Remuneration for the Use of Works

Silke von Lewinski, Silke von Lewinski

• Publisher: De Gruyter
• Year: 2016
• ISBN:
  9783110476439
• Edition: 1
• Topic: Law
• Subtopic: Copyright Law
• Index: Law

Royalty payments are once again becoming a hot button issue for authors and artists, as well as other holders of copyright or related rights, because they fail to receive adequate compensation for the use of their work on the internet. This volume from the 2015 ALAI Congress contributes to the international discussion of this issue by examining the causes of the problem and possible solutions, including a set of business models to compensate for internet usage. The volume contains mainly English as well as French and Spanish contributions.

Session 1: Legal Models to
Assure Remuneration for Use de lege lata

Les modèles juridiques pour garantir une rémunération de l’utilisation de lege lata

Modelos legales para aseguar una remuneración por el uso de lege lata

1. Exclusive Rights

Thomas Dreier5

1.1 Introduction

In copyright, exclusive rights are the fundamental tool allowing authors to control the dissemination and, in particular, to obtain appropriate remuneration for the use of their works. Therefore, this first part of Session 1 focuses on the role of exclusive rights in this regard. After the break, the second part of Session 1 will be devoted to the importance of remuneration rights.

Throughout the history of copyright, the extension of the exclusive rights to new technical modes of reproduction and communication – or, more precisely, the catching up with economic changes that resulted from the use of new dissemination technologies for the exploitation of copyrighted works – has always been a challenging task.

After broad coverage of uses was achieved with regard to analog exploitation, digital and networking technologies have again challenged the reach of exclusive rights. With the introduction of the making-available right in the WIPO Treaties of 1996 an attempt was made to close the gap yet again. But does that mean that all economically relevant use acts are now covered by an exclusive right? What about the different forms of linking, up- and downloading, and, last but not least, providing platform services? Of course, it is appropriate to leave the activity of most forms of mere linking outside of the realm of copyright’s exclusivity. But the BestWater-decision of the CJEU (which applies the same rule to the embedding of someone else’s copyrighted content in a user’s website) gives rise to serious doubt. Perhaps even more important: although ISPs – and in particular platform providers such as Google’s YouTube (to name only the most prominent) – today generate most of the income on the basis of the use of copyrighted material, they are not even addressed as players by copyright legislation. Rather, the legal liability of ISPs mostly results from legal rules outside of copyright law proper. Moreover, their liability is generally limited to injunctive relief, if it is not exempted altogether. It follows that platforms generally do not license for themselves in their own name, but at best only on behalf of their users.

Of course, problems of exclusivity in a digital and networked environment don’t stop here. In some instances the possibilities to effectively enforce exclusive rights by obtaining injunctive relief and/or damages, are less strong in the digital than in the analog world (because of the multiplicity of users and their anonymity). In some instances, however, the possibilities to effectively enforce exclusive rights are even stronger than in the analog world (due to the direct contact between right holders and end-users in which use conditions can be negotiated by contract or simply imposed upon the end-user by way of technical access and use restricting devices).

Another important question concerns the mechanisms for adequate remuneration of creators and performing artists vis-à-vis editors and media companies (in particular those which make use of a broad or even comprehensive repertoire). The exclusive right as such is silent on the issue of remuneration. Therefore, even in the analog world individual creators and performing artists often do not obtain adequate remuneration. So far, only some countries have tried to remedy this situation. Others leave the remuneration to the forces of the market, which often results in the stronger parties exploiting the weaker ones.

But whenever the granting of an exclusive right in the hands of individual creators and performers does not lead to an adequate sharing in the proceeds or at least the financial gains obtained from the exploitation of copyrighted subject matter, the exclusive right, it might be argued, has lost its raison d’être. In such circumstances, a claim for remuneration might indeed be the better tool in order to assure adequate remuneration for the use of copyrighted subject matter.

These two issues – scope and enforcement tools to assure remuneration as well as mechanisms to ensure adequate remuneration for creators and performers – will now be highlighted by Marshall Leaffer and Tristan Azzi. Marshall Leaffer is a Professor at the Indiana University Maurer School of Law, USA, and a longtime ALAI-Member. Tristan Azzi is Professor at the University Paris 1, Pantheon Sorbonne, France.

Mr. Leaffer, the floor is yours.

Marshall Leaffer6

1.2 General Report: Scope and enforcement tools to assure remuneration, part A of the questionnaire

INTRODUCTORY SUMMARY: In the internet environment, copyrighted works are used by dispersed, anonymous members of the public, under conditions of low visibility. In this environment, license agreements are difficult to conclude and recourse to litigation is impractical. How rights owners are remunerated in the digital age is the theme of our conference. My task here is to discuss the responses given to Part A of the questionnaire regarding the scope and enforcement of the exclusive rights under existing law. My colleagues in turn will discuss Parts B, C, and D, which cover different aspects of remuneration mechanisms.

This report is based on the responses from 20 countries. In the short time I have and for the purpose of clarity, I cannot provide a discussion in nuanced, intricate detail. My goal is to present the general tendencies revealed in the reports. For more nuance and perhaps accuracy one should access the individual national reports.7

Part A poses four questions (with subparts) on how each country’s laws implemented the exclusive rights enjoyed by the copyright owner. I have placed in italics and bold the questions presented to the national groups of ALAI, followed by a general summary based on the national reports. As stated above, these short summaries, of course, are not intended to be exhaustive but are only to be used as a frame of reference in reading the national reports. These summaries are then followed by examples from the national reports.

Question one concerns how eight enumerated acts on the internet are treated by each country’s law. I have broken down this question in three groupings. In “section I” of Question one I discuss hyperlinking, deep linking, and framing/embedding. In “section II”, I discuss the acts of streaming, downloading, and uploading of works. In section III, I examine the “supply of a platform for ‘user generated content’ and “other novel forms of use on the internet”.

I. First Question

How are the following acts covered by the copyright law of your country (statute and case law)?

i. Offering of hyperlinks to works

ii. Offering of deep links to works

iii. Framing/embedding of works

iv. Streaming of works

v. Download of works

vi. Upload of works

vii. Supply of a platform for ‘user-generated content’

viii. Other novel forms of use on the internet

1. SUMMARY – HYPERLINKING, DEEP LINKING, FRAMING/EMBEDDING: The most interesting fact revealed in these reports is that, with the possible exception of Croatia, no country has addressed these acts of hyperlinking, deeplinking, and framing/embedding in their statutory law. As the Argentine Report (Barrenechea & Wegbrait) emphasizes:

“The Argentine Intellectual Property Act8 … does not specifically regulate either the aspects contemplated in the question or any of the uses on the Internet of works or categories protected as neighboring rights. However, these uses are still covered because Section 29 of the Intellectual Property Act recognizes a broad and exclusive right to dispose of works, in whatever form and manner of exploitation. It is considered that this broad formulation covers the Internet.”

It is surprising how little actual litigation we have had on this question given the importance of these typical uses of the internet. Another generalization: I found a slight consensus in the reports that hyperlinking, deep linking, and framing/embedding of works are legal absent other factors that would lead either to direct or to third party liability. As the Hungarian Report states: “offering hyperlinks, deep links, framing/ embedding subject to certain conditions do not constitute a restricted act.”

U.S law provides one solution. Under U.S. law, offering a hyperlink to a website that contains a copyrighted work does not constitute direct copyright infringement because hyperlinks do not themselves contain copyrighted works. However, under U.S. law, claims for third party liability, contributory or vicarious liability, are possible. Claims for secondary liability – for an action in contributory or vicarious liability – are available if a person offering a deep link is likely to have specific knowledge of the infringing work. Likewise, framing or embedding of works has been held not to constitute direct infringement where the work is not stored on an operator’s own computer. There is the possibility of an action for unfair competition.

European law has achieved much the same result as the United States, but the resolution of the problem is more complicated and controversial as revealed in the reports. European reports specifically point out the effect of the jurisprudence of the CJEU in the Svensson and BestWater cases10 in rendering the acts of linking, deeplinking, and framing/ embedding as per se legal. The main bone of contention is not with the result of these two decisions but that Svensson and BestWater appear to conflict with some basic assumptions of the EU Information Society Directive where it is stated that no act of communication to the public can cause copyright exhaustion. The Italian Report reflects the controversy, stating that by requiring a new public or a new media as a requirement for finding infringement as a communication to the public, the court introduces the equivalent of exhaustion of the online communication right. Recall that the study approved by the ALAI Executive Committee in September 2014 maintains that the requirement conflicts with the rules of the WIPO treaties.11 The ALAI study stated:

While the CJEU in Svensson gave a correct and positive response to the basic question of whether hyperlin...