Publications
European IP Bulletin, Issue 7, December -
Copyright
Copyright
4. BELGIUM FOUND IN BREACH OF EU COPYRIGHT OBLIGATIONS
The Member States were obliged to implement Council Directive 92/100/EEC of
19 November 1992 on rental right and lending right and on certain rights
related to copyright in the field of intellectual property, into their
national laws by 1 July 1994. Article 1 of the Directive requires Member
States to recognise that authors have the exclusive right to authorise the
public lending of various copyright works. However, Article 5 allows states
to derogate from this exclusive right if remuneration is made to the author.
Belgium did recognise the lending right and created an exception under
Article 23 of the Belgian Loi relative au droit d'auteur et aux droits
voisins for “lending [that] is organised for an educational and cultural
purpose by institutions recognised or organised officially for that purpose
by the public authorities”. Article 62 of the law allowed for authors to be
remunerated in those circumstances and Article 63 stated that the King would
fix the relevant amount by decree. However, no such decree was ever made and
so no rate of remuneration was fixed for derogation cases. Belgium said that
this was because of opposition to the lending right by the Belgian federated
entities, which are responsible for cultural matters in Belgium. The
European Commission brought this action claiming that Belgium had failed to
fulfil its obligations under Articles 1 and 5 of the Directive.
The ECJ found in favour of the Commission. The Court rejected Belgium’s
argument that Articles 1 and 5 of the Directive were not precise enough to
be incorporated into its national law, finding that where directive
obligations are unclear, states must determine the relevant criteria in
their own territory rather than just completely refusing to implement what
is called for by the Directive. Additionally, Directive 92/100 authorised
Member States to exempt certain categories of undertaking from paying but
did not require them to do so. In so far as it was unclear which
undertakings this authorisation applied to, the States should have not
exempted any undertaking rather than completely failing to implement the
relevant articles.
It was deemed irrelevant that, according to the Belgians, no remuneration
was paid in France, Greece or Luxembourg among others. A State cannot
justify its failure to perform its obligations under EU law by pointing to
similar failings on the part of other Member States. The hostility of the
federated entities also provided no excuse for the failure to implement
because a Member State cannot rely on provisions, practices or circumstance
in its internal legal order to justify a failure to comply with obligations
and time-limits laid down by a Directive.
Companies such as IMS and Microsoft are certainly in favour of having high qualification levels and conditions being specified before they are ordered to part with their intellectual property under compulsory licensing. Supporting this view is the argument that if the levels are set too low then any innovative company may be discouraged from developing projects, since as the potential for compulsory licensing is increased, the company’s potential commercial gain will be reduced.
The present debate stems from IMS’ claim in Germany of copyright infringement of its “1860 brick structure” for collecting pharmaceutical sales data. This structure has become the national standard in the German pharmaceutical industry. It segments Germany into 1,860 geographical “bricks” each with at least four pharmacies. This avoids the German data protection law prohibition of providing sales information for individual pharmacies.
After blocking their use on the grounds of copyright infringement, IMS then refused to license use of the structure to two competitors, NDC Health of the US and Asyx of Belgium. In response, NDC approached the Commission alleging abuse of a dominant position and seeking an interim grant of a compulsory license by IMS. On the facts of the case the license was granted. The reasoning being that there was a risk of serious and irreparable harm to competition and intolerable damage to public interest of the licence was not granted.
On an appeal by IMS, the decision to grant the licence was stayed by the CFI and ECJ and on 13 August 2003 the Commission reversed its earlier decision of July 2001 and rescinded the interim measures. The reasoning for this was that NDC’s circumstances had changed and NDC, having developed its own methods, had increased its market share.
The case is now once again in the news as Advocate General Antonio Tizzano has given his opinion to ECJ on this complex issue. The ECJ is presently seized of the matter with German Courts seeking its ruling on the preliminary question of defining the scope of copyright protection granted to IMS on its bricks structure, and whether the refusal to NDC by IMS of using its methodology is justified on any grounds. The Advocate General has opined that refusal to grant compulsory licences of IP protected assets can constitute an abuse under certain circumstances. However, licenses can be granted to future licensees with onerous conditions like that they must have an intention of producing goods and services with different characteristics.
This case highlights the perennial tension between IPR protection and the Community’s competition policy. Although the opinion of the Advocate General carries significant weight at the ECJ and is followed in some 80% of the cases, the substantive judgement of the Court is awaited with interest. Whatever the outcome of the case, it will undoubtedly have an effect on the law relating to refusal to supply, essential facilities and IPRs.
6. P2P UNITED LAUNCH MEMBER CODE OF CONDUCT
P2P United a group representing the peer-to-peer technology industry’s
leading companies and proponents, launched a code of conduct in September
2003 in order to improve the industry’s image in the face of accusations of
piracy and copyright infringement.
The code of conduct is divided into three sections, namely, installation and
configuration, compliance with applicable law and user privacy, security and
confidentiality.
By endorsing the code of conduct, the members of P2P agree to obtain the
user’s informed consent before installing or upgrading their software on the
user’s computer; to provide a method by which their software may be
uninstalled by the user; and to require the user to confirm the folders
containing the file material that the user wishes to make available to other
users before, making such material available.
The members of P2P further agree to inform their users that the use of
software for illegal activities, including infringement of intellectual
property laws, is strictly forbidden and may subject the user to civil and
criminal penalties. Also, they agree to provide their users with appropriate
links to sources of information on copyright law and to comply with the
Children’s Online Privacy Protection Act.
Finally, they agree to establish and post on their website user privacy
principles; to make available information regarding potential risk of
inadvertent exposure to children of inappropriate content; to incorporate
features into their software that enable adults to restrict use of the
software to designated members of their households; and not to disclose
personal information about the user or the user’s online activities to third
parties unless required by the law to do so.
The Recording Industry Association of America (RIAA), who regularly launches
lawsuits against P2P users, said the code of conduct was a positive step but
that P2P United needed to go further and ensure that its member were more
active in educating their users about the consequences of illegal
file-sharing that is rampant on their networks, as well as the other risks
these networks pose to personal privacy and security.
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