kaye Solicitors

© Laurence Kaye 2002T: 01923 352 117E: laurie@laurencekaye.com 

www.laurencekaye.com http://laurencekaye.typepad.com/ 

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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 non-commercial 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 laurie@laurencekaye.com.