Copyright Society: international developments

International Copyright Developments
Moderator: Robert Brauneis, George Washington University Law School
Covering not the world, but focusing on certain important areas. Also focused on new rights/limitations rather than issues of jurisdiction and procedure.  Tomorrow: event on Marrakesh Treaty at AU—come!
Jiarui Liu, University of New Hampshire School of Law
Chinese backlash to Chinese copyright law: authors, musicians, and artists voiced their views in public.  Coverage in media was relatively impartial.  Rare treat to see gov’t agency called controversial and irritating.  In a country with 90% piracy rates, the general public appears to be sympathetic to authors and approve of their efforts against rent seeking. 
In response, the Copyright Office presented three different drafts.  Most controversial: extended collective license, orphan works, mechanical licenses.  ECL pioneered by Nordic countries.  Limited to special cases—copying for research, preservation, etc. Authors may sometimes opt out.  First draft of Chinese proposal: substantially different from Nordic model, not limited to special cases—any collecting society (China has 5 now) could apply. Existing societies: Musical works, music videos, literature, photos, and motion pictures—all the commercially significant types except software; potentially quite expansive. Authors would only be entitled to royalties if the user/infringer obtained a license from collecting society; opt out would not increase royalties.  Key difference: Chinese collecting societies are far from representative.  Objections: undermine remuneration, harms both users and authors, might violate Berne’s three-step test.  90% is not a special case. 
Pressure resulted in dramatic turnaround—collecting society that was driving force behind first draft pulled its support.  Admitted that the society was “too narrow minded” and short-sighted and insensitive to authors’ needs. 
But the ECL system does have its merits.  Lowers transaction costs for potential users.  Increases bargaining power of collecting society.  Example: collecting society approached Google, as only society for Chinese literature.  But only represent 10% of Chinese authors—pay us and there’s still a 90% chance of getting sued. Google rationally walked away.  The less representative a society is, the more it wants ECL. Many Chinese societies currently offer indemnity to users, holding users harmless.  So Chinese collecting societies not uncommonly fight with Chinese authors.
ECL is not the only way to increase representativeness—could improve service/attract more. ECL would undermine incentives to offer better terms/better services.
Orphan works. Should user have to pay royalty before author emerges?  China sides with Canada/compulsory license because it creates opportunities for rent-seeking for collection societies.  The US approach (no royalty before author emerges) makes more sense.  Alternative is worst of both worlds: user tax with no incentive for authors. Well-functioning market benefits entire society.
If all producers get from gov’t, nobody has any need to negotiate prices or terms—central planning.  Not favored by Chinese public.  Market economy produced growth: lesson is that lower transaction costs don’t justify abandonment of markets.
Madeleine Lamothe-Samson, Norton Rose Fulbright
Canada: New right of making available.  ESA v. SOCAN (2012): is a musical work communicated to the public by telecommunication when video game w/work in it is transmitted for download?  Answer: No.  Likewise for downloads of music, though yes for streams.
But that was before the law changed to introduce making available.  Is the Supreme Court decision still relevant?  Hot debate in Copyright Board now.  Rightsholders say the legislator has spoken; for this change to be meaningful there has to be a new right to comply with our international obligations.  Right to get paid separately from the download, which triggers the reproduction right.  (Don’t they get paid for downloads too?)  Opponents say that it’s a clarification, not a new right.  Decision probably before Christmas.
Fair use: two step test—allowable purpose and fair?  Before Nov. 2012, there was a list: research, private study, criticism or review, and news reporting.  Purpose of the dealing, character, alternatives to dealing, nature of the work, and effect of dealing on the market—similar to US test for fairness, but fixed list of purposes.  SOCAN v. Bell Canada: 30-second previews of muscal works were fair dealing for the purposes of research.  Purpose must be the purpose of the end user, not the purpose of the service provider.  Thus Bell was helping individual consumers w/their own private research of music of interest.  Another case: Access Copyright, SCt said that student’s purpose allowed institutional copying by teachers of book excerpts.  Universities have now reacted and there is a big fight going on.
New era for private copying: time and format shifting now legal without compensation; so is backup copying; so is reproduction for private purposes—CD to iPod.  Exciting times!
Axel Nordemann, Boehmert & Boehmert
EU: 28 different copyright laws.  Not even Benelux, with unified TM law, has unified © law. One tool for harmonization is EU directives.  May not be stricter or looser: copyright term.
EU doesn’t have a general exemption, like fair use.  Rather there’s a conclusive list of exceptions for certain uses provided by law.  Three-step test on top.  Always difficult to achieve lack of prejudice to rightsholder.  (!)  Private copying exemption: member states may but need not exempt it.  Luxembourg and UK do not; but this is due to change soon.  Only the copying is exempt, not distribution/making available.  Private copy must always be made from lawful source. 
oyalty on storage media: controversial, and differs substantially across countries.  Mess.  Hard drive may be expensive, or free of tariff.  The company trying to make the most out of this mess is Amazon, whose EU business is organized to contract/invoice always through Amazon EU in Luxembourg, thus doesn’t pay tariff. But shipping/return centers are usually centrally located, mainly in Germany. Refuses to pay royalties for recording devices because Luxembourg has a zero royalty.  But this is no longer justified.  The rule of the member state in which the end consumer is located is applicable.
Photocopies are also exempted, if related to reproduction on paper/similar medium. Photographic techniques or processes having similar effects.  Not applicable to sheet music.  Fair compensation must always be made. Digital copies are not exempted.
Collecting societies sometimes have territorial monopolies—we thought CJEU might kill this as against free movement of goods/services, but CJEU allowed member states to give a monopoly, but pricing is subject to checks on abuse.
Right of citation is also exception/limitation.  Citing a work must be in accordance w/fair practice, and source including name of author must be indicated.
Exhaustion/first sale: we only have regional exhaustion, first sale in EU. Prevailing opinion was: must relate to material medium, thus only CDs etc., not to downloads. This has changed since the Usedsoft decision of CJEU.  Now you can sell downloaded software. Main reason for judgment: economic point of view—sale of computer program on CD v. by download is similar.  Does that affect digital exhaustion of downloaded music?  (Why not yes?)
Shira Perlmutter, United States Patent and Trademark Office
At WIPO/multilaterally.  WIPO internet treaties established new rights, such as making available, and relied on permissive system for making exceptions w/in the three step test.  After over 15 years of inactivity, new developments in both rights and exceptions.  Two treaties in 3 years: one with new rights, and one with new exceptions. Beijing Treaty on audiovisual performances and Marrakesh Treaty for print-disabled access.  We may not be done, because current agenda involves another possible new rights treaty and several categories of exceptions.
Beijing Treaty: update rights of performers in AV works to deal with realities of current technological world.  In 1996, AV performers were carved out of internet treaties mostly because EU and US couldn’t agree.  Conflict over transfer provision—in what circumstances the movie producer could exercise the performer’s exclusive rights.  US WFH doctrine is controversial, and motion picture industry wanted to keep it in place when films were exploited in other countries and other countries didn’t want to agree.  Finally, this sticking point was resolved.  Solution: each country’s law can decide how to deal w/transfer, but that’s made explicit in the treaty.  Each country may provide that consent to fixation means that exclusive rights of authorization shall be owned/exercised by/transferred to producer, subject to any contract w/the producer. Countries could provide for equitable remuneration despite transfer rules.
Actors get economic rights as in WPPT, and moral rights, but agreed statement puts a number of specifics in place.  Explicitly permits modifications in normal course of exploitation, including compression, formatting, and dubbing.  Term, formalities, rights management information/TPMs also covered.  Agreed statement: nothing in the TPM article prevents  acontracting party from adopting measures to ensure the benefit of limitations and exceptions, where TPMs have been applied and there is legal access to the content, and where appropriate and effective measures haven’t been taken by rightsholders to enable the beneficiary to take advantage of the limitations and exceptions. Every word there was carefully negotiated, among other things to be consistent w/DMCA rulemaking. How does that affect interpretations of past treaties, which doesn’t have that agreed statement, or future treaties? 
Botswana, Syria, and Slovakia have ratified; EU will take us over the threshold of 30 countries ratifying.  US is working on ratification and implementation.
(What is the need that this treaty is solving?)
Proposed broadcasters’ treaty.  No question that there’s a need to update from the Rome Convention.  (Really? Because I have that question.)  US proposed a treaty for broadcasters, cablecasters, and webcasters—anyone who invested in programming and sent it to the public.  That wasn’t popular.  Copyright owners expressed concerns about their rights to license.  User groups worried about ability to make private copies.
Signal-based approach instead of content-based approach—what exactly does that mean? Confusion about meaning has been rife.  The work stagnated for a few years. Last year, US made a new suggestion: time to break impasse.  More targeted approach: something we can all agree on.  Fundamental problem of broadcasters: signal piracy over any medium.  Proposal would have provided a single right to authorize simultaneous or near-simultaneous transmission of their signal to the public, allowing only for delays due to technical requirements or to time differences.  No protection for subsequent uses of fixations of the signal.  That would be content protection. Would avoid concern over extra layer of protection requiring authorization for post-fixation use.
Current status: discussions are continuing.  Some progress on clarifying subject matter of protection.  Looking at which rights are necessary and ways in which past proposals could be narrowed.  Public briefing at PTO coming June 11.
Marrakesh: Debate over whether treaty was necessary, or whether it could be done voluntarily between publishers and authorized entities. Int’l copyright has historically been “flexible” rather than requiring specific obligations for exceptions. Here there was a unique humanitarian need, for a limited class of users, not the general public.  Messy treaty. Countries are free to impose requirement that exception is only available if copies aren’t available on reasonable commercial terms. Three-step test continues to apply, repeated throughout.  Needs 20 countries to go into force.  Zero so far, but a lot are working on it, including US.
On agenda: exceptions for libraries, archives, educational uses, other disabilities.  Text-based work was our first priority; still an open Q what kind of text is at issue. Developing countries want treaties, but industrialized countries oppose them. US: these are important issues and libraries are key to vibrancy of system; we have exceptions in our law that work very well, but we need int’l flexibility for countries to tailor to their own conditions/needs.  (RT: You know, like rights are tailored to countries’ conditions and needs ….)  We don’t want a treaty.  Objectives and principles should be agreed on: countries should have an exception allowing libraries to make preservation copies under appropriate conditions.
There was a big fight over what text-based means.  More to come.
Q: how does EU know whom to compensate for copying onto digital media?
Nordemann: not sure. Same problem with radio broadcasting in EU member states.  But there the stations will deliver lists/schedules of songs.  Nobody can know whether that’s similar to private copying.
Lamothe-Samson: Same for Canada.  Distributed to different collectives, who have access to radio statistics.  (I’m sure that’s helpful for determining non-music distribution!)
Q: the idea is that there is a correlation–SCt of Canada accepted try before you buy because of the idea that in fact the use generated sales.  
Lamothe-Samson: that’s one way of seeing it.  (laughter)
Q: in new Canadian mashup exception, how is commercial defined?
Lamothe-Samson: It’s not!  We are all wondering.  If you become a viral hit on Facebook, and you end up starting a business, where does it stop?  We don’t have any definition or guidelines from cases yet.  A lot of undefined new vocabulary in the act–private use, private purposes, noncommercial purposes.  Very confusing.
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