Joint ICSU Press/UNESCO Expert Conference on ELECTRONIC PUBLISHING IN SCIENCE

UNESCO, Paris, 19-23 February 1996

COPYRIGHT ISSUES IN A DIGITAL PUBLISHING WORLD

By: Thomas Dreier

Table of Contents

Abstract

I. Introduction: The digital era, copyright and the law

II. Digital Networking Scenarios

III. Copyright/Droit d'auteur

IV. Unsolved Copyright Issues

V. Concluding remarks


Abstract -

Copyright and droit d'auteur were born in response to the invention and practical application of book printing. To a large extent, this is reflected in the language of the existing copyright laws. Of course, since the early times, copyright has had to adapt to new distribution techniques such as phonograms, radio, television and video. In addition, mass uses such as home taping and reprography had to be dealt with. In spite of all this, it was possible to preserve the model of the individual exclusive right, or at least an individual claim to adequate remuneration.

It is by now common knowledge that the transition of copyright into the digital era is not going as smoothly as the adaptation to other new technologies in the past. This is due to the fact that digitization affects the whole body of protected works, and that networking fundamentally alters the traditional means of creating, distributing and using both existing and newly created subject matter protected by copyright. Immaterial distribution becomes much easier than the distribution of copies in material form, and digital copying is not only inexpensive, but likewise takes only little time and leaves the user with a copy the quality of which is equal, if not superior, to the quality of the original. Furhermore, in a networking context, any user may himself easily become a distributer.

How does copyright/droit d'auteur respond to this development?

It should be noted that quite like the predictions of the digital world itself, predictions regarding the future development of copyright also often tend to be overextrapolating.

Rather, it is submitted for discussion that copyright and droit d'auteur - contrary to the opinions of some fundamental and/or pessimistic critics - are indeed capable of adapting to the digital and networking context. Indeed, remarkable progress has already been made at both the legislative and especially the contractual level in order to cope with the new problems raised.

However, a number of fundamental issues still needs to be adressesd. Most notably, these issues include:

It shall be the purpose of this intervention to provide an introduction into these questions so as to create a better understanding of the problems involved in a digital environment.

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I. Introduction: The digital era, copyright and the law

Without doubt, the digitization of analog material poses numerous problems to our legal system. Networking makes these issues even more complicated, and the increasing pace of technological invention and its practical implementation in our day-to-day life calls for an increasingly rapid adjustment of our existing legal rules. Telecommunications and broadcasting laws will define the future framework of a digital networked "post-information" society; authenticity, especially in legal document transmission, but also in business transactions, data security, legal liability regarding the contents of information are all issues which require urgent attention. Much discussed, but likewise neglected at times, is the issue of intellectual property protection, which shall be briefly outlined in this short intervention.

Multimedia, digitization and networking constitute a major challenge to both copyright theory and practice. Traditional roles will converge and new players will emerge. In terms of cultural development, the importance of the beginning of the digital information age may well be equal to, if not greater than the invention of book printing by Gutenberg at the end of the 15th century. In political terms, cultural imperatives mix with industry concerns, and the development of information infrastructures is seen in the context of employment, economic growth and international competitiveness. This requires a careful analysis of the ability of existing copyright law rules to adapt to the new forms of production and distribution of protected subject matter. It also requires a description of possible contractual as well as technical answers.

It is by now common knowledge that the transition of copyright into the digital era does not go as smoothly as the adaptation to other new technologies in the past. This is probably due to the fact that digitization does not just create a new category of protectable subject matter, nor does networking mean just another way of distributing protected works. Rather, digitization affects the whole body of protected works, and networking fundamentally alters the traditional means of creating, distributing and using both existing and newly created subject matter protected by copyright.

Of course, not all problems created by this technological revolution are new ones. For example, although based on the model of the individual exclusive right, copyright, for some time now, has had to deal with mass uses of protected works. Furthermore, with computer programs copyright has seen the first truly digital object of protection, which wasn't even addressed to the human senses. With the exception of some fundamental and/or pessimistic critics, it is by now generally believed that copyright is indeed capable of adapting also to the digital and network context. The fact that control becomes more difficult in a digital environment is balanced by the tremendous possibilities to exercise access and accounting control by digital means themselves: Apart from adapting existing copyright laws in a traditional way, "the answer to the machine lies in the machine" (Ch. Clark).

However, several core issues remain still unsolved, some of which, however, are of vital importance for both the interests of the individual players involved (authors, producers, users, network and service providers) and the interest of the general public. Any solution has carefully to avoid the pitfalls of over as well as underprotection. Furthermore, cultural imperatives mix with industry concerns, and it comes by no means as a surprise that the EC views the development of information infrastructures in the context of employment, economic growth and international competitiveness.

Before these issues can be fully adressed (IV.), a brief examination of the future digital scenarios as they are often described seems to be called for (II.). Furthermore, in order to evaluate the changes which the future digital scenarios will initiate regarding copyright law, a brief description is necessary of what copyright has been, what it is, and what it may become (III.).

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II. Digital Networking Scenarios

1. The Overtly Enthusiastic Picture

a) The Unduly Narrow Term "Multimedia"

It should be noted that the term "multimedia", currently much in use, tends to narrow unduly our perspective of the dimensions which the future networking scenario might adopt. Multimedia - which more appropriately would have to be called "unimedia" anyway - tends to focus too closely on off-line applications, and the bulk of applications marketed so far make it appear to be hardly more than an extension of the already existing video game market.

b) What is New ?

What is new is neither the digital format of each single work, nor the combination of several digital works and not even networking as such (which has already been in existence in the form of wireless broadcasting and cable systems for quite some time). The mass use of protected material created by an ever increasing number of people is not new either.

Rather, what is new - apart from the fact that the effect of the whole new scenario is greater than the sum of its component parts - appears to be best characterized as follows:

- the replacement of the dissemination of material sequentially defined in time by the information provider by the making accessible of material in a non-linear structure enabling the user to define his or her own sequential order in time each time the information pool is accessed;

- the democratization in the use of the network structures as currently witnessed in the form of the increasing number of people connecting to the Internet ( the "virtual commnity" (H.Rheingold) although it should be noted that traditional cable connections and certainly satellite transponders are still not accessible by the public at large); and, as a result of the two foregoing

- interactivity, not only in the sense of merely reaching the information provider, but in the sense of each user having the possibility of feeding material back into the net, thus becoming him or herself an independent offerer of material ("everybody becomes a data base provider").

c) What are the Structural Changes about: The Larnier-Paradox

This leads us then to the question as to what might be the real structural changes brought about by this new technology. However, in trying to predict the future with a sufficient degree of certainty, we encounter one major difficulty, which might be called the Larnier- paradox (after one of the inventors of cyberspace): "We always tend to overestimate the short-term effects, and we always tend to underestimate the long-term effects of technology changes". The problem thus described is that all we can do today is extrapolate the future effects on the basis of the facts as we know them today. However, these facts are subject to change due precisely to this future development; the process is a dialectic one, rather than a linear one.

Numerous are the examples which illustrate this paradox. Let me just name two of them:

- It was claimed that the fax-machine would revolutionarize office work; that it would create economic advantages; that it would replace ordinary mail, etc. However, in most cases we now use the fax in the same way that we used the mail some time ago; surface mail has not disappeared; the comparative advantages of the fax-machine are virtually non-existent since everybody is now using the fax-machine. And yet, the fax-machine has indelibly affected our perception of what paper-correspondence is and can be;

- a second, more general example: historically, it has often been claimed that new - reproduction - technology leads to a loss in reality; that the book, the picture, the sound record are hardly more than "substitutes" ("Ersatz") for the true, "real" perception and experience of reality, and that this will not remain without effect on the acceptance and development of the new medium. But isn't it strange that parents who a generation ago complained that their child was a "bookworm", turning its back to the real world, now would be delighted if, instead of spending endless hours with "unreal", escapist computer games, their child would read a "real" book? Similarly, at first sight, the term "virtual reality" may seem to be a contradiction in itself; however, quite to the contrary communications theory already describes "virtual reality" as being redundant, since the representation we make ourselves from the "real" has already been transformed by virtuality for quite some time now. Think of the telephone: indeed, it would hardly occur to us nowadays that the person we are talking to is not "here"; that all we hear is an electro-mechanical representation of his or her voice. And yet, the example proves another point: apparently, it takes a certain time span before we fully accept as real what in the beginning, mirrored against our past experiences, seemed to be virtual. For quite some time people tended to shout into the phone during a long-distance call, just because something deep in their mind still told them that someone who is far away can only hear them if they shouted.

In sum, the changes that technological development brings to the existing "reality" it affects, whether it just adds to it quantitatively, whether it transforms it in the long run, or whether in the end it will indeeed result in a quantum leap, remains difficult to predict (and most likely depends upon the perspective - both of the person and in time - from which it is judged).

d) The Overtly Enthusiastic Prophets

It is therefore by no means surprising that, just like in biblical times, there are again false and true prophets when it comes to predicting the future development leading from Guten- berg to data highways. In addition, it can by no means be ascertained whether the true prophets indeed have the sharper mind and better foresight, or whether they were just lucky in having made the right bet at a relatively early stage of development.

However, apparently even the most cautious and careful forecasters frequently fall into the trap of the Larnier-paradox: They simply proceed by extrapolating existing facts on the basis of the new technological parameters, and thus disregard the extent to which the changes brought about by these new technological subject matter will reshape the factual reference frame which served as a starting point. It follows that most of these predictions result in overtly enthusiastic prognoses. Of course, there are also good reasons for this. The first one is economic in nature, fostered by an obvious desire to pursue marketing activities in order to launch the new product(s), to acquire, or at least preserve, a certain market share in a relatively saturated consumer market at a time where consumer expenditure is low; or, as a former CEO of Apple once phrased it: "The best way to predict the future is to invent it". Another reason, I presume, is simple curiosity, a certain tendency of the human mind to embark on science fiction, coupled with a certain vain trait of being the best story-teller in an information society.

What are the most blatant of these predictions? Of course, they cannot all be listed, but here are a few examples:

- data highways will render printed books obsolete. Overtly enthusiastic, since pragmatically speaking, at the present state of technology, hardly anybody can read for more than a couple of minutes from a screen (G.Saur), or - ironically put - you cannot curl up in bed with a PC (N. Negroponte), nor can you wrap a dead fish in a computer (A. Buchwald);

- in a network environment, "information is at your fingertips", and this, we are told, gives life a better, more enlightened quality. Overtly enthusiastic? Well, there are several reasons for this, exemplifying the whole dilemma of over-extrapolating. First of all, this statement seems relatively devoid of content since information as such hardly constitutes a value in itself. In general, what is important is the treatment of data and information by mental act, not the mere retrieval of data and information as such. Second, due to the poor quality of most older documents, it will take decades before all the information we possess will be digitally stored, and it will still take years before search software will enable us to find easily and quickly the precise information we seek. Third, is access to information really a, or the, major problem responsible for major malfunctions in our economic and societal life? Fourth, will competition amongst those better informed not be structurally similar or identical amongst those who are not so well informed? And what about the dangerous possibility of a crucial, and cruel, future division between the "informations-haves" and the "information-have-nots", as pointed out by those who are more critical towards the so-called "progress" of technology development?

- and, the one I personally like best, since it is almost correct but nevertheless totally misses the point as much as any other example: travel agencies will cease to exist. That may already surprise, since the travel industry as such has become one of the biggest single industries, if not the biggest single industry world wide; and isn't it quite likely that travel agencies will themselves be the first to offer on-line services? However, as an explanation, we are told that all tasks travel agencies now do will be done by the computer and the data base to which it is connected, and other things beyond this, such as walking around virtual hotel rooms and along virtual beaches. As a user, all you will ultimately have to do is choose between a countryside retreat in the Toscana or in the Emilia Romagna. Now, I ask you, how can you possibly make that choice without ever having physically been to, read about or even heard of, the Emilia Romagna? So, where is the change? And, moreover, hasn't the ever increasing complexity of software given rise to a whole new service industry of people providing information of how to use these new sophisticated tools, both in written and in oral form? In fact of this, are you still of the opinion that the private traveller of the future will do all the work of finding out the cheapest rates himself?

- furthermore, we are told by the media gurus that useful applications will be mass-used (e.g., every room in every home will have huge thin screens plastered to the walls). The underlying, unquestioned assumption is that anything which is technologically possible will be produced, and anything which will be produced will indeed be consumed, consumed not only by a certain group of consumers, but by all of them. Why do I think this is an over-enthusiastic over-extrapolation? Well, first, it runs counter to another prediction according to which the multiplication of information sources (such as tv-channels; the appearance of video parallel to tv and of computer games parallel to video witnessed in the past) will break down the homogenous consumer group into an ever-increasing number of ever smaller subcultures (needless to add that this fragmentation of society will be heightened by the proliferation of additional enterntainment and leisure possibilities other than informative ones). Second, the relative failure to popularize digital formats such as DAT or even CD-I shows that factors such as consumer acceptance, compatibility and pricing may heavily influence the actual success of a particular system. It might also be pointed out that it is still unclear whether the future system will evolve around TV or around the computer, whether it will be based on the telephone lines or on cable, whether it will be exclusively on-line, or likewise off-line. Third, such a prognosis overlooks what sociologists and phsychologists call the relative stability of the heterogenity rate, i.e. the fact that even in cases where there is a high degree of consensus within a certain group about what is or should be, there is always one (or a numer of) small subgroup(s) which does not share this opinion. As an illustrative example, take the handy, the portable telephone: those who use it, and especially those who use it in public, consider their reachability to be the essential feature of what they perceive as a post-modern, "chic", personality; others, however, sense that only a person who cannot be reached at all hours is really free, and therefore rich and important, and they just laugh at what appears to them as kindergarten-behavioural gossip pollution of the public sphere. Similarly, it is fairly safe to assume that not everyone will spend hours surfing on the Net, and not everyone will be disposed to plaster the walls of his or her appartment with wall-sized tv-screens. Likewise, to cite yet another example, not everybody is turned on by the Windows screen design; as a matter of fact, the screen appearance of the early Apple Macintosh, which I found just awkward, deterred me from buying even an IBM-compatible PC for at least three or four years. This indicates another factor to be taken into account: the marketability of a certain product cannot be predicted with a sufficient degree of certainty by the producers themselves.

Needless to add that any clear cut yes/no alternative -already suspicious in itself, as the past age of ideologies has amply proven - is a model that is far too simplistic and therefore hardly acceptable in a networked context, where traditional dichotomies, such as before and after, author and user, emitter and receiver, seem to loose their meaning.

2. Valid Assumptions

What then can be validly assumed ?

Contrary to the common strategy of extrapolating future developments, it is proposed instead to try to describe the factors which are most likely to remain constant over time, and to ascertain certain trends which are likely to continue, without, however extrapolating them to their extreme. This should then enable us to foresee certain directions which copyright/droit d'auteur might or should take in the future.

As regards those factors which are most likely to remain constant, are concerned, their number seems to be relatively limited. Amongst them, I would count (obviously without any guarantee of providing a complete listing):

- a day only has 24 hours. Since the human brain cannot be connected directly to a computer memory, at least not yet, all information has to be absorbed and processed by means of a mental act; there is nothing like a quick-command copy of pre-existing material from a computer memory into the human brain. It follows that the amount of information which any human can absorb per day is limited;

- in addition, before searching for precise information, a certain background knowledge is necessary in the field where the information is sought. Likewise, symbols such as logos, slogans, names and characters will have to be recognized, before they are able to convey a certain message. To merely state that "information is at your fingertips" is without informative content. One might add that in order to be accepted, the authenticity and quality of the information will have to be guaranteed by some kind of authoritative source (such as a brand name; peer review, or the like);

- similarly, the famous quote "the medium is the message" (M.McLuhan) does not apply within the digital networking context, since the acceptance of the system will largely depend on the quality of the material travelling on the data highways. Without sufficient acceptance of this material, however, the investment necessary for building the data highways will not be recuperated, or, eventually not even made available. It follows that "the medium is the message" is irrelevant with repsect to the subject of copyright, since copyright only attaches to the message and not to the medium.

- in addition, in view of the stability of the heterogenity rate in human behaviour patterns, it may likewise be predicted that we will not end up with one large consumer group using all applications offered on the market in the same way. Quite to the contrary, the possibilities of interactivity offered by digital networking will further increase the number of possible media attractions, and thus further fragmentize consumer groups. The fact that provision of some of the new services is comparatively cheap in a digital network environment, will contribute to this tendency. Ultimately, we may assume that we will witness the simultaneous existence of any activity from broadcasting to narrowcasting to personal casting;

- furthermore, we may assume that after the demise of the planned economy model, the model of market economy will be the framework for economic activities for years to come.

In addition, we may fairly safely assume certain trends, without being able to predict their exact scope and extent, owing to the uncertainties just described.

Such trends will include, but will not be limited to:

- a shift regarding the form in which protected works, data and information will be "distributed": from the material to the immateral (cf. N.Negroponte: "What is being shipped is bits, not atoms");

- since it is probable that users will not stop using material embodiements altogether (in the same way as traditional communication involving all human senses will not be totally replaced by merely verbal on-line communication), the trend just mentioned will result in an increase in the number of material copies produced by the user him or herself;

- in a step further, the exact content of protected works and the composition of any given set of data or information, which in a Gutenberg environment were pre-defined by the author of the work, will in a data highway environment be determined increasingly by the user (cf. again Negroponte: "the intelligent browsing agent");

- furthermore, it follows from the aforementioned that the dividing line between a copyrighted work and mere data and/or information will become blurred (which is rather intriguing for intellectual property purposes, since a work enjoys an exclusive right, whereas absent special circumstances, mere data or information do not) and that at least in certain areas the economic emphasis might shift from works to data and/or mere information;

- it follows that, due to the fact that the informative "value" of identical data varies from user (group) to user (group) and over time, the target group reached by "broadcasting" will be narrowed down from the general public to a growing number of limited publics reached by "narrowcasting" (it may, of course, be subject to dispute whether the activity of reaching the smallest public possible, i.e. a single user, is only quantitatively or also qualitatively different from narrowcasting);

- furthermore, as a result of the steady growth of networks, which is favored by the dereguliarzation of public network and network services monopolies, and due to the increasing number of people having direct access to these networks, we will observe a growing internationalisation in immaterial dissemination of copyright protected material (the "global village" (M.McLuhan) in spite of language barriers which will, of course, continue to exist).

Apart from these trends which concern the change in the object of, and the modalities of the object's, communication, certain other structural trends may be predicted which have more to do with the societal consequences of building data highways:

- one such trend certainly relevant for copyright in a data highway environment will be the decentralized restructuring of factory, office and production sites to the effect that more and more work will be done at distant spots (probably at home); this will give rise to a tremendous increase in the number of copyright relevant use acts without any corresponding rise in value added;

- and, ultimately, the continuation of the convergence of information, education and entertainment activities already witnessed presently (indeed, the play-element of surfing on the net has led to such neologisms as infotainment and edutainment).

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III. Copyright/Droit d'auteur

Before we draw any conclusions from this limited set taken as valid assumptions and most likely trends, it is necessary to recall briefly the purpose, history and development of copy- right.

1. What is Copyright ?

Copyright grants authors of protected works a comprehensive set of exclusive rights in order to control the exploitation of their works. In addition, in exercising one or more of these rights, or in exercising them at different times, any author is able to bargain for what the parties consider an adequate compensation. The system shows characteristics of a property scheme, and in some countries, such as Germany, the rights are guaranteed by constitutional law. However, this is only the economic side of copyright, which, it seems worth mentioning, contributes to the industrialized nations' GNP with an average of some 3% or more, tendency rising. Consequently, for roughly a decade now, copyright has been viewed as trade-related (hence its inclusion, together with industrial property rights, in the TRIPS-agreement of the recent WTO-Agreement) and is being discussed within the framework of international competitiveness, securing of full-employment, and thus as a factor of social well-being. In this respect, copyright serves as an incentive for individual authors to creation and for the dissemination of the works created.

However, this is not all there is to it. Rather, the property aspect of copyright is overlapped by either the moral rights of the author (such as under continental European system and all systems following their tradition, which is therefore called droit d'auteur), or by a strong balance against the interest of the public in having access to the greatest number possible of protected works (such as especially under the anglo-american, but also, albeit to a lesser extent, under a droit d'auteur approach). Needless to emphasise that the moral rights doctrine, according to which the human creator is always the first owner of copyright, having a right of divulgation, name attribution and integrity in his or her work (all of which cannot totally be waived or signed away), poses an obstacle to mere economic concerns and is therefore fiercely combatted mainly by U.S. industries and U.S. industry-oriented policy, which tend to favor the interest of producers in commercializing the protected work with as few restrictions as possible from residual rights vested in the authors. Regarding the interests of the general public, both copyright and droit d'auteur legislation contain certain limitations which provide for free use of protected material, in some cases against, and in other cases even without, payment of adequate remuneration. In essence, it may be said that private use acts (such as reading a book, or viewing a film) are generally copyright-free, as are acts done for the purpose of teaching, news reporting and the like, provided, however, that the effect of such acts taken in their aggregate does not conflict with normal exploitation interests of the right holders.

2. How can Copyright/Droit d'Auteur Evolve ?

a) Past Evolution

It has become a common statement that, much more than in many other areas of law, the evolution of copyright closely follows the evolution of technoloy. As a consequence of the aforementioned, this evolution is brought about by adjusting the definitions of the exclusive rights, and by fine-tuning the exceptions to these exclusive rights, in order to maintain the delicate balance between the interests of authors, producers and users which alone guarantees the functioning of the copyright system.

Of course, copyright was initially designed to solve the problem of illegal re-printing of books, and as such is inextricably linked with the invention of Gutenberg. The core of copyright language is "print-related", and the mechanism works on the basis that the information contained in the protected form of a given work can be conveyed either in the material form of a book, i.e. a copy of the work, or in immaterial form, i.e. essentially by reading the text or performing a play in public.

How did the system historically react to the advent of new technologies, such as radio, the sound carrier, film, TV and video?

It may be said that so far, both copyright and droit d'auteur have shown great flexibility in adapting to new technologies. Admittedly, this has not happened without any difficulty, but in the end it was generally accepted that, e.g., the storage of music on piano rolls constitutes a reproduction of the music (in spite of the change in media, and in spite of the fact that the music on the roll can only be percieved by the human ear after the intervention of a machine); or that, to cite yet another example, the playing of a TV-set in a place accessible to the public is a separate act subject to copyright as is the simultaneous retransmission of broadcasts, including collective reception which goes beyond the limits of the private.

The dates of the invention of the new technologies just mentioned and the adaptation of the international legal instrumentarium speak for themselves: implementation of broadcasting in the early 1920s and amendment of the Revised Berne Convention (RBC) already in 1928; popularization of film beginning in 1896 and amendment of the RBC in 1908 and in 1948; and popularization of the sound record and creation of new international instruments expressly designed for their protection 1961 and 1971 (especially against piracy).

b) Over-Extrapolating Regarding Copyright

What may be looked at as the main problem of copyright facing digital and networking technology?

It comes as no surprise that in copyright literature we find the same attempts to predict the future based on just extrapolating existing sets of facts. However, what is rather surprising is that other than predictions regarding the general technology development and acceptance, predictions regarding the future development of copyright contradict each other to such an extent that it becomes obvious that something must be wrong with them.

It has thus been claimed that in a digital networking environment copyright in its present form will invariably lead to unacceptable overprotection, since it covers mere acts of use and since it also extends to mere (collections of) data and facts which so far have been copyright free. But it has likewise been claimed that in view of the tremendous digital copying and dissemination possibilities, copyright in its present form will lead to underprotection. Similarly, it has been claimed that the tremendous rise in the use of an ever-increasing number of works created by an ever-increasing number of users will render individual licensing obsolete, and collective licensing the only form of licensing possible. But it has also been claimed that networking and data transmission software might enable us to establish a highly individualized system of controlling and accounting for individual uses of individual works by individual users (provided, of course, privacy issues can be solved), which would make traditional collecting societies obsolete. A variation of such a scenario consists in the so-called "copy-mart" system, a huge data base which contains not only information regarding right holders and individual licensing terms and conditions, but in addition the complete data set of each single work (an example of which would be the picture library already set up by Bill Gates).

Needless to say that once again, we encounter those who believe in progress, and those who are rather sceptical regarding progress; and both groups form alliances with anti and pro- copyright interest groups, which, of course, doesn't make their predictions more credible.

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IV. Unsolved Copyright Issues

1. Conceptual problems

Copyright notions were mostly shaped in view of the print medium, and eventually adapted to new technologies such as sound recordings, radio and film. However, the fact that what used to be a work is now broken down to 0s and 1s affects the very notion of what constitutes a "work", and therefore all other notions defined with regard to it, such as "originality", "author", "infringement", to name just the most obvious. Similarly, networking which abolishes the public sphere, requires a re-definition of "public" communication. In addition, due to the digital nature of material works and their dissemination, production and use activities so far typical for the activity of a producer (publisher, soundrecord and film producer) are now increasingly undertaken by the end user him or herself.

2. Protection of the players involved

The success of the digital networking environment will largely depend on the protection the players involved do in fact enjoy for their respective activity in the field. Here, a careful analysis of protection already existing will indicate to what extent legislative action will be required.

It seems that in general databases will be eligible for copyright protection, although it should be mentioned that questions of originality of selection and arrangement of the material included may in practice pose tricky problems. Yet here the focus is on the question as to against which acts the owner of a database will be protected. The same holds true for CD-ROM producers, although it seems rather unclear under what protection scheme they fall in countries which also provide neighboring rights protection. Are CD-ROMs akin to sound recordings, do they qualify as simple films, or will they just have to be treated as a collection? The problem lies in the fact that different legal rules - ownership, scope of rights, presumption of transfer of rights - are attached to each of these qualifications. For the very same reason, the term rather imprecise term "multimedia" should not be introduced into legal language.

A question of far more uncertain outcome is the protection available to network and to service providers. Yet such protection seems essential, since the whole success of the future national and global information infrastructures depends on the investment made by these two players. Of course, their need of protection largely depends upon the extent to which their investment is subject to unauthorized appropriation by third parties. At present, it can only be presumed that what network providers most likely need is protection against unauthorized use of someone else's network, whereas service providers will probably need protection against the unauthorized appropriation or distribution of the services rendered.

It follows that where technical control devices or even safeguards are used in rendering the services, protection against misappropriation will essentially consist of measures against illegal decoders and devices circumventing access controls. However, in this regard, at least three things should be noted. First, such protection is currently provided by a number of dispersed laws, such as criminal law of computer fraud, telecommunications regulations, unfair competition and copyright law. Second, it will have to be clarified who shall be the beneficiary of such protection. Most likely, this should be the service provider, eventually the network operator, such as has been provided for under U.K. law with regard to scrambled and/or pay-tv. However, regarding computer program protection devices, the EC directive has accorded these rights as rights against secondary infringement to the person who owns the copyright of the computer program. And third, so far it does not seem clear how to circumscribe the devices to be declared illegal. Obviously, only to envisage those the "sole" intended purpose of which is to circumvent access and/or copy protection would be too narow. To envisage those whose "main" purpose is to circumvent protection devices, or which are specifically designed to achieve this aim, might proove to be too uncertain, and may leave certain uses of otherwise legal devices without legal sanction. Ultimately, any harmonizing legislation will have to define the illegal acts; shall it be use of the device only, or likewise offering for sale, importing, or even exporting and mere possession?

3. Rights granted

The next question then is to know the exact scope of rights granted and needed in a digital and networked environment.

First of all, one has to know which digital use acts do amount to reproduction and/or public communication of the protected work in question. To cite just one example, it is not clear whether the display of a work on the screen amounts to an act of reproduction, of communication or of distribution. However, its qualification entails different legal consequences.

Second, it is of paramount importance to know against what acts - downloading, partial reproduction, extraction of data - database providers and CD-ROM producers are or will be protected. Will copyright be sufficient, or do we need a new right to prevent unauthorised or at least unfair extraction, such as currently proposed by the draft EC database directive? Of course, it has to be studied very carefully whether, on the one hand, protection as proposed does in fact satisfy the justified protection needs of those concerned, and, on the other hand, whether protection does not unduly hinder competition and block access to information.

Third, given the international scope of digital networks, it becomes of prime importance to harmonize the limitations or exceptions to copyright. What may be subject to the rightholder's consent in one country may well be considered fair use or legitimate private use in another. Indeed, such loopholes may threaten the economic basis of the application or service offered as such. This is especially true with regard to document delivery systems and the private copying exception.

In addition, the protectability of product and interface standards by copyright will once more attract considerable attention.

4. Acquisition of rights

Furthermore, some multimedia producers have complained that the acquisition of all rights necessary to produce and market a particular application had proven to be too time- consuming and that the total remuneration to be paid would be prohibitive, thus depriving the general public of certain highly useful and desirable applications. Consequently, it has been claimed that the acquisition of rights should be facilitated both by technical means and by imposing certain restrictions on the exercise of exclusive rights, even beyond antitrust law requirements.

However, multimedia producers by now seem to have become aware of the fact that any facilitation of the acquisition of rights which would cut back the exclusive right and benefit them today, especially a legal licence, likewise would affect their own rights in their own products tomorrow. Thus, it is hardly surprising that the U.S. multimedia industries seem to have taken the view that, in general, rights should continue to be acquired on a contractual basis.

However, this does not preclude that all efforts will have to be undertaken in order to facilitate the contractual acquisition of rights. It starts with developing identification and authentification codes, such as currently undertaken by WIPO and other rightholders' and private industry groups. It comprises the development of technical means to implement these codes in protected material and parts thereof. A step further would be the building up of huge databases containing information relevant to rights, rightholders, conditions of use and licence fees, and ultimately the works themselves, as mainly proposed in Japan. In addition, especially in countries with a well developed system of collecting societies, it seems more realistic for the time being to concentrate the administration of digital rights with collecting societies as far as so-called "small rights" are concerned in protected subject matter which is essentially substitutable. Another alternative would be centralized or collective licensing, of course, where a centralized agency is entrusted to license according to terms and conditions set, or at least agreed to, by each individual or a group of rightholders.

Apart from this, legal practice is about to develop appropriate licensing techniques. Here, ideas may be borrowed from the experiences gained especially with software licensing. Licences of limited time may serve as a starting point and a trial basis. Of course, authors as well as other right holders have to be much aware of so-called "buy-out" techniques as increasingly practiced by big media and communication enterprises. Here also, the legislator is called upon to protect adequately those who are the very source of protectable subject matter and cultural emanations.

It follows that national legislatures will have to look into all these matters. However, given the time end effort it will take to clarify these issues further and to legislate accordingly without disrupting the traditional structure of the law, it will still take some time before appropriate answeres will have been implemented on the national level.

5. International Protection

However, the issues related to the digital and network environment are not confined to national boundaries. Apart from traditional radio, and especially satellite-tv, the digital and network environment for the first time permits truly international exploitation and dissemination of protected subject matter. Yet apart from the minimum standards as laid down in the International Conventions, copyright legislation is still a national affair. Any transborder exploitation activity will therefore be governed by a multitude of national laws which are not only inadequate in some respects, but which also differ from each other. These differences may have been of little importance as long as the exploitation of protected works was confined to single national territories. However, these differences become vital when the exploitation "goes international". Here, we will be faced with such well-known dichotomies such as copyright and droit d'auteur, author and producer, copyright and neighboring rights, economic and moral rights, not to mention the more subtle, but decisive differences regarding the limitations and exceptions to copyright in each country. Or, as the drafters of the U.S. Information Infrastructure Task Force have formulated it in their report:

"To attain the needed level of protection internationally, ways to span the differences between the continental droit d'auteur and neighboring rights systems and the Anglo-American copyright systems must be developed. An essential element of this effort will be to harmonize levels of protection by establishing standards that can be implemented through either system."

6. Applicable Law

As long as, and to the extent, such international harmonisation has not yet been achieved, we will have to live with conflict of laws rules which, again, are national in nature and anything but harmonized. Furthermore, it seems highly questionable whether traditional approaches looking for a "place" as a point of attachment for legal consequences will work at all in the digital and networking "virtual ubiquity" of - not all things, but of - all bits around.

The transborder problem is twofold: on the one hand, if exceptions to copyright vary considerably from country to country, this can be accepted as long as most exploitation activities take place on a national scale. However, world-wide harmonization becomes essential where exploitation starts crossing borders (just think of the current problem of document delivery services which legally extract documents under a private use exception in one country from a data base located in another country, and then deliver the material back to users in the country where the data base is located). On the other hand, in view of the territorial nature of intellectual property laws, the question is which law to apply to acts which are more and more difficult to localize at a particular place (both the work and the use act are about to loose their "domicile"). The EC has established a first model solution regarding the transborder activity of transmitting radio or tv-programmes (a typical transition problem, since powerful satellites cover more Member States than the program providers can economically handle, and since the EC is still on its way from national markets to a European Audiovisual Area). However, it seems that absent further international harmonization of (both material and contractual) copyright/droit d'auteur, this solution cannot be generalized for the data highway context as such. Yet it is difficult to decide which forum and which approach to such a harmonization will lead to success. Of course, I have no doubts that the system will adapt over time; but this time span may prove too long for some of the players and for some of the developments.

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V. Concluding remarks

In order to conclude, two remarks seem to be called for.

First, in view of the valid assumptions retained, and quite contrary to the predictions that copyright obstructs the construction of the data highways, the system of granting exclusive, monopoly-like property rights as such will no doubt continue to exist as a necessary condition for the construction and operation of data highways. The reason for this is as follows: since we live in a market economomy, the investment made has to be recovered on the market. A product which does not prove to be profitable will be withdrawn from the market. This means that the data highways will only be built if the investment necessary will most likely be returned. Whether or not this is the case depends on the quality of the material "travelling" on the data highways. The production of good quality material is expensive, and it requires quite substantial advertising efforts to obtain a proper return. Already today, major motion pictures including their advertising campaign cannot be financed by box office sales alone, nor by exploitation of the film by way of video and tv. Rather, a whole range of merchandizing activities is necessary, and ultimately, merchandizing even becomes the main part of the whole marketing and profit making activity. Of course, merchandizing only works if the characters, signs and logos merchandized are known to a sufficiently large consumer group, if they are well protected by intellectual property rights. Without the latter, the system will invariably break down; the system of copyright as such is therefore guaranteed. Furthermore, it should be recalled that what used to be large and relatively homogenous user groups (think only of the 70% and more tv-audience rates as compared to today's highs of 10 to 14%), will desintegrate into an almost infinite number of small subgroups which are much more difficult to reach, and therefore only at a much greater expense, than the homogenous user and consumer groups of the past (already today, producers have difficulties in reaching the age group of 12 to 14 year olds via tv). What the media professionals therefore look for to an increasing extent is the single blow, knock-out, beat-all records "killer"-copyright (S.Sassa).

Second, the main problem, however, seems to reside in what may be called transition. Firstly, transition of technology, since at least in the near future we will still see analog and digital distribution of protected subject matter taking place in parallel; transition of technology also since both cable networks and satellite transmission allow for national and international work distribution. Transition, secondly, since economically we will observe a transition from the business of shipping atoms to the transportion of bits, which in turn results in a convergence of traditional distribution activities: publishers assume the role of libraries; libraries assume the role of book retailers; both of them assume the role of broadcasters, and so on. Users will feed the material back into the net: ultimately, everybody becomes a data base provider. Already, we have become used to calling this development convergence. Transition, thirdly, since copyright/droit d'auteur might shift from an exploitation to a use-oriented right.

The real problem of transition and convergence is that while the (economic, copyright) system as such will continue to exist, each individual player living within the system will have to adapt at a much faster pace than that at which the internal structure of the system evolves. But which adaptation decisions should be taken, if the short-term parameters are so uncertain? If relying on long-term trends proves too risky? Obviously, one way out of this dilemma may be to undertake anything possible to influence the development of the system. If the players cannot build the future themselves, i.e., if they are too weak to adopt a strategy of the offensive, it is, of course, rather tempting to react defensively and lobby for the maintenance, adaptation or erection of protective mesures which are either already obsolete or, worse, will hinder a meaningful development of the - technical, economic or legal - system as such.

Cruel but true, some of today's activities are bound to disappear. All we can do is to try to make the transition process as smooth as possible. Once more, history provides ample case material. In retrospect, wouldn't it indeed seem both futile and contraproductive, had one tried to protect miniature portraitists in the long run against portrait photographers? One might add that with the so-called physionotracists (i.e. portraitists who operated a pantograph-like machine which combined the techniques of silhouette-taking and engraving, and quickly produced a drawing-like portrait) another transitional profession appeared in Paris which took over business from miniature painters in a big way, only to dissapear shortly thereafter.

References

** Dr. jur.; M.C.J. (NYU); Member of the New York Bar; Member, Research Staff of the Max-Planck-Institute for foreign and international Patent, Copyright and Competition Law, Munich, Germany.

See, e.g., EC White Paper "Growth, Competitiveness and Employment - The Challenges and Ways forward into the 21st Century", Doc. COM(93) 700 final, of 5 December 1993.


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