e-Copyright The Change and Future of Finnish and

e-Copyright: The Change and Future of Finnish and European Copyright Regime in the Network Society by Dr Tuomas Pöysti Counsellor, Finnish Ministry of Finance (Chief Counsel on Public Economic, Admistrative and Constitutional Law & Regulatory Policy) Docent (Univ. of Helsinki), Researcher (Univ. Lapland & Helsinki) 1

Introduction & Excursion • Scientific background • Role and Responsibilities in the Ministry of Finance • Ministry of Finance and Information Society • Ministry of Finance and Law & Legal Policy 2

Purpose • Discuss the change of copyright – in the digital environment of the network society • Highlight the situations of copyright law and regime today, and, eventually tomorrow – critical phenomenology • Change of Copyright carries the message about: – inter-action between technology and law; law and economy, law and innovation, law and freedom – juridication of new phenomena related to ITC 3

Copyright Actualities • WIPO Copyright Treaty of 1996 • WIPO Performances and Phonograms Treaty – entered into force or just about to enter into force • EC INFOSOC Directive – Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society • Implementation of INFOSOC Directive and change of copyright law in Finland (in other European Countries) 4

Copyright challenges • Challenge of control in the new media and infrastructures – The so called digital agenda • Europeanisation of copyright • Challenge of constitutional state and constitutional governance • Challenge of contracting and creating markets related to copyright • Challenge of efficient markets and efficient competition – Undue monopolies • Challenge of legal doctrine - Challenge of understanding 5

Challenge of Control • Hypothesis 1: Issues of control play an important role in the change of copyright law and intellectual property law in general • Hypothesis 2: Intellectual Property Law / Copyright law moves towards the protection of investment into innovation and information • Hypthesis 3: There is a turn to infrastructures in the copyright law • Hypothesis 4: If 1+2 + 3 hold, we must question the role of copyright in information policy and the justification of the regime 6

Copyright History and Future ? : • From printer’s exclusive ’patents’ to modern copyright • Arrival of the author as the ’mythical’ subject of copyright law • Focus moves away from the author to publisher (content industry) and to infrastructure 7

Copyright • Art. 1 of the Berne Convention: … for the protection of the rights of authors in their literary and artistic works • Copyright Act (404/1961), Section 1: A person who has created a literary or artistic work shall have copyright therein, whether it be a fictional or descriptive representation in writing or speech, a musical or dramatic work, a cinematographic work, a photographic work or other work of fine art, a product of architecture, artistic handicraft or industrial art or a work expressed in some other manner. 8

Copyright • exclusive rights to dispose of the work by making copies of it and by making it available to the public, in either the original or an altered form, in translation or adaptation, in another literary or artistic form or by other technical means (Section 2 (1) of Copyright Act) 9

Scope of Copyright • Economic rights – Reproduction right – Communication to the public – Distribution right • Moral rights – name of the author should be stated in the manner required by proper usage (as required by good practise – respect of author’s literary and artistic reputation – non-violabilty of author’s reputation in the alterations of work 10

WIPO Copyright Treaty, art. 2 • Copyright protection extends to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such 11

Digital agenda • Concern for the effectiveness of copyright in the digital environment – – – easiness of copying easy transmission and processing of information piracy - pirated markets (music only 4, 6 billion euros) new working methods and business models uncertainty about law; genuine uncertainties and scarcity phenomena 12

Digital agenda beyond the surface • control over business models • true and virtual challenges of legal certainty; • imperatives of technology, convergence, commoditification of symbols and information • changing transaction costs 13

Control of work • Opinion of Copyright Council 2002: 7 – Protected arts in the music videos • utilisation and creation in chain; the value chain – Extent of exclusive rights; modifications • Opinion of Copyright Council 2002: 6 – Photos of the pieces of art in adverts – Assumptions and duties of care 14

Privacy, private copying and copyright • Acts in the private sphere were not interesting in the traditional copyright law • Private copying as a copyright excemption • Competing theories of justificiation – privacy justification – balancing theory – law and economics justification 15

Problem 1: copying as a default option of infrastructure • BBS case of Finnish Supreme Court, KKO 1999: 115 – bulletin board system as a platform of copying • Peer-to-peer technologies (P 2 P) – ’’Napster’’ – organisation of web-based cyber communities – duties of care and clearance – MP 3 case in Swedish Supreme Court (HD) 16

Problem 2: Linking • Freedom of information and copyright • Traditional view: meta-data and indexing outside the copyright law – how to find information? – could get independent protection as catalogue or other litterary work of arts 17

Linking continued – from meta-data to automatic page/appearance formation • ’’expressions’’ by WIPO Treaty • Opinion of the Finnish Copyright Council 2001: 8 18

Problem 3: Digitalisation of work and modifications • • Ring tones for mobile telephones Copyright Council, Opinion 2000: 12 Alteration and moral rights Collective Licesing contracts – transaction costs – role of copyright organisations – individual contracting 19

Database protection • EC Database directive 96/9/EC • Requirements of work as a problem of the content industry • ’’Collections of independent data … arranged in a systematic way’’ • Sui generis right in the system of intellectual property – exclusive rights • Protection of significant quantitative or qualitative work • Direction towards protection of certain types of information 20

Database protection; directions • Requirements received a fairly flexible interpretation in practise – British Horseracing Board vs. William Hill Organisation • Critique: – Unfortunate consequences 21

New copyright institutions • Technical protection measures • Rights management systems 22

Technological protection measures • Initially in the Software Directive • WIPO Copyright Convention articles 11 and 12 • INFOSOC Directive, art. 6 – technological measures • INFOSOC Directive, art. 7 rights-management information • US Code, Title 17, Chapter 12, Sec 1201 23

Europeanisation • Copyright as part of the EC Law; • EC legislation currently the most significant source of legal change in the copyright law • Copyright even traditionally one of the most international fields of law 24

ECJ cases - evolution of the case law – Competition – Anti-discrimination, equality: Phil Collins -case C-92 and C 326/92 • copyright is subject to EC law – Exhaustion rules: example C-61/97 – General doctrines and principles become subject for EC law 25

Challenge of Constitutional State and Constitutional Governance • Constitutional state; material and effective protection & promotion of fundamental rights – effectiveness, quality • Constitutional governance – beyond the nation-state sovereignty; protection of fundamental rights is not only entrusted to and attached to the state alone 26

Copyright in the Constitutional perspective • U. S. Constitution; copyright and constitutional information policy • Section 8. The Congress shall have power: – To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries; 27

European / Finnish Constitution • EU Charter of Fundamental Rights; copyright • Finnish Constitution; implicitly in – Right to property – Freedom of trade – Inviolability of person, personal integrity – Social and Cultural rights • Copyright is at centre of tension between individual and collective rights 28

Constitutional issues of technological protection measures • Copyright balance – Copyright law balances between different interests • Exclusive rights and copyright excemptions are the mechanisms of balancing – Excemptions represent the cultural rights, freedom of information and right to know – In the balancing, copyright law claims supremacy over other fields of law • both traditional maxims has to be questioned 29

Technological protection measures • Enable protection beyond the exceptions • Is the legal protection of technological protection measures de facto extending the domain of exclusive rights • Balancing in the copyright directive • Question of re-engineering 30

Balancing and the technological protection measures in the INFOSOC directive • Voluntary agreements • Measures by the Member States 31

Constitutional law response • Contracting and freedom contract is protected as property – Limitation shall be in conformity with the principle of proportionality • Horisontal and vertical effects of fundamental rights – Public law approach; mainly vertical effect • No direct horisontal effect against private parties • Constitutional rights to freedom of information and meta-right to know • Mandate to public power to enable access (libraries etc) • Privacy rights 32 – Copyright protection gives no excuse to the violation of privacy

Meta-Constitutional Issues • Lessig: The Future of Ideas – or the Scarcity of Innovation and Information ? • Question about proportionality, reasonabless, control and freedom in the networks – justification of copyright and the information policy therein • Lessig’s concern: – networks become instruments of control, control and exclusive rights defined too extensively as default option in the structure of networks • physical layer • logical layer or code • content layer 33

Too much control • Scarcity of innovation • Obstacles to right to know, lack of the freedom of information 34

Challenge of markets and contracting • Uniformity of contracting rules; cross-border markets – information (’’content’’) markets • Nordic copyright unity - European copyright unity ? – market enabling necessity – part of legal and cultural identity • In the US: UCITA (Uniform Computer Information Transactions Act) • Chain creation and group work – contract formation – copyrighted materials in other contractual relations • copyright clearance 35

Example: • Feasibility of copyright as guarantee (security) • Traditional doctrinal views 36

Challenge of efficient markets and competition • Exclusive rights and undue use of monopolistic market power – prohibitions of the restrictions of competition, abuse of dominant position • Paradox of copyright law – scarcities created by monopolies – provision of incentives to creation and thereby overcoming the scarcities by establishing exclusive rights • justifications of copyright regime 37

ECJ approach so far • copyright management is a service under the EC Treaty, joined cases 110/88, 241/88 and 242/88 • enforcement of copyright maybe abuse of dominant position, joined cases C-241/91 P and C-242/91 P. 38

Network Society and dominant position • Some economists argue that networks favour the creation of dominant positions – some dispute this view • Copyright law may reinforce such positions • Copyright and competition law shall be made compatible 39

Compatibility of competition and copyright law • Inter-operability becomes the key issue – ’’Microsoft standard’’, Open source – Inter-operability exceptions in copyright – GRID, Zig. Zag • Security exceptions 40

Understanding the law of network society - doctrinal challenge • Convergence and collisions of copyright with other fields of law • New understanding – Information law 41

Three perspectives of information law – law of information, information-processing and information markets – information law as part of legal theory and legal informatics: • phenomenological approach; phenomena of information markets and ITC + bio-information • meta-system over the traditional, converging disciplines – meta-rights, general principles » right to knowledge, freedom of information • information law as a critical and constructive method to assess legal change – => Useful to analyse and study copyright in the information 42 law angle