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4. Substantive Copyright Law: Problems and Need for Reform

The producer Multimedia has created a new interactive product. Before launching his product on the market, he - and his employees - want to know to what extent the product attracts protection and which rules will apply in an individual case. He is startled by the prognoses of renowned media gurus, according to whom the copyright laws. constructed for an analogue world, are absolutely unsuited to the digital environment and have hence become obsolete. Yet being a businessman. Multimedia will not launch his product onto the market until he is certain that he has a chance of recouping his investments and making the envisaged profits. In order to achieve these aims. however, he must be in position to prohibit others from taking or imitating his product without permission and without paying licence fees.

According to the law as it currently stands, corresponding to previous technical developments, the provisions expressly cover collections, cinematographic works, databases, computer programs, videograms and phonograms. Where do digital works fit in? To which rights are employed creators entitled? May existing works be altered or even faked without restriction by using any of the digital tools available? How does on-line and off-line distribution of digital works fit into the traditional distinction between tangible and intangible exploitation of a work? In particular, is

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protection afforded to authors and producers against the digital product being made available in a database by a third party, without permission? What are private users allowed to do with digitally obtained products? How much scope for manoeuvre do libraries and information brokers have in the digital environment? And just who is liable for infringement in the long chain of information transmission - ranging from content provider via several service providers, network operator and access provider to the end user?

It is often postulated that copyright law has fallen hopelessly behind the explosive developments in technology and will therefore soon become obsolete as a regulatory instrument in the digital world [Fn.3: According to Negroponte in particular, "Being digital' 58 (London 1995).] . Yet this prognosis appears unlikely, for a number of reasons:

  • firstly, in the past copyright law has proved that it is flexible and open to reform in the face of technological advances; in this respect it was unimportant whether the technology led to new objects of protection (photographs, film, phonograms and videograms, computer programs and databases) or whether it enabled new kinds of exploitation of protected works and achievements (by phonograms, radio, television, video, cable networks and satellites); consequently, there are no principal obstructions to incorporating multimedia works and on-line provision thereof into copyright law;

  • secondly, in a digital context there is still a need for a categorisation of goods in the sense of property, guaranteeing to creators rights in the intellectual creations they have created. The reason lies not only in the fact the a certain degree of property protection is afforded under constitutional law and general human

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    rights, but primarily in the fact that exclusive rights in goods the production of which requires investments constitute one of the main pre-requisites for the function of a market economy. In other words: creators and producers will only make available immaterial goods the creation of which entails considerable investment if they can rely on a legal framework which enables them to gain a profit or at least to recoup their investments in commercial competition. This applies all the more in view of the fact that the creation of protected works is shifting from the individual author to the copyright industry. Hence, in the end the users also have a long-term interest in effective copyright protection, although their short-term interests lie more in being able to undertake acts of use without being subject to copyright provisions;

  • Finally, copyright law does not focus on the interests of creators alone, rather, it embraces the interests of all participants - of authors, producers and even of end-users - and arrives at a reasonable balance between them. In particular, the information contained in a work is not protected as such, but the configuration in which the information is transported to the user. In this respect as well, copyright law does in fact appear to be the right instrument to provide adequate provisions in the digital environment.

Consequently, it is not necessary to develop a completely new model in order to categorise the products in a digital context. Copyright law will remain an essential instrument of cultural and economic control in the digital world. Yet it is true that the law as it is currently in force, with its underlying balance of interests between creators, producers and (end) users, is based primarily on the fixation of protected works and achievements in analogue form; one only need mention the terms "reproduction" and "printed media." Hence, it is necessary to pinpoint the lacunae, legal uncertainties and any inappropriate implications of the Copyright Act as it currently applies in a digital context,

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and to develop and put forward corresponding solutions for these issues [Fn.4: The recommendations made under points 4.1-4.6, 5.1 and 5.3 reflect the results arrived at in the expert opinion "Urheberrecht auf dem Weg zur Informationsgesellschaft," prepared by Schricker , Dreier, Katzenberger and von Lewinski , commissioned by the Federal Ministry of Justice. The issues discussed under points 4.7, 5.2 and 6-8 were not dealt with in the opinion.] .

4.1 Protection of Multimedia Works

The first question to be posed is what kind of copyright protection is granted to digital off-line and on-line media. Two problems must be distinguished: firstly, whether the mere digitisation of analogue material gives rise to copyright protection; secondly, what kind of protection does a multimedia work attract in its individual combination of component parts.

As regards digitisation as such, independent protection does not come into question under the law as it stands, nor should such protection be introduced in future. The reason is that, with the exception of certain individual cases [Fn.5: Such exceptional cases include digitisation processes involving an adaptation of the digitised material (e.g. colourization; improvement of sound), which do not follow purely functional criteria, but which leave the person carrying out the digitisation a certain scope for decision-making which is in fact used in a creative manner.] , digitisation using a scanner or similar device is simply an act of reproduction without any personal creative achievement on the part of the person who carries it out; the originality requirement of Sec. 2(2), German Copyright Act is not fulfilled. According to previous case law, a person who merely copies another's picture does not obtain a copyright or even a

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related right in the copy [Fn.6: See decision of Federal Supreme Court, 1990 GRUR 669 - Bibelreproduktion .]. Were such a right granted, it would then exist side-by-side with the copyright vested in the original author, so that exploitation of the digitised work would require additional authorisation. Such a situation would unnecessarily complicate trade in digital products.

Digitisation as such does not attract protection to the benefit of a person or entity who merely digitises analogue material.

The second question is how to qualify digital off-line and on-line media from a copyright perspective. The significance of the issue lies in the fact that the relevant categorisation entails different legal consequences. To give a few examples: different provisions apply to computer programs created in the course of an employment relationship than do to other works created in the same circumstances; for cinematographic works there are specific legal presumptions as regards the exploitation rights which the authors of the individual creative contributions have assigned to the producers; phonogram producers, film producers and now database producers enjoy rights that are not conferred on other producers. Categorisation is especially compounded by the fact that digital technology permits the creation of a multitude of very different products ranging from music CDs, digital dictionaries, traditional databases to interactive CD ROMs;

the future will doubtlessly bring other kinds of multimedia work. A solution should be guided by two considerations:

  • firstly, protection of the individual elements of a multimedia production must not be confused with protection of the multimedia production as a whole. This corresponds to the previous tradition in copyright law [Fn.7: Even in the area of cinematographic works, which previously entailed the most intensive fusion of the individual independent works (underlying text, script, music, etc.) and achievements (acting performances, phonograms, etc.), German copyright law proceeds from the assumption of the legal independence of the individual component parts, where there is no joint authorship (Sec. 8, German Copyright Act).]

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    and, in addition, takes into account the fact that it remains possible to dispose of the individual contributions separately, even after the individual elements have been combined in one single work. A different solution is conceivable, but not advisable in the current economic situation;

  • secondly, there is no reason to set aside existing legal protection possibilities for digital products without necessity and to replace them with a completely new kind of protection; this is all the more true since in practice the definition of a multimedia work is still extremely unclear, so that a sufficient delimitation vis-à-vis other types of work appears to be impossible.

The implications of the above remarks for multimedia works are as follows: to the extent that the multimedia work is a database in the sense of the EU Directive [Fn. 8: According to Art. 1(2) of the EU Database Directive (cf. point 8.3), a database is a "collection of independent works, data or other material arranged in a systematic or methodical way and individually accessible by electronic or other means;" the identical wording is anchored in the implementation of a new Sec. 4(2), German Copyright Act (Art. 7, German Multimedia Act, IUKDG, BGBl. I, pp. 1870, 1877 et seq .). According to Art. 1(3) of the Directive protection of databases explicitly excludes protection of "computer programs used in the making or operation of databases."] , it attracts copyright and related rights [Fn.9: Pursuant to the future Arts. 87a et seq., German Copyright Act. The new provisions will enter into force on January 1, 1998.] protection as a database; to the extent it is a cinematographic work or a video game, it attracts copyright protection as a cinematographic work under Sec. 2(1)(6), German Copyright Act and also attracts related rights protection to the benefit of its producer pursuant to Secs. 94 and 95, German Copyright Act; to the extent that it

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is a pure phonogram, its producer is protected under Sec. 85, German Copyright Act. [Fn.10: Digital video- and phonograms already fall within the legal definition contained in Sec. 16(2), German Copyright Act ("devices which permit the repeated communication of a series of images or sounds"); yet in the course of a future reform of copyright law this aspect should be clarified, in particular in order to incorporate individual images.] Finally, collections that do not fall within the database definition attract copyright protection under Sec. 4, German Copyright Act; in this respect, however, an independent related right is not granted.

Since it has not yet been clarified to what extent multimedia works, and interactive multimedia works in particular, fall within one of the above-mentioned types of work, it should be pointed out in legislation that a work can consist of the combination or merging of other works. This would ensure that the prerequisites of protection were not examined separately but in relation to the multimedia work as a whole, which would enable protection of the interactivity so characteristic of many multimedia works, provided that it fulfils the originality requirement. The question whether or not it is necessary to provide additional related rights protection for producers of non-original multimedia productions can be left open, at least for the time being, especially in view of the broad related rights protection conferred on database producers.

First, it is necessary to point; out that: data carriers also fall within the definition of videograms and phonograms.

In addition, it would be advisable to clarify in legislation that a work can consist of the combination or merging of works; this would ensure that the prerequisites for protection are not examined separately but in relation to the multimedia work as a whole. However, it would not be advisable to equate all multimedia works with the existing category of cinematographic works; at any rate, analogous

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application of the presumption of assignment of rights with respect to cinematographic works laid down in Secs. 88 and 89, German Copyright Act, to multimedia works is not considered to be advantageous. [Fn.11: See .infra point 5.1.]

The fact that digital products are vulnerable not only to copying of the whole work but also vis-à-vis copying of parts of the work poses additional problems. According to the previous prevailing opinion, unauthorised appropriation of parts of a work only amounts to an infringement of copyright where the relevant part attracted protection as such. This follows from the copyright principle of refusing protection to the smallest components in order to avoid excessive impediments to the creation of new works. Therefore, it is intended to maintain the practice of granting protection against the appropriation of non-original parts under related rights (see point 4.6), if at all, or under competition law.

4.2 Rights Ownership

It is often claimed that the large number of authors of works necessary in order to produce digital off-line and on-line media complicates acquisition of all the rights involved to a degree that sometimes renders realisation of the planned production impossible. Consequently, there are demands for a simplification of the acquisition of rights, the most radical demand advocating the concentration of all rights, from the outset, not with the authors but with the producer of the final digital product.

Notwithstanding the fact that this solution would not be of any use to the producers of digital products comprising works created without regard to their future use in such products, such a radical solution also gives rise to fundamental reservations. According to German copyright law, as a matter of principle the author is the person who creates the work (Sec. 7, German Copyright Act). This still applies where the work is created within the context of an employment relationship (Sec. 43, German Copyright Act) and all the more so where it is created within the context of a commission.

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Even where works contain numerous individual creative contributions, e.g. cinematographic works, the legislature has consciously upheld the principle of the authorship of the persons who created the individual contributions. In this respect attribution of the original authorship is largely determined by international conventions (Revised Berne Convention; TRIPS); in particular, such works would not be made available if those who created them were not able to rely on a legal basis for their exploitation.

In order to facilitate legal transactions in individual cases, the legislature did not establish original authorship of the producer, but determined certain presumptions as regards the assignment of rights (Secs. 43, 69b, 88 and 89, German Copyright Act, for works or computer programs created within an employment relationship and for cinematographic works). Since Sec. 43, German Copyright Act, applies generally to works created in the course of an employment relationship and hence to multimedia works as well, the question arises whether the presumptions of assignment of rights anchored in Secs. 69b, 88 and 89, German Copyright Act - which go beyond the provisions of Sec. 43 of the same Act - should be applied to digital products as well. The answer to this question is negative. Section 69b, German Copyright .Act, pursuant to which any exploitation rights in computer programs created by an employee are transferred to the employer, unless there is an explicit contractual provision to the contrary (not only those rights required by the employer in accordance with the purpose of the employment relationship, as under Sec. 43 of the Act), such provision deriving from the EC Computer Program Directive, was not carried over to the EU Database Directive. There is no reason for German law to adopt a different path to Europe on this issue. It does not seem advisable to apply the cinematographic presumption of assignment of rights under Sees. 88 and 89, German Copyright Act, to multimedia works either. [Fn.13: Secs. 88 and 89, German Copyright Act, apply anyway to those multimedia works that qualify as cinematographic works.] This would require a

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sufficiently precise definition of multimedia works, something that appears to be impossible (see point 4.1). Furthermore, an important prerequisite of Sees. 88 and 89, German Copyright Act, is a contractual agreement between the author and the producer, within the framework of which the producer may explicitly obtain the grant of the corresponding rights.

Consequently, a chancre in the original authorship is not advisable, nor is an extension of the existing presumptions or the assignment or rights. Instead, It would be advisable to take into account the legitimate interests of the copyright industry by facilitating acquisition of rights in practice (see point 5.3) and the interests of lawful users of digital works by crafting corresponding limitations on copyright similar to Sec. 69d(1), German Copyright Act (see point 4.5).

4.3 Moral Rights

Digital technology enables the user to alter, adapt, distort, and divide a protected work in almost any manner desired, to combine it with other works or parts of works, and to erase the author's name. In the face of such a loss of control, it would appear advisable to strengthen [Fn.14: For this reason one may consider deleting Sec. 93, German Copyright Act, which restricts the right to the integrity of a work in the area of film production.] the author's preventive powers deriving from moral rights [Fn. 15: Cf. supra point 2.2. on the scope of these rights. ] rather than to undermine or revoke these rights on the basis of the frequently voiced argument that the law should not block the way for technical developments.

Notwithstanding the latter argument, changes to the existing preventive powers of authors on the basis of their moral

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rights are not recommended in a digital context:

  • according to the current statutory language, the author's right to the integrity of his or her work requires a balancing of the circumstances of each individual case (danger of prejudice to "lawful intellectual or personal interests"), including the conflicting interests of the user or of the person or entity exploiting the work; hence it only applies in case of serious interference. In addition, the problem of effective protection against unlawful interference with the integrity of a work lies less in a lack of legal protection than in the practical aspects of control;

  • the right: to be identified as author is sufficiently flexible as it is construed in case law. At any rate, identification of the author in the digital context poses less problems than in the analogue sphere, since the names of even a larger number of authors can be integrated easily into digital files. Moreover, producers themselves will have an enhanced interest in being identified correctly and in the correct identification of the relevant authors;

  • as regards other preventive powers deriving from moral rights, there is no need for legislative action at the moment. This applies e.g. to the right of divulgation (or first publication) (Sec. 12, German Copyright Act), the right to access to copies of the work (Sec. 25, German Copyright Act) and to the right of revocation on the basis of non-exercise or changed conviction (Secs. 41, 42, German Copyright Act). The exclusion of these rights in the field of cinematographic works and non-original moving images (Sec. 90, German Copyright Act), justified by reference to the enormous expense of cinema film production, does not have to be extended to multimedia works since it is usually quite easy to remove the part of such a work for which the exploitation rights have been revoked.

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The main problem arising from protection of moral rights in a digital environment is that as yet there has been no final clarification of the conditions governing, and the extent to which it is possible to conclude, binding contracts disposing of moral rights prerogatives. On the one hand, copyrights are inalienable as a whole, just like moral rights and their individual elements (see Sec. 29, German Copyright Act); on the other hand, modification agreements are permissible in principle (see Sec. 39(1), German Copyright Act), and the author may only prevent a licensee from modifying the work within the boundaries of good faith (Sec. 39(2), German Copyright Act). In the literature it is attempted to draw a line around a so-called inalienable core of rights which the author may not assign or otherwise dispose of, even if he wishes to. Case law concerning the right to be identified as author adopts a similar standpoint, permitting agreements reaching up to the so-called inalienable core, which, however, is not defined precisely. [Fn.16: See decision of German Federal Supreme Court, 1995 GRUR 671, 27 IIC 130 (1996), - Architect's Right to be Named .] Conversely, case law does accept implied covenants, if they correspond to customary practices in the relevant sector. This legal situation poses a considerable threat to the legal and planning certainty of the copyright industry; in addition, the author is deprived of the possibility of self-determination even in an area where he or she is able to appreciate the implications of his or her disposition from the outset.

Therefore, it would be advisable to determine precisely the prerequisites of legal transactions concerning permission to modify works and other impairments of authors' ideal interests. Individual, precisely described alterations, even those of a drastic nature, should be rendered permissible. Yet blanket agreements should remain prohibited. This solution does not require a legal presumption or changes to authors' preventive powers deriving from moral rights.

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4.4 Authors' Exploitation Rights

One of the main problems facing copyright law in the digital environment concerns the categorisation of acts of use within the existing system of exploitation rights as anchored in Secs. 15 et; seq., German Copyright Act. In this context the clear distinction in the Act between communication of a work in tangible form and communication in intangible form becomes rather blurred. In addition, acts of transmission which from a legal viewpoint constitute intangible use of the work, are more similar to exploitation in tangible form when viewed from an economic perspective. Yet within the sphere of intangible communication of a work, the act of making a protected work [Fn.17: As regards the specific problems associated with related rights, see infra point 4.6, and on the difference between works and performances supra point 3.3.] available on-line is not easy to categorise (broadcast or other kind of communication to the public?).

As regards the primary form of the right to material exploitation of a work, namely the reproduction right (Secs. 15(1)(1) and 16, German Copyright Act), the following problem arises: in the course of digital use of a work a number of reproduction acts take place which are of a purely technical nature (interim storage, computer-internal reproduction), and which as such do not open up new and independent possibilities of use. In contrast to the use of works in analogue form (reading of a book, watching of a film), use of a digital work also necessitates numerous acts of reproduction which are reserved to the author under the law as it currently stands. On the other hand, authors and rights holders have a greater need to control matters owing to the ease with which the digital data files they have made available to third parties can be copied. [Fn.18: This applies at least as far as access to digital works and in particular exploitation of such works cannot yet be controlled by technical measures; cf . point 6.]

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It would be advisable to satisfy the rights holders' need to control matters by broad application of the reproduction right, which would only exempt purely technical acts of reproduction; this would be in accordance with the previous case law handed down by the German Federal Supreme Court with respect to computer programs. [Fn.19: Cf . decision of Federal Supreme Court, 22 IIC 723 (1991) - Operating system: "... must take into account that during utilisation of computer programs from a purely technical point of view various actual reproduction processes can occur, to which the reproduction right according to Sec. 16 of the Copyright Act does not unreservedly apply."] It is not necessary to include within the term reproduction under Sec. 16(1), German Copyright Act, the display of protected works on a screen, since the right proposed below, namely the right to make protected works available for delayed access, also covers the act of transmission. Apart from this, the legitimate interests of users should be taken into account by establishing a corresponding limitation on copyright (see point 4.5). Consequently, the following factors are of significance in amending the reproduction right:

Digitisation, input, storage and printing of protected word's all constitute independent acts of reproduction under the Law currently in force. Hence it is not necessary to amend Sec. 16(1),), German Copyright Act, in this respect ("the .same applies to Sec. 23, German Copyright Act, as regards adaptations).

In contrast, with regard to all works in digital form, it should be clarified in Sec. 16(1), German Copyright Act - parallel to Sec. 69c(1), German Copyright Act, and Art. 5(a) of the Database Directive - that temporary reproduction of such works does fall under the exclusive reproduction right; yet purely technical acts of reproduction should not fall within this right.

With respect to intangible transmission of works, it is

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undisputed that making such works available for retrieval by members of the public is something that should remain reserved to authors and rights holders. The differences of opinion concern the question whether the distribution right, the broadcasting right or another, previously untitled right of intangible communication should cover such acts. There are two fundamental issues behind the dispute: firstly, not all related rights holders are entitled to a broad right of public communication; performing artists and phonogram producers in particular are only entitled to adequate remuneration when their phonograms are broadcast. Secondly, in practice it appears necessary to make a legal distinction between traditional radio broadcasting and making products available digitally on-line. After all, economically speaking, some acts of on-line transmission do appear rather similar to previous distribution of material copies of the work (e.g. similarity of video-on-demand to sale and rental of video cassettes), so that a number of authors advocate application of the distribution right.

However, if one takes into consideration that by nature making protected material available on-line belongs in the category of intangible exploitation of works, and remedies the previous deficits in protection of related rights by strengthening these rights (see point 4.6), and, finally, if one retains the distinction between the right of making available on-line and traditional radio broadcasting, then one necessarily arrives at the following solution to amend the German Copyright Act:

The right to make protected works available for delayed (interactive) access via digital networks should not be granted through analogous application of the right of material distribution or by applying the rental and/or lending right.

Rather, it is recommended to list this right as a sub-category of the right of intangible communication in a special paragraph of Sec. 15 (2), German Copyright Act; this would distinguish the right from the broadcasting right (Sec. 20, German Copyright Act,) and from the rights of making available using technical means (Secs.

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19(3) and (4), 21 and 22, German Copyright Act). The right could be called a "right of intangible transmission" or "right of intangible making available" or simply a "transmission right." The contents of the right would be described as "the right to make available to the public protected works, by wire or wireless means, in such a way that members of the public may access them," in accordance with the wording of Art. 8, WCT, and Arts. 10 and 14, WPPT. [Fn.20: See infra point 8.2 for further details of the WCT and the WPPT.]

In addition, it is recommended to revise the meaning of the term "public" laid down in Sec. 15(3), German Copyright Act with respect to all kinds of public communication of a work; the revised wording could read as follows: "The communication (of a work) shall be public if it is intended for one or a number of persons that belong to the public. It shall not be public if personal relations exist between the person or persons and the organiser."

It will remain the task: of case law to clarify when an individual person or a number of persons belong to the public in an individual case.

4.5 Limitations on Copyright

The limitations placed on copyright serve to adjust precisely the exclusive rights reserved to the author. They balance the interests of authors against the legitimate interest of the copyright industry, of users and the general public especially in freedom of information and freedom of intellectual creation. In accordance with their nature as exceptions to exclusive rights, as a matter of principle the existing provisions limiting copyrights are subject to a narrow interpretation. In principle, de lege ferenda the legislature does have a broader scope for manoeuvre at its disposal, yet the relevant balancing of interests must be oriented to the

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principle of proportionality anchored in constitutional law. [Fn.21: This derives in particular from the protection of copyright as a property right under the Constitution in the sense of Art. 14(1), German Constitution; see only 3 IIC 394 (1972) . School Book; Kirchenmusik .] There are a number of instruments available for this purpose, ranging from compulsory licenses, mandatory administration of rights by collecting societies and statutory licenses [Fn.22: On the differences see - infra point 5.1.] to a complete freedom from authorisation and remuneration, all instruments permitting different modes of procedure.

In the context of limitations on copyright, evolutive amendments to the existing limitations laid down in Secs. 45 et seq., German Copyright Act, are advisable. The amendments proposed are guided by the principle that the exclusive rights should be limited to the smallest possible extent and to the extent necessary in order to arrive at a reasonable balance between the interests of all participants in the digital environment. Consequently, the current wording of the existing provisions should be examined from three perspectives:

  • it should be broadened where it is too narrow to fulfil the previous purpose of the relevant limitation, in a digital context;

  • it should be narrowed where it embraces digital exploitation but where the interests of rights holders would thus be impaired unreasonably;

  • finally, in view of the specific nature of digital exploitation of works, the extent to which additional exceptions should be laid down to the benefit of users should be examined, exceptions that were not deemed necessary so far within the previous context of exploitation in purely analogue form.

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Analysis of the existing limitations to and exceptions from copyright reveals the following scenario:

The following limitations on copyright: do not require revision:

  • Sec. 45, German Copyright Act (Administration of Justice and Public Safety)
  • Sec. 47, German Copyright Act (School Broadcasts)
  • Sec. 51, German Copyright Act (Quotations)
  • Sec. 55(1), German Copyright Act (Reproduction by Broadcasting Organisations)
  • Sec. 57, German Copyright Act (Accessory Works of Secondary Importance)
  • Sec. 62(l), (2) and (4)', German Copyright Act and Sec. 63, German Copyright Act (Indication of Source).

The same applies to the claim to remuneration for rental and lending pursuant to Sec. 27(1) and (2), German Copyright Act.

In contrast, the following provisions require clarification, amendment, harmonisation or deletion:

  • Sec. 46, German Copyright Act (Collections for religious. School or Instructional Use), could be broadened corresponding to the purpose of the provision to include incorporation of multimedia works having small dimensions, without consent being necessary, and to include transmission of privileged collections by making them available on-line;

  • Sec. 48, German Copyright Act (Public Speeches), should be broadened to include speeches about questions of the day that are made available to the public on-line, and distribution of such speeches on data carriers could also be permitted, subject to the conditions laid down in the provision. Moreover, for the purpose of clarification the exception laid down in para. 2 of the .provision

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    should be broadened to include public communication;

  • Sec. 49 German Copyright Act: (Press Articles and Broadcast Commentaries) the group of articles, commentaries, news and news of the day listed in sub-sec. 1, first sentence and sub-sec. 2 that may be incorporated in a work without consent being necessary, should be broadened to include expressions of opinion made available on-line. It would be no problem to include digital off-line media in the incorporating media as well; as regards incorporation of such material into digital on-line media, expansion of the exception to internal use for personal use would seem appropriate;

  • Sec. 50, German Copyright Act (Visual and Sound reporting), should be extended to cover any kind of reporting by deleting the words "visual and sound" in the field of intangible use of works. At the same time not only reporting "by broadcast or film," but generally speaking any kind of reporting by communication to the public - i.e. including on-line reporting - should fall under the exemption;

  • In Sec. 52 (l) (Public Communication), public communication of works should exclude from the exemption the communication of works by making them available on-line; in Sec. 52(3) (Public Communication), the restriction of the exemption for certain forms of public communication should be extended to public communication by making available on-line, and the public communication of works for purely private purposes by making them available on-line should possibly be exempted from copyright;

  • In Sec. 53 (l) and (2) (l) and (2), German Copyright Act, it should be clarified that digital reproduction, i.e. making of a .single digital copy of a work for private use and for personal

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    scientific use, as we as inclusion of a work in digital archives for private and personal scientific purposes is permissible without: the author's consent, provided that a personal copy of the work is used as the model for the reproduction. Only personal making of copies, not making by another person should be permissible. Otherwise, digital reproduction of works - also with regard to the obligation under TRIPS to grant protection that does not prejudice the normal exploitation of the work and the legitimate interests of the author - should not fail under Sec. 53, German Copyright Act. - In the interests of libraries and documentation services one may consider introducing mandatory administration of the right by collecting societies if agreements are not concluded on a voluntary basis;

  • In Secs. 54 (1) and 54a(1), German Copyright Act, it should be clarified that a levy is payable for blank, recordable digital storage media and for equipment that is likely to be used to make digital copies of a work within the sense of Sec. 53, German Copyright Act;

  • In Sec. 54d (1), German Copyright Act, the reference to the amounts set out in the annex should be deleted;

  • Sec. 55 (2), German Copyright Act, (Reproduction by Broadcasting Organisations), should be deleted as a whole or at least as regards the archiving of lawfully made digital fixations pursuant to Sec. 55(1), German Copyright Act;

  • Sec. 56, German Copyright Act, (Reproduction and Public Communication by Commercial Enterprises), should be extended to cover - if not devices for digital data processing as a whole, then at least - devices that are suitable for retrieving works made available on-line;

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  • Sec. 58, German Copyright Act (Illustrated Catalogues), the restrictions to works "of visual art" and to inclusion in "catalogues" should be deleted. Further, public communication by making works available on-line should be rendered permissible without the author's consent, In return, authors could be granted a claim to remuneration which is subject to mandatory administration by collecting societies;

  • Sec. 59, German Copyright Act, (Works Exhibited on Public Premises), should be extended to include reproduction, distribution and public communication of street scenes by means of digital on-line and off-line media;

  • Sec. 60, German Copyright Act (Portraits), should be broadened to the benefit of those exempted so as to include digital making available on-line - but not broadcasts pursuant to Sec. 20, German Copyright Act;

  • Sec. 61, German Copyright Act (Compulsory License for Phonogram Producers), should be revoked with respect to digital phonograms as well;

  • As to Sec. 62(3), German Copyright Act, (Prohibition of Modifications), in addition to the cases mentioned in the provision, any modification entailed by methods of tangible or intangible exploitation should be permissible, provided that the legitimate interests of the author are not prejudiced thereby;

  • In addition, the scope of application of Sec. 101(1), German Copyright Act, could be extended to cover cases of negligent infringement, where the infringing party was unable to locate the injured party despite all reasonable efforts undertaken to this end, and where he put on deposit an adequate remuneration, even before commencing exploitation;

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  • Finally, parallel to Sec. 69d(1), German Copyright Act, acts of reproduction that are necessary for the use of protected works in digital form by a lawful user, such use being in accordance with their intended purpose, should not be subject to the authorisation of the rights holder.

4.6 Related Rights

Not only authors, but related rights holders [Fn.23: See supra point 3.3.] also require adequate protection in order to control exploitation of their achievements or performances in digital form. In comparison with copyrights proper there are two significant differences to be considered: firstly, so far moral rights protection of performing artists only exists in rudimentary form, so that performing artists are not entitled to an independent right to be identified and, in addition, are left almost unprotected as regards modification of their performances by a lawful user. Secondly, contrary to authors, performing artists and phonogram producers are not entitled to a broad right of communication to the public; in particular, in the case of radio broadcasting of commercial phonograms they only have a claim to remuneration. Where their subject matter and performances are made available on-line, performing artists and broadcasting companies would at most be entitled to this claim to remuneration, if they do not remain without any protection at all since making a work available on-line, according to the opinion of this author, does not constitute a broadcast in the sense of Sec. 20, German Copyright Act. [Fn.24: See point 4.4. within this section.]

On the basis of the Treaty negotiated and concluded at the end of 1996 under the aegis of the World Intellectual Property Organisation (WIPO), a right to be identified as performer and a right of integrity for performing artists will have to be introduced as regards performances fixed in a phonogram; [Fn.25: Art. 5 of the WIPO Performances and Phonograms Treaty; see point 8.2.]

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therefore an express recommendation is necessary regarding a general right of name attribution and integrity of performing artists.

The same considerations apply to the creation of an exclusive right for performing artists and phonogram producers as regards the making available of their performances and achievements in on-demand services. [Fn.26: To be granted according to Arts. 10 and 14, WPPT] This right corresponds to that proposed for authors; [Fn.27: See supra point 4.4.] consequently it should be granted not only to performing artists and phonogram producers, but to all related rights holders protected under the German Copyright Act.

This right would be independent of the previous broadcasting right, so that in the field of radio broadcasting the previous regulation of a mere obligation to pay remuneration for use of commercial phonograms would remain unchanged. However, a more specific regulation would be advisable as regards special-interest (multi-channel) digital broadcasting services. In the sense that the sequence of programs broadcast is still determined by the broadcasting companies, these services still amount to radio; however, owing to the digital broadcasting signal and the recognition codes together with thematic specialisation, users are able to use the signals received in a manner comparable to the use of phonograms. Since the distribution of protected phonogram subject matter is subject to the exclusive right of performing artists and phonogram producers, it would appear advisable to introduce a corresponding exclusive right to cover the use of protected subject matter and performances within the context of multi-channel services as well.

The final question in this context addresses the issue of whether related rights only confer protection against appropriation of a subject matter or performance as a whole, or whether protection exists against taking of individual parts. The argument against such protection of parts is that related rights protection must not be more far-reaching than

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protection under copyright proper. [Fn.28: See decision of Hamburg Higher Regional Court, 1992 GRUR Int. 390 - Tonträgersampling.] However, appropriation of even the smallest parts (in particular individual characteristic notes) can be of such commercial interest that the person taking the notes saves on his own efforts by-profiting from another´s investments. In the literature, opinions are divided on this issue, on the law as it currently stands and as regards the desirable scope of such protection.

According to the solution proposed by this author, protection for parts of a performance or achievement should at least be granted where the appropriation thereof diminishes the possibilities of exploiting the performance or achievement as a whole; this applies to performing artists in particular, to the creators of simple photographs, and to phonogram and film producers, inasfar as more than very small parts of a work are taken.

In conformance with the new WIPO Treaty (WPPT) performing artists should be granted a right to identification and a broad right of integrity. This right should not be limited to fixations in phonograms.

In addition,. going beyond the provisions of the WPPT, not only performing artists and phonogram producers, but all those entitled to related rights protection under the German Copyright Act should be granted an exclusive right to mace their performances and/or achievements available on-line.

Performing artists and phonogram producers should be granted an exclusive right with respect to digital multi-channel services; as regards traditional radio broadcasting, the previously applicable remuneration rule can remain unchanged.

Finally, it is recommended to mention explicitly protection against appropriation of parts where such appropriation impairs the commercial exploitation of the

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subject matter or performances from which the parts were taken.

4.7 Liability for Copyright Infringements

An issue of enormous significance for those who participate in the digital transmission of protected works and achievements is that of who - and under what circumstances - is liable for any copyright infringement that may occur. Participants will only undertake the necessary investments if the risk of being sued for damages and/or an injunction is calculable. In this context it must be taken into account that the extent to which the individual participants are legally and technically expected and in a position to control the contents of the material they handle depends on their relevant activity (provision of contents, operating of a server, of a network service, provision of communication cables/lines, access provider, etc.).

According to the German Copyright Act, a person who interferes with the legally defined exclusive rights of the author is liable for infringement of copyright. This means the person who actually carries out the offence, who instigates or is an accessory to the offence. [Fn. 29: Intent is required with respect to the main offence.] According to case law, a person who does not make copies of a work him or herself but who commissions another to do so infringes the reproduction right. [Fn.30: Intent is required with respect to the main offence.] If such person was acting with fault or negligence, then he is liable for damages; liability for injunction and removal arises irrespective of fault or negligence.

Under copyright law as it currently stands typical preparatory acts are as a rule defined as constituent elements of an infringement (e.g. importation and offering for sale as independent infringements of the distribution right). In this respect, a person who stores a protected work or performance without permission on a server, or a person who makes

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available on-line to a third party works and performances, is liable for copyright infringement. The only problematic issue in the on-line field appears to be liability for damages where there is fault or negligence, such liability applying not only where there is intent but also in cases of slight negligence. In practice, it is very difficult for those in the chain of making protected material available on-line to pinpoint infringements that were initiated by third parties. However, these problems could be solved by imposing corresponding demands as to the care to be taken in the trade. Where such a solution is considered unsatisfactory, relief from liability according to the example of the so-called press privilege anchored in competition law [Fn. 31: Sec. 13(6), Act Against Unfair Competition; according to this provision, editors, publishers, printers or distributors of periodical publications are only liable for damages if they knew that a statement made by them was misleading.] may come into consideration for those persons who are merely involved in transmitting contents that infringe copyright. Yet on no account should a complete exemption from liability (i.e. even for intentional infringements) be laid down. [ As now laid down for access providers in Sec. 5(3) of the Tele Services Act (TDG; Art. 1, Multimedia Act).]

However, liability may be questionable where the person concerned, e.g. the network operator, the access provider [Fn. 33: See on the distinction between copyright-relevant re-broadcasting activities and mere reception and retransmission activities in the analogue field the decision of the Federal Supreme Court, 1994 GRUR 45, 46 - Verteileeranlagen: according to the Court, the broadcasting right is not encrroached upon by a person who limits his activities „to reception of broadcasts via aerial or via cable and subsequently to re-broadcast them"] or the person who only provides storage capacity, does not him-or herself interfere in another's copyright. [Fn. 34: This as previously the case where the person interfering made available devices that were used or could be used by third parties for the purpose of copyright infringements; as ragards previous technology see the case of production and distribution of tape recorders and of tapes, Federal Supreme Court decision, 1964 GRUR 94 - Tonbandgeräte-Hersteller, Federal Supreme Court decision, 1965 GRUR 686 - Magnettonband II.] In this

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respect liability for injunction or removal of a so-called indirect interference with property rights comes into question. [Fn.35: Liability for unjust enrichment will probably not arise under Sees. 812 et seq., German Civil Code, since the person concerned did not infringe another's exclusive right himself.] According to general principles of civil law (Sec. 1004, German Civil Code), such liability exists where the person concerned has an obligation to cease or remove the interference, and where this is technically possible, allowed by law and reasonable following consideration of the surrounding circumstances. So far specific regulation of this issue has only taken place in Sec. 69f(2), German Copyright Act, based on the EC Computer Program Directive of 1991, such provision being a claim to destruction of unauthorised devices intended to circumvent access control measures applied to computer programs, which is enforceable against the owners or proprietors of such devices.

If one transfers the above-mentioned principles to digital on-line transmission of protected works and achievements, one may draw the conclusion that, in view of the technical impossibility of monitoring all the communications processes in the network and in view of the legal protection of the contents communicated, at least network operators and access providers are not obliged to monitor contents; at most they would be subject to a - probably random - obligation to monitor where they had knowledge of repeated and severe infringements. [Fn.36: As in the parallel case of making available terrestrial broadcasting facilities for the dissemination of broadcasts made by third parties, by the then Deutsche Bundespost, see Schricker, "Urheberrechtliche Probleme des Kabelrundfunks" 24 (1986) . Yet in the majority of cases a general control obligation and thus liability of access providers and all the more of network operators is rejected completely; see, e.g. Rütter, 1992 jur-pc 1812, 1820; Marly, 1992 jur-pc 1442, 1443, with reference to the reasoning of the Federal Supreme Court decision in 1976 NJW 799 on liability of the sole importer of a foreign periodical which contained false statements. On the liability of service providers in particular see Spindler, 1996 ZUM 533, and, most recently, Bortloff, 1997 GRUR Int. 387.] In contrast, in an individual case a network

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operator may reasonably be expected to prevent an individual infringement of copyright where he has knowledge of it or where it has been declared imminent in a preliminary injunction; this applies all the more in cases where this is the only possibility of preventing a copyright infringement and where it is not possible to stop the person behind the infringement in time (the so-called subsidiarity of liability of a person causing indirect interference with a property right) . Owing to the fact that such cases must be decided on an individual basis following consideration of all the circumstances involved, it is not advisable to incorporate more detailed description and provisions into the Act; this holds all the more true since, so far, decisions leading to unacceptable results have not been handed down. [Fn.37: Similarly now Sec. 5(4), TDG (Art. 1, Multimedia Act)]

From a technical point of view, efforts should be undertaken to achieve improved identification of infringing contents and improved prevention of infringements without encroaching upon basic rights guaranteed by the Constitution.

The currently applicable, general principles of liability still appear appropriate in the digital environment. In view of the loss of control on the part of rights holders, it is not advisable to reduce liability; in particular, liability for damages in case of intentional infringement and liability to cease in case of individual infringements should not be revoked. However, one may consider excluding from liability

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slight negligence on the part of persons who are merely concerned, with transmitting contents that infringe copyright.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | Juli 1999

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