CONFERENCE REPORT:
COPYRIGHT IN THE DIGITAL AGE

Contents

1) Executive summary
2) Opening Comments
3) Session 1: What is copyright and what are the policy developments of interest to consumers?
4) Session 2: Technical Protection Measures and their effect on Fair Use
5) Session 3: Enforcement of copyright in the digital age
6) Session 4: Control of digital information
7) Closing Panel
8) Participants

Executive Summary

The conference heard from a wide range of highly qualified speakers with the conclusion from intellectual property (IP) rights experts and consumers’ representatives that legitimate expectations and traditional rights are being eroded by the development of IP law.

This is particularly true in the U.S. in the wake of the Digital Millenium Copyright Act (DCMA), and threats are also raised by the EU’s proposed IP Enforcement Directive. The record industry has used the DCMA to pursue ordinary users rather than cracking down on the real problems of piracy and counterfeiting, which were highlighted by industry representatives. The development of IP law is preventing consumers from exercising the rights enjoyed with analogue technologies, such as the ability to make copies or use materials in education establishments.

Furthermore, new laws are criminalizing ordinary users. There was much concern expressed about the EU’s proposed IP Enforcement Directive, currently being discussed by the European Parliament and the EU member states. Many speakers warned that the Directive could be used to pursue ordinary users with criminal law. The European Commission explained that the Directive was simply designed to ensure a level playing-field for enforcement but this view was not shared by consumer groups. Many speakers commented that the entertainment industry is exploiting IP law to deter trade and competition, and companies were urged to develop new business models to answer consumers’ demands rather than resorting to legal action to defend their profits.

There was much discussion about limitations and exceptions to copyright and how these could coexist with digital rights management (DRM) technologies as these were developed.  There was a range of views on the merits of DRM and levies, with some speakers calling for levies on peer-to-peer networks. Other speakers said that DRM systems are difficult to use and could undermine consumers’ rights, while some suggested they could be acceptable if user-friendly models were developed.

There was a lot of support for trying to protect consumer’s rights through drawing up a declaration or convention on universal unassailable rights rather than trying to guarantee access through IP legislation itself. Finally, consumer advocates stressed the need to raise awareness about new legislation being passed and how it is being implemented and to mobilise citizens to fight to defend their rights, possibility through consumer actions.

Opening Comments

Rhoda Karpatkin, emeritus President, US Consumer’s Union, opened the one-day conference referring to the success of TACD’s Intellectual Property Working Group which, since 2001, has built the capacity of the consumer movement to engage in very technical discussions about intellectual property rights issues. Asking how copyright had become a consumer issue,  she explained that copyright laws define what consumers can do with copyrighted materials and ensure fair compensation to rights-holders. But new laws addressed to the digital environment have introduced new restrictions to the interests and rights of consumers, provoking concerns about restrictions on use in educational establishments and about intrusive enforcement. New legislation should instead ensure a fair balance between the rights of copyright holders and the rights of users such as consumers, educational institutions and other public interests.

Jim Murray, Director, European Consumers’ Organisation BEUC, argued the 2001 EU Copyright Directive (EUCD) had restricted consumers’ rights in the digital environment which they enjoyed previously. He raised the theoretical possibility of consumers having songs ripped out of their Walkman or MP3 players as they crossed national borders, and pointed out that the music industry had been able to use major stars to win support for their ideas on the Directive.

The European Commission has now made a proposal on IP enforcement and the European Parliament’s Legal Affairs Committee is making it worse. Industry is using intellectual property law to segment the market. The music industry in Europe has started selling copy-protected CDs which can be played on CD players but not computers or in people’s cars, for example. This was being challenged by consumers groups in France and Belgium.

Mr Murray made it clear that consumer groups do not support piracy and robbery. “We believe in copyright and a fair reward for creativity otherwise there would be much fewer creative work in the future”.

Session 1: What is copyright and what are the policy
developments of interest to consumers?

Jule Sigall, US Copyright Office, said that the issue of consumers and copyright was a recent one, with consumers not traditionally playing a direct role when copyright policy was drawn up. Copyright and copyright-controlled activities were limited to larger organisations like publishers, printers and broadcasters, and were normally regulated between businesses. When copyright law was being formed the user side (libraries, universities etc) represented consumers in the debate. But technology changed things by making it possible for users to share or distribute materials on a much wider basis. The success story of copyright is that us has allowed consumers to enjoy broad access to creative works, and that has heightened their expectations. They have become been accustomed to getting access in an inexpensive fashion. There can be no turning the clock back on how the consumer wants to enjoy these products and that’s what causes friction between artists, rights-holders, and consumers.

Liability for consumers under copyright law is a new issue because consumers are now able to make their collections available to other users through networks. From a consumer perspective, the question is now how much Internet Service Providers and P2P software providers, for example, should be responsible for informing consumers on the liability they might be subject to. It is a question of consumer protection, labelling and disclosure. The power of the consumer is in the market place and the consumer has a strong ability to register concerns directly with businesses. For example there was an outcry from consumers about the copy-protection measures in tax-preparation software ‘Turbo Tax’, and the company backed down. The speed of interaction between consumers and copyright holders is faster than policy-making.

Bertrand Moullier, International Federation of Film Producers, wanted to debunk the myth that the film industry was all about big conglomerates. His members are small and medium-sized businesses (SMEs) who are struggling to keep afloat. IFFP wants to create a copyright environment which protects producers. His members are not Luddites, are embracing broadband and are excited at the growth rates for sales of DVDs, which give extraordinary home delivery possibilities. But in some countries the piracy rates of 85-95% of the market threaten the eradication of the legitimate DVD market. The film industry is facing a severe challenge in the broadband environment, and is working in good faith with technology producers to retain reasonable levels of income.

IFPI wants a copyright law which works. The WIPO Copyright Treaty and the EU Copyright Directive strike a fair balance between consumers and rights holders, as does the proposed EU Enforcement Directive, the original text of would have legitimised small scale piracy. Mr Mouiller also stressed educational aspects, saying that there’d been a societal and cultural shift. As the power of the consumer grows, this generation seems to think that IP is not a valid concept or that getting content for free is an anti-authoritarian challenge. We need to create an awareness that taking content for free is theft.

Nick Ashton-Hart, Executive Director of the International Music Managers Forum, explained that music managers were responsible for managing all aspects of artists’ professional careers. As such, they deal with all aspects of copyright system in a way that others didn’t.  The Internet has provided the first new exclusive rights for performers in more than 40 years in deciding whether to allow interactive use of their recordings, as mobile phone ring-tones for example. But performers would not see any use of that right because contracts assign all copyright present or future to producers, with no control left to the performer. Contrary to the notion of the Internet as a celestial jukebox many sound recordings are not legally available. Music companies are more interested in controlling markets than selling music. The economic chain should connect performers to music users, and copyright should be a river, not a dam. The Internet promised to allow more people to access more markets more easily. But the control of copyright is in fewer and fewer hands and would allow companies more control of delivery methods more than in the past. The independent record sector, however, has always been very innovative and continues to be vibrant and healthy, and gives artists more power. Culture should be accessible and copyright should make it possible for more creative people to make more creative things.

Chris Murray, the US Consumers’ Union, stressed that, despite its technical nature, this was a crucial consumer issue. What had happened in copyright had been a story of unintended consequences. The law must follow where the state of copying art is at. There is a push and pull going on between the protection of rights holders and what consumers can do with content. On the one hand, the Internet allows more opportunity for illegitimate copying and distribution but, on the other, technical protection measures are pushing into reasonable consumer uses and expectations such as anonymous usage, the ability of the consumer to make back-up copies, mix CDs, tinker with computers etc. For example, the ‘Broadcast Flag’, under discussion in the Federal Trade Commission, is designed to prevent digital TV being redistributed over the Internet and its scope is unthinkably large. People are watching digital TV on their TV sets but also on desktops. The Motion Picture Association of America (MPAA) wants PCs and consumer electronics to be included in the legislation. MPAA President Jack Valenti told Congress that, unless it approves Broadcast Flag, the industry would bleed and bleed until going out of business; which is very similar to what he infamously predicted VCRs would do to his business.

Discussion:

• Mark Silbergeld, Consumers’ Federation of America – what will happen to four digital rights: Fair use, right to time-shift telecasts and broadcasts, portability and the right to copyright after expiration?
• Jule Sigall – the US Copyright Office has been asked to look at the effect of technical protection measures on legitimate uses, which it does every three years. As to time-shifting, under the broadcast flag system adopted by the FCC, consumers would be permitted a large number of copies within personal digital environment - the system is about controlling redistribution rather than copying. Regarding copyright after expiration, it’s not unlawful to circumvent a technical protection measure for a work which was not protected by copyright.
• Susan Grant, National Consumers League - enforcement rights should be targeted at operations like illegal DVD factories and one solution would be to find a new business model to meet legitimate expectations.
• Bertrand Moullier agreed that it was right to go after criminals, but ongoing talks do not prevent  While there talks at international level on this it didn’t prevent putting the threshold of infringement at a level where lower levels of piracy can be caught. It was possible to change business model but it was difficult to propose a viable model when there is a lack of clarity.

Session 2: Technical Protection Measures and their effect on Fair Use

Richard Owens, Director, Copyright Division, World Intellectual Property Organisation, pointed out that the term ‘Fair Use’ only existed in the U.S., where it had become a catch-all resulting from a series of decisions in the 1840s. It is different from the more widely used term of ‘scope of limitations to expectations and rights’. International standards are not based on fair use but on broader notions of limitations and exceptions, which varied. In the EU Copyright Directive (EUCD) there is one mandatory exception for transient use and a closed list of optional limitations. The three-step test, as laid down in the Berne Convention and TRIPS agreement, provides an international standard on the use of content without permission or payments: special cases do not conflict with normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author or right-holder. It only covers rights of reproduction and national legislators must confirm exemptions. This has only been tested once by the Irish Music Rights Organisation so there isn’t a lot of guidance at international level at how the test should be applied. WIPO commissioned a study by Professor Ricketson on limitation and exceptions to copyright (available here).

There are a number of approaches to ensuring the compatibility of Technical Protection Measures (TPMs) and limitations. For example, sometimes, such as in the EUCD, member states must take appropriate measures to ensure that right-holders make available the means to benefit from an exception. The Copyright Directive specifically notes that member states can provide for copyright exceptions with respect to non-commercial private copying on condition that the right-holders receive fair compensation. The Directive seems to envisage a process where levies will be adjusted to the deployment of TPMs. 

On the relations between TPM and copyright levies, there could be exceptions allowing private copying, providing that a levy is paid. There is a question over how the role of collecting societies will evolve and how DRM (Digital Rights Management) systems could coexist with this approach. One option for public authorities is additional legislation to strengthen the operation of TPMs, and to increase the effectiveness of limitations in the digital environment, but there is a question of how much legal intervention is required. Consensus-building and the engagement of all concerned parties are important to provide a framework for negotiations on the appropriate interplay between limitations and DRMs. WIPO is now looking at how to make TPMs compatible with limitations and exceptions. There is no incompatibility from a technical point of view but there needs to be more work on the interface.

Bernt Hugenholz, Professor, University of Amsterdam, ivir.nl/staff/hugenholtz, pointed out that the European Software Directive of 1991 already provided for certain copyright exemptions, such as the right to make back-up copies, that cannot be overrided by contract. One would have expected similar provisions in the EU Copyright Directive of 2001 but there was nothing of the sort. Did this mean that right-holders could always restrict consumers’ rights? Is contract law king or do consumers’ freedoms prevail? He cited the example of an eBook copy of “Alice in Wonderland” which stated that the book cannot be lent, given or even read aloud.  There is no easy legal answer to the question. Suggesting solutions, he pointed to Dutch and German consumer law regimes where standard non-negotiated terms are not valid if consumers are not informed in advance, and that contain so-called grey and black lists of invalid terms. It would be useful to similarly establish a set of unallowable terms in consumer licensing agreements to ensure the possibility to copy, or time-shift, for example. The problem of balancing freedom of contract and consumer interests does not necessarily lie within framework of IP law. It might be more useful to look at opportunities in consumer law instead and escape the rigid copyright law paradigm altogether.

Laurence Lebersborg, Belgian consumers’ association, Test-Achats, spoke about legal proceedings her organisation has brought against four major music companies - Sony, EMI, BMG and Universal - after receiving complaints from consumers that it was impossible to play CDs or make a copy. They discussed the problem with the industry association IFPI and tried to get a solution. IFPI wanted to solve the problem with new technical devices but consumers were still complaining, so Test Achats decided on a court case - under Belgian law, authors can’t prohibit private copying because Belgium compensate for this.  Test Achats is often asked by journalists if it supports piracy but they just want consumers to be able to read CDs and make a personal copy, although they also foresee problems with DVDs. The music industry is not using the right technical devices but their aim is achievable and justified. There was a first hearing at the beginning of January, which was postponed to March 8. Test Achats hopes to plead the case before the end of June but no definitive decision is expected for a few years because the companies will appeal.

Gwen Hinze, Staff Attorney, Electronic Frontier Foundation, said she was “the voice of doom and gloom” based on the impact on consumers’ rights of legally –enforced DRMs in the U.S. The US experience demonstrated the dangers and need for clear exceptions for consumers to enjoy existing rights under national schemes. The Digital Millennium Copyright Act (DMCA) legislation has gone overboard and destroyed the balance between public and private rights, eliminating all fair use rights for protected works. DMCA bans the circumvention of TPM measures as well as the tools used to circumvent them. It has also overridden statutory limitations, for non-profit organisations for example, so making Braille translations of protected e-books for the blind is no longer possible. Right-holders can use TPMs to prevent copyright works such as movies, going into the public domain when they go out of copyright.  At the same time, content-based DRM has not eliminated commercial piracy and would not do so. It has given consumers fewer rights for the same or a higher price. 

In addition, consumer hostility to DRMs has forced them to go outside the law. “If I want an MP3 copy of a copy-protected CD I’ve bought, it’s more likely that I go to an unauthorised peer-to-peer network”. DRMs backed by law had allowed right-holders to create monopolies, reducing competition and consumer choice. While DRM had not been successful in eliminating piracy it had been successful in extending rights control, resulting in a stifling of innovation and competition. For instance, DVD technology has been frozen since 1995.

Michelle Childs, Head of Policy Research, UK Consumers Association, spoke about the encoding of DVDs and CDs. This is not just a consumer issue, but was a complex mix of IP protection and the way in which business models are changing. IP is being used to limit trade and maintain prices, giving the consumer less choice. DVDs are encoded so that they can only play on machines in a specific region of the world. where discs are only supposed to play on regional machines. The scheme allows market segmentations because the DVD regions are not geographical but are instead price-branded markets, based on market power and the knowledge of consumers’ willingness to pay. However, many EU retailers were selling multi-regional machines and there are websites selling multi-region DVDs. For the time being DVD makers are turning a blind eye because a small number of consumers are buying a large number of DVDs.

The Internet should be used as a key information tool, especially on prices. Consumers wonder why they have to pay £15 in the UK market when CDs are much cheaper elsewhere. The Consumers Association is very concerned that DVD makers could be using IP to restrict trade. Is encoding of DVDs anti-competitive? The music industry used to say that home taping would kill music. There has been a paradigm shift in that industry now has the technical ability to stop consumers asserting their rights. She cited the example of internet retailer ‘CD Wow’ which sells imported CDs directly to consumers, and has been attacked by the music industry despite paying all custom and copyright levies. Music companies have a regional, rather than global, business model as it had been the British part of the industry which complained - the British Phonographic Industry sought to the use the Copyright Directive but not to stop piracy or reward poor artists. The legislation restricts consumers’ ability to personally import goods, and stopping consumers from virtual shopping would limit e-commerce.  While companies are keen to use the Internet to reduce their costs, they quickly turn to laws and legislation to protect their profits. CD encryption criminalizes the consumer, and the systems are designed to protect trade and competition, to protect old business models and ways of making money. For example, the industry’s reaction to music downloads was to clamp down on them rather than meeting consumer demand.

Discussion:

• Volker Grassmuck - likes the idea of unwaivable rights, but how would it be implemented? At EU, WIPO, UN Information Society level?
• Bernt Hugenholz - would keep it out of the IP framework, and advised starting at the national level where consumer friendliness abounds, especially in Germany . He advised against starting by trying to create a law but by trying to do it through consumer organisations and developing soft law. This is how consumer law had developed, and sometimes it evolves into hard law.
• Jamie Love, Consumer Project on Technology - what does WIPO feel about TACD’s request for an information meeting on TPMs?
• Richard Owens - WIPO is very interested in the idea of an information meeting. An EC representative said that it would not ask WIPO for a meeting as it normally left such decisions to the discretion of the organisation’s Director-General.
• Gwen Hinze - Article 13 of the TRIPS agreement would come up in US negotiations with third countries for Free Trade Areas (FTAs) or the Free Trade Area of the Americas. The question is how countries can maintain exceptions under national law. Early drafts of the WIPO treaty had contained language on broadcast flags, e.g. on time-shifting up to 3 hours.
• This was challenged by Richard Owens - the broadcast flag did not figure in the treaty for broadcast organisation. Broadcast flag TPMs could, however, be implemented by a member state which had acceded to a treaty. There were a variety of TPM proposals and it could figure in one of them but it was not, per se, part of a proposal.

Session 3: Enforcement of copyright in the digital age

Roger Wezenbeek, DG Internal Market, European Commission, explained that the EU’s IP Enforcement Directive is being discussed in the European Parliament and should be settled by the end of March 2004. Member States are in the process of implementing the Copyright Directive, and Article 5 includes exceptions which have to be made in light of the three-step test. The Enforcement Directive is about harmonising legal instruments. “We have tried to see how we can ensure a level playing-field, rather than introduce new substantive laws. We are trying to bring enforcement measures into line”. There has been a debate on the scope of the Directive and whether it should only cover infringements for commercial purposes. There is a provision on sanctions and this will remain one of the most contentious issues. The legislation was not aimed at large number of users of peer-to-peer networks, but rather at commercial-scale infringements which cause significant harm.

Ted Shapiro, Vice President and General Counsel-Europe, Motion Picture Association, said that, while Bernt Hugenholtz’s suggestion might work for consumer groups, the film industry could not escape the copyright paradigm, because it is the basis of their business. As only three or four in ten films break even in the cinema, the film industry tries to make as much revenue as possible from the rest of the chain, beyond cinemas. Their current business model, sequential release is challenged by the Internet. While consumer groups said the industry had complete control, the MPA member groups are concerned that they are losing control. The digital environment creates both challenges and opportunities. MPA is looking at five areas (environment for new business models, consumer education, technology, enforcement and legislation). Technological measures take years to develop and involve many different industries. The DVD format, including CSS, took years of negotiations with consumer electronics and IT industries and was a compromise that had to take into account differing interests. The DVD has been the most successful new CE format in history and wildly popular with consumers.  The industry has not inhibited technological advances and MPA members are embracing technology. The MPA has always taken the view that copying is about time-shifting from free TV. The broadcast flag is not a copy control, but is instead designed to prevent unauthorised retransmission, and the three-hours rule would only apply to pay-per-view (which is totally consistent with applicable legislation and caselaw). The industry is also looking at day and date release as one way to address piracy. The MPA knows that pirates take advantage of staggered release dates and that some consumers are unhappy. MPA participates in over 70 anti-piracy organisations worldwide. In addition, the MPA is trying to make consumers aware of the importance of copyright. They do not support levies for copying from illegal sources - a private copy should only come from a legal source. The three-step test (article 5.5 of the Directive) and Article 6.4 of the Directive are also important provisions to consider.

Comparisons of the Enforcement Directive with the DMCA are largely misplaced. The Enforcement Directive will change little over existing law in the member States. It may not apply to criminal infringements [NB this has since become the case] and, as regards the scope for civil infringement, it would appear to offer less protection than TRIPS. The issue of privacy has to be balanced against the need for effective enforcement, which is a TRIPs obligation. The MPA is not optimistic that the Directive would do much for the industry but it could send a strong message that if you take part in some activities there is a price to pay.

Christiaan Alberdingk Thijm, SOLV New Business Advocaten, talked about a case brought 60 years ago when German consumer electronics company Grundig introduced the tape recorder. There was concern over falling sales in the music business and the German collecting society GEMA filed a suit requesting that Grundig inform consumers that copying was illegal, even though private copying was not illegal. The German Supreme Court said that the 1901 law on copyright had been drafted when legislators could not have foreseen the advent of copying, but there was no precedent for copyright law being extended to private households. Recently the Dutch performing rights society brought an action against online music store Kazaa, lost its claim and said it had no option but to go after consumers. In the U.S. major record companies took action against more than 500 individuals, including a 12-year old girl and a 66-year old grandmother – it was a public relations nightmare for the record industry.

Nine years after the Grundig/GEMA case the Supreme Court had to rule again because GEMA wanted electronic consumer goods vendors to register the names of customers so they could check up on them. The case was thrown out because the enforcement of copyright law could not be extended to homes. On the Internet, however, it doesn’t need to, because it can be done with software robots which can track infringements and record IP addresses - a unique number which makes it possible to identify computer users like a telephone number. To find the identity of a person you need the cooperation of the Internet service provider. The music industry wants the Internet Service Providers (ISPs) to identify subscribers and provide their details. So far ISPs have been reluctant to cooperate under EU data protection law. In 2001 a software robot designed to track users of Napster was launched and thousands of napster users were identified. The Belgian Ministry of Justice sternly warned the IFPI that it wasn’t in line with data protection rules in Belgium and ordered full research into its conduct. Mr Alberdingk Thijm suggests introducing a licence for peer-to-peer users.

Sarah Deutsch, VP and Associate General Counsel, Verizon, said the original objective of the IP enforcement Directive was to fight large scale piracy. The question for her company was how this would be done. The Directive was not a level playing-field and the losers would be consumers and ISPs. The Directive is not balanced and criminalizes consumers, branding them as pirates. It could lead to a wave of litigation and threatens to undermine privacy rights.

ISPs have a number of problems with the Directive. Article 9 of the IPR Directive says you can’t get information from an ISP about an individual without the authorisation from a judge or a court order. But in the U.S., the Recording Industry Association of America (RIAA) sued Verizon to obtain user data using the lowest level of legal procedures - a clerk’s signature. The RIAA issued thousands of suits but when challenged about the fact that the targets included teenage girls and pensioners they simply commented: “When you fish with a net you’re going to catch a dolphin”. The IFPI had announced it is ready to start harpooning dolphins.  Art 9 of the Directive targets ISPs, prohibiting them from warning subscribers, and the Directive would turn ISPs into Big Brother. A provision in the Directive places ISPs in the role of reporting infringements to rights holders.

A real life preview of the IP Enforcement Directive can be seen in France where ISPs are being asked to be responsible for blocking illegal content. Verizon believes that it would be subject to an excessive number of injunctions, and advises EU policy-makers to look at how press and public opinion has opposed excessive enforcement. European lawmakers must get this Directive right, so they should not rush this through, and should take views of all intermediaries and stakeholders into account. 

Volker Grassmuck, Helmholtz Centre for Cultural Technology, Berlin, observed a general trend of the abolishing of copyright law as a balance of interests and rights. In Germany, for example, if right-holders don’t make exceptions available they can be sued for €50,000 but this only applies to analogue private copies – digital private copying has been left out.  For the second round of copyright legislation the German Ministry of Justice is employing a cooperative method of lawmaking with interested parties. The film industry has argued that its products are special because of the ‘exploitative cascade’ (the different stages of revenue from cinemas, videocassettes, DVDs and, finally, free TV).  A number of models have been proposed by the music industry, such as copy stations in music stores, delayed copy protection, limitations on the number of copies which can be made or smartcards with a certain number of copies. Another is online registration in a kind of rights’ locker, such as Bertelsmann’s Digital World Service. There is also the possibility of storing personal data, (although there are implications for privacy), and personally-signed private copies or lightweight DRM which locks content to a user’s machine. This would allow you to make copies for family and friends, but not for release to peer-to-peer networks.  He concluded by quoting a number of industry insiders, such as Peter Biddle of Hewlett Packard, who said that DRM was “inefficient, futile and stupid”. Others said that it can never be effective and it takes way from existing rights. Instead, he suggested one could operate according to the principle: “Control what can be controlled. Compensate what cannot be controlled”.

Discussion:

• Bernt Hugenholz- the enforcement Directive would introduce many sanctions not known in continental Europe. The legislation should be about piracy and counterfeiting but not about ordinary infringements. Letting intermediaries off the hook would put consumers in the firing line, so he urged intermediaries to be a bit more cooperative. Finally, It is not realistic to have levies to compensate for peer-to-peer file sharing of copyrights works.
• Ted Shapiro- the IP Enforcement Directive offers less protection than the TRIPS agreement in terms of scope if you considered Article 41, as amended by the EP Legal Affairs committee. The Directive’s provisions are useful enforcement tools. There is a question about how to interpret provisions and there may be different interpretations of Article 9
• Rogier Wezenbeek - it should be a judge who decides whether to issue a subpoena rather than a clerk.
• Sarah Deutsch - the scope of the Directive should be restricted to piracy and counterfeiting.

Session 4: Control of digital information

Rishab Ghosh, International Institute of Infonomics, said that IP rights were a state-supported monopoly. The trend in IP regulation is to entrench existing monopolies and extend their scope. Legal monopolies could be as dangerous as illegal ones through enhanced IP protection, and there is a need for open standards and interoperability.  Creators of information would be controlled by publishers and distributors and already many do not have control over what they create. Increased IP protection doesn’t improve rights of creators but of publishers and distributors. Professional creators hand over rights with their consent, but consumers are not giving any consent to give up control over what they create. Vendors have a role in allowing consumers to be creators and retaining rights over what a consumer creates depends on not being forced to use tools of just one vendor. For example, if someone creates a document in Word but in 2010 the only platform is Word 2010 then that person has lost control. If DRM prevents consumers from having access to a product they have created creators they will be locked into products of specific vendors. The Software Patent Directive allows you to do reverse engineering and violate patents to create something which is compatible. The Copyright Directive doesn’t have such provisions and vendors will use TPMs to extend control over information created by consumers.

Manon Ress, Consumer Project on Technology, spoke about the WIPO broadcast/cablecast/webcast Treaty which is being drawn up. She talked about the range of Treaties covering IP including the 1996 Treaties which created new rights, especially anti-circumvention provision. The legal framework for protection of broadcasters came under the Rome Convention which is governed by UNESCO and the ILO. TRIPS, administered by the WTO, also mentions broadcasters. Other international treaties include the Brussels satellite convention for pre-broadcast protection.  WIPO started work on the ‘casters Treaty in 1998. The main issues were the object and subject of protection, as well as the scope – i.e. should webcasting be included? A treaty was proposed for traditional broadcasters and cable providers, but including webcasters has been a source of increased problems.  Questions were raised about what rights are necessary or appropriate. How long should be the term? Rome and TRIPS say 20 years but the WIPO treaty says 50 years.  Term extension is a real problem, as well as the definition of webcasting. The WIPO secretariat says there is no established definition of webcasting. Other issues include consumer concerns and the impact of technological measures on privacy and innovation. The Treaty takes information out of the public domain, while a loose definition of webcasting could lead to expansive interpretation.

Robin Gross, IP Justice, explained that her organisation is an international civil liberties organisation working for balanced IP laws. The answers to the questions being asked at the conference are being determined at international level, such as TRIPS/WTO, WIPO, the EU Directive on IP enforcement and regional trade agreements like the Free Trade Area of the Americas, and national laws are largely irrelevant. However, the interests which were having an impact were those of the entertainment and software industries. Consumers’ rights to freedom of expression are being shrunk and consumers’ privacy and copying rights, such as Fair Use, are being reduced. Scientific research is being affected – it is actually illegal to publish work on DRM standards. Technological conferences are moving overseas because organisers can be held criminally responsible, while liability and burdens are being imposed on innocent third parties like ISPs. Laws are creating barriers to trade and competition and enabling the creation of monopolies in unrelated fields. Laws are preventing interoperability, making it difficult for people to watch DVDs on a Linux box for instance.  Stronger IP measures are being proposed which would lead to the criminalization of peer-to-peer networks, while industry is trying to link IP infringements to organised crime. The EU Enforcement Directive links infringements to terrorism, child porn and drug trafficking. Copyright terms are getting longer - formerly 50 years after the death of the author, they are now becoming 70 years in the U.S.  No study has found that IP enhances the public interest. The question is how these rules should be framed. Do these rules promote or inhibit creativity? Too much protection could create a chokehold on creativity.

IP rules should shrink the knowledge gap, not increase it. We are moving to a pay-per view society where the level of education will increasingly depend on income. Private copying rights should be protected, as most copies are not infringements, and copying rights must move with us into digital environment.  IP should not limit traditional consumers’ rights but it is being used to prevent people fast-forwarding through adverts on DVDs. Greater consumer protection is needed in law and we need to stop supporting companies which are destroying our rights. Consumers should vote with their wallets, and need to understand the power they wield. We are seeing civil disobedience over rights and this will be the next struggle for global justice.

Machiel van der Velde, Dutch consumers’ organisation, Consumentenbond.nl, quoted the European Commission’s DG Information Society website which says that the development and use of DRMs must be encouraged. In testing, Consumentenbond has found DRM systems very difficult to use, and sometimes they only work in Windows Media Player format or allow for limited access to songs. This is what consumers are facing if control remains with industry that does not take into account consumer views and expectations.  DRMs should respect legal exceptions and should be interoperable. Users shouldn’t be required to use specific players, he said, and DRM should not coexist with levies. DRMs should respect privacy and must not hinder access to works in the public domain. In fact, governments should demand that right-holders provide access to works in the public domain. DRMs should respect existing consumer expectations and not infringe on exceptions to copyright. Other business models should be developed, citing the example of !Fun a Coca-Cola-sponsored free website. There should be a genuine producer-user relationship, rather than control over use.  DRMs are managed by contractual use but if this means that they cannot be used in the way wanted, then Mr van der Velde would prefer levies and keeping access, despite levies being a rough way of dealing with the problem.

Discussion:

• Volker Grassmuck - a proposal on the table in Germany would prevent a double levy. Works marketed through DRM should be registered as such with collection agencies so they did not receive levies and this might encourage competition
• Rishab Ghosh - any DRM registers should be clear that DRM products should not benefit from levies.
• Robin Gross – we must motivate the consumer, who is angry about limitations, and cannot turn CDs into MP3s. She recommended letter-writing and general awareness raising.
• Bernt Hugenholtz - the EU Copyright Directive dealt with the double payment problem, prescribing that levies should be phased out as technical measures become available. But to what extent are technical measures available? There is limited availability on the market place of practical and consumer-friendly systems, he suggested. DRM is not all bad and good DRM could, and should, replace levies. 

Closing Panel

Richard Owens - the number one priority is awareness and it is important to raise awareness of the different national legislation being developed on Fair Use, ISPs, liabilities, etc. The same rules are not being developed worldwide. He spoke of the need for soft law, consensus building and cooperation between consumer groups. On the question of whether compulsory licencing could help, he pointed out that it was limited to a particular territory and is seen as a temporary measure to remedy market failure, generally being time-limited. He urged people to think multi-territorially, if not globally, and mentioned the work of the Digital Media Project.

Michelle Childs - hoped the conference delegates had been convinced that this was not an esoteric issue, but a consumer issue. Just because something (DRM) is technically possible does not mean it is socially or economically justified. She would like to see the term ‘proportionate’ introduced - if you criminalize consumers you have to show you using proportionate measures. As the Internet was becoming more public some people might go back to high street and pay in cash. It is fair enough for companies to maximise profits but not for legal monopolies to be backed by legal sanctions.

Victoria Villamar, European Consumers’ Organisation / BEUC - everyone is talking about the right balance of legislation. Consumers lost out on the Copyright Directive, and BEUC is concerned about the IP Enforcement Directive. The discussion was about protecting legitimate rights and that had to be combined into legal instruments. The way the U.S., the European Commission and national parliaments are dealing with IP it is important to be alert to risks that new instruments could have for consumers. BEUC is concerned how these enforcement powers could be used. BEUC agrees on the need for the involvement of interested parties in drafting legislation, and praised the consultation model used in Germany.

Mark Silbergeld - the entertainment industry is a very bad prognosticator of how their own business would develop, having said that the video recorder was devilish when it came out and asking Congress to licence sales of home video cassettes but to disallow rental. He argued that figures on reduced sales by the entertainment industry hadn’t taken into account the economic slowdown and people were spending less on entertainment in general. Regional restrictions on distribution ought to be challenged. He expressed concern about the availability of materials for lifetime after copyright - in patent law if you register something and don’t use it then someone else can. That should apply to copyright. He advocated develop a consumers’ bill of rights so “we’re all on the same page when we talk to lawmakers”. There was a need to take political action at global, international, national and regional level, and time-limited consumer boycotts were suggested.

Gwen Hinze - likes the idea of a consumer doctrine, but said that the key question for consumers is how to get involved in the formulation of legislation. Countries involved in the implementation of legislation should look at involving consumers in an ongoing review, which had not been the experience in the U.S. Consumers’ expectations are not in a void - they are the product of the environment. In the U.S. people have a sense of Fair Use because it has existed since the 1840s. The danger of copyright was that DRM will police what people do in their own homes and have the backing of law. Content-based DRM has not been successful in combating piracy while consumers were suffering.

Anna Fielder, ConsumersInternational.org, asked: “Where do we go from here?” The consumer movement is very well organised, so a bill of rights would not be so arduous to draw up. Consumer groups must be engaged and educated as to how this is important for the future, and the consumer movement must learn to pre-empt things. Consumentenbond had started testing DRMs and this kind of research is something consumer groups are very good at. Detailed research is very effective. It is also important to do a cost-benefit analysis and to ask governments to prove the need for this.  Civil disobedience is another option. There is a need for alternatives, for out of the box thinking, to maintain the balance between right-holders and consumers. 

Participants List