WHY IS COPYRIGHT BROKEN IN THE EUROPEAN UNION?
DYSFUNCTIONAL & NOT FIT FOR THE DIGITAL WORLD
Copyright reform is needed to adapt to the digital world we live in. Under the current system everything tends to fall under copyright unless it is covered by a specific exception in the law. The trouble is that these exceptions are narrow, specific and technologically outdated: the list was written in 2001! This was well before YouTube and Facebook were created. As a result, everyday habits of online users could be considered illegal today. A blogger linking to copyrighted content, a meme based on a copyrighted image, a video with some footage from an existing movie or a song: all of that could create issues for the user that posted them.
The duration of copyright protection (up to 70 years after the death of the author) stifles access to knowledge and culture and is disproportionate compared to the average commercial life of copyright protected works. Shortening the term of protection will decrease the number of works that are in copyright but out of commercial exploitation. Moreover, society needs not only shorter copyright terms but also a mechanism enabling faster transfer to the public domain of works whose right owners abandon them (as in the case of some orphan works) or which are not available anymore (out of commerce works).
CONFUSING TO USERS & OUT OF SYNC WITH REALITY
Each EU Member State can pick and choose amongst the current list of exceptions. This means in practice that even though something you do in your country might be perfectly legal, it could be illegal when put online or shared with friends, family or colleagues in another country. That is confusing and scary. European citizens should have the same rights with regards to access to knowledge and culture regardless of where they live. It is simply unacceptable that users and service providers are constantly wondering if what they do is legal or not. If we want society to accept copyright rules we need to ensure that they can be understood by everyone affected by them.
NO HARMONISATION: DIFFERENT IN EVERY EU COUNTRY
While there are no borders in cyberspace the EU has failed to create a digital single market where the same rules apply to al citizens and market participants in the Union. This makes it harder for companies to launch Europe wide services, deprives citizens in some member states of access to services that are available elsewhere in the EU and hampers collaboration across borders. In the field of research this means that researchers have difficulties working together and sharing knowledge across borders and when it comes to access to culture inter-library loans are hampered across borders. All of this puts Europe at a competitive disadvantage compared to other economies.
NEELIE KROES, Vice-President European Commission
‘Today our fragmented copyright system is ill-adapted to the real essence of art, which has no frontiers. Instead, that system has ended up giving a more prominent role to intermediaries than to artists. It irritates the public who often cannot access what artists want to offer and leaves a vacuum which is served by illegal content , depriving the artists of their well deserved remuneration.’Kroes, N. (2010, 5 November). A Digital World of Opportunities [SPEECH/10/619].
JOAQUIN ALMUNIA, Competition Commissioner, European Commission
‘The distribution of online content across the EU is expensive, difficult and primitive if compared to the technology we now have. In particular, we need to address the persistent market fragmentation for online rights management, which harms consumers, rightholders and everyone else in between.’Almunia, J. (2010, 29 November). Competition Policy for an Open and Fair Digital Economy [SPEECH/10/610].
SIR TIM BERNERS-LEE, Father of the World Wide Web
‘The simple setup [of the World Wide Web] demonstrated a profound concept: that any person could share information with anyone else, anywhere.’Berners-Lee, T. (2010, December). Long Live the Web: A Call for Continued Open Standards and Neutrality. Scientific American.
EUROPEAN PARLIAMENT, Study for the IMCO Committtee
‘The issue of fair remuneration recalls that copyright is perceived as a fuel for creativity and innovation, because it guarantees author’s right to remuneration. Even if creativity would be induced intrinsically, creative acts deserve remuneration. However, transaction costs that built up around old media business models of physical distribution of goods and services carrying IPR – based on artificial restraining of access in order to maximise profits, thus creating a significant access barrier to content and information – do not correspond to opportunities that the Internet economy creates for sharing creativity.’European Parliament, Study for the IMCO Committee IP/A/IMCO/ST/2012-14, Streaming and Online Access to Content and Services, March 2014, p. 39.
NOT FIT FOR THE DIGITAL WORLD
COPY LEVIES: ECONOMIC WASTE PER COLLECTED EURO
According to an economic analysis of alternative models of compensation for private copying by ENTER there is an “economic waste of at least 51.2 Cents for each 1 Euro collected”.ENTER. (2011, May). Compensation for Private copying: An Economic Analysis of Alternative Models. p. 3.
‘Why is it that someone who is resident in Spain cannot buy an e-book destined for the French market or that a German subscriber to an internet television service finds he cannot watch his programmes when holidaying in Croatia?
Such cross-border problems arise largely because of national control of copyright.’Nicholas Hirst, Cross-border content complications, European Voice, 6 March 2014.
IS UNAVAILABLE TO PUBLIC LIBRARIES
LIMIT THE RIGHTS OF CITIZENS
The circumvention of digital restrictions is prohibited by the InfoSoc Directive, even when this circumvention is done in order to benefit from flexibilities that are provided for in national and European law (for example, to make a private copy). As a result, many users are not able to reproduce CDs and DVDs legally acquired and, in a few years, these materials become unusable due to technological obsolescence. It is an absurdity that technological progress has led to a situation where, actions that were possible before this technology was used – such as buying and selling second-hand cultural goods – are now being prohibited, to the detriment of citizens.
For example, the UK and Ireland do not have a private copying exception, so an act that is legal in Spain or the Netherlands suddenly becomes an offence in the UK. Similarly, Finland hardly has a parody exception, so a work considered legal in Germany could be infringing copyright in Finland.
In the EU, copyrighted material remains protected up to 70 years after the death of the author when it concerns artistic works, and up to 70 years after the death of the last surviving major contributor (e.g. director, composer, screenwriter), when it concerns films and audio-visual content.
THE 20th CENTURY BLACK HOLE
This black hole means that there are significantly fewer works from the mid to late 20th century available on europeana.eu than works from the centuries before (many of which are clearly in the public domain) or from the 21st century (many of which are still available commercially and whose rightholders can generally be contacted quite easily). The chart below shows the number of objects available on europeana.eu that have been produced in a given decade of the 20/21st century.
FOR DIGITISATION OF NEWSPAPERS BY LIBRARIES IN AUSTRIA
Libraries aren’t making digitized versions of newspapers published after a given date available to the public because of the difficulty of tracking down rights owners. Austria has the earliest cut off date c. 1840’s, followed by Portugal (1860), Czech Republic (1890). Others go by a 70 year rule i.e. 1940’s. And by ‘publically available’ it’s often meant only available at national level and not cross border. This demonstrates that ‘life plus 50 or 70 years’ does not necessarily mean this in practice: tracking down rightsholders for something as complex as a newspaper is so prohibitively expensive for libraries that they will opt to make the content available under very conservative conditions to protect themselves from litigation.Source: http://www.europeana-newspapers.eu/wp-content/uploads/2012/04/D4.1-Europeana-newspapers-survey-report.pdf
OUT OF SYNC WITH REALITY
Global Digital Information Created and Shared from 2005 to 2015 (Est.), in zettabytes*
The amount of global digital information created & shared – from documents to pictures to tweets – grew 9x in five years to nearly 2 zettabytes* in 2011, according to IDC.Note: * 1 zettabyte = 1 trillion gigabytes. Source: IDC report “Extracting Value from Chaos” 6/11.
Examples: WordPress users produce about 36.3 million new posts and 63.1 million new comments each month. 130 hours of video are uploaded to YouTube every minute. There are more than 77,000 active contributors to Wikipedia working on more than 22,000,000 articles in 285 languages. On Facebook, 41 000 posts are uploaded per second and there are 5,700 Tweets a second on Twitter. According to Business Insider, 758 million photos a day were uploaded and shared online in 2013 (Business Insider, ‘The Future of Digital:2013’).
In the EU-28, according to Eurostat, close to 23 million Europeans engaged in creating a website or blog in 2012, including 14% of EU citizens aged between 16 and 24 years old. Over 83 million Europeans uploaded self-created content to a website, including 47% of 16 to 24 year olds. 11% of Europeans posted opinions on civic or political issues via websites.
Applying the same copyright rules to this creativity makes little sense, and creates huge legal uncertainty for users and rightholders alike: see Stef van Gompel, ‘Formalities in the digital era: an obstacle or opportunity’ (2012).
& WAS ALREADY AVAILABLE IN THE US IN 2011
Well-known symptoms of this fragmentation are the Spotify and Netflix roll-outs in Europe. Spotify was not available in every EU Member State a full four years after its launch and had to undergo long discussions with GEMA (German Collecting Society) before launching the service in Germany due to excessive fees requests.
In a similar vein, Netflix currently faces very long discussions and negotiations before being able to launch its service in different EU Member States (France being one example).
And these are the success stories! Pandora and Yahoo! Music had to exit the EU market due to the complexity of the licensing system.
In a survey conducted with 54 European angel investors, 20 US venture capitalists and 10 European, Booz & Co found that “decreasing the cost and complexity of obtaining licensing agreements would increase the pool of investment funds available to DCIs [Digital Content Intermediaries]”, as investors’ interest in putting money into an EU service provider increased by 38% “if regulations were altered to decrease the cost and complexity of obtaining licensing agreements”Le Merle, M., Sarma, R., Ahmed, T., & Pencavel, C. (2012). The Impact of the E.U. Internet Copyright Regulations on Early-Stage Investment – A Quantitative Study. Booz & Company. p. 19.
DIFFERENT WAYS TO IMPLEMENT THE INFOSOC DIRECTIVE
The directive outlines 20 different optional exceptions or limitations to the right of reproduction of copyrighted works. Each country implementing the directive can choose to either include or leave out the exception clause. This gives us 2.097.152 different ways to implement the directive.
Calculation by Smari McCarthy
WHAT NEEDS TO BE DONE
Faced with these shortcomings of the current EU copyright framework, a 3-step approach by the European institutions is needed
CLARIFY THE CURRENT RULES
A copyright review is necessary but will require quite some time to ensure the right balance is struck between the different rights and freedoms at stake. In the interim, the Commission should clarify in a Communication that all the exceptions in the existing InfoSoc Directive should be interpreted with a maximum of flexibility, and encourage Member States to broaden their views. Licences should not be seen as a ‘solution to all problems': the legal gaps that are present in the current EU copyright framework reinforce the lack of balance in negotiation powers between institutional users on the one hand and rightholders on the other (and in some cases between various types of rightholders). These unbalanced power relations do not contribute to establish an environment which allows the emerging of best practices for negotiation and contracts and, as a result, licences are currently not satisfactory at a variety of levels (notably in terms of technical restrictions, cost both in terms of negotiation and in general, etc.).
REVIEW COPYRIGHT RULES TO MAKE THEM IN-SYNC WITH THE DIGITAL WORLD
Harmonisation should be dealt with in the near future. There is too much legal uncertainty and the adaptation to the digital era needs to happen now! The more the EU waits the less attractive the European market is, the less innovation can be developed and the less EU citizens have access to the same content and services. A more flexible approach is needed, combining the current system of a list of exceptions (but made mandatory for all EU countries and specified as not exhaustive), but stating specifically that these cases must be interpreted as applying to ‘similar uses’. It should also be made clearer that exceptions apply regardless of the type of work (neighbouring right) and regardless of the technical nature of use (whether the work is fixed on a tangible medium or not). Additional exceptions also need to be added (notably for user-generated content, text and data mining, e-lending) to make the list more robust in light of technological evolution and changes in users’ behaviour. It should also be explicitly stated in the law that technical protection measures (TPMs) and contracts should not override such an exception.
ADD AN OPEN NORM, THAT COPES WITH TECHNOLOGICAL EVOLUTION
From an economic perspective, the current EU copyright regime puts Europe at a competitive disadvantage with the rest of the world, as knowledge intensive economies such as the US, South Korea, Taiwan and Singapore benefit from flexible norms based on ‘Fair Use’-type exceptions. Europe would benefit from a more flexible, open norm approach that allows the legislative framework to adapt to technological evolutions and innovations, and avoids situations where users are criminalized for their behavior or new technological uses are stifled in their development due to legal uncertainty. An open norm would provide more certainty on the legal aspects of activities like text and data mining without having to undertake legislative changes (which take years to implement).
POTENTIAL IMPACT OF A REVIEW
Other countries have adopted flexible norms such as fair use, fair dealings or an adaptation of the 3-step test, either as a longer historical tradition (e.g. the USA) or as a more recent legal standard (e.g. Singapore and China).
GDP ADDED VALUE OF FAIR USE IN THE US
In the US, the added value of the Fair Use-related industry was estimated at 16% of the GDP in 2007Rogers, T., Szamoszegi, A. (2010). Fair Use in the U.S. Economy. Economic Contribution of Industries Relying on Fair Use. Capital Trade Incorporated. p. 8.
WHICH REPRESENT 9,3% OF THE EU’s GDP
A 2010 study found that industries relying on exceptions and limitations represent Euro 1.1 trillion, or 9.3 percent of the EU’s GDP. They employed close to 9 million people and were growing 3 percent faster than the rest of the EU economy. SEO Research, Economic contribution of EU industries relying on exceptions and limitations to copyright (2010).