Directive on Copyright - E.U

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Critically evaluate the impact of the E.U. Directive on Copyright in an Information Society, 2001/29/EC, on the problems posed for musical copyright owners by the development of the Internet.

Does the Directive achieve, in your view, a workable and effective balance between copyright owners and Internet users?

Contents

Copyright Owners' Perspective 12

Internet Users' Perspective 17

Conclusion - Striking a Balance 20

References 25

Custom EU Law Essays Order

Copyrights Owners' Perspective
The concept of copyright is essential to the development of new concepts and ideas. It is the reward for composer's work when producing a song or piece of music. It gives the owners of such works a level of control over what is done with it once it has been created. The provisions specifically designed to protect copyright owners' rights can be found in Articles 1,2,3,4,6 and 7. These rights ensure that the copyright owners' have the right to be identified as the author and have the exclusive right to reproduce, control and distribute their works.

The creation of the Internet brought with it a number of difficulties in enforcing the rights of composer's. It is effectively "one large copy machine that can make and distribute an unlimited number of copies of content worldwide." 1 . The availability and increasingly widespread use of the Internet has made it infinitely possible for thousands, if not millions, of users to copy, download, and distribute songs and music, without the knowledge or supervision of the original author. This in turn makes it infinitely impossible for the authors to control the use of their material once it is out of their hands. The problem with this is that it may lead to a reluctance to create such works due to being unable to fully exploit it once created.

The Internet is also fast-paced and uses rapidly advancing levels of technology, of which the governing laws are having increasing difficulty keeping up with. The Directive was therefore an attempt at resolving. It manages to promote some level of standardisation within the EU regarding copyright and related rights. This was a necessity for the successful enforcement of copyright owners' rights.

Prior to standardisation, the laws governing the Internet within the EU were so fragmented that they could be circumvented by a user merely setting up a server in a country other than his own which had a lower standard of applicable laws and enforcement of those laws. The standardisation within the EU now means that all Member States have a degree of harmonisation and can enforce this Directive without dispute as to governing law (within the EU).

The Directive has outlined the rights of copyright holders and the boundaries and limitations of those rights. This was vital since a lot of problems had previously been caused due to the fact that right-holders were unaware of what they could or could not do. The Directive provides clarity and allows the right-holders to see exactly where they stand in the grand scheme of things.

However, in terms of actually enforcing the rights of copyright owners, there is still much to be done. The Internet is not an EU phenomenon, but a global one. It is a product of a global community and can therefore only truly be governed by a global system of governance. The EU Directive is only applicable within the EU, much of the infringement can take place anywhere else in the world - the EU cannot guarantee the right-holder protection from this. All it can do is provide protection within the boundaries of the EU which is only a small proportion of the reaches of the Internet.

There is a faction of people who believe that any laws regarding the Internet will have to take the unique characteristics of cyberspace into consideration (Whittington, 1997), while other view the Internet as no different to the rest of the world (Mason, 1996). I am inclined to agree with the first point of view since the Internet is like no other place on Earth. It is not limited by geographical or cultural boundaries. As a unique entity, it requires a unique system of governance, which the Directive seems to have fallen far short of. Efforts to control the flow of information across physical borders in a 'virtual reality' will not work, at least in countries hoping to participate in global commerce (Johnson, 1996).

Peer-to-peer (P2P) file sharing has become common both in this country and many other due to the file-sharing sites like Napster, Scour, and Morpheus. It is these types of sites that the Directive is aimed towards preventing, yet copyright owners themselves are seeking to target not only the makers of these sites, but also the companies that provide products that rely on or add value to public P2P networks, such as MP3Board.com. This provides a web-based search engine for the Gnutella network (which defines the manner in which computers can speak to one another in a decentralised fashion. As a result, from a copyright owners point of view, the Directive should have encompassed all parties involved in the infringing act, not just the end user that gets the songs.
In the Napster case 2, Napster itself had argued that they did not make or distribute any of their copyrighted works and that they could only be liable for contributory and vicarious infringement. However, this defence was unsuccessful because the courts found that:

" at least some of Napster users were direct infringers, because they distributed and reproduced copyrighted music without authorisation;
" Napster had actual knowledge of infringing activity;
" Napster had the ability to control the infringing activities of its users;
" Napster had provided the site and facilities for the directly infringing conduct of its users; and
" Napster had derived a financial benefit from the infringing activities of its users because this activity acted as a 'draw in mechanism' for users, and a portion of Napster's value is derived from the size of its user base, and its site contained advertising.

As a result of cases like the Napster one US law was also introduced to help solve the problem. The Digital Millenium Copyright Act (DMCA) was enacted in 1998 as a solution. This does contain a provision that made it a crime to distribute technology that circumvents electronic locks on books, films, articles, software and songs - even though circumvention itself is not always illegal and that the ban on technology itself strikes directly at scientific research.

The EU Directive contains a similar provision in Article 6(2) against the manufacture, import, distribution, sale etc of products or components or the provision of services, which are advertised for the purpose of circumvention. This must be their prime purpose and have little other significant purpose other than to circumvent effective technological measures (designed to prevent or restrict infringing acts). Whilst in some cases this would be easy to spot, in others this would be a major discussion point. The problem would be identifying whether circumvention was the main purpose.

The damage here would be done to innocent parties such as cryptographers. Nothing in the Directive affords them any protection against prosecution. Both the DMCA and this EU Directive seemed to have made the same mistake. Though created a number of years apart, it seems the EU has not taken on board the effect of the DMCA in reducing the pace of cryptographic research.

Cryptographers design and produce many of the measures put into place to protect copyrighted works. In producing these measures, cryptographic algorithms (the concept of which need not be explained here, all that is necessary is the idea of them) are used, as well as a number of known algorithms that are used for a variety of purposes - many of which are little to do with technical protection methods 3 . In the process of investigating an algorithm, cryptographers may discover weaknesses by showing that the encrypted message can be obtained, in effect, that the measure can be circumvented, thus making the academic concerned liable to prosecution. Also, academics tend to publish their work, often on websites, and in cases where the research concerned (incidentally or otherwise) the circumvention of a technical protection measure applied to computer programs, the publication would make the researcher liable to prosecution. They would be liable to prosecution since, although not creating a product or service that enables circumventing, they would be providing information regarding circumventing.

Based on Article 6(2), it would seem that these researchers would be liable to prosecution. However, under a strict interpretation, they would technically fall outside the scope of Article 6(2) by not providing a product or service. This in turn would provide a loophole for others whose main aim was circumvention. Therefore either this part of the EU Directive provides so much protection that it has encompasses innocent parties, or it has created a loophole for those wishing to provide the technology to circumvent preventative technological measures.

Neither of these interpretations would satisfy copyright owners. By hindering research into cryptography (as the DMCA has been shown to have done 4 ), right-holders will have fewer methods by which to protect their work, by creating a loophole, the Directive will have found a way round its own provisions for those seeking to aid the practice of infringement.

1

Internet Users' Perspective
The main provision applicable to Internet users is Article 5 of the Chapter II rights and exceptions. Paragraph 3 of Article 5 - as listed above, demonstrates the emphasis on not prosecuting users who are downloading for legitimate purposes such as teaching purposes and for criticism and review. However, most of the exceptions applicable to musical copyright had already been provided for in existing legislation.

The dilemma comes with users who download for private use. The reason being that although the Directive allows this to an extent, the original copyright owner should be fairly compensated for this use of his work. This is difficult to do in practice, predominantly due to the sheer volume of users downloading various materials.

To this extent, the legitimate uses have been adequately provided for, in that they are now all in one document and it will be much easier for users to see where they stand and it is expressly stated what is and is not allowed. This provides clarity and easy reference so that ignorance can no longer be a defence.

Despite this, there is a huge market for downloading infringing copies in the P2P market. This is where non-commercial private users have their legally obtained copies of music available on their servers for any third party to download. This is the simplest form of information sharing on the Internet. This seems to bypass some of the laws. For example, the makers of Morpheus (a programme that acts as a network that connects private users to other private users) have been allowed to continue on the basis that the programme itself was not in breach 5- it merely provided a method of downloading files which could be used both lawfully and unlawfully (similar to the Betamax principle). Users are responsible for how the technology is used rather than the makers of the technology. Analysts report that just one of the many peer-to-peer systems in operation is responsible for 1.8 billion unauthorised downloads per month 6 .

There is no reason to suggest that any of these users would have purchased the single or album they downloaded if it had not been available for free. Also, a number of users download unauthorised material because the original is no longer available in stores 7.

In addition, the main argument against unauthorised downloading is that it is taking away from the copyright holder, full exploitation of their work and is not reasonably compensating them for their efforts. However, the exposure provided on the Internet has meant that the popularity of particular artists has soared, not because of the legal advertising and marketing efforts of their management, but rather the illegal dissemination of information and music available on the Internet. For example, the rise of pop star, Eminem was seen to be a result of the mass of information about him and the volume of downloadable music created by him.

It seems that the stars who are most hit by free downloads are the 'mega superstars' such as Celine Dion, whereas the vast majority of musical copyright owners are actually helped by the music available on the Internet. Ipsos-Reid found, in a recent survey, that 84% of people using the Internet for these purposes, are also listening to song clips, reading about lyrics and tour information, and researching bands prior to actually purchasing their CD. 47% of these individuals indicate that they have subsequently purchased a CD from a band or artist, solely because of something they first read or listened to on the Internet. 29% indicate that their typically preferred genre of music has changed since the inception of their downloading behaviours and 21% report that their radio listening activities have also changed since they began downloading.

Instat-MDR estimates that on-line music revenues are expected to grow at a compound annual growth rate of 33.4% between 2001 and 2006, while revenue from downloading and streaming are expected to remain less than 10% of total revenues through the year 2004 8.

Based on these findings, the artists are receiving income indirectly from the free downloads because the users are subsequently purchasing the CD's, giving them increased sales through mass exposure. Therefore, since they are being compensated for their efforts in producing this work, the free downloads and their providers should fall within the exemption in Article 5, paragraph 3 which states that private use should be allowed only if the author is fairly compensated.

On this basis, rather than abusing the Internet and the rights of copyright owners, the free downloads available are encouraging the dissemination and exposure of these artists and are effectively providing free advertising. The only difficulty remaining here is that the right-holders do not have any control over the distribution of their work and treatment of it. However, I am fairly certain that given the increased revenues they will receive as a result, this would not prove too much of an inconvenience.

In relation to the use of the works, the main problem for copyright owners is the use of their work, rather than the abuse of it. The work is being enjoyed by a vast majority of people and is that not the purpose of being creative? The problem occurs when users take the works and adapt or modify it in a way that the creator would consider derogatory treatment of it. This should be the primary concern because once an adaptation has occurred, the adapted version could spread round the Internet just as fast as the original version which may not put the author in a favourable light. More emphasis should therefore be placed on the use of the work once it has been downloaded as this is more likely to adversely affect the creator, the dissemination of it merely demonstrates the popularitsy of the artist in question.

Overall, the complaints of the right-holders seem too excessive. Not only is their work being enjoyed by a wider audience than it could be via any other medium, it is promoting and advertising the artists involved as well as adding to their revenues.

Conclusion - Striking a Balance?
In relation to the above findings, the Directive itself does seem to strike a fair balance between the rights of copyright owners and the internet users. A major problem is that it does not account for the innovation of cryptography which is essential to the survival of the Internet. It seems that interpreted too widely would mean innocent parties would be liable to prosecution, a too narrow a construction would mean that piracy would be tolerated. The legislation provides a good basis for exercising a balanced law in favour of both parties but the ultimate responsibility lies with the individual judges deciding each case. The enforcement of the Directive within the EU is dependant on the good judgement of the judiciary and the balance will not be struck in the legislation, rather in the court rooms.

However, despite the effectiveness of the legislation within the EU, the Internet is not merely an EU phenomenon. It's global presence requires a global solution. The laws relating to the Internet must not only be harmonised within the EU but throughout the world. This would enable a minimum standard of protection and give copyright holders the security of knowing that their work will receive the same protection wherever it is infringed.

The United Nations created a specialised agency called World Intellectual Property Organisation (WIPO) which is an intergovernmental organisation. It is responsible for the promotion of protection of intellectual property throughout the world through cooperation among countries and for the administration of various multi-lateral treaties dealing with the legal and administrative aspects of intellectual property. Two international treaties have been adopted in 1996 by the WIPO to protect everything from software to movies and music available online. There is no international copyright laws, only these treaties and agreement who provide the form and measure of protection available in foreign countries. These treaties establish minimum required standards, require protection for foreign copyright owners and provide for enforcement under local national law (Beberman, 1996). Such global organisation should enable a uniform system of governance worldwide of the Internet and related copyright issues. If there is complete harmonisation of copyright laws, once the issue has been brought into its own jurisdiction, the enforcement of it will be much easier to achieve.
However, it is infinitely impossible to police the internet due to the difficulty in tracing the infringers involved. By targeting the providers, right-holder's aim to prevent the unauthorised copying of their work, but where one site closes, ten more can open and this severely restricts the enforceability of any laws relating to this issue.

The problem of liability of the service providers is completely out of hand - how can a service provider be held liable for the infringement of one of its subscribers, if it is almost impossible to control what information is posted on newsgroups and on webpages. Censorship in this case could be a way of controlling privacy. What service providers should do is investigate the complaints of copyright infringement and then remove or deny access to the infringing material while they investigate, If condemned, the used or company accounts should be immediately cancelled and all the other service providers should be informed about the issue. The UN, through WIPO, together with all the countries should create an international law regarding copyright that would allow transgressors to be prosecuted independently of their physical location.

Therefore, whilst a balance has been achieved to a certain extent, there are still areas which need clarification. The problems for musical copyright owners are apparent but with software and loop-holes enabling the circumvention of the internet copyright laws, their rights over their work have been impinged. Although Gnutella networks may provide an indirect source of finance and thus indirect 'fair compensation' for the right-holder, it weakens any right they may have to control the distribution of their works or subject-matter in the information society.

Additionally, with the introduction of broadband, downloading will become faster, easier and cheaper, so a solution to the issue of copyright infringement should be aimed for sooner rather than later. The problem with this is that the Internet and Internet technology is progressing far quicker than the law can and seems to be always one sep ahead. The solution may therefore be much simpler. Rather than rushing to legislate the current problems, organic growth of the law should be facilitated.

The Internet is a unique entity. By allowing the law to develop naturally, it will find that it will eventually encompass all issues relating to the Internet. This solution would come into being the same organic way that most things come into creation. It will happen because individual people and groups will decide that they want to copy and distribute the music, and will just do it. It will be driven by the human needs of the community of Internet users, not by external government or police force. It is the Internet users who effectively police the Internet - things get reported when they occur, then we can do something about them. Organic growth will facilitate this co-dependency that the society as a whole and the legislating bodies have. One cannot function without the other. If the Internet users are themselves policing the Internet, too many restriction on their rights and freedoms on the Internet will push them into the opposite direction. Rather than help the law, they will turn against it and thus more Internet crime will result.

The dynamics that will be at work if the organic growth route was pursued would be two opposing forces: one the one hand would be the people being creative and wanting to distribute the fruits of the creativity in exchange for benefits, and on the other hand, consumers who want to get quality creative products. Therefore, the optimum configurations of the Internet will be those in which creatives are given enough incentives to produce and distribute enough creative products to satisfy the consumers. The people who want to take stuff off the Internet without giving anything in return are going to be marginalized. The brute for of free-market economics will just push them to one side; and the Internet is an extremely free market, and has an enormous amount of energy pushing it.

The law must not be so inflexible. Achieving an effective balance between these two opposing sides will in effect, be like walking a tightrope - go too far in any on direction and it will cause chaos.

Furthermore, in addition to relying on the general public to police the Internet, there are increasingly sophisticated forms of technology available. Technology is available that will allow authors to mark and track their work on the Internet, protecting their property. Some technologies can therefore be used before distributing the intellectual property to control or inhibit infringement of the works (pre-infringement); others to ensure payment prior to or at the time of the consumers use of the intellectual property i.e. downloading the song, music, or video clip (metering); and finally to identify infringements and thus enhance enforcement of intellectual property rights (post-infringement). (Goldman, 1997).

In conclusion, the Directive does obtain a reasonable balance between the aims of the two opposing parties, however, it is one of many solutions and the rapidly changing face of the Internet should prompt regular review of the existing legal framework. Harmonisation of EU laws is a good start but may prove ineffective if the rest of the world do not follow suit. The inadequacies of by the DMCA can already be seen and this should be learned from when looking to implement future legislation. The rights of both the right-holders and Internet users should be examined as a whole rather than as separate issues as they are inextricably linked. Flexibility should be maintained and rather than a rigid framework, a basic guideline should be developed via WIPO and then more specific guidelines could be developed for each individual country based on its own needs. A slower convergence of laws could then take place.

When looking at balancing the opposing rights, care should be taken to ensure that neither party is seen as being the one who is favoured. If the Internet users are seen as being favoured, the copyright owners will have less incentive to continue creating their works and further abuses over the Internet may take place if the law is regarded as being 'too soft'. If the copyright holders are seen as being favoured, the Internet users will feel that they have been 'hard done by' and will refuse to police the Internet as they will be the only ones who will know who is doing the infringing and how to deal with this. The matter itself however, should be kept in context and must not be seen as being totally out of hand. Despite the number of unauthorised downloads that take place every year, there is a much higher percentage of people lawfully downloading for completely legitimate reasons. This must not be forgotten.

A final point to note would be that once a global system of governance is put into place, it would have to be enforced on a global scale. Rather than trying defendants in their own country's or in the country's where the infringement took place, they should be tried in a completely neutral place, for example, a separate court set up to deal exclusively with Internet related law. Since the Internet itself has no physical boundaries, the law's governing it should not have physical boundaries either. Intellectual property is completely different in the way it behaves than physical property and should therefore be treated accordingly.

  1. Remoaldo, P (June 1998), Copyright Infringement, Law and Borders on the Internet, Portugal.[^ Return]
  2. Citation not found.[^ Return]
  3. Description and explanation of cryptography found in: Midge, J. T. J. (21 August 2002), Critique of the Proposed UK Implementation of the EU Copyright Directive <uk.eurorights.org>[^ Return]
  4. As in footnote 7 above.[^ Return]
  5. Metro-Goldwyn Mayer v Grokster[^ Return]
  6. Rosen, H (28 February 2002) Letter to the Honourable Rick Boucher (Congressman).[^ Return]
  7. As above in footnote 1.[^ Return]
  8. Greenspan, R (12 June 2002) Making Money on Free Music, CyberAtlas[^ Return]

References
*All online resources used.

Beberman, Julie A; De Carlo, Kean J; Olsen, Anda; Stephens, Don E (1996) Intellectual Property Law and the Internet http://gsulaw.gsu.edu/lawand/papers/su96/beberman.htm

EU Directive 2001/29/EC - taken from www.patent.gov.uk

Goldman, Eric (1997) The Intellectual Property Renaissance in Cyberspace: Why Copyright Law Could be Unimportant on the Internet http://ww.coolie.com/pulications_content.ixe?section=Article+Reprints&id+ar_1504

Heins, M (2002) The Progress of Science and Useful Arts: Why Copyright Today Threatens Intellectual Freedom http://www.fepproject.org/policyreports/copyright.html

Johnson, David R; Post, David G (1996) Law and Border - The Rise of Law in Cyberspace (Stanford Law Review) http://www.cli.org/X0025_LBFIN.html

Lohmann, Fred von (January 2003) Peer to Peer File Sharing and Copyright Law after Napster http://www.eff.org/IP/P"P/20010227_p2p_copyright_white_paper.html

Macmillan, F (2003) Copyright Commodification of Creativity http://oiprc.ox.ac.uk/EJWP0203.pdf

Mason, Aron C (1996) A Crime by Any Other Name, Church of Scientology International http://www.freedommag.org/english/vol2704/crime.htm

Midgley, J. T. J. (2003) Critique of the Proposed UK Implementation of the EU Copyright Directive <uk.eurorights.org>

Remoaldo, P (June 1998) Copyright Infringement, Law and Border on the Internet http://www.fe.up.pt/~mgi97018/is/copyright.html

Whittington, Brandy (1997) The Church of Scientology's Ironic Contribution to Intellectual Property Law on the Internet, Texas Tech University School of Law http://www.law.ttu.edu/cyberjou/jour17.htm

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