COPYRIGHT AND RELATED RIGHTS IN THE DIGITAL

ENVIRONMENT
A prospective outcome for the ongoing
European Copyright Reform
by Victor Castro Rosa
(Lawyer, Lisbon , Portugal)

COPYRIGHT AND RELATED RIGHTS IN THE DIGITAL

ENVIRONMENT
INTRODUCTION AND DECLARATION OF INTERESTS
The Author has worked for a private television broadcaster in Portugal
for more than 20 years;
As a massive user and acquirer of Copyright licenses, he has participated
in several negotiations and deals between right-holders and users, on
both sides of the table;
Currently working as an independent consultant and lawyer, he
regularly offers advice on Copyright and Related Rights issues both to
right-holders and users;
The author is a member of the Portuguese branch of ALAI Association
Littraire et Artistique Internationale, founded by Victor Hugo in 1889,
studying and participating on regular European and International
events.

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ENVIRONMENT
THE MAIN ISSUES TO BE SOLVED:

EU Commission political will to create a Single European Digital Market;

Lack of legal harmonisation throughout the European Union;
Copyright issues blamed for geo-blocking audiovisual and music;
Practical impossibility of individual control of own Intellectual property
once made available throughout the internet;
High levels of Copyright piracy and lack of consciousness of wrongdoing;
Profit loss on physical sales and lack of incentive for creativity;
Threat to the survival of local CRM /niche repertoires;
Threat to cultural/language diversity;
Threat to moral rights and exclusive rights over own cultural production;

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ENVIRONMENT
1. POLITICAL WILL TO CREATE A EUROPEAN DIGITAL SINGLE MARKET;
The Juncker Commission has appointed Copyright Reform as one of its
major goals, clearly integrated in a Digital Single Market strategy;
Aim is for EU to be able to match the USA as a Regional market;
E.P. is currently discussing the REDA report, proposing further steps in
the Copyright harmonisation, by generalising all optional exceptions,
terminating geo-blocking, creating open-ended exception for research;
Previous Commission conducted public consultation whose outcome
was strongly divided between rights-holders , users and platform
operators;
Copyright is a significant part of I.P. sector like Patents and Trade
Marks, where harmonisation has recently been reinforced (E.P. Court).

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ENVIRONMENT
2. LACK OF LEGAL HARMONISATION ACROSS EUROPEAN UNION;
Public Consultation and the REDA report claim that European citizens
crossing borders should be allowed access to own Countries service;
Consumers who travel dont appreciate territorial access restrictions;
On the other hand, Copyright is territorial, by nature, and right-holders
react negatively to the perspective of losing royalties in case of further
harmonisation;
Territorial exploitation is regarded as a form of maximising return of
investment and the exhaustion of rights acts as a deterrent to creation;
Paneuropean licensing should become a possibility, not an imposition;
Current degree of harmonisation allows expression of cultural and
tradition differences but business needs require more legal certainty.

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ENVIRONMENT
3. COPYRIGHT ISSUES BLAMED FOR MUSIC & VIDEO GEO-BLOCKING;
ECJ has stated in PREMIER LEAGUE Case that cross-border use of access
devices is legal across EU, independently from where they were bought;
Broadcasting, Cinema and Audiovisual On Demand have exploitation
windows as acknowledged by the ECJ in the CODITEL I Case-law;
No exhaustion principle applies to services, only goods, according to
2001/29/EC Directive, with the exception of software (Usedsoft v. Oracle
case C-128/2011 of 03.07.2012 );
NETFLIX , SPOTIFY, APPLE, GOOGLE, already available Europeanwide;
Rightholders are willing and ready to offer services wherever there is a
relevant market , as the Plum Consulting Report concluded in 2012;
ECJ acknowledges the notion of different publics as relevant for the
public communication (SGAE, EGEDA, AirField, TV Catch Up, Svensson).

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ENVIRONMENT
4.PRACTICAL IMPOSSIBILITY OF INDIVIDUAL CONTROL OF OWN I.P.

Right to make available is an exclusive right, not a remuneration right;

DRMs have failed to deliver control of rights to individual rightholders;
Consumers have reacted very negatively to TPM preventing copies;
Will the machine solve the problem it created? (Charles Clarke) Tracking
devices are still only an undelivered promise and platform dependent;
Most right-holders prefer to entrust rights management to publishers
and CRM in order to focus themselves on creation;
Most rightholders want to reach more and more public, and to get paid;
Moral rights (right to prevent publishing or withdrawal, protection of
integrity and acknowledgement of authorship must be ensured;
Legal statute as Orphan Works depends upon diligent search.

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ENVIRONMENT
5. HIGH LEVELS OF COPYRIGHT PIRACY & LACK OF CONSCIOUSNESS
Piracy or illegal use of Copyright levels increasing according to reports;
However, recent data from the UK reveals substantial decrease owing to
Copyright Enforcement, namely Court blocking applied to well known
pirate websites domain names boosts legal website access;
Number of persons who are willing to change behaviour if legal
contents become available, according to Digital Entertainment Survey
WIGGINS 2013;
Traditional ways to fight Copyright Piracy: Court injunctions;
administrative sanctions; ADR; Compensation for damages/loss of
profits; Criminal procedures against unauthorised users; Graduated
response as an educational and motivational provision (HADOPI, DEA);
Lack of self-regulation, claims of liability exemption justify status quo.

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ENVIRONMENT
6. PROFIT LOSS ON PHYSICAL SALES - LACK OF CREATIVITY INCENTIVE
Numbers of decreasing sales of records, CDs and DVDs ;
Decreasing royalties as compensation for private copy;
Need to obtain return from the digital markets via new business
models:
Content sold or licensed to websites against a fee;
Content displayed for advertising viewing/consumer feedback;
Content is paid up by aggregators who charge their customers.
Legalising piracy endangers new licensing models market-oriented;
Level of consumption monitoring via audits, publishers and CRMs.
Future perspectives: growth of digital sales, physical supports become a
niche market whereas online entertainment becomes a commodity;
Cloud entertainment offered via cyberlockers at accessible prices.

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ENVIRONMENT
7.THREAT TO THE SURVIVAL OF LOCAL CRM /NICHE REPERTOIRES
Danger of paneuropean aggregation of CRMs setting aside local CRMs;
Danger of certain CRMs reinforcement and closure of local CRMs;
National CRMs will need to aggregate to europeanwide organisations in
order to collect/distribute rights from online uses (centralised licensing);
National CRMs will tend to unify representation by Right-holder
category;
National CRMs must continue to represent each-others via Reciprocal
Representation Agreements, offering licenses valid for national
territories and act as local representation offices for Europeanwide
federations;
National CRMs must also continue to license niche repertoires (ethnic,
folk, language - specific genres);
National CRMs keep Registry Databases and authorship certification.

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ENVIRONMENT
8. THREAT TO CULTURAL/LANGUAGE DIVERSITY
English prevails as the most important language for the music industry;
European diversity loses ground for Anglo-Saxon Culture & Expression;
Policies to foster and promote European works/artists vs. U.S.A.,
through promotion of French, German, Latin catalogues will develop;
U.S. industry is powerful because of the massive investment which is
normally compensated through substantial income;
European co-productions must also continue and generate more income;
Promotion of EU works must continue generating substantial income.
Translation into any European official language must be copyright free,
as a way to foster distribution, without prejudice to translators
Copyright.

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ENVIRONMENT
9. THREAT TO MORAL RIGHTS AND EXCLUSIVE RIGHTS
Internet represents a second domain for social life, where human
activity tends to reproduce and complement brick and mortar
realities;
Right-holders are no longer in the position to control or interfere with
the transition from real life into the virtual World although they are
legally entitled to do so since the making available is an exclusive right;
Exclusive right is very often breached by third parties who illegally
upload works and performances, primarily for own purposes but also
for sharing with other people, thus enhancing notion of private use;
Legal offers are already assuming reasonable level of sharing (6 people);
Works are very often reduced, twisted and distorted as they are reused
into User Generated Content that pays no acknowledgement or credit.

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ENVIRONMENT
10. CONCLUSIONS: THE MOST LIKELY OUTCOME OF COPYRIGHT REFORM
Internet represents another Gutenberg revolution - a paradigm shift.
A huge reproduction system, which, by its very nature, requires digital
copying as a basic operative instrument - copying is no longer a
privilege;
There is no practical way to ensure that only the rights-holder can
determine the moment and the circumstances of transition to digital
but there is technology enabling search-engines and distributors to do
so;
Upload of Works and Performances corresponds to what publishing
used to be: the moment where they reach the public.
Licensing and collecting fees/Creative Commons/Compliance Logos
Right-holders to refrain further publishing and circulation via right to be
forgotten injunctions addressed to search-engines and social networks.

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ENVIRONMENT
Internet is not Public Domain, as long as Copyright and Related Rights
impend upon works and performances, not even a mere Paywall.
It is extremely important that all CRMs contribute to Registry
Databases, possibly managed by the OHIM, in Alicante, for future
reference as to the validity of rights and also to enable the search of
legitimate right-holders;
Nevertheless, it is not to be expected that digitisation of Works and
Performances will be preceded by consultation of any Databases;
At some point, illegal upload and massive copying will take place, but
removal or blocking injunctions must always be available and made
easy.
Minimum levels of compensation via CRM licensing, must be available;
the right of withdrawal, as a moral right, or individual licensing, also.

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ENVIRONMENT
Thus, the most likely outcomes of European Copyright Reform will be:
enhancing of the Exhaustion Principle for online entertainment;
ban of geoblocking as contrary to fostering of Digital Internal
Market;
harmonisation of Copyright basic protection via Regulation, similarly
to the European Patent;
OHIM to be entrusted with Copyright Registry Databases operation;
List of exceptions to be applied in general across the whole EU;
Widening of exceptions related to Research or Non-profitable uses;
One-Stop Shop licensing for online use of EU works/performances;
Collective licensing not compulsory but strongly recommended
unless rightholders wish to prevent online or prefer individual
management.

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ENVIRONMENT
QUESTION: WHAT DIGITAL ACTIVITIES NEED A LICENSE FROM THE RIGHTS-HOLDER?

The main criterion seems to be whenever there is an act of misappropriation

Copyright and Related Rights are full

EXCLUSIVE l;

All forms of unauthorised use = misappropriation of faculties contained by

such EXCLUSIVE;

Some forms are legitimated by the PUBLIC INTEREST (Exceptions &

Limitations)

In the digital environment, misappropriation & personal benefit are easier and
most common;

INTERNET doesnt convert exclusive into mere equitable remuneration rights;

There must be a presumption of reserved act of exploitation, not the opposite.

Propriety Rights,

which are

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ENVIRONMENT
QUESTION 2: PRACTICAL EXAMPLES OF HOW USEFUL SUCH CRITERION MAY BE

Making available is an act of communication to the public, contained within the

EXCLUSIVE;

Adaptation and transformative uses = exercise of moral or personal INTEGRITY RIGHT;

Any economic advantage for the professional or business benefit of a third person is USE;

PRIVATE USE, legitimated through publishing, also requires some form of compensation;

EXCEPTIONS such as RESEARCH, DISABILITIES, TEACHING AND LEARNING do require

ACKNOWLEDGEMENT and compensation whenever possible;

COMMUNICATION TO THE PUBLIC requires a license whenever economically relevant.

Search-Engines and Content Aggregators are liable upon notice of Copyright Infringement

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ENVIRONMENT
QUESTION 3: A KEY TO THE FUTURE FORMS OF SEARCHING FOR LEGITIMACY:

Uploading works and performances requires Rights-holder licensing;

Downloading and streaming is also a form of misappropriation whih requires payment;

User-Generated Content (UGC) is a form of transformative use which requires, at least, an

acknowledgement , if the righs do not appear strictly reserved for the rights-holder;

Online licensing should be enabled through voluntary

Databases;

Peer-to-Peer is not for profit but may represent damage to Rights-holder normal
exploitation;

Three-Step Rule = balancing Rights-holder damages with Public Interest accessibility

reasons;

Territoriality and Duration of Proprietary Rights to be defined by the EU legislative policy .

CRM representation and