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Francisco Pinto Balsemão
Chairman, EPC
Chairman and CEO,
Impresa S.G.P.S.
Rua Ribeiro Sanches 65
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Portugal
Tel: +351 21 392 9782
Fax: +351 21 392 9788
Angela Mills Wade
Executive Director
c/o Europe Analytica
26 Avenue Livingstone
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B-1000 Brussels
Belgium
Tel: +322 231 1299
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Heidi Lambert Communications
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Issues

Why the Parliament was right to defend the need for strong copyright protection against piracy in the digital age

Will the European Commission now reject Parliament's amendments in favour of the interests of the networks and equipment manufacturers?

At First Reading, the European Parliament voted through, by a massive majority, some major amendments to the draft Directive on Copyright and Related Rights. Will the Commission now reject these? Welcomed by the community of rightsholders such as European publishers, whose core business this directive is designed to protect, these amendments have led to vehement opposition from the intermediaries - the telcos and equipment manufacturers - who will be distributing and displaying our content. Angela Mills, Executive Director of the European Publishers Council, outlines why she believes that it is important to dispel some of the myths that cloud this debate so that the EU's draft laws on copyright and e-commerce can be made to work in everyone's interests in the online world.

Europe's copyright industries have been early pioneers of electronic trading. Newspapers and magazines, books, photographs, music and films have been some of the first products and services traded over the Internet. The Parliament's amendments to the draft copyright directive passed at first reading provide essential legal protection against piracy for electronically traded content, something which is vital in the digital world where perfect copies can be made and distributed in seconds. European creative industries need a clear legal framework in order that we can protect our core business. Why then is there such a problem?

As the Commission faces the difficult political decision of whether or not to accept Parliament's democratically agreed amendments on who should be allowed to make copies and under what circumstances these copies would be illegal or not, the creative content industries ponder their fate. There is currently complete deadlock.

On the one hand, content producers such as publishers want to be sure that any copy made of their published works - including technical, temporary, transient copies - is authorised, regardless of whether or not money changes hands and regardless of its method of distribution - that is what the Parliament sought to clarify.

On the other hand, the intermediaries who play an important part in distributing our works, such as telecommunications companies and those whose machines are used to download and display our content - manufacturers of PCs, CD players and so on, want to make sure that they are neither held liable for any such copies, for any piracy that might take place when copies are made, nor be made responsible for paying or collecting levies on any copies that might be made during the course of transmission of works over the Internet or when consumers are using PCs or CD players. Publishers believe they can meet these concerns in full.

In view of the key economic importance of making available and transmitting copyright material via networks in the Information Society, the Directive (in Article 2) must cover all forms of copies, permanent and transient. Unauthorised, transient copies cannot simply be carved out of the scope of a directive designed to protect copyright protected material which is, in effect, what the telcos and other intermediaries are requesting. Having said that, publishers readily recognise that there is a need to deal with the issue of liability for the making of transient electronic copies. This related question of liability is being dealt with in a separate directive on electronic commerce and publishers believe the provisions in this draft directive meet fully the concerns of the intermediaries over the question of liability for temporary copies. Publishers also readily accept that there is a need to make sure that intermediaries who carry or store such copies are not subject to an obligation to collect or pay levies in respect of such transient electronic copies which, in themselves, carry no economic value.

Copies come in all shapes and sizes - legitimate copies that people have paid for, copies that are made illegally and then re-distributed to people who might or might not pay for that content which they receive illegally and copies that just happen on a day to day basis as an integral part of sending packets of data down telephone wires or as you download content onto your PC's hard disk and onto the screen, or as you turn on your CD player to play your favourite CD. These are the "temporary" or "transient" copies defined in the directive and Parliament's amendments under Article 5.1.

This is the deadlock: We, as content producers need the amendment giving us "prior authorisation" for the making of technical, temporary copies as an essential link to the provisions in the e-commerce directive which deals with the related question of liability for illegal content. Unless we have Parliament's amendments or something similar in effect, we do not have the ability to authorise any kind of copy, regardless of its economic significance, and thereby lose our control over illegal, piratical distribution of our works. Furthermore we would have no means of ensuring co-operation from those distributing and displaying our content in removing illegal content from the networks.

The telcos and hardware manufacturers on the other hand say they can't accept the Parliament's amendments because firstly they feel they may still be held liable for making or distributing technical, temporary copies and secondly they may be subject to the imposition of levies on these technical, temporary copies in spite of the fact that we have answered these concerns on many occasions as follows:

First on the question of liability: Content producers accept primary liability for their content. Just as in the off-line world, newspaper publishers must ensure that their content is legal and they want to be able to control the licensing and dissemination of their content. In order to protect our content and to control its distribution, temporary copies are legally infringements of the copyright, unless the temporary copy is made as part of a lawful act of transmission or use, as permitted by the rightsholder or otherwise within the law. That's where the authorisation comes in, the part added by the European Parliament. Publishers accept that the provisions on liability of the e-commerce directive must apply to these acts of copying. Telcos and hardware manufacturers will not be held liable for these acts because they will be authorised.

If however they know or have reason to know that the transmission is leading to an act of piracy they have a duty to act in partnership with the rightsholders to end the unlawful transmission. It might be helpful for the Commission to link the two directives somehow to ensure that intermediaries are confident that they will not be held liable for technical, temporary copies that are part of a lawful act of transmission. A considerable body of law has been built up on these matters over the years, including, for example, that physical distributors and retailers of copyright goods have a liability from the moment they know, or should know, of a purported infringement. In the information society, there is increasing confusion between the role of conduits, distributors, and content providers, and it is clearly vital that operators are firstly not able to escape liability as having one role when in fact acting in another, and secondly take an active part in helping prevent infringement. We are concerned that established rules on liability should be maintained in the digital environment, and that partners in the information chain should each have to play a proper part in ensuring that the law is sensibly enforced. The proposals in the e-commerce directive appear to distinguish clearly between different functions, and have adequate criteria for determining into which category an activity falls. The exclusion from liability of a party merely engaging in providing a conduit, and the imposition of liability of a host or caching service when on notice of infringement, should dispel the fears of the telcos and hardware manufacturers.

Secondly, on the question of levies: the Telcos and hardware manufactures claim we will try and impose levies on temporary copies (as defined in article 5.1). We have clearly stated that these temporary acts of copying have no economic significance - only a technical, legal one. We do not want or need levies or other royalties for making temporary or transient reproductions. Publishers and other content providers encrypt or "watermark" their content in such a way that it's authorised use can be traced throughout its dissemination and use. Technical measures of protecting copyright works are more efficient than levies and leave the control with the publisher, not a third party.

Publishers want to encourage the development of electronic trading in creative content. It is a fact of electronic life that temporary copies are an indispensable part of the technological process of electronic trading and must, therefore be dealt with in a pragmatic way. In summary, let it be clear once and for all: publishers accept primary liability for content and that third parties to publication or dissemination of our content should not be liable for infringement through temporary technical copies unless they have knowledge or reason to know that the transmission was infringing; third party intermediaries acting as mere conduits and manufacturers of equipment used to make such temporary technical copies should not be liable to pay levies for making such copies; in order to maintain control over dissemination of our copyright protected material, and to be in a strong position to fight piracy, we need to be able to authorise any copy of our work, including temporary technical copies.

Unless the Commission, and ultimately the Council, can find a way to incorporate Parliament's amendments into the legislation on copyright we will face the perverse and unacceptable situation of watching third party interests' taking precedence over the content producers' interests, whose core business this directive is supposed to protect.

 

Angela Mills
Executive Director
European Publishers Council

 

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