In a relatively recent judgement in a criminal case, the Supreme Court of Estonia ruled that that the terms  ‘trade scale’ and  ‘commercial scale’ are not synonymous. The concept ‘commercial scale’ in criminal law cannot be interpreted in such a broad sense as the concept ‘trade scale’. 

A. Gubinski allegedly committed a copyright infringement, therewith violating section 222″1 of the Estonian Penal Code. Gubinski argued that did not commit a crime since (i) it had not been proven that the files found in his computer could be regarded as a copyrightable computer program and (ii) that he did not gain profit as a result of possessing the computer program. The prosecutor argued that it was clear that Gubinski possessed a computer program that had to be regarded as copyrightable subject matter and that any kind of unlawful possession of a computer program should be  sanctioned if it is the intention of the possessor to gain profit from using the computer program. In this case it was evident that the clear and only intention of Gubinski was to use the computer program for his own business activities, not to sell it.

According to the Estonian Supreme Court, unlawful use of a copyright protected computer program is only sanctioned criminally  when the person possessing and using the computer program has a clear intention to benefit systematically and repeatedly. The “commercial scale” requirement is not fulfilled when the person only intends to obtain some financial benefit, e.g.  as a result from using the program himself . Therefore the accused person, Gubinski, could not be considered to have committed a copyright infringement as laid down in section 222″1 of the Estonian Penal Code. Although both courts in lower instances had convicted A. Gubinski, the Estonian Supreme Court took the position that Gubinski had to be acquitted.

EV

“It is not the European Parliament that officially determines the scope of the negotiating mandate, although its position now can certainly give a sign regarding the political winds that await the TTIP agreement.”

The EU and the US have been holding talks on a trade agreement that goes by the name of Transatlantic Trade and Investment Partnership (TTIP). Apparently, it is both parties’ intention to include a chapter on intellectual property, which has caused a lot of ACTA-related bells to ring. Regardless of the (de)merits of including an IP chapter in the TTIP, the specific mandate regarding copyright aspects is (still) unknown.

The Committee of International Trade of the European Parliament adopted a draft motion for a resolution on the agreement (to be voted next 23 May 2013), which refers to the negotiating mandate. There, it is stated that “the agreement should not risk prejudicing the Union’s cultural and linguistic diversity, including in the audiovisual and cultural services sector” (point 10); and that “the agreement should include strong protection of precisely and clearly defined areas of intellectual property rights (IPRs), including geographical indications, and should be consistent with existing international agreements”, while “other areas of divergence relating to IPRs should be resolved in line with international standards of protection” (point 12).

What the “precisely and clearly defined areas” of IP exactly are is unclear, as is the notion of “other areas” where divergences will be resolved according to international standards of protection. In which group does copyright fall? This will hopefully be clarified when the negotiations proper begin. In any case, it is not the European Parliament that officially determines the scope of the negotiating mandate, although its position now can certainly give a sign regarding the political winds that await the TTIP when the Parliament is called to take a stance on the final text of the agreement. According to art. 207/3 of the Treaty on the Functioning of the European Union (“TFEU”), it is up to the Council to define such mandate.

As per the Lisbon reform, the TFEU expressly includes the commercial aspects of intellectual property in the common commercial policy of the EU (art. 207/1 TFEU). Those aspects can thus be part of the EU’s external action. However, when it comes to the field of trade in cultural and audiovisual services, the Council has to act unanimously if the agreement risks prejudicing the Union’s cultural and linguistic diversity (art. 207/4/a) TFEU)). On that note, both the European Union Trade Commissioner Karel De Gucht and the European Commission president José Manuel Barroso have expressed their will to keep Europe’s cultural diversity untouched by the agreement, which might imply that the Council will be able to act by a qualified majority – and therefore more easily reach consensus.  But even if that is the case, a couple of thorny issues still have to be considered. For example, given the link between copyright and culture, to what extent does the exclusion of “cultural diversity” limit the negotiating mandate on copyright matters? This blogger’s guess is, to a not-so-negligible extent. While the definition of “cultural diversity” is absent from the Treaties, art. 167/2 TFEU gives some context to that concept by referring to such expressions as “the culture and history of the European peoples”, “cultural heritage”, or, more significantly, “artistic and literary creation.”

Moreover, independently of the exclusion or inclusion of cultural diversity in the negotiating mandate, the question posed above is still valid in light of art. 207/6 TFEU, which reads: “The exercise of the competences conferred by this Article in the field of the common commercial policy shall not affect the delimitation of competences between the Union and the Member States, and shall not lead to harmonization of legislative or regulatory provisions of the Member States in so far as the Treaties exclude such harmonization.”

The first part of this provision is in line with case law of the Court of Justice of the European Union (“CJEU”) establishing that internal measures cannot be separated from the system of external relations (see, e.g., the ERTA case). But the scope of the EU’s external powers has been broadening throughout the various treaty amendments, which means that the external competence of the EU is not necessarily the mirror of its internal competences. On the other hand, and even though the common commercial policy is an exclusive competence of the EU (art. 3/1/(e) TFEU), the agreements negotiated must be compatible with internal Union policies and rules (see art 207/3 TFEU), which indeed implies a certain coherence between the internal and external dimensions of the EU. This tails with the second part of the provision, outlawing harmonization through the exercise of external competence in fields where the Treaties prohibit such harmonization. Notably, one of those fields is culture (art. 167/5 TFEU).

In sum, even if culture is not excluded from the negotiating mandate, a thorough application of Treaty rules might just have the same effect, at least if the idea is to reach some sort of harmonization with the copyright system of the other side of the pond. Pedro Velasco, from the Commission’s Directorate General of Trade, has already declared that “neither highest IPR enforcement nor highest copyright exceptions will be harmonized in this agreement.” Yet, given the connection between copyright and culture, on the one hand, and Treaty constraints, on the other, that list of excluded subjects might (should?) grow exponentially. In the end, if copyright does not turn out to be a complete outcast, it certainly should not play a central role either.

AR

In a recent judgment, following the preliminary Infopaq-rulings of the European Court of Justice, the Danish Supreme Court ruled that extracts of newspaper articles comprising no more than 11 words can be works protected by copyright. The use of extracts that are the results of a process of data capture undertaken by the media analysis company Infopaq International A/S (now Infomedia) constitutes copyright infringement, unless prior consent from right holders has been obtained.

The judgement of the Danish Supreme Court is the outcome of an eight-year dispute between Infopaq and Danske Dagblades Forening (Danish Daily Newspapers Association). The core of the dispute concerned Infopaq’s right to scan and print extracts of newspapers with the purpose of providing abstracts of newsfeed to their customers.

Infopaq scanned articles from newspapers in order to perform electronic searches and to print short text extracts of 11 words – one search word plus five words prior and five words post without asking permission from right holders. The process  of data capture was divided into four parts; the creation of so called TIFF files, the transformation into text files, the data storage and the printing of text files. The purpose of this process was to ease searches and to be able to find relevant articles quickly.

The Supreme Court asked the European Court of Justice twice (Infopaq I and Infopaq II) for a prejudicial decision on a number of questions which can be narrowed down to the following two matters:

- Are  acts of reproductions of 11 words of articles reproductions that can be protected by the exclusive copyrights of the right holders as set out in article 2 of the EU Copyright Directive (‘Infosoc Directive’)?

- Is Infopac’s  process of data capture an act of temporary and transient reproduction as set out in article 5 of the Infosoc Directive and as such exempted from the exclusive rights of the right holders according to article 2?

The ECJ answered in its ruling that the data capture process, where 11 words are stored on a computer memory and abstracts are printed, can constitute partial reproductions that are protected by exclusive copyrights as set out in Article 2 of the Infosoc Directive, provided that the 11 words in themselves are works that are products of the authors’ own intellectual creations.

The ECJ considers that the printing of the text files is an act that is not covered by an exemptions in article 5 and thus requires consent from relevant right holders. However, the other three parts of the data capture process are acts that do fulfil the requirements of article 5(1), even though the acts involve human intervention: they are transient and an integral and essential part of a technological process with the sole purpose to enable a lawful use, and have no independent economic significance.

Based on these prejudicial answers the Supreme Court handed down its final ruling in favour of Danske Dagblades Forening, arguing that the process of data capture occasionally involves abstracts of texts that are protected by copyright. Since the printing of 11 words does not fulfil the requirement of transience, the data capture process is not an action covered by the exemption in Article 5(1) of the Infosoc Directive.

With this dispute Infopaq wanted to challenge the competing company Infomedia, which is owned by concerns of Danish newspapers. In 2005 Infopaq moved its manufacturing activities to Sweden and later assigned all Danish activities to Infomedia. It is noteworthy that in a similar dispute in Sweden, Stockholm District Court in 2008, was decided in favour of Infopaq.

MF

A full summary of this case will be added to the Kluwer IP Cases Database ( www.KluwerIPCases.com).

“The Supreme Court puts an end to a French oddity and makes the business of music synchronisation safer. (…) The Supreme Court took the opportunity to settle two major issues in French neighbouring rights: (1) a collective management organisation may only take action for the defence of its own members; (2) the collective agreements entered into before the Act of 3 July 1985 granting neighbouring rights to performers, are still in force.”

The Franco-Belgian movie Podium, released in 2004, tells the story of a Claude François lookalike who prepares for a contest. Claude François, AKA ‘Cloclo’, was a famous French pop singer of the 60s and 70s. In order to use recordings from the 60s and 70s in the movie, the producer of the film, Fidélité, entered into what is referred to as ‘synchronisation agreements’ with the producers and owners of the recordings, namely EMI, Sony, Warner and Universal, who were supposedly the assignees of the rights held by the performers.

Had all the performers assigned their rights to the record producers? No! Not all, thought SPEDIDAM, a collecting society that mainly represents side musicians in the music industry. SPEDIDAM therefore brought an infringement action against the movie producer on the grounds of article L.212-3 of the Intellectual Property Code, which provides that “The performer’s written authorisation shall be required for fixation of his performance, its reproduction and communication to the public as well as for any separate use of the sound or images of his performance where both the sounds and images have been fixed”. In turn, within the same proceedings, the movie producer asked for a guarantee from the producers and the broadcasters.

This gave the Supreme Court the opportunity to settle two major issues in French neighbouring rights: (1) a collective management organisation may only take action for the defence of its own members; (2) the collective agreements entered into before the Act of 3 July 1985 granting neighbouring rights to performers, are still in force.

1. A collecting society may only take action for its own members

Claiming that the synchronisation of the film Podium infringed on the performers’ rights, SPEDIDAM brought this case against the movie producer in order to defend the interests of the collective interest of the profession, which is of course legitimate, and also to claim damages not only for the prejudice allegedly suffered by certain of its members, but also by artists that are not its members. Some are foreign, deceased or members of other collecting societies.

SPEDIDAM based its action on its articles of association (which authorise it to take action for performers, whether they are its members or not) in combination with article L.321-1 of the Intellectual Property Code (which provides that the “societies shall be entitled to take legal action to defend the rights for which they are responsible under their articles of association”). Surprisingly, since the beginning of the 90s, many courts, but not all, accepted this argument. Equally surprising, this issue was only brought to the Supreme Court in the present case, after over 20 years of incomprehensible and diverging court rulings.

In the present case, the Court of Appeal of Paris, in its judgement of 20 May 2011, declared that SPEDIDAM may not act in defence of the interests of performers that it does not represent. The Cour de Cassation, the French Supreme Court, in a judgement of 19 February 2013 has upheld this decision, stating that it follows from article L. 321-1 of the Intellectual Property Code, that whatever is provided by its articles of association, a collecting society may only defend the individual rights of a performer that has given the said society the power to take such action.

This solution of course applies to collecting societies that manage the rights of authors and publishers. This puts an end to a French oddity and makes the business of music synchronisation safer…

2. The collective agreements entered into before the creation of neighbouring rights are still in force

In France, performers are granted neighbouring rights on their performances since the 3 July 1985 Act (now codified in article L.212-3 of the Intellectual Property Code). In 1959, collective agreements had nevertheless been entered into between the national union of performers and the national union of record producers. These agreements provided that the performer who participates in a recording authorises the use of his interpretation in a movie, subject to receiving a fee in addition to the payment received for the recording session. SPEDIDAM claimed that when the 3 July 1985 Act came into force on 1 January 1986, the collective agreements terminated.

The judgment of the Court of Appeal of Paris rejected SPEDIDAM’s arguments, stating that the recordings in question had been made in the framework of the 1959 collective agreements. The Supreme Court upholds this judgement, explaining that the 1959 agreements, which are binding on SPEDIDAM, must be interpreted as granting the producers the right to exploit the recordings for the sound of the motion pictures yet to come, subject to paying an additional fee to the performers. In addition, the Supreme Court notes that when the performers signed the attendance sheets during the recording sessions between 1963 and 1981, they had not made any reservation for the use of their performances.

It will now definitely be easier and safer to synchronise music recorded before 1986.

BS

“The most obvious one is the fact that, if enhanced cooperation is permitted in the area of creation of unitary titles, then a similar solution could be envisaged for copyright.”

Last month, the CJEU came to a decision in joined cases C-274/11 and C-295/11, where the claims of Spain and Italy against enhanced cooperation for the creation of a unitary patent were dismissed. Did this blogger just take the wrong exit on the IP interstate and arrived in patent city? Not really. While this is a patent decision, some of its splinters might indeed land in copyright town.

In a nutshell, 25 Member States of the EU decided to establish enhanced cooperation between them in the context of creating a unitary patent, following Article 20 of the Treaty on European Union (TEU) and Articles 326-334 of the Treaty on the Functioning of the European Union (TFEU). The creation of the unitary patent would take place under Article 118 TFEU, which grants the EU competence to create European intellectual property rights.

Spain and Italy, however, threw their toys out of the pram and didn’t tag along, filing the cases mentioned above. One of the arguments used against enhanced cooperation in the proceedings is that Article 118 TFEU falls within the exclusive competence of the Union. If that would be the case, establishing enhanced cooperation would not be possible, since this mechanism can only be used in relation to shared competences of the EU. The CJEU ruled that Article 118 TFEU is a shared competence (i.e., one where both the EU and its Member States are competent to take action). The Court also stated that the competence of Article 118 TFEU was “attached” to the objective of building an internal market – much like, e.g., Article 114 TFEU, which has been used so far to harmonize national copyright laws (see paragraph 21 of the decision).

So, what does this all mean for us copyright addicts? Well, in this blogger’s opinion, there are a couple of relevant points here. The most obvious one is the fact that, if enhanced cooperation is permitted in the area of creation of unitary titles, then a similar solution could be envisaged for copyright, provided that other requirements are met and should there be the political will to do so (after all, only 9 out of the 27 Member States need to be on board to establish enhanced cooperation, according to Article 328 TFEU). Enhanced cooperation has its quirks, and going deep into that is not an exercise for a blog post. Suffice it to say that, although the Lisbon Treaty has watered down the requirements for using enhanced cooperation, the latter still implies an apartheid between Member States that adhere to it and the ones that do not. How rigid this divide might be, especially in the case of a unregistered unitary title, is somewhat an open question. As it is whether such solution actually promotes integration – one of the goals of enhanced cooperation – or whether it just adds an extra layer of legal uncertainty that might actually contradict that goal.

Another consequence for copyright is the express attachment of the use of Article 118 TFEU to the objective of building an internal market. Does this mean that Article 118 TFEU cannot be used as a self-standing competence to create just any kind of IP title, including copyright? In this blogger’s opinion, the answer is yes, that is exactly what it means. If Article 118 is linked to the establishment and functioning of the internal market as an objective, then we must recall all the CJEU case law that interprets that concept. Again, this is not the place to do so, but in short , according to the CJEU, there must be a genuine link between the aim and content of a measure , on the one hand, and the establishment of an internal market, on the other. In the Court’s view, the internal market must be a genuine goal of the legislative measure, which will be the case if obstacles to cross-border trade exist and the measure in question is designed to prevent them (see among others case C-376/98 – Tobacco Advertising I and case C-380/03 - Tobacco Advertising II).

Translated into copyrightese: the creation of a pan-European copyright title should be aimed at doing away with obstacles to cross-border trade in copyright goods and services. Sure, despite the fact that we have eight copyright directives (not counting the enforcement one) and one more one the way, some unharmonized aspects and inconsistencies subsist that do not foster the internal market. On the other hand, however, the directives did achieve some level of harmonization that facilitated cross-border trade.  An eventual copyright regulation would have to prove its worth in that sense, even though the CJEU also allows for consideration of goals other than the internal market, so long as they are ancillary (case C-376/98 – Tobacco Advertising I and joined cases C-465/00, C-138/01 and 139/01 – Österreichischer Rundfunk).

So yes – copyright town does have something to chew on, if the creation of an European copyright title is a foreseeable and/or desired option.

AR

“No need to wait for the ECJ, the Court replied.”

In Belgium, besides being a tort from a civil law perspective, a copyright infringement can also be a criminal offence, on the condition that it is done “with malicious or fraudulent intent”. When copyright infringements are committed by unknown perpetrators (which is quite common on the internet), it is usual to file a complaint with an examining magistrate who is endowed with specific criminal investigation powers.

This is what the producer of “Fait d’hiver” (an Academy award nominee short film) did after noticing that the movie had been entirely uploaded on YouTube and embedded in the pages of two websites, namely koreus.com and garagetv.be. Google AdSense advertising banners were added on the latter, generating 2 Eurocents per click.

The original YouTube upload had been made via a Russian IP address. As Google Inc (owner of YouTube) refused to communicate data from outside Europe to a European claimant, this first inquiry was dropped. Likewise, the person responsible for the post on koreus.com was not found.

However, the person responsible for the embedment on gargetv.be had been identified and prosecuted in a criminal court. The court of first instance acquitted the defendant, but the claimant appealed the decision.

“Let’s await the ECJ’s decision in the Svensson Case C-466/12” answered both the plaintiff and the defendant at the hearing to the question whether linking or embedding are communications to the public within the meaning of Article 3(1) of Directive 2001/29/EC.

“No need” replied the Court!

Indeed, in its decision of 19 March 2013 (available in Dutch here), the Court reminds that two cumulative conditions must be met to uphold the alleged offence: the copyright infringement and the additional moral element, namely the malicious or fraudulent intent. According to the Court, there has been no such intent, as:

- the defendant was not exploiting the film, just the banners;

- this mere fact does not prove that the defendant was fraudulently acting when embedding the Youtube video;

- there is no proof that the defendant was aware of the illegitimacy of the initial uploading on Youtube;

- on the contrary, as the platform’s Terms of Service provide that users must represent and warrant that they have the right to upload their content, the defendant could assume that the video had been uploaded with the authorisation of the rights owners; and

- moreover, the fact that the video had been uploaded more than a year before the post without having been removed could support the defendant’s assumptions.

Consequently, the Court decided to confirm the first instance decision to acquit the defendant.

It must be emphasized however that the reasoning of the Court, which we deem reasonably convincing, pertains to the assessment of the moral element of the copyright –criminal– offence only, and not to the copyright infringement as such, which is subject to other criteria. As regards the latter: let’s indeed wait the ECJ’s decision in the Svensson case!

“This decision is significant insofar as it should impact the legislative process regarding the Proposed Directive “on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses.”

On April 12, 2013, the General Court of the European Union ended a 5 year wait and delivered its judgement in Case T–442/08 CISAC v. European Commission (CISAC 2013), as well as in twenty-two other related cases involving a like number of European collecting societies (see Press release No 43/13). In it the Court partially annulled the Commission’s decision of July 16, 2008 (CISAC 2008). This blog post will focus on the CISAC 2013 decision, as the remaining decisions follow its template. Readers familiar with the CISAC 2008 case are advised to skip directly to the “ANALYSIS” section below.

Background

The International Confederation of Societies of Authors and Composers (CISAC) is an umbrella organization representing collecting societies in over 100 countries. Its members provide services in their countries of establishment relating to the management of musical works, intermediating between authors (and foreign collecting societies) and commercial users, such as broadcasters or organisers of live shows.

The majority of EU collecting societies in this field provides services on the basis of the non-binding CISAC model contract for cross-border management and licensing of authors’ public performance rights of musical works. Collecting societies have adapted this model into Reciprocal Representation Agreements (RRAs), which scope covers the exercise of offline uses, as well as uses via the Internet, satellite and cable broadcast. Through a network of RRAs, each collecting society is granted multi-repertoire licenses covering the portfolio of other members, but is only allowed to license uses in its territory of establishment, thus restricting its ability to engage in multi-territorial licensing (MTL). The image below provides a very simplified illustration of this model:

Figure 1. CISAC Model for Cross-border Licensing (simplified).

This restrictive licensing approach led to refusals by collecting societies to grant community-wide licenses to commercial users seeking them, namely television and music broadcasters. As a result, some of these users – RTL in 2000 and Music Choice Europe in 2003 – lodged formal complaints with the European Commission, which led to the 2008 Commission’s decision – applying solely to “public performance” uses via the Internet, satellite and cable transmission. Said decision, taken under arts. 81 of the EC Treaty and 53 of the EEA Agreement prohibited twenty-four European collecting societies from engaging in practices that limited the provision of services outside their domestic territory, as these were deemed restrictive of competition. Significantly, the decision allowed for the subsistence of RRAs, subject to compliance with 3 prohibitions:

(i) The imposition (or de facto application) of membership restrictions that limit author’s freedom of choice of collecting society;
(ii) The grant of exclusive licenses to collecting societies in their territory of establishment;
(iii) The existence of concerted practices between collecting societies leading to national territorial limitations.

The first two prohibitions were addressed (at least apparently) by CISAC and its members through amendments to the model contract and the RRAs. Regarding the third, CISAC (and the collecting societies in question) brought an action for the partial annulment of the decision, in what it was later supported by the European Broadcasting Union (EBU), a representative association of broadcasters (among the largest users of musical works). Both CISAC and EBU claimed that the General Court should annul Art. 3 of the CISAC 2008 decision, which stated inter alia that CISAC and the collecting societies had coordinated “the territorial delineations in a way which limits a license to the domestic territory of each collecting society…”.

Analysis

CISAC supported its action on two main alternative pleas of law: (1) infringement of arts. 81 and 253 EC, insofar as the Commission failed to prove the “existence of a concerted practice with regard to the national territorial limitations”; and (2) should a concerted practice be found, the non-restrictive (to competition) nature of the same.

The General’s Court reasoning and decision.

In analysing this claim, the Court noted that, in disputes on the existence of an infringement, the burden of proof rests with the Commission, which must adduce “precise and consistent evidence” (“viewed as a whole”) establishing the pre-requisite circumstances of the same. As such, the subsistence of doubts regarding evidentiary elements would benefit CISAC and the collecting societies.

In the Court’s view, and in the absence of documentary evidence, the factors susceptible of proving the existence of concerted practices, other than the parallel conduct of the collecting societies, are the following:

“…the discussions on the scope of the mandates contained in the RRAs …, the Santiago Agreement, the Sydney Agreement, and the historical link between the exclusivity clause and the national territorial limitations”.

Analysing each factor, the Court was of the opinion that the Commission failed to establish the requisite legal standard of evidence of concerted practices concerning national territorial limitations. Consequently, for the Commission’s decision to be upheld, it had to have provided evidence sufficient to dismiss the alternative justifications for parallel conduct put forward by collecting societies.

CISAC and EBU argued that the decision to provide for territorial limitations in RRAs relates to the necessity to maintain a local presence so as to effectively combat infringement via unauthorized uses of musical works. In this respect, the Commission’s analysis focused mostly on authorized uses, failing to demonstrate how it would be possible for collecting societies to satisfactorily untangle the monitoring of said uses and the enforcement of unauthorized uses. For this purpose, it is not sufficient to note the existence of technical solutions and agreements that allow remote monitoring of licensees’ online uses, such as the ‘Nordic and Baltic’ model, the Simulcasting and Webcasting Agreements, the Santiago Agreement, the CELAS joint venture (facilitating the grant of direct licenses), or even a document signed by several collecting societies entitled ‘Cross border collective management of online rights in Europe’ (which endorses multi-territorial-repertoire licensing). In fact, by themselves, these practices, agreements and documents do not constitute evidence that effective enforcement of unauthorized uses is possible absent geographic proximity, namely where multiple collecting societies can provide licenses for a given national territory, thus undermining the economic incentive and practical possibilities for cooperation in this field.

In light of the above considerations, the Court concluded that the Commission failed to prove the required evidentiary legal standard for the “existence of a concerted practice relating to the national territorial limitations”, either by (1) demonstrating the existence of a concerted practice to that aim, or (2) by showing that the collecting societies’ justifications for the parallel conduct – namely those related with the need to effectively enforce unauthorized uses – were implausible. As a result, Art. 3 of the CISAC 2008 decision was annulled, to the benefit of CISAC and 20 of the collecting societies involved. (in the case of 2 applicants – STIM and SGAE – the actions were dismissed or found inadmissible on procedural grounds.)

Reactions and Potential Significance

Feeling vindicated, CISAC’s Director-General welcomed the decision, noting that it allows his association “to get back to the job of ensuring the 3 million creators and rights holders that we represent obtain a fair income from the use of their creative work, and to continue developing licensing models that meet the market’s needs.” CISAC’s Director of Legal and Public Affairs considered this to be “a major victory for CISAC”, highlighting the Court’s conclusions that technologic developments per se do not make existing collective rights management structures anti-competitive, and that there are valid justifications for structuring such services via a one-territory/one-society model.

In this blogger’s view, implicit (and at certain passages explicit) in the Court’s judgement is a reproach of the Commission’s evidence gathering in this process, leading both to unsubstantiated claims and even to blatant contradictions between the 2008 decision and its posterior interventions in replies to the Court and during the course of the oral hearings. This decision is significant insofar as it should impact the legislative process regarding the Proposed Directive “on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses” (noted here and here).

To remind readers, the Proposed Directive’s Title III is aimed at enabling and indeed promoting the granting by collecting societies of MTL for online rights in musical works, through a rather complex “European Licensing Passport System”. This MTL system is an offspring of the Commission’s proposed model in the 2005 Online Music Recommendation and seeks to dismantle (at least for online exploitation of author’s rights in musical works) the RRAs system favoured by collecting societies, with the aim to foster competition at the rights holders level. In its (very thorough and critical) Comments to the Proposed Directive the MPI for IP and Competition Law notes that the previous RRA model emerged as a result of a natural monopoly of collecting societies in national territories, which “adequately responded to the economic needs of both rightholders and users” (para.64). This position of natural monopoly, coupled with the RRA model (allowing for the aggregation of repertoire) and the practice of blanket licensing allowed for collecting societies to address the challenges of fragmentation of rights and legal uncertainty in a way that the Commission’s MTL Passport system does not. The MPI scholars conclude that the proposed system is contrary to the foundations of collective rights management and seem to advocate a preference for the option of a centralised licensing portal (identified as Option B5 in the Impact Assessment of the proposed Directive).

The CISAC 2013 decision undermines the Commission’s justification for the proposed MTL system, even if it is mostly the result of a failure by the latter to produce evidentiary support for its claims. If national territorial limitations are not deemed anti-competitive but are instead perceived as the most efficient collective rights management scheme for online exploitation of author’s (public performance) rights – an assertion emphasized by CISAC’s intention to “go back” to that model –, then one could argue that the Commission’s intentions to foster an MTL passport system should be reconsidered. Of course, it is also possible for the Commission to appeal this decision (on the points of law) to the Court of Justice. To be continued?

JPQ

“The road to Marrakesh is open but is not paved with roses and the outcome of the negotiations is awaited with both hope and reservations. “

While some statistics demonstrate that only about 5% of all published books are available in accessible formats for print disabled people globally, 2013 promises to be a landmark year in the combat against this scarcity of reading sources for visually impaired people. A scarcity that is often referred to as ‘book famine’.

On April, 20, 2013 the Informal Session and Special Session of the WIPO Standing Committee on Copyright and Related Rights (SCCR) is expected to have prepared a revised and maybe final version of the draft text of a Treaty to Facilitate Access to Published Works by Visually Impaired Persons and Persons with Print Disabilities. Subsequently, a Diplomatic Conference, the highest-level treaty negotiation, will be held in Marrakesh  (June 17 to 28) to discuss and adopt such a treaty.

This will be the culmination of a long procedure. Promoting access to knowledge for visually impaired people should theoretically and ideally have been an uncontroversial issue under the light of the principles of non-discrimination, equal opportunity, accessibility and full and effective participation and inclusion in society, as proclaimed in the Universal Declaration of Human Rights. Nonetheless, since the question is intrinsically linked to the thorny issue of copyright exceptions and limitations, things have become more complex.

That might explain why it took almost 35 years from the first WIPO-Unesco report on this issue (Report of the Working Group on Access by the Visually and Auditory Handicapped to Material Reproducing Works Protected by Copyright, Paris, October 25 to 27, 1982) to fix a date for a Diplomatic Conference to adopt a “Treaty to facilitate Access to Published Works by Visually Impaired Persons and Persons with Print Disabilities”.

Drafting an international binding legal instrument establishing copyright exceptions and limitations for the benefit of the blind was far from easy. In 2008, when the first proposal for a WIPO Treaty was formulated, copyright holders strongly opposed the idea of adopting an international mandatory copyright instrument and insisted, instead, on promoting voluntary measures or adopting soft law ‘instruments’, that would only offer guidelines and recommendations. This has also been the position of the EU and the USA, home of some of the world’s biggest publishing companies.  On the other side, the adoption of a binding legal instrument has did receive the support of the European Parliament, that, in 2012, endorsed a resolution calling on the European Council and the Commission to support a binding WIPO treaty.

In this context, the debate gained significant political, moral and economic dimensions, also accentuating the divide between developed and developing countries. The pros and the cons of the adoption of such a treaty have been intensively debated for years. While no one can doubt the immense significance of the treaty for blind people, copyright holders, albeit recognizing that the promotion of a treaty could contribute to an improvement of the public image of copyright, often feared that the establishment of internationally recognized exceptions would function as a ‘Trojan horse’, facilitating piracy and ending up to be counterproductive,  since it would reduce incentives for the copyright holders to offer of accessible formats themselves.

Another view supported by the opponents of the adoption of a treaty, has been that access to knowledge for visually impaired is wrongly seen as a copyright issue, since the problems with access for visually impaired people  essentially originate from a lack of financial means and appropriate equipment.

Technological developments intensified the tension between the interests at stake. On the one hand,  the risk of massive piracy could be higher when a broad exception, that also covers the achievements of the digital era, should be adopted. On the other hand, imposing technological protection measures be could significantly hamper conversion to an accessible format.  Since the conversion to accessible formats is an act of exploitation which is connected to a new market, copyright holders have a strong interest to control it tightly. An example of this controversy in the USA is a case in which the Authors Guild objected to the Kindle 2’s robotic text-to-speech feature, which can read Kindle books aloud in a synthesized voice, claiming that Amazon offered a product that was competitive to audio books, since it  would cut into their sales. After the complaint, Apple gave publishers and authors the possibility to disable the text-to-speech function.

What is the treaty about? Blind people need to read books in accessible formats such as braille, formatted audio or large print books. In principle, conversion of works to these formats infringes the copyright of the author and the conversion to formats accessible for the visually impaired people therefore requires the authorization of the right holders. Unless there is a copyright exception. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society has included such an exception in the list of copyright exceptions and limitations (in article 5 (3)).

Nevertheless, national approaches in Europe and and other countries on this issue are very divergent. According to a WIPO study published in 2006, 60 countries, just one third of all countries, have introduced exceptions for the benefit of the blind and these exceptions also differ significantly at various points, such as whether right holders are entitled to remuneration for the permitted uses.

Books in accessible formats cannot legally cross borders, since  exceptions provided in national legislations do not justify the exchange, the import and the export of adapted works between different countries. Therefore, under the current legislative framework, if a work is converted to an accessible format, for example in Greece on the basis of the relevant copyright exception (article 28 A of Law 2121/1993), it cannot legally be imported in another country, e.g. Cyprus, without the authorization of the right holders. It will therefore be necessary to converted the same work to an accessible format for visually impaired people in Cyprus as well. 

The proposed treaty aims at the international harmonization of exceptions to facilitate the global sharing of resources for the production of accessible formats.  One of the main aims of the proposed treaty is to facilitate the cross-border transfer of copyrighted works that have been adapted for the benefit of visually impaired people. The draft text of the treaty provides that authorized entities shall be permitted, without the authorization of the copyright rights holder, to make an accessible format copy of a work, obtain a work in accessible format from another authorized entity, and supply those copies to a beneficiary person (the visually impaired)  by any means, including by non-commercial lending or by electronic communication by wire or wireless means on a non-profit basis, while  it is also possible that  making an accessible format copy of a work is effectuated by the beneficiary himself or by another person acting on his behalf,  e.g. a caretaker, for the personal use of the beneficiary.

The draft in its current form leaves it to national law to determine whether these exceptions or limitations are subject for remuneration. The cross-border exchange of accessible formats is provided for in article D of the draft text, under the terms of which, if an accessible format copy of a work is made, that accessible format copy may be distributed or made available to a beneficiary person or an authorized entity in another Member State/Contracting Party by an authorized entity. This is crucial because will globally increase the number of titles of works available in accessible formats and means that repetitive work can be avoided.  For example, the great volume of books in accessible forms hold by Spanish authorized entities could be sent to Latin American countries, where the scarcity of sources for blind people is huge (libraries in five Latin American countries,  Colombia, Nicaragua, Mexico, Uruguay and Chile, have fewer than 9,000 accessible books between them, according to Dan Pescod of the British Royal National Institute of Blind People ). The obligation to enable beneficiaries to enjoy the limitations and exceptions regardless of the application of technological protection measures is another key point which has also been introduced in the draft text of the treaty (article F).

Consequently, it seems that the path for adopting the treaty is now open. Nonetheless, drafting the final text still requires some significant compromises in a series of weighty questions, such as the issue of the commercial availability of the work in an accessible format in the market and the application of a ‘respect of copyright provision’, alias the three step test. 

The issue of whether the exception shall not apply in case an accessible format copy of a published work can be obtained commercially in a reasonable price in the market indeed remains a bone of contention, since a balance has to be found between the publisher’s right to invest in accessible formats of works and the right of the visually impaired to have equal access to knowledge through a variety of sources. 

Moreover, developing countries have expressed fears that the application of the three-step-test, which served the last years as a powerful legal weapon for the safeguard of the interests of the copyright holders, could significantly limit the ambit of the exception. So, the road to Marrakesh is open but is not paved with roses and the outcome of the negotiations is awaited with both hope and reservations. 

TS.

“This agreement covers all types of videos broadcasted by YouTube.”

The French collecting society SACEM, which manages the rights of authors and publishers of musical works, announced, on 3 April 2013, that it has entered into a new agreement with YouTube and Universal Music Publishing International (UMPI). This agreement defines the conditions of use of SACEM’s repertoire and UMPI’s Anglo-American repertoire in videos broadcasted by YouTube in 127 countries across Europe, the Middle East, Africa and Asia. The deal, however, does not include the United States. This agreement, which commences on 1 January 2013, covers all types of videos broadcasted by YouTube, including user-generated content.

In its public announcement, SACEM explained that “This agreement enables greater transparency, due to better coordination in the exchange of data, while ensuring a fair remuneration of the right holders who are entitled to a share of the revenues generated by the platform”. However, the rights of authors and composers of Universal Music Publishing who are members of other European collecting societies remain subject to the agreements entered into between YouTube and the relevant collecting societies.

SACEM explains that the agreement was entered into as part of DEAL (Direct European Administration and Licensing), a joint initiative of SACEM and UMPI for the creation of an entity to deliver multi-territorial licenses for all types of online media.

SACEM has already entered into over 200 agreements for the collection of fees for the broadcasting of music on the internet. These agreements cover a wide range of internet business models, such as downloading, subscriptions for unlimited streaming and free online streaming. The following Internet players have entered into such agreements: Deezer, Spotify, iTunes, Qobuz, Wat, Beezik, Omnifone, Idol, Believe, Nokia, Orange, Yahoo, SFR, etc.

“The viewer will not experience it as real and will even consider it to be weird, amateurish or even ridiculous.”

In a case about the use of the ‘house style’ of the Dutch police, the summary proceedings judge  District Court Amsterdam ruled this week that the Dutch State has to give permission to the producer of the television series ‘Doctor Tinus’ for the use of the police-logo, the police car-striping  and  other elements of the  house style of the Dutch police.

In this case, the Dutch State took the position that the State doesn’t  have to give permission for the usage of elements of the ‘police house style’ and the other features of the police in fictional movies or series, if these elements or features are protected as intellectual property (trademarks/copyrights).  The State’s policy is that if the police is depicted neutrally and realistically and in a way that doesn’t harm the image or reputation of the police, permission will be give without hesitation, but that permission will be denied if (as was said to be the case in ‘Doctor Tinus’) fictional police officers are depicted as being goofy, drunk or stoned, breaking  the law or torturing suspects.

The judge concluded, after balancing the interests of both parties, that entertainment programs (including drama series) fall within the scope of Article 10 of ECHR and that the producer of the litigious series ‘Doctor Tinus’ were right to assume that he was  allowed to use the required elements of the police house style.

Not only is the television viewer  fully aware that series are fictional, but he is also accustomed to the fact that  the police in police drama series is usually depicted exactly like the real police. As a result, a producer of a TV series has a valid reason to make use of police uniforms and police cars that are equipped with the ‘real’ logos of the State. The defense of the State that producers can always use alternatives (fake uniforms, fake cars), is invalid. The viewer will not experience it as real and will even consider it to be weird, amateurish or even ridiculous.

The State has a monopoly on police services and the police uniforms and cars can only be rented by producers at rental companies with a permit from the State. That means that there is a closed system. This and the active role of the state,  a far-reaching interference with the content of the script before the series are broadcasted,  make that the conduct of the State is at odds with article 7 of the Dutch constitution (prohibition of censorship).  That producers aren’t obliged to ask for permission, can’t alter that conclusion. The high(er) costs of making identical costumes instead of  being allowed to rent them and the threat of costly legal proceedings afterwards, can force television producers to ask permission beforehand.

Although the State was ordered to give permission to the producer of the television series Doctor Tinus, the complaint of the other plaintiff, the association of television producers, was rejected. The association claimed that permission is never required before broadcasting  and that the State must always give permission for the use in a drama series of the police logo and other features of the police in the future.  According to the summary proceedings judge, it can be assumed that the State is, in general, not permitted to review a television programme in advance, but it cannot be excluded that an exception to this rule can be made, considering the specific circumstances of a case. If (e.g.) it isn’t clear that it is a fictional program, if the only intention of the program is to harm the reputation of the police or if the safety of civilians is at risk, a review in advance may not prohibited by definition. A general judgment cannot be given in summary proceedings.