Culture is future » Financing and economic models


DEBATES 2011 - Intellectual property - Tendencies and stakes of copyright by Lorena Boix Alonso

Lorena Boix Alonso is Deputy Head of Cabinet of  Neelie Kroes.

Is there a parallel between the development of internet services in a country and the regulation on IP protection?

Real-time entertainment traffic continues to grow steadily and today is, both in North America and Europe, the largest percentage of internet traffic in fixed networks. Immediately after comes P2P.  In we talk about trends, studies say that  by 2012 Internet video will account for over 50 percent of consumer Internet traffic In 2015, 1 million minutes of video content will cross the network every second.

These services require for their provision content which is often protected by copyright. It is therefore evident that the way copyright is regulated, in terms of both licensing and enforcement has an influence in the availability of internet services. A copyright system which makes the acquisition of licenses burdensome, will increase the cost for providing a service and diminish the incentives of providers to offer legal content. On the other hand, a copyright system which is not sufficiently protective will diminish the trust of content right holders in the internet and deter them from providing licenses. This is why, in order to foster legal content services, it is necessary to act on both fronts. On the one hand, it is necessary to ensure that the legal framework enables content providers to obtain licenses as easily as possible. On the other hand, copyright law has to be seriously enforced to give confidence to right holders.

This is why the two angles need to be tackled together. Let's indeed not forget that the objective of any enforcement measure is to protect what is legal.

Is enforcement of IPRs less efficient on the internet than enforcement of criminal offecences (racism, antSeitism, etc.)?

All offences on the internet are difficult to enforce. First, because technology makes it easy to infringe, allowing for low-cost law-breaking and leaving few traces. Cyber-lawbreakers may operate alone or be part of larger schemes, sometimes even organized crime. The number of actors involved in different jurisdictions makes enforcement very difficult. Second, because anonymity makes it more difficult to take appropriate measures against such infringements. Thus, enforcement often involves a restriction of privacy rights.

The additional difficulty of enforcing IPRs on the Internet is that, while it is obvious for the society that certain crimes are reprehensible, the same culture does not exist when we talk about IPR infringing behaviour. Sometimes users lack sufficient knowledge of what is legal and illegal. For example, according to recent studies many consumers are confused about what they are allowed to copy or record concerning content leading to negligible costs of reproduction they have legally, to the point that in many cases consumers are even paying for unauthorised access to content . Moreover, they do not seem to be aware of the value of IPR. With digitisation of content, users tend to forget the creativity part behind an item and do not measure the impact of their action. These factors make IPR enforcement difficult. This is why IPR enforcement actions by governments are often not understood by the users.

Is there a lack of political awareness or willingness?

My impression is that most European Governments are aware and willing to act, at least as regards IPR enforcement. Member States are taking different approaches that range from general awareness campaigns to individual notifications, to website blocking and to the cutting of internet access. Many are not yet up and running, while for others it is too early to evaluate the effects.  When I see in fact how seriously this matter is taken in certain countries I sometimes wish other issues like child abuse or human traffic in the Internet were taken with the same political strength.

As regards the facilitation of legal offers, ideas are also being explored by certain actors, like the Kulturflatrate in Germany, or the Licence Globale in France. The independent review of IP led by Professor Ian Hargreaves in the UK is also a good example.

What is difficult is to act on time and with the right tools. Piracy on-line goes much faster than legislation and by the time a government has tried to pass a new enforcement regime, piracy techniques have changed. The same when we talk about developing new regimes rewarding creators licensing. Users’ behaviours constantly change, in particular in Europe. There are many diverse factors impacting subscribers’ behaviour, including evolving devices, billing models, availability of new online services, etc.

The Commission is certainly aware and taking action, as you can see in the Digital Agenda for Europe Communication and the Communication on the "Single Market for Intellectual Property Rights, Boosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe".

If we look at other regions of the world, in particular China, I am not sure that the awareness and willingness is the same. Efforts have been done as regards IPR legislation, but more can certainly be done when we talk about enforcement.

Do you think that new rules are needed to organize the links between IT providers and right owners in order to improve the protection of IPRs?

Internet intermediaries own or control the physical or logical infrastructures with which the Internet delivers its outputs. This is why, they obviously have a role to play when it comes to IPR enforcement. However, most Internet intermediaries are private entities and therefore follow market logic, not public policy objectives. The difficulty lies in how to involve them while not asking them to act as public entities.

On the one hand, over-regulation and burdensome requirements can stifle what continues to be an innovative sector. On the other hand, as Vice President Kroes  said in a recent speech, "On the Internet, we are not atoms. (…), if there is harmful behaviour out there, then as members of a society we share a duty that goes beyond the purely legalistic”.

The liability regime is clearly set in the e-Commerce Directive. But it is true that there have been technological and economic developments since the adoption of this Directive in 2000. E-Bay was in its infancy and not yet present in Europe and companies like Facebook did not even exist. The Commission is currently evaluating the application of this directive.

But I am not sure that the right tool here is necessarily legislative, given how fast things change on the Internet. Voluntary cooperation is essential. The e-Commerce Directive already leaves an open door to this. Initiatives like the stakeholders' dialogue on the sale of counterfeit goods over the Internet, promoted by DG MARKT under the auspices of Commissioner Barnier, which resulted in a Memorandum of Understanding this year, show what can be done. And as many intermediaries develop their own content offers or bundles, this can increase their incentives to take on such responsibilities.

How can public policy reinforce IP protection by creating a strong desire for action on the part of governments and the courts?

In a particularly bad period governed by an unprecedented economic crisis public policy should point at the economic potential of the creative sector. This is what the Commission is doing as indeed it accounts for 3% of employment and is among one of the most dynamic sectors in the EU.

It is also important to take passion away from the debate. IPR protection on the internet is an extremely sensitive issue and there is a lot of passion among the stakeholders, each taking sometimes very radical positions. Many right holders focus on the risks and most users tend to focus on the opportunities. But I think there are opportunities and risks on both sides. We should point more to the opportunities for right holders and the risks for users, in order to rebalance the debate.

What changes in copyright law in Europe do you suggest, especially regarding the matter of the private copy which is anoutdated notion in the digital era?

Do you have insights on regulatory trends in this area?

There is certainly a need to change things in Europe. And this is precisely what the European Commission is doing. As I mentioned before, the Commission adopted a strategy on IPR in its Communication on a Single Market for Intellectual Property Rights. In this strategy the Commission tackles the two sides of the coin I was mentioning before: facilitating new business models by improving the licensing framework and protecting right holders by strengthening copyright enforcement. Now strategic discussions are giving way to concrete actions: the Commission has already proposed legislation on orphan works in order to enhance their digitisation and dissemination. It has also published a green paper on audiovisual works in order to explore the opportunities and challenges stemming from the online world and come up with appropriate and effective policy responses. Moreover, a proposal on collective management of copyright is being prepared by the services of DG MARKT. I expect it to ensure efficient licensing of works and transparent governance of collecting societies. A review of the 2001 Copyright Directive is also essential.

On IPR enforcement the Commission adopted a Report on the implementation of the IPR enforcement Directive and a public consultation was opened on that report. I believe that any resulting proposal should be based on sound evidence, and the impact on the development of the information society should be carefully measured.

Last but not least, the Commission has proposed an extensive stakeholder dialogue on copyright measures beyond collective rights management, without excluding or favouring any legal option, including deeper and modernised harmonisation of European copyright law. This is a more forward looking exercise that explores options which include grater harmonisation of exceptions and limitations, and an optional EU copyright title.

As regards copyright levies, there is indeed a need to do something in this field. Copyright levies were imposed at the time of the analogue world, when most recording devices were mostly devoted to copy. In the digital world, the same device (whether private or professional) can be used for many different purposes. The industry claims that the levies system is "démodé", while right holders are worried about increased levels of piracy. This is why some argue for making copyright levies disappear and replace them by a complete different system and others ask for expanding them.

The Commission has proposed to kick-start a stakeholder agreement and appoint a high level independent mediator. The mediator should explore possible approaches with a view to harmonising the methodology used to impose levies, improve the administration of levies, specifically the type of equipment that is subject to levies, the setting of tariff rates, and the inter-operability of the various national systems in light of the cross-border effects that a disparate levy system has on the internal market. A concerted effort should lay the ground for comprehensive legislative action at EU level by 2012.

How could regulation or other elements contribute to meeting both citizens/users’ expectations of free or cheap Access to contents and IPR’s holders’ expectations to a fair remuneration?

I don’t think that we should try to meet any expectation of accessing content for free – unless, of course, legitimate business models find other means of remunerating right-holders than payment by end consumers. What is nonnegotiable is that creators need to be remunerated for their creations. As Vice President Kroes explained in her speech at the World Copyright summit, our dream is that of artists really living from their art by embracing the opportunities of the digital era and  spreading their art around Europe, and the world, if they so wish. European citizens should ultimately benefit from all this.

Technological developments are making citizens' expectations evolve and are exercising an increasing pressure on the traditional content production and distribution structures.  Policy makers have to acknowledge them and use them as enablers for the creative sectors. There are some ideas being tested in different Member States, but I am not sure that the right way is for public authorities to impose any particular business model. What we need to do is not to lose sight of the fact that the key players in this game are the artists, who are providing the content and the users that are the artist' audience. We need to ensure that the legal framework allows businesses to develop attractive new offers on different platforms and across borders, while ensuring at the same time a robust protection of copyright and a fair remuneration of creators. And new technology can help here, as it provides artists with novel ways to reach their audiences and be paid for it. Different players in the chain may need to change their role, and functions may need to adapt.

In building a legal framework that meets these expectations we have several challenges. The first is dealing with a fragmented digital market, which is at odds with a borderless internet. The second challenge is dealing with the present while leaving the door open to legal innovative distribution channels and attractive consumer experiences. Finally, each sector (music, books, audiovisual) has different characteristics and therefore different needs. This is particularly visible in the audiovisual field, where current financing models are based on territorialities and exclusivities and where the role of intermediaries is less prominent.

What is (are) the next steps to improve cultural preservation in the digital and physical fields?

Facilitating the preservation and dissemination of Europe's rich cultural and intellectual heritage and encouraging the creation of European digital libraries is key for the development of the knowledge economy. Innovative licensing solutions are needed to promote the seamless sharing of knowledge and culture that allow academic institutions, businesses, researchers and private individuals to lawfully use copyright-protected materials while compensating authors, publishers, and other creators for the use of their works. The Commission is proceeding by way of a two-pronged approach to promote the digitisation and making available of the collections of European cultural institutions (libraries, museums and archives). One strand is the promotion of collective licensing schemes for works still protected by copyright but no longer commercially available (works that are "out-of-commerce"). The other is a European legislative framework to identify and make available so-called "orphan works". The successful completion of these two initiatives will also boost the development of Europeana as an online platform through which citizens can access the diversity and richness of Europe's cultural heritage.

 In relation to preservation of film in the digital era, the Commission is carrying out a Study on a digital agenda for European film heritage. It started on 10 January 2011 and will last for 11 months. An on-line consultation on the preliminary findings of the study is currently open until 29 September.


© European Union, 2011 

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