15 Management of copyright and related
rights within the internal market
| (25564)
8628/04
COM(04) 261
| Commission Communication: the management of copyright and related rights in the internal market
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| Legal base | — |
| Document originated | 16 April 2004
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| Deposited in Parliament | 23 April 2004
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| Department | Trade and Industry
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| Basis of consideration | EM of 10 May 2004
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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Background
15.1 Copyright, like other intellectual property rights, is essentially
territorial, with copyright protection being granted under national
law in respect of acts taking place within the national territory.
International conventions (such as the Berne Union originating
in 1886) may require participating States to treat non-nationals
in the same way as nationals in relation to the enforcement of
rights within the national territory.
15.2 Copyright and related rights have been the subject
of a number of EC harmonisation measures, seven Directives being
adopted between 1991 and 2001. Most recently, the Directive on
the enforcement of intellectual property rights was adopted on
26 April 2004.[26] These
measures have concentrated on the nature of the rights conferred
by national copyright laws, seeking to harmonise them to the extent
necessary to remove obstacles to the free movement of goods and
services and removing distortions of competition.
15.3 National laws confer two broad classes of right.
On the one hand, the author or creator of the work may have an
exclusive right to authorise or prevent the copying of his work
(as is the case where printed or electronic copies are made of
a book) or he may benefit from a right to reasonable remuneration
where his work is made use of in some other way, such as where
a sound recording is broadcast or performed in public. In both
cases, the author or originator of the work may appoint a collecting
society to manage his rights, but it is more common for the right
to equitable or reasonable remuneration to be administered by
a collecting society. This is principally because these rights
are inherently more difficult to monitor and assert on an individual
basis.
15.4 The operations of collecting societies have
not so far been the subject of specific Community legislation,
although they are subject to the general rules of the EC Treaty
relating to economic activity, notably the rules on competition,[27]
the free movement of goods and the freedom to provide services.
The Commission's communication
15.5 The Communication notes the substantial contribution
of copyright-based industries to Community GNP, which the Commission
estimates to be around 5%. It recalls that the Commission has
been consulting widely on the management of rights, both on an
individual and a collective basis, since 1995. The Communication
deals separately with collective and individual management, before
considering the role and operations of collecting societies.
15.6 In the case of collective management, the Communication
refers to views expressed by rights users, particularly those
providing services on-line, in favour of more Community-wide licensing.
Such users would prefer the grant of a licence for a single collecting
society in a single transaction for exploitation throughout the
Community. The Communication points out that those concerned
in the creation and exploitation of rights have devised various
contractual means for granting licences on a Community-wide basis,
such as the BIEM/IFPI agreement relating to sound recordings and,
in relation to on-line transmission of music, a series of agreements
notified to the Commission under Article 81 EC, under which a
Community-wide licence would be granted by the collecting society
for the Member State where the content provider operates. Similar
agreements are being devised for music performing rights and sound
and television broadcasts.
15.7 The Communication points out that the most radical
step would be for Community legislation to require a right holder
to grant a Community-wide licence, but that this would amount
to imposing a compulsory licence. Such a system of compulsory
licences would need careful assessment to establish its compatibility
with the Berne and Rome[28]
Conventions and the more recent WCT and WPPT treaties adopted
under the auspices of the World Intellectual Property Organisation
(WIPO), as well as with the provisions of Article 295 EC (which
provide that the EC Treaty "shall in no way prejudice the
rules in Member States governing the system of property ownership").
15.8 Another option identified in the Communication
would be for Community legislation to provide that any national
licence of rights relating to communication of a work to the public,
"at least as regards activities with a cross-border reach",
would also be authorised in respect of the whole Community. The
Communication acknowledges that this option would amount to a
partial removal of the territorial principle in national copyright
laws. Other options would be to adopt the model of Directive
93/83/EEC on satellite broadcasting, but the Communication points
out that to apply this model to copyright and related rights without
also limiting the contractual freedom of the parties would not
achieve the result of multi-territorial licensing. Collecting
societies could also be empowered to offer Community-wide licences,
but in the Commission's view this would require efficient and
accountable collective rights management across the Community,
including the adoption by collecting societies of the necessary
reciprocal agreements allowing them to grant rights for territories
other than their own.
15.9 Another option, which the Communication describes
as being "at the less interventionist end", is to leave
the matter to the collecting societies, since they already provide
for "one-stop-shop" licensing. The communication considers
that this is a significant advantage for right holders and users
alike and should not be prejudiced. The Communication nevertheless
concludes that centralised licensing arrangements could be fostered
by eliminating further any disparities in Member States' laws
on the conditions for collective management and introducing at
EU level good governance rules for the functioning of collecting
societies.
15.10 The Communication also discusses systems for
digital rights management (DRM), noting that Directive 2001/29/EC
protects technological measures and electronic rights management
information and provides a legal framework for use of DRM systems
to administer rights. Although DRM systems are helpful for administering
rights at a high volume with a low transactional cost, the Communication
considers that they do not constitute an alternative to copyright
policy in balancing the interests of authors and creators with
those of users or a means of setting the limits to copyright protection
with the exceptions and limitations which are traditionally fixed
by law. The Communication concludes that the decision as to which
rights management system is to be preferred should be left to
the development of the market place, and that close monitoring
of developments in the market will be essential.
15.11 With regard to the individual management of
rights, the Communication notes that Directive 2001/29/EC confirms
that the exclusive rights to authorise reproduction and communication
to the public may be transferred, assigned or licensed without
prejudice to the relevant national law on copyright and related
rights. Directive 92/100/EEC made similar provision in relation
to exclusive rental, lending, reproduction and distribution rights.
The Communication also notes that the copyright legislation of
most Member States imposes conditions on the transfer of rights
and requires formalities to be observed (such as by requiring
assignments to be in writing or evidenced in writing).
15.12 The Communication concludes that there is considerable
commonality of approach between the Member States and that the
degree of common ground appears to be sufficient to make any immediate
action at Community level unnecessary.
15.13 The Communication goes on to explain that collecting
societies act as trustees and generally administer, monitor and
collect royalties for an entire group of right holders on a territorial
basis, applying the relevant national law. From the viewpoint
of the user, the collecting society occupies a key position in
that it is able to provide access to a global catalogue of rights
and offer a "one stop shop" for the licensing of rights.
Individual right owners, who may not have substantial bargaining
power, are also enabled to manage their rights effectively by
having recourse to a collecting society. The Communication refers
to consultations about copyright conducted by the Commission following
its 1995 Green Paper, which showed that most stakeholders agreed
that collective management was in the interests of both right
owners and users.
15.14 There has nevertheless been criticism from
users in respect of tariffs and an apparent lack of transparency
in relation to pricing policy. Right owners who have substantial
bargaining power (such as major record producers) are more able
to use technical means (such as watermarking and digital tracking)
to control the reproduction and use of their works and rely less
on collecting societies.
15.15 The Communication reviews the application of
the competition rules of the EC Treaty to collecting societies,
explaining that collecting societies are generally in a dominant
(and even monopolistic) position within the national territory.
As such, a collecting society may not require an author to assign
all his rights or exclude from membership right owners from other
Member States. Collecting societies may not engage in a concerted
practice which has the effect of systematically refusing to grant
direct access to their repertoires by users located outside the
national territory.[29]
As far as reciprocal arrangements between collecting societies
are concerned, the European Court has decided that reciprocal
representation agreements are not prohibited by Article 81 EC
provided that no exclusivity or concerted practice is involved.[30]
15.16 The Communication notes that the competition
rules are effective for regulating the market and the behaviour
of collecting societies, but nevertheless considers that these
rules could be complemented by a legislative framework for good
governance. The Communication suggests that in relation to the
creation of a collecting society this might cover matters such
as standards of efficiency, accounting obligations and a sufficient
number of representatives of right holders. It also suggests
that collecting societies should be obliged to publish their tariffs
and to grant licences on reasonable terms and that users should
be able to contest the tariff, whether through the courts or by
a specially constituted tribunal or by recourse to a public authority.
15.17 As there is usually only one collecting society
for the relevant rights in the national territory, the Communication
considers that such a society, being the only "gatekeeper"
of the market, should observe good governance principles of non-discrimination,
transparency and accountability. The terms of the mandate by
which a society administers rights on behalf of a right owner
should offer a reasonable degree of flexibility with respect to
its duration and its scope. Right owners should, in principle,
retain the right to have their rights administered individually.
The communication also suggests that in all Member States adequate
external control mechanisms should be available.
15.18 The Communication concludes by announcing the
Commission's intention to propose legislation on certain aspects
of the collective management of rights and on the good governance
of collecting societies. This initiative will go out to public
consultation.
The Government's view
15.19 In his Explanatory Memorandum of 10 May 2004
the Parliamentary Under-Secretary of State for Science and Innovation
(Lord Sainsbury) explains that the Communication does not set
out in any detail the likely legislative proposals. The Minister
also explains that in the UK there is already legislation (the
Copyright, Designs and Patents Act 1988) regulating certain aspects
of the collective administration of rights. The Minister points
out that the 1988 Act confers jurisdiction on the Copyright Tribunal
to adjudicate on the terms and conditions of collective licensing
arrangements, but that until there is more detail of legislative
proposals at Community level it is not possible to identify how
existing UK policy might be at variance with those proposals.
15.20 The Minister also explains that the Government
generally accepts the need for good governance of collecting societies
and in particular the need for a mechanism for resolving disputes
between collecting societies and users. The Minister agrees that
a harmonised framework on collective administration and the governance
of collecting societies could facilitate cross-border licensing,
which would benefit UK right holders as well as users.
Conclusion
15.21 We consider this Communication to be a helpful
analysis of the existing mechanisms for the individual and collective
administration and enforcement of copyright and related
rights. We also welcome the emphasis the Commission has placed
on market-led solutions, and the rejection of any concept of a
Community-wide system of compulsory licensing of copyright.
15.22 We agree with the Minister that there is
a place for common rules on good governance for collecting societies,
provided such rules go no further than what is strictly necessary.
15.23 We are content to clear the document.
26 (25394) 6376/04; see HC 42-xii (2003-04), para 15
(10 March 2004). Back
27
The first Commission decision under Article 86 of the EEC Treaty
(now Article 82 EC) finding that an undertaking had abused its
dominant position was against the German collecting society GEMA:
OJ No. L 134, 20.6.71 p. 15. Back
28
The International Convention of 1961 for the Protection of Performers,
Producers of Phonograms and Broadcasting Organisations. Back
29
Ministere public v. Tournier [1989] ECR 2521. Back
30
See footnote 29 above and Lucazeau v. SACEM [1989] ECR
2811. Back
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