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The European Commission  has adopted a Communication on Copyright and Related
Rights in the Information Society.   The Communication, which is a  follow-up
to a July 1995 Green Paper, outlines the legislative initiatives required  to
achieve throughout the  European Union a  level playing  field for  copyright
protection in the framework of the  European Single Market and presents  them
in a coherent  context. A level-playing field is  essential to the success of
the  Information Society  in  the EU,  as  the content  of  most  of the  new
interactive services are  protected by intellectual property. EU action to be
proposed in the  first half of 1997, will  focus on the reproduction, on-line
communications  and  distribution  of  protected  material,  as  well  as  on
protection against the  circumvention of anti-copy devices and the like. This
action  will be undertaken  in parallel  with action  at the world  level, on
which international negotiations are in progress.

Single   Market  Commissioner,   Mario  MONTI,   on   whose  initiative   the
Communication was adopted, commented:  We have  to provide the basis for  the
Information Society  to be a success  for investors,  rightholders, users and
consumers,  while ensuring  we  respect both  the  Single Market  and current
multilateral initiatives at the world level. 

In  its Communication,  the  Commission addresses  all  issues raised  in the
Commission's  Green  Paper,  and outlines  four  priorities  for  legislative
action to eliminate distortions  of competition between Member  States and/or
significant barriers  to  trade  in  copyright  goods  and  services  in  the
following areas:

*   Reproduction right: The reproduction right  has always played a  key role
    in copyright  protection. Its  role will  increase even more  in the  new
    information  society environment.  Once protected  material is  converted
    into  electronic  form  and  transmitted  digitally,  it   is  much  more
    vulnerable to exploitation by copying than in the past.

  In view  of the development of new forms  of reproduction, such as scanning
  of printed works, or loading and/or storing  of digitised material (such as
  text,  music and  video) in a  computer memory or  other electronic system,
  there is  a need for  a clear  definition of what  exactly is protected  as
  well as an equivalent level of protection across the EU.

  The  Commission  will   therefore  pursue  further  harmonisation   of  the
  reproduction right as a matter  of priority. In so doing, harmonisation  of
  the  limitations/exceptions  to the  reproduction right  will be  of utmost
  importance.
  As further explained in  the Communication, the present  differentiation in
  Member  States'  legislation   or  case  law,  notably   between  unlimited
  exclusive rights of  reproduction, cutting down  the exclusive  right to  a
  right to  remuneration  (legal license),  and  permitting certain  acts  of
  reproduction without remuneration ( fair  use  exception)  will have to  be
  reassessed and further harmonised in the new electronic environment. 

*   Communication to  the public right: The market in  on-demand  services is
    considered  to  be  one  of  the  main  areas  of  growth,  with  further
    technological   developments   to   come.    On-demand    services    are
    characterised  by the fact that material stored in a digital format (such
    as texts,  films, phonograms, software,  or databases) is  made available
    to  the public  or its individual  members in  such a  way that  they may
    access it  and request its transmission individually with respect to time
    and place.

  As  the exploitation of works  and other protected  material in the context
  of  on-demand  services will,  to a large extent, depend on EU-wide markets
  and a  clear and coherent  level of protection  of these activities  across
  Member States, the right  applicable to  on-demand  transmissions will have
  to be harmonised as a matter of priority.

  The Commission  will propose  protecting digital  on-demand   transmissions
  on the basis of a further harmonised right  of communication to the public.
  This right  will include   the making  available to members  of the  public
  individual  access  to  works  and   other  protected  matter .  Harmonised
  measures  will  also set  out  the limitations  to this  right,  which will
  follow the line taken for the harmonisation of the reproduction right.

*   Legal protection  of anti-copying systems:  Digitisation not only  brings
    about new  risks for  rightholders of  copyright and  related rights,  it
    also makes  it  potentially easier  to  administer  and control  acts  of
    exploitation by means of access  control, identification and anti-copying
    devices.

  A successful  large-scale introduction of  such systems or  devices - which
  are under development or have already been developed by  the private sector
  - will  depend upon  the implementation  of measures  that provide  for the
  legal protection in  relation to such acts such as circumvention, violation
  or manipulation of these systems.

  Community  legislation  is  therefore  required   to  harmonise  the  legal
  protection  of the  integrity of  technical  identification and  protection
  schemes. 

*   Distribution right:  The distribution right entitles the author of a work
    to require  his consent for  any distribution of  tangible copies of  his
    work. Important differences exist between  Member States as to  the exact
    form as well as the exceptions  to the right, in particular with  respect
    to  its  exhaustion .   The distribution  right may  be considered  to be
    exhausted with  respect to tangible  copies of a  work once they  are put
    into circulation in the market with the consent of the rightholder.

  In certain  cases, some  Member States  provide for  no  exhaustion of  the
  distribution right at  all whereas others  apply exhaustion  even when  the
  first legal act  of distribution  has occurred in  a place  outside the  EU
  ( international  exhaustion ). The  absence of  harmonised  rules for  most
  categories of works  provokes significant obstacles  to the  free trade  in
  goods as  rightholders,  under certain  conditions,  are allowed  to  block
  imports  of   copies  of   their  work   from  a   Member  State   applying
   international exhaustion .

  The Commission therefore intends  to harmonise  the distribution right  for
  authors  as regards all categories  of works. Any  initiative in this field
  should also  affirm  that  the  principle  of  exhaustion  applies  to  the
  distribution of goods only and not to  the provision of services, including
  on-line services.

  Other equally fundamental issues for  the exploitation of copyright  in the
  Information Society  (relating to  the broadcasting  right, the  applicable
  law and  law enforcement,  management of rights,  moral rights) necessitate
  further  consideration and/or action  before decisions  can be  taken. This
  implies,  inter  alia,   the  need  to  evaluate  further  relevant  market
  developments, through  studies and/or contact  with interested parties  and
  Member States. Some  of these initiatives have already started, others will
  be launched later this year.

Copyright, the Information Society and the Single Market

The Communication is based  on the results of consultations  launched in 1995
with the  adoption of the Commission's  Green Paper on  Copyright and Related
Rights in  the Information Society (see  IP(95)798). The  Green Paper focused
the  debate  with  the  other  EU   institutions,  Member  States,  industry,
rightholders, users and  all other interested  parties on  the challenges  to
copyright  and  related  rights  brought  about  by  the  new   technologies.
Following  publication of the Green  Paper, interested  parties provided more
than  350 submissions. A conference in Florence  in June 1996 (see IP(96)479)
marked the end of this extensive consultation process of almost two years.

Many interested parties  stressed the  necessity of a  Single Market for  the
successful development  and commercial viability  of new Information  Society
products and services.  The Single Market must, in particular, offer adequate
and secure conditions  for investment and  legal security across  the EU  and
not be fragmented by different sets of rules in different Member States.

The  Communication  states that  further harmonisation  needs  to  adjust and
complement  the existing  legal framework  on copyright  and related  rights,
where this is necessary for the proper  functioning of the Single Market  and
the  need  to  bring  about  a  favourable  environment  which  protects  and
stimulates creativity and innovative activities  across Member States. In  so
doing, the  traditionally high level of  copyright protection  in Europe must
be  maintained  and  further developed  at  both  European and  international
level. At the same  time, a fair balance of rights and  interests between the
different categories  of rightholders and between rightholders and users must
be safeguarded.

The copyright  Communication forms  part of  Commission efforts  to ensure  a
flexible  regulatory framework  to ensure  a  Single  Market for  Information
Society services (see Memo/96/94).  A number of Directives  have already been
adopted,  such as  the  data protection  Directive  (95/46/EC) and  the legal
protection  of databases  Directive (96/9/EC).  In  other areas,  legislative
initiatives  are  well underway  (such  as  the  Commission  Green Papers  on
encrypted services,  Commercial Communications and  the protection of  minors
in  audio visual  services,  and the  proposed  Directive on  a  transparency
mechanism ).

The international aspects of the Information Society

Progress  needs also  to be made  concerning copyright and  related rights at
the international  level. An isolated response  from the  European Union will
not  be  sufficient. As  the  Information  Society has  a  global  nature, it
requires  global answers, at  least with respect  to the  most crucial points
related to the digital  environment. A Diplomatic Conference  is due to  take
place  from  2  to  21  December  1996  under  the  auspices  of  the   World
Intellectual  Property Organisation  (WIPO)  on  the possible  conclusion  of
three international  treaties -  a Protocol  to the  Berne Convention,  a New
Instrument for the Protection of  Performers and Producers of  Phonograms and
a possible  Instrument  for the  sui  generis  protection of  databases.  The
Commission, in  its Communication, stresses  the importance  of a  successful
outcome of this Conference as  it provides the timely and unique  opportunity
for  agreeing  on   international  minimum  standards  of   protection.  Such
agreements  could considerably minimise the  risks of divergent approaches in
legislation and the creation of havens for piracy.

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