Universal Availability of Publications Core Programme

COPEARMS News
Issue 1, May 1997

Michèle Ledger, Rosa Julia, Séverine Dusollier&

Introduction

• provide the assisted projects with an overview of recent developments in the legal framework concerning the development and /or deployments stages of an Electronic Copyright Management System (ECMS);
• explain how the existing advice documents (D.4.2. documents) have been amended and updated;
• Any other business (conference, workshops, articles,....)

1. Legislative developments

1.1. Communication from the Commission on the Follow-Up to the Green Paper on Copyright and related Rights in the Information Society

On November 20, 1996, the European Commission issued a so-called Follow-up to the Green Paper on Copyright and related rights, in order to set out the Commission’s policy in this area, namely based on a consultation process.

This communications addresses the following priority issues for legislative action at community level :

Reproduction right : The comments submitted in the consultation stress the need for harmonising the right of reproduction, deciding whether temporary or ephemeral acts should be included in its scope and harmonising the exceptions and limitations thereof.

Therefore, the Commission intends :

• to pursue the harmonisation of the reproduction right which would cover the digitisation of works, scanning, uploading, downloading and transient or other ephemeral acts of reproduction.

• to harmonise the limitations/exceptions to the reproduction right by taking in account the two criteria defined in the Berne Convention, i.e. the reproduction may not either risk to unreasonably prejudice the rightholder’s legitimate interests or conflict with normal exploitation of his intellectual property.

Communication to the public right : This right will be harmonised in order to include therein the acts of «on-demand transmissions» defined as the making available to members of the public individual access to works and other subject matter. The harmonisation of the limitations and exceptions which apply to this right, will also be ensured.

Legal protection of the integrity of technical identification and protection schemes : With a view to arriving at interoperable systems, the Commission seeks further pursuing of the standardisation work in this area.

Furthermore, the Commission will take actions to ensure the legal protection of the integrity of such technical systems by taking into account a number of principles such as, principle of proportionality, protection of privacy with regard to the processing of personal data and user’s rights.

Distribution right including the principle of exhaustion : The distribution right has already been partially harmonised at Community level with respect to computer programs and databases. A harmonisation of this right of distribution and of the principle of mandatory Community exhaustion will be carried out.

Regarding the other issues requiring further evaluation, it should be noted that :

• the Commission intends to release a Communication on the applicable law issues and to enforcement of rights clarifying the existing legal situation.
  
• Concerning the management of rights, the Commission will define at Community level the rights and obligations of collecting societies.

1.2. Diplomatic Conference on Certain Copyright and Neighbouring Rights Questions

On December 20, 1996, the Diplomatic Conference on Certain Copyright and Neighbouring Rights Questions[1] adopted the "WIPO Copyright Treaty" and the "WIPO Performances and Phonograms Treaty". Both treaties are now open for signature until December 31, 1997, by any Member State of WIPO and by the European Commission and will enter into force three months after 30 instruments of ratification or accession by States have been deposited[2].

These treaties seek to introduce new international rules and to clarify the interpretation of certain existing rules in order to provide adequate solutions to the questions raised by, among other things, technological developments.

I. The main provisions adopted can be summarised as follows:

• Right of Communication to the public: Defined as follows " ....Authors of literary and artistic works shall enjoy the exclusive right of authorising communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them" (article 8 of the Copyright treaty).

  In the Berne Convention the exclusive right of communication to the public of works was regulated in a fragmented manner and applied only to musical, dramatic and cinematographic works, except for certain forms of communication to the public which concerns all categories of literary and artistic works. Technological developments have now made it possible to make protected works available in many ways that differ from traditional methods and to communicate to the public all sorts of artistic works. Literary works, including computer programs, are presently one of the main objects communicated over networks. Other affected categories of works are also not covered by the right of communication, significant examples being photographic works, works of pictorial art and graphic works. The second part of Article 8 explicitly states that communication to the public includes the making available to the public of works, by wire or wireless means, in such a way that members of the public may access these works from a place and at a time individually chosen by them, which implies that interactive on-demand acts of communication are within the scope of the provision.[3]

• A new right has been introduced , the right of distribution defined as follows « ... Authors of literary and artistic works shall enjoy the exclusive right of authorising the making available to the public of the original copies of their works through sale or other transfer of ownership » (article 6 of the Copyright Treaty). The difference with the right of communication to the public is the notion of sale or other transfer of ownership, which implies a tangible support. Therefore, the transmission of protected works through a network is not covered.

• Limitations and exceptions: the preambles to both treaties recognise the need to maintain a balance between the rights of the authors and the larger public interest, particularly education, research and access to information, as reflected in the Berne convention:

• Therefore, article 10 of the Treaty states that: "(1) Contracting Parties may, in their national legislation, provide for limitations of or exceptions to the rights granted to authors of literary and artistic works under this Treaty in certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author. (2) Contracting Parties shall, when applying the Berne Convention, confirm any limitations of or exceptions to the rights provided therein to special cases that do not conflict with the normal exploitation of the work and do not unreasonably prejudice the legitimate interest of the author." In the Agreed Statements Concerning the WIPO Copyright Treaty, it is specified that Article 10 (1) should be understood as meaning not only that Contracting Parties should be entitled to carry forward and appropriately extend into the digital environment limitations and exceptions in their national law which have been considered acceptable under the Berne Convention. Likewise, this should permit Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment

• Paragraph 2 introduces an obligation for Contracting Parties to apply these same conditions to any limitations that they would make to the rights provided for in the Berne Convention whereas these limitations had only been applied to the right of reproduction alone

• Obligations concerning technological measures: "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works which are not authorised by the authors concerned or permitted by the law. (article 11). This formulation is very large and does not specify the type of protection Contracting Parties shall provide.

• Obligations concerning rights Management Information :

• « (1) Contracting Parties shall provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing, or with respect to civil remedies having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by this Treaty or the Berne Convention :
  
  a) to remove or alter any electronic rights management information without authority ;
  b) to distribute, import for distribution, broadcast or communicate to the public, without authority, works or copies of works knowing that electronic rights management information has been removed or altered without authority.

  (2) As used in this Article, « rights management information » means information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public»

• Legal protection of data bases: Copyright protection is recognised: "Compilations of data or other material, in any form, which by reason of the selection or arrangement of their contents constitute intellectual creations, are protected as such. The protection does not extend to the data or material itself and is without prejudice to any copyright subsisting in the data or material contained in the compilation". (article 5). A recommendation was also adopted on data bases to the effect that data bases are recognised as a " a vital element in the development of a global information infrastructure" The diplomatic conference expresses its interest in examining further the possible implications and benefits of a sui generis systems of protection of data bases at the international level. Moreover, the need to strike a balance between the interests of the producers of data bases in protection from fair copying and the interest of the users in having appropriate access to the benefits of a global information infrastructure is reaffirmed. The sui generis system of protection is therefore not adopted at the Conference but it was nevertheless recommended that an extraordinary session of the competent WIPO Governing Bodies is convocated during the first quarter of 1997 to decide on a schedule of work in this respect. This session took place in March and it was decided that a information meeting will be held on September 1997. This constitutes a backward step from what had been envisaged Expert Committee.

II. Reproduction right :

Article 7 of the proposed Treaty contained a proposal on the scope of the right of reproduction to include therein direct and indirect reproduction, whether permanent or temporary, in any manner or form[4]. This proposal was given up as a result of strong opposition. Anyway, the scope of the right of reproduction as defined in the Berne Convention is already broad and clearly includes the storage of a work in any electronic medium; it likewise includes such acts as uploading and downloading a work to or from the memory of a computer. Digitisation, i.e. the transfer of a work embodied in an analogue medium to a digital one constitutes always an act of reproduction.

1.3 Council Directive on the Protection of Consumers in respect of Distance Contracts

An important new directive has just been adopted in the field of consumer protection which will carry strong implications when deploying an ECMS: Council directive of 17 February 1997 on the protection of consumers in respect of distance contracts[5]. It is provided in article 15 that member States will have to bring into force their laws, regulations and administrative provisions no later than three years after it enters into force, that is to say at the latest by the end of 2000.

The directive governs distance selling contracts between consumers and suppliers.

Distance contracts cover "any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sales or service-provision scheme run by the supplier, who for the purpose of the contract, makes exclusive use of one or more means of distance communication[6] up to and including the moment at which the contract is concluded ".(article 2.1.) From this definition and from the areas that are explicitly excluded from the scope of the directive[7], it appears clearly that the "on-line licensing and/or distribution of protected materials" is covered by the directive. As a consequence, the following obligations will have to be complied with when contemplating the setting up a service that will lead to the conclusion of distance contracts as defined above:

Prior Information: In good time prior to the conclusion of any distance contract, the consumer must be provided with information[8] concerning :

(a) the identity of the supplier and, in cases requiring payment in advance, his address,
(b) the main characteristics of the goods and services;
(c) the price of the goods or services including taxes,
(d) delivery costs, where appropriate,
(e) the arrangements for payment, delivery or performance,
(f) the existence of a right of withdrawal,
(g) the cost of using the means of distance communication, where it is calculated other than the basic rate,
(h) the period of time for which the offer remains valid,
(i) the minimum duration of the contract.. (Article 4 (1))

For contracts that are intended to be entered into on the Internet, it is ideal for this type of information to be included on a website in a clearly accessible manner.

Written confirmation of information : Article 5 provides : «the consumer must receive written confirmation or confirmation in another durable medium available and accessible to him of the information referred to in Art. 4(1)(a) to (f), in good time during the performance of the contract, and at latest at the time of delivery ...

In any event the following must be provided :

• written information on the conditions and procedures for exercising the right of withdrawal,
  
• the geographical address of the place of business of the supplier to which the consumer may address any complaints,
  
• information on after-sales services and guarantees which exist,
  
• the conditions for cancelling the contract, where it is of unspecified duration or a duration exceeding one year.»
  
  

Right of withdrawal: As a rule, for any distance contract, the consumer will benefit from a period of at least 7 working days in which to withdraw from the contract without penalty and without giving any reason. The supplier will then be obliged to reimburse the sums paid, free of charge[9]. However, an exception is provided, which will probably apply to the on line distribution of protected material: Unless the parties have agreed otherwise in respect of certain types of contracts, such as for the provision of services, if the performance has begun with the consumer’s agreement, before the end of the seven working day period, for the supply of newspaper, periodicals and magazines or for the supply of audio or video recordings or computer software which were unsealed by the consumer.

Performance: Again, unless the parties have agreed otherwise, the supplier must execute the order within a maximum of thirty days from the day on which the consumer has forwarded his order to the supplier[10].

Other Provisions: Member States will have to ensure that appropriate measures exist to allow the consumer to request cancellation of a payment where fraudulent use has been made of his payment card and to be recredited with the sums paid[11].

The provisions of the Directive are binding which means that the consumer may not waive the rights conferred by him therein and that it may not be agreed otherwise by contract[12].

It should be noted that the Directive states explicitly the choice of the law of a non-EU country may not be allowed if it has as consequence to prevent the consumer from benefiting from the protection granted by the Directive. This will apply if the contract has a close connection with the territory of one or more Member States[13].

1.4. Communication from the Commission on "A European Initiative in Electronic Commerce"

The European Commission issued on April 1997 a communication on electronic commerce with the aim of «encouraging the vigorous growth of electronic commerce in Europe». The scope of covered electronic commerce is both the so-called indirect commerce which consists of ordering tangible goods, and the direct electronic commerce which is the on-line delivery of intangibles.

The primary concerns of the Commission are the following :

• Promote the technology and infrastructure needed :
  • by ensuring the effective implementation of a fully competitive telecommunications market
  • by providing efficient access systems for users
  • by encouraging a broad consensus on standards and on the interoperability of electronic market systems
• Capitalise on the Single Market by ensuring a coherent regulatory framework for electronic commerce in Europe and in wider global markets.
• Foster a favourable business environment for electronic commerce
  • by creating awareness and confidence for the consumers
  • by creating awareness and encouraging best practice for business
  • by promoting a more pro-active public sector
• Work towards global consensus from a common European position.

Concerning the building of a coherent regulatory framework, it should follow these principles :

no regulation for regulation’s sake
any regulation must be based on all SINGLE Market freedoms
any regulation must take account of business realities
any regulation must meet general interest objectives effectively and efficiently

The following fields of law will be taken into account :

electronic payments, contracts negotiated at a distance, copyright and neighbouring rights, legal protection of conditional access services, digital signature, regulated professions, commercial communications, contract law, accountancy, fraudulent use of electronic payments, data security, data protection, industrial property, direct and indirect taxation, public procurement

1.5 OECD Guidelines for Cryptography Policy

The OECD has adopted Guidelines for Cryptography Policy[14], setting out principles to guide countries in formulating their own legislation in this field.

This Recommendation is a non-binding agreement that identifies the basic issues that countries should consider in drawing up cryptography policies at the national and international level.

The Guidelines set out eight basic Principles for cryptography policy:

1. Cryptographic methods should be trustworthy in order to generate confidence in the use of information and communications systems.

2. Users should have a right to choose any cryptographic method, subject to applicable law.

3. Cryptographic methods should be developed in response to the needs, demands and responsibilities of individuals, businesses and governments.

4. Technical standards, criteria and protocols for cryptographic methods should be developed and promulgated at the national and international level.

5. The fundamental rights of individuals to privacy, including secrecy of communications and protection of personal data, should be respected in national cryptography policies and in the implementation and use of cryptographic methods.

6. National cryptography policies may allow lawful access to plain text, or cryptographic keys, of encrypted data. These policies must respect the other principles contained in the guidelines to the greatest extent possible.

7. Whether established by contract or legislation, the liability of individuals and entities that offer cryptographic services or hold or access cryptographic keys should be clearly stated.

8. Governments should co-operate to co-ordinate cryptography policies. As part of this effort, governments should remove, or avoid creating in the name of cryptography policy, unjustified obstacles to trade.

2. Update of existing documents

The Deliverable 4.2.2. on «The provisions on the circumvention of technical protection devices» has been updated on 15 May 1997 in order to consider the new legislative developments in this field. Therefore, a new paragraph has been added in point 2 ‘Recent developments at the Community level’ and the point 4 on ‘the possible Protocol to the Berne Convention’ has been amended by the recent adoption by the WIPO Copyright Treaty, as described above.

3. Any other Business

• Ministerial Conference on Global Information Networks, Bonn, 6-8 July 1997 (organised by the German Government and the European Commission)
  
• IMPRIMATUR SIG on Liability , September
  
• Global standardisation conference, to be held in Brussels, 1-3 October 1997 (organised by the European Commission).
  
• European Multimedia Microprocessor Systems and Electronic Commerce, to be held in Florence on 3-5 November 1997 (organised by DG III).
  
• IMPRIMATUR SIG on public domain and user’s freedoms, beginning of 1998
  
• International ECMS Conference, London, 13-14 November 1997

NOTES

1.   Referred to below as the diplomatic conference
   
2.   Articles 19 and 20 of the "Copyright Treaty" and 28 and 29 of the "Performances and Phonograms Treaty"
   
3.   Basic proposal for the substantive provisions of the treaty to be considered by the diplomatic conference, Notes on article 10, Referred to below as "Basic Proposal"
   
4.   Basic Proposal, notes on article 7
   
5.   At the time of writing, directive has not been published yet
   
6.   Defined as any means which, without the simultaneous physical presence of the supplier and the consumer, may be used for the conclusion of a contract between those parties (article 2.4). This clearly covers contracts entered into on an open network such as the Internet
   
7.   Article 3.1
   
8.   Article 4
   
9.   Article 6.1 and 6.2
   
10.  Article 7.1
    
11.  Article 8
    
12.  Article 12 (1)
    
13.  Article 12 (2)
    
14.  Recommendation of the OECD Council concerning Guidelines for Cryptography Policy, 27 March 1997,
    http://www.oecd.org/dsti/iccp/crypto_e.html