GREEN PAPER ON COPYRIGHT AND THE CHALLENGE OF TECHNOLOGY - COPYRIGHT ISSUES REQUIRING IMMEDIATE ACTION
Date: 1988-06-07
Institutions: European Commission
Subjects: EU relations, audiovisual piracy, computer piracy, copyright, data protection, database, digital single market, impact of information technology, reprography, software

COMMISSION OF THE EUROPEAN COMMUNITIES

COM ( 88 ) 172 final

Brussels , 7 June 1988

GREEN PAPER

ON COPYRIGHT AND THE CHALLENGE OF TECHNOLOGY -

COPYRIGHT ISSUES REQUIRING IMMEDIATE ACTION

Communication from the Commission .

COMMISSION OF THE EUROPEAN COMMUNITIES

COM ( 88 ) 172 final

Brussels , 7 June 1988

GREEN PAPER

ON COPYRIGHT AND THE CHALLENGE OF TECHNOLOGY -

COPYRIGHT ISSUES REQUIRING IMMEDIATE ACTION

Communication from the Commission .

GREEN PAPER

ON COPYRIGHT AND THE CHALLENGE OF TECHNOLOGY -

COPYRIGHT ISSUES REQUIRING IMMEDIATE ACTION

Communication from the Commission .

© 1988

Commission of
Reproduction is authorized , except
purposes , provided the source is acknowledged .

the European Communities .

for commercial

- I -

CONTENTS

Pages

CHAPTER 1

: COPYRIGHT AND THE EUROPEAN COMMUNITY

1.1 .

Emergence of important copyright issues at Community Level ..

1

1.2 .

The growing importance of copyright to industry and
commerce. 2

1.3 .

The Community 's concerns in general. 3

1.4 .

Cultural considérations. 5

1.5 .

1.6 .

The EEC Treaty and the Community 's powers in relation to
copyright goods and services. 8

The Community 's priorities : the purposes and scope of this
consultative document. 15

1.7 .

Summa ry .....'. 16

1.8 .

Conclusion. 16

CHAPTER 2 : PIRACY

2.1 .

The nature of piracy. 19

2.2 .

The importance of piracy by sector. 20

Books. 21
Sound recordings. 21
Films and video recordings. 28
Computer programs. 35

2.3 .

Main reasons for differences between sectors. 36

2.4 .

Different bases for protection at the international level ...

38

Books , film and video recordings. 38
Sound recordings .'. 39
Broadcasts and cable transmissions. 40

2.5 .

Necessary conditions for the repression of piracy . 42

II

Pages

2.6 .

Present situation inside the Community. 45

Substantive legal provisions. 45
Procedures facilitating legal action and proof : . 54
- search and seizure procedures. 54
- customs seizure. 61
Remedies and sanctions :. 65
- damages or other financial relief. .
65
- injunctive relief. 67
- disposal of infringing products and equipment used to

produce them. 68
- dissuasive criminal sanctions. 69

2.7 .

The organizational framework for enforcement . .

71

Right holders and their organizations. 72
Public authorities. 74

2.8 .

The international context for future initiatives and
developments at Community level. 80

2.9 .

Future developments and initiatives at Community level . 83

2.10 . Summa ry. .. 90

2.11 . Conclusion. 91

2.12 . Timetable for submissions. 93

CHAPTER 3 : AUDIO-VISUAL HOME COPYING

3.1 .

Introduction. 99

3.2 .

The early development of home copying. 101

3.3 .

The international legal framework . . 102

3.4 .

The legal position in the Member States .. 103

Member States appearing to treat home copying as an
infringment of copyright or relevant neighbouring rights .... 104
Member States appearing to treat home copying as permitted
under national législation. 104
Radio and television broadcasts and cable transmissions . 107
Legislative trends in the Member States. 108

- III -

Pages

3.5 .

Home copying in practice. 109

The market for recording equipment , blank tape and
audio-visual recordings. 110
The effect of home copying on the market for audio-visual
recordings. 113
Impact of copying on the exploitation of protected works .... 116

3.6 .

New technical possibilities. 118

Digital recording techniques. 118
Technical protection devices. 119

3.7 .

The views of interested parties. 120

Demands for greater protection. 120
Opposition to demands for greater protection. 122
A " pay at source " approach to the home copying problem . 125

3.8 .

The main issues for the Community. 125

3.9 .

The Commission 's present orientations. 126

3.10 . Possible legislative responses. 127

Principles. 127
Solutions :. 128
- mandatory technical solutions. 128
- levies. 132
- the " Pay at source " approach. 135

3.11 . Associated policies .

135

3.12 . Summary. 136

3.13 . Conclusion. 137

3.14 . Timetable for submissions. . . 138

3.15 . Appendix : Technical protection

139

IV

CHAPTER 4 ; DISTRIBUTION RIGHT , EXHAUSTION AND RENTAL RIGHT

4.1 .

Distribution right : the right to control commercial
exploitation. .. 146

4.2 .

Exhaustion of distribution rights : national law . 147

4.3 .

Exhaustion of rights : Community law. 148

4.4 .

Distribution rights and exhaustion : outstanding issues . 152

4.5 .

The distribution of sound and video recordings. 155

4.6 .

4.7 .

4.8 .

The present position concerning the rental of
sound recordings. 157

The present position concerning the rental of
video recordings. 159

Recent legislative proposals concerning the rental of
sound and video recordings. 160

4.9 .

The Community dimension of the problem. 160

4.10 . The future development of the Community 's sound and video
recording industries and the general introduction of
a rental right. 161

4.11 . Summary. 165

4.12 . Conclusion. 166

4.13 . Timetable for submissions. 166

CHAPTER 5 : COMPUTER PROGRAMS

5.1 .

Subject matter .. 170

5.2 .
5.3.
5.4 .

The economic , industrial and technological context . 171
The legal response ...j. 175
Community involvement to date. 180

5.5 .

Copyright : the focus for a Community initiative . 181

- V -

Pages

5.6 .

Clarification and adaptation of existing copyright regimes ..

186

Availability of protection. 186
Originality and independent intellectual effort . 187
Fixation. 189
Scope of protection : restricted acts. 189
- restricted acts : reproduction , translation , adaptation

and use. 190
- restricted acts : adaptation to improve performance . 192
- reproduction for private purposes. 192
- the term of protection. 193
- authorship. 196
- computer-generated programs. 196
- moral rights. 197
- beneficiaries of protection. 197
- problems of proof. 199

5.7 .

Summary. 200

5.8 .

Conclusion. 200

5.9 .

Timetable for submissions. 201

CHAPTER 6 : DATA BASES

6.1 .

Subject matter. 205

6.2 .

The creation of the common information market. 207

6.3 .

Legal problems arising from the storage and retrieval of
information using data bases. 208

Storage of information. 209
The retrieval of works stored in computerized data bases ..... 210

6.4 .

Protection of data bases as such against copying . 211

6.5 .

Data stored on discs and tapes. 215

6.6 .

Summary. 215

6.7 .

Conclusion. 216

6.8 .

Timetable for submissions. 216

- VI

Pages

CHAPTER 7 : THE ROLE OF THE COMMUNITY IN MULTILATERAL AND

BILATERAL EXTERNAL RELATIONS

7.1 .

External relations : Multilateral and bilateral . 218

7.2 .

Multilateral relations. 219

The World Intellectual Property Organization ( WIPO ) . 219
United Nations Educational , Scientific and
Cultural Organization ( UNESCO ). 221
General Agreement on Tariffs and Trade ( GATT ) . 221
Organization for Economie Co-operation and Development ( OECD )
224
International Labour Office ( ILO ). 225
Council of Europe. 225

7.3 .

Bilateral relations : general. 226

7.4 .

Bilateral relations in the context of existing arrangements .. 229

Design problems of the textile and clothing industry . 230

7.5 .

The Lomé Conventions. 231

7.6 .

The new trade policy instrument. 232

7.7 .

Summary. 236

7.8 .

Conclusion . . .. 236

7.9 .

Timetable for submissions

236

CHAPTER 1

: COPYRIGHT AND THE EUROPEAN COMMUNITY

1.1 .

Emergence of important copyright issues at Cowunity level

1.1.1

1.1.2

1.1.3

The development of copyright laws in the Community and elsewhere reveals a
continual re-examination of those laws to achieve an appropriate balance ,
in the light of conditions prevailing at the time , between important
objectives that are partially in tension . Protection of the economic
interests of the author and
to information , and the pursuit of cultural goals have all had to be
pursued and reconciled . In recent years and with increasing frequency , this
challenge has been raised , in terms of copyright
Community level .

other creators , the promotion of ready access

law and policy , at

1

The directly applicable provisions of the Community Treaty concerning the
free movement of goods and freedom to provide services have produced a
number of leading cases on the extent to which copyright , of necessity
national in scope , may be relied upon if the result is to prevent goods and
services being supplied across the Community 's internal frontiers . As
elsewhere in the field of intellectual property rights , the European Court
of Justice quickly established the principle that , where goods are lawfully
placed on the market in a Member State , copyright cannot be relied upon to
restrict the free circulation of those goods elsewhere in the Community .
More recently , it has been called upon to define more clearly the limits of
that principle , for example , as regards the continuing possibility for
right holders to rely on their rights in relation to performances of
2
imported films and sound recordings and to the rental of video recordings .

Copyright issues have also emerged in other contexts . Reference must be
made to initiatives taken to develop Community action in the cultural
sector
to possible applications of Community competition law to certain
situations involving the exercise of copyright and industrial designs ; to
problems posed by the arrival of new technologies including television by
cable and satellite
, and new
audio-visual recording techniques
problems caused to Community right holders by lack of effective protection
for their rights in many non-Member States

and to the important commercial

, computer technologies

, semiconductors

6

4

8

5

- 2 -

1.1.4 .

The emergence of all these issues at Community level within recent years is
not due to pure chance . It is in large part a reflection of the profound
changes which have been occurring in the world economy , involving as they
do important structural adaptations not least in the industrialized
countries .

1.2 .

The growing importance of copyright to industry and commerce

1.2.1 .

The structural adaptations that are under way can be said to be
characterized by the following phenomena , all of which have served to
emphasize the importance of copyright protection to industry and commerce .

1.2.2 .

1.2.3 .

First , a shift has continued in the economic activity of industrialized
countries away from the production of goods having the character primarily
of staple commodities and towards the production of goods to which
considerable value has been added through the application of technology ,
skill and creativity . The superior performance and non-material attributes
of such goods , such as their design or image , constitute their main
competitive advantages . If some or all of those features can be readily
appropriated by others through copying for commercial purposes at a
fraction of the cost of developing a competing original , then the
production and marketing of such high added-value goods is put at risk

9

Second , the industrialized countries' manufacturing activities have often
proved less dynamic than the service sector , of which the information and
entertainment industries form an important part . Those industries are also
particularly vulnerable to damage through misappropriation , in particular
. Thus the very activities which offer the best
by unauthorized copying
hope for economic expansion , and are consequently the subject of
considerable new investment , are those which are particularly exposed to
losses through copying and accordingly have been seeking appropriate forms
of protection, including suitably adapted copyright laws .

10

- 3 -

1.2.4 .

1.2.5 .

Third , technological innovation itself paradoxically generates not only the
possibility for new kinds of economic activity but , at the same time , the
means whereby the results of the efforts of others can be readily
misappropriated . In the field of semiconductor designs , for example , it has
been estimated that the original development of a sophisticated chip could
involve an investment of 100 million dollars , whereas reproduction of an
existing design would cost between 50,000 and 100,000 dollars
computer program representing many man hours of work and other investment
besides can be copied perfectly and almost instantaneously at the touch of
a button . Multiple copies of a sound or video recording can be made with
equipment little more sophisticated than that used in the average home .

. A complex

11

12

against ready misappropriation of their products ,

In sum , the growing economic importance of the industries needing copyright
protection
particularly by copying , has naturally produced pressure for the
modernization of existing copyright protection systems at both national and
Community level .

1.3 .

The Coamunity 's concerns in general

1.3.1 .

In the Commission 's view , the Community 's fundamental concerns in this
field should be four-fold .

1.3.2 .

First , the Community must ensure the proper functioning of the common
market . To the maximum extent possible , creators and providers of copyright
goods and services should be able to treat the Community as a single
internal market . This requires the elimination of obstacles and legal
differences that substantially disrupt the functioning of the market by
obstructing or distorting cross-frontier trade in those goods and services
as well as distorting competition .

- 4 -

This matter is explored in greater detail in the next section of this
chapter . It suffices to note here that significant differences in the
protection available to particular classes of copyright works can clearly
fragment the internal market in those works in an undesirable way .
Similarly , if in a number of Member States , effective action is not taken
to eliminate audio-visual piracy , the benefits of a Community-wide internal
market will be denied to the European production industry since it will not
be able to operate successfully in those parts of the market where it will
be undercut by unfair competition from pirate products . Action at Community
level is needed to remove differences in national laws and procedures
creating problems of this kind and to prevent new and harmful divergences
from arising .

1.3.3 .

Second , in framing measures to ensure the proper functioning of the
internal market in copyright goods and services , the Community should
develop policies that will improve the competitiveness of its economy in
relation to its trading partners , particularly in areas of potential growth
such as the media and information . In addition to project-oriented measures
such as ESPRIT , accompanying measures are also needed , among them
legislative initiatives in relation to intellectual property , so that
European creators and firms can rely on legal protection for their products
and activities at least as favourable to their development as that enjoyed
by their principal competitors in their home markets .

1.3.4 .

The third general concern must be that intellectual property resulting from
creative effort and substantial investment within the Community should not
be misappropriated by others outside its external frontiers . It should
enjoy a fair return when exploited in non-Member States . This is frequently
not the case at present

13

- 5 -

1.3.5 .

On the other hand , copyright is an exclusive right granted by legislation
to an individual . One of its effects is inevitably to limit to a certain
extent the normal freedom of third parties to compete by marketing similar
products . In the more traditional domains of copyright applying to
literary , musical and dramatic works , this has not posed a significant
problem since independent works of the same genre can in law and practice
still compete with each other quite fairly . In areas which have developed
more recently , however , the restrictive effects of copyright protection on
legitimate competition have on occasion risked becoming excessive , for
example , in respect of purely functional industrial designs and computer
programs . In such contexts , copyright protection without suitable limits
can in practice amount to a genuine monopoly , unduly broad in scope and
lengthy in duration .

1.3.6 .

It follows that , in developing Community measures on copyright , due regard
must be paid not only to the interests of the right holder but also to the
interests of third parties and the public at large , since , particularly
with regard to products of an industrial character , works are placed on the
market by a decision of the right holder himself .

1.4 .

Cultural considérations

1.4.1 .

The economic interests which copyright law aims at protecting are
inextricably interwoven with cultural interests and cultural needs . New
dissemination and reproduction techniques have developed with an
ever-increasing speed and have added , at a corresponding rate of speed , to
the complexity of this relationship . These new technologies have entailed
the de facto abolition of national frontiers and increasingly make the
territorial application of national copyright law obsolete , while , at the
same time , permitting for better and for worse in every country ever more
rapid , easy , cheap and high-fidelity reproduction . This has at one and the
same time been a cause of satisfaction and concern .

- 6 -

1.4.2 .

1.4.3 .

1.4.4 .

1.4.5 .

Satisfaction has been expressed because the creator never before has
enjoyed comparable possibilities of making his work known at the national ,
European or even global level at a speed which continues to increase . Thus ,
it is more and more commonplace that the audience , for a specific work or
performance , consists of hundreds of millions or even billions of
spectators . At the same time , it raises concern because new technologies
render the control of the exploitation or use of a work difficult or even
impossible , thereby reducing the value of copyright protection based on the
provisions of national law and the existing framework of international
conventions .

Seen in the perspective of the completion of the Internal Market , the
Commission cannot but welcome the possibilities of rapid , simultaneous
dissemination of intellectual creation in the Community . In any case , the
trend to ever increasingly rapid dissemination cannot be reversed or
repressed . The Community must meet this challenge .

Any action at the Community level is to be based on the following
considerations . Intellectual and artistic creativity is a precious asset ,
the source of Europe 's cultural identity and of that of each individual
State . It is a vital source of economic wealth and of European influence
throughout the world . This creativity needs to be protected ; it needs to be
given a higher status and it needs to be stimulated .

In general , the protection of creativity implies that creators enjoy due
respect for the integrity of their work and the right to authorize the use
made thereof . Remuneration must be adequate and in general correspond to
the use made of the work . To give a higher status to creativity implies the
search for the appropriate means of rapid and extensive dissemination ; and
the stimulation of creativity implies that , in addition to the protection
from which the work may benefit , the creator is offered additional
advantages in terms of royalties , new ways of dissemination and
exploitation , and new markets .

1.4.6 .

1.4.7 .

1.4.8 .

1.4.9 .

7

It is evident that the three objectives are at the one and same time
interactive and contradictory . They are interactive since the purpose of
protection can only be the search for higher status and stimulation . They
are contradictory because undue protection may hamper the possibilities of
dissemination as well as constitute the basis of unduly high remuneration .
On the other hand , uncontrolled dissemination may make protection
inoperative and thereby prejudice the possibilities of generating adequate
income .

The Copyright Green Paper is intended to constitute the basis of a broad
consultation of interested circles . For this purpose , the paper contains an
analysis , legal and economic , of the various priority issues in respect of
which new technologies have raised questions .

In each chapter a number of legislative or technical solutions have been
suggested so that future political decisions can establish the delicate
balance which needs to be struck between the conflicting objectives ,
thereby promoting at the Community level the protection , the increased
status and the stimulation of intellectual and artistic creativity .

However , Community legislation should be restricted to what is needed to
carry out the tasks of the Community . Many issues of copyright law , do not
need to be subject of action at Community level . Since all Member States
adhere to the Berne Convention for the Protection of Literary and Artistic
Works and to the Universal Copyright Convention , a certain fundamental
convergence of their laws has already been achieved . Many of the
differences that remain have no significant impact on the functioning of
the internal market or the Community 's economic competitiveness .
Differences in national approaches to authors' moral rights , for example ,
do not in general produce situations which need to be addressed by
Community legislation . For this reason , the matter can for the most part be
left to be regulated by national laws within the framework of Article 6 bis
of the Berne Convention
including , for example , the introduction of a public domain subject to
payment and artists' resale rights .

The same applies to many other matters

14

.

- 8 -

1.4.10 .

The Community approach should therefore be marked by a need to address
Community problems . Any temptation to engage in law reform for its own sake
should be resisted .

1.5 .

The EEC Treaty and the Community 's powers in relation to copyright goods
and services

1.5.1 .

In law , the Community 's objectives in the copyright field as in others are
defined by the Treaty , which also specifies the means by which they are to
be achieved .

1.5.2 .

The rights of authors , performers and others under national laws of
copyright are not abstractions but are in practice exercised in respect of
specific goods or services . Many provisions of the EEC Treaty govern the
movement of goods and the provision of services ; and in the absence of any
explicit exception concerning goods and services subject to copyright
protection , these are covered like all others by the provisions in
question . An examination of the most important of these provisions shows
that the general concerns set out above correspond to the Community 's
competence as defined by the EEC Treaty and that it disposes of the powers
necessary to provide solutions .

1.5.3 .

The objectives of the Community as specified by Article 2 of the EEC Treaty
( hereafter EEC ) are to promote throughout the Community a harmonious
development of economic activities , a continuous and balanced expansion , an
increase in stability , an accelerated raising of the standard of living and
closer relations between the Member States . These objectives are to be
realized by establishing a common market and progressively approximating
the economic policies of the Member States .

- 9 -

1.5 . A.

For these purposes , the Community must carry out a number of activities
Listed in Article 3 EEC . These can be grouped under the following
headings : first , the elimination as between Member States of quantitative
restrictions on the import and export of goods and on all measures having
equivalent effect ; second , the establishment of a common commercial policy
towards non-Member States ; third , the abolition as between Member States of
obstacles to freedom of movement for persons , services and capital ; fourth ,
the institution of a system ensuring that competition in the common market
is not distorted ; and fifth , the approximation of the laws of Member States
to the extent required for the proper functioning of the common market . In
addition , Member States are under an obligation to facilitate the
achievement of the Community 's tasks and to abstain from any measures which
could jeopardize the attainment of the objectives of the Treaty . Also ,
within the scope of application of the Treaty , and without prejudice to any
other special provisions , any discrimination on grounds of nationality is
prohibi ted .

1.5.5 .

Many of the Community 's tasks are further elaborated in subsequent
provisions of the Treaty and the application , actual and potential , of all
those provisions in the copyright field would occupy many pages . For
present purposes , it suffices to concentrate on the elimination of all
measures having equivalent effect to quantitative restrictions ; on the
approximation of the laws of the Member States to the extent required for
the proper functioning of the common market ; on the removal of obstacles to
the free provision of services and , finally , on the establishment of a
common commercial policy towards non-Member States and to other possible
bases for common action as regards the Community 's external relations .

- 10 -

1.5.6 .

1.5.7 .

1.5.8 .

Under the Treaty , quantitative restrictions on imports and exports and on
measures having equivalent effect are prohibited between Member States
( Articles 30 to 34 EEC ). These provisions are widely interpreted by the
Court of Justice . They are one of the most effective instruments of the
Treaty for ensuring the free circulation of goods . They are , however ,
subject to certain qualifications . They do not , for example , preclude
prohibitions or restrictions on imports , exports or goods in transit
justified on the grounds of protection of industrial and commercial
property , although such prohibitions or restrictions may not constitute a
means of arbitrary discrimination or a disguised restriction on trade
between Member States ( Article 36 EEC ).

As already mentioned , cases concerning the free movement of goods subject
to copyright or to similar rights have already reached the Court of
Justice . Although the number of cases is not yet as great , nor the range of
conflicts as wide , as those which have caused litigation in other areas of
intellectual property rights such as patents and trademarks , it is already
clear that , as regards copyright goods , the principles which forbid a
partitioning of the market_are applicable in copyright cases just as they
are in cases where the industrial property right in question is a patent or
a trade mark . However , those principles do not exclude the application of
copyright to imported products where exploitation is through a performance
of the work , unless reliance on the right constitutes a means of arbitrary
15
discrimination or a disguised restriction on trade between Member States

Accordingly , the effect of the provisions of the Treaty on free circulation
of goods may be said to apply broadly , mutatis mutandis , to goods subject
to copyright ; and, in particular , recourse to copyright law as a means of
artificially partitioning the market is as effectively prohibited , being
equivalent in effect to a quantitative restriction, as recourse to patent
or trade mark law . In addition , it follows that conditions may well arise
in which harmonization of national copyright rules might be necessary . Such
could be the case in particular where Article 36 , and notably its exemption
of restrictions justified on grounds of protection of industrial and
commercial property , applies to national rules which would otherwise be
contrary to Articles 30 or 34 EEC .

- 11

1.5.9 .

The Treaty confers on the Council the power and the duty , acting
unanimously on a proposal from the Commission , to issue directives for the
approximation of such provisions laid down by law , regulation or
administrative action in Member States as directly affect the establishment
or functioning of the common market ( Article 100 EEC ). Until recently , this
power constituted the most likely basis for action at Community level in
the field of copyright law . It is a vital instrument for the harmonization
of differing national laws and for creating a standard throughout the
Community , even where some Member States have no laws governing the
subjects at issue . The provision was accordingly used as the main legal
basis for the recently adopted directive on the legal protection of
topographies of semiconductor products

16

1.5.10 .

After the entry into force of the Single European Act , Article 100A EEC has
become available for measures aimed at the establishment of an internal

market . This provision permits such measures to be adopted by qualified
majority . Accordingly , where differences in the copyright laws of the
Member States affect the functioning of the internal market to the point
that legislative action is required , the Community is now able to rely on
this new possibility to remove the obstacles and distortions in question .

1.5.11 .

Performances subject to copyright and neighbouring rights protection may
fall into the category of services within the meaning of the Treaty ; this
is the case if they are normally provided against remuneration and if they
are not governed by the provisions relating to freedom of movement for
goods , capital and persons . Consequently , they are covered by the
provisions of the Treaty abolishing restrictions on freedom to provide
services within the Community ( Articles 59 to 66 EEC ). While there is ample
case law on the general application of these provisions , there is little in
the specific field of copyright services . However , there is no doubt from
such case law as is available that certain services relating to copyright
goods are fully covered by the provisions in question . More particularly,
they have been explicitly held to cover broadcasting services

17

1.5.12 .

1.5.13 .

1.5.14 .

1.5.15 .

- 12 -

Article 57 EEC may accordingly have an important role to play as the legal
basis for directives designed to facilitate the provision of services
subject to copyright through the co-ordination of provisions regulating the
taking up and pursuit of such activities . The copyright chapter of the
proposal for a Council directive concerning broadcasting activities
constitutes the first use of Article 57 EEC for this purpose

.

Obstacles to inter-State trade in goods and services flowing from copyright
have been brought to the Commission 's attention in several fields . It
suffices to refer again by way of example to problems that have arisen
concerning broadcasting and the rental of video cassettes .

However , in addition to such obstacles, differences in copyright laws can
clearly have other direct and negative effects on the functioning of the
common market by distorting the competitive conditions under which
enterprises operate in different parts of the Community .

In jurisdictions where copyright is difficult to enforce, for example ,
works will tend to be misappropriated more readily than in jurisdictions
where copyright offers effective protection . Moreover , the illegally copied
works will in many cases be produced at a lower cost than the originals and
will then be able to undercut the latter in the market place . The
functioning of the common market will be directly affected in that , in
Member States offering relatively weak protection , illegally copied works
will tend to occupy a bigger market share than they do elsewhere .

Moreover , the risk of such copied works finding their way onto national
markets where the original is protected is a real one . The functioning of
the common market is in this way further disturbed since works lawfully
produced in one Member State , though legally copied, can circulate until
action is taken to stop them in Member States where the original is
protected by which time they may be in the hands of innocent economic
operators . At the same time , the need to take action against imported goods
that infringe copyright in the importing State tends to perpetuate controls
at the Community 's internal frontiers which inevitably produce adverse
consequences for the movement of legitimate products .

I

1.5.16 .

1.5.17 .

13 -

Finally as regards the elimination of obstacles and distortions , it should
be noted that the functioning of the common market is a broad concept
embracing the movement of all the factors of production across the
frontiers of the Member States including direct investment . Divergent
levels of protection offered by copyright and other intellectual and
industrial property laws will affect not only trade flows in the goods and
services concerned but more fundamentally the scale and nature of the
connected productive activities in different Member States and the

investment therein .

Mention should also be made , in addition to the power to issue directives
for the harmonization of national laws , to a further enabling power in the
Treaty , which proves relevant to some areas of copyright law . If action by
the Community should prove necessary to attain , in the course of the
operation of the common market , one of the objectives of the Community , and
the Treaty has not provided the necessary powers , the Council has the power
and duty to take the appropriate measures ; and these measures may consist
of directives , regulations or other instruments ( Article 235 EEC ). This is
in the nature of things a supplementary means of action . It would not be
appropriate as regards harmonization measures to complete the internal
market for which Article 100A EEC provides a specific legislative basis ,
but it could well be one of the powers to be used in dealing with problems
for which harmonization alone may well not provide an adequate solution ,
such as piracy . The Council Regulation laying down measures to prohibit the
release for free circulation of counterfeit goods
interesting precedent in this regard .

constitutes an

19

1.5.18 .

1.5.19 .

- 14 -

Turning to the Community 's external relations , piracy in copyright goods is
one of several ways in which copyright problems extend beyond the
boundaries of the Community itself ; and it is the objective of the
Community 's commercial policy to ensure the setting up of a uniform
commercial policy in relation to third countries . The customs union is , as
it were , the starting point for the common commercial policy , for by
establishing a customs union between themselves . Member States aim to
contribute to the harmonious development of world trade , to the progressive
abolition of restrictions on international trade and to the lowering of
customs barriers . But the common commercial policy also includes such
matters as the conclusion of trade agreements and measures to protect and
promote external trade . Tariff and trade agreements are increasingly used
as instruments for further protecting goods and services covered by
intellectual property rights . The new GATT round includes a consideration
of possible action to address the trade related aspects of intellectual
property rights
upon to arrive at a Community position .

In areas of this kind, Article 113 EEC may be relied

In addition , the provisions of the Treaty governing the common commercial
policy also include a provision to the effect that Member States are
required in respect of all matters of particular interest to the common
market to proceed within the framework of international organizations of an
economic character only by common action ; and it is for the Commission to
submit to the Council proposals concerning the scope and implementation of
such common action ( Article 116 EEC ). This procedure has been adopted in
relation to the World Intellectual Property Organization , in respect of
negotiations on the Revision of the Paris Convention for the protection of
industrial property and , if similar negotiations take place in the future
concerning the Berne Convention for the protection of copyright or for
other copyright or neighbouring rights conventions administered by WIPO , if
necessary , similar procedures would apply . The need to rely upon Article
116 EEC will in any event diminish to the extent that the Community adopts
legislation harmonizing the copyright laws of the Member States . In such
circumstances , the legal basis for Community action will be the AETR
21
decision of the Court of Justice

- 15

1.5.20 .

A consideration of the Legal powers of the Community pursuant to the EEC
Treaty would not be complete without a reference to Article 222 . This
article provides that the EEC Treaty shall in no way prejudice the rules in
Member States governing systems of property ownership . The Commission has
already explained in some detail the interpretation to be given to this
article in the field of intellectual property
. In essence , the contents
of the provision are that the assignment of property to private or public
owners and hence the question of whether property is to be nationalized or
transferred from public to private ownership remains the preserve of the
Member States . However , the content of proprietary rights , the scope of
protection afforded to them and the limits on their use may be regulated by
the Community to the extent required by its objectives , and in particular ,
to the extent required for the proper functioning of the common market . The
scope for Community action thus remains considerable .

22

1 . 6 .

The Community 's priorities : the purposes and scope of this consultative
document

1.6.1 .

For some time now , the Commission has been keeping under review the
copyright field as a whole with a view to publishing a consultative
document that would deal comprehensively with the issues that have emerged
as meriting discussion and decision at Community level . The European
Parliament has also , on numerous occasions , in particular by submitting
questions to the Commission
Commission 's position on current copyright issues . The issues dealt with in
this document are not the only ones requiring attention at Community level
but constitute the issues considered most urgent .

, expressed its interest in learning the

23

1.6.2 .

In brief , they are piracy ; home copying of sound and audio-visual material ;
distribution and rental rights for certain classes of work , in particular ,
sound and video recordings ; the protection available to computer programs
and data bases ; and finally , the limitations on the protection available to
Community right holders in non-Member States .

- 16 -

. 6.3 .

Other matters , such as problems in relation to the protection of designs
and models , have not been forgotten . They will continue to be addressed
both on the basis of the Treaty 's directly applicable provisions and with a
view to possible further legislative initiatives when the time is ripe . At
present , however , it would be unrealistic to think that such legislative
proposals could be launched with a reasonable chance of success . They would
also require an allocation of additional resources . Even those initiatives
that are proposed as a matter of priority will pose problems in this regard
and will require a particular effort to be made to ensure that results are
achieved within a reasonable period of time .

1.7 .

Summa ry

The scope of this consultative document has been limited to piracy, to the
home copying of sound and audio-visual works, to the question of
distribution and rental rights for sound and videorecordings, to the legal
protection of computer programs, legal problems relating to the operations
of data bases and to the external aspects of copyright protection .

1.8 .

Conclusion

The Commission would welcome the views of interested parties on the
specific suggestions made in the ensuing chapters of this consultative
document . To focus and facilitate the consultative process , the key issues
on which views are sought have been listed in a summary conclusion to each
chapter . However , all relevant comment is welcome , including reactions to
the general propositions contained in this introductory chapter .

\

1

2

3

4

5

6

7

8

9

10

11

12

- 17 -

i

When used without qualification , " copyright " in this document signifies
the broad range of rights that are perhaps more correctly referred to as
copyright and neighbouring rights , that is , in addition to authors'
rights , analogous rights granted to , amongst others , performers ,
producers of audiovisual works , and broadcasting organizations . Different
views exist as to whether some rights should be considered to be
" copyright " even if it is used in this broad sense , for example , rights
in designs and models or semiconductor topographies . For the purposes of
this document , such rights are to be considered as being included unless
the contrary is specified .

See Chapter 4 below for further details .

See Community Action in the Cultural Sector , Bulletin of the European
Communities , Supplement 6 / 77 , and Stronger Community Action in the
Cultural Sector , Bulletin of the European Communities , Supplement 6 / 82 .

See the proposal for a Council Directive on the coordination of certain
provisions laid down by law , regulation or administrative action in
Member States concerning broadcasting activities of 6 June 1986 , O.J. No .
C 179 of 17 July 1986 , p. 4 and " Television without frontiers", a green
paper on the establishment of the common market for broadcasting ,
especially by satellite and cable , C0M(84 ) 300 final of 14 June 1984 .

See Council Directive 87/ 54 / EEC of 16 December 1986 on the legal
protection of topographies of semiconductor products , O.J. L 24 / 36 of 27
January 1987 .

See Chapter 5 below .

See Chapters 2 and 3 below

See Chapter 7 below .

The Community 's textile industry constitutes a good example .
See Chapter 7 , paragraphs 7.4.4 . to 7.4.8 . below .

See Chapters 2 , 3 and 5 below .

See Robert W. Kastenmeier and Michael J. Remington , Minnesota Law
Review , Vol . 70 No . 2 , December 1985 page 437-438 .

A number of attempts have been made in recent years to quantify the
economic importance of copyright . Naturally such attempts have
confronted serious definitional and measurement problems . Taken
together , however , such studies suggest that , in the industrialized
countries , copyright activities generate at least 2% to 3% of Gross
Domestic Product and probably much more . Higher estimates are in the
region of 5% to 6% . Available evidence also indicates unsurprisingly
that these percentages are rising .
See , in particular , J. Philipps , The Economic Importance of Copyright ,
The Common Law Institute of Intellectual Property , 1985 ; J.S. Cramer ,
J.M. Meigering, T.J.M. Nijssen , The Economic Importance of Copyright in
the Netherlands in 1982 , Stichting voor Economisch Onderzoek der
Universiteit van Amsterdam , 1986 ; A.H. Olsson , Copyright in the National
Economy , in Copyright , World Intellectual Property Organization , April
1982 ; United States Copyright Office , Size of the Copyright Industries
in the United States , Report to the Subcommittee on Patents , Copyrights

- 18 -

and Trade Marks of the Committee on the Judiciary of the US Senate ,
1984 ;, Office of Technology Assessment of the US Congress , Intellectual
Property Rights in an Age of Electronics and Information, 1986 .

See Chapter 2 , paragraphs 2.2.2 . to 2.2.31 below .

This approach was adopted , for example , in the proposal for a Council
directive concerning broadcasting activities , loc . cit ., Article 20 . For
one possible but limited exception , see Chapter 4 , paragraph 4.4.4 .
be low .

See Chapter 4 , paragraphs 4.3.5 ., 4.3.6 . and 4.9.1 . below ,

loc . cit .

Coditel v . Ciné-Vog Films ( 1980 ) ECR 881 .

loc . cit .

Council Regulation 3842 / 86 / EEC of 1 December 1986, O.J. No . L 357 of 18
December 1986 .

See Chapter 7, paragraphs 7.2.5 . to 7.2.8 . below .

Commission v. Council ( 1971 ) ECR 263 . See also Chapter 7 , paragraphs
7.2.2 . and 7.2.3 . below .

Most recently in " Television without frontiers", op . cit ., pages 323 to
328

See , for example , written question no . 1977 / 86 ( O.J. no .
1987 , page 26 ), written question no . 1157 / 86 ( O.J. no . C 149 of 9 June
1987 , page 8 ), written question no . 656/ 87 ( O.J. no . C 315 of 26
November 1987 , page 3 ).

C 124 of 11 May

13

14

15

16

17

18

19

20

21

22

23

- 19

CHAPTER 2 : PIRACY

2.1 .

The nature of piracy

2.1.1 .

" Piracy " for the purposes of this chapter embraces the unauthorized
reproduction of works protected by copyright or allied rights for
commercial purposes as well as all subsequent commercial dealing in such

reproductions .

The commercial purpose and frequently the scale on which

the activity is carried out are characteristic features which distinguish
the practice from other forms of unauthorized reproduction or use such as
Piracy in this sense includes " bootlegging ", that is , the
home copying .
unauthorized recording of performances and the subsequent marketing of
copies of the recording .
" counterfeiting ", that is , unauthorized use of a legitimate product 's
commercial presentation , in particular , its trade mark or some other
protected indication .

It is frequently associated with

2.1.2 .

Defined in this way , piracy includes the piracy of computer programs .
However , since most discussion in recent years has concentrated on the
question of whether computer programs could be or should be assimilated to
works protected under copyright laws in force ,
appropriate to give an account of this discussion separately in Chapter 5 .
However , insofar as the trend in the Member States is in favour of the
protection of computer programs through copyright or a neighbouring right ,
the observations made in this chapter are frequently applicable mut at i s
mutandis to computer programs also .

it has been felt more

2.1.3 .
2.1.3 .

2.1.4 .

_ 20 _

Similarly , commercial misappropriation of designs falls within this concept
of piracy . In certain fields , such as textiles and clothing , piracy and
counterfeiting constitute a significant problem for Community firms .
However , since the production , though not the marketing , of such goods
embodying pirated designs is taking place primarily outside the Community ,
the problem is considered for the most part in the context of Chapter 7 of
this paper concerning the Community 's external relations . Nevertheless ,
much of what is said in this chapter is also applicable to piracy of
designs , in particular , observations concerning measures directed at
imports into the Community of infringing products .

In recent years , piracy has emerged as a serious problem for copyright
industries and for creative artists depending upon due respect of copyright
for their living .
Ministers of Culture , during their very first formal meeting at Community
level spent considerable time on the subject preparing a resolution on
measures to combat audio-visual piracy , a resolution which was adopted on
24 July 1984 by representatives of the governments of the Member States .

It is thus not a coincidence that , in June 1984 ,

1

2.2 .

The importance of piracy by sector

2.2.1 .

The significance of piracy in practice varies from sector to sector and
with the passage of time .
concerned can be summarized as follows though necessarily information on
such illicit activities has frequently to take the form of informed
estimates rather than rigorously controlled data .

Recent developments in the main sectors

2.2.2 .

2.2.3 .

21 "

Books

There appear to be no statistics available even on an estimated basis as to
the scale of piracy of books within the Community , but the generally held
view in the publishing industry is that the share of pirate books on the
internal market is negligible compared to that of legitimate publications .
Some sources have expressed apprehension as to the future , however ,
including fears as to the development of sophisticated reproduction
techniques in parts of the world known as pirate-havens in respect of other
products which might lead to increased imports into the Community of
illegally produced books .
signifi cant .

At present , the problem does not seem to be

In sharp contrast , outside the Community , the problem must be Considered
serious , especially for books in the Spanish , French and English languages ,
the latter forming the greatest part of the illegitimate traffic .
occurs to such an extent in India , Pakistan , the Middle East , South East
Asia , Latin America and Africa that publishers claimed in 1983 that their
lost sales due to piracy corresponded to approximately 1 billion US dollars
2
a year .

It is considered that this figure is still valid today

Piracy

I _ I

. . J _

3

• J

__l

e •

. .

•_

b

•

•

.

I

_

_

.

I

.

I

Sound recordings

2.2.4 .

For many years , the sound recording industry has suffered considerable
losses due to the piracy of records and tapes .
an issue of constant concern to the industry which has made great efforts
and taken numerous initiatives to improve the law and its enforcement in
order to combat piracy as effectively as possible . Likewise , at the level
of competent international organizations , piracy of sound recordings has
been the subject of numerous conferences and discussions .

The piracy problem has been

" 22

2.2.5 .

In order to obtain detailed information on the penetration of pirate
products in the individual Member States and on specific legal problems
connected with the protection of sound recordings , the Commission has
commissioned studies and consulted experts in the field .
On piracy of
sound recordings , a study was carried out at the Commission 's request by
Gillian Davies , Associate Director-General of the International Federation
of Producers of Phonograms and Videograms . The study contains a wealth of
information on the problem which need not be repeated in its entirety here
The following remarks on piracy of sound recordings are a reaction to that
study and , in particular , to its conclusions as to the importance of the
piracy problem as it affects sound recordings .

4

2.2.6 .

The tables in the 1984 version of the study showed alarming figures on the
For the
estimated losses caused by piracy in the Community and worldwide .
purposes of this paper , those tables have to the extent possible been
updated and enlarged to cover also the new Member States of the Community .

I. Estimated Loss of earnings resulting from phonogram piracy - 1984
( In Millions of National Currency and US dollars )

Count ry

Publishers

Authors /
Music

Performers

Distributors

Belgium

Germany

Greece

Spain

France

Italy

Nether lands

Portugal

United Kingdom

BF
US$

DM
US$

3.8
0.06

2.9
0.9

Dr.i> 24.0
US$
1 .8

7.1
BF
US$ 0.11

5.4
DM
US$ 1.8

Dr .!520.0
US$
2.5

Pst . 4420.0
US$

1.9

Pst . 780.0
US$

4.5

FF
US$

7.8
0.8

L6,‘720.0
US$
3.5

Df l
US$

1.3
0.4

ESC 308.7
US$

1.9

£
US$

0.8
1.0

FF 14.6
US$ 1.5

L12 , 480.0
US$

6.5

Df l
US$

2.4
0.7

ESC 573.3
US$

3.4

£
US$

1.6
1 .9

BF
US$

DM
US$

8.2
0.13

6.3
2.0

Dr . 480.0
US$
3.9

Pst ,. 900.0
us$
5.2

FF
US$

16.8
1.8

L14 ,, 400.0
US$
7.5

Df l
US$

2.8
0.8

ESC 661.5
US$
4.0

£
US$

1.9
2.3

Producers
Of
Phonograms

BF
US$

DM
US$

8.2
0.13

6.3
2.0

Dr . 480.0
US$
3.9

Pst ,. 900.0
US$
5.2

FF
US$

16.8
1 .8

L14 ,, 400.0
US$
7.5

Df l
US$

2.8
0.8

ESC 661.5
US$
4.0

£
US$

1.9
2.3

( The level of phonogram piracy in Denmark , Ireland and Luxembourg is
considered to be insignificant ).

Source : Information obtained from IFPI

24 -

2.2.7 .

Even if allowance is made for the fact that not every sale of a pirate
product necessarily substitutes for the sale of a legitimate recording ,
the economic importance of the losses seems undeniable .
Moreover ,
though the market share of pirate products within the Community has
declined since 1978 ( see Tables II and III ), this should not be
interpreted as indicating that the problem has been solved .

(3)

II . Unit sales of pirate phonograms as a percentage of the total market
( pirate and legitimate markets )

in 1978 and 1984

1978 1

1984 D

T apes

Belgium and
Luxembou rg

15.0%
3.0%

■ BIHMIII
□

Germany

9.0% ■ III·
5.0% □

Greece

Spain

France

Ire land

Italy

78.0% ΙΙ·ΙΙΙΙΙ··ΙΙ·ΙΙΙΙΙΙΙΙΙΙΙΙΙΙ·ΙΙΙΙΙΙΙΙΙΙΙ
64 . 0% I

- . '

..

J

-

50.0% f

..

...

_

.

.. _ .

]

12.0% min

5.0% :

j

20 . 0%
3.0% □

40.0%
25.0% :

~

i

Nether lands

10.0% ■ mi
5.0% C:J

Discs LPs

11 3.0%
0 1 . 0%

1 2.0%
0 1.5%

Very low
Very low

-

1 1 . 0%
I 0.5%

II 3.0%

Very low

( III 6.5%
r::g 7.0%

III ! 7.0%
Π 3.0%

Po rtugal

_

-

80.0% r. '

■ . '

·

■

.

ï

Uni ted
Kingdom

7.0% III !
5.0% LLJ

■ 2.0%
Γ 1.0%

Source : Information received from IFPI

- 26 -

III . Retail value of pirate phonograms as a percentage of the total market
( pirate and legitimate markets ) in 1978 and 1984

1978 ■

1984 □

Belgium and
Luxembourg

Germany

6% III
1% ö

4% IN
2%

D

Greece

Spain

France

Ireland

Italy

28% CZ.. . - - Z)

26% I_I_I

II

4%
1.5%fl

6% INI
0 . 5%l

14% Z-.ZZ1

Nether lands

6% 111
3% Zi

Portugal

23% tzn .._j

Uni ted Kingdom

6% III
2% 0

Source : Information received from IFPI

27 -

2.2.8 .

First , the decrease is partly due to the continuing efforts of the
industry , sometimes under difficult circumstances , to suppress piracy .
Second , while those efforts appear to have had positive results , a
substantial part of the decrease during the last few years is probably due
to the fact that pirates have been concentrating for some time on video
products which , as will appear from what follows , at least for a period of
time , have offered a more profitable and therefore more attractive target .
Finally , it is important to bear in mind the particular characteristics of
the sound recording industry .
recordings released do not make a profit ^.
proportion of profitable releases , which can be considerable , are used to
finance new releases and maintain a breadth of repertoire that would
otherwise be impossible .
recordings which are already known to be in current demand and in this way
the overall profitability of the recording industry is reduced .

But the pirates of course target precisely the

The returns on the small

The overwhelming majority of sound

2.2.9 .

Table IV gives an indication of the provenance of pirate sound recordings
sold within the Member States of the European Community .

IV .

Home markets of EEC Member States ( except Portugal and Spain ) -
provenance of pirate products sold

40%

1 00%
40%

% Imported into
the country

|
I Country
I
I
I
I
|
iBelgium and
|
[ Luxembourg
|
I Denmark
|
iGermany
I
I
|
iGreece
| over 50% Arab repertoire
I France
I low % of other repertoire
I
i
I
I
I
|
I Ire land
¡Italy
i
I
I
|
[ Netherlands
i Uni ted Kingdomj
I
I

85%
5% tapes
80% records
99%
very low

0%

|
|
I
I

I
I
I
l
|
|
I
I
I
|
|
I
|
I

Provenance of
imported product

Mainly EEC

EEC & Row
Mostly EEC ( Belgium ,
Italy , Netherlands ).

EEC & Row
( in particular :
Italy , Netherlands
South East Asia ).
50 / 50 EEC / Row .

Non-EEC ( USA ,
Singapore ) .

50 / 50 EEC / Row .

EEC & Row

I
I
!
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I

=

Row
Source : Based on information contained in Piracy of Phonograms , Gillian

Rest of the world

Davies , second edition 1984 .

2.2.10 .

The cross-frontier nature of the traffic emerges clearly , both as between
Member States and between Member States and non-Member countries .

- 28 -

2.2.11 .

2.2.12 .

Outside the Community , the Middle East is rife with piracy . Combined with
Africa , the problem is estimated to be in the region of 355 million dollars
of pirate products sold each year^. Equally important is the problem in the
Far East , in particular , in India, Malaysia , Taiwan , Indonesia and , until
recently , Singapore where new copyright legislation and energetic
anti-piracy actions have considerably reduced the previous level of piracy .
It is estimated that the value of sales of pirate products in this area
amounts to 350 million dollars a year . On a worldwide basis , it is
estimated that the value of pirate products sold represents 1,200 million
US$ compared to a global turnover of about 10,000 million dollars . A
considerable proportion of this pirate trade concerns recordings of
European origin . In contrast to the position in the Community , the market
share of pirate products in the areas mentioned does not show a tendency to

decline .

Films and video recordings

Owing to video recording being a relatively recent phenomenon , available
information concerning the industry and the piracy of films and other video
products in the early years of the video recorder (VCR ) is less extensive
and less detailed .
The magnitude of the piracy problem is clear , however .
Illegitimate video recordings on the market both within and outside the
Community have been found to such an extent that they sometimes outnumber
those legitimately produced .
recorders the problem is less serious , but in the UK , for example , where
the penetration of video recorders is high , the government made an estimate
according to which the market share of pirate products in 1983 was 66% .
After amendment of copyright law and its more energetic enforcement , it is
estimated that the market share of pirate products has been significantly
reduced , though to a still substantial 20% or so .

In countries with relatively few video

2.2.13 .

Table V shows the estimated penetration of VCRs in Community households in
1985 and 1986 .

V. Penetration of VCR in homes ( at year end )

- 29 -

COUNTRY

i
I
i
I Belgium
I Denma rk
I Germany
I Greece
I Spain
I France
I Ireland
I Italy
I Luxembourg
i Netherlands
i Portugal
i United
i

Kingdom

1985

I
Iper cent of
I households
I
I
I
I
I
I
i
I
I
I
I
I
i

14.9%
23.0%
22.0%
6.9%
13.8%
14.0%
22.0%
3.0%
26.4%
29.0%
10.0%

40 . 0%

I
|
I
I
I
I
I

I
I
I
I
I
I
I

Number
C' OOO )
471
430
5,250
200
1,500
2,800
220
500
24
1,500
200

8,500

1986

per cent of

households

Number

( ' 000 )

18.7%
28.5%
26.0%
8.3%
18.4%
17.0%
27.0%
5.0%
34.0% .
35.0%
15.0%

46.0%

595
545
6,250
250
2,000
3,500
250
800
31
1,850
300

9,800

I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I

Source : Information obtained from IFPI

2.2.14 .

Table VI shows industry estimates of video piracy as a percentage of the

ma rket .

VI . Extent of video piracy in the Community

Market share of video pirate products

Belgium and
Luxembourg
Denmark
Germany
Gr eece
Spai n
F ran ce
I re land
It aly
Nether lands
Po rtugal
United Kingdom

I
I
I
I
I

I

i
!
!
¡
I

1983

30-40%
5-10%
40-50%
60-70%
60 - 70%
30-40%
80%
50%
50-65%
90-95%
60-70%

I
I
I
I
I
I
Í
I
¡
I
I
I
i

1984

1985

in the Community
I
I
I
25%
I
5-10%
I
65%
I
50%
I
35%
I
30%
I
40%
I
50%
45%
I
I
75-85%
1 under 20%

30-40%
5-10%
40-50%
60-70%
40%
20-25%
60%
50%
50-60%
90-95%
35-40%

1986

25%
5-10%
45%
50%
30%
25%
30%
40%
40-45%
70-75%

I

I
I
I
I
I
I
I
I
I
!
i
i

Source : Statistics provided by the Motion Picture Export Association of

America for the Commission in October 1986 .

- 30 -

2.2.15 .

As to the nature and origin of pirate products in the Member States ,
information provided by the industry gives the following picture of the main
features of recent pirate activities .

2.2.16 .

In Belgium , piracy has decreased slightly since 1983 and is believed now to
represent around 25% of the market . It is impossible to know how much piracy
consists of copying by retailers but it is believed to be substantial . Most
piracy , however , is industrial in character . Pirate copies available in
Belgium are manufactured in the country as well as imported from the
Netherlands which share a common language . Pirate products are also exported
to the Netherlands . Some masters are imported from the United Kingdom or the
USA but then need to be subtitled or dubbed before copies can be duplicated .

2.2.17 .

Denmark has the lowest incidence of piracy in the Community . Piracy is

estimated to represent now around 5% of the market as compared to more than
50% some years ago . This striking reduction is probably due to the
organization of the legitimate rental market . A network of primarily rental
outlets with an appropriate territorial coverage has been created and
distributors organized within the Association of Danish Video Distributors
( ADV ) which covers the legitimate market in nearly its entirety . Membership
of this organization and respect for its rules is in reality a condition for
access to legitimate material . The Association of Danish Video Distributors
has also been energetic in taking successful anti-piracy action .
Nevertheless , piracy occurs and a substantial number of pirate cassettes
have been seized during raids carried out as a result of investigation by
the ADV . Pirate copies are believed to be imported from the United Kingdom

or the USA .

- 31

2.2.18 .

In Germany , contrary to the trend outlined in other Community countries ,
video piracy was until 1985 on the increase and at that time still
represented 65% of the total market . Two factors are reported as having
contributed to a change in the picture . One is the creation in December 1984
of GVU " Gesel Ischaft zur Verfolgung von Urheber rechtsver letzungen " which is
the German Federation against copyright theft based in Hamburg . The other
factor is the 1985 amendment of copyright law which introduced heavy prison
terms for piracy and made piracy a " public offence " enhancing police
participation in investigation and detection . Through 1985 , GVU became
active and instigated more than 450 raids on outlets carrying pirate stock

and obtained more than 500 convictions . As a result the market share of

pirate products in Germany , domestically produced or imported from
neighbouring German speaking countries such as Austria and Switzerland , is
now reported to be on the decrease , for 1986 being estimated at 45% of the

market .

2.2.19 .

In Greece , the video industry is still at a very early stage of development
since only 8% of households own a video recorder . Piracy has , however ,

bedevilled the Greek video industry from the start . However , recent court
actions resulting in heavy prison sentences and fines for the pirates have
had the results of reducing the level of piracy quite noticeably to around
50% of the market .

2.2.20 .

In Spain , the market share of pirate products has now been brought down to
around 30% .

The decrease seems to follow the activities undertaken by

ADICAN ,
a national distributors association formed by major companies
engaged in the distribution of video products , which has been able to
inspire a different approach to the piracy problem by the authorities and in
particular the Supreme Court .
In 1985 , the Anti-Piracy Federation ( FAP ) was
established under the stewardship of the Motion Picture Export Association
of America .
activities against pirates , thus succeeding in making the market share of
pirate products decrease in a significant way .

This organization has carried out a number of successful

- 32 -

2.2.21 .

In France , video piracy is estimated to represent 20% to 25% of the market .
Pirate products are made almost exclusively in France . This is due to the

fact that France uses the SECAM system which is different from the PAL
system used in much of the rest of the world ( apart from the USA which uses
the NTSC system ). This technical difference as well as the need to have many
videos dubbed in French probably protects France from a higher incidence of
video piracy than is currently the case .

2.2.22 .

In Ireland , piracy has decreased over the past few years and now accounts
for 30% of the market . Pirate copies are made in Ireland as well as
imported , mostly from the United Kingdom . Pirate copies are often made from
private homes and then sold by video clubs or from market stalls or vans .

2.2.23 .

In Italy , video piracy is believed to account for 40% to 50% of the total
market with a slightly decreasing tendency . This total turnover , however , is
relatively small since the video market is in an early stage of development

in Italy . There are only 800,000 VCRs in the country which represents a
penetration of only 5% of households . The video market has developed more
slowly in Italy than in most other European countries probably in part
because of the superabundance of TV channels and the wider choice of
entertainment thus available to the public . The less important form of
piracy consists of copying by retailers . As regards the more serious
industrial piracy , copies are made from masters of newly released feature
films or even new films which have not yet been released .
feature films are legitimately released on video one year after the
theatrical exploitation . Pirate products thus consist mainly of films which
are not yet released for video exploitation . Pirate copies are mainly
manufactured in Italy , here again for language reasons . Only masters are
sometimes imported from abroad .

By and large ,

•

2.2.24 .

As far as Luxembourg is concerned , piracy has not been reported as being a
significant problem , though a number of anti-piracy actions were carried out
in 1985 and 1986 .

2.2.25 .

*

2.2.26 .

- 33 -

In the Netherlands , for a considerable time , pirate products had a dominant
share of a market marked by the increasing penetration of VCRs , to reach a
level in 1986 of around 35% of all households . The importance of the pirate
trade in this well-organized and normally law-abiding society has tickled
the curiosity of many people but indications that video piracy is in the
hands of well organized criminal circles have been so constant and so
numerous that they cannot simply be dismissed . Since January 1984 the fight
against video piracy has however been increasingly successful . At that time
the Dutch Cinematographic Association together with the Motion Picture
Export Association of America , the N.O.S. ( the Dutch television ), the STEMRA
( the Collecting Society for Mechanical Rights ) and the NVPI ( Nederlandse
Vereniging van Producenten en Importeurs van Beeld- en ge luidsdragers )
formed a federation against copyright theft , the Stichting Video Veilig . The
organization has with the assistance of STEMRA carried out a large number of
raids leading to numerous convictions and important seizures of pirate
material . Due to energetic action from right holders the level of piracy has

now decreased to 40% to 45% of the market .

It is difficult to explain clearly why the

In Portugal the penetration of VCRs has reached 15% of households in 1986
according to the latest estimates . Pirate products dominate the market with
a market share of 70% to 75% .
piracy problem is so acute in Portugal .
reasons of which two seem particularly important .
law giving substantive rights to all right holders has only recently come
into force .
not organized to the same extent as , for example in Denmark , and , as a
result , rental outlets are not able to offer consumers an adequate choice of
legitimate titles in all parts of the country .

Second , the rental market in respect of legitimate products is

There seems to be a variety of

First , a modern copyright

- 34 -

2.2.27 .

FACT ( the Federation against Copyright Theft ) which has

The United Kingdom has also seen a striking decrease in the Level of video
piracy over the past few years , which is now believed to be around 20% of
the market or less .
been actively engaged in anti-piracy actions , believes that it has now
stopped the theft ( or " borrowing ") of newly released films from UK cinemas
for piracy purposes .
A system of " marking " films played a crucial role in
stopping piracy of newly released films since those markings enabled police
and FACT investigators to identify the cinema from which the copy had been
" borrowed ".
broken , there is still a steady stream of imports of pirate cassettes from
abroad , mainly transfers from the NTSC American format imported from the
USA .
Malay , Chinese and Indian subtitles .

There is also evidence of importation of films from the Far East with

Although two major rings of local video pirates have been

2.2.28 .

Most pirate video cassettes found on the market within the Community appear
to be of Community origin . This is due to various factors .
Language ,
technical equipment and know-how play a role , as do different colour
television standards .

The choice of London and Amsterdam as production

centres in the early days of video piracy was due partly to the fact that
the PAL system used in the United Kingdom and the Netherlands has widespread
application elsewhere in the world .
Moreover , a considerable proportion of
the production most in demand is released relatively quickly on the United
Kingdom market , for example , British television programmes , films and a
large number of popular American productions .
languages are furnished with English subtitles when they are shown in the
United Kingdom and can then be copied , not necessarily in the United Kingdom
itself , and rapidly introduced on major markets all over* the world .

Productions in other

- 35 -

2.2.29 .

The general trend in respect of a decrease in the market share of pirate
products of the video market from 1983 to 1986 shown in table VI has

According to information provided by the Motion

continued during 1987 .
Picture Export Association of America to the Commission in November 1987 ,
the estimated mid-1987 European piracy levels appear to be slightly lower
than the figures for the preceding years .

2.2.30 .

Outside the Community , video piracy is naturally most prevalent in those
countries with a high level of video recorder ownership such as the United
States , Canada and Japan .
limited to such countries , being found also in certain developing countries ,
for example , in South East Asia .
works are of European origin .

Production of pirate products , however , is not

A considerable proportion of the pirated

Computer programs

2.2.31 .

Recently computer software and in particular computer programs have become a

very vulnerable target for pirate activities .

As long as the use of

Programs for computers and in particular games are sold

Since the microcomputer has become popular the picture has ,

computers was restricted mainly to professional use in business and
administration , the penetration of illegally reproduced programs was not
alarming .
however , changed .
over the counter as consumer goods tike records and tapes .
easily reproduced at costs which only represent a tiny fraction of the costs
involved in their original development . This has caused considerable harm to
the packaged software industry . For example , the Federation Against Software
Theft ( FAST ) has estimated that sales of legitimate programs lost through
piracy in the United Kingdom in 1986 amount to £ 150 million .

Programs are

2.3 .

Main reasons for differences between sectors

- 36 -

2.3.1 .

2.3.2 .

Thus the current prevalence of video piracy is

The differences in the importance of piracy in the main sectors concerned
are explained by a number of factors .
Some of these are legal in nature and
these are further considered below , but the principal factors appear to have
an economic character .
undoubtedly due in large part to the considerable profit margin available to
the illegal producer which is much greater than in the case of either books
or sound recordings . Unauthorized reproduction of books , for example ,
permits royalties to be saved .
of the retail price .
at costs similar to those of legitimate products .
recordings can be readily and cheaply reproduced on tape , their average
retail selling price is much less than that of a video recording , which can
8
also be profitably exploited through rental .

These amount in general to about 10% to 15%
But the books still have to be printed and distributed

The video recording is thus a

Likewise , even if sound

much more tempting target .

For some years too right holders in feature films undoubtedly contributed to
the creation of a market for pirate products by witholding licences to
market their works on video cassettes .
as a supplementary source of income for productions already shown in
cinemas , for productions which had not been a commercial success and for
childrens' movies , for example , many producers were opposed to the new
medium and tried unsuccessfully to resist it by refusing licences .
television and video as a threat to film production instead of as an

Instead of welcoming this new medium

They saw

important new outlet .

- 37 -

2.3.3 .

2.3.4 .

Another exacerbating factor contributing to the attractiveness of video
piracy has been the normal distribution policy of film producers .
to musical productions which are normally released simultaneously on all
markets , new films are released on the various markets at different times ,
depending on when it is thought most lucrative to release the work .
addition , modern productions are often so expensive that a major publicity
campaign has to precede the release of a film to maximize box-office
receipts .

The publicity campaign is meant to create a demand for the work

In

Contrary

and normally does so , but unfortunately also in areas where no immediate

release will follow or where no release will follow on video cassettes . The

practice thus creates a ready market for pirate copies and an almost

irresistible temptation for racketeers .

Whatever view is taken of national

laws or agreements designed to ensure the exploitation of films in cinemas
prior to their marketing as video recordings , by generalizing and
institutionalizing the delay between the two forms of marketing , they
contribute to the piracy phenomenon and accordingly reinforce the need for
effective means to combat pirate activities .

The decreasing market share of pirate video products which has been observed
in the last few years can be attributed , like the decline in piracy of sound
recordings , to a variety of factors . Improved legislation and more energetic
action by right holders are undoubtedly two important reasons . But probably
most important of all are economic factors . The price of high quality
pre-recorded material is falling dramatically . In the US the purchase price
of a feature film on video cassette is less than 20$ and the " rental "
price less than 1$ . Though prices in the Community generally are higher than
in the US it
dramatically reduced in the last few years , taking away a major incentive to

is a fact that the profit margin for video pirates has been

9

engage in the activity .

- 38 -

2.3.5 .

Piracy in respect of compact discs is so rare as to be unheard of , probably
because the manufacture of CDs is too costly and technically complicated for
pirates . However , the arrival of digital audio tape recording ( DAT ) may
again stimulate audio piracy . Since DAT is considered , however , primarily to
raise issues relating to unauthorized private reproduction, detailed
discussion on DAT will take place in Chapter 3 on home copying .
Nevertheless , the piracy aspect should not be overlooked .

2.4 .

Different bases for protection at the international Level

2.4.1 .

Books , sound recordings , films and video recordings are not protected in the
same way at the international level . The extent and quality of the
protection varies from one sector to another , particularly as between books
and video products on the one hand and sound recordings on the other . The
basis on which broadcasts and cable transmissions are protected also has a

particular character .

Books , film and video recordings

2.4.2 .

10

and national laws of Member States

Books are protected as literary works at the international level by the
Berne and Universal Copyright Conventions . All Community Member States are
parties to the Berne Convention
accordingly vest in the author the exclusive right to authorize the
reproduction of his work . Similarly , in conformity with the Berne
Convention, cinematographic works are protected in all Member States , the
ownership of the copyright being however governed by national legislation
within the framework established by Article 1 4b i s of the Convention . Video
recordings appear to have been assimilated to films in accordance with the
Berne Convention 's definition of cinematographic work as including "works
expressed by a process analogous to cinematography "
. Some contemporary
legislation , however , expressly protects video recordings which , together
with cinematographic works , are then sometimes referred to as audio visual
works .

11

- 39 -

Sound recordings

2.4.3 .

However ,

Accordingly , they do not ensure protection of the

The legal protection of sound recordings is much less uniform . Neither the
Berne nor the Universal Copyright Conventions require protection to be given
to sound recordings as such as distinct from the literary and musical works
that may be recorded .
performers and producers responsible for sound recordings .
provision to this effect has been made by the International Convention for
the Protection of Performers and Producers of Phonograms and Broadcasting
Organizations signed in Rome in 1961 , generally called the Rome Convention
The Rome Convention offers producers of phonograms
on neighbouring rights .
the right to authorize or prohibit the reproduction of their phonogram for a
period of at least 20 years from the first fixation .
protected against inter alia the unauthorized fixation of their
performances .
following Community Member States :
Luxembourg , United Kingdom and France . A total of 31 States are members as
of 1 September 1987 .

This Convention has , however , been ratified by only the
Denmark , Germany , Ireland , Italy ,

Performers are

2.4.4 .

The limited ratification of the Convention had two main causes : first , at
the time of its adoption in 1961 it was in advance of many national
legislations , so that most countries had to legislate before they could
adhere to it . Second , it contains a non-ob ligat ory provision on the right of
performers and producers to receive , equitable remuneration when records are
played by radio and television or otherwise communicated to the public . This
provision has been vigorously opposed from the outset by broadcasting
organizations . On the other hand , the Convention has been actively promoted
by the sound recording industry and performers' organizations who have
constantly pressed for full protection under its provisions . Sufficient
consensus to permit the adoption of legislation has accordingly sometimes
been difficult to achieve .

- 40 -

2.4.5 .

However , the problem of piracy had become so acute by 1969 that the sound
recording industry was obliged to seek protection by means of another
international instrument in view of the limited application of the Rome
Convention . As a result the Convention for the Protection of Producers of

Phonograms against Unauthorized Publication of their Phonograms was signed
in Geneva in 1971 . This Convention allows States who are not in favour of

the equitable remuneration of performers to subscribe to measures directed
against piracy . The following Community Member States have ratified this
Convention : Denmark , Germany , Spain , France , Italy , Luxembourg and United
Kingdom . A total of 39 States are currently members .

2.4.6 .

In contrast to the Rome Convention of 1961 , contracting States to the Geneva

Convention are not required to adhere to the Berne Union or the Universal
Copyright Convention . The Convention , dealing specifically with the
unauthorized reproduction , importation and distribution of sound recordings ,
offers a choice of four possible methods of legal protection : copyright , a
specific or neighbouring right , unfair competition law or penal sanctions or
combinations of these possibilities . Community Member States who are parties
to the Convention have chosen different methods of implementing it , as will

appear in greater detail from the analysis below .

Broadcasts and cable transmissions

The protection accorded to broadcasts and cable transmissions as such , as
opposed to that accorded to literary and other works when broadcast or
transmitted , also falls outside the Berne and Universal Copyright
.
Conventions

12

* •

2.4.7 .

(4)

- 41

2.4.8 .

2.4.9 .

The Rome Convention provides for national treatment to be accorded to
broadcasting organizations in other contracting States .
in Article 13 that broadcasting organizations shall enjoy the right to
authorize the fixation of their broadcasts and , within certain limits , the
reproduction of such fixations .
transmission for public reception of sounds or images and sounds .
Transmissions exclusively by cable are thus not covered even if fixation of
a broadcast signal re-transmitted by cable might nevertheless be regarded
as an infringement of the broadcaster 's right where the re-transmission is

Broadcasting is defined as wireless

It also provides

instantaneous .

The European Agreement on the Protection of Television Broadcasts of 1960
provides for broadcasting organizations to have the right to authorize any
fixation of their broadcasts or any reproduction thereof .
The protection
applies to the visual and sound elements of television broadcasts , but not
the sound element when broadcast separately ( Article 5 ).
No definition of
broadcasting is given , but if broadcasting means wireless transmission as
in the Rome Convention , then the Agreement would not appear to protect
transmissions exclusively by cable against unauthorized fixation or any
reproduction thereof .
Belgium , Denmark , Germany , Spain , France and the
United Kingdom are members of the Convention .

2.4.10 .

The legal protection available to broadcasts or cable transmissions as such
is a matter of considerable and growing importance given the fact that they
constitute a readily accessible source of access to a steadily increasing
range of audio-visual works , some of which may not be protected otherwise .
As with sound recordings , the existing international instruments leave a
considerable degree of liberty to the Member States as the subsequent
analysi swill show .

2.4.11 .

Before proceeding to such an analysis , however , the conditions necessary
for the repression of piracy should perhaps be summarized , if in somewhat
idealized terms , as a basis for evaluating the strengths and weaknesses of
the present situation in the Member States of the Community .

2.5 .

Necessary conditions for the repression of piracy

- 42 -

2.5.1 .

2.5.2 .

The necessary conditions for the repression of piracy are essentially
four-fold :
clear substantive legal provisions giving protection to the
interests that piracy can damage ; effective procedures for taking legal
action against and proving pirate activity ; adequate sanctions and
remedies ; and organized and co-ordinated enforcement efforts of interested
These conditions are to a certain
parties and relevant public authorities .
extent inter-related . For example , procedures and remedies may well be
dependent on the kind of substantive legal provisions enacted in a
particular Member State .
helps to clarify an analysis of the problem .

Nevertheless , considering each of them separately

The

First , there must be clear rules of substantive law protecting the
important economic interests in question from the main acts of piracy .
law should clearly specify what interests are protected and against what
forms of activity .
The main interests to be taken into account appear to
be those of the authors of relevant literary , musical and artistic works ;
of the performers who have participated in the making of a sound or
audio-visual recording or film;
of the producers responsible therefor ;
and of broadcasters and cable operators . The main acts of piracy should
These include not only unauthorized
also be clearly prohibited .
reproduction of the works in question , but also the importation ,
exportation and distribution , including possession for commercial purposes ,
of illicit copies .
performances should be clearly prohibited .

As regards performers , unauthorized fixation of live

- 43 -

2.5.3 .

Second ,, effective procedures for taking Legal action against and proving
pirate activity should permit right holders and relevant public authorities
to begin legal proceedings with an adequate chance of success against those
In
whom they have reasonable grounds to believe are engaged in piracy .
particular , provision should be made for search and seizure procedures
enabling plaintiffs and prosecuting authorities to obtain interim orders ,
preferably on an ex^ parte basis , permitting them to enter the premises of
the presumed infringer , search for evidence of pirate activity and , if
necessary , seize such evidence pending trial of the action .
procedures help to ensure that pirates cannot hide , destroy or otherwise
dispose of pirated material once they know they are suspected .

Such

The

evidence thus obtained not only proves the existence of the infringement ,
but also gives an indication of the scale on which the piracy is being
carried out and thus contributes to the imposition of an adequate sanction .
It also ensures that any pirate material seized cannot continue to
circulate in the market . Safeguards against the abuse of such procedures
are clearly necessary and can be readily incorporated , for example , by
means of security requirements or undertakings to pay damages concerning
losses thereby inflicted on innocent defendants .
customs procedures enabling apparently pirated goods to be stopped on entry
to the Community from third countries pending an adjudication on their
legitimacy can play an important role .
suspected goods to be controlled at this point much more efficiently than
when they are passed further down the distribution system .

The opportunity exists for

In addition , appropriate

2.5.4 .

2.5.5 .

2.5.6 .

- 44 -

Third , the remedies and sanctions applicable after final judgement should
be such as to ensure not only that adversely affected interests are
compensated to the full extent possible , but also that pirate products can
no longer circulate and that pirates are prevented or dissuaded from
continuing their illicit activities .
Damages to compensate the right
holder for his losses clearly have a role to play , but difficulties may
well arise owing to the plaintiff not being able to establish the real
extent of his loss .
well be prepared to run the risk of paying damages , as and when proved , in
the knowledge that this will frequently not be possible in practice and
that , in any case , awards of damages can be avoided by ensuring that
realizable assets are not available to meet them .

In any event , sophisticated pirate enterprises may

In addition, destruction of seized merchandise ensures that no

For this reason , damages to compensate right holders for loss need to be
Injunctive relief , damages not linked to
accompanied by other measures .
proof of economic loss and criminal sanctions , including imprisonment for
particularly serious or repeated cases , may all make a contribution in this
respect .
profit will be made from it at the right holder 's expense .
can be achieved if seized merchandise is required to be rendered
unmarketable or transferred to the right holder . Finally , destruction of
the means of producing infringing copies ensures that new activity will not
immediately begin using the equipment that led to the original
infringements .

Similar results

Once relatively sophisticated

Fourth , whatever rights , procedures , remedies and sanctions are prescribed
Moreover , experience suggests
by law , they have to be applied in practice .
that when piracy has been allowed to develop on a certain scale it becomes
much more difficult to repress .
organizations have been allowed to establish themselves , they tend to have
the resources and techniques to avoid being easily caught .
Also a public
acceptance of their practices can develop that makes it harder for right
holders and public authorities to eliminate the illicit trade . Accordingly ,
right holders have to equip themselves to be vigilant and active in their
own defence and procedures must be established that facilitate co-operation
between them and relevant public authorities , who have an equally important
role to play .

2.6 .

Present situation inside the Community

- 45 -

2.6.1 .

The paragraphs which follow seek to analyse the present situation in the
Community in the light of the model set out in the preceding paragraphs .

2.6.2 .

It should be emphasized from the outset that the present situation in many
respects is materially different from the situation in July 1984 when the

13

. The resolution and its implementation were discussed on the

representatives of governments of the Member States were for the first time
addressing the piracy issue and adopting a resolution on combatting
piracy
25 June 1985 during a special meeting of representatives of national
authorities concerned with the fight against piracy within the framework of
the Council ( Working Party of Cultural Affairs Attaches ). That discussion
and subsequent events both demonstrate that substantial improvements in law

and in practice can produce positive results .

Substantive legal provisions

2.6.3 .

2.6.4 .

2.6.5 .

In the area of substantive legal provisions , the protection given to books
seems to give satisfactory results in practice .
As regards films and
audio-visual recordings , the situation could in some jurisdictions be
improved . The main weaknesses , however , appear to concern sound recordings ,
broadcasting and cable transmission .

To begin with books , authors of literary works are clearly protected in all
Member States and the normal contractual relationships between authors and
publishers appear to enable the latter to act effectively against pirates
in practice in so far as the need arises .

As for films and video recordings , these seem to be protected everywhere as
cinematographic works or , in some recent laws , as audio-visual works or
videographic works . However , the question of who owns the exclusive rights
or who is presumed to be able to exercise the economic rights on behalf of
all who have participated in the creation of the work is settled differently
from one jurisdiction to another .

- 46 -

2.6.6 .

For historical reasons , the film producer does not normally represent the
author of the film music . During the silent movie era it became practice
that collecting societies representing the author of the music played as
accompaniment to the film by a band or a piano player in movie theatres
collected royalties for the use of the music actually played during shows .
- The arrival of the " talking movie " did not change this pattern . The authors

of the film music still collect independent royalties through their
collecting societies on the basis of box office receipts . This tradition may
be expressed explicitly in the law as for example in France

and the

14

1 5

but even when it is not , the same general pattern can be

Netherlands
recognized in all jurisdictions . The film producer does not represent the
author of film music , which has proved to be an important target for pirates
even quite independently of the cinematographic work itself .

2.6.7 .

As regards rights in cinematographic works as such , one group of Member
States grants the rights explicitly to the film producer who either acts as
the sole right holder or the legal representative of all authors in respect
of the collective work which the film represents . This group consists of
Spain, Ireland , Luxembourg , the Netherlands , Portugal and the United
Kingdom . Italy achieves a similar result since , though copyright originates
with the persons who create the cinematographic work , within certain limits ,
the exploitation rights pass immediately by operation of law to the film
producer . Another group of States consisting of Germany and France provides
that , unless the contrary is proved , the rights of those who create the work
are presumed to be transferred to the producer . Finally , in Belgium , Denmark
and Greece , copyright is vested in the persons making an artistic
contribution to the creation of the film .

Transfer of these rights to the

producer has a contractual basis .

- 47 -

2.6.8 .

2.6.9 .

The rebuttable presumptions applicable

In practice , even in those States where producers are not automatically
granted rights , whether directly or by reason of a transfer by operation of
law , contractual arrangements have frequently been reached which enable
producers to act against pirates .
in some jurisdictions play an important role , but even in their absence the
necessary rights are in practice frequently transferred to the producer by
contract . Nevertheless , it would be preferable if , in all Member States ,
producers of audio-visual works had their own rights , though without
prejudice to the rights of other persons ,
act against pirates .
granting such rights directly or through the immediate transfer by
operation of law of the rights of those who have participated in the
It is noteworthy in this respect that , as regards video
production .
recordings , the recent French and Portuguese laws directly grant just such
a right to the producers of the new and separate category of audio-visual
works .

Such a result could be achieved either by the law

on the basis of which they can

The need to grant rights to persons other than the producer or his
successor in title , in the context of the repression of audio-visual
piracy , is less evident , though clearly other social and cultural
considerations weigh strongly in favour of rights being granted to those
who contribute to the creation of such works or perform in them .
piracy is by its nature primarily an economic problem and it is the
producer who normally assumes the economic risks involved in a production .
He has the pressing economic interest in repressing piracy and above all
needs a firm legal basis on which to act .
For this reason , the rights of
other contributors and of performers , important as they are , are not
further considered in this context .
Incidentally , it may be observed, that
as regards performers , audio-visual bootlegging of live performances is for
obvious technical reasons not a problem of the same practical importance as
bootlegged sound recordings .

However ,

- 48 -

2.6.10 .

of the rights of the author of any work recorded .

Turning to sound recordings , the Member States which are parties to the
Rome Convention have enacted laws giving protection to producers of such
recordings independently
Likewise , they protect performers against the unauthorized fixation of
their live performances though in the case of Ireland and the United
Kingdom this is achieved by application of the criminal law alone . However ,
in November 1987 , the UK government , within the context of a new copyright
bill , has proposed to make civil remedies available to performers

16

2.6.11 .

In other Member States , the situation is less clear and can give rise to
problems .

2.6.12 .

In Belgium , where the copyright law dates back to 1886 , no legal provision
gives producers and performers a specific right to authorize reproduction
of sound recordings .
Instead producers and performers have sought protec ¬
tion , in particular , under the Law of 14 July 1971 on Trade Practices .
Article 54 of this law prohibits acts contrary to honest commercial usage
by which a trader harms or attempts to harm the professional interests of
one or more other traders .
under this law have been quite successful and the system of protection is
reported to be considered relatively effective by producers . Nevertheless ,
certain problems remain which would be solved if producers and performers
were protected by a right analogous to copyright
In particular , search
and seizure procedures might become available facilitating the proof of an
infringement and of its importance .
paragraphs 2.6.27 . - 2.6.40 .

Actions brought by producers and performers

This is discussed further below in

17

.

- 49 -

2.6.13 .

In Greece , there is no specific Legislative protection for producers and
performers against copying of recordings but in practice the Greek courts
have accepted the view that the protection enjoyed by authors under
copyright Law has been assigned to phonogram producers by means of their
contracts for mechanical reproduction .
This has enabled producers to act
on the basis of copyright law and such problems as arise in their regard
concern primarily the adequacy of available sanctions .
As to performers ,
legislation was passed in September 1980 providing amongst other things for
performers to have the right to authorize or prohibit the recording or use
of their performance in any manner
.
Presidential Decree to bring the law into force has not so far been issued .

Unfortunately , the necessary

18

2.6.14 .

Spain has ratified the Geneva Convention for the Protection of Producers of

Phonograms against Unauthorized Duplication of their Phonograms but not the
Rome Convention . The requirements of the Geneva Convention have hitherto

been fulfilled through the provisions of the Decree of 10 July 1942 on the
Protection of Phonographic Works confering upon the record producer the
rights described in Article 19 et seq . of the law of 1879 on intellectual
property . These rights included the right to authorize or prohibit the
reproduction of the recording . These provisions have , however , recently been
19
replaced by the provisions of Articles 108-111 of the 1987 copyright law
conferring upon the phonogram producer the right to authorize reproduction
of phonograms for a period of 40 years computed from the production or
publication of the phonogram . In respect of performers , however , it appears
to be a question of interpretation whether the right for the performer laid
down by Article 102 of the 1987 copyright act to authorize reproduction of
his performances also applies in respect of recordings .

- 50 -

2.6.15 .

This is due to the fact that the

place a heavy burden of proof on the
He has first of all to provide proof of the illegal act , that

In the Netherlands , where no specific rights in respect of reproduction
have so far been granted to producers and performers , protection against
unauthorized reproduction has in practice to be sought by joining forces
with the authors' society , STEMRA .
remedies available to producers and performers , namely , actions brought
under the law of unfair competition
plaintiff .
is , the manufacture of or dealing in pirate , counterfeit or bootleg
products .
knew or at least should have known that these acts were illegal .
actual prejudice suffered by the plaintiff must also be proven and
quantified and also the fact that the prejudice suffered is caused by the
These limitations and the alleged concentration of
acts of the defendant .
pirate activity in the Hague may thus be more than a coincidence .
Fortunately , legislation appears to be in preparation to introduce specific
neighbouring rights for record producers and performers

Further , he has to prove that the pirate acted in bad faith and

The

20

- 51

2.6.16 .

21

which puts it in a

Portugal is not a contracting party to the Rome Convention nor to the Geneva
Convention but in 1985 it enacted new legislation
position to ratify the Rome Convention , if it wishes . By virtue of Article
178 of the law , performers are given the right to authorize the fixation of
their performances and the reproduction of their fixed performances . By
Article 184 , producers of phonograms are given the right to authorize the
reproduction and distribution of their recordings . The conditions for
protection of performers as laid down in Article 190 are fulfilled when the
performer is of Portuguese nationality ; or when the performance is on
Portuguese territory ; or when the original performance is fixed or broadcast
for the first time on Portuguese territory . Likewise for phonograms ,
protection is accorded to the producer on the condition that he is a
Portuguese national or has his headquarters on Portuguese territory , or that
the fixation has taken place in Portugal ; or that the first publication has
taken place in Portugal or simultaneously in Portugal with the publication
for the first time elsewhere . The provisions giving performers and producers
the right to authorize the reproduction of recordings is consequently of
limited value to foreign right holders , except where protection in
accordance with Article 193 follows from bilateral or multilateral

ar rangements

*

22

2.6.17 .

Provision for producers' and performers' rights in relation to sound
recordings in all Member States would clearly be an improvement .
Moreover ,
there are particular factors at work in this sector which differentiate it
Producers of sound
from others and reinforce the case for such rights .
recordings are not necessarily in a close , contractual relationship with
authors holding rights in the works that they record .
compulsory licensing systems exist in some Member States ( Germany , Ireland ,
the Netherlands , Portugal and the United Kingdom ) which enable second or
subsequent versions of recorded musical works to be made without the
authorization of the authors .
In the field of classical music , many
recordings , involving considerable investment , will in any case relate to
Finally , as regards performers , only
works on which copyright has expired .
the star performer may have a significant interest in pursuing bootleggers
and securing the co operation of authors may prove difficult .

Statutory or

2.6.18 .

2.6.19 .

2.6.20 .

2.6.21 .

- 52 -

23

Accordingly , quite independently of the question of the desirability of all
Member States ratifying the Geneva and Rome Conventions in their
entirety
, the general introduction of producers' and performers' rights
in sound recordings would appear to be a desirable development that would
contribute to the effective repression of piracy and therefore merits
serious consideration .

Turning to broadcasts and cable transmissions , protection against
24
unauthorized fixation and reproduction for commercial purposes
only in part .
works , but this is not always the case .
of copyright or a neighbouring right in the broadcast or transmission as
Even when a broadcast or transmission
such is of particular importance .

Rights may often exist of course in broadcast or transmitted
In these situations , the existence

exists

\'

concerns protected works , such rights provide a clear legal basis for the
broadcasting or cable organizations to take action on their own behalf

against pirates .

Ireland and the United Kingdom have long extended copyright protection to
broadcasts both domestic and foreign in conformity with their international
obligations under the Rome Convention and , as regards television in the
United Kingdom , the European Agreement .
modified its law to give explicit protection to cable programmes even when
these have not been broadcast in the traditional way .

In 1984 the United Kingdom

25

Denmark , Germany , France , Luxembourg and Portugal accord broadcasters a
neighbouring right through provisions virtually identical with those of
Article 13 of the Rome Convention which provides that broadcasting
organizations shall have the right to authorize the fixation of their
broadcasts and reproductions thereof .
through the provisions of Articles 79 and 203 of its copyright law .

Italy arrives at the same result

- 53 -

2.6.22 .

In Belgium , which does not yet adhere to the Rome Convention , the
protection of television broadcasts is based on the European Agreement
ratified by Belgium by a law of 14 January 1968 pending new legislation
which will allow Belgium to adhere to the Rome Convention

26

2.6.23 .

Further , the
Spain ratified the European Agreement on 23 October 1971 .
1987 copyright law has conferred upon broadcasters a right to authorize
fixation of their broadcasts and reproductions thereof for a duration of 40

27

years

2.6.24 .

In Greece and the Netherlands , no specific protection is given to
broadcasts or transmission as opposed to the works from which programmes
may be composed , though reform is reported to be under consideration in the

latter State

28

2.6.25 .

2.6.26 .

Even in those Member States that provide for it , the extent to which
protection accorded to broadcasting applies to transmissions by cable is
frequently far from clear .
re-transmitted by cable , a strong argument can clearly be made that
unauthorized fixation of the cable signal is an unauthorized fixation of
Where the cable transmission is not being contemporaneously
the broadcast .
broadcast over the air , however , or not broadcast over the air at all , such

Where a broadcast is being instantaneously

a conclusion is much more difficult' to reach .

it would appear that , as with sound recordings , the

Accordingly ,
introduction of rights for organizations engaged in broadcasting to
authorize or prohibit the fixation of their broadcasts for commercial
purposes would be desirable where they do not exist already .
given the likely development of cable systems carrying both re-transmitted
and original material , clear provision prohibiting unauthorized fixation of
cable signals and the reproduction thereof would also serve a useful

Similarly ,

purpos e .

- 54 -

Procedures facilitating legal action and proof

Search and seizure procedures

2.6.27 .

2.6.28 .

Search and seizure procedures are available in most Member States , though
their efficacity varies not only from one jurisdiction to another but
depending on the nature of the rights being protected .
A minority of
Member States has not yet developed procedures of this kind .

In Belgium , Article 29 of the copyright law of 1886 provides for a seizure
procedure on simple request of the right holder as regards works protected
by copyright in its narrow sense and subject to the possibility of a
guarantee being constituted by way of security in accordance with
Article 31 .
This procedure is not available , however , under the provisions
of the unfair competition law upon which producers of sound recordings and
performers are still obliged to rely in the manner already described .
Instead a provision is made under Articles 70 to 72 of that law for a
seizure procedure in cases of infringements committed in bad faith within
This procedure is dependent on the co-operation
the meaning of Article 61 .
of the public officials responsible for enforcing the law and , in addition ,
the requirement that bad faith be shown limits its application .

2.6.29 .

In Denmark , search and seizure procedures were previously not available in
the copyright field . In 1985 , however , the copyright law was amended
to
provide more effective remedies and sanctions for piracy . Right holders ,
including the producers of sound recordings and performers , are also now
entitled to request the public prosecuting authorities to proceed against
pirates . By virtue of Article 55 of the copyright law as amended in 1985
search and seizure procedures pursuant to Chapters 72 and 73 of the Law on
Civil and Criminal Procedure ^ have been made applicable to cases of
pi racy .

29

- 55 -

2.6.30 .

In Germany , search and seizure procedures are available for violations of

31

. Whereas copyright infringement normally is subject to public
of

copyright and neighbouring rights under the general law of criminal -
procedure
prosecution only on request of an injured party , the 1985 amendment
the German copyright law concerning the reinforcement of remedies introduced
a system of public prosecution ex officio also if the public interest
requires the involvement of public authorities . The wording of the new
Article 109 shows that this will normally be the case where there is
commercial piracy for which penalties have been laid down in Article 108a .

The new provisions on sanctions have made normal procedures in criminal
cases including search and seizure measures fully applicable to piracy .

2.6.31 .

Under Greek penal procedure , seizure can be ordered as an interim measure

by law enforcement authorities .

2.6.32 .

In Spain , the police may in piracy cases under the terms of the Penal Code

request a court order to search the premises of a suspect . If there is
prima facie evidence of infringement taking place pirate copies will be
seized and placed in custody of the Court .

- 56 -

2.6.33 .

In France , Articles 66 to 69 of the copyright law of 1957 provide for the
summary seizure of illicit copies of works protected by copyright in its
narrow sense on the simple request of the right holder , subject under
certain conditions to the constitution of a guarantee by way of security .
These procedures have been considered sufficiently valuable for the new law
of 1985 to include provisions introducing similar though not identical
procedures in the context of the new neighbouring rights granted to
performers and producers of sound and video recordings and to audio-visual
communications undertakings . The new law also provides for a procedure
whereby officials of the National Centre for Cinematography may have access
to accounts and records to establish the origin or destination of video
recordings reproduced or distributed as well as the operating receipts of
persons reproducing or distributing video recordings for private use by
members of the public^. Such procedures clearly facilitate the task of
demolishing complete networks for the distribution of pirate products ,
enabling action to be taken against all involved .

- 57 -

2.6.34 .

the Court

If the District Court is

Section 27 of the Irish Copyright Act , 1963 contains provisions on search
and seizure as to infringing copies of copyright works including sound
recordings , but excluding cinematographic works .
satisfied by information on oath that there is reasonable ground for
suspecting that an offence is being committed on any premises ,
may grant a search warrant authorizing a member of the police force to
enter the premises , if need be by force , and to seize any copies of any
work or any plates in respect of which he has reasonable grounds for
suspecting that any offence is being committed .
provides that the District Court , if satisfied by evidence that there are
reasonable grounds for believing that infringing copies of a copyright work
are being hawked , carried about , sold or offered for sale , may by order
authorize a member of the police force to seize the copies without warrant
and to bring them before the Court which may order them to be destroyed or
delivered up to the owner of the copyright .
include cinematographic works is under active consideration .
Anton Piller type
Irish courts'*"’ .
works .
performers combat bootlegging .

The extension of section 27 to
Orders of the
are available in civil copyright proceedings before the

These can be obtained in cases involving cinematographic

However , none of these remedies appear to be available to help

The same section also

34

- 53 -

2.6.35 .

A guarantee by way of security may be required except

In Italy , for works protected by copyright in its narrow sense , search and
seizure procedures are available in accordance with Article 161 of the
copyright law .
Notice to and hearing of the presumed infringer , though
normally required , can be dispensed with in cases of extreme urgency
( periculum in mora ).
where proceedings are begun by the national organization representing
authors^. As regards neighbouring rights , the possibility of relying on
Case law exists denying the possibility^,
Article 161 is controversial .
Article 700
In any event ,
while certain commentators argue otherwise
of the code of civil procedure can be relied upon .
This permits the court
to order whatever measures it considers necessary in favour of any person
who has reasonable cause to fear that during the period needed to establish
his rights under the normal procedure , he will suffer a prejudice that in
practice cannot be corrected .

38

.

2.6.36 .

In Luxembourg , no possibility appears to exist of search and seizure in
copyright cases under criminal procedure .
Such a
Seizure may be ordered under Article 37 of the Copyright Act .
possibility does not apply to cases of infringement of the rights of
producers of sound recordings or performers .

In civil proceedings , however ,

- 59 -

2.6.37 .

The procedure is subject to little

In the Netherlands , copyright owners can seize infringing copies under
Article 28 of the Copyright Act .
formality , the order being granted on the request of the right holder to
the president of the court .
Seizure is also possible in copyright cases
under the criminal law .
However , since producers of sound recordings and
performers , as has been seen , are at present not protected by copyright or
a neighbouring right , none of these procedures appear to be available to
them in their own right .
It is understood , however , that the new law now
in preparation introducing neighbouring rights for producers and performers

will also introduce seizure procedures similar to those already applicable

in copyright cases . Further , licensees will also be entitled to request

seizure .

2.6.38 .

In Portugal , copyright infringement is subject to public prosecution . The
law of 1985 provides for the seizure of all illegally produced copies as
well as their packaging and any machines or other instruments and documents
which are involved in the infringement . In flagrante delicto , various
branches of the police and other enforcement authorities have the

competence to proceed to seizure

2.6.39 .

- 60 -

,

40

the practice has

Thus there must be a strong prima facie case that infringement

In the United Kingdom , following the decision of the Court of Appeal in
Anton Pi ller KG v. Manufacturing Processes Ltd .
developed of allowing a plaintiff to obtain an interim order , without prior
notification to the defendant , permitting him to inspect the latter 's
premises , take photographs , and seize materials infringing copyright and
neighbouring rights in the defendant 's possession .
Naturally , such an
order is only granted where certain conditions are met and subject to
safeguards .
has occurred , the damage to the plaintiff must be actually or' potentially
serious , and a grave danger must exist that vital evidence will be
destroyed if the defendant is put on notice . In addition , the inspection
must be carried out according to certain procedures and the plaintiff must
give an undertaking in damages to compensate the defendant for losses
resulting from inspections that prove unjustified .
Associated interim
orders may also be granted compelling the defendant to reveal relevant
information to the plaintiff , including the names of persons from whom
infringing articles have been obtained or to whom they have been
distributed
the Copyright ( Amendment ) Act 1983
police warrants for search and seizure on suspicion of piracy has been
introduced for films and sound recordings and extended by the 1985 Copyright
( Computer Software ) Amendment Act
to computer programs . The Government
has , however , now proposed these powers be extended to all categories of
copyright material ^ . As for performers , these remedies are not available
to combat bootlegging , since it has been held that the legislation making it
an offence to make or distribute unauthorized recordings of a performance
creates no civil rights of action
proposed this gap be closed by making orders for search and seizure
available to performers also

. By
powers for magistrates to grant the

, and also preventing him from disposing of his assets

. The government has , however , now

_ .

. 42

47

43

44

41

46

,

.

- 61

2.6.40 .

In summary , search and seizure procedures , subject to appropriate
safeguards , could be made available more generally in Belgium , Luxembourg
and the Netherlands .
In particular , in those countries , they need to be
placed at the disposal of both the producers of sound recordings and
performers . The latter would also benefit from such procedures being made
available in Ireland and the United Kingdom .
Consideration might also be
given to the more general adoption of powers such as those already found in

France and the United Kingdom which require pirates to disclose from whom
infringing copies have been obtained and to whom they have been

transferred .

Customs seizure

2.6.41 .

Seizure by customs authorities is possible in some Member States though not

in others .

Moreover , where the systems exist , they vary as to the extent

to which they can be used in practice .

2.6.42 .

Belgium and Luxembourg , which operate a complete customs union , give no
legal powers to the customs authorities in relation to copyright or indeed
Customs authorities thus play little
to intellectual property generally .
However , consideration is
or no part in the detection or proof of piracy .
now being given to a more active role for the customs authorities as
regards counterfeiting of trade marks following the adoption of Council
Regulation No . 3842 / 86 on measures to prohibit the release for free
48
circulation of counterfeit goods

2.6.43 .

In Denmark , there are at present no provisions in copyright or trade mark
law enabling customs authorities to intervene to prevent the importation of
pirate products . Again , however , action will now be taken to give effect to
Council Regulation No . 3842 / 86 .

- 62 -

2.6.44 .

2.6.45 .

In Germany , the Law provides a basis for customs authorities to act to
seize imports of goods with false indications of the source or the identity
of products in addition to goods bearing trade marks without the consent of
thei r owners

49

.

In Greece , no specific provisions of Greek Law authorize customs
authorities to intervene to prevent importation of pirated goods .
since the Berne Convention is considered part of Greek national copyright
Law and provides that infringing copies of works protected by the
Convention shall be liable to seizure on importation^, the Customs
Investigative Service does intervene in piracy cases to seize illicit

However ,

.
copies

51

2.6.46 .

In Spain, there are no specific provisions under legislation currently in
force which enable customs authorities to intervene to prevent the
importation of pirated goods . In practice , however , the customs authorities
are reported to have been co-operating with the Spanish Authors' Society
( SGAE ) and the record industry in the control of transborder traffic in

copyright goods .

2.6.47 .

In France , importing articles which infringe French copyright law
constitutes a criminal offence under the Penal Code^. This permits
customs authorities to exercise a degree of control over imports of such
goods .
matter , action has been regularly taken on this basis , at least as regards
imported sound recordings"^.

Since 1977 , when a series of directives were drawn up on this

- 63 -

2.6.48 .

2.6.49 .

2.6.50 .

Section 28 of the Irish Copyright Act , 1963 enables the owner of rights in
any published literary , dramatic or musical work or sound recording , but
not cinematographic works , to give notice to the customs authorities that
he is the owner of the copyright in a particular work or recording , and to
require them , for a fixed period of time , to treat copies of the work or
recording as prohibited goods .
authorities to prevent importation , except for private and domestic use , of
any infringing copy of the work or of the recording .
and the fees payable in respect thereof are included in matters prescribed
in Regulations made under the Act by the competent customs authority .
Arrangements have been made between right holders' organizations and the
customs authorities to define the circumstances in which consignments will

This procedure enables the customs

The form of notices

be inspected

54

.

Similar provisions exist under the Irish trade and

merchandise marks legislation .

In Italy , customs authorities have powers to prevent the importation of
goods which have been deliberately misdescribed^^ or which bear counterfeit
trade marks 3
copyright or neighbouring rights .

They have no specific powers as regards infringements of

.

In the Netherlands , no specific provision is made for customs authorities
to intervene to prevent the importation of pirate products .
Though they
may inspect all goods in the course of their importation , their powers to
intervene are limited to the control of import formalities , including the
The customs authorities are
accuracy of the declared value of the goods .
also subject to obligations of secrecy .
Customs intervention has thus not
developed as an important instrument in the repression of piracy , though on
occasions information has been passed on in appropriate cases to the police
or to right holders' organizations 3
makes no proposal on the involvement of Customs Authorities in its report on
piracy
, but action will now be needed to give effect to Council
Regulation No . 3842 / 86 .

. The Interministerial Working Group

58

2.6.51 .

2.6.52 .

- 64 -

confers upon
In Portugal , Article 229 of the law on Industrial Property
customs authorities the power to seize counterfeit goods at the frontier .
This provision is however applicable only where a trade mark or an
appellation of origin has been falsified .

59

In the United Kingdom, section 22 of the Copyright Act 1956 provides that
the owner of the copyright in any published literary, dramatic or musical
work may by notice require the customs authorities to treat copies of a
given work as prohibited goods and prevent their importation .
provision does not apply to sound recordings or cinematographic works ,
however .
Similar provision is made as regards goods bearing infringing
trade marks under section 64(a ) of the Trade Marks Act 1938 .

This

This

In its copyright bill of October 1987 the

provision is of course available to producers who are owners of trade marks
appropriated by pirates .
government has inserted a provision aiming at the introduction of the same
possibility in respect of films and records , though right holders will have
to give an advance notice as to the time and place of the expected
importation in respect of infringing copies of films and recordings
These notice requirements can , however , limit the utility of these
procedures from the point of view of right holders

61

2.6.53 .

It would thus appear that , in many Member States , customs seizure at the
Community 's external frontiers could be developed as a more effective
instrument in the repression of infringements of copyright . At the
Community 's internal frontiers , no control can be exercised after 1992 .
This does not , however , exclude customs seizure when the existence of
illegitimate merchandise is brought to the attention of customs authorities
or , when they , in the exercise of internal control functions, detect fraud .
However, attention will have to be paid to the practical difficulties ^
involved if the customs services are not to be diverted from their
principal tasks , while at the same time procedures cannot be so burdensome
to right holders that they are of little or no practical use .

- 65 -

2.6.54 .

In December 1986 , the Council adopted a regulation laying down measures to
prohibit the release for free circulation of counterfeit goods , that is ,
goods to which a trade mark has been improperly affixed^. This regulation
creates common rules on the procedure to be followed to prevent counterfeit
goods being imported into the Community .
The regulation is limited to
goods bearing infringing trade marks but , as stated in the explanatory
memorandum of the Commission 's initial proposal , at a later stage ,
consideration might be given to applying the procedures to other
intellectual property rights , in particular , copyrights .
of the regulation would ensure that customs seizure procedures made a
uniform contribution to the repression of copyright piracy at the external
frontiers of the Community .

Such an extension

Remedies and sanctions

2.6.55 .

A relatively comprehensive State - by - State description of the current
situation would involve a considerable degree of detail .
preferable to concentrate on a limited number of important issues , namely
the availability of damages or other financial relief to those whose rights
have been violated ;
the availability of injunctive relief ; the possibility
of disposing of discovered pirate products and equipment used to produce
them in ways which ensure that they will not continue to circulate to the
right holders' disadvantage ; and , finally , the possibility of imposing
sufficiently dissuasive criminal sanctions , including imprisonment for

It seems

serious offences .

Damages or other financial relief

2.6.56 .

As regards damages , where exclusive rights have been granted under the
civil law , damages will of course in principle be available , as may an
action for an account of profits .
can be relied upon in a civil action , damages can be obtained for
consequent financial losses .

Similarly , where unfair competition law

- 66 -

2.6.57 .

2.6.58 .

On the other hand, as has been seen , certain important interests may not be
This applies not only to cases where
protected by civil rights of action .
the interest is simply not legally recognized , such as those of the
producers of sound recordings in the Netherlands , but also to jurisdictions
which protect certain interests exclusively by the criminal law and without
provision for compensation within the criminal framework .
seen , this is at present the case as regards the unauthorized recording of
live performances in the United Kingdom and probably Ireland .
introduction of civil rights of action as already announced by the United
Kingdom government would close this particular gap

As has been

The

64

and the United

Only in Ireland0

In some jurisdictions , the damage may

More generally , claims for damages are normally dependent on proof of the
damage sustained or income foregone .
include damage of a moral character though this is normally limited to
authors' and performers' claims .
Kingdom^ is provision made enabling courts to award conversion damages
equivalent to the full value of infringing copies detained or converted
and, in flagrant cases , additional exemplary damages .
Even so , awards of
the former depend on proof of the number of copies in question and awards
of the latter are subject to a number of restrictive conditions making them
unusual in practice . Further , the UK Government has recently announced its
intention to abolish conversion damages
objectionable in particular in the field of design copyright . Instead the
powers of the courts to award additional damages will be strengthened by
removal of existing limitations on their applicability .

which are regarded as

67 -

2.6.59 .

The necessity of proving the damage sustained or income foregone can pose
problems since the quantities of pirate products in fact sold may not be
ascertainable with any degree of certainty , even where search and seizure
procedures have been successfully used .
the added difficulty arises that an estimation of the depressive effect of
the appearance of a bootleg recording on sales of legitimate records is
These problems of proving the quantum
frequently speculative in character .
of damages , as well as the practical difficulty of enforcing awards against

In the case of bootleg records ,

the many pirate enterprises which are careful to keep their realizable
assets relatively small , mean that damages need to be complemented by other
remedies if pirates are to be effectively dissuaded from continuing their

act i vi t ies .

Injunctive relief

2.6.60 .

An important instrument in this respect is injunctive relief , that is , the
availability of judicial orders which will enable continuing or future
pirate activity to be subject to sanctions of a penal type .
are available in somewhat different forms in Belgium , Denmark , Germany ,
Ireland , Luxembourg , the Netherlands (" astreint " or " dwangsom ") and the
United Kingdom,
limitations as to the substantive rights conferred by the law and the
availability of civil rights of action . They may also be available on an
interim or accelerated basis which has the considerable advantage of
enabling action to be taken that can prevent pirate products being placed
on the market in the first place .

subject of course to what has already been said concerning

Such remedies

2.6.61 .

In Greece , injunctive relief is available and , under certain conditions , as
an interim measure also^.

2.6.62 .

In Spain , injunctive relief is available under the provisions of the 1987
copyright law and under certain conditions as an interim measure also

- 68 -

2.6.63 .

In France , however , injunctive relief appears not to be available and it
has been suggested that its introduction would in many cases be helpful ,
particularly to combat more sophisticated and persistent lawbreakers^.
The new French law
other measures which are aimed at the determined pirate

does not alter this position , though it provides for

72

71

2.6.64 .

In Portugal , injunctive relief is not available under the legislation in
force .

Disposal of infringing products and equipment used to produce them

2.6.65 .

Different techniques exist for ensuring that pirate products that have been
discovered will not continue to circulate to the right holders'

disadvantage .

2.6.66 .

Thus , under the rules of civil and criminal procedure in force in most
Member States , proceedings for the infringement of rights in books , films
and sound and video recordings may lead to the court ordering that
infringing copies be destroyed or , in some cases , be rendered unusable or ,
in others be transferred to the right holder .

2.6.67 .

Likewise , provision is frequently made for equipment used to produce
infringing copies to be destroyed with a view to preventing pirate activity
from continuing in the future .

- 69 -

2.6.68 .

The main gaps in this area appear to be consequential on certain interests
not being protected by the substantive rules of civil or criminal law
rather than weaknesses in the procedural provisions alone .

Some of these

have recently been closed .
introduced confiscation for sound and video recordings infringing the
substantive neighbouring rights which the law now has introduced for

For example , in France , the new law has

Such a possibility has long existed for books
Other gaps remain , however , notably those flowing from the
for
In addition , the Belgian law of

performers and producers .
and films
absence of specific protection for producers of sound recordings and
performers in Greece and the Netherlands .
1971 on Trade Practices which , as has been seen , plays an important role in
the protection of sound recordings , appears not to permit confiscation or a
similar remedy in either criminal or civil proceedings .

Dissuasive criminal sanctions

2.6.69 .

The nature of many pirate operations requires substantial criminal
penalties to be available to dissuade those who seek to avoid the full
effect of civil judgements and are skilful in so doing . In addition ,
providing for severe penalties , including imprisonment for more serious
offences , gives a clear indication to law enforcement authorities of the
need to act against piracy and a real incentive to do so .
On the other
hand , if these authorities know that even a successful prosecution will
lead only to a small fine , which will probably be regarded by pirates
simply as an irritating tax on their continuing activities , it is
understandable that they prefer to concentrate their limited resources on

other matters .

- 70 -

2.6.70 .

Many States have already recognized the importance of having an adequate
range of criminal sanctions available to secure effective police involvement
in the detection of piracy and the enforcement of law and also to constitute
effective disincentives to pirates . Thus , in spite of the general tendency
in the Community to reduce criminal penalties , in particular , those
consisting of imprisonment , sanctions available in case of piracy have been
substantially reinforced in many Member States in accordance with the
objectives set out in the resolution by representatives of governments of
the Member States of 24 July 1984
increased its maximum penalties in 1983
and Portugal
years . In Italy the penalties introduced for piracy in respect of recordings
were made applicable for film and video piracy in 1985
in 1981
Further , an increase of penalties available is under active consideration in
Ireland and the Netherlands . In short , deterrent sanctions are already or
will be shortly available in Denmark , Germany , Greece , France , Ireland ,
Italy , Luxembourg , the Netherlands , Portugal and the United Kingdom .

France
have all introduced increased penalties in the past two

. Whereas the United Kingdom had already
78
,

, Denmark

, Germany

76

80

77

75

74

79

81

2.6.71 .

However , in the following cases in particular , the criminal sanctions
applicable seem in need of reinforcement .

2.6.72 .

Thus , in Belgium , imprisonment is not possible for copyright infringement
as such , whatever the nature of the right infringed or the scale or
character of the offence . However , where conviction is obtained for
counterfeiting or under Article 191 , 498 or 505 of the Penal Code sentences
of imprisonment may be imposed .

2.6.73 .

As regards producers' rights in sound recordings , as has been seen , these
are not protected in the Netherlands and a fortiori penal sanctions are not
available , though their introduction is being considered

82

2.6.74 .

Finally , the penalties applicable to bootlegging in Ireland do not include
imprisonment .

2.6.75 .

2.6.76 .

à

- 71

In addition , however , the effectiveness of criminal sanctions depends not
only on the characteristics of the penalties , but also on the degree of
certainty that they will in practice be applied . This in turn depends in
large part on law enforcement authorities taking an active part in the
prosecution of offenders .
repeated offences , as has already been stated , act as an incentive for law
However , it
enforcement authorities to act where they have power to do so .
appears that , in some cases , copyright infringements , though criminal
offences , can be prosecuted only on a complaint from an injured party , as
in Belgium and Luxembourg or even only by the injured party himself as in

Substantial penalties , at least for serious or

Greece .

However ,

The explanation for this state of affairs seems in part at least to be an
understandable reluctance to give law enforcement authorities
responsibilities in cases of the more classical and delicate type in which
one author is alleging that another has plagiarized his work .
modern , commercial copying is clearly
distinguishable from such cases : the
copies are complete or nearly so , no attempt being made to present the work
as different from the original . Moreover , the scale of the phenomenon is
such that it should rank as an economic crime of the first order damaging ,
not only to individual right holders , but also to the viability of
important areas of economic and cultural activity .
Member States authorize law enforcement authorities to prosecute on their
own initiative as regards large scale copying and traffic in pirate
products or at least encourage public prosecution on request by the injured
party .

Such approaches should be adopted by all Member States .

For these reasons , most

2.7 .

The organizational framework for enforcement

2.7.1 .

The organizational framework for enforcement activities is complex and
varies from State to State .
organizations representing such right holders and public authorities .

It includes individual right holders ,

- 72 -

Right holders and their organizations

2.7.2 .

Authors are in all Member States organized in societies which are engaged
primarily in the collecting of royalties for literary and musical works .
Separate societies may exist for different classes of work , for example ,
societies dealing with dramatic and dramatic musical works are frequently
distinct from those dealing with other forms of music and lyrics including
popular songs . The national organizations are members of an international
. Other right holders are also organized at national

, organization , CISAC

83

Thus producers of sound and video recordings are

and international level .
organized in all Member States and these national organizations , together
wih others , form the International Federation of Producers of Phonograms
.......
84
85
are
and Videograms ( IFPI ).
and distributors0
Film and video producers0
,
also organized at national and international level as are publishers
broadcasters0 , and performers0 .

86

2.7.3 .

In an increasing number of cases , the current prevalence of piracy has led
at both national and international levels to new initiatives , including the
formation of ad hoc anti-piracy organizations bringing together different
interest groups , to combine resources and operate with greater
effectiveness .
enforcement such as the marking of films to enable the source of seized
copies to be identified more easily .

New techniques have been developed to facilitate

- 73 -

2.7.4 .

For example , in the United Kingdom , the British Phonograph Industry ( BPI )
has been dealing with piracy of sound recordings , while the Federation
Against Copyright Theft ( FACT ) was founded in 1982 and has since played an
In
important part in reducing the market share of pirate video recordings .
1983 , a similar action group was founded to combat video piracy in the
Netherlands known as Foundation Video Safe .

In Ireland , the Irish National

Federation Against Copyright Theft ( INFACT ) began operations in 1984 and
from the beginning of 1985 , the Belgian Anti-Piracy Federation ( BAF ) and ,
in Germany , the Society for the Prosecution of Copyright Infringement
( GW , Gesellschaft zur Verfolgung von Urheber rechtsverletzungen ) have begun
similar operations . These examples and , in particular , the success achieved
in the area of video piracy in the United Kingdom have inspired the
creation of similar organizations in other Member States : in France ,
l 1 Assoc iat ion de Lutte contre la Piraterie Audiovisuel le ( ACPA ); in Spain :
Federacion Antipi rater ia ( FAP ); and in Denmark , the Foreningen af Danske
Videogramdi st ributdrer .

2.7.5 .

At the international level also , the producers of sound and video
recordings have created an organization in co-operation with the
International Chamber of Commerce and the Commonwealth Secretariat .

The

International Maritime Bureau of the International Chamber of Commerce

contributes to the project its particular expertise in monitoring the
transportation of goods .
intelligence collected by its national and regional groups throughout the
world .
( JAPIG ), achieved significant results from the outset

The organization , known as the Joint Anti-Piracy Intelligence Group

IFPI contributes amongst other things

89

- 74 -

2.7.6 .

This concentration of anti-piracy interests at national and international
level is a welcome development .
By centralizing relevant information and
activity on a limited number of focal points , it not only increases the
effectiveness and efficiency of anti-piracy efforts , it should also
facilitate the deve lopment\ of fruitful co-operation between rights holders
and public authorities by providing a limited number of contact points
which , without prejudice to the rights and possibilities of others , can
develop particularly productive relations with relevant national

administrations .

Public authorities

2.7.7 .

At national level , different agencies may be involved depending
x^tate in question including the customs , the police and public prosecuting
autfiorities as well as agencies responsible for taxation and consumer
protection .

on the

2.7.8 .

90

, limitations on the role and powers of some

As has already been indicated
of these agencies sometimes exist , for example , as regards the police and
Removing these limitations would increase the contribution
the customs .
In particular , ensuring
that they would make to the repression of piracy .
that customs authorities are in law and in practice able to inform right
holders of possible violations of their rights so that the latter can act
to protect themselves , where appropriate , seems to be a desirable
obj ect ive .

- 75 -

2.7.9 .

However , this involves not only removing the legal limitations to which
reference has already been made , but also ensuring that there are readily
usable lines of communication between the authorities on the one hand and

As has been seen , the formation

right holders' organizations on the other .
of ad hoc anti-piracy action groups is already making a significant
contribution in this respect .
right holders are in a position to improve the position in the short run
for themselves by taking action along the lines already traced by others .
In the longer term , attention might also be given to the creation of
systems using modern information technology to ensure that useful
information is made available to the parties at the lowest cost possible .

To the extent that there may be weaknesses ,

Further reference will be made to this possibility subsequently .

2.7.10 .

Conversely , the effectiveness of the public authorities depends on their
having the full co-operation of those interest groups which are adversely
The activities of public authorities are subject to
affected by piracy .
inevitable resource constraints .

The restrictive effect of those

constraints can be significantly reduced to the extent that those
immediately concerned can provide the authorities with information enabling
them to act with efficiency .
In the customs context , for example , one of
the obstacles to more effective intervention is the difficulty and cost of
establishing that goods are probably pirated and the identity of those
whose rights have been infringed . The possibility of extending the Council
Regulation , to which reference has' already been made , on release of goods
into free circulation , to include other forms of intellectual property ,
including copyright , depends in substantial part on solutions being found
to these practical problems .

- 76 -

2.7.11 .

Again , modern information technology may help to provide the solution .
From time to time , the suggestion has been made at Community level of the

creation of a register of rights in cinematographic or audio-visual

91

works

.

This has been regarded primarily as an instrument

to facilitate

92

the financing of film production and up to now agreement on the creation of
. However , a register of rights in
such a system has not proved possible
respect of sound recordings , video recordings and films could also play a
role in the repression of piracy by making it relatively easy to identify
This could
who has the right to exploit a work in a given jurisdiction .
facilitate intervention by customs and other authorities since they should
be able to establish more easily and rapidly whether merchandise seems
likely to be infringing or not and would also be able to inform interested
parties of consignments of apparently pirated products . Within the
framework of WIPO-UNESCO , a Committee of Governmental Experts will discuss
in March 1988 the setting up of an International register of audiovisual
works . Depending on the outcome of the WIPO-UNESCO meeting , the work at
Community level could be co-ordinated with future work at the international

level .

2.7.12 .

In order to make such a system workable in practice from the point of view
of customs authorities , right holders would need to notify those
authorities periodically of works in relation to which a particular risk of
pi racy exi st s .

77 -

2.7.13 .

The Commission has in 1985 submitted to Council a communication on the

93

, which the Council endorsed by decision of 4 February
. The system envisaged could probably be used to orient customs

co-ordinated development of computerized administrative procedures , the
C.D. project
94
1986
checks in the piracy context . Detailed examination of this possibility
would not be appropriate in the context of this paper but should form part
of the work leading to the development of the system . As to the register
itself , one of the main objections in the past has been the cost to the

public of its creation and administration .
as to whether it would not be possible for a register to be organized and
paid for by those who will derive the benefit from it , that is , the right
holders concerned .

If such an approach were possible , Community

But the question clearly arises

involvement could be limited to ensuring that the register could be

accessed by customs and other relevant authorities within the framework of

the C.D. project and possibly to providing a simple legal framework to give
the registry and the information that it contains legal recognition .

2.7.14 .

In addition to co-operation between public authorities on the one hand and
right holders on the other , co-operation between relevant public

authorities at national , international and Community levels is also

important .

- 78 -

2.7.15 .

2.7.16 .

2.7.17 .

However , a strong case can be made for the

At the national level , Member States are in a position to take for
themselves the necessary measures in the light of their particular
administrative structures .
creation or designation of focal points having particular responsibilities
in relation to piracy and associated problems .
As regards the audio-visual
field, the role of the Centre National de la Cinematographic in France
constitutes an interesting example .
co-ordination of the activities of all public authorities concerned and
co-operation between them .
interlocutor for right holders and their organizations which , as has been
explained above , are frequently in the process of creating similar focal
points for themselves .

Such focal points not only facilitate

They can also perform the role

of natural

At the Community and international levels , procedures for co-operation
between law enforcement agencies already exist which can be used in
95
appropriate cases including, for example , the services of Interpol
general legislative tendency to sanction piracy as a serious offence
punishable by imprisonment should make it easier to use these procedures
since it makes it less likely that piracy will be perceived as a matter of
minor importance .

. The

The Interpol General Assembly at its 46th session in Stockholm in 1977
adopted a resolution on audio-visual piracy and has since made efforts to
expand its activities to combat piracy . It should be remembered however
that co-operation within Interpol consists of voluntary acts of mutual
assistance and is based on the possibilities offered by national laws of
its Member States , their national sovereignty being strictly respected .
They retain power to decide whether or not to co-operate ; they do not have
to justify their decisions and no measures may be taken if they do not .
These limitations on the co-ordinating possibilities of the Interpol are an
important qualification on its ability to act in the repression of piracy .

2.7.18 .

2.7.19 .

- 79 -

For the future , at Community Level , a Logical consequence of the recent
adoption of a Community regulation on the release into free circulation of
counterfeit goods^ might be to consider counterfeit as a matter that
should fall within the mutual assistance regime created by the Council
Regulation on mutual assistance between the administrative authorities of
the Member States and co-operation between the latter and the Commission to
ensure the correct application of the law on customs and agricultural
matters
.
assistance .
to clarify the position . It would also follow that if it proves possible to
extend the regulation on release into free circulation to other forms of
intellectual property infringement , including copyright , the mutual
assistance regime could apply equally in such cases .
Project will provide the technical means whereby such mutual assistance can

If necessary , a relatively simple amendment could be adopted

This provides for both assistance on request and spontaneous

Finally , the C.D.

97

be efficiently managed .

98

Furthermore , in 1975 ,

In 1953 , it adopted a Recommendation on Mutual

At the international level , the Customs Co-operation Council ( CCC ) has
proved an efficient instrument for increasing co-operation between national
customs authorities .
Administration Assistance aiming at providing information on new methods or
means of customs fraud and to offer on request of another Member State the
maintenance of a special watch on particular consignments , on persons known
to be engaged in smuggling or on suspect vehicles .
the Council adopted a Recommendation on the Pooling of Information
concerning Customs Fraud .
communicated to States relates to persons convicted of smuggling or customs
fraud , methods of smuggling and vessels involved in smuggling .
instruments do not relate directly to copyright goods , but they can play a
role when trade in pirate products involves , as it often does , customs
fraud .
customs in implementing copyright and industrial property law .
the study partly carried out by means of a questionnaire addressed to
Member States and international organizations was to define the role of
customs authorities in general anti-piracy action and how the participation
of these authorities could be made more regular and effective .
was completed in 1984

in 1983 , the CCC embarked on a study of the role of the

The information collected and subsequently

The aim of

The study

However ,

These

99

2.7.20 .

- 80 -

The study has been discussed by the competent Committees of the CCC , that
is the Enforcement Committee and the Permanent Technical Committee .
The
Enforcement Committee reached the following conclusions . First , customs
enforcement of intellectual property law would be a permanent item on the
Committee's work programme so that the Committee could continue to exchange
views about developments in this field .
Secondly , the CCC Secretariat
should now propose practical means of assisting administrations which
already have competence in this field . Thirdly , the Secretariat should
continue to maintain contacts with the international organizations which
are concerned with this question , and to co-ordinate the activities of the
Enforcement Committee and of the Permanent Technical Committee which was
responsible for the administrative aspects of the question . Fourthly, the
Secretariat should further analyse the enforcement instruments of the CCC
with a view to determining the extent to which they could be used for
purposes of combating piracy and counterfeiting pending further
consideration of a new instrument .

The Permanent Technical Committee has

finished its work in developing a model law which gives customs authorities
power to act in counterfeiting and piracy cases .

2.7.21 .

The CCC's programme in relation to piracy and counterfeiting clearly merits
the Community's full support .

2.8 .

The international context for future initiatives and developments at
Community level

2.8.1 .

Before proceeding from the analysis set out above to a consideration of
possible future initiatives and developments at Community level , the
broader international context in which such initiatives and developments
may be taken should be considered in so far as this context has not yet
been covered .

- 81

2.8.2 .

The international organizations which administer the relevant copyright and
related rights conventions have several times addressed the piracy issue to
alert the public to the damage done to cultural activity by piracy and to
promote , in the various parts of the world where piracy constitutes a
serious problem , actions to combat pirate activities .

2.8.3 .

At the level of the Rome Conventi on^^, the Intergovernmental Committee in
October 1979 adopted a recommendation to Member States of the United

Nations in which the administering organizations recommended UN Member
101
States to accede to the Convention
the Intergovernmental Committee during its eighth Ordinary Session in
November 1981 ^^.

This recommendation was renewed by

.

2.8.4 .

A resolution was

At the WIP0 level , a first worldwide Forum on the Piracy of Sound and
Audiovisual Recordings was held in Geneva in March 1981 .
adopted recommending steps to be taken both in developed and developing
countries to bring into force appropriate legislation to prevent piracy and
A second worldwide forum
to ensure the application of such legislation
was organized in WIP0 in March 1983 , this time on " Piracy of Broadcasts and
the Printed Word ".
104
It considered that
meeting
the search for practical measures for combating piracy with more efficiency
should continue and recommended that the Assembly of the Berne Union adopt
a recommendation on the subject . The subject was addressed again at a
meeting of government experts on 2-6 June 1986 organized by UNESC0 / WIP0 and
a resolution adopted calling for stronger penal sanctions against

The resolution adopted as the conclusion of the

expressed concern over the spread of piracy .

103

.

105

piracy

2.8.5 .

The Resolutions adopted within WIP0 can realistically only aim at bringing
to the attention of national governments the need to adopt appropriate
measures against piracy at the national level .
Even when taking a general
position as to the piracy issue , the wording of a resolution must be chosen
with delicacy if an important number of developing countries are not to
find it too difficult to endorse .
of intellectual property rights must normally be balanced against
recognition of the need for ready access to copyright material .

For them , the importance of due respect

2.8.6 .

2.8.7 .

2.8.8 .

- 82 -

The UNESCO Secretariat has prepared a document entitled "Analysis of the
replies to the UNESCO questionnaire on the phenomenon of the piracy of
printed material , phonograms , audiovisual material , films , and radio and
television programs ," which summarizes and analyses the replies to the
questionnaire given by its Member States .

106

At the level of the . Council of Europe , Ministers of Culture adopted a
resolution in May 1984
and European level , action to repress audio-visual piracy .
1988, the Committee of Ministers adopted a Recommendation
States on measures to combat piracy in the field of copyright, and
neighbouring rights .

inviting Member States to organize , at national
On 18 January
to Member

107

In 1984 , a group of

This GATT initiative aimed at

Within the GATT, the possibility of action on the trade aspects of
counterfeiting has been actively discussed since 1982 .
experts was set up to pursue the matter .
providing a framework for the participation of customs authorities in the
detection and seizure of counterfeit merchandise , which is at present
defined as merchandise on which a trade mark allegedly has been placed
without the consent of the trade mark owner .
only the work but also the packing, which for audio-visual works is
frequently the case , this initiative is also of interest to the copyright
holder . However , the work within GATT has not resulted in an agreement on
counterfeit merchandise , because of opposition by numerous third countries ,
in particular developing countries .

Insofar as pirates copy not

- 83 -

2.8.9 .

This work had resulted in that at least one area of intellectual property
rights could be dealt with by GATT . In September 1986 , the Ministers of
Trade of contracting States meeting in Punta del Esta decided that , in a
more general sense , trade aspects of intellectual property should be
included on the agenda of the multilateral negotiations , which they had
just opened . Consequently , these negotiations will also include other
issues of intellectual property , which have an impact on trade flows and
trade relations . It is clear from the preliminary discussions on this issue
which have taken place that there is a marked willingness at Community
level to examine the possibilities of effectively reinforcing legislation
on copyright and related rights within the framework of GATT , in particular
to combat book , phonogram and videogram piracy , on the basis of the work
already carried out on counterfeit goods .

2.8.10 .

Finally ,
it should be noted that the Community has recently taken up
intellectual property problems with third countries , in particular as
regards the barriers which certain intellectual property systems constitute
in respect of trade flows and investment by Community enterprises . It
appears worthwhile at this stage to consider the possibility of using these
contacts more systematically to combat piracy . This question will be
examined in more detail in Chapter 7 .

2.9 .

Future developments and initiatives at Community level

2.9.1 .

The present situation as regards piracy in the Member States of the
European Community and in the rest of the world can be summarized as
Although in several Member States substantial progress has been
follows .
made in the recent past , piracy of sound recordings and audio-visual works
remains a substantial problem both within and outside the Community .
Piracy of books also remains serious , though in this case the problem
exists essentially in certain non-Member countries .

- 84 -

2.9.2 .

Many other countries do not take effective

Outside the Community , positive trends can be perceived only in Western
European countries , the United States , Canada , Japan , Australia , Hong-Kong
and recently Singapore .
anti-piracy action and in some cases , display a degree of complacency that
suggests connivance , even complicity . The external dimension of the piracy
problem seems likely to remain significant for some time to come . The
Community has a clear -interest in using its collective weight to ensure
better protection for the creations of its authors , performers and
producers in non-Member States . The nature of possible Community actions to
this end and the frameworks within which such actions can be taken is
discussed in detail in Chapter 7 .

2.9.3 .

Inside the Community , there is good reason to believe that progress recently
made in repressing piracy can be maintained , even increased . Copyright laws
have been amended or are under current review in many Member States . The
Council Resolution of 1984 has drawn the attention of Member States to the

piracy problem . As a consequence , reinforced legislation , deterrent
sanctions and better enforcement procedures can now be relied upon in a
number of cases . Further , right holders have in the recent past organized
themselves in anti-piracy organizations and are actively taking
against piracy .

action

2.9.4 .

2.9.5 .

Nevertheless , many improvements remain to be made in particular
jurisdictions . Moreover , it could be dangerous to relax too soon ,
particularly when new reproduction technology may give fresh impetus to
pi rate activity .

As stated in paragraph 2.3.5 ., pirate compact discs are virtually unknown
due to the fact that the manufacture is technically complicated and requires
high investments . The launch of the digital audio tape recording equipment
( DAT ) which offers the same sound quality as the compact disc may change the
picture in respect of piracy of high fidelity sound recordings . Digital
sound sources , whether compact discs or digital tape , can be perfectly
reproduced and contrary to analogue copies , digital copies do not
deteriorate by successive copying . On the basis of a " clone " copy ,
generations of copies may be reproduced , each copy serving as a master copy .

- 85 -

2.9.6 .

In an effort to reduce the piracy problem , Japanese producers have agreed to
implement in full the standards of protection for digital recordings laid
down in the R-DAT conference standard of 1986 . Guidance from MITI has led

a sampling rate for digital

all major manufacturers of DAT in Japan to accept the conference standard
which includes the following measures :
recording ( 48kHz ) which is different from the sampling rate used for compact
discs ( 44,1kHz ). This has the effect of excluding the reproduction of a
compact disc through the digital input socket of the DAT recorder and
thereby excludes the production of " clones " on the basis of CDs , unless a
rate converter is applied . Further , the MITI guidelines provide for the use
of detector circuitry to identify copy-inhibit codes inserted in the

sub-codes of pre-recorded digital software , both CD and eventually DAT . This
renders digital copying of CD onto DAT impossible but does not prevent
copying via the analogue output of a CD player . MITI guidance also suggests
that licence agreements with non-Japanese firms to produce DAT should

maintain both these anti-copying measures .

2.9.7 .

The use of digital audio tape is seen by the recording industry primarily as
a potential problem in relation to home copying and is consequently dealt
with in Chapter 3 below where a number of possible protection measures are
discussed . A piracy problem remains , however , since the described measures
relating to the prevention of direct digital copying will not prevent the
determined pirate from producing such illegitimate copies as the market may

demand .

2.9.8 .

Mass production of pre-recorded digital tape will eventually take place by
means of contact process printers allowing copies to be made many times
faster than on a recorder . The danger that such machines , in the wrong
hands , might be used to produce large quantities of pirate copies is real .

- 86 -

2.9.9 .

On the other hand , manufacturers of recorded music are Limited in number and
the identity of legitimate manufacturers in the Community is known to right
holders and their organizations . Since considerable economic interests are
at stake , consideration might be given to limiting the sale of DAT printers
to professional users such as record companies and to making the sale to a
user and his possession of the equipment dependent on a licence to be issued
by a public authority of a Member State . This public authority would keep
track of all machines sold on its territory to make sure that equipment is
not subsequently transferred to non-licensed users . Licences could be
revocable on proof that the user had engaged in pirate activity .

2.9.10 .

Since contact printing equipment is not yet on the market or at least in a
very limited number only , such a measure would be effective and would not
necessarily imply the introduction of unreasonably burdensome bureaucratic
procedures . It could well be compared to the firearm licence in use in
Member States with the qualification that the licence would be delivered to
any person being a bona fide producer of pre-recorded DAT .

2.9.11 .

If a licensing scheme were to prove successful within the Community ,
consideration could then be given to persuading other countries to do

likewise .

2.9.12 .

2.9.13 .

2.9.14 .

- 87 -

In addition , even

A considerable proportion

More generally , that piracy of copyrighted goods in the Community has a
significant cross-frontier dimension is clear .
of pirate goods sold in the Member States have been imported from the
countries both from within and outside the Community .
when pirate products are produced in the Member State of sale , the
protected work may well have its origin in another Member State , having
been procured or copied from a broadcast originating there .
phenomenon is likely to increase as cross-frontier television broadcasting
and cable transmission become increasingly common in the Community .
Accordingly , strategies for the repression and prevention of piracy that
are conceived exclusively within national frameworks are unlikely to prove
satisfactory .
much of the problem and , in so far as they will be obliged to confront
pirate imports essentially at the national frontier , they risk having
negative effects on legitimate commerce between Member States .
accordingly have a direct , and adverse , effect on the functioning of the

Such approaches will not be able to tackle the source of

This last

They could

common market .

A strong case can thus be made for concerted actions at Community level to
reduce to the maximum extent possible production of pirated works by
sources within the Community and trade in pirate products of whatever
provenance or origin . The main actions that might be taken follow from the
analysis already made .

First , quite independently of the ratification of relevant international
conventions , substantive rights should be enacted where they are lacking at
present , in particular , in favour of producers of films and sound and video
recordings , performing artists , broadcasters and cable operators . They
should be entitled to authorize the fixation and reproduction for
commercial purposes and the commercial distribution by way of sale
their works ( see paragraphs 2.6.3 . to 2.6.26 . above ).

108

of

- 88 -

2.9.15 .

2.9.16 .

2.9.17 .

Second , effective search and seizure procedures , subject to appropriate
safeguards , should generally be made available in both civil and criminal
proceedings .
powers , again subject to appropriate safeguards , to enforce disclosure of
sources and destinations of pi rate products ( see paragraphs 2.6.27 . to
2.6.40 . above ).

Consideration should also be given to the general adoption of

Third , consideration should be given to extending the Council Regulation on
prohibiting the release for free circulation of counterfeit goods to
include goods infringing copyrights . Now that the regulation has been
adopted , experience will soon be gained as to its operation ( see paragraphs
2.6.41 . to 2.6.54 . above ).

Fourth , as regards remedies and sanctions , appropriate damages should be
available to those whose interests have been damaged ;
injunctive relief
should be available to deal with persistent offenders ; confiscation of
infringing goods and equipment used to produce them should be introduced
where they are not possible at present ;
criminal offence , subject to public prosecution and entailing the
possibility of imprisonment for serious or repeated offences ( see
paragraphs 2.6.55 . to 2.6.76 . above ).

and piracy should be treated as a

89 -

2.9.18 .

This involves both the removal of certain formal

Fifth , the efforts of rights holders and their organizations to develop
structures enabling them to act effectively against pirates should be
developed and encouraged , not least by the public authorities responding in
a reciprocal fashion .
constraints on co-operation between public authorities and rights holders
and , in addition , practical measures to improve the effectiveness of such
co-operation while respecting the inevitable resource constraints on public
administrations .
creation at national level of administrative focal points to facilitate
co-operation both between concerned public agencies and between the
administration as a whole and rights holders and their organizations .
Consideration might also be given to the creation by right holders'
organizations of a register or registers of rights in protected works in a
computerized form .
The possibility of exploiting this information in order
to strengthen customs controls should be explored in the context of the
C.D. project for the co-ordinated development of computerized
administrative procedures ( see paragraphs 2.7.10 . to 2.7.13 . above ).

In this context , consideration might be given to the

2.9.19 .

2.9.20 .

Sixth , co-operation between competent authorities should be promoted at
national , Community and international level .
In this context , at the
Community level , consideration should be given to an extension of the
mutual assistance regime to include first counterfeit and then copyright
infringements ( see paragraph 2.7.18 . above ).

Finally , at the international level , the initiatives within GATT and
Customs Co-operation Council in this field should be actively supported by
At the same
the Community , while duplication of efforts should be avoided .
time , consideration should be given to using more systematically the
various channels open to the Community to influence countries which are
known to be sources of pirate products to act against the producers ( see
paragraphs 2.7.19 to 2.8.10 . above and chapter 7 below ).

- 90 -

2.9.21 .

Some of the actions listed above clearly call for formal legislative
activity by the Community 's institutions , for example , the extension at the
appropriate time of the regulation on the release of counterfeit goods and
the mutual assistance regime .
Equally clearly , some other actions are not
legislative in character , for example , the creation of administrative focal
points and the initiatives at the international level .
actions as to which binding Community legislation would be possible , but as
to which less formal , and probably less lengthy , responses may also be
possible .
Into this category fall the actions designed to assure the
general introduction of deterrent sanctions in respect of piracy , for
example . At this stage , however , the advantages in terms of legal security
offered by a binding Community legal instrument seem to outweigh the
advantages of other techniques in so far as measures concerning the
availability and legal enforcement of relevant intellectual property rights

In between , are

are concerned .

2.10 .

Summary

Whereas measures to combat piracy outside the Community 's jurisdiction is
dealt with in Chapter 7 on the Community 's external relations, the findings
of the present chapter can be summarized as follows :

The repression of piracy of sound and video recordings in the Community
requires the existence of clear substantive legal provisions in favour of
authors, producers and performers and broadcasting organizations in respect
of their right to authorize the reproduction for commercial purposes of
their recordings and broadcasts .
Such substantive legal provisions must be accompanied by appropriate
procedures facilitating legal action and proof against acts of piracy, in
particular provisions on search and seizure .

- 91

Efficient remedies must be at the disposal of right holders in infringement
cases and dissuasive criminal sanctions available for dealing with , in
particular , organized professional piracy . Finally, an appropriate
organizational framework permitting an effective cooperation between right
holders and public authorities, in particular law enforcement authorities,
must exist . Specific measures, such as the control of commercial tape
duplication equipment , should be adopted where appropriate .

2.11 .

Conclusion

The Commission would accordingly welcome the views of interested parties on
the following matters .

* The intention of the Commission to submit to the Council as a matter of

priority a proposal for a binding legal instrument :

a ) requiring all Member States to provide , through one legal technique or
another , for rights for producers of cinematographic works, videograms
and sound recordings to authorize the reproduction for commercial
purposes of those works and their commercial distribution ;

b ) requiring all Member States to provide rights for performing artists to

authorize the reproduction for commercial purposes of their fixed
performances and their commercial distribution ;

c ) requiring all Member States to provide rights for organizations engaged

in broadcasting to authorize the fixation and reproduction for
commercial purposes of their broaccasts , as welt as the commercial
distribution of such fixed broadcasts and the introduction of similar

rights in respect of signals transmitted by cable in favour of cable
television operators ;

d ) requiring the introduction in all Member States of regimes making the
possession of digital audio tape commercial duplicating equipment
dependent upon a licence to be delivered by a public authority and the
maintenance of a register or registers in respect of licensed equipment .

* The intention of the Commission to submit to the Council in due course a

proposal for a regulation :

^

e ) extending Council Regulation ( EEC ) no . 3842 / 86 laying down measures to
prohibit the release for free circulation of counterfeit goods to cover
equally goods under copyright ;

f ) extending the mutual assistance regime to include first counterfeit and

then copyright infringements ;

* The desirability of :

^

g ) recommending to Member States-to provide for rights for authors ,

producers of phonograms and videograms and performers to request public
prosecution in respect of acts of piracy ;

h ) recommending to Member States the introduction of minimum requirements

as regards search and seizure procedures in cases of suspected piracy of
copyright goods ;

i ) recommending to Member States the introduction of minimum requirements

as to criminal sanctions and civil remedies ;

j ) creating at the appropriate Community or international level a register
or registers , financed by right holders , of rights in sound recordings ,
video recordings and feature films , eventually linked to the C.D.
project .

k ) setting up an agreement at an international level on the seizure of
counterfeit goods , applicable not only as regards the counterfeit of
trade marks but also as regards other intellectual property rights
including copyright and related rights .

- 93 -

L ) the inclusion in such an agreement of measures relating not only to the
importation of counterfeit goods but also on their exportation and of
measures to be taken within the country where the goods are produced or
commercialized .

2.12 .

Timetable for subnissions

2.12.1 .

General comments on Chapter 2 should be submitted to the Commission no
However , given the urgency of the matter ,
later than 1 December 1988 .
comments on the control of digital commercial duplicating equipment are
requested by the end of July 1988 .

- 94 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

0J No .

C 204 of 3 August 1984 , page 1 .

Statement by Mr. Clive Bradley of the United Kingdom Publishers
Association to the WIP0 Worldwide Forum on the Piracy of Broadcasts and
the Printed Word , Geneva , March 1983 ( PF / 11 / S / 2 ).

Statement of the United Kingdom Publishers Association to the
Commission , 7 January 1987 .

Piracy of Phonograms by Gillian Davies , second edition 1984 , Commission
document SG / Culture / 52 / 84 .

As many as 90% of releases do not make a profit , see Music and Video
Piracy in the EEC , IFPI 1984 .

Source : Extent of piracy of sound recordings worldwide in 1984 . IFPI
1985 .

See Chapter 4 on rental rights . There seems to be a clear link between a
low level of piracy and the existence of rights of the author to
authorize the rental of videograms .

See Chapter 4 .

Since the rental may be considered illegal , many " rental " contracts in
the United States present themselves as arrangements for pre-viewing
prior to possible purchase .

The Berne Convention for the Protection of Literary and Artistic Works
is in the present context more important than the Universal Copyright
Convention ( UCC ), to which all Community Member States also adhere ,
because the Berne Convention in contrast to the Universal Copyright
Convention contains an important catalogue of minimum rights .

Art icle 2(1 ).

This chapter is concerned with piracy as defined in paragraph 1 above .
It does not address itself to provisions concerning re-broadcast or
re-transmission of signals which are discussed in the green paper
" Television

without frontiers ", June 1984 , COM ( 84 ) 300 final .

See paragraph 2.1.4 . above .

See article 63-1 of Law no . 85-660 of 3 July 1985 .

See article 45 of the copyright law 1912 as amended by Law of 30 May
1985 ( Staatsblad no . 307 of June 18 , 1985 ).

- 95 -

Copyright , Designs and Patents Bill ( H.L. 12 ) of 28 October 1987 ,
section 175-177 .

See Bill presented by Mr. Desmarets and others of 29 May 1986 . Senate
1985-1986 , p. 282 and Bill Nr . 615 of 18 July 1987 presented by Mr.
Lallemand and others .

Law no . 1075 / 1980 of 23 September 1980 .

Ley de propiedad intelectual no . 22 / 87 of 11 November 1987 , Boletin
Oficial del Estado no . 275 of 17 November 1987 .

See also Piracy of copyright protected works , Interim Report of the
Interdepartmental Working Group on Piracy , 1984 , pages 28 and 29 .

Code of Copyright and Related Rights ( No . 45 / 85 , 17 September 1985 ).

The question of the compatibility of the new Portuguese law with the EEC
Treaty is not considered here . The matter is under discussion with the
Portuguese authorities .

See Resolution of 24 July 1984 of the representatives of the governments
of the Member States on measures to combat audio-visual piracy , 0J No .
C 204 of 3 August 1984 , page 1 .

For a general discussion of issues related to recording for private
purposes , see Chapter 3 .

Cable and Broadcasting Act 1984 , section 22 .

See Bill of 29 May 1986 , loc . cit .

27 .

loc . cit .

28

29

30

31

32

33

34

35

36

37

Letter of 9 November 1984 from the Minister of Justice to the Chairman
of the Second Chamber ; Piracy of copyright protected works , loc . cit .
p. 28 .

Law no. 274 of 6 June 1985 .

" Retsplejeloven ".

Section 94 and following of the Strafprozessordnung .

Law of 24 June 1985 , Bundesgesetzblatt no . 33 of 27 June 1985 .

Law no . 85-660 of 3 July 1985 , article 52.'

See the passage below concerning the United Kingdom , paragraph 2.6.39 .

See House of Spring Gardens Ltd , v. Point Blank Ltd , ,

( 1980 ) FSR 359 .

Societa italiana degli autori ed editori .

Pretura Roma , 9 May 1947 published in Foro Italiano 1947- 1 -871 and 1 May
1955 in Diritto commerciale, 1956- 11 - 69.

- 96 -

Mario Fabiani , Il Diritto di Autore Nella Giurisprudenza , Cedam Padova
1972 , page 220 .

Law no . 45 / 85 of 17 September 1985 , article 201 .

( 1976 )

1 WLR 162 . See also the Supreme Court Act 1981 , section 72 .

See EMI Ltd v. Sarwar and Haidan ( 1977 ) FSR 146 and the Supreme Court
Act 1981 , section 72 .

See CBS United Kingdom Ltd , v. Lambert ( 1983 ) FSR 127 and the Supreme
Court Act 1981 , section 37 .

Copyright ( Amendment ) Act 1983 ( 1983 c . 42 ), 13 May 1983 .

Copyright ( Computer Software ) Amendment Act 1985 ( 1985 c . 41 ), 16 . July
1985 .

Bill ( H.L. 12 ) loc . cit . , sections 89 and 104 .

See RCA Corporation v. Pollard ( 1983 ) FSR 9 and Shelley v. Cunane ( 1983
FSR 390 ).

Bill ( H.L. 12 ) loc . cit . , sections 177 and 183 .

Council Regulation ( EEC ) No . 3842 / 86 of 1 December 1986 laying down
measures to prohibit the release for free circulation of counterfeit
goods , O.J. No . L 357 / 1 of 18 December 1986 .

See Article 28 of the Trade Mark Law of 5 May 1936 , as revised on
2 January 1968 and Article 2 of the Law ratifying the Madrid Agreement
for the Prevention of False and Misleading Indications as basis for
customs seizure in some cases of piracy .

Art icle 16 .

See Davies , op . cit ., p. 69 .

Articles 425 , 427 et seq.

See Davies , op ■ cit . , p. 63 .

See Davies , op . cit ., p. 71 .

Article 57 of the Customs Law .

Law no . 1322 of 15 December 1954 , Chapter II B 1 and 2 ; Article 303 of
the Customs Law , no . 43 of 23 January 1973 and Article 483 of the Penal
Code .

See Davies , op . cit . , p. 81 .

Piracy of copyright works , Interim Report by the Interministerial
Working Group , August 1984 .

Law decree no . 30679 of 24 August 1940 .

45

46

47

48

49

50

51

52

53

54

55

- 97 -

Bill ( H.L. 12 ), loc . cit. section 102 .

See Davies, op .

c i t . , p. 88 .

For a possible solution to one of these difficulties , see paragraphs
2.7.13 . and 2.7.18 .

Council Regulation ( EEC ) No . 3842 / 86 of 1 December 1986 laying down
measures to prohibit the release for free circulation of counterfeit
goods . O.J. no . L 357/ 1 of 18 December 1986 .

See paragraph 2.6.39 supra .

Copyright Act 1963 sections 22 and 24 .

Copyright Act 1956 sections 17 and 18 .

Bill (H.L. 12 ) loc . cit . , section 87 .

See Article 682 and 691 of the Code of Civil Procedure .

Loc . cit. , articles 123 and 126 .

See P. Chesnais at p. 366 of International Copyright and Neighbouring
rights , ed . S.M. Stewart , 1983 .

loc . cit .

See paragraph 2.6.68 . below .

See Article 57 of the law no . 85-660 of 3 July 1985 and Article 73 of
the Law of 1957 on literary and artistic works .

O.J. no. C 204 of 3 August 1984 .

Copyright ( Amendment ) Act 1983 .

Law no . 274 of 6 June 1985 .

Law of 24 June 1985 .

Law no . 85-660 of 3 July 1985 .

Law 45 / 85 of 17 September 1985 .

Law no . 406 of 29 July 1981 .

Law no . 400 of 20 July 1985 .

See Piracy of copyright protected works , op . cit .

Confédération internationale des sociétés d' auteurs et compositeurs .

Fédération internationale des associations de producteurs de Films
( FIAPF ) and Fédération européenne des réalisateurs de l' audiovisuel
( FERA ).

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

- 98 -

85

Fédération internationale des associations de distributeurs des films
( FIAD ) .

86 .

,

•

i

„ 1.

1

•

i_ . _ ^

International Publishers Association and Organisation internationale
d'editeurs de presse .

_

.

.

.

.

87 European Broadcasting Union .
88

International Federation of Actors and International Federation of
Musicians .

89

92

93

94

95

96

97

Statement by the JAPIG representative to the Council Working Party ; 25
June 1985 .

See paragraphs 2.6.41 , 2.6.54 . and 2.6.75 - 2.6.76 . above .

Proposal for a fifth Council Directive for the purposes of co-ordinating
certain laws , regulations and administrative provisions concerning the
film industry , O.J. No .

C 106 / 23 of 23 October 1971 .

The Commission 's proposal was formally withdrawn in 1981 .

O.J. No .

C 15 / 1 of 16 January 1985 .

Decision 86 / 23 / EEC , OJ no . L 33 / 28 of 8 February 1986 .

See Statement of Mr. A. Waldman on behalf of Interpol to the WIP0
Worldwide Forum on the Piracy of Sound and Audiovisual Recordings ,
Geneva , March 1981 ( PF1 / 15 ).

„

See paragraph 2.6.54 . above .

Council Regulation ( EEC ) No . 1468 / 81 of 19 May 1981 , O.J. No . L 144 / 1 of
2 June 1981 .

Paragraph 5 . 6 . 4 . 2 . of the Commission 's communication suggests , under
systems interconnection , " real time exchanges of data required for
mutual assistance and other purposes ".

Study on the Role of the Customs in Implementing Intellectual Property
Law , 30 October 1984 , TE7 - 80108 .
1 Administered by UNESCO , WIP0 and, because of the element of protection
of performers in the convention , by the ILO .

101

102

103

104

105

106

107

108

Document IL0 / UNESC0 / WIP0 / ICR 7 / 11 of 1979 .

Document IL0 / UNESC0 / WIP0 / ICR 8 / 7 of 1981 .

WIP0 PF / I / 21 of 27 Mar ch 1981 .

PF / II / 9 of 18 March 1983 .

Document UNESC0 / WIP0 / CGE / AWP / 4 .

Council of Europe , Document CMC(84)6 .

Recommendation no . R(88)2 of 18 January 1988 .

For issues concerning rental , see Chapter 4 .

- 99 -

CHAPTER 3 : AUDIO-VISUAL HONE C0PYIN6 .

3.1 .

Introduction

3.1.1 .

The term " audio-visual " is used throughout this chapter to denote both
sound and visual works . Where reproduction without permission of protected
audio-visual works takes place for commercial purposes , it is a clear
copyright infringement . For this , the term " piracy" has been used in this
document . The problem of piracy and possible Community responses have been
discussed in the preceding chapter . The present chapter deals with the
unauthorized reproduction of audio-visual material in the home , that is ,
reproduction by the individual consumer to satisfy his personal needs ,
without reference to the owner of the rights in the work for permission to
copy . This chapter does not deal with reproduction of audio-visual material
in the " semi-private " sphere , that is , for example , in institutions such as
educational establishments . Copying of audio-visual material in such
circumstances raises different issues from home copying and is relevant to
the discussion of the issues raised in this chapter only in so far as the
approach taken to home copying may have implications for copying in these

other contexts .

3.1.2 .

Until recently , the audio-visual material in question consisted of sound
and video recordings , radio and television broadcasts and cable
transmissions . Recent technical developments seem likely to broaden the
range of material to include various kinds of information , possibly
together with images and sound , recorded digitally on a support of one kind
or another . These developments need to be taken into account .

3.1.3 .

The topic of audio-visual home copying is ripe for discussion at Community
level for a number of reasons .

- 100-

3.1.4 .

3.1.5 .

3.1.6 .

First , some of the industries most concerned have brought claims to the
attention of their national governments and to the Commission and other
international bodies . These claims relate to the alleged economic harm done
to their activities by the practice of home copying , to the negative effect
on right owners generally and to the need for greater protection against
what they consider to be infringement of rights . Recently , developments in
technology such as digital audio tape recorders have given new impetus to
such claims . In turn , the claims have provoked counterclaims from interests
that view home copying as on balance positive .

Second , the claims for greater protection have resulted in a number of
measures being introduced at national level by some , but not all , Member
States , and by a number of trading partners among non-Member States , in
order to compensate right owners by means of taxes or levies . This has
created new divergences in intellectual property law among Member States
over and above those already existing for long standing , historical
reasons . Concern has been expressed that the divergences may have
significant , negative effects on the functioning of the internal market .

Third , new technical developments are increasing the ease and
attractiveness of home copying of audio-visual material : high speed
copying , improvements in the quality of home made copies , and now the
arrival of digital audio tape recording ( DAT ) with its capacity for making
perfect copies both rapidly and cheaply have raised new questions as to how
copyright laws should deal with the matter . In addition , in opening up new
possibilities for the creation of innovative kinds of audio-visual work ,
technical developments have raised the question of how the considerable
investment of time , effort and money needed for the creation of such works
can be secured if an entire work on the scale of an encyclopedia can be
perfectly , rapidly and cheaply copied by machines accessible to almost

anyone .

- 101

3.2 .

The early development of home copying .

3.2.1 .

3.2.2 .

The early machines for playing phonograms were unable to make recordings of
sound . They could only be used to play the phonograms which the consumer
had purchased or borrowed . Home , copying first became widespread when the
marketing of cassette tape recorders permitted the ordinary consumer to
obtain relatively cheap and easily managed equipment to transfer recorded
sound from one support to another , perhaps editing it in the process .

The compact cassette also gave the consumer the freedom to carry sound
recordings around from place to place and to compile selections of
favourite tracks for use in cars or elsewhere outside the home . Compared
with its predecessor , the black vinyl disc , easily damaged and requiring
cumbersome playing equipment , or even by comparison with the reels of tape
for use on reel to reel recorders , the compact cassette marked a revolution
in the popular music field , soon gaining popularity at the expense
primarily of the vinyl disc .

3.2.3 .

It was some time , however , before a full range of titles became available
in pre-recorded cassette form . Moreover , the quality of blank tape used in
the early stages did not always match up to the sound quality of the black
vinyl record , and not surprisingly , the consumer soon learned to make his
own cassette recordings using a better quality of blank tape to copy his
own or borrowed records or to record off the air from broadcasts .

3.2.4 .

The video cassette recorder ( VCR ) permits the play back of pre-recorded
material and the recording of both sounds and images , primarily , in the
first instance at least , from television broadcasts .

3.2.5 .

In 1983 the launch of compact disc again re-introduced the concept of
play-only machines , but with a greatly enhanced sound quality and
durability compared with the vinyl record . Re-usable optical discs which
would allow the transfer of material from one compact disc to another have
not yet been commercialized for home use , although developments in this
field seem promising .

- 102-

3.3 .

The international legal framework

3.3.1 .

The Berne Convention
in its 1967 revised Stockholm text contains in
Article 9(1 ) the basic copyright principle that authors shall have the
exclusive right of authorizing the reproduction of their works in any
manner or form . It was however clear , even in 1967, in spite of the
emerging popularity of audio visual media and the corresponding risk of an
increase in the practice of home taping , that this principle could not be
upheld without exception , in particular in respect of private use .
Therefore it was felt necessary to find a means by which copying which
took place in the private sphere could continue . Such copying would be in
any event , uncontrollable , but it was believed that Member States should
be free to permit certain kinds of reproduction where the authors'
interests would not be unreasonably prejudiced . The wording of the
exception clause within the framework of an international treaty had
necessarily to be fairly general to find approval by all signatory States .
Consequently the following was laid down in Article 9(2 )

:

" It shall be a matter for legislation in the countries of
the Union to permit the reproduction of such works in
certain special cases ,
provided that such reproduction
does not conflict with a normal exploitation of the work
legitimate
not
and
interests of the author ".

unreasonably

prejudice

does

the

This wording leaves States which are signatories to the Berne Convention
fairly wide room for manoeuvre and it is consequently not surprising that
the legal position has developed in somewhat different directions in the
Member States .

103 -

3.3.2 .

3.3.3 .

3.3.4 .

Thus , the absence of provisions in the older copyright laws of some Member
States , and the failure of the Berne Convention to deal explicitly with the
question of home copying should be situated in the context of the evolution
of home copying described above . Even after the 1967 revision of the Berne
Convention , it was some time before legislation was introduced in a number
of Member States in response to growing pressure from the recording
industry to provide remuneration for right holders for acts of home
copying .

No actions have yet been brought by right holders against individual home
tapers within the Community . In the absence of either express provisions in
national legislations or of case law , the issue of the legality of home
taping remains unclear in a number of Member States .

However , in those Member States which have introduced levy or tax systems
to provide remuneration for acts of home copying , it would seem evident
that in return for such payment , home copying is then permitted . There does
not seem to be any indication of a trend in Member States towards expressly
permitting home copying per se ( without remuneration ) within present
interpretations of Article 9(2 ) of the Berne Convention .

3.4 .

The legal position in the Member States

3.4.1 .

The positions taken in Member States may be defined as follows :

- in one group of States , the position is undefined by national legislation
or is defined so broadly that some interested parties have claimed that
home copying might be interpreted as not permitted under the relevant
provisions . There are no known cases to prove the validity of this

. interpretation , and given the likelihood that a Court in a Member State

would prefer not to intervene in what an individual does in his own home ,
the situation in these Member States is at best theoretical ;

- 104 -

- in a second group of States , express provision has been made to permit

home copying , either free of charge under the general exception provision
contained within Article 9(2 ) of the Berne Convention or against
remuneration where levy schemes have been brought in .

Member States appearing to treat home copying as an infringement of
copyright or relevant neighbouring rights

3.4.2 .

In Ireland and the United Kingdom , the producers of both cinematographic
films , a concept that includes video tapes and discs , and of sound
recordings have the exclusive right to authorize their reproduction . In
addition, any recorded literary , musical and dramatic works are also
protected against unauthorized reproduction subject to fair dealing
provisions that are unlikely to be applicable to the activities of the
typical home copier^. Belgium, Greece and Luxembourg make no provision for
fair dealing or private use and accordingly unauthorized reproduction would
appear to infringe relevant rights . Italy makes provision of a narrow kind
for private copying of protected works for the personal use of " readers"
provided the copying is done manually or by some means unsuitable for
public diffusion'5 . It is difficult to see how the home copier of sound or
video recordings could successfully rely on this provision .

Member States appearing to treat home copying as permitted under national
legis lati on

3.4.3 .

In the Netherlands , home copying of audio-visual recordings is permitted .
The copyright law provides for the making of a limited number of copies of
protected works^ for the sole purpose of the personal practice, study or
use of the person who makes the copies or who orders them to be made^. The
permission to cause a third party to make a copy for this private purpose
does not extend to reproductions made by recording a work in whole or in
part on an article intended for causing the work to be heard or seen .
Nevertheless the result is that home copying of sound and video recordings
by persons for their own personal use in not at this time considered an
infringement of Dutch copyright law .

3.4.4 .

3.4.5 .

- 105 -

Similarly , in Denmark , Germany , Spain, France and Portugal copying of
audio-visual recordings for private use is explicitly permitted by relevant
legislation0 . Moreover , in Germany, Spain, France and Portugal provision is
also made for compensation of right holders other than broadcasting
organizations for the private copying of their works .

Article 54 of the German copyright law , as amended by Law no . 33 of 27 June
1985
provides that certain right holders can claim remuneration through
a collecting society for the opportunity to make copies of their works for
personal use on video or sound supports . The right holders in question are
authors , performers and record producers . Broadcasting organizations have,
however , been excluded from the scope of application of the provision
This remuneration is financed by means of a levy both on recording
equipment and on blank tape . The levy has been fixed at 2.50 DM ( 1.20 ECU )
on audiorecorders and at 18 DM ( 8.66 ECU ) on videorecorders . The levy on
tape has been fixed at 0.12 DM ( 0.06 ECU ) per hour playing time for
audiotape and at 0.17 DM ( 0.08 ECU ) per hour playing time for videotape .
The proceeds of the levy are divided between the relevant right holders .

8

.

3.4.6 .

o

Title III of the French law of 3 July 1985 on the amendment of the
copyright law
provides that right holders shall have the right to receive
remuneration for the private reproduction of phonograms and videograms . The
right holders in question are authors , performers and producers of
phonograms and videograms . To provide a source of remuneration , a levy has
been imposed on blank recording tapes , the proceeds of which are paid to a
collecting society to be divided between the various right holders .

- 106 -

3.4.7 .

3.4.8 .

3.4.9 .

While the law establishes the principle that the levy shall be calculated
on the basis of playing time , the size of the levy and certain technical
details as to its collection and the distribution of the proceeds are
decided by a commission composed of representatives of the various
interests involved . This commission decided
1.50 FF ( 0.17 ECU ) per hour playing time for audiotape and 2.25 FF ( 0.33
ECU ) per hour playing time for videotape . For reproduction of audio
material , authors are to receive one half , whereas performers and producers
each receive one quarter of the total proceeds . From the levy on
videotapes , the three groups mentioned each receive one third of the
proceeds .

that the levy is to be

10

11

In Denmark , the Copyright Law Committee suggested in a report completed in
1982
that a levy should be introduced on audio and videotape to
compensate certain right holders for private reproduction . The right
holders in question were , according to the proposal , to be authors ,
performers and phonogram producers . However , by Law no . 257 of 9 June 1982 ,
the Parliament introduced a new fiscal measure applicable to both
videorecorders and videotapes , subsequently repealed as to videotapes by
Law no . 184 of 9 April 1987 . No bill has yet been introduced concerning a
copyright levy .

12

provides in Article 82 for a

In Portugal , the new copyright law of 1985
levy to promote cultural activities and compensate authors , artists and
producers of phonograms and videograms but not broadcasters . The levy is to
be imposed on all forms of recording and reprographic equipment and
supports . The amount of the levy and the precise manner in which it is to
be applied are to be fixed by a decree which has not yet been adopted . The
provision thus at present has the character of a programme for future
action rather than a directly applicable system .

3.4.10 .

3.4.11 .

3.4.12 .

- 107 -

13

In Spain a new comprehensive Copyright Law
provisions making reproduction for private use legitimate against
compensation to right owners , to be financed through a levy on blank tape
and recording equipment . Detailed rules on the amount of the levy and the
share of different groups of right holders in the proceeds of the levy are
to be laid down in administrative regulations .

contains in Article 25

Radio and television broadcasts and cable transmissions

15

of home copying of broadcasts as such and , in the United
. However , since the

As to home copying of radio and television broadcasts and cable
transmissions , the legal position is broadly similar to that of audio¬
visual recordings though some differences also exist . One notable legal
and the United
difference concerns the general admission in Ireland
Kingdom
Kingdom, of programmes transmitted by cable
programmes being broadcast or transmitted frequently involve the use of
protected works to which only the much more limited fair dealing exceptions
apply
reduced . Of much greater significance in both law and fact is the exclusion
of broadcasters from participation in the proceeds of the levy schemes in
Germany , Spain , France and Portugal .

, the practical significance of this legal distinction is much

16

17

14

Nevertheless , whatever the detail of the differences , the essential result
is that in one group of States private copying of audio-visual material
being broadcast or transmitted by cable is interpreted as lawful , while in
others it normally is not . Thus in Denmark
France
copying, while in the Netherlands broadcasts , cable transmissions and sound
recordings are not protected by copyright or a neighbouring right at all ,
and private copying of broadcast works is expressly authorized

express provision is made authorizing private

and Portugal

«
, Spain

, Germany

. 22

, _

20

19

18

23

21

,

_

.

.

-108-

On the other hand , in Belgium, Greece , Ireland , Italy , Luxembourg and the
United Kingdom, private copying is not expressly authorized , except for
broadcasts as such in Ireland and the United Kingdom and cable
transmissions in the latter country . However , as has been seen , these
exceptions are of limited significance given that programmes frequently
involve the use of protected works . The status of cable transmissions may
be uncertain in some countries , however , particularly if the programme
being transmitted is not being broadcast over the air either simultaneously
or at all . But for the purposes of the present discussion of private
copying this complex question will not be further explored .

24

Before concluding this summary of the present legal position , however , it
should be noted that relevant international agreements , namely, in addition
to the Berne Convention for the protection of literary and artistic
works
phonograms and broadcasting organizations
, all contain provisions which
the protection of television broadcasts
allow Member States to permit exceptions to be made for private copying .

, the Rome Convention for the protection of performers , producers of
and the European Agreement on

26

Legislative trends in the Member States
Reference has already been made to the laws recently adopted in Germany ,
Spain , France and Portugal as a response to the problem of private copying .
Consideration is also being given to legislative reforms in this respect in
other Member States . It would appear that in those Member States which have
introduced or which are contemplating the introduction of a levy on blank
tapes
the average level of such levy amounts to around 8-10% of the sales
price of a blank audio tape .

27

was introduced in the Senate in May

In Belgium , a Private Members Bill
1986 permitting reproduction for private purposes of audio-visual works
against compensation to right owners . The compensation was to be financed
through a levy on recording equipment and blank tape . A second Bill has
recently been introduced in the Senate
the levy is to be fixed at 8% of the sales price , the proceeds to be
divided 50% to producers , authors and performers and 50% to promote
cultural activities and train performers .

, according to which the size of

28

3.4.13 .

3.4.14 .

3.4.15 .

- 109 -

3.4.16 .

For Denmark , reference has already been made in paragraph 3.4.12 . to the
proposal of the Copyright Committee in respect of a blank tape levy . The
proposal has not however made tangible progress towards becoming law .

3.4.17 .

3.4.18 .

3.4.19 .

has been considered for some time .

In Italy , an amendment of the existing provision of the Copyright Law
29
permitting reproduction "by hand"
Pending a final government position , a Private Members Bill was introduced
to the Parliament in July 1986 ^ proposing to make home audio and video
copying legitimate against a levy on recording equipment and blank tape .
The proposal , which is expected to be re-introduced in the new Parliament ,
is sufficiently recent that relatively new equipment , such as twin-cassette
deck tape recorders , has been taken into consideration and for those a high
levy has been proposed .

In the Netherlands , a government memorandum favourable to the introduction
of private copying royalties was issued in February 1987 and a bill has
been approved by the Council of Ministers on 23 October 1987 and is now
awaiting adoption by Parliament .

In the United Kingdom, the government has decided against the introduction
of a blank tape levy in the Copyright Designs and Patents Bill published on
The Minister of Trade and Industry indicated that it was
28 October 1987 .
felt that the levy proposals went beyond the principle of the Government
providing legal protection to the intel lectual property of a creative
artist , and that any financial benefit to copyright owners and performers
would be outweighed by the adverse effects the levy would have had on
consumers , especially visually handicapped people .

3.5 .

Hoae copying in practice

3.5.1 .

The increasing facility with which home recordings can be made and their
steadily improving quality has for some time caused understandable concern
to the relevant right holders , who claim that the practice of home taping
is not only harmful but also, according to their interpretation of national
legislation and international conventions , unlawful .

- 110 -

3.5.2 .

Whether it is in fact lawful or not , however , the private copying of
audio-visual recordings and programmes is clearly a common practice .

3.5.3 .

3.5.4 .

3.5.5 .

Much statistical information has been made available to the Commission from
interested industries and organizations on the size and evolution of the
market for audio-visual recordings , blank recording tape and recording
equipment .

Many studies have also been submitted by the numerous interest groups
involved in the home taping issue in support of their claims . To refer in
detail to all these studies and submissions would undesirably extend the
length of this document . The main arguments which they contain are,
however , summarized in the sections which follow .

The market for recording equipment , blank tape and audio-visual recordings

Studies submitted to the Commission show that although sound recording
equipment has been on the market for a long time , a high penetration did
not take place before the marketing of the cassette recorder which is easy
to use and cheap to acquire . In larger Member States like Germany, France
and the United Kingdom, over 70% of private households possess at least one
. Figures from smaller countries but with the same degree of
recorder
industrialization point to the same level of penetration . Audio cassette
recorders are indeed today within the reach of almost everyone , even those
of modest means . Many manufacturers include portable and in-car recorders
and players among their range of products .

31

3.5.6 .

These sound recording facilities are certainly used , as available figures
on sales of blank tape clearly show . Sales of tape increased steadily year
by year from 1977 through 1985 , reaching particularly high levels in
Germany and the United Kingdom and for the Community as a whole ( 286
million units in 1985 )

- 111

3.5.7 .

As to video recording , being a more recent phenomenon , it has yet to
develop on the same scale as audio recording . In addition , the
substantially higher price of video recording equipment is a constraining
factor . Nevertheless , such figures as are available show expanding
penetration of video recorders in households throughout the Community ,
particularly in Germany , France and the United Kingdom where approximately
. Likewise , available
40% of all households possess at least one VCR
figures show that sales of blank video tape have increased steadily in
recent years , again reaching particularly high levels in Germany and the
. The increasing miniaturization and portability of video
United Kingdom
equipment indicate that it may in time occupy a position similar to that of
portable sound recording / playing equipment .

34

3.5.8 .

As to sales of sound and video recordings , the main trends appear to have
been the following .

3.5.9 .

Sales of long playing vinyl discs in the Community have fallen steadily
from their peak of 350 million units in 1978 to approximately 211 million
A similar trend is apparent in the USA . Moreover , in
units in 1985
spite of the general increase in costs and prices in recent years , the
total world sales of all kinds of recording have remained constant from
1981 to 1985 at about 12 billion US dollars or 9.6 billion ECU . However , a
closer examination of the available data reveals more positive features .

3.5.10 .

- 112 -

Initially , the decline in vinyl disc sales was not fully compensated by
increases in sales of other forms of recording such as pre-recorded
cassettes . However , beginning in 1983 , and more obviously from 1985 , sales
of compact discs appear to be redressing the situation . Just as the compact
cassette offered major advantages of portability and a copying facility
over its predecessor , the vinyl disc , so the CD offers its own advantages
of greatly enhanced sound quality and resistance to damage , thanks to the
use of digital recording techniques and its laser " reading" technology .
Some manufacturers were hesitant to embrace the new technology and
penetration of the market by CD was initally slow . Investment costs in CD
pressing plants were high but industry is now beginning to recoup some of
that investment as sales of CDs have risen dramatically over the past two
years . For 1986 , it is estimated that CD sales world-wide amount to 140
million units , more than double the preceding year and , largely as a result
of this increase , total world sales of all sound recordings amount to 12.75
billion dollars or 10.2 billion ECU

3.5.11 .

The turnover in pre-recorded video cassettes shows a different trend . On
the one hand , the penetration of the video cassette recorder is still lower
than that of the record player or the cassette player and the degree of
penetration is very different from one Member State to another . On the
other hand, in the Member States with a high degree of penetration ,
primarily Germany and the United Kingdom, the sector shows a healthy
development in the sense that in recent years the annual increase in
turnover , comprising both sale and rental of video cassettes , has been
estimated to be in the neighbourhood of 20%

113 -

3.5.12 .

The evolution of new recording techniques has thus naturally produced
changes in the market for recorded material . There is no sign of this
tendency coming to an end or even slowing down as new recording media are
under development that are likely to modify the situation further . These
include digital tape recording ; compact discs used for data storage
( CD-ROM , that is , compact disc-read only memory ); compact discs for video
( CD-V )
relation to the recorded material ( CD-I , that is , compact disc-interactive )
and the forthcoming re-usable , optical disc .

; compact discs that permit the user to have an active role in

38

3.5.13 .

Thus as the relationships between the different parts of the audio-visual
recording market become closer and interfaces develop with other
communication and information management systems , so it becomes
increasingly important to find the appropriate means for protecting
relevant copyrights while allowing these dynamic technologies to evolve in
a way that is most beneficial to the producer and consumer alike .

The effect of home copying on the market for audio-visual recordings

3.5.14 .

The extent to which the decline in sales of the vinyl disc and the absence
of growth in the world sound recording market from 1981 to 1985 can be
attributed to home copying is far from clear . Many factors other than home
copying were certainly present which could account for the results . Even if
it is accepted that home sound and video recording is an increasingly
common practice , as the figures on sales of recording equipment and blank
tape confirm, questions remain as to whether the recordings made are of
protected works and, if so , whether they have a negative impact on the
normal exploitation of those works . Since home copying is by its nature a
private act , a clear picture is difficult to draw .

- 114 -

3.5.15 .

3.5.16 .

3.5.17 .

As far as sound recordings are concerned , such survey evidence as is
available suggests that while a proportion of home recording does not
concern protected material , much of it does . European surveys indicate , for
example , that in France 95% of all recordings concerned artistic works , and
that 70% were made from sound recordings on disc or tape , a further 28%
being made from radio and television
the United Kingdom showed that 84% of recordings were of music , made mainly
. A more recent
from discs ( 70% ), radio ( 21% ) and pre-recorded tapes ( 6% )
European study confirms that most home sound recordings are of music , the
most common source being discs and the radio

. Likewise a survey carried out in

40

39

41

.

A survey carried out in the USA in 1982 indicated a substantially lower
level of home copying of recorded music , which highlights how difficult it
is to arrive at general conclusions about home copying practices . Even so,
it indicated that such copying constituted almost half ( 48% ) of the total
use made of audio tapes in the relevant period

42

As to video, available evidence indicates that in earlier years nearly all
home recordings were made from television , with films and entertainment
forming the major part of the subject matter . A French study indicated that
92% of private video recordings were made from television , with a further
. Of the total number of
4% to 5% being made from pre-recorded material
recordings made , 65% were of films followed by 12% consisting of variety
programmes . A more recent survey has confirmed that nearly all video
recording is in fact made from television . Further it showed that in France
83% of respondents had recorded a film during the week preceding the
survey ; in Germany , 67% of respondents and in the United Kingdom, 56% of
respondents . Entertainment programmes were also popular , recordings having
been made in the preceding week by 22% of respondents in France, 34% in
Germany and 52% in the United Kingdom

44

- 115 -

3.5.18 .

3.5.19 .

The most recent survey , Limited to Germany however , indicates a growing
trend to use video cassette recorders for reproduction of pre-recorded
material , in particular , feature films which often are exchanged with
friends
television broadcasts for time-shift purposes is still predominant , the
reproduction of pre-recorded material could soon be a matter of concern .

. The film industry points out that though recording of

45

Nevertheless , present duplication techniques available to the home user do
not allow the easy making of perfect copies of pre-recorded videos .
Double-headed machines are not widely available so that two machines are
needed . There is a considerable degeneration in quality from copy to copy ,
excluding in reality the making of generations of copies , and high speed
copying facilities such as are available for audio are not yet on the
consumer market . However , duplication equipment enabling one format of
video to be transferred to another is already reported to be ready for
launch . Digital television and video are being developed . When fully
digitalized image systems become a reality , the problem of near perfect
home copy making currently facing the audio recording industry will present
itself to video producers . However , at the present time , available evidence
suggests that home copying of pre-recorded video material is not extensive .
Unauthorized copying of pre-recorded video material for gain does take
place in the commercial sphere but this aspect is more appropriately dealt
with in Chapter 2 on Piracy ( see paragraphs 2.2.12 . - 2.2.30 ).

3.5.20 .

3.5.21 .

3.5.22 .

- 116 -

Impact of copying on the exploitation of protected works

If it is clear that substantial amounts of protected audio-visual material
are copied for use in the home , the question of whether such copying has a
negative impact on the exploitation of those works remains to be answered .
As far as recording off-air is concerned, the exposure of authors via radio
and television broadcasts has been doubly beneficial to right holders .
First , remuneration for the broadcasting of their works has been received .
Second , the popularity of successful creators and producers of audio-visual
works has been largely a factor of the promotion they have received from
radio and television broadcasts . Therefore any alleged economic harm done
to right holders' economic interests by off-air recording should be viewed
against this background of greatly enhanced revenue from the broadcasting
of their works . As far as recording of purchased pre-recorded original
audio-visual material is concerned , available statistical information is
far less helpful here for arriving at clear conclusions though it appears
likely that a distinction should be drawn between sound and video
recordings .

As regards sound recordings , the French study of 1983 indicated that the
great majority of home sound recordings were to be retained for a
. Of the
considerable period of time and listened to frequently
recordings made on cassette, 81% were made on new tape; of those made on
reels , 78% . An intention to keep the recording was indicated in 82% of the
cases . As to frequency of use of cassettes, 49% had been listened to on
average five times , 26% on average fifteen times ; and 25% more than twenty
times . Cassette recordings were kept for an average of ten to eleven
months , those on reels being kept substantially longer , for a period of at
least two years .

46

A British survey published in 1984 showed that respondents used the same
blank tapes for sound recording on average somewhat less than twice
same survey also provided information concerning the likelihood that
copying substituted for purchase of recordings . Of those copying from the
radio, 8% said that they would very likely have bought the record; and 20%
that they were quite likely to have done so . Of those who had copied long

47

. The

3.5.23 .

3.5.24 .

- 117 -

playing discs or tapes , 16% said that they would definitely have bought the
recording, 15% said they would very likely have done so and 20% that they
were quite likely to have done so . 17% said they had already done so and
were making a copy of their own recording .

48

provides less clear results since information is not

A later study
available in the same detail on the periods of time for which recordings
were kept , the frequency with which they were played or the possibility of
respondents buying recordings if copying had not been possible .
Nevertheless , permanent retention of the copies was indicated as the
intention in over 15% of cases , with temporary retention , unquantified ,
also forming a substantial but unspecified proportion of the total . Editing
or switching the support was given as the reason for copying in another 30%
of the cases .

Information available on home taping of TV programmes and video cassettes
taken as a whole , though limited , points to a significant difference : a
much smaller proportion of such recording seems intended for long term
retention and successive viewing on a significant number of occasions . The
French study of 1983
showed that only 36% of the home video recordings
in the households surveyed had been made on new tape . An intention to keep
recordings permanently was indicated in over 45% of cases but in reality
recordings appeared to be kept permanently to a lesser degree . The average
length of time recordings were kept was approximately two and a half
months , while they were played on average only four times .

49

3.5.25 .

The later study confirms the findings of the earlier one in the sense that
permanent retention was the objective in a relatively small proportion of
the cases , between 5% and 10%

3.6 .

New technical possibilities

- 118 -

3.6.1 .

Some of the new technical developments such as DAT to which reference has
already been made will almost certainly further modify home copying
practices . While forecasting the future is necessarily hazardous , an
attempt must be made to understand and evaluate the most important
implications of these developments since they may affect not only the scale
and nature of the problem but also the possible means for dealing with it .

3.6.2 .

Digital recording techniques

Digital recording techniques , whether applied to sound , image or data ,
employ the same basic principles . In the case of sound , information about
the sounds to be recorded is sampled and then converted into binary code in
the same way as information is normally processed by a computer . The code
can then be " re-translated" back again to produce the exact sound which was
originally recorded . When sound is recorded by analogue means by
conventional recorders , there is a loss of sound quality every time a copy
is made . This puts a limit in practice on the number of generations of copy
which can be made . Digital recording will have no such limits . Each copy
will be perfect , at least as far as the ordinary listener is concerned , and
can serve as a master from which many other generations of copy can be
made . A very small number of purchased original recordings could serve to
generate many thousands of perfect " clone" copies . The digital cassette
recorder will undoubtedly open up new markets in the data storage and audio
recording fields . Although compact disc and CD-Rom have advantages of speed
of access and durability , the high cost and technical complexity of the
disc pressing process is a limiting factor on the rate of entry onto the
market of small new companies . Cheaper and simpler recording and

- 119 -

duplication facilities using digital tape will therefore widen the
opportunities available for growth in the market for specialist products .
The Commission welcomes the advent of DAT for this reason and is conscious
of the fact that the possibilities of DAT as a recording medium may present
considerable advantages to the popular music market . At the same time ,
digital tape will complement the existence of digital discs in the same way
that analogue tape has co-existed with analogue vinyl discs , at least for
such time as discs for the consumer market remain " play only ".

3.6.3 .

The DAT recorder referred to in paragraph 3.6.1 . above is intended for the
recording of sound . Other types of dedicated digital recorders are being
developed , for example , for the data storage market , with appropriate
modifications to the electronic specifications .

Technical protection devices .

3.6.4 .

3.6.5 .

At the same time as these new forms of recording are appearing , attention
is also being given to the development of technical devices that might be
used to prevent or control copying of recorded material . A summary of these
technical protection systems is contained in an Appendix to this chapter .

All technical protection devices raise issues as to their reliability in
practice , as to their possible effects on use of the equipment for playing
authorized material , and as to how their use would affect the balance of
interests among right holders , equipment producers and consumers . Before
examining these issues , however , it would seem useful to situate that
analysis by reference to the views already expressed on the home copying
debate as a whole by the main protagonists . These remarks reflect the
arguments which have been put to the Commission and may be in part at least
conjectural owing to the difficulty of obtaining reliable evidence as to
activities in the private sphere .

- 1Z0 -

3.7.

The views of interested parties

Demands for greater protection

3.7.1 .

3.7.2 .

On the one side ,, the recording industry , frequently supported by
organizations representing other right holders , argues in favour of
measures to compensate them for home copying and , more recently , to limit
possibilities for home recording through the mandatory application of
technical anti-copying devices to DAT recorders .

They claim that private copying of audio and video material , whether lawful
or not , is at present occurring on such a considerable scale and for such
purposes that it conflicts with the normal exploitation of the works being
copied and unreasonably prejudices the legitimate interests of the right
holders . The relatively low level of sales of discs from 1979 to 1984 and
survey evidence to which reference has already been made are cited as a
measure of the negative effect of home copying . The sound recording
industry in particular claims that unlimited private recording facilities
jeopardize the profitability of the industry by reducing the revenue
generated by more popular works, which it is claimed makes it more
difficult to maintain a broad repertoire containing works of less
popularity . New technical developments are said to exacerbate the problem .
The high speed, double-headed recorder greatly facilitates the practice of
copying . The digital audio recorder is already being marketed , which ,
without protection measures , could permit copies to be made of very high
quality , comparable even to originals recorded on compact discs . Further
developments can be expected which , it is claimed , will increase even more
the facility , speed and technical quality of home copying . These
developments in the " hardware" available to the public entail the risk of
further serious damage to the " software" side of the recording industry .

3.7.3 .

3.7.4 .

3.7.5 .

- 121-

Although in theory , right holders maintain that they would prefer increased
sales and reduced private copying of their works , when recommending
appropriate measures to deal with the problem , they have until recently
underlined the difficulty of effectively controlling what takes place in
the private sphere in the absence of any effective technical or legal means
to prevent copying . For this reason, they have promoted legal provisions
which recognized the practice as legitimate but ensured a reasonable return
to right holders as the most solid basis for a solution .

According to this school of thought , private reproduction must be permitted
against compensation based on a levy on recording equipment or blank tapes
or both . The size of the levy should be such that it would give right
holders and producers compensation more or less equivalent to the use made
of protected material and to the losses caused by the practice . The levy
could be collected through existing collecting societies and distributed to
authors and producers on the basis used in a number of Member States for
the collection and distribution of remuneration due to authors and

producers for the sale and broadcast of records . Such mechanisms , based on
a points system related to sales or air-play and on reports from relevant
organizations , have been applied in other areas . Exceptions could be made
for certain categories of user who have a particular need to make
recordings , such as , for example , in the case of the blind .

The arrival of DAT and the new possibilities for technical protection have
led to a modification of this approach , at least in so far as DAT is
concerned . To protect works recorded on compact disc , some sections of the
recording industry initially favoured the mandatory inclusion of the CBS
Copycode System ( see Appendix ) in all DAT recorders to be marketed for
private use , together with ancillary measures to make it illegal to
circumvent or to make available devices for circumventing the system .
Legislation to achieve this goal was promoted in the USA and in Europe by
those who supported the recording industry view . The levy system is
considered inadequate to deal with the allegedly greater economic harm
which DAT could imply for right owners
industries now appear to favour other technical solutions based on digital
recording technology itself . For example , alternatives based on draft

. The recording and hardware

3.7.6 .

3.7.7 .

- 122 -

specifications drawn up by the International Electrotechnical Committee
have been proposed . These alternatives called , for the sake of convenience ,
SOLOCOPY , address the specific characteristic of digital audio recording ,
namely the possibility of making " pyramids " of copies from one digital
original . These proposals are described in the Appendix .

Opposition to demands for greater protection

The opposite school of thought , led by representatives of the blank tape
industries , some sections of the hardware industry and supported by certain
consumer organizations , has in the past rejected the claims of the
recording industry and other right owners as to the harm done by the
practice of home copying .

First , the prejudice alleged to be caused has been denied . As regards video
material , since most copying is for the purposes of time shifting of
television broadcasts , the negative effect on other forms of exploitation
is said to be insubstantial and , if it exists , should be taken into account
when right holders settle the terms on which material will be broadcast . As
to sound recordings , it is argued that the relatively low levels of disc
sales from 1979 to 1984 should be set against increasing sales of
pre-recorded tapes , and more recently , compact discs . At present , the
record market is believed to be showing clear signs of recovery . It is
further claimed that much copying takes place from sources for which the
consumer has already paid , either directly in the case of his own records
or tapes , or indirectly , as in the case of recording off-air . It is
therefore argued by these groups that transferring music already purchased
on one form of carrier onto another form of carrier for personal use does
not cause prejudice to right owners' interests .

3.7.8 .

x

3.7.9 .

- 123 -

For both video and sound , this school of thought further argues that the
" software " and " hardware" sides of the recording industry are
interdependent and that any analysis should go beyond identifying adverse
economic effects , if any , of home recording on the " software" side . The
beneficial effects should also be taken into consideration, and it is
claimed that these effects are considerable . Home taping is said to
stimulate consumers to purchase records and pre-recorded tapes , as portable
recorders are said to increase the demand for portable music . Right holders
are also said to receive additional benefits from video recorders creating
a market for purchased or rented pre-recorded cassettes . The film industry
is profiting from this outlet which has created an important market for
older films and even films considered commercial failures in other

context s .

As regards levy schemes , the claim is made that such schemes would
inevitably be overly broad and crude in their application . They would
subsidize copyright owners at the expense of the public . No scheme could
come into operation without all purchasers of recorders and blank tapes
paying the royalty regardless of intended or actual use . Exceptions for
particular groups of users are said to be impractical and in any case will
not solve the problem of the ordinary user who may well buy tapes for
purposes other than copying protected material and will be unfairly
penalized when he does so . The problem of differentiating between leviable
and non-leviable products will become all the more difficult as new types
of recording support are developed , such as the programmable optical disc
and digital audio tape, which may have many uses not involving the
reproduction of copyright material or which may be used to copy material
such as computer programs where a levy would be considered inadequate
compensation for acts of unauthorized reproduction . Finally , levies would

3.7.10 .

- 124 -

involve a serious misallocation of revenue and would be highly unjust since
compensation would be allocated primarily to popular authors and other
successful right holders or , in other words , to those least in need of
subsidies . Although a number of Member States have introduced legislation
in favour of levies on blank tape and / or equipment , it is interesting to
note that in the most recent instance of discussion on the subject,' the
United Kingdom has come down strongly against levies in t.he Copyright
Designs and Patents Bill currently before Parliament ( see paragraph
3.3.19 ).

Devices to prevent unauthorized copying were initially rejected by the
majority of those who oppose levies as having negative consequences that
outweigh their benefits to right holders . They were said to risk
stultifying important technological developments and the potential markets
for hardware and software associated with them . Doubt was expressed about
the systems' efficacity and, in some cases , their possible negative effects
on sound quality . The risk that audio-visual material would be " locked up"
in an undesirable way was also stressed . In spite of these concerns , there
is now every indication that the hardware and music recording industries
might find a compromise technical solution acceptable to their respective
interests . The solutions currently under discussion appear capable of
avoiding the shortcomings indicated above, unlike earlier proposals for
systems such as Copycode ( see Appendix ).

3.7.11 .

125 -

A " pay at source " approach to the home copying problem

This approach has

It has been suggested in some circles that remuneration of right holders in
return for acts of home copying could also be achieved by means of a charge
applied at the moment of first sale , not to the carrier or support on which
the copy is made , but to the material which is copied .
already been adopted in varying forms in the fields of pay-television , data
base operation and the marketing of computer software where a rate is
charged for the goods or services commensurate with the use which the
consumer can be expected to make of them . In time , telecommunications
networks will also be widely used for the transmission of entertainment
products such as sound and video recordings . When such integration occurs ,
the " pay at source " approach may well prove to be financially beneficial to
right holders . This would be , in effect , direct enhancement of the royalty
which right holders already receive for their works . Objections have been
raised to this concept by the music recording industry which fears that the
charge will be seen simply as a price increase to the first purchaser which
would have a depressive effect on markets and could indeed exacerbate the
home copying problem .

3.8 .

The nain issues for the Connunity

3.8.1 .

The main issues for the Community concerning audio-visual home copying at
the present time appear to be the following .

3.8.2 .

3.8.3 .

First , to what extent should it be concluded that home copying adversely
affects the legitimate exploitation of certain audio-visual works and , if
so , which ones? How do the latest technical developments appear likely to
affect the position ?

Second , if such adverse effects can be established , what legislative
response at Community level , if any , seems preferable ? In this connection ,
is there a role to be played by Community rules either on levies on
recording media , on mandatory technical protection devices or a
pay -at - source approach ?

- 126-

3.8.4 .

Third, if any of these solutions are retained , how far can they be applied
consistently with the spirit of the Berne Convention ( Article 9(2 )) and in
fairness to all interested parties ?

3.9 .

The Commission 's present orientations

3.9.1 .

The evidence available at present suggests that , as regards sound
recordings , home copying does have negative but unquantif iable effects on
the legitimate exploitation of recorded works . None of the studies referred
to has been able to quantify with precision the extent to which home
copying has substituted for sales of pre-recorded material due to the
inherent difficulty in assessing consumer behaviour in twelve Member
States . Estimates as to the volume of lost sales vary widely and are in
many cases exaggerated . The only accurate starting point for assessing the
substitution effect is the sale of blank tapes in the Community , estimated
at 350 million units a year . But not all home copies substitute for
legitimate sales , particularly where they are made by persons who have
themselves purchased the recording in question , or where copies have been
made off-air of works which are not for sale . According to the music
industry 's own calculations , if home copying were to be prevented , around
25% of those who now transfer music from one carrier to another would

definitely purchase the same material in pre-recorded form . This
calculation would indicate that the upper limit of the substitution effect ,
or the " loss" to authors in case home copying from all sources were totally
prevented , would amount to approximately 1.5 billion ECU per year . Since a
significant proportion of those who copy at home do so from sources they
have already purchased , it seems reasonable to expect that sales of
pre-recorded music would not necessarily increase dramatically , even if
home copying of recorded sources were totally prevented . On the other hand ,
if technical measures can be introduced to prevent the copying of certain
sources , and in particular , the production of second and third generations
of copies , sales of pre-recorded material could be expected to rise , with
increased revenue to right holders in consequence . This is especially the
case for digital recordings , which allow the consumer to produce a copy
which is in effect identical to a studio master tape , implying that home
copying could in future substitute for purchases of originals to a much

- 127-

I

greater extent than at present using analogue techniques . Given the
increasing density and value of the material which can be recorded
digitally on discs and tapes , and the fact that sound , image and data
collections can be transferred cheaply , rapidly and perfectly from one
support to another , the Commission believes that urgent action is called
for to protect right holders against unauthorized reproduction of their
works by digital means . In view of the fact that analogue products ,
especially vinyl discs , may be coming to the end of their life span , the
Commission does not view the problem of home copying of analogue products
with the same degree of urgency .

3.9.2 .

As to video recordings , the available evidence is inconclusive . Most
recording is of television programmes , and for the purpose of
time-shifting , that is , to enable television viewers to re-schedule their
viewing to suit themselves . It would seem that the majority of programmes
recorded off-air at home are not available for sale in video cassette form

and recording does not therefore substitute for purchase of video . Even
where the subject of a recording from television is a feature film , the
prejudicial effect on other exploitations of the work is unlikely to be
substantially greater than the effect of showing it on television in the
first place . Home copying of pre-recorded video material is still a
relatively limited phenomenon and the negative effect on the commercial
exploitation of those works correspondingly small .

3.9.3 .

New technical developments may well exacerbate the home copying problem for
video as well as for sound . Digital techniques , in particular , seem likely
to stimulate home copying since they hold out the prospect of the easy
making of perfect copies , in the not too distant future , of video
recordings also . Therefore , since in time , all information management ,
communications and entertainment systems will be digitalized and
inter-related , any solution which is retained must be appropriate to
developments in the video and information management fields even if , in so
doing , no totally adequate remedy can be found for the copying of the
present generation of analogue products .

- 128-

3.10 .

Possible legislative responses

Principles

/

3.10.1 .

In establishing whether legislative measures are needed at Community level
and , if so , what their content should be , the Commission has sought to
apply the following principles .

/

3.10.2 .

First , copyright laws should seek to ensure that right holders in
audio-visual works can authorize , prevent or at least require remuneration ,
for any reproduction of their protected works which will adversely affect
their ordinary sale to a substantial degree . In other words , it should not
be possible , in principle , to copy a protected work instead of buying it .
The creative and financial investment devoted to the making of the work is
entitled to be protected against copying particularly where that copying
enables consumers to produce unlimited quantities of perfect replicas of
the original recording , and thus to reduce the market for legitimate sales
of the product . Where a purchase has been made of a pre-recorded source , or
payment made directly or indirectly to receive a broadcasting transmission,
in both of which cases a royalty has been received by the right holder , it
should be possible to reproduce that source or transmission for personal
use . The Commission feels that such reproduction for personal use does not
unduly prejudice the normal exploitation of the work .

3.10.3 .

At the same time , copyright protection for audio-visual works should not
prejudice the functioning of a competitive market in such works nor the
development of new audio-visual technologies . On the contrary , copyright
should provide an important part of the legal environment which favours
creativity , innovation and competition .

3.10.4 .

In addition , remedies should not be adopted for want of anything better if
to do so would simply substitute one set of injustices for another . In
matters of legislation , something is not necessarily better than nothing .
Abstention is sometimes the best solution .

- 129-

SoLutions

Mandatory technical solutions

3.10.5 .

Applying these principles , the Commission has concluded that , with regard
to DAT , Community measures to require a degree of technical protection
would be desirable provided that they are technically feasible and properly
balanced in respect of all the interests concerned .

3.10.6 .

A technical solution of a type similar to those outlined in the Appendix
would have the following advantages : it would allow right holders to fix a
limit on the number of copies which could be made of their works , and for
the first time effectively to control which sources could be copied : it
would permit hardware and tape manufacturers to enjoy approximately the
same market for their products as at present whilst encouraging the
development of new technologies to the full : it would allow the consumer
the freedom to make copies of works for personal use within fairly generous
limits . In effect , once digitalization is complete in the audio field, the
consumer will have at his disposal approximately the same sources as at
present , namely , radio , pre-recorded material and microphone . Such copying
would be limited
so that copies made on a DAT recorder could not serve as
masters for subsequent generations of copy . At the same time , the
specialist and handicapped user would be free to use DAT technology to meet
particular needs .

3.10.7 .

No solution is without disadvantages , and it is clear that a technical
solution , in addition to the risks of circumvention or malfunction inherent
in such systems , will pose difficulties in respect of a differentiation
between professional and domestic user products . Such a distinction must be
made if DAT technology is to develop to the maximum , and if smaller
recording studios and individual professional users are to have access to
the benefits of digital audio recording techniques .

3.10.8 .

3.10.9 .

3.10.10 .

3.10.11 .

- 130-

Similarly , a distinction must be maintained for the foreseeable future
between machines for audio use and those for data storage . Solutions
appropriate to the former cannot be applied to the latter . It is not
proposed to place technical limitations on DAT machines for data storage
use provided that they remain incapable of being used to record audio .

It is intended that the technical measures described should be applied to
all DAT audio machines irrespective of their type . If manufacturers wished
to put "professional " audio machines on the market , with specifications
which differ from those required under the technical protection proposals ,
they would apply for a licence to put such equipment on the market in the
same way as manufacturers of DAT contact printers
a way that professional and home audio recorders are not interconnectable .

or design them in such

52

In this way , bona fide users of professional machines , such as recording
studios , broadcasters , educational establishments and the like will not be
deprived of the opportunity to use equipment designed for their specific
needs . Such machines will not be allowed onto the general consumer market ,
and manufacturers and importers will have to take some responsibility for
ensuring that the two markets are kept separate . Any other differentiation
based on price or technical specifications is bound in the long term to be
subject to circumvention . It is only by maintaining some measure of control
over the distribution of " professional " equipment that the freedom for the
consumer to copy to the extent proposed can be guaranteed .

The basic concept of a legal framework requiring digital tape recording
equipment produced or marketed in the Community or imported from non-Member
States to incorporate particular technical features designed to limit its
use for unauthorized home copying appears therefore to be worthy of serious
consideration . Such an approach could take the form of a legal instrument
which would oblige the Member States to prohibit the production,
commercialization or importation of such machines unless they conform to
certain specified technical requirements . Ancillary measures prohibiting
devices to frustrate the operation of such technical protection systems
would also have to be included .

- 131-

3.10.12 .

The Commission has concluded that the incorporation of technical protection
systems into existing analogue machines , whatever its attractions in
theory , would in practice prove unworkable in view of the re-design costs
involved and the volume of existing products already on the market .

3.10.13 .

As to the different possible protection devices currently under development
for DAT machines , the information at present available suggests that a
number of such devices are technically feasible and would give some measure
of protection to right owners against unauthorized reproduction of their
works . It would be premature at this point to attempt a definitive
evaluation of the technical merits of any particular system . It suffices to
say that , in principle , an ideal system would present the following
characteristics . First , it would encourage technological development and
conform to the general trend towards fully digitalized systems in the
audio-visual field . Second , it would accommodate future developments in
telecommunications and information management systems . Third , it would
permit the full potential for high quality, flexible , digital sound
reproduction of both disc and tape to be developed in parallel . Fourth , it
would offer right owners a measure of control over the unauthorized
reproduction of their works . Fifth , it would allow the consumer to have
access to, and to make fair use of the sound recordings and transmissions
for which he has paid .

3 . 10 . H. It is self-evident that no technical solution can ever be guaranteed

against deliberate attempts at circumvention . However , if a reasonable
degree of security can be achieved together with no deterioration in the
quality of product offered to the consumer , and a reduction in the level of
sales lost through home copying , then a technical protection system offers
a solution which is worthy of consideration .

3.10.15 .

It is hoped that interested circles will themselves work constructively to
provide a solution which can be rapidly implemented and effectively
maintained in force . Preliminary evaluation of some systems has already
taken place . Further detailed consultation with the industries concerned
will be pursued if the principle of a technical protection system is
accepted .

- 132

3.10.16 .

Accordingly, the Commission invites comments on the desirability of a
technical solution which would permit DAT recorders to carry out certain
limited copying functions , but which would at the same time impose
restraints on the scope and nature of that copying . There may also be a
need for particular provisions to be made for special categories of users
of digital audio equipment .

Levies

3.10.17 .

As already indicated, in spite of any limitation of DAT recording as
suggested above , copying from analogue sources by analogue recorders would
continue to be possible . While the inevitable deterioration in quality will
in practice limit the extent to which copies will themselves be reproduced
by analogue means , nevertheless , as long as a high quality analogue source
and analogue recorder are used , good quality copies will still be
realizable . In time , digital sound recording equipment will replace most
analogue systems . For the present , the question of whether right holders in
analogue audio-visual recordings should be compensated for the reproduction
for private use of their works by analogue means and , if so, whether this
should be by means of a levy , remains to be answered .

3.10.18 .

In the case of sound recordings , the Commission has weighed most carefully
the evidence presented in favour of and against levy schemes per se and in
favour of and against measures to generalize levy schemes by way of
harmonization at the level of the European Community .

3.10.19 .

As regards the advantages and disadvantages of levy schemes , it is not
necessary or appropriate for the Commission to pronounce itself in favour
of or against such schemes insofar as they have been introduced already in
a number of Member States . The Commission is of the view that where such
schemes have been introduced, it is the responsibility of right holders to
ensure that the collection and distribution of revenues is satisfactory .

3.10.20 .

3.10.21 .

3.10.22 .

- 133-

The Commission does not intend to propose that existing levy schemes
covering analogue products should be removed where right holders are
satisfied that they are working to their advantage on analogue products .
This is a matter on which Member States are competent to decide for
themselves . Levy schemes generate revenue for right holders and in those
countries where they have been introduced , right holders appear to find
them an acceptable solution .

Nevertheless , the Commission feels it would be inadvisable to view levy
schemes as the most appropriate solution to the copying of works by digital
means . The amount of revenue which can be generated in this way will never
adequately compensate right holders for the losses incurred by unrestricted
digital copying . Similarly , the increasing interchangeability of carriers
and supports and the trend towards integrated digital networks and
integrated products combining data , image and sound make the levy an
inadequate tool with which to regulate the home copying practices of the
future .

Nor does the Commission feel it appropriate to take steps at this late
stage to harmonize existing levy schemes on analogue products . The reasons
for this are as follows :
First , analogue products are becoming obsolete . Digital radio receivers are
expected to be on the market within two years , digital audio is available
now as compact disc and DAT . Digital video will follow within a few years .
All leisure , telecommunications and information management technology is
moving rapidly into the totally digital domain . Any Commission initiative
now would require a commitment of time and resources which would risk being
made obsolete itself by the march of progress within a decade .
Second , the Commission is not convinced that levies are entirely in the
interests of right holders , more especially of creative artists , in that
they sanction unlimited acts of home copying regardless of the value of the
work copied .

-134-

Third , the possible distortion or deflection of trade between Member States
which could result from differences between leviable and non-leviable
products and differing rates of levies does not appear sufficiently
important to justify a Community initiative at this stage . Existing levy
schemes do not and , indeed , need not entail systematic controls at the
borders as is currently the case with respect to fiscal measures . In
addition , the schemes operate on the basis of direct reporting arrangements
between the relatively limited number of producers and importers , on the
one hand , and the designated collecting societies on the other hand . In
this respect too , the collection of levies cannot be equated with the
collection of value added taxes . The collection of levies will continue to
operate in much the same way even after the abolition of internal frontiers
after 1992 . Equally , the value of the products themselves in the economy as
a whole and the small divergencies in their price as a result of a failure
to harmonize levies do not call for action on the part of the Commission of
the same order as the proposals in other more important areas .

As to video recording , at present entirely analogue and likely to remain so
for an uncertain period into the future , the evidence is , as has been seen ,
inconclusive . In these circumstances , a Community initiative to generalize
the levy schemes already adopted in some Member States would not be
justified . Any measures taken as regards technical protection of digital
recordings might of course incidentally offer protection in practice to the
new types of audio-visual work likely to be marketed in the future . Even if
images are recorded analogically , they will be of limited interest if the
sound and data to which they refer cannot be reproduced as well . In
addition , existing systems of protection as described in paragraph 3.15.2 .
of the Appendix to this chapter already offer some measure of security to
rights owners against unauthorized reproduction of pre-recorded video
cassettes . National legislation and technical developments will be kept
under review with a view to ensuring that appropriate action is taken if it
becomes necessary .

3.10.23 .

135 -

The " pay at source " approach

3.10.24 .

This solution has certain advantages / namely that it adapts the present
royalty system to remunerate right holders directly and proportionately in
relation to sales or air-play of their works . Collection and distribution
of the charge could be carried out by existing collecting societies , and a
relatively modest price increase would generate substantial additional
revenue to right holders . A " pay at source" approach could be most
effectively applied in future, when the networking of sound , image and data
by digital transmission systems becomes commonplace , if a technical
solution is adopted now at an early stage . On the other hand the objections
as to the rough justice of a system which imposes a charge on all who
purchase a recording regardless of their intention to copy or not cannot be
ignored , nor can the argument that payment by consumers in return for the
right to copy may stimulate further acts of home copying . The Commission
would welcome the views of interested parties on these issues .

3.11 .

Associated policies

3.11.1 .

The home copying issue , including the implications of new technical
developments , should not be considered in isolation . Other policies
considered in this document are relevant to different degrees and should
not be lost from sight . The Commission has sought to reconcile a number of
divergent interests in its proposals on copyright reform . On the one hand ,
through limitations on the activities of the home taper especially in
relation to OAT , it has sought to protect the legitimate interests of the
creative artist whilst at the same time recognizing the economic and
cultural significance of consumer interest in audio-visual products . By
measures to curb the uncontrolled development of rental of audio-visual
recordings , it has sought to give a greater degree of protection to the
investment of those who produce and market such recordings . The need to
stimulate and invest in the development of new manufacturing industries and
to foster the growth of new technologies has not been overlooked . The

- 136-

measures proposed to combat piracy in Chapter 2 and to protect computer
programs in Chapter 5 will help to ensure that the software products of the
audio-visual and computer industries will be able to derive maximum
advantage from the Community's internal market . Measures taken to secure
better protection for these works in markets outside the Community , as
suggested in Chapter 7 , will also serve to safeguard the legitimate
interests of the industries concerned . The proposals made by the Commission
thus reflect the need to balance a broad range of interests in the proposed
policies considered as a whole .

3.12 .

Summary

3.12.1 .

The Commission recognizes that the practice of home copying may cause
losses to right holders to the extent that home copying may substitute for
sales of pre-recorded material . It therefore proposes a series of related
measures, which , in combination and as seen in the preceding paragraph , aim
to reduce home copying practices ( and thus indirectly to stimulate sales of
pre-recorded sources ) rather than to sanction the home copying phenomenon
by means of harmonization at Community level . Thus the limitation of the
copying by technical means of right holders' works , the introduction of a
rental right for audiovisual works, the introduction of a series of
anti-piracy measures and the freedom for Member States to maintain or
introduce levies should all contribute to an enhancement of right holders'

revenues .

3.12.2 .

The Commission accepts that home copying of digital sound recording by
digital means could prejudice the interests of right holders if allowed to
continue and to develop in an uncontrolled way . The Commission proposes to
counter this risk by the introduction of technical measures to limit the
scope of the copying facility of digital audio machines .

3.12.3 .

The Commission proposes that the levy solution should be retained where
Member States feel that this is the best way to remunerate right holders .

- 137-

3.12.4 .

The Commission does not feel that action is required at the present time to
make Mandatory the introduction of technical devices to protect video
recordings, but intends to keep the situation under close review .

3.13 .

Conclusion

3.13.1 .

The Commission would welcome the views of interested parties on whether , as
regards digital audio recordings :

( a ) DAT recorders should be required to conform to technical specifications

which prevent their use for unlimited acts of audio reproduction ;
Cb ) the manufacture , importation or sale of machines which do not conform

to the specification should be prohibited ;

( c ) the measures outlined in ( a ) and ( b ) should apply to all DAT machines

for recording audio ;

( d ) the manufacture , importation or sale of devices intended to circumvent
or render inoperable the measures outlined in ( a ) and ( b ) should be
prohibited .

( e ) possession of machines intended for professional or specialist use and
not conforming to the specifications for home use outlined in ( a )
should be made dependent upon a licence to be delivered by a public
authority and the maintenance of a register or registers in respect of
licensed equipment ;

3.13.2 .

The Commission would welcome the views of interested parties as to whether
it is accepted that levies should remain in those Member States which have
introduced them , and could be introduced if Member States so wish in those
countries which have not yet introduced them , no Community action being
required for their introduction or harmonization .

3.14 .

Timetable for submissions

- 138-

3.14.1 .

Comments , at least statements of principle , on Chapter 3, considering the
urgency of the DAT issues , should be submitted to the Commission no later
than 31 July 1988 . On the basis of comments received , the Commission will
decide whether further advice - eventually by way of hearings - is called
for .

- 139-

APPENDIX

3.15 .

Technical protection

3.15.1 .

One system , widely publicized and demonstrated , is the " Copycode " developed
by the Columbia Broadcasting System Records Technology Centre in the USA .
This system works in the following way . Sound recordings are encoded by the
inclusion of a notch , that is , by the removal of an extremely narrow sliver
of sound energy taken from the upper middle of the audible sound spectrum
at a frequency around 3840 Hz . This notch can be detected by a scanner
device in the form of an integrated circuit incorporated in recording
equipment in such a way that its removal , failure or bridging would in
practice be impossible or at least extremely difficult . The detector in the
recorder scans an incoming signal when the recorder is used to make a
recording . If a notch is detected , the record function is interrupted
making a copy useless . If the recording does not contain the notch code ,
then the scanner in the recorder permits copying to go ahead uninterrupted .
It was claimed that the CBS system would work for both analogue and digital
recordings . The CBS system has recently been evaluated by the National
Bureau of Standards of the United States Department of Commerce in order to
determine its applicability and effectiveness . The early enthusiasm for the
system displayed by IFPI , representing the major record companies , seems
now to have waned in the light of the National Bureau 's findings
( Evaluation of a Copy Prevention Method for Digital Audio Tape Systems ,
National Engineering Laboratory , February 1988 )."

3.15.2 .

3.15.3 .

- 140-

Devices are also under development to prevent the unauthorized recording of
videos or television programmes . One system, Macrovision , seeks to rely on
the existing design of video recorders . A signal is incorporated into the
original video recording or programme which , while undetectable during
normal playing or viewing , causes the videorecorder to produce a
disturbance in the picture if a copy is made . Such a copy will therefore be
unusable for replay purposes . This system has the advantage of not
requiring special circuitry in the recorders . Tests are being carried out
currently to establish the reliability of the system and whether the
existence of the protection interferes with legitimate viewing of a video
or television programme . Another system , being developed by CBS Fox , also
works on the principle of a code signal in the video or transmission being
detected by a device incorporated in an integrated circuit in the recorder .

The same technology which distinguishes digital audio recording from its
predecessor , analogue recording, also offers specific possibilities of
protection against unauthorized reproduction . Following a conference of the
world electronic industry held in Tokyo in June 1986 , a specification for
the Rotary Head Version of Digital Audio Tape Recorder , R-DAT, using
technology similar to that of the video recorder , was agreed to ensure that
there would be only one format of digital audio recorder and digital audio
tape commercialized for the home user market at present . This conference
standard contains two elements which permit CDs to be protected against
copying onto R-DAT tape . The first element is the different sampling
frequency rates at which CD and DAT operate : 44.1 KHz for pre-recorded CDs
and 48 KHz or 32 KHz for recording onto DAT machines . This means that a CD
cannot be copied onto a DAT machine by digital means , but only via the
analogue output of the CD , with a resulting small loss of sound quality .
The second element is the existence of subcode areas in CDs and in DAT tape
which permit the insertion of a copy prohibit code in digital signals .
Where such codes are present in a digital in-put , the R-DAT specification
is designed to ensure that digital recording of a digital source will not
occur . Since the DAT machines currently on sale do not have the capacity to
record a CD digitally , this copy prohibit code mechanism has not yet come
into effect in reality .

- 141-

3.15.4 .

The R-DAT specification formed the basis for guidelines issued by the
Japanese Ministry for International Trade and Industry ( MITI ) early in 1987
to the Japanese electronics industry . It was indicated to the Commission
that these guidelines also provide that where the copy prohibit code ,
mentioned in paragraph 3.15.3 . above , has been included in a digital
source , it must be passed on if that source is relayed and becomes a
digital output .

3.15.5 .

An alternative form of protection system called SOLOCOPY using draft
specifications outlined by the Technical Committee 84 of the International
Electrotechnical Commission has been proposed by some sections of the
hardware and recording industry .

3.15.6 .

Using the specifications , OAT recorders would be able to identify the
source of an incoming digital signal by means of a flag added as a parallel
signal on the space reserved for control information which would indicate
to the receiving DAT recorder whether the signal could or could not be
recorded . For example , if the source was a compact disc , the DAT machine
would be able to record . In the case of a recording made on a DAT machine ,
it would not . Depending on how the system is implemented, digital radio
broadcasts would be recordable , but copies of broadcasts made on a DAT
recorder could not be used as masters to be copied again digitally , neither
could digital recordings made of compact discs be used again to copy from
one DAT recorder to another . Direct recording by digital microphone would
be possible but not copying from DAT machine to DAT machine of such
recordings .

3.15.7 .

The consumer would still be able to make a digital copy of a compact disc
or broadcast or record with a microphone just as he can make analogue
recordings today . Therefore a balance would be retained between the
consumer demand for the freedom to make recordings off-air or from
purchased originals , whilst at the same time the potentially harmful
pyramid effect of DAT to DAT copying would be halted .

3.15.8 .

- 142-

As an alternative to the SOLOCOPY proposal , a version named the SOLOCOPY
PLUS has also been outlined . This would remove the analogue input and
analogue to digital convertor from within the DAT recorder , thus preventing
the first time copying of analogue sources . Digital copies would not serve
as a master for further generations of digital copy , since DAT to DAT
copying would be still impossible . The recording industry has claimed that
in view of the risk that the continuing existence of analogue to digital
convertors within the DAT machine would lead to circumvention of the

protection system , the Solocopy Plus concept is more attractive to some
right holders . The view has also been expressed to the Commission by a
major hardware manufacturer that if a Solocopy Plus type system were to be
made mandatory , it would have the effect of stimulating the market for
digital products and drying up the demand for analogue ones . The fact that
digital equipment would be put on the market which could not be
interconnected to existing analogue equipment would accelerate the rate at
which the change-over to totally digitalized entertainment and
communications networks would occur .

3.15.9 .

Other forms of protection systems aimed at limiting the number of times a
digital copy could be made of the same digital source are currently being
discussed among interested circles .

\

- 143-

1

2

The Berne Convention for the Protection of Literary and Artistic Works .

Under Section 6 of the United Kingdom 's Copyright Act 1956 and Section 12
of the Irish Copyright Act 1963 no fair dealing with a literary ,
dramatic or musical work for purposes of research or private study shall
constitute an infringement of the copyright in the work . Thus domestic
reproduction of suh works is not per se permitted . The purpose of the
making of the copy , study or research , will determine its legality .

^ Article 68 of the Italian copyright law .
4

These include dramatic , dramatico-musical , musical and cinematographic
works . It should be recalled that producers of sound recordings and
broadcasters in the Netherlands do not benefit from the protection of
copyright or a neighbouring right , see chapter 2 , paragraphs 2.6.10 . -
2.6.18 .

Article 16(b ).

See Article 11 of the Danish copyright law . Article 53 of the German

copyright law , Article 41 of the French copyright law and Article 81 of
the Portuguese copyright law of 1985 .

^ Bundesgesetzblatt no. 33 of 27 June 1985, page 1137 .
8

See Article 87 paragraph 3 .
Law no . 85-860 of 3 July 1985, Official Journal of 4 July 1985 page
7498 .

Decision of 30 June 1986 , Official Journal of 23 August 1986 , page
10279 .

Report no . 944 / 1982 . Båndafgifter , Sanktioner , Påtale .

Code of Copyright and Related Rights ( No . 45 / 85 , 17 September 1985 ).

Ley de propiedad intelectual No . 22 / 87 of 11 November 1987 , Boletin
Oficial del Estado no . 275 of 17 November 1987 .

Section 19(5 )

( a ) and ( b ) of the Copyright Act 1956 .

Section 14 ( 4 )

( a ) and ( b ) of the Copyright Act 1963 .

In Ireland, the status of programmes transmitted by cable is at present
unclear .

See paragraph 3.4.3 . and note 2 above .

Law on copyright , section 48(3 ).

Article 87(3 ) of the Copyright Act 1965 .

Ley de propiedad intelectual No . 22 / 87 of 11 November 1987, Boletin

^

10

11

12

20

14

15

16

17

18

19

20

-144-

Oficial dei Estado no . 275 of 17 November 1987 .

Article 29(2 ) of the Law No . 85-860 of 3 July 1985 .

Articles 81 and 189 of the copyright law .

Artide 16 b .

Artide 9(2 ) .

Artide 15 .

Artide 3 .

Bill introduced by Mr. DESMARETS and associates , Senate 282 ( 1985-1986 ),
No .

1 , R.A. 13596 .

Bill no . 615 ( 1986-1987 ) introduced by M. LALLEMANO and others .

See paragraph 3.4.2 . above .

Proposal No . 3911 of 10 July 1986 , Camera dei Deputati .

See , for example , Audio and Video Cassette Equipment Study in West
Germany , France and the United Kingdom, MARPLAN GmbH , October 1985 .

Source : European Tape Industry Council .

See Audio- and Video Cassette Equipment Study in West Germany , France
and the United Kingdom , op . cit .

See Davies , The Private Copying of Sound and Audiovisual Recordings ,
1983 , Annex 15 and the United Kingdom government 's green paper " The
Recording and Rental of Audio and Video Copyright Material , 19 , Cmnd .
9445 , para . 2.1

Source : International Federation of Phonogram and Videogram Producers
( IFPI ) .

Source

I FPI .

See , for example , for Germany , Mediumspiegel , April 1987, page 3 .

In its non-compact form , the video disc has had only limited success .

Etude sur les enregistrements sonores effectués par le public pour son
usage personnel , Sofres , May 1983 .

See the United Kingdom government 's green paper , op . cit . , para . 2.2

See Audio and Video Cassette Equipment Study in West Germany , France and
the United Kingdom , op . cit . , pages 18 to 20 .

Why Americans Tape , Yankelovich , Skelly White Inc ., September 1982 .

21

22

23

24

25

26

27

28

29

30

31

32

36

37

38

39

40

41

42

- 145-

Les enregistrements vidéo effectués par le public pour son usage
personnel , Sofres , December 1983 , pages 7 and 22 .

See Audio and Video Cassette Equipment Study in West Germany , France and
the United Kingdom , op . cit ., page 33 .

V. Bottcher Marktforschung , Usage and Attitude Study Video , 1986 .

Etude sur les enregistrements sonores effectués par le public pour son
usage personnel , op . cit. , pages 11 , 25 and 26 .

Copyright Infringement , British Market Research Bureau , September 1984 .

See Audio and Video Cassette Equipment Study in West Germany , France and
the United Kingdom , op . cit ., pages 18 to 20 .

Les enregistrements vidéo effectués par le public pour son usage
personnel , op . cit. , pages 7 , 36 to 40 .

See Audio and Video Cassette Equipment Study in West Germany , France and
the United Kingdom , op . cit . , page 35 .

See I FPI , Digital Music and Copycode - The Future , 1987 .

52

See paragraphs 2.9.7 . to 2.9.11

above .

- 146-

CHAPTER 4 : DISTRIBUTION RIGHT, EXHAUSTION AND RENTAL RIGHT

4.1 .

Distribution right : the right to control commercial exploitation .

4.1.1 .

4.1.2 .

This right , where it exists , can be most simply described as

One major area of difference concerns the economic right of

These rights are defined in different ways in different Member

Copyright consists of a number of specific rights , some essentially economic
in character , others protecting the author 's artistic integrity and
reputation .
States .
distribution .
the exclusive right to authorize that a work or copies thereof be made
available to the public . What the distribution right is meant to add in
addition to the other exclusive rights of the author is control over the
It can be
commercial exploitation of his work within a given jurisdiction .
of particular importance if the manufacturing of copies of the work is not
itself an " infringement " because it takes place , for example , in a country
where the work is not protected or where protection has expired .

1

Some Member States provide expressly for the author to have the exclusive
right to offer to the public or to place in circulation the original work or
any copies thereof .
This technique is applied in Denmark , Germany , Italy ,
the Netherlands and Portugal
, and the new copyright law recently adopted
. Others make no such express
in Spain contains a corresponding provision
provision , though tq some extent a distribution right may form part of the
Moreover ,
publication right granted by Irish and United Kingdom law
under Belgian , French and Luxembourg law , it seems possible to achieve
results close to those of a distribution right by means of conditional
exercise of the reproduction right .
published copies of the work , right holders may at least in some cases , be
4
able to limit the use that third parties may make of them .

By clearly indicating conditions on

2

- 147-

4.1.3 .

The question to be considered in this context is whether a distribution
right should be introduced in all Member States and, if so , in respect of
which works and which rights in those works .
Examination of this question
should include an assessment of the consequences appearing to flow at
present from the absence of distribution rights or from their early
exhaustion .

4.2 .

Exhaustion of distribution rights ; national Law .

4.2.1 .

4.2.2 .

" Exhaustion" should not be confused with " expiry" of the term of copyright
protection . For an explanation of the meaning and application of exhaustion
see paragraph 4.3.1 . et seq . The doctrine of exhaustion is a familiar
principle of intellectual property laws of different kinds .
question are considered to be exhausted or consumed when the protected goods
are first lawfully marketed , that is , by the right holder himself or with
his consent . It has been applied in the patent and trade mark context as
well as in the copyright field . The principle can be applied in more or less
sweeping forms .
In the copyright field, for example , it tends to be applied
rigorously to the sale of copies of literary work , but in a more qualified
form to the sale of copies of musical works .
rental of the music may still be subject to the author 's consent .

In the latter case , subsequent

The rights in

Those States that have expressly provided for a distribution right in their
copyright laws have been obliged to confront at the same time the question
of the appropriate limits of the right since permanent control for the
duration of copyright protection over all forms of distribution of copies of
a work seems clearly excessive .
right of the holder is the time when the work or a copy of it is first
lawfully placed on the market .
is given explicit expression in this way in the copyright laws of Denmark ,
Germany and the Netherlands , whereas the same result is obtained in Italy by
way of interpretation
exhaustion of rights by first sale

The new Spanish law also contains a provision on

This " exhaustion" or " consumption" principle

One obvious moment to put an end to the

- 148-

Portugal , however , has no provision in its copyright law on exhaustion
despite the far-reaching distribution right laid down in Article 68(2 ).
Finally , given that their laws do not make specific provision for a
distribution right , Belgium, Greece , France , Ireland, Luxembourg and the
United Kingdom make no express provision for exhaustion .

4.2.3 .

In the absence of clear provisions on the exhaustion of rights upon the
first sale of a copy of the work , it may be uncertain to what extent the
author by contractual or semicontractual means such as a notice of rights on
the cover page of a book can impose restrictions in respect of the use of
the copy on the buyer of a copy and on third parties .

4.3 .

Exhaustion of rights : Community law .

4.3.1 .

Goods lawfully

and trade marks

The doctrine has thus played a

In its original form , the doctrine of exhaustion related only to the
jurisdiction within which the rights in question had arisen .
marketed in other jurisdictions could still be kept out on the basis of
rights arising in the first jurisdiction .
However , the development of
regional and international markets has led to the exhaustion concept being
applied to favour cross-frontier trade .
major role in the case law of the European Court of Justice , in relation to
as well as copyright . The Court has held that in
patents
all these fields reliance on an exclusive right to exclude goods lawfully
marketed in other Member States would be incompatible with the fundamental
principles of the Community Treaty providing for the free circulation of
goods since it would legitimize the isolation of national markets . While
Article 36 EEC authorizes the Member States to maintain restrictions on
imports justified on the grounds of the protection of industrial and
commercial property , it does not permit a right holder to prevent the free
circulation of goods once , with the right holder 's consent , they have been
placed on the market within the Community .

- 149-

4.3.2 .

4.3.3 .

More particularly as regards copyright and neighbouring rights , the Court
stated in Deutsche Grammophon v. Metro

that :

10

" If a right related to copyright is relied upon to prevent the marketing in
a Member State of products distributed by the holder of the right or with
his consent on the territory of another Member State on the sole ground
that such distribution did not take place on the national territory , such a
prohibition which would legitimize the isolation of national markets , would
be repugnant to the essential purpose of the Treaty , which is to unite
national markets into a single market ".

11

, the Court similarly concluded that copyright

In Musik-Vertrieb v. GEMA
did not permit right holders to claim the difference between the royalty
payable in an importing Member State and that payable in an exporting State
when sound recordings had been lawfully placed on the market in the latter .
Such a claim was an improper restriction on the movement of goods in free

circulation .

4.3.4 .

In subsequent cases , the Court has been given the opportunity to define
further the proper limits of the doctrine of Community exhaustion in the
copyright field .

- 150-

4.3.5 .

4.3.6 .

.

12

First , the Court has made it clear that its doctrine of exhaustion is
limited to the marketing through the sale of copies of the works in the form
of physical objects like other merchandise
In such cases , the legitimate
interests of the copyright holder are satisfied by the payment of the
royalty received on first sale irrespective of where within the Community it
took place and even if the royalty paid is lower than it would have been if
the first sale had taken place in another Member State . But where a work is
marketed by being performed , as is the case with films , for example , then
the right holder 's legitimate interest in receipts from successive
performances of the work will enable him to prevent performances in a given
juri sidiction that would otherwise have been possible . Thus in Coditel v.
Cine-Vog
the Court held that the holder of performing rights for a film in
Belgium could prevent the re-transmission by cable television in Belgium of
a German broadcast of the same film .
exhausted by the authorization to perform the film by televising it in
Germany given his legitimate interest in calculating the royalty for cinema
performance in Belgium on the actual or probable number of performances in
that country .
Re-transmission by cable television of the German broadcast
would clearly upset that calculation .

The producer 's rights were not

14

a French

More recently, the Court has had to address the question of the public
performance of sound recordings . In G. Basset v. SACEM
discotheque had challenged the right of the author to claim a supplementary
mechanical right royalty on top of the performance royalty when sound
recordings imported from the United Kingdom were performed in public in
France . In the United Kingdom, the mechanical right royalty is unchanged
whether the phonogram is used for private purposes or used for public
performance purposes . French copyright law , on the other hand , gives the
author the discretion to increase his claim for remuneration for the
reproduction when copies are used for public performances .

- 151-

Before the French courts , the discotheque owner had unsuccessfully argued
that the right of the author , according to the French law , to claim a
supplementary mechanical right royalty for phonograms used for public
performances was contrary to Community law because the first sale of the
phonogram took place in the United Kingdom where a similar right did not
exist . The Court did not endorse this claim , however , holding that the
Treaty provisions posed no obstacle to the non-discriminatory application of
a national law which permitted a collecting society to demand a royalty,
known as a supplementary mechanical right royalty , by reason of the use in
public of the recordings , even when such a supplementary right did not exist
under the law of the State where the recordings were legitimately placed on
the market . It should be noted that the situation in this case was

significantly different from that in Musik-Vertrieb v. GEMA in that in the
latter case the extra royalty was claimed on the simple grounds of
importation from one Member State to another . In G. Basset v. SACEM ,
however , the royalty in question became due only on public performance of
the recording within the importing State .

4.3.7 .

4.3.8 .

The limits of the doctrine of Community exhaustion in the field of rental of
video cassettes will be addressed by the Court in the near future
matter is considered further in the context of the discussion of video

. This

15

rental rights in paragraphs 4.10.1 . to 4.10.9 . below .

Finally , in this context , it should be noted that the doctrine of exhaustion
founded upon Articles 30 to 36 EEC concerns the free circulation of copies
of copyright works after they have been lawfully placed on the market .
Its
effects should not be confused with the effects of competition law on
agreements by which publishing rights are allocated on a territorial basis .
Such agreements , which are of considerable interest to authors and
publishing companies , are to be respected provided they do not run counter
to the principles of competition policy in the Treaty , particularly the
provisions of Article 85 .

4.4 .

Distribution rights and exhaustion : outstanding issues

,

\
\

- 152-

4.4.1 .

As regards the free circulation of copyright goods , the development of the
exhaustion doctrine by the European Court on the basis of the Treaty 's
directly applicable provisions has already to a large degree ensured that
national copyright laws will not have adverse or divergent effects on the
However , some issues have not y^t been
functioning of the common market .
specifically decided by the Court .

This applies , for example to the effect of the exhaustion doctrine on
restrictive conditions indicated on copyright goods placed on the market and
intended to limit or prevent the free circulation of those goods from one
Member State to another . Such indications might state , for example , that the
goods are " Not for sale in . " or "Not for export ". Such conditions
might in principle be permitted by a given national law . However , there
seems little reason to doubt that the Court would rule also in the area of

copyright , as it has done in other areas of intellectual and industrial
property law , that such an exercise of the reproduction right does not form
part of the essential function of copyright in goods placed lawfully on the
market and accordingly cannot be used to oppose the import of goods from
other Membert States . Such conditions run counter not only to the
provisions of the EEC Treaty on the free flow of goods but also to
competition rules . To this extent then , the " Europeanization of the
exhaustion principle "
/

has already been largely achieved .

16

4.4.3 .

These are likely to raise issues as

As regards performing rights in protected works , as has been explained , the
exhaustion doctrine does not apply .
regards the free provision of services rather than the free circulation of
goods .
In the broadcasting field , for example , the cross-frontier
transmission of broadcasts , particularly television , by satellite and cable
encounters legal obstacles deriving from copyright that require to be
removed by appropriate Community secondary legislation . A proposal has
already been submitted by the Commission to the Council

17

- 153-

A. 4 . 4 .

The Commission has so far received no request for the introduction in all
Member States of a distribution right of general application in the
copyright field .
Most problems that have been mentioned
capable of adequate solution at national level . It has been suggested , on
the other hand , that the question of public lending or rental of books and
the possible right of the author to receive remuneration for this use of his
work is an issue requiring a solution at the Community level

seem to be

19

18

4.4.5 .

The desirability of allocating resources to this subject at Community level
at this time seems far from evident , however .

4.4.6 .

4.4.7 .

4.4.8 .

First , in reality , only relatively small sums of money are at present
involved . Commercial rental of books has practically disappeared . Public
lending schemes , where they exist , generate only modest total revenues . In
no Member State do they appear to exceed 10 million ECU per annum .

Second , the schemes operate only in a minority of Member States : Denmark ,
Germany , the Netherlands and the United Kingdom . Moreover , their
introduction has on occasion generated considerable controversy .
Establishing a political consensus in those circumstances , even at national
level , has proved difficult and time-consuming . The chances of arriving at a
Community consensus within a reasonable period of time are not great .

Third , of the four schemes in operation , those in force in Denmark , the
Netherlands and the United Kingdom are not strictly speaking part of the
copyright system at all , but a supplementary regime whereby authors receive
sums from a fund largely financed from public sources . It may be doubted
whether such forms of public financing are an appropriate subject matter for
Community harmonization at this time .

- 154-

4.4.9 .

Fourth , neither the absence nor presence of such schemes appears to cause
significant problems for free circulation of books or to the development of
book publishing in the Community . In particular , the lending or rental of
books is far less closely linked to problems of private copying and piracy
such as those that affect the audio-visual sector in the manner further
explained below ^ .

4.4.10 .

For all these reasons , the Commission is of the opinion that Community
action in respect of approximation of laws in this area at the present time
would not be justified .

4.4.11 .

On the other hand , in the audio-visual sector , important issues have arisen
having both a cross-frontier dimension and important implications for the
future development of the Community 's sound and video recording industries .
Authors and producers of such recordings have for some time been arguing
strongly in favour of the introduction of a distribution right or at least
for protection against unauthorized commercial rentals .
made in part in the context of the Community debate on audio-visual piracy
But the
and some aspects of the problem have been considered in Chapter 2 .
demand also raises issues of substantive copyright law that merit further

The demand has been
21

consideration here .

4.4.12 .

As regards the rental of computer programs , it is proposed in Chapter 5
( paragraph 5.8.2 . ( d )) that specific provisions be made for a rental right
within the context of the proposed directive on the legal protection of
computer programs . Rental of computer programs is therefore not dealt with
in this present chapter .

- 155-

4.5 .

The distribution of sound and video recordings

4.5.1 .

Sound and video recordings appear to Lend themselves increasingly to
commercial exploitation by way of rental .

4.5.2 .

But even where these systems have existed , the negative

As regards sound recordings , non-commercial libraries have been in existence
for some time , especially in those countries where the public library system
is well developed .
effects of lending or rental on right holders have appeared to be relatively
The principal reason is that the quality of traditional recordings
limited .
on disc suffers proportionately to the number of times the record is
borrowed , wear being inevitable and the risk of accidental damage high .
Control of wear and tear on returned copies is at best burdensome and
frequently impractical .
Worn or damaged copies are unattractive whether for
listening or private copying . The need to replace damaged copies of popular
recordings operates as an automatic limit on the extent to which the
purchase of one copy of a given work for lending or rental will substitute
for the purchase of other copies and indeed on the entire scale of lending
and rental operations .
exploitation of traditional sound recordings through rental seems to have
been rendered insufficiently attractive for it to develop on a substantial

For all these reasons , profitable commercial

scale .

- 156-

4.5.3 .

The first technical development to change this state of affairs was the
introduction of the tape cassette which is much less susceptible to damage .
However , the relatively recent arrival of the laser read compact disc is
likely to have much more profound effects since it appears to be virtually
indestructible in normal use and repeated playing has little effect on the
quality of the sound .
rental activity is much higher than before and in a number of countries ,
particularly outside the Community where the penetration of the compact disc
player is particularly high , rental outlets have mushroomed . This is the
case in Canada , Japan and the USA . Recently, following the increasing
penetration of compact disc players in the United Kingdom , compact disc
rental outlets have started to appear in large numbers . Similar developments
can be expected elsewhere .

Consequently the possibility of profitable commercial

4.5.4 .

Furthermore , sound recordings on compact disc could until recently only be
copied on to tape using ordinary analogue recording equipment , but the
advent of the digital audio tape recorder means that the digital recording
can be copied in digital form, unless protected against reproduction by
technical means .
digital tapes , the same problems will arise for this support as for the
compact disc . The problem of home copying is treated in Chapter 3 , but it is
. mentioned here since the negative impact of lending and rental undertakings
on the income of right holders is clearly increased when high quality copies
can be readily made by hirers at low cost .

When a repertoire is eventually available on pre-recorded

- 157-

4.5.5 .

4.5.6 .

The reasons why video

Lending and rental of video recordings on cassette differ from the rental of
sound recordings because the predominant method of distributing video
recordings to the public is rental and not sale .
recordings are rented and not sold include the saturation effect of repeated
playing of most popular video products , in particular , feature films , and
the relatively high price , though now decreasing , for their purchase by
comparison with their rental . Some special types of recordings undoubtedly
tend to be purchased , such as instructional and children 's videos , for these
are likely to be used repeatedly .
cassettes expressly for rental which accordingly then takes place with the
full agreement of right holders .

But much material is produced on

Such rental outlets , operating independently and without

At the same time , however , the video industry is concerned about the scale
and nature of the unlicensed video rental activities that have developed in
recent years .
agreements with right holders in respect of the material rented , have
increased substantially not only in Europe but also in the United States ,
Canada and Japan .
Competition between outlets is often fierce and their
Their activities have a negative effect on
financial situation precarious .
the revenue of right holders by diverting legitimate business from licensed
distributors and , in addition , they tend to form the main outlet for pirate
copies which produce a larger profit margin than rental of legitimate
products .

4.6 .

The present position concerning the rental of sound recordings

4.6.1 .

The main features of the present legal position as regards the rental of
sound recordings in the Member States can be summarized as follows according
to the three categories of right holder concerned .

4.6.2 .

First , as regards authors' rights in respect of audio recordings , these will
be exhausted by first sale in Italy
. Accordingly ,
authors are not entitled in those countries to authorize or to receive
specific remuneration for subsequent rental of their recorded works .

22 _ _ 23
and the Netherlands

4.6.3 .

4.6.4 .

- 158-

In another group of States , the opposite situation prevails . Thus , in
Denmark , the Copyright Act was amended by law no . 274 of 6 June 1985 to
exclude exhaustion in respect of the right of the author to authorize the
commercial rental of musical works including recordings thereof . In Germany ,
Article 27 of the copyright law explicity grants authors a right to
remuneration when sound recordings are lent or rented but not a right to
prohibit such use of their works .
Article 19 of the new Spanish copyright law , the right to control rental .
This right is not exhausted by the first sale of a copy . Also in Portugal ,
Article 68(1 ) of the copyright law makes explicit provisions for the
author 's right to authorize rental copies of his work .

In Spain authors have , by virtue of

24

In yet a third group of the States , a degree of uncertainty prevails . In
Ireland and the United Kingdom , where rental of published works is not a
restricted act , it appears that authors have no right to control rental of
copies of recordings marketed with their consent ,
contract ; though serious doubts have been expressed about the efficacy of
such practices
distribution right is recognized , conditional exercise of the reproduction
right might in theory permit restrictions to be placed on subsequent rental
by means of clear notification on the copies sold
appears to be no case law unequivocally sustaining the thesis that
commercial rental can be controlled in this way and commercial practice in
those countries frequently suggests the opposite .

In Belgium , Greece , France and Luxembourg , where no

except perhaps by

However , there

.

4.6.5 .

As far as producers are concerned , laws at present in force do not generally
give them the right to control the subsequent rental of recordings put into
In France and Portugal , producers have
circulation by sale to the public .
however in 1985 been granted such a right
. In other countries , an effort
has been made to achieve this end . Under the terms of the IFPI / BIEM Standard
, producers agree to print the following on record labels :
Contract

- 159-

"AIL rights of the producer and of the owner of the work reproduced
reserved . Unauthorised copying , hiring , lending and public performance of
this tape prohibited ".

Third parties are thereby put on notice that neither the producer nor the
author of the work has given authorization for the hiring or lending of
Moreover , the IFPI / BIEM Standard Contract also specifies that the
records .
producer is granted the right to put recordings into circulation solely with
a view to their sale for private use . In Germany , recent case law
renders
such restrictions ineffective . In the Netherlands , the authors' society is
engaged in litigation in order to test whether the unauthorized commercial
rental of records can be prevented on this basis

28

29

4.6.6 .

As for performers , no Member State has enacted laws giving them the right to
authorize the rental of their performances fixed on sound recordings .

4.7 .

The present position concerning the rental of video recordings .

4.7.1 .

The legal position in respect of rental of videograms is partially similar
but not identical to the position in respect of rental of sound recordings .

4.7.2 .

One important difference is that a videogram is assimilated to a
cinematographic work protected according to Article 2(1 ) of the Berne
Convention . This implies that the producer of a videogram , irrespective of
whether a given State operates with a specific film copyright in favour of
the producer
is automatically considered an author , if not the sole
author of the work and in that capacity , unlike producers of phonograms ,
enjoys authors' rights .

4.7.3 .

As to the rights of authors and producers to authorize or receive specific
remuneration for the rental of videograms after their first sale , the legal
results appear to be essentially the same as for sound recording though the
legal technique used to realize those results may be different .

- 160-

4.8 .

Recent Legislative proposals concerning the rental of sound and video
recordings

4.8.1 .

In Belgium , proposals for new legislation have recently been made which
address the problem of lending and rental of sound and video recordings
In the United Kingdom , an amendment to the Bill published on 28 October 1987
proposes the introduction of a rental right

32

31

.

4.9 .

The Community dimension of the problem .

4.9.1 .

Given the differences in the legal situations in the Member States ,
difficulties may obviously arise if a video cassette is brought from a
country where the author has no right to control rental into a country where
this right exists . Such a situation has recently been the subject of
litigation before the Court of Justice in case 158 / 66 Warner Brothers Inc .
and Metronome Video Aps v. Erik Viuff Christiansen . In that case , the Danish
defendant bought in the United Kingdom a video cassette of a feature film
which was not available on video cassette in Denmark whether for rental or
for sale . The plaintiff , Warner Brothers , later granted exclusive rights to
the plaintiff Metronome Video Aps to exploit the work by way of rental in
Denmark . The question which the Court had to decide was whether the right
holder in Denmark , having the right to authorize rental in the territory of
Denmark , could stop a person who purchased a video cassette in a Member
State where rental is not a restricted act from exploiting the imported
cassette for commercial rental purposes . By its ruling of 17 May 1988, the
Court , in accordance with the Commission 's suggestion , answered the question
in the affirmative , motivated by the consideration that the exploitation of
the film also by way of public performance or shows in cinemas could be
severely compromised . The case is a vivid demonstration of the Community
dimension of this type of problem from the point of view of the functioning
of the internal market in sound and video recordings .

- 161-

4.10 .

The future development of the Community 's sound and video recording
industries and the general introduction of a rental right .

4.10.1 .

Present trends in the distribution and marketing of sound and video
recordings suggest that commercial rental will constitute an increasingly
important means by which such recordings will be made available to the
Furthermore , given the links between rental and the problems of
public .
piracy and private copying , this development implies significant economic
consequences for those whose works and performances are recorded .
In the
absence of a firm legal basis for right holders to authorize the commercial
exploitation of their works through rental , it seems likely that those
responsible for creating recorded works will receive a much lower return for
their efforts and investment than would otherwise be the case , while
middlemen could profit disproportionately from the efforts of others .
likely consequence may well then be that recorded works will tend to be sold
at relatively high prices since right holders will seek to achieve a return
on first sale that will reflect , if only in part , the rental use that may
However , this policy is unlikely to
subsequently be made of their works .
provide a satisfactory solution from the right holders' point of view since
there are other limits on the prices that may be charged on first sale ,
while these higher prices will nevertheless prejudice those consumers who
would prefer to buy rather than rent the recordings in question .

One

- 162-

4.10.2 .

On the other hand , if right owners can sufficiently control the commercial
exploitation of sound and video recordings through rental , they will be in a
position to ensure that they receive an adequate return on their investment
for rental exploitation of their works . Control of the exploitation by way
of rental is also the necessary prerequisite for receiving remuneration for
rental of a copy intended for public performance . The practice of
entertaining different audiences such as patients in hospitals , military
personnel in barracks , seamen aboard ships and inmates in penitentiary
institutions can constitute a supplementary source of income to right
holders . A rental right should provide the legal foundation for such income
to be realized . At the same time , sufficient control over rental should
favour the adoption of low pricing policies on sales which will encourage
that form of demand and directly benefit the consumer . Finally , better
control over the rental market should contribute to the repression of piracy
since it will tend to ensure that rental outlets will not deal in infringing
products .

4.10.3 .

In this connection , the need to provide adequate resources for the future
activities of the Community 's audio-visual industries should be borne in
mind . As the Commission has already explained in other contexts
the
European audio-visual programme industries must be able to call on new
resources if they are to meet the challenge of supplying the new
audio-visual media with the material that the latter will need . A rental
market which ensures that right holders receive an adequate return on their
investment has an important role to play in this regard .

4.10.4 .

4.10.5 .

- 163-

Various remedies have been suggested to improve the situation including
licensing of all rental outlets and the introduction of a broad distribution
right for sound and video recordings . Such remedies are probably more than
is necessary to solve the problem . However , a rental right would provide the
solid legal foundation necessary for the future development of the
Community 's sound and video recording industries without underestimating the
importance of other cultural policies designed to support authors and
performers .
It would also have the advantage that many practical matters
could be settled by contractual arrangement rather than by the law itself
including , for example , the uses to be made of rented copies , royalties and
their distribution between different categories of right holder .
Finally ,
the general introduction of a rental right in all Member States would ensure
that artificial distortions do not arise as regards the marketing of sound
and video recordings as a result of commercial rentals requiring
authorization by right holders in some Member States and not in others .

The decisions of the European Court concerning exhaustion are in no sense
incompatible with the introduction of a rental right whether at national or
The situations so far held incompatible with the Treaty 's
Community level .
free circulation provisions have all involved the sale and re-sale of goods
lawfully placed on the market for that purpose , not the rental of recorded
case , the Court
works subject to copyright .
held that where copyright works are exploited through successive
performances , the first performance did not exhaust the holder 's rights .
The exploitation of sound and video recordings through rental raises similar
issues to exploitation through performance , not least the holder 's
legitimate interest in controlling successive commercial uses of the work .

In addition , in the Coditel

34

4.10.6 .

4.10.7 .

- 164-

In conclusion then , current developments in the distribution of sound and
video recordings suggest that the introduction of a rental right in all
Member States of the Community should be considered a priority matter .
a right should be granted to authors of works embodied in sound and video
recordings / to the producers of such recordings and to performers whose
performances have been fixed thereon .
Many details could probably best be
settled at national level , preferably by contractual arrangements between
This would probably apply, for example , to the
the interests concerned .
questions of how the royalty income from rental where authorized should be
shared between the various right holders and what mechanisms may be needed
On the other hand , the
to handle demands for licences authorizing rental .
scope of the right should be defined at Community level in order to avoid
undue distortions .

Such

A choice has to be made in this context between a right to authorize rental
and a right to equitable remuneration as provided at present by German law .
Each solution has different advantages and disadvantages , but at present the
right to authorize rental appears to be the most appropriate .
The trend in
technical development is towards recording and copying facilities that
readily and cheaply produce increasingly high quality copies and which
permit the use of pre-recorded material by numerous users without
deterioriation . This trend is likely to lead to rented products having an
increasing market share .
by charging more for their products ,
available for rental , is limited and , in any case , higher sales prices
prejudice the consumer and tend to operate in themselves as an incentive to
rental and to copying .
holders to decide on the extent to which their products would be marketed by
rental or sale on the basis of commercial considerations including the
probable impact of one form of marketing on the other .
remuneration would be far less satisfactory from this point of view and
would inevitably involve the uncertainty and complexity of procedures
designed to determine what is equitable remuneration in any given case .

The ability of right holders to protect themselves
particularly those intended to be made

A right to authorize rental would enable right

A right to equitable

- 165-

4.10.8 .

It seems appropriate to suggest a duration of the rental right of 50 years
to be calculated from the end of the year in which the recording was made in
accordance with the legislative trend in Member States in respect of the
reproduction of recordings .

4.10.9 .

Since the problems currently arising are a consequence of commercial
lending , no need appears to arise to extend the scope of the right to
including free lending , for example , by public libraries .
Community action to commercial lending , Member States are also left the
discretion to make appropriate arrangements in respect of other
non-commercial lending of sound and video recordings , as for example
lending to educational institutions .

By restricting

4.11 .

Summary

4.11.1 .

The Commission considers that the increasing penetration of compact discs,
which do not deteriorate by frequent use, entails the risk that the author ,
the performer and the phonogram producer may suffer economic damage by the
unauthorized commercial rental of sound recordings .

This risk should be countered by the introduction in all Member States of a
right for the author, the performer and the phonogram producer to authorize
the commercial rental of sound recordings .

4.11.2 .

As far as video recordings are concerned, the economic interest of the
producer of the cinematographic work so recorded makes it necessary to
guarantee him the right to choose the time and place to exploit his work by
performance in movie theatres and by commercial rental . The right to
authorize the commercial rental of videograms , as laid down in the
legislation of some Member States, should be generalized .

4.11.3 .

There appears at the present time to be no need for the introduction of a
general right for authors to control other elements in the commercial
distribution of copies of their works .

4.12 .

Conclusion

- 166-

4.12.1 .

The Commission intends to submit to the Council a proposal for a directive ,
to be based on Article 100A EEC , to introduce a rental right for sound and
video recordings in all Member States of the Community . Comments are
invited on whether this right as suggested should consist of the right to
authorize rental or should be restricted to the right to receive equitable
remuneration .

4.12.2 .

Comment is also invited on the conclusion drawn in this chapter that the
other issues of a broad distribution right and a harmonisation of
exhaustion provisions do not appear to call for legislative initiatives at
Community level at the present time .

4.13 .

Timetable for submissions

4.13.1 .

Comments on Chapter 4 should be submitted to the Commission no later than
1 December 1988 .

- 167-

See for Denmark , section 2 of Law on Copyright no . 158 of 31 May 1961 with
later amendments , for Germany, article 16 of the Copyright Law of 9
September 1965 with later amendments , for Italy , article 12 of the
Copyright Law no . 633 of 22 April 1941 with later amendments , for the
Netherlands , article 12 of the Copyright Law of 23 September 1912 with
later amendments and for Portugal , section 67(1 ) of the Code 45 / 85 of
Copyright and Related Rights of 17 September 1985 .

See article 17 of Ley de propiedad intelectual no . 22 / 87 of 11 November
1987
Boletin Oficial del Estado no . 275 of 17 November 1987 .

See A. Dietz , Copyright Law in the European Community , 1978 , para . 233 ;
and Copinger and Stone James , Copyright , twelfth edition, 1980 , paragraph
495 .

See A. Dietz , op . cit . paragraphs 233-234 ; and Gotzen , Het
bestemmingsrecht van de auteur , 1975 , p . 17 et seq .

5

6

7

8

9

10

11

12

13

14

15

16

17

A. Dietz , op . cit. , para . 231 .

Article 19 loc . cit .

Centrafarm et al . v . Sterling Drug ,

( 1974 ) ECR 1147 .

Centrafarm v. Winthrop ,

( 1974 ) ECR 1183 .

Deutsche Grammophon v . Metro - SB - Grossmärkte ,
( 1981 ) ECR 147 .
Musik-Vertrieb Membran v . GEMA ,

( 1971 ) ECR 487 and

loc . cit .

loc . cit .

Coditel v . Ciné-Vog Films ,

( 1980 ) ECR 881 .

loc . cit

Case 407 / 85 , G. Basset v. SACEM , not yet reported . A similar problem will
be addressed by the Court in its judgement on the pending Case 270 / 86 M.
Cholay , Societe Bizon 's Club v. SACEM .

Case 158 / 86 , Warner Brothers Inc , and Metronome Video Aps v. Erik Viuff
Chri stiansen .

A. Dietz , op . cit. , para 236 .

Proposal for a Council Directive on the coordination of certain
provisions laid down by law , regulation or administrative action in
Member States concerning the pursuit of broadcasting activities of 6 June
1986 , O.J. No .

C 179 of 17 July 1986 , p. 4 .

-168-

For example , see A. Dietz , toc , cit ., paragraphs 227 and 250 et seq.

A. Dietz , Loc . cit . paragraphs 250-258 and Community action in the
cultural sector , Bulletin of the European Communities , Supplement 6/ 77
paragraph 26 .

New technical development such as the development of the compact disc
read only memory ( CD-ROM ) could alter this situation but it cannot be
assumed that it will .

See for example G. Davies , Piracy of Phonograms , second edition 1984,
Commission Document SG / Culture / 52 / 84 , pages 111 to 112 . See also Report
of the Group of Experts on the Rental of Phonograms and Videograms ,
UNESCO - WIP0 , November 1984 , UNESCO / WIPO / GE LPV.1 / 6 .

A. Dietz , op . cit . , paragraph 231 .

See Article 12 of the Copyright Law of 23 September 1912 and A. Dietz ,
op . cit . paragraph 231 .

See the Recording and Rental of Audio and Video Copyright Material ,
February 1985 , Cmnd . 9445 , page 11 .

See Rental of Videograms and Phonograms prepared by the International
Federation of Producers of Phonograms and Videograms ( IFPI ) for WIP0 and
UNESCO . Doc . UNESCO / WIPO / GE / LPV 1 / 2 , Paris 30 August 1984, paragraph 44 .

See for France Law no . 85-660 of 3 July 1985 , Article 21 and for Portugal
Law no . 45 / 85 of 17 September 1985 , Article 184(1 ) and 176(8 ). The
provisions in article 190 of the law which restricts application of the
protection will not be discussed in this context .

Standard Contract drawn up by the International Federation of Producers
of Phonograms and Videograms and the Bureau International de I'Edition
Mecanique .

See decision of 6 March 1986 of the Bundesgerichtshof in case 1 ZR
208 / 83 , GRUR 1986, page 736 .

STEMRA v. Free Recordshop . The decision by the High Court reported in NJ
1986 Nr . 206 is at present before the Supreme Court ( Hoge Raad ).

For details on film copyright , see paragraphs 2.6.5 . to 2.6.9 . of
Chapter 2 on Piracy .

Bill no . 282 of 29 May 1986 submitted to the Senate by Mr. Desmarets and
others . See also Bill no . 615 of 18 July 1987 submitted to the Senate by
Mr. Lallemand and others .

The Copyright , Designs and Patents Bill ( H.L. 12 ).

See in particular the Community 's broadcasting policy, Proposal for a

( 12)

- 169-

Council Directive concerning broadcasting activities , Bulletin of the
European Communities , Supplement 5 / 86 point 16 and Action Programme for
the European Audiovisual Media Products Industry , C0MC86 ) 255 final of 12
May 1986 .

34

loc . cit .

- 170 -

CHAPTER 5 : COMPUTER PROGRAMS

5.1 .

Subject natter

5.1.1 .

5.1.2 .

A computer program is a set of instructions the purpose of which is to
cause an information processing device , a computer , to perform its
functions . While more complicated definitions have been attempted
simple description will suffice for the purposes of the present discussion .

, this

1

The program as such will frequently be accompanied by supporting
documentation in a "package ". In addition , its development will have
involved the creation of the necessary preparatory design material . The
program together with the supporting and preparatory design material
constitute the " software". The legal protection of the supporting and
preparatory design material may raise similar issues to those raised by the
protection of the program itself as regards both the availability and scope
of protection .

5.1.3 .

Computer programs are of different types and can be classified in different

ways .

5.1.4 .

Operating systems control the internal functioning of the computer , while
application programs direct it to perform particular functions for the
user . If the application program is designed for a software developer , a
professional user rather than the typical end user , it is often described
as a " tool ". Until recently application programs have normally required to
be loaded into a computer prior to being used . However , it is becoming
increasingly common for certain application programs to be incorporated in
the computer hardware, for example, data base management programs . The
distinction between operating systems and application programs is thus
eroding and this trend seems likely to continue .

- 171 "-

5.1.5 .

Programs in object or machine code are expressed in binary digits , while
source code programs are expressed in some other form and are automatically
translated into binary digits by a computer 's compiler .

5.1.6 .

Finally , programs can be classified according to the different media on
which they are fixed , including paper tape , punched cards , magnetic tape
and discs , optical discs , as well as integrated circuits (" firmware ").

5.1.7 .

Unless otherwise indicated , in this chapter , the word " program " signifies
all computer programs however they may be classified .

5.2 .

The economic , industrial and technological context

5.2.1 .

The importance of computer software to the Community 's economy and its

industrial and technological future is quite apparent .

5.2.2 .

First , from a quantitative point of view , the world software industry is
already large and will continue to expand . Information concerning this
industry and its development is necessarily fragmentary . The following
indications will serve , however , to give an impression of its main

features .

5.2.3 .

Commercial software sales amounted in 1985 to between 30 and 39 billion

dollars , the higher figure including an adjustment for distribution costs .
Since such sales figures do not include developments by users for their own
purposes , the total annual output of the industry can be assumed to have a
significantly higher value .

5.2.4 .

The largest software market is found in the United States which is about
half the size of the world market and about 50% larger than the market in
Western Europe . Since the United States imports relatively little software ,
while its industry exports on a considerable scale , with exports of package
application programs expanding significantly in recent years , the US share
of the world market amounts to at least 70% .

5.2.5 .

5.2.6 .

5.2.7 .

5.2.8 .

- 172 -

The Japanese software market is at present comparatively small at about 5
billion dollars . Japanese business attitudes and language difficulties are
reflected in an almost exclusive demand for custom software and an
industrial policy that aims for a mass market in software development
systems . If this policy is successful , Japan could be a world player in
software markets within a decade .

The Western European software market was valued in 1985 at 9.5 billion
dollars of which 5.1 billion , or 54% , were derived from sales of package
software . Package software sales are growing fast . They are led by packages
for micro-computers which are at present growing at 30% per annum , having
expanded by as much as 40% to 50% per annum in the recent past . Overall ,
software demand is currently stronger in Europe than in the USA which has
motivated US firms to increase their sales and developments through
subsidiaries and joint ventures in Western Europe .

Indeed , the dominant suppliers of software in Western Europe are of US
origin . Taken together , US firms in 1985 supplied in the region of 65% to
85% of the Western European market for system software depending on the
class and about 55% of the market for application software .

It is also striking that computer hardware manufacturers are the largest
suppliers , even in the case of package software . Amongst the computer
hardware firms , IBM leads the field with a 41.5% share of the package
software market in Western Europe ( 1985 ). IBM 's main contenders are Hewlett
Packard , DEC , ICL and Bull with shares between 4.3% and 4% , followed by
Siemens , Olivetti and Nixdorf with somewhat smaller shares of between 3.4%
and 3.3% . The largest and most dynamic firms not involved in hardware
production occupy positions much lower down the scale , ranking between
tenth and twenty-fifth in relative importance : Computer Associates ,
Software AG , Cullinet , Microsoft , Ashton Tate , Cincom , Lotus and Scicon
Internati ona l .

5.2.9 .

5.2.10 .

173 -

As to developments in the future , some informed commentators^ believe that
the growth of package software will continue into the 1990‘s , at the
expense of custom software and processing services . This opinion is not
shared by all . In fact , a few software houses , notably in France , believe
that they and their customers will be better off if they serve the growing
demand for integrated solutions by supplying application programs that are
more easily adaptable and portable than they were in the past . Such
programs must also be produced more quickly and cheaply than in the past ,
by means of raising the number of re-usable program elements or modules . In
their view , suppliers will have to assemble the necessary skills and offer
a host of professional services including market research , business
consultancy and user training in order to maximize value added .
Developments in other Member States suggest that this view may well be

cor rect .

Uncertainty also prevails as to the extent to which reliance on proprietary
as opposed to freely accessible standards will affect the market position
of software suppliers . At one level , free worldwide standards reduce
investment risk . This is demonstrated , for instance , by POSIX - a standard
set of interfaces between UNIX and similar operating systems and the
application programs that run on these systems . Existence of POSIX now
allows independent software producers to develop application software with
the knowledge that this software will " fit " a range of installations
irrespective of the version of the operating system being used . Conversely
it is said that some computer makers aim to restrict the use of operating
systems to their own products and to sell as much application software as
possible . By withholding interface information for their products , they may
delay or prevent competitive software from being developed . It was
precisely such considerations which , in 1984 , led the Commission to insist

5.2.11 .

5.2.12 .

- 174 -

that IBM undertook ( ref . Bulletin of the European Communities 10-1984, page
96 et seq .) to identify the interface to be used by any competing product
and give access to the relevant interface information . It has also been
claimed that "proprietary standards " distort competition in the software
markets , but the degree of distortion is difficult to measure because data
about software activities are notoriously poor . The matter is clearly of
sufficient cause for concern that it must be kept under close examination .
Some important aspects of this problem are considered in paragraphs 5.5.8 .
to 5.5.12 . below .

Whatever the outcome , it is nevertheless clear that , in the future ,
software will increasingly constitute the most important component of
computer systems , with the hardware consisting increasingly of similar ,
standardized interoperable components . These systems will be of vital
importance in all sectors of the economy . To retain its place in the
forefront of technical advance , and indeed to maintain its competitiveness
generally, the Community will accordingly have to ensure that it has a
competitive , dynamic software industry .

At the present time , however , there is little room for complacency on this
score since , though particular European firms may well be very successful
in their particular niches , overall , the industry is characterized by the
predominant position of US suppliers , in both the world and the Community
markets , especially as regards operating systems . US computer manufacturers
have a technological lead as regards much computer hardware . Operating
systems are often supplied together with the hardware . This "bundling" of
the software and hardware inevitably helps them to maintain their
predominant position . As regards application programs , users have a much
greater degree of freedom to choose their suppliers and , unsurprisingly , it
is in this field that European firms have found it easier to invest in the
development of competitive products and so increase their market share .

- '75 -

5.2.13 .

Given the late start of the Community 's software industry compared to that
of its principal competitors, it is particularly important to ensure that
appropriate legal protection is available to computer programs and software
generally , which will contribute to an environment favourable to investment
and innovation by Community firms , thus permitting the Community industry
to catch up with its competitors . Further , in debating the scope and term
of protection , a correct balance should be found between the benefits
protection gives to software producers and the " opportunity costs" it may
impose on software users in the form of the range and price of software
products available to them .

5.3 .

The legal response

5.3.1 .

Until recently , the development of computers and their associated programs ,
which has been under way for many years , had not produced widespread
legislative change in intellectual property laws . Part of the explanation
for this inactivity lies in the fact that , until a short time ago , access
to programs was on the whole limited to more professional users in a direct
relationship with program developers . This permitted many problems to be
resolved satisfactorily on a contractual basis . At the same time , in the
industrialized world , programs were not only protected contractually , but
were widely considered to be eligible for protection under the existing
provisions of copyright and , to a lesser degree , patent laws . The exact
scope of this protection might well not be completely clear , but to the
extent that case law was expected to clarify progressively the application
of the law , there was a natural reluctance to embark on legislative
initiatives which might prove to be unnecessary . In addition , if the
protection of programs developed on the basis of existing instruments ,
national and international , it might be possible to avoid putting at issue
valued principles which would run a greater risk of being questioned in the
context of more comprehensive legislative reform .

5.3.2 .

5.3.3 .

- 176 -

Accordingly , until recently in the Member States , attention focused on the
application and adaptation of existing laws to the particular characte¬
ristics of software rather than on the promotion of new legislative
solutions .

4

As regards patent law , the common starting point has been the assimilation
of computer programs " as such " to those forms of innovation , such as
mathematical methods and presentations of information , that are not
regarded as patentable inventions
. But this point of departure has not
eliminated patent protection for programs to the extent that might appear
at first sight . For where a program forms part of an invention that , taken
as a whole , meets the criteria for patentability , patents have indeed been
granted and upheld by the courts . The Paris Court of Appeal , for example ,
held in 1981 that an invention permitting the analysis and recording of the
physical characteristics of the earth 's strata , including its oil-bearing
potential , should not be refused protection simply because certain steps of
the procedure were directed by a computer program3 . Similar approaches have
been adopted in several Member States . In addition , the European Patent
Office has re-examined its practice in this matter and adopted new
examination guidelines in 1985 which , among other things , are designed to
ensure that an invention which , taken as a whole , has a technical character
and meets the normal criteria for patentability , may be patented even if
the subject matter claimed includes a computer program^. Nevertheless, the
restrictive criteria that must be met to obtain a patent monopoly are
undoubtedly such that many programs representing a considerable investment
are not patentable probably because the technical character of an invention
is absent , no change being produced on matter or energy in the physical
world . Even where a computer program does form part of an invention having
this technical character , the required level of inventiveness may not be
reached . In any event , to obtain patent protection , procedures have to be
followed and charges paid . These can result in potential right holders
failing to secure the legal protection of their work .

5.3.4 .

5.3.5 .

5.3.6 .

- 177 -

These limitations of patent law have emphasized the potential role of
copyright in the broad sense , that is , authors' rights and neighbouring
rights as the primary means for protecting computer programs both at the
level of Community Member States and at the international level . The
scepticism expressed by some in the sixties and seventies in respect of the
extension of " copyright " protection to this new kind of work , gradually and
in parallel with an increasing understanding of the similarity between a
computer program and a literary and artistic work , has been replaced both
at national and international level by a general acknowledgment of the
advantages for creators , right holders , users and society as a whole of a
" copyright " solution to the problem of ensuring adequate protection of
programs against unauthorized reproduction .

Indeed , so strong had the preference for a copyright solution become , that
the 1983 session of the World Intellectual Property Organization ( WIPO )
group of experts pursuing the work started in 1979 to consider the
protection of computer programs at the international level , recommended
that the conclusion of a special treaty giving sui generis protection to
computer programs should not be pursued for the time being . Instead , it
noted the suggestion that WIPO and UNESCO , the two bodies responsible for
the main international copyright conventions , should further study the
protection available for computer software under existing copyright laws
and treaties and should convene a committee of governmental experts for
this purpose .

On this basis , work on the protection of computer programs has been
continued at the level of the competent international organizations . The
session convened by WIPO and UNESCO in February 1985 may well be considered
to have failed to achieve universal recognition of the existence of
protection systems founded on the application of copyright laws . Neither
did it obtain a general consensus on the desirability of the introduction
of copyright protection where not already applicable . It did , however ,
demonstrate that copyright protection against unauthorized reproduction of
computer programs already exists in most industrialized countries , and
among those , nearly all Member States of the European Communities .

- 178 -

5.3.7 .

Indeed , the record demonstrated that in Member States , case Law has
increasingly recognized the application in principle of copyright to
computer programs and the other forms of expression , such as supporting
documentation , that together constitute the software family .

Q

5.3.8 .

In recent years , legislation has also been proposed or adopted in many
Member States , but essentially to confirm the trends in case law rather
than to modify them substantially .

5.3.9 .

9

10

amends the copyright law so as to

the term of protection . In France , the law of
provides that computer programs shall figure among the works

In Germany , the law of 24 June 1985
assimilate programs for data processing to literary works , including for
the purposes of determining
3 July 1985
protected under copyright law , albeit subject to particular provisions
including a limitation of the term to 25 years from creation .
In the
11
United Kingdom , the Copyright ( Computer Software ) Amendment Act 1985
was
enacted in order to make it clear that computer programs attract copyright
protection . Most recently Spain has provided for explicit copyright
protection of computer programs by its comprehensive copyright law of
. 13
,
1987
Italy
have also announced that they will favour copyright as an appropriate
vehicle for protecting computer programs . In Portugal , learned opinion
considers computer programs to be covered by the notion of " Intellectual
creation " in Article 1 of the 1985 Code on Copyright and Related Rights
,
though they are not mentioned in the examples specified in Article 2 . Only
in Greece^ do there appear still to be doubts about the desirability of
protecting software in this way .

. Similar legislative initiatives are being taken in Denmark
14 . 15
, the Netherlands

. The governments of Belgium

16 _ 17
and Luxembourg

...... . .

.. .

, „

12

18

19

.

.

5.3.10 .

5.3.11 .

- 179 -

In brief then ., the Member States have generally taken the view that the
legal protection of computer software should reside primarily in the
application of copyright laws in the broad sense with the patent system
playing a more limited and ancillary role in the case of inventions
It is also generally recognized that the laws
involving computer programs .
of contract , trade secrets and unfair competition have important roles to
play , though legislative reform is not generally considered to be necessary
in these areas in the immediate future . Copyright laws , on the other hand ,
are the subject of critical comment in their application to computer
programs and the European debate is now focusing on the modifications that
may be desirable to take account of the particular characteristics of
computer programs and the needs of Community industry both within and
outside the data processing sector . In order to broaden the activity base
of the software industry , the Community and the governments of the Member
States have committed themselves to IS0 / 0SI standards in data processing .
The need to provide for more uniform protection in the Community has also

become apparent if industry is to take full advantage of its large internal

market .

In order to take advantage of this market , industry needs comparable
operating conditions in the Member States . Commercial developments such as
the advent of personal computers have underlined the need for specific
legal provisions and interpretations of the laws . Small computers are being

mass marketed like other consumer durables as is the software with which

they operate . Programs in the form of tapes and discs are sold like books
or records over the counter and the ability of the developer to protect
himself contractually has been much reduced . The incomplete evolution of
legal systems through case law and practice in some jurisdictions is
increasingly seen as a handicap by comparison with clear legislative
provisions adopted , for example - as regards copyright in computer programs ,

in the United States of America

21

.

It should be noted however that recent

American experience suggests that even if specific legislative provisions
are enacted , difficult questions of interpretation will remain to be
solved . One important example is discussed in paragraph 5.5.11 . below .

- 180 -

5.3.12 .

Given the fact that these questions of interpretation will take time for
the courts to resolve . Outstanding issues may be dealt with by agreement or
by means of arbitration procedures . Such approaches may permit relatively
detailed settlements to be reached quite quickly and in a way which takes
largely into account the interests of those directly concerned , as has
recently been demonstrated by the arbitration involving IBM and Fujitsu in
the United States^.

5.4 .

Coraunity involveaent to date

5.4.1 .

The Commission has monitored developments concerning the legal protection
of software both within and outside the Community over a number of years .
It has also participated in the meetings of the WIP0 committee of experts
and in discussions in other international fora . It has in addition

consulted experts and organizations interested in the question including ,
representatives from major European Information Technology companies ,
UNICE , the European Computing Services Association ( ECSA ) and the
Confederation of the European Computer Users Associations ( CECUA ). On the
basis of this involvement , the Commission concluded that a directive on the
legal protection of computer programs was a necessary step for the
completion of the internal market . Consequently , in its White Paper
23
" Completing the Internal Market "
, it undertook the commitment to submit
to Council before the end of 1987 a proposal for a directive on the legal
protection in Community Member States of computer programs . Though delayed
for technical reasons , the proposal will be submitted to Council as rapidly
as possible .

- 181

5.5 .

Copyright : the focus for a Community initiative

5.5.1 .

It is suggested that the directive be based on the following principles .

5.5.2 .

No action appears to be called for at this time in relation either to

patent law or to trade secrets and contract laws . As regards patent law , as
previously mentioned , the European Patent Office in 1985 amended its
guidelines on examination in the field of computer programs to make it
clear that inventions having a technical character may be patentable even
if they rely on computer programs to achieve their effects . Similar
developments are occurring in the Member States . The Commission considers
this kind of evolution to be desirable and hopes that all national patent
administrations will adopt a similarly liberal approach . No formal
Community initiative seems to be necessary at present . Likewise in relation
to trade secrets and contract law , the situation in the Member States seems
relatively satisfactory and legislative action at Community level is not at
present needed .

5.5.3 .

Similarly , no legislative initiative appears necessary as regards contract
law though its importance in this field is often underestimated . Guidelines
for software suppliers and users might well prove useful , however , and
commercial practices be developed which , once they become widespread , will
acquire the character of rules which might be applied failing other
arrangements . The Confederation of European Computer Users Associations and
some national associations are examining the possibility of drawing up
guidelines in this area .

5.5.4 .

From time to time , the possibility is raised of protecting computer
programs by means of technical devices . Devices developed recently may
prove more effective than they have in the past . At this stage , however ,
further experience is needed of their use in practice . No Community
initiative is accordingly suggested at the present time .

- 182 -

5.5.5 .

As to copyright and neighbouring rights , the basic question whether their
application to protect computer programs is in principle desirable , is
generally being answered in the affirmative . Those who have argued that
such protection is either inadequate or excessive have not been vindicated

by events .

5.5.6 .

As to the suggestion that copyright is insufficient , some European voices
have indeed suggested in the recent past that protection against copying is
insufficient and that a true monopoly right , analogous to a patent , is
needed . They have suggested that the limitations of copyright , in
particular the principle that it protects the form in which ideas are

expressed rather than the ideas themselves , render it a less than
completely adequate solution . The application of the principle to computer
software leads to the conclusion that while programs are protected , their
underlying logic or algorithms are not . To the extent that the basic
concepts can be expressed differently , programs can thus be developed to
achieve the same results . This has led some to propose that a new form of
protection be adopted , alongside copyright , to grant exclusive rights in
new algorithms involving an inventive step . Such protection would in many
ways be analogous to patent protection being dependent on registration and
giving an effective monopoly for a fixed period in the region of 20 years
as to the algorithms in question .

24

5.5.7 .

183 -

However , this approach has not met with general approval . Many in the data
processing industries indicated their doubts about the desirability of such
protection , in particular , the risk that the development and use of
programs might be stultified by the creation of monopolies in concepts
having a mathematical or scientific character and as such unprotectable
under any intellectual and industrial property protection system . This
danger that the development and use of programs might be stultified is said
to be greater since the number of useful algorithms appears in all
probability to be limited . A broad consensus has emerged that competition
would be severely impaired , if " independent invention " of programs having
essentially the same functions of existing programs but developed without
undue " inspiration " by existing programs and expressed in a different
manner and " reverse engineering " were to be prevented . Interestingly , the
same conclusion has been reached in the context of recent developments
concerning the protection of semiconductor designs in the main producer
countries .

5.5.8 .

As to the question of whether copyright protection can itself give an
excessive degree of protection that is damaging to competition in the data
processing industry and to the spread of computer technology , a definitive
answer cannot be given at the present time but should soon emerge as more
experience is gained both in the USA and in Europe .

5.5.9 .

5.5.10 .

5.5.11 .

- 184 -

For example , the problem of " access protocols " and interfaces has been
raised . These must be used in the exact form in which they were first
expressed if newly developed software or hardware is to operate compatibly
with software or hardware already on the market . It has been argued that
copyright could create an undesirable monopoly not only of the access
protocol itself but of the entire segment of the systems market that
depends on its use . The development of compatible programs , which is
desirable from the point of view of both competition and industrial policy ,
would be impeded if competitors were prevented from integrating into their
product range protocols or interfaces that are gaining wide support as
likely international standards . The same would apply if protocols or
interfaces were technically available, but only at a licence fee that only
the largest of competitors can afford . Because of the severe consequences
effective monopolies in such software would have for communications and
industry at large , the specific exclusion of protocols and interfaces from
25
.
copyright and similar protection is being debated in interested circles

Similarly , the allegation is sometimes heard that copyright protection
makes it so difficult to create compatible systems without at least the
appearance of copying that , quite apart from the particular problem of
access protocols and interfaces , the legitimate development of compatible
systems will be impeded and desirable competition will be stifled . This
applies particularly to the systems software and business applications
markets .

At present , the extent to which the copyright laws of the Member States
might permit program developers to prevent others using access protocols
and interfaces or developing compatible programs is unclear . In any case ,
it might well be that in situations as described in the foregoing
paragraph , where the exercise of copyright as to access protocols or
interface specifications is likely to create and increase market dominance,
such exercise would be accompanied by other factors so that an abuse of a
dominant position may be established under the relevant competition laws .

5.5.12 .

185 -

Much will probably depend on how successfully the courts manage in concrete
cases to resolve the level of abstraction problem and so achieve a
reasonable balance between the interests of right holders in existing
programs and of persons who can show that they have independently developed
programs to achieve similar results to existing ones . While copyright
protection reaches beyond the form of the program , in object or source
code , to include preparatory material such as the program description ,
there comes a point at which a claim for protection is a claim to an idea
rather than the expression of that idea . For example , a mathematical
formula to solve a particular problem can be implemented in a program in
many different ways . Each implementation can provide the same result or
output given identical values for the initial variables or input . But the
performance of the different implementations will vary , perhaps
considerably . Copyright should protect the manner of the implementation ,
and hence its particular advantages in terms of performance , and leave the
formula to be implemented by anyone . As courts become more familiar with
the subject matter , they should be able to develop case law on what
constitutes copying in this field just as they have in more traditional
fields . Copyright court cases have multiplied in the USA and so have the
number of interpretations as to the scope of protection . At this stage , in
the Community , there is not yet enough experience that would allow one to
conclude that copyright laws need modification . If problems should arise ,
then methods could be found for dealing with them either within the
relevant intellectual property laws themselves , through suitable
non-voluntary licensing provisions or , in whole or in part , through the
application of competition and standardization policy .

5.5.13 .

The Commission is of the opinion that from the point of view of fundamental
economic policy , protection against copying of software by copyright or a
neighbouring right seems correct and should be accorded by the Member
States of the Community as a whole . After the Commission has taken a
position on the question of principle , attention needs to be given to a
consideration of what parameters may be needed to ensure sufficient
convergence in the systems that will be applied in practice by the Member

States .

5.6 .

Clarification and adaptation of existing copyright regimes

- 186 -

5.6.1 .

As regards clarification and adaptation of copyright regulation , the
following matters have been said to merit consideration : the availability
of copyright protection to computer programs , including requirements as to
fixation ; beneficiaries of protection ; the scope of protection, that is ,
restricted and unrestricted acts , including possible provision for fair
dealing or other exceptions from the exclusive right of the copyright
owner ; the term of protection ; authorship , including the employee author
and the self-employed author producing for remuneration ; the protectabi lity
and authorship of computer generated programs ; moral rights ; and problems
of proof .

Availability of protection

5.6.2 .

26

While judicial decisions in several Community jurisdictions have recognized
, and learned opinion
that computer programs are protected by copyright
generally supports this conclusion , nevertheless a degree of uncertainty
remains and will continue to do so until resolved by a series of
authoritative decisions of final courts of appeal . This uncertainty should
be removed by means of legislative clarification on the basis of a
directive explicitly protecting computer programs under copyright law in
the broad sense .

5.6.3 .

5.6.4 .

Originality and independent intellectual effort

- 187 -

Such a directive would not by itself necessarily ensure , however , that all
computer programs are protected against reproduction on a uniform basis in
all Member States . In every Member State , to be eligible for copyright
protection strictu sensu a work must be " original " in the sense that it is
the result of the creator 's own intellectual efforts and not itself a copy .
But in some jurisdictions , more may be required in certain cases ,

particularly where works have a utilitarian rather than an aesthetic
function . Courts may then find that work lacks sufficient creative merit or
is too modest in scope to attract full copyright protection though in some
cases this " small change "
" kleine Miinze ") may still be eligible
for a lesser form of protection designed to protect the investment of time ,

( in German ,

manpower and money

, _ 27

28

, the

In Germany , in the Inkasso Case

This tendency is more apparent elsewhere in Europe than in the United
Kingdom and Ireland and , even where it exists , it manifests itself to
different degrees as two recent decisions of final courts of appeal have
shown in Germany and in France .
Supreme Court held that programs must represent an individual , original ,
creative achievement and that this required that the form of the computer
program resulting from the selection, collection , arrangement and division
of the relevant information and statements exceeded the average skills
displayed in the development of computer programs . On the other hand , in
that
France , the Court of Cassation held in March 1986 in the Atari Case
the Paris Court of Appeals had erred in excluding a program for a computer
game on the ground inter alia that the program did not manifest the kind of
originality of expression that would confer on it the aesthetic character
necessary to attract the protection of the law on literary and artistic
property . The program should be protected without any attempt being made to
apply aesthetic criteria .

29

5.6.5 .

5.6.6 .

- 188 -

If the courts of different Member States apply standards of originality
that are substantially divergent , action may be needed to eliminate the
resulting distortions . However , at this stage , it would be premature to
exaggerate the seriousness of the problem or the difficulty of finding a
soluti on .

First , as to the seriousness of the problem, the divergence threatened by
the Inkasso Case may turn out to be less significant than might at first
sight appear . A complete reading of the judgment suggests that the Court
was in large part concerned by the need to distinguish between , on the one
hand , protectable programs and , on the other , those that consist of
elements so commonplace that they are in a sense in the public domain . If
the judgment , when applied in concrete cases , means no more than the
exclusion of such commonplace elements from the protection of the copyright
law , the divergence between the legal situation in Germany and that in many
other Member States will not be very significant .

5.6.7 .

If nevertheless significant divergences persist a solution may already be
to hand in the provision of the recently adopted directive on the legal
protection of topographies of semiconductor products^. The text reads as

follows ( article 2(2 ))

:

a

of

product

semiconductor

intellectual effort

" The topography
protected
insofar as it satisfies the conditions that it is the result of its
and is not commonplace in the
creator 's own
a semiconductor
semiconductor industry .
product
the
it shall be protected to the extent that
semiconductor industry ,
the combination of such elements ,
fulfils the
above mentioned conditions ".

Where the topography of

taken as a whole ,

commonplace

elements

consists

shall

that

are

be

of

in

A similar provision seems adequate also for the forthcoming directive on
the protection of computer programs .

F i xat ion

189 -

5.6.8 .

Programs may well be expressed in conventional written form on paper but ,
as already indicated , they may also be stored on magnetic tape and magnetic
or optical discs or even as a pattern of electrical charges on a micro -

circuit or chip . Indeed these less accessible forms are becoming the normal
medium for recording software . Copyright laws should therefore make clear

that protection extends to programs fixed in any form

31

Scope of protection : restricted acts

5.6.9 .

The particular nature of computer software and its typical use must be
taken into account when assessing which forms of uses must be regarded as

restricted acts for which the permission of the author is mandatory . The
restricted acts applying to traditional works are not always perfectly
adapted to software . Accordingly , consideration might well be given to the
adoption of specific provisions clearly defining the content of the rights
in question in the software context .

5.6.10 .

- 190 -

Restricted acts : reproduction , translation , adaptation and use

It is frequently recommended by the

Of the traditional rights , those most obviously relevant to software appear
to be copying the work in any material form from which it can be reproduced
and making , reproducing , or publishing an adaptation of the work including
translations of programs from one code to another . One particularity of the
use of a computer program lies in the fact that , for technical reasons , its
normal use necessarily involves operations of such kinds . In a typical
case , a user receives the computer program on a machine-readable medium
such as a floppy disc or magnetic tape .
software supplier that the user makes a back-up copy of the software . The
copy delivered by the software producer may well no longer be necessary
thereafter . It is kept for security reasons in case of a defect in the
computer . For the program to be used , it has to be transferred into the
memory of the computer , which means it has to be copied . After this first
and complete reproduction , the program is copied many times , although only
in parts , whenever the program is run on the computer : when it is
transferred from the program library into the main memory ; when individual
program instructions are transferred to the Central Processing Unit ( CPU );
or when units of information are made visible on the screen or printed on
paper . The use of a computer program for the purpose it is intended to
serve is not conceivable without constant reproduction , adaptation and
possibly even translation , and hence the execution of restricted acts .

5.6.11 .

It is clear that authorized use of a program under a licence agreement
implies authorization for reproduction , adaptation and translation of this
kind , without which the program could not be used for its intended purpose .

5.6.12 .

On the other hand , by virtue of such comprehensive rights to authorize
reproduction , adaptation and translation , the right holder is entitled

191

5.6.13 .

under copyright law to restrict the use made of a program by reference to
the purpose , time or place of such uses . For example , sophisticated

software is often licensed only for use on a specified individual computer .

Some manufacturers do provide " site " licences , which authorize the licensee

to run the program on any and all machines which are located in the same

room or on the same premises . Those restrictions appear justified , since

they are intended to ensure that the licensor obtains a licence fee which
corresponds to the extent of the use made by the licensee . Without it ,
large users in particular could profit unfairly from one licence fee , in
view of the ease of reproduction and of multiple use .

These rights might be thought to be less appropriate , and indeed unlikely
to be in practice enforceable , as far as mass-marketed packaged software is
concerned . This kind of software is sold rather than licensed , although
many suppliers try to maintain the character of a licence agreement .
Typical restrictions on the user provide that he is only allowed to use the
program on one computer at a time and that he is authorized to pass on the
licensed material to a third party under the condition that he does not
retain a copy of it and no longer makes use of the software . This reflects
the need for the supplier to impede the simultaneous use by more than one
user of a program for which only one fee has been paid . On the other hand ,
the authorization to transfer the software to other parties pays tribute to

the sales-like character of the marketing of this type of software and to

the public interest in its free circulation .

5.6.14 .

a broad use right , either formulated as such or resulting from

In brief ,
rights to authorize reproduction , rental , adaptation and translation , seems
appropriate given the way software is used in practice . It provides the
legal foundation for relating the remuneration received by the right holder
to the use being effectively made of the program . At the same time ,
authorization to use a program must necessarily imply authorization for all
acts inherent in any such use .

5.6.15 .

Restricted acts : adaptation to improve performance

- 192 -

Attention must be given also to certain adaptations other than those
necessarily inherent in the normal running of a program , namely those by
authorized users for their own purposes . Much software is continually
adapted by its users to improve its efficiency in the context of their
particular activities . On the other hand , the right to authorize
adaptations can be considered a normal feature of copyright . A balanced
solution is required which takes proper account of the interests of both
users and suppliers . The right holder 's authorization should be necessary
for adaptations which conflict with the normal exploitation of his rights ,
for example , where adaptation involves the translation of substantial parts
of a program to enable them to be run on a machine other than that for
which the program was licensed . Likewise commercial exploitation of an
adaptation should be subject to consent . On the other hand , adaptation of a
program to improve its efficiency when used within the scope of the basic
licence provisions agreed between user and supplier should be considered as
a legitimate and even necessary aspect of a user 's right to use the program
for the purposes for which it was acquired . The supplier 's consent should
not be needed or is rather to be conclusively presumed . It would , however ,
be appropriate for suppliers of software under commercial contracts to
require that they be informed of any adaptations that are made so that they
have the opportunity to check that these fall within the basic scope of the
licence . Further suppliers' service and maintenance obligations and
warranties may well be modified by a user 's modification of the program .

Reproduction for private purposes

5.6.16 .

Member States of the Community have , in different ways and to varying
degrees , made use of the discretion given to States by Article 9(2 ) of the
Berne Convention , to allow reproduction of works without the right holder 's
authorization in special cases . Reliance has frequently been placed on this
provision to permit reproduction for private purposes .

5.6.17 .

193 -

The recent German , French and Spanish Legislation , however , does not apply
the normal licence for reproduction for private purposes to computer
programs . The reasoning behind the provisions is not so much the wish to
ban genuine private copying which , in any case , cannot be policed , but to
accord producers the necessary substantive rights to be able to proceed
against " semi-private " reproduction , which can be described as the
reproduction and exchange of programs within organizations and enterprises ,
between residents at universities , by members of computer clubs , and so on .
In addition , the arguments used to justify private copying of audio-visual
material , such as the consumer 's need to change the support or to make
extracts or compilations of material , have little application to computer
programs . The real purpose of private copying of programs is in most cases
simply to obtain a " free " copy of a program instead of purchasing a
legitimate one .

5.6.18 .

This reasoning seems convincing . Accordingly , the directive should contain
a provision excluding private copying of computer programs in general . At
the same time , the production of a back-up copy or copies by a legitimate
user would explicitly be made permissible . Such a copy or copies would need
to be destroyed when the right to use the program expired .

The term of protection

5.6.19 .

If programs are simply protected as literary works , the length of the
period of protection , according to the copyright laws of Member States , is
at least 50 years after the death of the author . This appears to be the
position in all Member States with the exception of France . According to
Article 48 of the French law of 3 July 1985^, computer programs are
protected for 25 years only from their creation . This divergence will
sooner or later create problems in relation to free circulation of
programs . Indeed , since the French law does not contain any specific

5.6.20 .

5.6.21 .

- 194 -

provisions on the matter , programs created prior to the new law coming into
force on 1 January 1986 may be subject to the shorter term . The issue may
therefore begin to have practical consequences rather quickly as computer
programs created in the sixties and seventies in France fall into the
public domain .

The case for a term of protection shorter than 50 years frequently takes as
its point of departure the character of computer programs , particularly
operating systems , as functional devices of potentially strategic
importance to the development of the industrial economy as a whole . In this
connection, reference is made to the fact that many application programs
have in practice a very short life and represent a limited investment for
which a period of protection of 50 years is inappropriate . It stresses that
given this functional character , the term of protection should not be
longer than the minimum necessary to provide an appropriate investment
incentive to program developers . Patent duration is in the region of 20
years and , given the functional , industrial character of software , a
similar term of protection would be preferable .

The case for a 50 year term stresses that the fact that many programs have
and will probably continue to have an exploitable life much shorter than
this period is not in itself a compelling argument for proposing a shorter
period of protection . The same can be said of many other items that are
protected by copyright . In so far as programs do have a lengthy useful
life , they should be entitled to protection and in so far as they do not ,
they will simply not be used . It certainly cannot be excluded that
particular types of software, for example , operating systems , may have
useful lives of considerable length . It is hoped that the reactions to this
part of this paper will include information concerning experiences as to
the useful life of programs , proprietary and otherwise, particularly those
older than 25 years .

5.6.22 .

5.6.23 .

- 195 -

In addition to the issue of the Length of the term , its calculation from the
death of the author may one day pose practical problems since programs are
frequently collective works though often all commercial rights will have been
transferred to the enterprise for whom the authors have worked .
extremely difficult for a third party to know when the term comes to an end ,
since he will need to know the date of the death of the last surviving author .
The practical relevance of this has of course been negligible as yet .
Nevertheless , in the longer term , the issue may become important and
consideration should be given to providing for calculating the term from the
creation or first use or marketing of the program rather than the death of the
author .
technical , industrial or commercial character of much software .

Such a method of calculation might also be thought to reflect the

It may be

It would clearly be desirable from the point of view of the functioning of
the internal market in software , for all Member States to apply the same
term of protection to a given program . A persuasive case has been made for
calculating the term , whatever it is , from the program 's creation . As to
the length of the term , the choice between 50 years and a shorter term in
the region of 20 or 25 years has to be resolved in the face of
considerations pointing in opposite directions . It will be easier to
resolve in favour of the longer term the extent that future developments
establish that copyright protection will not lead to undesirable
limitations on competition in the software market ( see paragraphs 5.5.8 . to

5.5.12 . above ).

Authorship

- 196 -

5.6.24 .

In the field of authorship, software produced by employees or on commission
poses problems similar to those in other fields where collective works are
common , such as advertising . But there is little doubt that the nature of
the software industry is such that the legal situation as to authorship can
be particularly complex . Standardization of the legal starting point
throughout the Community would be the ideal solution but it cannot be said
to be essential since , as regards economic rights , matters can be

; satisfactorily regulated by agreement and the absence of a uniform solution
to this issue will not jeopardize the realization of an internal market for
computer programs . Contractual solutions are , however , facilitated if there
is at least a clear legal starting point in the jurisdiction in question .
It would accordingly be desirable for all Member States to ensure that
their law at least establishes clearly who is the right holder in the
absence of any agreement to the contrary . A minimum provision of this kind ,
which still leaves the Member States considerable freedom as to the legal
techniques that they use to resolve the problem, has been laid down in the
Council Directive on the legal protection of semiconductor topographies^.
The provision may serve as a model for a corresponding provision in the
software context .

Computer-generated programs

5.6.25 .

Increasingly in the future , computer programs will be produced with the aid
of a computer that is itself programmed to carry out certain programming
functions . The question then arises as to who , if anyone , owns the
copyright in the program that finally results from the process : those who
used the computer , those who programmed it , the owner of the computer or
conceivably all of these .

- 197 -

5.6.26 .

The basis of all copyright protectipn is the exercise of sufficient skill
and labour for a work to be considered original . The Commission inclines to
the view that it is those who use the programmed computer , which is
essentially a tool , who should be regarded as entitled to protection . This
solution has the important advantage of conferring the right on those who
are most easily identified .

Moral rights

5.6.27 .

Moral rights , that is , the right of the author to claim paternity and to
object to prejudicial modifications of his work , do not appear to have
given rise so far to significant practical problems . Nevertheless , given
their inalienable character , serious doubt exists as to the suitability of
their application to works frequently produced collectively , having a
technical , industrial or commercial character and subject to successive
modifications . At least , consideration should in the long term be given to
permitting the rights to be ceded by agreement though it should be noted
that this would necessitate modification of the Berne Convention , should it
be one day agreed that programs constitute literary works within the
It seems , however , unnecessary to include
meaning of that instrument .
provisions on moral rights in a Community framework directive at the

present time .

Beneficiaries of protection

5.6.28 .

To the extent that the Member States take the view that programs are
protected by copyright within the meaning of the Berne or Universal
Conventions , there is no strict need for a provision in a directive on
protected persons . Each Member State will protect persons from other Member
States in the same way as it protects its own citizens . On the other hand ,
it may be argued that neither of those instruments at present requires
computer programs to be protected by copyright in the strict sense . A State
taking such a view would probably consider that rights in programs under
its law should be considered neighbouring rights falling outside the scope
of any existing multilateral arrangement .

5.6.29 .

- 198 -

34

The directive need not seek to resolve the issue of whether computer
programs are to be protected by copyright strictu sensu or by a
. But if it leaves the issue open , it must then address
neighbouring right
the question of protected persons since that issue will not be resolved by
existing multi laterial arrangements . One model for so doing exists in
Article 3 of the semiconductor directive : provisions for the protection of
persons having specified links with the Community , combined with a
mechanism for extensions of protection to others . A more radical
alternative , which might avoid the need for relatively complex provisions
and procedures , would be to provide , without prejudice to the question of
whether the protection is to be classified as copyright or a neighbouring
right , that Member States shall protect nationals and residents of members
of the Berne and Universal Copyright Conventions . Provision might also be
made for programs first published in those countries . Such an approach
would have the advantage , besides that of relative simplicity , of avoiding
potential disputes with such countries , though at the cost of perhaps
granting protection in favour of some countries which do not extend
reciprocal protection . The views of interested parties would also be
welcome on the even simpler and more radical possibility of according
national treatment to all natural and legal persons irrespective of origin

or domi c i le .

Problems of proof

199 -

5.6.30 .

Problems of proof also seem to require consideration . Since copyright does
not protect ideas but the form in which they are expressed , proof of
copying requires a comparison of the works in question in their final form .
Normally this poses no problem : if necessary , the works can be produced
for examination by the competent tribunal which can judge for itself the
degree of similarity . However , computer programs may exist in different
versions and between some of these there may be little superficial
resemblance . In addition , a right holder may not have access to the version
of the infringing program which would enable him to show similarity ; for
example , his source program may have been translated by an unknown computer
into an object code that looks to the human eye completely different from
either the right holder 's object code or the original program . This may be
a particularly difficult problem prior to full discovery , for example , when
seeking interlocutory relief .

5.6.31 .

A possible solution to the problem would be for the burden of proof to be
shifted to the alleged infringer once the right holder makes available to
the court the different versions of his own program to which he has access
and establishes a prima facie case of copying . He might show , for example ,
that the allegedly infringing program achieves the same results with
virtually the same method and that the alleged infringer has had access to
the right holder 's program .

5.7 .

Summary

200 -

5.7.1 .

As already mentioned in paragraph 5.4.1 ., the Commission has decided within
the framework of the completion of the internal market , to examine as a
matter of priority the issues relating to the legal protection of computer
programs and subsequently to submit a proposal for a Council directive on
the legal protection of computer programs . For this purpose, certain
preliminary consultations have already been concluded, which have confirmed
the desirability of an early initiative in this field . Further, all
information received and experience gained from participation in the
discussion at the international level on the appropriate protection system
indicates that the Community approach should be within the framework of
copyright and related rights .

5.8 . . Conclusion

5.8.1 .

The Commission intends to submit to the Council as a matter of urgency a
proposal for a directive based on Article 100 A EC for the protection of

computer programs .

5.8.2 .

As regards the contents of the directive , and especially in the light of
Community standardization policy , the Commission would like to receive

comments on whether :

a ) the protection should apply to computer programs fixed in any
b ) programs should be protected where they are original in the sense that
they are the result of their creator 's own intellectual effort and are
not commonplace in the software industry ;

form ;

c ) access protocols , interfaces and methods essential for their realization

should be specifically excluded from protection ;

d ) rights to authorize restricted acts should include a broad use right
either formulated as such or as a consequence of rights to authorize
reproduction , rental , adaptation and translation ; for these latter
rights , specific provision should be made in any event ;

( 14)

201

e ) the adaptation of a program by a legitimate user exclusively for his own
purposes and within the basic scope of a licence should be permitted ;
f ) the reproduction of a computer program for private purposes should not
be permitted without authorization of the right holder whereas the
production of back-up copies by a legitimate user should be permitted
without authorization ;

g ) the term of protection should start with the creation of the program and

last for an appropriate number of years to be fixed by the directive ; a
choice will have to be made between a period of 50 years and one in the
region of 20 or 25 years ;

h ) the issue of authorship of computer programs , including authorship in

respect of computer-generated programs , should be left largely to Member
States but with national laws having to establish who , in the absence of
contractual arrangements to the contrary , is to be considered the
author ;

i ) protection would be available for creators who are nationals of States
adhering to the Berne Convention or the Universal Copyright Convention
or enterprises of such countries or possibly to all natural and legal
persons irrespective of origin or domicile ;

j ) in infringement cases the onus of proof in respect of copying should be
shifted to the alleged infringer once the plaintiff makes available to
the Court the different versions of his program to which he has access
and shows similarity and that the alleged infringer has had access to
the right holder 's program .

5.9 .

Timetable for submissions

5.9.1 .

Given the need to begin the legislative process as soon as possible , the
Commission will be seeking the views of interested parties on these matters
as a matter of urgency . Comments on the above mentioned suggestions should
be submitted to the Commission not later than 1 September 1988 .

- 202 -

1

2

3

4

5

6

7

8

9

10

11

12

See , for example , the definition adopted for the purposes of the WIP0
Model Provisions on the Protection of Computer Software, Geneva, 1978 :
"( 1 ) " computer program" means a set of instructions capable , when
incorporated in a machine-readable medium, of causing a machine having
information-processing capabilities to indicate , perform or achieve a
particular function, task or result ;". See also the Report of WIP0
Working Group on Technical Questions Relating to the Legal Protection of
Computer Software , Geneva , 30 April 1984 ( LPCS / WGTQ / I / 3 ) .

US Department of Commerce , A Competitive Assessment of the US Data
Processing Services Industry , December 1984 , pp .
23-24 . US Office of Technology Assessments , Computer Software : Aspects of
International Competition , November 1985 , Exhibits V/ VIII .
0ECD-ICCP(87)6 , The Internationalisation of Software and Computer
Services, distributed in March 1987, p. 5 & 27 ff .

International Data Corporation , EUROCAST - Software and Services
Marketplace , Western Europe , 1985-1991 .

See Article 52(2 ) of the European Patent Convention ( 1973 ) reflected in
the laws of Belgium, Denmark , Germany , Spain , France , Italy , Luxembourg ,
and the United Kingdom .

Propriété Intellectuelle Bulletin Documentaire ( PIBD ), 1981 ,

I I 1–1 75 .

Decision of the President of the European Patent Office of 6 March 1985 .

Report of the Committee of Experts on the Legal Protection of Computer
Software , Geneva , June 1983 , LPCS / 11 / 6 .

Leading cases include : for France , Babolat-Mai llot-With v , Pachot ( Paris
Court of Appeal , 2 November 1982 ); Apple Computer Inc , v. Segimex SARL
( Paris " Tribunal de Grande Instance", 21 September 1983 ); Atari v. Sidam
( Court of Cassation , 7 March 1986 ); for Germany , Visicorp v. Basis
Software GmbH et al .
( Munich District Court , 1983 ); Sudwestdeutsche
Inkasso KG v. Bappert and Burker Computer GmbH ( Federal Supreme Court ,
1985 ); for Italy, Atari Inc , and Bertolino v.~Sidam Sri .
( Tribunal of
Turin, 14 July 1983 ), Unicomp Sri , v. Italcomputers and General
Informatics ( Tribunal of Pisa , 14 April 1984 ); for the Netherlands , The
" Logboekprogram" Case ( District Court of Hertogenbosch , 14 May 1982 ); for
the United Kingdom, Sega Enterprises Ltd , v. Alca Electronics ( Court of
Appeal 1982 ).

Law of 24 June 1985 on the Amendment of Legal Provisions in the Copyright

Field ( Official Journal ( Bundesgesetzblatt ) No . 33 of 27 June 1985 ).

Law No . 85-660 of 3 July 1985 on the rights of authors , performers ,
record and videogram producers and communication enterprises ( Official
Journal of 4 July 1985 , page 7495 et seq . ).

Copyright ( Computer Software ) Amendment Act 1985 , c . 14 of 16 July 1985 .

See Articles 91-100 of Ley de Propiedad Intelectual no . 22 / 87 of 11

- 203 -

November 1987 , Boletin Oficial del Estado , no . 275 of 17 November 1987 .

!

Bill No . L 153 of 14 January 1988 on the amendment of the Copyright Act .

For example , draft law No . 1746 communicated to the President of the
Senate , 25 March 1986 .

Declaration of the Dutch delegate at the meeting of the World
Intellectual Property Organization 's group of experts held in February
1985 .

Declaration of the Belgian delegate at the meeting of the World
Intellectual Property Organization 's group of experts held in February
1985 .

Answer of 26 November 1986 by the Minister of Economy and Trade
( Ministre de I'Economie et des Classes moyennes ) to Parliamentary
questions no . 39 and 40 . Parliament Report of 26 November 1986, pages
761-762 .

See Rebello in Revue Internationale du Droit d' Auteur , no. 129, July
1986 , page 16 .

19 . _ -

. . .

Law no . 45 / 85 , Code of Copyright and Related Rights of 17 September 1985

^ Declaration of the Greek delegate at the meeting of the World

Intellectual Property Organization 's group of experts held in February
1985 .

Pub . L. 96-517 ( 12 December 1980 ) 94 Stat . 3015 .

Arbitrator 's Report . 15 September 1987 . Announcement of Dispute
Resolution by the American Arbitration Association Commercial
Arbitration Tribunal in the matter of IBM-Fujitsu Ltd .

Document C0MC85 ) 310 final , point 149 .

See for example , " Vers une protection des logiciels informatiques :
situation actuelle et propositions ", 21 June 1984 .
Report of a working group created within the framework of INPI ( Institut
National de la Propriete Intellectuelle ).

Japanese Copyright Amendment Act No . 62 of June 1985 specifies , in a
paragraph added to Article 10 that algorithms , programming languages and
rules are excluded from copyright protection;
determined whether or not to require registration ).

( also , Japan has not yet

26

See note 8 above .

See , for example , Article 49 of the Danish Copyright Law ( Law no . 158 of
31 May 1961 with later amendments ). According to this provision
" catalogues , tables and similar productions , in which a great number of
items of information have been compiled , are protected against

28

29

30

31

32

33

34

- 204 -

unauthorized reproduction for a period of 10 years following
production".

See note 8 above .

See note 8 above .

Directive no . 87 / 54 EEC , O.J. nr . L 24 of 27 January 1987 , page 36 .

It should be noted in this connection that according to Article 8 of
the semiconductor directive , the legal protection of the topography of a
semiconductor product does not extend to the information embodied in the
topography other than the topography itself .

Law n° 85-660 of 3 July 1985 , Journal Officiel de la République
française , 4 July 1985 , page 7495 et seq.

Loc . cit . , article 3(1 ), 3(2 ) and 3(3 ).

Neighbouring and related rights are those relatively modern creations
which have been used on occasion to extend a type of protection similar
to copyright to classes of work not covered by copyright itself . The
policy decision whether to create a new neighbouring right or extend
copyright to a new class of work depends on many factors and as a result
can vary both with time and space . "A given work may enjoy a copyright
in one country , but only a neighbouring right in another . This is the
case with photographs , enjoying a copyright in France but only a
neighbouring right or related right in another . Other rights , formerly
granted a neighbouring right , may one day become beneficiary of a
copyright " ( Frangon , International Protection of Neighbouring Rights ,
RIDA , 1964 , Anniversary Number , p. 410 ). One obvious advantage of
choosing the neighbouring right approach from the legislator 's point of
view is that he has a freer hand to adopt specific solutions that differ
from those already adopted in the copyright context .

- 205

CHAPTER 6

: DATA BASES

6.1 .

Subject matter

6.1.1 .

The term " data base " is used in this chapter to mean a collection of

It may be a collection

information stored and accessed by electronic means .
of full-text material , that is to say , existing copyright works , in which
case an analogy might be made between the data base and a generalized or
specialized library . It may be a compilation of extracts of works , similar
to an anthology or a documentation centre , from which relevant parts of
works may be obtained . It may be a collection of material which is in the
public domain , such as lists of names and addresses , prices , reference
numbers . There is here a similarity with catalogues , timetables , price
lists and other such reference material in printed form .
consist of the electronic publishing of a single but voluminous work , such
as an encyclopaedia .

Lastly , it may

6.1.2 .

The specific problems relating to electronic publishing and electronic
libraries are not discussed in this chapter , although they frequently cause
copyright problems similar to the ones related to the activities of data
bases . Electronic publishing poses problems in relation to reprographic
techniques , information management and transmission networks which fall
outside the scope of the present chapter . Similarly , electronic libraries
involve issues of public lending rights which , whilst they may occur in the
context of the general discussion on rental contained in Chapter 4 or in
relation to the piracy and home copying of audio-visual works discussed in
Chapters 2 and 3 respectively are not considered in detail in this
consultative document .

- 206 -

6.1.3 .

The most common mode of use of a data base is at present by on-line access
The data base may thus be accessed
using electronic communication media .
by users situated at great distances from the source of information . The
arrival on the consumer market of CD Rom discs similar to audio compact
discs but having an immense data storage capacity permits the user to
purchase his own copy of certain types of data base instead of accessing a
central store of information by electronic means . The main target markets
for such discs appear at present to be for works such as encyclopaedias or
directories containing large numbers of names and addresses , but future
generations of CD Interactive discs allowing the user to interact with the
data base will contain sound and image in addition to data . Optical
laser-read cards the size of a credit card and containing information
equivalent to 20 volumes of printed text are being developed . Other types
of re-usable discs known as WORMS ( Write Once-Read Many Times ) are being
produced . Digital tape recorders are also being developed to serve as
external data storage units .

6.1.4 .

The advantages of data bases over printed material stored in conventional
ways are numerous . First , data bases are comprehensive in the sense that
all available material of a given type can be located in a single data
base . Second , data bases allow selectivity in that only relevant
information on a given subject may be accessed easily from one source
without having to search through non-relevant material . Third , they give
accessibility of information which would be impossible in a conventional
library , since constantly up-dated information can be given to the user at
high speed and over great distances . It is the combination of this
comprehensiveness , selectivity and accessibility which ensures the
commercial success of the data base .

- 207 -

6.1.5 .

Since the most common applications of commercial data bases would appear to
be in the scientific , industrial and business fields , it is frequently the
raw data itself and the fact that it can be easily retrieved and readily
updated , which is of value , rather than the way in which the work was
originally written . This factor can have an impact on the selection of
material to form a data base since in some scientific fields , very brief
extracts from learned publications , such as formulae , may be sufficient to
provide key information . This means that in the compilation of some types
of data base , the form of expression of the information is of lesser
importance than the substance of the information itself . Nevertheless , the
arrangement of the compilation will have a bearing on the speed and ease
with which the data can be accessed and hence its commercial success .

6.2 .

The creation of the common information market

6.2.1 .

The creation of a European information services market , currently divided
by juridical and linguistic barriers , is of prime importance . Figures
collected by the International Publishers Association and quoted in a

recent Memorandum of UNESC0 / WIP0

1

would seem to indicate that the market

for data bases is evolving as follows : the number of data bases in
existence for use by the public has grown from 400 in 1980 to 2,901 in
The worldwide turnover of electronic publishing in 1985 amounted to
1986 .
5 billion US dollars . Of this , the United States were responsible for more
than 4 / 5 of the total turnover but the value of the total market produced
by Germany , France and the United Kingdom represented 350 million dollars .
Obstacles to the free flow of information between Member States must be

removed if the Community is to develop a competitive role in the
information services market . The Commission has established a specific
policy and an action plan for the development of this market . Legal issues
affecting this market are being examined in cooperation with a Senior
Officials Advisory Board ( S0AG ) and a Legal Advisory Board ( LAB ) for the
Information Market , and in the context of Commission initiatives in
specific sectors . The Legal Advisory Board is made up of legal experts of
Member States who , acting in their individual capacity , advise the
Commission services inter alia on legal problems in relation to transborder
data flow .

2

- 208 -

6.2.2 .

Data of a personal nature may also be incorporated into computerized data
bases , giving rise to questions of privacy of the individual and the
protection of confidential information . These questions of data protection
fall outside the scope of the present chapter which deals with copyright
issues only . The same applies to problems associated with the liability of
data base operators for the accuracy of the information contained in their

systems .

6.3 .

Legal problems arising from the storage and retrieval of information using

data bases

6.3.1 .

6.3.2 .

A broad discussion on the legal problems arising from the use of data bases
is taking place within the framework of S0A6 and LAB .
premature to indicate detailed findings at the present stage of these
discussions but in order to give those interested circles which have not so
far been consulted directly the possibility of expressing their view on the
main copyright issues under consideration , some tentative general
conclusions will be drawn . At a later stage , the Commission will submit its
findings in respect of the possible necessity for adaptations in existing
laws , if any .

It would thus be

The use of computerized information systems creates problems in three
respects from a copyright point of view . First , the question arises as to
whether incorporation into a data base of a protected work in its entirety
or in part constitutes a restricted act from a copyright point of view .
Second , the question arises whether the retrieval of stored information
constitutes a restricted act under copyright law . Third , it has been
suggested that the question of adequate protection of the compilation of ^
data as such merits consideration .

6.3.3 .

A number of countries^ have recently considered the protection of data bases
within the context of revision or amendment of their copyright laws . The
international organizations engaged in the establishment and administration
of the intellectual property conventions have also for some time been
engaged in a discussion on the intellectual property issues .

209 -

6.3.4 .

The main issue in relation to the operation of computerized information
systems , namely the use of computers to access literary works , was discussed
jointly by WIPO and UNESCO , that is , within the framework of the Berne and
Universal Copyright Conventions . As a result , the Second Committee of
Government Experts on Copyright Problems Arising from the Use of Computers
for Access to or the Creation of Works , which met in 1982 , was able to adopt
a number of recommendations for solving at the level of relevant national
legislations the copyright problems arising . The experts also concluded
that revision of the copyright conventions was not necessary since the
solutions could be accommodated within the existing framework of principles
as established by those conventions . A Committee of Governmental Experts on
the Printed Word met in Geneva on December 7 to 11 , 1987 and discussed a
number of principles in relation to data bases . The Commission will take
note of the discussion of these principles which , as regards their aims ,
appear broadly compatible with the tentative conclusions of this chapter .

4

Storage of information

6.3.5 .

As a result of this previous work undertaken by WIPO and UNESCO , it is
recognized in all Member States of the Community that the use of a work
protected by copyright in the broad sense in a computerized information
system is relevant from a copyright point of view . The incorporation of the
work in extenso will constitute a reproduction and presupposes the consent
of the author or his successor in title unless the reproduction falls within
a recognized exception to the restricted acts under the copyright laws of
Member States . Given the fact that a computerized information system
normally aims at giving extensive access to the information stored , the
normal exemptions from restricted acts in the laws of Member States for
certain uses , such as private use , or fair use , are of little practical
relevance to the storage of copyright works in information systems .

6.3.6 .

It is equally clear that bibliographical information relating to published
works and authors thereof , indexes , references and similar information can
be compiled freely since the use of such information in no way implies that
works are reproduced in full or in part .

6.3.7 .

- 210 -

The extent to which bibliographical information on existing copyright works
can be supplemented by quotations , extracts , value-added abstracts , or
summaries has in some jurisdictions caused litigation . Though this issue is
one of general relevance , it is of course of specific interest to
publishers , creators of data bases , information compilers and the operators
of data bases . Some experts have expressed an interest in seeing the legal
situation clarified to the maximum extent possible but have also expressed
the view that the practical importance of the problem from an economic point
of view should not be exaggerated .
composed mainly or wholly of abstracts of learned and scientific
publications do exist . Uncertainty as to whether such abstracts can be
inserted in a data base without the consent of the author or his successor

Nevertheless , data bases which are

in title may have a negative impact on the development of this particular
kind of data base . However , the practical difficulties of resolving issues
like the appropriate scope of the right to quote or borrow from existing
works should not be underestimated . It may be that these issues can only be
settled by legislation in a very general way , leaving it to case law to
determine the precise parameters in specific circumstances .

The retrieval of works stored in computerized data bases

6.3.8 .

Some jurisdictions treat all forms of retrieval of information from a data
base involving direct recording ( downloading ) as a restricted act . However ,
retrieval may take place in different ways and in some jurisdictions a
distinction is apparently made by learned opinion between the various ways
in which a user may have access to the material stored , the main distinction
being made between visual display and print-outs . Whereas print-outs are
considered a copy everywhere , visual display is sometimes compared to the
mere reading of a page of a book in a library or bookshop and consequently
not considered a restricted act . Those differences in the legal position of
Member States appear , however , to have relatively limited practical impact .

- 211

6.3.9 .

Insofar as the storage in a data base is a restricted act presupposing the
authorization of the author , the latter will naturally , when solicited for
authorization , fix the conditions for the various ways in which his work may
be retrieved . The fact that those conditions more often than not are fixed

by a collective agreement comprising all or a majority of authors in respect
of a particular kind of work does not change the basic principle according
to which storage and access to the work is in practice regulated by one act
of agreement . It has consequently been suggested by some interested circles
that initiatives aimed at the clarification and approximation of laws to
arrive at a more uniform solution in respect of retrieval of information are
not needed at the present time . Other sources have , however , indicated that
it has proved difficult to negotiate agreements which take into account
possible later extensive use of the information stored . Whereas authors and
their successors in title in other areas can exercise a reasonable control ,
so that royalties are paid according to , for example , sale or rental of
copies , public performances and the like , it is difficult to ascertain to
what extent a given work stored in a data base is actually used . The views
of users and operators of data bases would be welcome as to the necessity of
Community action in this field .

6.4 .

Protection of the data base as such against copying

6.4.1 .

The protection accorded to data bases relates under existing national
legislation and international conventions to the characteristics of the
works stored therein , rather than to the data base itself as a collection
of information . Thus , in the case of full-text data bases , where a single
work such as an encyclopaedia is stored , the position is clear in relation
to the author of the encyclopaedia , who enjoys the same copyright
protection for his work regardless of whether publication is by
conventional or electronic means . In the case of a data base where numerous
works or extracts of works are stored, the provisions of Article 2(5 ) of
the Berne Convention are of relevance :

" Collections of literary or artistic works , such as
encyclopaedias and anthologies which , by reason of
the selection and arrangement of their contents ,
constitute intellectual creations shall be protected
as such , without prejudice to the copyright in each
of the works forming part of such collections ".

- 212 -

Thus a work which is protected by copyright in a Member State will continue
to enjoy that protection when , in its entirety or in part , it is
incorporated in a data base . Difficulties arise where the extracts from
protected works are themselves not covered by copyright , by nature of their
brevity , for example , or where the subject matter is not protected at all by
copyright but is in the public domain .

The types of work which are normally considered to be in the public domain
include official texts , legislative and administrative documents , records of
public and legal proceedings . Works for which the period of copyright
protection has expired are also considered to be in the public domain . All
of these types of work may form the subject matter of data bases requiring a
considerable degree of skill and investment in their compilation . In
particular the compilation will have been designed to ensure ready access to
the information and to create features attractive to particular groups of

users .

In some cases the nature of the data base may be such that " selection" of
material has not taken place in the sense that all available published
material has been included in an exhaustive data base . Equally " arrangement "
may be constrained by the technical necessity to order the information in
the most readily accessed way , for example in alphabetical or chronological
order .

Nevertheless , the compilation of such information may be subject to
copyright in some jurisdictions dependent on the level of originality and
creativity which the compilation represents and on the requirements in
respect of originality and creativity laid down in the specific national
legislation . The problem in this respect is similar to that discussed in the
context of computer programs ( Chapter 5 , paragraphs 5.6.3 . to 5.6.7 .).

6.4.2 .

6.4.3 .

6.4.4 .

- 213 -

6.4.5 .

6.4.6 .

6.4.7 .

In some countries where a specific compilation may not attract genuine
copyright protection because the work is considered insufficiently original ,
comprehensive or creative , another sort of short-lived protection against
reproduction may nevertheless exist . This is for example the case in Denmark
where , according to article 49 of the Copyright Act , catalogues , tables and
similar works which compile information may not be reproduced without
consent of the producer ( compiler ) for a period of 10 years from the date of
publication . In other countries , works which are considered insufficiently
creative to attract protection are in the public domain .

Similarly , a right in the published edition exists in some jurisdictions ,
over and above the author 's right in the content of the published work . In
both Ireland ( Copyright Act 1963 , section 20 ) and the United Kingdom
( Copyright Act 1956 , section 15 ), such a protection of the typographical
arrangement of the published edition against unauthorized facsimile
reproduction exists for a 25 year period from the year in which the edition
was first published .

It has therefore been suggested to the Commission that the investment which
a compilation of data may represent , and which may not attract copyright
protection , necessitates some protection against unauthorized reproduction .
" Information broking ", that is , the buying and selling of data bases
containing factual information is indeed a growth industry , which requires a
clear legal framework within which to develop . The Commission is accordingly
considering whether to propose the introduction of measures to give some
limited protection to the data base itself , as a compilation .

6.4.8 .

It would have to be considered first , who should be the beneficiary for such
a protection . Second , the scope of protection and the restricted acts would
have to be carefully considered lest access to computerized information be
unjustifiably restricted . Finally , the issue of down-loading for private
purposes would have to be considered carefully before being made a
restricted act in general .

- 214 -

6.4.9 .

6.4.10 .

Such a protection would not limit the access to information since the scope
of application of copyright will not be enlarged beyond the protection
already given to compilations under Article 2(5 ) of the Berne Convention in
cases where the material contained in the data base was already protected by
copyright . In cases where protection does not follow from the application of
ordinary copyright law , by reason of the work 's brevity or lack of
creativity , or its nature , or because the term of protection has expired , it
would still seem desirable that protection against copying of the mode of
compilation should be available to the data base operator . It would give the
producer a right similar to the right of the phonogram producer . The latter
normally has a specific statutory right to protect his interest in the
recording itself regardless of whether or not he is recording a protected
work . The producer of a data base may well not have such a right at
present , even where the content of the data base is itself protected by
copyright .

To combat data piracy , such a right may prove to be an important tool . The
unauthorized reproduction of data will more often than not involve works of
several authors . The individual author may not be in a position to establish
that an infringement has taken place and even , in case of such knowledge ,
may consider the infringement of marginal importance only in respect of his
economic exploitation of his work . To the data base operator , the
infringement may nevertheless be of considerable importance . He is often
better placed than the author to detect infringements and has , as mentioned
above , more pressing incentives to react . Finally, a close contractual link
between the operator of a data base and the numerous authors whose works
form part of the data compiled does not necessarily exist . A contractual
arrangement with a collective body , for example publishers or authors in
respect of specific types of scientific literature , is a common solution .

6.4.11 .

Similar arguments have , in respect of phonogram producers , led to the
conclusion that , in order to combat piracy , the general introduction of
producers' rights in sound recordings would appear to be a desirable
development . It is a logical step to introduce a corresponding right for
data base operators to pursue unauthorized reproduction in their own right .

6.5 .

Data stored on discs and tapes

- 215 -

6.5.1 .

As the optical disc or card market and the market for data stored on digital
tape expand so the protection of data stored on and accessible from such
sources will become of increasing importance . Data bases may well be
marketed along with other types of recorded audio and visual material . The
legal principles outlined in paragraphs 6.3.1 .- 6.4.9 . of this chapter will
of course apply in theory to data bases marketed in any form . However ,
enforcement of rights in data bases sold on discs , tapes or cards will be
more difficult in practice than where the user is in direct contractual
relationship with the data base operator and accesses the data base within
the context of a legally binding agreement as to conditions of use .
At the
present time , the impact of new technologies raises more immediate
difficulties in relation to the private reproduction of sound recordings and
the issues relating hereto have been discussed in chapter 3 on home copying .
Since the recording of data on disc or tape in digital form relies on much
the same technology whether that data represents a sound recording or a
literary work , the solution which is eventually retained for the protection
of digital sound recordings might equally well be applicable in principle to
data bases commercialized in the form of discs or tapes .

6.6 .

Summary

6.6.1 .

6.6.2 .

The storage of copyright works in futl or in part within computerized
information systems creates a number of legal problems for which , at
present the most appropriate solution would seem to be legal action to
protect the compilation of works within a data base where those works are
themselves the object of copyright protection . Specific legal action aiming
at resolving existing difficulties seems to be at best premature .

The Commission is also considering whether the protection of the mode of
compilation of the data base itself should extend to data bases composed of
material which is not in itself protected by copyright . Such action would
only be taken if it were felt that the considerable investment which the
compilation of a data base represents could best be served by copyright
protection rather than by other means .

6.7 .

Conclusion

- 216 -

6.7.1 .

The Commission would welcome comments from informed circles on the

following matters .

a ) whether the mode of compilation within a data base of works should be

protected by copyright and ,

b ) whether that right to protect the mode of compilation , in addition to

possible contractual arrangements to that effect , should be extended to
data bases containing material not protected by copyright and whether
this protection should be copyright or a right sui generis .

6.8 .

Timetable for submissions

6.8.1 .

Comments on above mentioned suggestions should be submitted to the
Commission not later than 1 January 1989 .

217

UNESC0 / WIP0 / CGE / PW / 3-II of K September 1987 .

The establishment at Community level of a policy and a plan of priority
actions for the development of an information services market ( document
C0MC87 ) 360 final ).

See Section 101 of Copyright Act 1976 of United States of America and
Article 12bis of Law for Partial Amendments to the Copyright Law ,
May 23 , 1986 , Japan . See also Article 2(1)(xter ) of the above .

UNESC0 / WIP0 / CEG0 / II / 7 , 13 August 1982 .

See Chapter 2 , paragraphs 2.6.10 . - 2.6.18 .

- 218 -

CHAPTER 7 : THE ROLE OF THE COMMUNITY IN MULTILATERAL

AND BILATERAL EXTERNAL RELATIONS

7.1 .

External relations : multilateral and bilateral

7.1.1 .

Not all Community action in the copyright field is concerned with
legislative measures or with litigation in the Court of Justice . An
important area in which the Community can take action is in the field of
external relations . Both in bilateral and multilateral relations , the
Community has a part to play in advancing the interests of copyright owners
operating from within the common market , and this in two respects : the
effective enforcement of existing intellectual property rights and the
establishment of recognized minimum standards of protection . In this
context , multilateral relations means relations within international or
regional organizations and bilateral relations all others , whether between
the Community and a single non-Member State or between the Community and a
regional or other grouping of non-Member States . In some cases , of course ,
bilateral and multilateral relations are closely interlinked as will
appear , for example , in relation to the protection of textile designs .
Since intellectual property regimes have direct and intended effects on
trade , the activities of the Community aiming at an elimination of
impediments to and
light of Article 113 EEC establishing a common commercial policy .

distortions of international trade must be seen in the

7.2 .

Multilateral relations

219 -

7.2.1 .

7.2.2 .

Multilateral discussions and negotiations on copyright and allied matters
take place in various international organizations . Of these , the most
important are the United Nations and its specialized agencies , in
particular , the World Intellectual Property Organization and the United
Nations Educational , Scientific and Cultural Organization ; the General
Agreement on Tariffs and Trade ; the Council of Europe ; and the Organization
for Economic Co-operation and Development ( OECD ). The nature of Community
and Commission actions in each of these contexts varies according to the
activities of the organization in question . References to some of the more
important of these actions and activities have already been made at
different places in the preceding chapters . The following paragraphs
attempt to summarize the main features for each of the organizations

concerned .

The World Intellectual Property Organization ( WIPO )

In copyright matters , the principal forum for international negotiations
and discussion is the World Intellectual Property Organization , a
specialized agency of the United Nations established under the WIPO
convention of 1967 . WIPO performs the administrative tasks of the Berne
Union and assumes or participates in the administration of other
international agreements to promote the protection of copyright and
neighbouring rights . The Commission has a working agreement with WIPO ,
under which there are exchanges of publications and reciprocal attendance
at meetings organized by WIPO and the Commission respectively . The
Commission is represented with the status of an observer at WIPO meetings
on subjects related to activities being carried out at Community level .

7.2.3 .

- 220 -

WIP0 is an international organization , of an economic character , within the
meaning of Article 116 EEC ; and therefore , in respect of all matters of
particular interest to the common market , Member States are under a duty to
proceed within the framework of WIP0 only by common action . Until recently ,
the Community has limited its action on this basis to the industrial
property field , particularly in relation to the current revision of the
Paris Convention . It is only a matter of time , however , before issues arise
concerning copyright and allied matters calling for a similar response .
Moreover , with the adoption of the directive on the legal protection of
semiconductor topographies to which reference has already been made , a new
phase in the Community 's relationship with WIPO has begun . For the first
time , an activity of WIP0 , namely , the preparation of a multilateral
Treaty , will be undertaken in relation to issues already covered by
Community legislation binding on all its Member States . For this reason , on
24 April 1987 , the Council decided that the Community should participate as
such in the preparatory work on the Treaty and that , in that context , the
Commission would present the Community position on questions falling within
the scope of the directive and the Commission has acted correspondingly .
The question of Community participation in a future diplomatic conference
for the adoption of a multilateral treaty on protection of integrated
circuits and the possibility for the European Economic Community as such to
become party to the future treaty have been raised in the Governing Bodies
of WIP0 , but no decision has yet been made by the competent bodies of WIPO .
The further evolution of the Community 's role within WIPO in general is a
matter of considerable importance given the likelihood of further Community
legislation on copyright and related rights and , indeed, on other forms of
intellectual property .

7.2.4 .

- 221

United Nations Educational , Scientific and Cultural Organization ( UNESCO )

1

2

Thus , in recent years , meetings have been

, on copyright aspects of direct broadcasting by satel -

and on the rights of performers , phonogram producers and broad¬

In certain respects , the activities of UNESCO also concern copyright
matters , either directly as , for example , by reason of the Organization 's
administrative responsibilities in relation to the Universal Copyright
Convention , or by virtue of its more general interests in educational ,
scientific and cultural affairs .
held jointly with WIPO concerning the use of computers for access to or
creation of works
Lite
casting organizations in respect of audiovisual works and phonograms
During 1987 , in co-operation with WIPO , attention has been given to the
protection of dramatic and musical works , works of applied art and printed
works , the latter in particular with a view to dealing with problems
relating to the creation and operation of data bases . The Commission will
continue to follow developments having Community implications and will
participate in discussions to the extent that its resources permit . In
addition , should matters arise that fall within Community competence or are
of particular interest to the common market , it will make appropriate
proposals to the Member States .

General Agreement on Tariffs and Trade ( GATT )

7.2.5 .

Trade related aspects of intellectual property rights have been mentioned
in the GATT on several occasions during the Tokyo Round of Multilateral
Trade Negotiations . In this context , the European Community 's and United
States' proposal for an agreement on commercial conterfeiting of 1979 was
of particular importance . Discussions on this subject matter among
interested delegations , including the European Community , remained
informal , however , and an agreement on a text for incorporation in the
final results of the Tokyo Round was not reached . It was not before the
Ministerial Declaration of the GATT Contracting Parties of 1982 that the
GATT decided to examine the question of counterfeit goods with a view to
determining the appropriateness of joint action in the GATT framework on
the trade aspects of commercial counterfeiting . Work on this issue did not
lead to conclusive results .

- 222 -

7.2.6 .

In September 1986 Ministers of the GATT Contracting Parties , meeting in
Punta del Este , Uruguay , decided to launch a new round of Multilateral
Trade Negotiations and to include in them negotiations on " trade-related
aspects of intellectual property rights , including trade in counterfeit
goods". The relevant part of the Ministerial Declaration reads as follows :

" In order to reduce the distortions and impediments to
international trade , and taking into account the need to promote
effective and adequate protection of intellectual property
rights , and to ensure that measures and procedures to enforce
intellectual property rights do not themselves become barriers
to legitimate trade , the negotiations shall aim to clarify GATT
provisions and elaborate as appropriate new rules and
disciplines .

Negotiations shall aim to develop a multilateral framework of
principles , rules and disciplines dealing with international
trade in counterfeit goods , taking into account work already

undertaken in the GATT .

These negotiations shall be without prejudice to other
complementary initiatives that may be taken in the World
Intellectual Property Organization and elsewhere to deal with
these matters ".

- 223 -

7.2.7 .

The Community and the Commission supported the inclusion of this chapter in
the new round in pursuit of the following , complementary objectives :

( i )

In order to avoid trade-related problems , steps should be taken to
ensure that intellectual property rights are effectively implemented ,
irrespective of whether infringements are carried out through
internationally traded goods or local production . Consequently ,
appropriate procedures should be provided for to ensure rapid and
efficient enforcement at the border ( regarding imports and exports )
as well as internally .

( ii )

The protection of intellectual property rights as recognized by
existing national legislation should be improved through the
application of certain general principles of the GATT . The
application of " national treatment " and " most favoured nation
treatment " would ensure that discrimination between national and

foreign and among foreign right holders is avoided , both with regard
to the substantive standards applied as well as the enforcement
procedures and remedies available . Moreover , effective dispute
settlement provisions allowing for appropriate sanctions would make
sure that all parties to an agreement would respect their
international obligations .

( iii ) A wider .adherence to and respect of international conventions on

intellectual property should be achieved . This applies in particular ,
but not exclusively , to the Paris Convention for the Protection of
Industrial Property and the Berne Convention for the Protection of
Literary and Artistic Works , which enjoy already rather widespread
récognition .

t

( iv )

The problems created by inadequate or sometimes excessive substantive
standards should also be addressed through the transposition into the
GATT legal system of those basic substantive rules that enjoy wide
( although not necessarily universal ) recognition , including but not
limited to those which are provided for in existing international
conventions .

- 224 -

( v )

Where appropriate , internationally agreed rules for the protection of
intellectual property , including those derived from new forms of
creative activity ( e.g. software , semiconductors ), should be
elaborated . All countries should be encouraged to participate
actively in the revision of existing and the elaboration of new
conventions within the competent international organ i-zat ions . ^

7.2.8 .

Organization for Economie Co-operation and Development ( OECD )

4

In the light of the Uruguay Round negotiations , the OECD Trade Committee
has also engaged in an examination and discussion of the impact of
intellectual property law on international trade , inter alia , with a view
to providing OECD member countries with analyses of practices and
legislation in OECD and developing countries . The OECD has also concerned
itself with copyright issues , particularly in the context of its work on
transborder data flows . In this context , the Organization has carried out
an examination of copyright provisions of its Member States which may act
as a barrier to the free flow of data . Copyright issues of Community
interest may also arise in future in the context of work on international
trade in audio-visual services . Further , the Committee for Information ,
Computer and Communications Policy has made preparations and drafted
reports for a High-level Meeting in the fall of 1987 on transborder data
flows under the theme " Improving International Rules of the Game ",
preparing an adaptation of the legal environment governing transborder data
flows . The Commission is participating in the Organization 's work and , in
particular , the work related to international trade . It will , as
appropriate , make proposals on issues arising in this context .

International Labour Office ( ILO )

7.2.9 .

Although the Commission has not so far been directly involved in
discussions held under the aegis of ILO in the copyright field, the ILO 's
contribution to such debates as those on satellite television and

employee 's rights is gratefully acknowledged .

(16)

7.2.10 .

7.2.11 .

- 225 -

Counc i L of Europe

The Commission has welcomed the opportunity to participate in meetings with
a direct bearing on certain aspects of copyright , particularly those of the
Steering Committee on Mass Media and its expert sub-committees . The
information gathered at these meetings has contributed greatly to its own
work , for example in the field of television by cable and satellite . Other
copyright issues of common concern have arisen , for example , as regards
private copying of sound and audiovisual recordings and piracy of
audiovisual works .

The Commission is of the opinion that work undertaken on copyright in the
Council of Europe and initiatives at Community level are complementary . On
the one hand , the Council of Europe seeks in the context of its larger
membership to deal with common problems normally by way of recommendation
and occasionally by means of international conventions . On the other hand ,

within the narrower context of States which are members of the Community ,

the Community seeks to create a genuine internal market for goods and
services , including those protected by copyright , using the Treaty 's
directly applicable provisions and the legislative and other powers that
the Treaty confers on its institutions . This may require an approximation
of national laws prior to and going further than the work which can be
achieved afterwards within the large grouping constituted by the Council of
Europe . At the same time , where common approaches can be agreed on the
Council 's wider basis , it is desirable that appropriate instruments be
adopted and that these instruments form a coherent whole together with any
Community measures adopted in relation to the same subject matter .

7.2.12 .

Accordingly , the Commission intends to continue to work together with the
Council of Europe on matters of common concern in the copyright field . It
will participate in relevant meetings to the extent that its resources
permit and will invite the Council 's secretariat to be represented at
similar meetings organized by its own departments , as it already has in the
field of cross-frontier television and lately in the preparatory work on
two Council recommendations on the subject of piracy and the private
reproduction of sound and video recordings , which were adopted by the
Committee of Ministers on 18 January 1988^.

7.3 .

Bilateral relations : general

- 226 -

7.3.1 .

While multilateral organizations and conventions represent in principle the
most adequate framework for addressing problems of intellectual property
rights and their enforcement , it must be recognized that the existing
international conventions relating to copyright have not yet achieved the
objective of providing effective copyright protection on a large enough
international scale , nor have have they succeeded yet in dealing adequately
with new forms of in principle copyrightable matters such as semiconductor
designs and software .

It is for these reasons that in addition to the work in the multilateral

context problems existing with regard to individual countries or groups of
countries need to be tackled bilaterally . These problems essentially relate

to three areas :

- the absence of adequate substantive standards protecting intellectual

property ,

- the lack of effective enforcement where such standards exist , and
- the application of national treatment to Community right holders .

7.3.2 .

7.3.3 .

So far as bilateral relations in general are concerned the Community can
act ( and has acted ) whenever specific problems concerning copyright and
allied matters have arisen . In recent years , such problems have arisen with
increasing frequency .

Thus , in 1984 , when the United States Congress considered and then adopted
, representations
legislation on the protection of semiconductor designs
were made on the basis of concerns expressed by Community interests likely
to be affected . In addition , action was subsequently taken by the Community
to secure protection on an interim basis for European semiconductor
producers in the US market pending adoption of legislation at Community
level in the form of a directive on the legal protection of topographies of
semiconductor products

7.3.4 .

7.3.5 .

- 227 -

The provisions of Article 3(7) of that directive concerning extensions of
protection to persons from non-Member States should also be noted in this
connection , which enable the Community to act as a whole . The procedure for
which they provide has recently been set in motion for the first time . In
the field of semiconductor designs , relations with non-Member States will
thus develop in future in large part on the basis of the specific
provisions contained in the directive .

Q

As regards Japan , reference may be made to the initiatives that were taken
when it was learned in early 1984 that new legislation was being considered
that could significantly limit the protection available to computer
software in a number of ways . Again , representations were made to the
Japanese authorities on behalf of the European interests that had expressed
concern . The widely reported decision of the Japanese government not to
pursue the creation of a specific form of legal protection for software but
to modify its copyright law , which it realized in 1985
welcome development .

, has been a

9

7.3.6 .

To complete the picture , reference can also be made to two other more
recent examples involving contacts with non-Member countries .

7.3.7 .

7.3.8 .

In the summer of 1986 , representations were made on behalf of the
Commmunity and its Member States to the government of Nigeria concerning a
range of intellectual property issues , including the need to strengthen
legal provisions for the repression of piracy of copyright materials .

Early in 1987 , the Commission was consulted by the authorities of Malaysia
on a new bill for copyright protection in that country . The proposed
limitation of copyright protection under the bill 's provisions to Malaysian
nationals and residents and to works first published in Malaysia is clearly
a matter of great concern to Community right holders . The Malaysian
authorities' attention has been drawn to the problem . Further Community
action will be proposed , should it prove necessary .

7.3.9 .

7.3.10 .

7.3.11 .

- 228 -

Finally, as recently as the beginning of November 1987, following a
commitment previously undertaken by the Republic of Korea to grant to
Community nationals and enterprises rights in the area of intellectual and
industrial property equivalent to the rights granted to US nationals by a
US-Korea bilateral agreement , a Commission delegation carried out
negotiations on a similar bilateral agreement including copyright
protection with the government of the Republic of Korea on intellectual
property protection . No results have as yet emerged from these
negotiations . As a result of the refusal of the government of Korea to
comply with its previously undertaken commitment , Community nationals are
the subject of discriminatory treatment within the jurisdiction of the
Republic of Korea . Consequently, on 18 December 1987, the Council agreed to
a proposal by the Commission to suspend the generalized tariff preferences
. The negotiations with
for products originating in the Republic of Korea
Korea will be resumed as soon as further negotiations appear realistic .

10

In addition to specific problems of this kind , meetings on an ad hoc basis
are also held between the Commission and particular countries or groups of
countries with which the Community has significant trade and other
relationships . On certain occasions in recent years , these meetings have
been used to discuss problems arising in the intellectual property field ,
though to date attention has focussed primarily on fields other than
copyright and no attempt has so far been made to develop this form of
intervention in a systematic way .

In recent years problems of piracy and counterfeiting have become more
serious and widespread . Clearly action within the Community or at the
border cannot solve these problems effectively . They should be raised in
the framework of the Community 's bilateral relations in a more systematic
way . Such action, which will require consistent co-operation from Community
interests affected, should not only aim at ensuring respect for the rights
of Community right holders , but could also address other matters of current
concern , for example , the need for adequate legal protection of computer
software

and semiconductor products .

1 1

7.4 .

Bilateral relations in the context of existing arrangements

- 229 -

7.4.1 .

7.4.2 .

7.4.3 .

The Community has woven a fabric of bilateral agreements with countries in
Asia , Latin America , the Mediterranean , Africa , the Caribbean and the
Pacific , thus creating a framework for diversified forms of co-operation .
This framework is sufficiently broad to encompass , formally or otherwise ,
any topic of economic co-operation , including notably the protection of
intellectual property .

Periodic meetings called under these agreements offer the occasion for
discussing problems encountered by one Community industry or another .
At times it has been useful to enter into negotiations and to conclude
formal bilateral agreements . Although this approach has not been
systematic , it should not be discarded , in particular for those countries
which maintain formal contractual relations with the Community . Their
interest in concluding one agreement with the Community , rather than a
series of separate agreements with some or all Member States , is

self-evident .

At times it has been necessary to deal in more informal manners with
intellectual property issues , given their delicate character and the
sensitivities of certain trading partners . Recently , for example , the
Commission has agreed to review the national legislation of one of its
trading partners to identify possible problems or lacunae . Training of
officials and other forms of assistance have also been envisaged . Another
forum for the discussion of these issues is constituted by the joint
investment committees set up between European operators and their Asian
counterparts in every capital of the ASEAN countries . These committees
regularly attempt to identify and solve the difficulties which either side

may encounter .

- 230 -

Design problems of the textile and clothing industry

7.4.4 .

In the textile and clothing sector , a start has already been made which may
well indicate the direction which future developments should take .

7.4.5 .

7.4.6 .

By way of background , it should be noted that the Community 's textile and
clothing industries have a particularly pressing interest in securing
better protection for their designs as well as their trade marks especially
in developing countries . Since the seventies , the industry has been under
severe pressure from low cost production in many newly industrializing and
State-trading countries . This competition has generated growing quantities
of low price imports which , combined with decreasing consumption , has led
to substantial shrinkage and restructuring of the industries . As an
important part of their response . Community industries have sought to
stress , besides technological innovation , the marketing of higher quality
products , protected by trade marks , offering innovative designs and models
subject to change with increasing frequency . However , Community industries
now find that this assertive strategy is being put at risk , and is even
being turned against them , by unauthorized copying of their designs and
trade marks , especially by firms exporting from developing countries . These
illicit practices weaken Community performance not only on the world market
but also within the Community itself since the firms which are copying are
saving themselves the costs of developing their own brands , designs and
models which frequently represent as much as 10% of total production costs .

Given the importance of the problem, as a first step , the Community sought
and obtained the inclusion in the fourth extension protocol of the
Multifibre Agreement of a provision recognizing the importance of the
problem and underlining the need for its resolution
the context of the bilateral textile agreements concluded between the
Community and individual trading partners , this recognition was explicitly
conf i rmed .

. Subsequently , in

12

- 231

7.4.7 .

As a next step , the general consultation clauses of the bilateral
agreements will be utilized to raise the problem, in particular , on the
basis of factual cases sufficiently proved . A pragmatic approach of this
kind should prove helpful in finding mutually acceptable solutions to the
problem which , it cannot be denied , presents a number of particular
difficulties including, for example , the short life of many designs and the
practical difficulties of detecting and proving infringements . The success
of such an approach will , to a considerable extent , depend on the
co-operation of Community industries and on the careful preparation of
appropriate cases .

7.4.8 .

Finally, in this context , future concessions in the framework of bilateral
textile agreements might well have to be conditioned by concrete evidence
of improved co-operation by partner countries in the field of intellectual
property rights including , in particular , both designs , models and trade
marks .

7.5 .

The Lomé Conventions

7.5.1 .

Given its importance , actual and potential , the relationship between the
Community and the African , Caribbean and Pacific ( ACP ) States merits
mention in this context .

7.5.2 .

Although the Convention does not specifically provide for the protection of
copyright , it does permit the Community to prohibit imports in order to
protect industrial or commercial property ( Article 132 ). Whereas this
provides a certain protection against illegal imports into the Community ,
it does not deal with the problems associated with illegal reproduction .

7.5.3 .

The Convention does however provide a framework for information and
consultation on such questions which can be invoked by any contracting
party . This framework will permit the Community to deal with specific cases
involving ACP countries if they arise .

- 232 -

7.5.4 .

There are specific problems which confront developing countries ,
particularly the least developed , in reconciling the legitimate concerns of
owners of intellectual property rights with their own pressing development
needs . In this context it is to be considered whether a higher profile
should not be given to such problems in any successor Convention to
Lome III .

7.6 .

The new trade policy instrument

7.6.1 .

7.6.2 .

In order to combat illegal commercial practices , the Community now has an
. One
additional resource at its disposal : the new trade policy instrument
of the main considerations which led to its adoption was that of providing
the Community with a procedure permitting it to respond more rapidly , more
effectively and with a wider range of measures than in the past to illicit
commercial practices of third countries with the aim of eliminating the
resulting injury .

13

Illicit commercial practices are defined as being international trade
practices which are attributable to third coutries and which are either
incompatible with international law or with the " generally accepted rules".
Thus , the instrument 's use is not confined to cases in which countries do
not respect their obligations under customary international law or
international agreements to which they are parties . The new trade policy
instrument , therefore , could be used against a State which disregards a
multilateral treaty to which it is not a party , but to which a large number
of other States are parties , when the treaty in question is not purely
declaratory of customary international law . A State does not act in breach
of international law if it acts in a way which is forbidden by a treaty
which is not binding on it . Yet it could be said to have acted in breach of
" generally accepted rules ".
necessary for the State complained of to have violated an obligation , legal
or otherwise , applicable to it : the relevant provision in the new
instrument is that action may be taken by the Community when there has been
action " incompatible with international law or with generally accepted
rules ".

Under the new instrument , it might not be

233 -

7.6.3 .

The concept of " generally accepted rules " is not defined in the new
instrument but its context is clearly that of States engaging in
international trade . There thus seems little doubt that , in the first
place , it is intended to refer to the General Agreement on Tariffs and
Trade , enabling the provisions of that agreement to be applied to the trade
practices of countries which are not GATT members
. On this basis , other
multilateral agreements can be evaluated to see whether the share of world
trade for which their members are responsible is of the same order as that
for which GATT members account . If this proves to be the case , the rules
contained in such an agreement should probably be considered as " generally
accepted " by the international trading community .

14

7.6.4 .

An examination of the States parties to the Berne Convention ( 77 States ),
the Universal Copyright Convention ( 81 States ), the Paris Convention ( 96
States ) and to the GATT ( 92 States ) reveals the following picture .

Table I

: The share of exports , imports and world trade for which the
members of certain international agreements are responsible .

I International
Agreement
I

I GATT

I Berne

I UCC

I Paris

I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I

Exports as % of
world total

80

66

82

88

I
I
I Imports as %
|
I of world total |
I
I
I
I
I
I
I
I

81

I
I
I
I
I
I
I
I
I

64

81

88

I
I
I
I
i
I
I
I
I

International
trade as %

of world trade

81

65

81

88

Source : IMF and UNO , 1985 figures .

7.6.5 .

Among these international instruments , the Berne Convention has the most
modest participation which however , measured in relation to international
trade , still accounts for approximately two-thirds of the total . The
members of the Universal Copyright and Paris Conventions each account for a
greater share of world trade than the members of the GATT itself .

7.6.6 .

7.6.7 .

7.6.8 .

- 234 -

Accordingly , the rules of the Berne , Universal Copyright and Paris
Conventions appear to be "generally accepted" among countries engaged in
international trade . Therefore , if the new instrument could be used against
a State for failure to respect a treaty to which it was not a party, it
could be used in the case of these three conventions .

An illicit commercial practice must also be attributable to third countries
if it is to fall within the scope of the new instrument . Thus
infringements , even repeated infringements , of intellectual or industrial
property rights as recognized by the multilateral conventions will not by
themselves be sufficient . The responsibility of a third country as opposed
to a private individual must be engaged in one way or another . This might
well occur , for example , when systematic infringements are carried out by
entities for which the State is directly responsible since they form part
of that State 's administrative structure , for example , State trading
organizations . Even in the absence of such a direct link , however , failure
to respect generally accepted intellectual or industrial property rights
might well be attributable to a particular country under certain
conditions , for example , where the illicit practices are widespread and,
despite repeated requests to act , nothing has been done to enact
appropriate laws or , where they exist , to enforce them .

Where , in the opinion of an interested party, illicit commercial practices
exist which cause injury to a Community industry, a complaint can be lodged
with the Commission by any person, or association acting on behalf of this
Community industry or by a Member State . The injury must be sustained
either within the Community or on export markets . The latter possibility is
of considerable importance in the present context for in some sectors , such
as book publishing , it is indeed on external markets that most of the
damage occurs
procedure which , where there is sufficient evidence , can lead to an
examination procedure on the basis of a formal notice of initiation
published in the Community 's Official Journal . This formal notice indicates
the product and countries concerned and a summary of the information
received . It also indicates the time limits within which interested parties
may make their views known and may request to be heard orally .

. A complaint triggers an internal Community consultation

\

7.6.9 .

7.6.10 .

- 235 -

Where it appears at the end of the examination procedure that action is
necessary in the interests of the Community in order to respond to any
illicit commercial practice with the aim of removing the injury caused by
it , commercial policy measures may be taken . These measures may consist of
the suspension or withdrawal of any concession resulting from commercial
policy negotiations , the raising of existing customs duties or the
introduction of any other charge on imports , or the introduction of
quantitative restrictions or any other measures modifying import or export
conditions or otherwise affecting trade with the third country concerned .
Such measures can be taken , however , only after the prior discharge of any
international procedure for consultation or for the settlement of disputes
which the Community has an international obligation to respect . Indeed ,
more generally , the procedures established by the new instrument are
expressly subjected to compliance with all existing international
obligations and procedures .

In the field of intellectual property , and copyright in particular , the new
instrument could conceivably play a significant role in the future ,
particularly as regards countries which practise a policy of more or less
active connivance in the pirating of goods and services developed
elsewhere .
Such a situation was at the basis of a first complaint , filed
in March 1987 , by the International Federation of Phonogram and Videogram
Producers concerning Indonesia . It alleged that this country permitted the
unauthorized reproduction of sound carriers on its territory , by reason of
the lack of protection granted to Community works in Indonesia , thus
causing serious injury to the Community industry
. Following consultations
with the Indonesian authorities and the commitment undertaken by Indonesia
to grant Community nationals national treatment on the basis of reciprocity
as regards the protection of sound recordings , the procedure has been
closed . The negotiation of a bilateral agreement between the Community and
Indonesia would permit the consolidation of this result and its extension
to the area of copyright in general . If in the future this instrument is to
have practical effect , the industries concerned will not only have to be
prepared to use it , but also to prepare possible complaints carefully and
communicate relevant information to the Commission . The value of the
instrument thus depends in large part directly on the response and full
co-operation of those whose interests are being adversely affected .

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7.7 .

Summary

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7.7.1 .

As is the case for other topics as well , copyright cannot be seen only in a
unilateral , bilateral or Multilateral context . Copyright too is placed in a
multi-faceted, plurilateral world . The success or failure of multilateral
efforts, and the ongoing negotiations in the new GATT round in particular,
cannot fail to have an effect on the Community 's bilateral efforts . These,
in turn, will affect and are affected by the use which interested parties
may make of the autonomous new commercial policy instrument . It is this
complementarity between the Community 's multilateral, bilateral and
autonomous efforts which lies at the basis of this chapter .

7.8 .

Conclusions

7.8.1 .

The Commission would accordingly welcome the views of interested parties on
the following matters :

a ) the priorities to be given to the different aspects of reinforcement of

intellectual property protection in the international context ;

b ) the development by the GATT of new disciplines as regards the effective
enforcement of intellectual property laws , in particular , copyright , as
well as the adoption , as appropriate , of improved substantive standards ;

c ) the more systematic use of bilateral relations , to ensure better

protection in non-Member States of the intellectual and industrial
property of Community right holders , particularly in the copyright
field .

7.9 .

Timetable for submissions

7.9.1 .

Comments on Chapter 7 should be submitted to the Commission no later than
1 December 1988 .

- 237 -

Report of the Committee of Governmental Experts of Copyright Problems
Arising from the Use of Computers for Access to the Creation of Works .
UNESCO / WIPO / CEGO / II / 7 , 13 August 1982 .

Report of Group of Experts on the Copyright Aspects of Direct Broadcasting
by Satellite , UNESC0 / WIP0 /GE / DBS / I / 4 , 29 April 1985 .

Report of Group of Experts on audiovisual works and phonograms ,
UNE SCO / WIPO / CGE / AWP / 4 . 30 June 1986 .

See paragraphs 7.2.5 . - 7.2.8 . above

^ Recommendation no . R(88)1 of the Committee of Ministers to Member States on
Sound and Audiovisual Private Copying and Recommendation no . R(88)2 of the
Committee of Ministers to Member States on measures to combat Piracy in the
Field of Copyright and Neighbouring Rights .
^ The Semiconductor Chip Protection Act 1984 .
^ Council Directive 87/54/EEC of 16 December 1986, O.J. No . L 24 of 27 January
1987 , page 36 . See also the notice as to interim protection in the United
States , O.J. No . C 284 of 7 November 1985 .

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12

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The Council has taken a Decision effective from 7 November 1987 on the
extension of rights on the basis of reciprocity to natural and legal persons
in the United States and the United Kingdom dependencies for whose external
relations the United Kingdom is responsible , O.J. No . L 313 of 4 November
1987 , page 22 .

Law Partially Amending the Copyright Law , Law No . 62 of 14 June 1985 .

Council Regulation ( EEC ) no . 3912 / 87 of 18 December 1987, O.J. no . L 369 of
29 December 1987 , page 1 .

See Chapter 2 paragraph 2.2.31 . and Chapter 5 paragraphs 5.3.5 ., 5.3.6 .

Protocol extending the arrangement regarding international trade in
textiles , paragraph 27 , July 1986 .

Council Regulation ( EEC ) no . 2641 / 84 of 17 September 1984 on the
strengthening of the common commercial policy with regard in particular to
protection against illicit commercial practices , O.J. no . L 252 / 1 of
20 September 1984 .

See Bourgeois and Laurent : Le " Nouvel instrument de la politique
commerciale " : un pas en avant vers l' élimination des obstacles aux
échanges internationaux , Revue trimestrielle de droit européen , no. 1 ,
January-March 1985 , p. 52 .

See Chapter 2 , paragraphs 2.2.2 ., 2.2.3 .

O.J. no. C 136 of 21 May 1987 , page 3 .