Legal Practice Briefing No. 31

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'.

What do the New Treaties
do?

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.

What the Treaties don't
do

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.

Australian Participation

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.

Future International
Developments

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/

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

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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