Damning report on EUCD

The European Commission released a damning report last month (ETD/2005/IM/D1/91) on the implementation and effect of Directive 2001/29/EC, the 2001 copyright directive and the EU's answer to the US Digital Millenium Copyright Act of 1998. It concludes:

"The Directive offers right holders in the European Union a higher level of protection than is required under the international treaties that bind the Member States...

The Directive’s rules on TPMs, probably the pièce de résistance of the entire Directive, deviate from the WIPO Treaties in two important respects. The nexus with copyright infringement that is essential to the WIPO regime has been mostly lost in the course of the adoption of article 6. This gradual drifting away from the copyright paradigm is reflected in the broad scope of the Directive’s definition of ‘effective technological measure’, which includes access control mechanisms. Not only does the European TPM regime go much further than is required by the WIPO Treaties, it is also out of step with corresponding laws of its main trading partners...

The standards set by the Directive regarding the rights of reproduction and communication to the public – both essential in the digital environment – have led to a satisfactory level of actual harmonisation of the laws in the Member States...

By contrast, the provisions on limitations and exceptions have not led to a similar result. Here, actual harmonisation has hardly been achieved...

The Directive’s rules on TPMs have had a modest harmonizing effect at best. Article 6(1) instructs Member States to offer ‘adequate legal protection’, without indicating the nature of such protection, thereby leaving States a broad spectrum of legislative solutions, varying from civil law to criminal law...

The broad definitions of restricted acts given by articles 2 and 3 of the Directive appear to have increased legal certainty for players in the online content industry. The Directive has left little doubt that, in principle, authorization must be sought for any type of digital use of copyright works or other subject matter, including the ‘file sharing’ over peer-to peer networks. The right of communication to the public that now includes an exclusive right of ‘making available’, serves as a powerful enforcement tool in the hands of right holders, both against infringing ‘file sharers’ and, more importantly, against ISP’s.

On the other hand, the combination of a broadly defined reproduction right and an equally broad right of communication to the public causes uncertainty about their interplay, especially when article 5(1) regarding incidental and transient copying is factored in. The overlap of both economic rights gives rise to confusion in the market place, and may result in unjust or inefficient licensing practices. Consultations with stakeholders have revealed that this overlap is not merely an academic problem, but that it has actually led to undue and unjustifiable ‘double payment’ to different right holders for unitary acts of exploitation, resulting in market distortions.

Article 5(1) is another source of uncertainty. In particular, the article’s requirement that a transient copy be without “independent economic significance” makes the line between infringing and non-infringing activities unpredictable...

Regarding TPMs, the vague wording of articles 6(1) and 6(2) of the Directive again leave much to be desired in terms of legal certainty. The wording of Article 6(4) is particularly convoluted and obscure. The provision fails to instruct Member States what ‘appropriate measures’ should be taken to protect disenfranchised users, or how long they should wait before taking action...

The sustainability of the Directive’s TPM regime is also highly questionable. In particular, it raises concerns regarding its compatibility with the two other existing legal regimes that prohibit the business of trafficking in illicit devices: those of the Computer Programs Directive and the Conditional Access Directive. Apart from its opaque wording, the ‘facilitation’ rule of article 6(4) lacks sustainability in that it is not formulated in technology-neutral terms. The rule immediately collapses as soon as content is delivered online and on-demand on agreed contractual terms...

The broad scope of the right of reproduction, which according to article 2 encompasses direct or indirect, temporary or permanent reproduction, by any means or in any form, in whole or in part, gives right holders near-absolute control over acts which in the off-line world were never the right holder’s prerogative...

While the substance and often broad wording of the limitations contained in the Directive may initially suggest a certain balance between the interests of rights holders and those of users, this superficial balance may be seriously undermined not only by the optional character of all but one limitations, leaving Member States discretion to arrive at ‘imbalanced’ legislative solutions, but also by the fact that they are not imperative and thus may be overridden by contract. This is exacerbated by the Directive’s failure to directly correlate the legal protection of TPMs with acts of copyright infringement. Thus the Directive fails to recognise that certain acts of circumvention may be done for entirely legitimate purposes. Moreover, it may serve as an incentive for the deployment of DRM for reasons well beyond the rationales underlying copyright protection"

The report comes in two parts, STUDY ON THE IMPLEMENTATION AND EFFECT IN MEMBER STATES’ LAWS OF DIRECTIVE 2001/29/EC ON THE HARMONISATION OF CERTAIN ASPECTS OF COPYRIGHT AND RELATED RIGHTS IN THE INFORMATION SOCIETY and The Implementation of Directive 2001/29/EC in the
Member States Part II. There is also an executive summary available.