ALAI Congress Kyoto 2012

One-Stop-Shop Online Licensing in the Crossborder Cloud Environment
Kyoto, 18 October 2012

Adj. Prof. Dr. Silke von Lewinski

Max Planck Institute for Intellectual Property and Competition Law

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Overview
Cross-border licensing: particular interest in EU (internal market); general, notcloud-specific
Factual and legal aspects of cross-border licensing
Policy and practical measures and options from EU point of view
Conclusions

Max Planck Institute for Intellectual Property and Competition Law

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EU perspective on cross-border licensing
Basic aim: internal market/free movement of (online) services; development of
online legal market; facilitate cross-border licensing
Many measures and communications by Commission; in particular:
2005 Music online Recommendation and preparatory documents on rights
management (2004 Communication, Staff Working Document 2005)
Digital content online
Copyright in the knowledge economy (Green Paper 2008, Communication 2009)
Orphan works directive, MoU on out-of-commerce works, 2011
Green Paper on online distribution of audiovisual works, 2011
IP Strategy for the internal market 2011
DG InfoSoc: Digital Agenda, Digital Libraries
Unleashing the Potential of Cloud Computing in Europe (27 September 2012)

Max Planck Institute for Intellectual Property and Competition Law

3Factual and legal aspects of cross-border licensing

Online cross-border licensing: bundle of aspects to consider (need todifferentiate)
Kinds of uses?
Generally (depending on business models): On-demand/interactive uses, e.g.:
via internet, cable, satellite; upload, streaming, download; for limited time(„rental“) or download to own for listening/watching/to burn on DVD („sale“));Different receivers, e.g.: PC, IPTV/set-top box, mobile phone, tablets, gameconsoles

Max Planck Institute for Intellectual Property and Competition Law

4Factual and legal aspects of cross-border licensing

Different business models
content provided by cloud provider or by user;
subscriber-based (pay per view/listen, pay per period of time), advertisementbased/free for consumer)

Max Planck Institute for Intellectual Property and Competition Law

5Factual and legal aspects of cross-border licensing (2)The rights to be licensed (depending on situation, e.g.: personal locker, scanand match etc., synchronisation; private cloud; public cloud; national law
differences)
Making available(if non-interactive; simulcasting): communication to the public
Reproduction (upload; download)

Possible application of exceptions and limitations (e.g., private copying)

Max Planck Institute for Intellectual Property and Competition Law

6Factual and legal aspects of cross-border licensing (3)The right owners at stake
Authors (including authors of pre-existing works for AV works)
Performers
Phonogram producers, film producers, or other holders of related rights
And/or derived right owners

Max Planck Institute for Intellectual Property and Competition Law

7Factual and legal aspects of cross-border licensing (4)The right owners at stake – licensors to users
Arts: authors and their agents, CMOs
Music: Split rights: Music publishers, CMOs; platforms (after 2005
Recommendation)
Audiovisual works: film producers (own and derived rights); CMOs for music

Max Planck Institute for Intellectual Property and Competition Law

8Factual and legal aspects of cross-border licensing (5)Different users (who performs the relevant act?):
Professional users (cloud service providers)
Individual consumers

Max Planck Institute for Intellectual Property and Competition Law

9Factual and legal aspects of cross-border licensing (6)Cross-border clearance of rights:
Are there rights to be cleared, and if so, which ones? (Specification of uses
recommended (rather than „cloud/on-demand/online rights“))or does an exception/limitation apply? What about TPMs and related rules?
Who is the right owner that can grant a license?
Who performs the relevant act and thus needs a license?
According to what law can these questions be answered (next panel on
applicable law)?
In addition, if several laws apply: take account of rules in other MS, e.g.,
mandatory contract law/licensing rules; moral rights

Max Planck Institute for Intellectual Property and Competition Law

10Policy and practical measures and options from EU point of view

Fine arts (paintings, sculpture, artistic photography):
OLA model (OnlineArt): 16 CMOs beyond EU cooperate; common server, withregistration of all licenses granted by one of the 16 CMOs (One-stop shop)
Common tariffs, and sometimes taking into account of individual requests byartists through individual negotiation based on tariffs

Audiovisual works:
Practice: mostly licensed by producers/distributors EU- (world-)wide, except formusic (CMOs)
AV Green Paper: options offered for consideration by stakeholders:„country of origin“-principle (extension to online environment already rejected
earlier, for good reasons („forum shopping“; int. law: act includes transmission,
taking place also in receiving state, etc.)

Max Planck Institute for Intellectual Property and Competition Law

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Policy measures and options from EU point of view (2)Audiovisual works, Green Paper (ct‘d):Extended Collective License? Questionable (workable cross-border?)Common legal framework for CMOs (transparency et al.) generally useful (here:esp. for music)
Regulation („Code“) on copyright
Unitary title
Questionable: legal basis (118 TFEU: arguably only for industrial property)
For whom would it be mainly useful (if so) (majors?/cultural diversity aspect);
registration
Complexity of copyright enhanced, less „user“-friendly, many open questions(right holder(s)?)

Max Planck Institute for Intellectual Property and Competition Law

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Policy and practical measures and options from EU point of view (3)Audiovisual works, Green Paper (ct‘d):Possibly: Technological measures to facilitate licensing, but also needed:(not mentioned in GP): revision of E-commerce Directive/liability rules for ISPs;
stakeholder solution (2011 agreement in USA) to enable stronger legal market

Max Planck Institute for Intellectual Property and Competition Law

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Policy and practical measures and options from EU point of view (4)Music: 2005 Recommendation (harshly criticized by EP and others)
Situation before Recommendation:
One CMO per branch and country manages world repertoire for exploitation on
domestic market;
on basis of network of reciprocal agreements (per se approved under EC
competition law);

one licence per country according to principle of country of destination(rationale in analogue world: local monitoring needs)

Max Planck Institute for Intellectual Property and Competition Law

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Policy and practical measures and options from EU point of view (5)Music: 2005 Recommendation, main contents:
Competition between CMOs in favour of right owners
Withdrawal of rights from other CMOs and conclusion of (mostly) exclusive
contract(s) with one (or few) CMO(s)Replacement of network of reciprocal representation contracts by singlerepertoire multi-territorial licence

Max Planck Institute for Intellectual Property and Competition Law

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Policy and practical measures and options from EU point of view (6)Music: 2005 Recommendation, main criticism in EP Report 2007 :not user-friendly (no one-stop shop);disregard of principle of territoriality;
aim of more competition would probably not be reached; instead:concentration/oligopolies;
negative effects on cultural diversity

Max Planck Institute for Intellectual Property and Competition Law

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Policy and practical measures and options from EU point of view (8)Music: 2005 Recommendation, reactions in the marketplace:
Mainly major publishers (mainly Anglo-American repertoires) withdrew
rights from CMOs, to platforms:
CELAS (MCPS/PRS and GEMA with EMI)

D.E.A.L. (SACEM/SDRM with Universal)
P.E.D.L. (MCPRS/PRS/STIM et al. And Warner Chappell Music)
PAECOL (GEMA and Sony/ATV MusicPublishing)
Peermusic with MCPRS/PRS and SGAE
Alliance Digital (MCPRS/PRS and Independants)
Armonia; Nordic model

Max Planck Institute for Intellectual Property and Competition Law

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Conclusions
Diversity of markets is high, single solution to all: not useful
AV-producers may offer multi-territory licences (but: music: CMOs)
CMOs: competition between CMOs in different countries in favour of rights
owners instead of reciprocal agreements (2005 Music online Recommendation)
does not lead to one-stop shop for world repertoire, but only for single
repertoire (multi-territory/single-repertoire licenses)
OLA model as solution? (but: competition law questions)
Work in progress….

Max Planck Institute for Intellectual Property and Competition Law18