Legal Practice Briefing

Number 31

10 March 1997

COPYRIGHT - INTO THE DIGITAL AGE

The international regime for copyright in the digital environment took a significant step forward at World Intellectual Property Organisation negotiations in December last year. On 20 December 1996, two new international copyright treaties were brought into being. Representatives of over 100 countries adopted by consensus the WIPO Copyright Treaty (CT) and the WIPO Performances and Phonograms Treaty (PPT).

The major achievement of these treaties is to update existing international copyright standards so that they protect copyright more appropriately in today's digital age. The treaties extend copyright protection to on-demand, interactive services on the Internet and other networks by an expanded right of communication and/or a new right of 'making available to the public'. The new standards cover the transmission of text and images and sound.

This briefing outlines the major provisions in the treaties and their implications, and discusses proposals that were defeated since these are also relevant to the likely obligations and opportunities presented by the treaties.

Implications for Clients

Clients should consider what impact the proposed new treaties may have on their operations or responsibilities in the longer term. Note that the new treaties could have an impact on their contracts and other legal obligations and rights which might extend beyond the next few years. In such cases it would be useful to consider any new or expanded rights which may arise out of implementation of the treaties in Australia.

Generally, the impact will not be immediate. The treaties do not enter into force until 30 ratifications or accessions for each treaty have been received by WIPO and even after they enter into force, will not have an impact in Australian law until the Government decides to ratify the treaties and the necessary amendments to the Copyright Act 1968 have been made. In considering whether to ratify the treaties, the Government will consult with affected interests.

If Australia is to be able to accede to both treaties, it will have to legislate for the new right of communication. Amongst other things, Australia would also have to legislate for a substantial extension of the existing rights granted to performers to enable it to ratify the PPT.

Background

Although more evolutionary than revolutionary, the new treaties are, nevertheless, a major advance in updating the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome Convention). The Berne and Rome Conventions and TRIPs are the basis of Australia's international obligations in copyright. The new WIPO treaties do not displace these existing international agreements but supplement and, in some cases, replicate their requirements.

The CT deals with the rights of authors of literary and artistic works (including films and videos), the 'traditional' subject matter of copyright, and the PPT deals with the rights of performers and producers of sound recordings, known as 'neighbouring rights'.

The new treaties enhance the rights of copyright owners. However, it is also worthy of note that the preambles to the treaties explicitly recognise the need to balance the rights of authors and performers and producers of phonograms with the larger public interest, particularly in education, research and access to information.

The new treaties:

• extend rights to network transmissions of text and images (eg, on the Internet) - rights of, for example, TV broadcasting and retransmission of text and images do not change;

• add to the right of 'communication to the public' so that the copyright owner's rights include the right to authorise or prohibit the making available on-line to the public (there need be no downloading to breach copyright);

• oblige contracting parties to protect copyright holders against circumvention of technological copyright protection measures (eg, decoders);

• establish a new right over the distribution of copyright material;

• provide new rights for performers exceeding those included in the TRIPs Agreement;

• extend the minimum term of protection of photographs to the same as that for other works, that is, life of the author plus 50 years;

• oblige Contracting Parties to provide for enforcement of rights; and

• incorporate some existing TRIPs standards.

Copyright in the Digital Environment

Digital communications are catered for in the new treaties by extending the right of communication to the public to include network transmission of text and images and by adding the right of making available on-line to the public. The treaties also oblige Contracting Parties to protect copyright holders against both the circumvention of 'technological copyright protection measures' and the alteration or removal of 'electronic rights management information' included on, in or with electronic material.

Although the Berne Convention already makes provision for a range of rights of communication to the public for works and films, CT Art. 8 extends that coverage to all wired or wireless communications to the public. It is by this means that transmissions other than by broadcast or retransmission of text and images, not presently the subject of a treaty right, are covered. This will be of growing importance with the ever increasing ubiquity of the Internet, e-mail and on-line services. While such services are currently based on digital technology, the new standard is not tied to that technology, and there is no express reference to digital technology in any of the standards themselves. The provisions are, in sum, technology-neutral (even though 'broadcast' continues to be limited to transmission to the public other than by wire) as they refer to 'any communication to the public by wire or wireless means ' (CT, Art. 8) and 'the making available to the public of their phonograms, by wire or wireless means ' (PPT, Arts. 10 and 14).

The new right of making available on-line to the public will impact directly on the Internet and other public access networks. Clients should be considering whether the current arrangements for access to material through their networks would amount to a breach of copyright, should the treaties be implemented in Australia.

The new right in CT Art. 8 and PPT Arts. 10 and 14 will supplement the reproduction right. For instance, the affording of access to the public by connecting a file server with a work already on it to a public network could be an exercise of the making available right, even if no members of the public were to download a copy of the material.

The right of making available on-line brings about a similar result to the decision of the Federal Court of Australia in APRA v Telstra (1995) 131 ALR 141. That is, 'the public' can, under the right conditions, consist of one individual. The treaties do not, however, provide a definition or some other benchmark of what 'the public' is. This is left to national determination. It may be one of the most difficult, and perhaps unresolvable, implementation issues. Apart from other copyright rights that may be in question, providers of on-demand databases of text, TV, films and music, as well as Government agencies with on-line links to such databases with copyright material, or databases constituting copyright works in their own right, will need to take into account how implementation of these treaties might, in the future, affect arrangements currently being put in place - particularly if access to material on their systems is granted to outside agencies.

Liability of Service Providers

Following considerable negotiation, the Conference adopted an agreed statement expressing the understanding that the mere provision of physical facilities for enabling or making a communication does not itself amount to a copyright communication to the public. Telecommunications carriers such as Telstra and Optus will breathe a collective sigh of relief as a result of this agreed statement, as will many Internet service providers (ISPs). However, so far as some service providers are concerned, it is arguable that they do a great deal more than merely provide physical infrastructure. It remains to be determined how the liability of ISPs will be dealt with in domestic laws.

Browsing on Computer Networks

The language of CT Art. 8 is wide enough to cover the provision of access to material on a site for viewing only, not just provision of access to material for downloading. Both treaties permit exceptions to the new on-line right which would allow reasonable on-line access to materials by, for example, library users and students. Government agencies providing information on-line, public libraries, universities and other educational institutions will need to understand how any future changes might affect them.

Two other measures in the treaties seek to assist technological protection of copyright. They are:

• a general requirement to outlaw devices and activities designed to circumvent 'technological' copyright protection, such as computer program 'locks' and subscription broadcast encryption; and

• detailed sanctions against deliberate removal of or tampering with copyright identification information (referred to as 'rights management information' in the treaties) electronically attached to copies of materials.

There may be implementation issues in relation to these matters that will be of interest. For example, the use of certain devices in the broadcast or transmission of copyright material may remove electronic rights management information. It will be necessary to determine the precise circumstances under which such uses would give rise to the liability contemplated by the terms of the treaties.

Broadcasting and Communication to the Public

The right of communication to the public and the right of making available on-line to the public in the CT are exclusive rights (CT, Art. 8). For performances and phonograms, while the right of making available on-line (PPT, Arts. 10 and 14) is an exclusive right, the right over broadcasting and communication to the public (PPT, Art. 15) is limited to a right to equitable remuneration. Full or partial reservations may be taken to this article.

Article 8 of the CT is carefully framed so as to avoid derogating from existing communication rights in the Berne Convention. Provision in Art 11bis of the Convention for compulsory licences for communication to the public by wire and for broadcasting is thus preserved.

The new standards for broadcasting and communication to the public of sound recordings (PPT, Art. 15) extend to direct and indirect communications. Under the Berne Convention, public performance of works included in broadcasts is one of the copyright owners' rights.

Accordingly under the Copyright Act, copyright owners are entitled to licence the playing in supermarkets, malls and shops open to the public of their works as included in radio and television programs; licensing is usually done via a collecting society.

However the Copyright Act denies producers of sound recordings any right in respect of playing of their recordings in public by operating a radio or TV, as opposed to playing a record, cassette or CD player in public. In considering whether to ratify the treaties the Government will need to assess the extent to which Australia should enter a reservation so as to preserve that position.

Performances and Sound Recordings

The PPT includes substantial strengthening of performers' rights and goes beyond the performers' rights protection provided for in the Rome Convention and the TRIPs Agreement. The performers' rights in the new treaty include:

• moral rights, that is, the right of a performer to be named in connection with their performance and to object to prejudicial alteration of their performance;

• exclusive rights over reproduction, distribution and providing on-line availability of sound recordings of their performances; and

• a right to equitable remuneration for the communication to the public and broadcasting of sound recordings of performances (bearing in mind the right to make a reservation to this provision in the treaty).

The new performers' rights in fixations of their performances apply only to sound recordings and not to films and videos.

Although no decision has yet been made to proceed to examine extended rights for performers in Australia, clients may wish to consider to what extent they might be affected or have an interest in the outcome of any Australian Government consideration of this issue bearing in mind the provisions in the treaties referred to above.

New Right of Distribution

Both new treaties include a new right of distribution. The controversy at the Conference over this concerned the circumstances in which the right should be exhausted. If the right is permitted to subsist until a sale or other transfer of ownership takes place within the jurisdiction of the relevant Contracting Party ('national exhaustion') this could amount to a de facto imposition of a right over importation. Because of this consequence, many countries argued at the Conference that the distribution right should be exhausted after first sale or other transfer in any territory ('international exhaustion').

The opposed views about the appropriate circumstances in which the right of distribution should be exhausted could not be reconciled. The treaties thus do no more than provide that countries are free to determine the conditions of the exhaustion of the distribution right after first sale or other transfer authorised by the right holder (CT, Art. 6(2); PPT, Arts. 8, 12).

Australia argued strongly in favour of such freedom being retained. Although Australia was opposed to the introduction of an international obligation to provide for an importation right (de jure or de facto), no implication can be drawn about the direction of the Government's decisions on its current review of the importation provisions in the Copyright Act in the context of examining the prices of sound recordings.

Existing TRIPs Standards

The Conference agreed to include in the new treaties the same standards as in TRIPs for the protection of computer programs as literary works, for the protection of original compilations of data and in the provision of a rental right for computer programs and sound recordings. These rights are now operative in the Copyright Act.

Although the preparatory documents for the Conference included provisions on the following, in the final result the treaties do not provide for:

• an importation right;

• a standard either clarifying or extending the scope of the reproduction right;

• phasing out the existing provisions in the Berne Convention that permit compulsory licences for the broadcasting and sound recording of works;

• performers' rights in audiovisual fixations.

Importation Right

The Conference rejected the inclusion of an importation right in the new treaties. As discussed above, the new treaties allow Contracting Parties the freedom to provide for exhaustion of the distribution right after first sale/transfer as they choose.

Temporary Copies on the Internet

The right of copyright owners over the reproduction of their works is expressly included in Art. 9 of the Berne Convention. The preparatory documents for the Conference included a provision clarifying or affirming that the scope of the right of reproduction covers temporary reproductions. The provision on the reproduction right in the preparatory documents would have also allowed national laws to exclude from the scope of the right of reproduction certain temporary and incidental reproductions that are made as part of the technical processes of transmitting copyright material on the Internet.

There was intense and divisive debate about whether the proposed provision on the reproduction right was an extension of the reproduction right in the Berne Convention or whether it was only a clarification of its scope. There was also disagreement on whether the provision should be included in the new treaties at all. Ultimately, no provision was adopted. Stated positively, there is constructive silence in the treaties on the meaning of Art. 9 in the Berne Convention.

A statement that any act of storage of a work or sound recording constitutes an exercise of reproduction right was adopted by the Conference, but only after a vote was forced. The fact that it was not adopted unanimously or by consensus weakens its authority.

The question whether copyright protection extends to some or all temporary reproductions has, thus, not been resolved. It will almost certainly require further examination. The debate at the Conference starkly demonstrates the difficulties to be faced in seeking an acceptable balance of rights in this area.

Compulsory Licences

The attempt to have the CT include provisions stating that Contracting Parties agree not to apply the provisions in the Berne Convention for countries to have non-voluntary licences for the broadcasting of works and the sound recording of works also failed.

Performers' Rights in Films

Despite intensive negotiations no agreement was possible on extending coverage of the PPT to performers' rights in films, videos and TV programs.

The Australian delegation at the Diplomatic Conference, led by Chris Creswell together with Frank Schoneveld, of the Attorney-General's Department, played an active role including on a number of major drafting issues. Australia can claim credit for the inspiration for the expanded right of communication. Australia was also heavily involved in analysing the implications of the proposal on the right of reproduction and the proposed introduction of an importation and distribution right.

In 1997, there will be international activity on the following copyright-related matters:

• the WIPO draft treaty on the protection of investment in databases;

• the extension of performers' rights to cover performances fixed in films and videos;

• the protection of folklore; and

• rights of broadcasters.

The preparatory documents for the Diplomatic Conference included a possible treaty on databases that was not considered. The scheduling by WIPO of work on the proposed treaty will occur in 1997 and possibly 1998. This delay will give countries, including Australia, more time to consider the implications of a possible databases treaty.

A resolution adopted by consensus at the diplomatic conference called on WIPO to continue work towards agreement on performers' rights in audiovisual fixations. A work schedule for this will be considered in mid March 1997.

A UNESCO-WIPO Worldwide Forum on the Protection of Folklore is scheduled for 8-10 April 1997 in Phuket, Thailand. A WIPO Worldwide Symposium on Broadcasting, New Communication Technologies and Intellectual Property will be held on 28-30 April 1997 in Manila, Philippines.

The treaties have been placed on the WIPO Internet home page: http://www.wipo.int/

 

The material in this briefing is provided for general information only and should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this briefing.

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