European Union Copyright Directive in Place

Client Alert
On April 9, the European Union Council of Ministers adopted the European Union equivalent of the Digital Millennium Copyright Act: A directive on the harmonisation of certain aspects of copyright and related rights in the Information Society ("the Directive"), intended to implement the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, both adopted by WIPO in December 1996, into European Union law. The original proposal for the Directive was put forward by the European Commission in December 1997. The Directive provides for a broad exclusive right of reproduction, allowing rightholders to control any copies that are made of their works (Article 2), a comprehensive making available/communication to the public right which enables a rightholder to control when, where and how his works are made available on-line (Article 3) and a right of distribution (Article 4). The Directive also requires European Union Member States to prohibit the circumvention of technical measures that protect access to or reproduction of copyrighted works (Article 6) and the removal or alteration of rights management information (Article 7). As is the common procedure in the European Union, the Directive will not become effective before it is implemented by Member States in national law. Member States are obliged to ensure implementation within 18 months of the Directive's publication in the European Union Official Journal, which usually happens within a few weeks from the formal adoption. Due to the lack of a European equivalent to the United States "fair use doctrine", a rather long list of exceptions to copyright were adopted. Given the broad exclusive right of reproduction, a mandatory exception for temporary technical copies in networks and consumer electronics equipment has been included in the Directive. There is also an exhaustive list of exceptions to copyright which are optional for Member States to maintain, adopt or ignore in their national copyright legislation. Member States may, however, continue to apply existing exceptions in their national laws in minor cases solely for analogue use. Among the optional digital exceptions is a hotly debated exception for private copying, allowing copies to be made by a natural person for private use and for ends that are neither directly nor indirectly commercial. The exception would seem slightly more narrow than the use permitted under the United States fair use doctrine. One condition for this exception, and for the exceptions for photocopying and broadcasts reproduced for viewing or listening in certain social institutions, is that the rightholder obtain "fair compensation". This is a rather unclear concept which may take the form of levies on copy shops, sales of blank tapes, and copying equipment, at least in certain Member States where such levy schemes are already in place. Where technical measures prevent such copying from taking place, there may be no obligation for payment or further payment. The Directive also includes optional exceptions for, e.g., use in teaching, libraries and by scientific institutions. One of the issues where it proved most difficult to reach a political compromise was with regard to the legal protection of technical protection measures. The Directive prohibits acts of circumvention as well as the manufacture, distribution, etc., of devices made for circumvention purposes. To secure the effective survival of copyright exceptions, the Directive effectively provides that rightholders must provide beneficiaries to a particular exception, e.g., schools and libraries, with the means to do so. The Directive applies Community exhaustion and not international exhaustion for the distribution right. Consequently, once a copyright protected product such as a CD is marketed in the European Community by or with the consent of the rightholder, the distribution right is said to be "exhausted", i.e., there is no right to restrict further distribution within the Community, but the rightholder will retain protection against parallel imports from third countries such as the United States. Unlike the United States Digital Millennium Copyright Act, the European Union has chosen not to implement copyright specific provisions limiting liability for caching, hosting, and access provision. Instead, such provisions have been included in the E-Commerce Directive, adopted in the early summer 2000. This directive provides for liability limitations similar to those found in the United States act, but the limitations apply "horizontally" to all forms of liability -- not just to copyright liability. The Copyright Directive nevertheless allows rightholders to obtain injunctions in court or by other action against intermediaries whose services are used by third parties for copyright infringement.

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