• 2. EXECUTIVE SUMMARY: The Need for Legislative Action
  

2. EXECUTIVE SUMMARY: The Need for Legislative Action

Point of Departure

1. Copyright is a legally anchored exclusive right comparable with a property right and embracing aspects of moral rights and property rights. Hence, it constitutes a basic and human right which enjoys the protection of Art. 1, Art. 2(1) and Art. 14 of the German Constitution. Copyright protects the creators of

   literary works, of scientific and artistic works (text, music and images, but also databases and computer programs) as well as certain participants in the culture

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   business (in particular performing artists, phonogram and film producers, broadcasting organisations).

2. Copyright guarantees creators and producers both control over and participation in the commercial exploitation of their protected works and subject matter; in contrast to property in a tangible object which can only be sold once by its original owner, basically speaking creators have the right to permit or prohibit not only the first but also every subsequent exploitation of their works.

3. Even before the digital age the copyright industry generated approximately 3% of the German gross national product (GNP); future digitisation developments will give rise to a further increase in this percentage. Hence, copyright will gain considerably in significance as regards securing employment and the industrial future of Germany.

   Problems in Connection with the Digital Use of Works

4. Digital technology enables protected works and subject matter to be copied at low expense and without any loss in time or quality; an additional problem is the vulnerability of digital data vis-à-vis manipulation ("digipulation") by third parties. This leads to a loss of control over data that can be accessed - even with permission - by third parties. This loss of control is even greater as regards on-line media (Internet, proprietary Networks, Intranets, etc.) than it is with respect to off-line media (disks, DAT, CD ROMs, DVD, etc.).

5. Owing to the fact that the language of the German Copyright Act is directed at analogue exploitation technologies, certain lacunae and in numerous cases uncertainties arise with respect to the exploitation of works in digital form. The same applies at the international level, for global digital networking is characterised by the ubiquity of the works fed into the net, yet a global copyright will not exist in the near future. Therefore, problems will continue to be regulated by a bundle of co-existing national copyright laws, giving rise to the necessity of world-wide harmonisation as regards both

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   substantive law and issues of applicable law, international jurisdiction as well as the effect, recognition and execution of national judgements in foreign countries.

6. From the perspective of rights owners, a loss of control and uncertainty in legal issues may well entail a drop in investment activities. This could lead to an undesirable restraint regarding investments in the digital infrastructure and in attractive digital products. Such restraint would be heightened by the fact that in many sectors it is currently impossible to predict the manner and extent to which analogue exploitation will be replaced by digital exploitation options (which will co-exist in the mid- if not even in the long term). Moreover, there are differences of opinion between the creators and producers as to the division of rights cm the content providers' side. Contrary to continental European traditions - protecting the author as the original creator and weaker contracting party - producers aim to acquire all the rights at once and on a centralised basis from the authors ("buy-out" in a "one-stop-shop"). Yet on the other hand, authors and rights owners are united in demanding a strengthening of copyright protection in order to compensate for loss of control.

7. In contrast, users of protected works and subject matter fear that such a strengthening of legal protection would result in their gradual exclusion from enjoyment of copyrighted works and that access would be blocked, even to unprotected information. It is alleged that broader copyright protection would make a large number of acts that as yet do not require authorisation subject to the consent of the creator. Libraries in particular have joined the users' side, for in accordance with their responsibilities they wish to lend not only analogue books but also to participate in digital information transmission; yet this means that they will become direct competitors of producers (publishers). The same holds true as regards independent information providers who make use of the preparatory work undertaken by third parties.

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   Recommendations

8. The following principles should be observed in amending copyright law to contend with the challenges posed by digitisation and digital networks:

   • contrary to negative prognoses (e.g. Negroponte), copyright will prevail in the digital world as a vital instrument of cultural and economic control. There is no need for a fundamental new system to regulate the rights in immaterial goods that are of such significance to commerce and society as a whole;

   • Uncertainties in copyright law should be resolved. Apart from this, copyright law should be strengthened and not undermined, for defective or a total lack of copyright protection means that necessary investments cannot be recouped and as a result will no longer be made. Yet without attractive products, the future development of the information society's infrastructure is at risk;

   • however, the loss of control will only be compensated in part by strengthening copyright protection; over and above this the answer to the problems posed by new technologies must be sought in precisely these technologies;

   • the strengthening of legal protection and the development of technical access control mechanisms, control of use and accounting mechanisms, does not preclude the future co-existence of legally protected and "unregulated" spheres (such as the Internet at this point in time). Moreover, unfettered access to information does not necessarily mean that this access will be free of charge;

   • finally, it should be noted that the necessity for global harmonisation of laws owing to developments in technology leads to a drastic reduction in the scope for national regulatory policy. This applies not only to the field of copyright law but to all legal matter affected by networking. The price to be paid for any attempt to

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   • uphold national specific legislative features will be a weakening of the international enforceability of rights.

9. Consequently, the following criteria should be observed in order to achieve adequate and suitable copyright protection:

   • firstly, the legislature is called upon to rectify lacunae and uncertainties in the German Copyright Act and, at the international level, to contribute to global harmonisation of copyright law. The conclusion of the TRIPS Agreement and of the two WIPO Treaties (WCT; WPPT) represents a first step in the area of substantive law. In this context, taking traditional aspects into account, particular attention should be paid to attaining a balance of interests (see in detail Annex 1);

   • secondly, support should be provided for initiatives commenced by rights holders with the aim of providing information on the ownership of rights in individual works, facilitating access to works whilst developing accompanying technical protection;

   • thirdly, it is the responsibility of practitioners to adjust copyright contracts to the changing technological situation with respect to the exploitation of protected works and achievements, and to develop new models of centralised rights management in addition to the existing system of collective administration.