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Brussels, 9 April 2001

Commission welcomes adoption of the Directive on copyright in the information society by the Council

The European Commission has welcomed the adoption by the EU's Council of Ministers on 9 April of the Directive establishing pan-EU rules on copyright and related rights in the Information Society. Adoption of the Directive fulfils one of the priority objectives set by the Lisbon European Council as part of the process to preparing the transition to a competitive, dynamic and knowledge-based economy in the EU. The final balanced outcome is a result of over three years of thorough discussion and a fine example of co-decision making where the European Parliament, the Council and the Commission have all had a decisive input. The adoption by consensus demonstrates the extent to which the Directive achieves common ground in an area of diverse interests. It is an essential building block for the Information Society and until now, one which was missing. The Directive is due to be implemented by Member States in national law within 18 months of its publication in the EU's Official Journal (likely within a few weeks).

Internal Market Commissioner Frits Bolkestein commented that "This is a very significant achievement. Not only is this Directive the most important measure ever to be adopted by Europe in the copyright field but it brings European copyright rules into the digital age. Europe's creators, artists and copyright industries can now look forward with renewed confidence to the challenges posed by electronic commerce. At the same time, the Directive secures the legitimate interests of users, consumers and society at large."

The text, as adopted, includes all nine of the compromise amendments voted by the European Parliament at its February 2001 plenary session. The Parliament's amendments had already been fully endorsed by the Commission especially as they reflected the delicate balance of the Council's Common Position.

The Directive will stimulate creativity and innovation by ensuring that all material protected by copyright including books, films, music are adequately protected by copyright. It provides a secure environment for cross-border trade in copyright protected goods and services, and will facilitate the development of electronic commerce in the field of new and multimedia products and services (both on-line and off-line via e.g. CDs).

The Directive harmonises the rights of reproduction, distribution, communication to the public, the legal protection of anti-copying devices and rights management systems. Particular novel features of the Directive include a mandatory exception for technical copies on the net for network operators in certain circumstances, an exhaustive, optional list of exceptions to copyright which includes private copying, the introduction of the concept of fair compensation for rightholders and finally a mechanism to secure the benefit for users for certain exceptions where anti-copying devices are in place. Further details on these and other aspects of the Directive are given below.

Adoption and implementation of the Directive will enable the Community and its Member states to ratify the 1996 World Intellectual Property (WIPO)Treaties -the so-called Internet Treaties. These two treaties, namely the WIPO Copyright Treaty (WCT) on the protection of authors and the WIPO Phonograms and Performances Treaty (WPPT) on the protection of performers and phonogram producers, were adopted by WIPO in December 1996.

Technical copies on the net

The Directive provides an obligatory exception for service providers, telecommunications operators and certain others in limited circumstances for particular acts of reproduction which are considered technical copies. A satisfactory balance has been found for what has been an extremely controversial issue. There are many conditions to be fulfilled before the exemption applies. In particular, those acts of reproduction have to form an essential part of a technological process and take place in the context of a transmission in a network. The Directive ensures therefore that there will be effective operation of the World Wide Web for those who place copyrighted material on the net and those who transmit or carry such material.

Exhaustive list of optional exceptions

There is now a detailed exhaustive list of exceptions to the reproduction right and right of communication to the public. All are optional and therefore Member States may choose to apply any or all of these exceptions. However, the list is exhaustive which means that no other exception may be applied. This proved controversial. Therefore, a "grandfather clause" has been included which allows Member States to continue to apply existing exceptions in minor cases for analogue (not digital use) only.

Fair compensation

This was originally suggested by the European Parliament in relation to certain exceptions and taken on board by the Commission in its amended proposal. It applies to three of the exceptions, namely reprography (photocopying), private copying and broadcasts reproduced for viewing or listening in certain social institutions. However, Member States are given flexibility in how to interpret this. In particular, in certain minor cases, there may be no obligation for payment or further payment. The precise form of such compensation (which may, but does not have to, take the form of levies on copy shops, sales of blank tapes and equipment, as exists in most Member States) would be up to the Member States to decide in accordance with their own legal traditions and practices.

Member States would also have a degree of flexibility in their treatment of fair compensation for time shifting i.e. private copies made off the air from radio or television for the purpose of viewing or listening to the broadcast at a later more convenient time.

Legal protection of anti-copying devices and exceptions

This has been amongst the most political and controversial topics of the whole debate. The problem has been how to ensure that an exception e.g. an act of reproduction or copying for illustration for teaching can be made use of where a copyrightholder also has in place an anti-copying device e.g. a digital tracker designed to prevent piracy. Failure to address this would have meant that the exceptions could have been meaningless in some cases. Here too there has been a balanced compromise.

Firstly, rightholders have complete control over the manufacture, distribution etc. of devices designed to circumvent anti-copying devices. A more flexible solution in this regard would have carried a greater risk of abuse and piracy.

Secondly, the Directive provides that rightholders either voluntarily or by way of agreements with other parties have to provide those who would benefit from a particular exception e.g. schools, libraries in the case of teaching, with the means to do so. It will be up to Member States to ensure that such means exist.

However, as far as private copying is concerned, the quality and quantity of private copying and the growth of electronic commerce all mean that there should be greater protection for rightholders in digital recording media (whereby unlimited numbers of perfect copies may be made rapidly). In certain limited cases, where rightholders have made the means available, private copying may be carried out.

Community exhaustion

The Directive applies Community exhaustion and not international exhaustion for the distribution right. This is in line with previous Directives in the field of copyright. Therefore, once a copyright protected product such as a CD or CD-ROM is marketed in the Community by or with the consent of the rightholder, the distribution right is said to be "exhausted" i.e. there is no right to restrict further distribution in the Community. Parallel imports throughout the Community will therefore be permitted but the rightholder will retain protection against parallel imports from third countries.

Relationship with the E-Commerce Directive

Both the E-Commerce Directive (see IP/00/442) and this Directive are important elements in meeting the EU objective to create a harmonised legal framework to encourage the development of the Information Society. They complement each other, as this Directive deals with aspects of copyright law whilst the E-Commerce Directive harmonises various legal issues relating to the functioning of the Internal Market. This Directive supplements the liability provisions of the E-Commerce Directive by confirming that injunctive relief i.e. the ability to stop infringing activity by court or other action must also be available to rightholders against intermediaries when their services are used by third parties to infringe copyright or related rights.

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