Notes on Executive Summary

"In sum, it is fair to conclude that the Directive has at best only partly achieved its main goal of promoting growth and innovation in online content services. As our benchmark test has revealed, the Directive deserves particularly low marks for its (lack of) harmonising effect and its (lack of) legal certainty. While the harmonised right of communication to the public is a model of technology-neutral regulation, the Directive's convoluted rules on TPMs have little more to offer to the Member States and its market players than confusion, legal uncertainty and disharmonisation."

Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society entered into force on 22/6/1. Two-fold objectives

  • Adapt legislation on (C) and RR to reflect technological developments
  • Transpose into community law the main int'l obligations arising from the 2 treaties on (C) and RR adopted into the WIPO framework in December 1996.

Purpose of this study: "consider how MS have implemented the Dir into national law and to assist the Comm in evaluating whether the Dir, as currently formulated, remains the appropriate response to the continuing challenges faced by the stakeholders concerned, such as rights holders, commercial users, consumers, educational and scientific users."

  • Part 1 (authored by the Institute for Information Law, Amsterdam) - early assessment of impact of Dir on the development of online business models
  • Part 2 (authored by the Queen May IP Research Centre of the University of London) - comprehensive inventory of the actual implementation by 25 countries, plus summary of remaining disparities and specific problems that have a detrimental and disharmonising effect.

Aim of ISD: 'foster growth and innovation of digital content services in the EU'

  • Part 1's study of online business models hindered by (a) Slow implementation (e.g. France, Spain), (b) Short time of operation: "The short time frame between implementation and assessment makes it difficult, if not impossible, to measure the actual impact, if any, of the norms of the Directive on the actual business decisions of market players."

=> Authors have resolved a methodology to predict rather than describe market impact of legislation. Benchmark test consists of 5 criteria: (1) consistency with int'l norms, (2) actual level of harmonisation achieved, (3) legal certainty, (4) sustainability, and (5) balance

Chapter one - History of Dir, and an overview of current online business models
Chapter two - Effect of Dir on the provision of services from the perspective of the rights and limitations on (C)
Chapter three - Technological Protection Measuress
Chapter four - Relationship between the application of TPMs and the exercise of limitations on (C)
Chapter five - Developing contractual practices; relationship between contracts and the limitations on (C)


Consistency with int'l norms

MS are offered higher level of protection than is required under binding int'l treaties e.g. reproduction right is broader in scope. Accords w/ Berne in terms of 3-step-test for limitations

  • TPM: major difference with WIPO is loss of nexus with copyright infringement; also reflected in broad scope of 'effective technological measure', which includes access-control mechanisms. Far beyond WIPO, and also out of step with main trading partners.

Actual level of harmonisation achieved

Satisfactory level in terms of rights of reproduction and communication to the public, but not so with limitations / exceptions, largely because

  • Provisions leave much discretion to the MS because phrased in broad and categorical terms
  • Failure to provide a set of mandatory limitations, results in mosaic of E and L that vary MS 2 MS and could hinder cross-border services

Rules on TPMs have had modest harmonising success at best, by 1. leaving MS a broad range spectrum of legislative solutions 2. leaving key concepts ambiguous / unarticulated. For example, some MS have maintained a nexus to (C) - as envisaged by Comm - others have worked to the wording.

legal certainty

'Reproduction' and 'making available' right have increased certainty in some respects, but also results in unjust and inefficient licensing practices cf double-payment.
Lack of harmonised rules as to limitations reduces certainty for cross-border services e.g. negotiating separately in the different territories greatly raises transaction costs.
TPM sections extremely vague


Communication to the public is tech-neutral so sustainable, whereas reproduction right focuses on copying so not

List of exceptions less so; a fixed and finite list is necessarily inflexible.
TPM section questionable for its interaction with other legal regimes that prohibit the business of traficking in illicit devices.


"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 rights holders near- absolute control over acts which in the off-line world were never the right holder's prerogative. For users and end-users / consumers the impact of this extensive right seems to go further than the limitation of article 5(1) accommodates."
Although limitations may appear plentiful, 1. Implementation is optional 2. Easily over-ridden (esp by Contracts) <p> Difficulties Compounded by disjunct between TPM protection and (C) infringement


Economic Rights

Reduce scope of reproduction right for online dealings, perhaps by reference to 'purpose'


2-tiered approach which takes into account subsidiarity and proportionality

  • Replace 'optional' list with shorter enumeration of mandatory limitations, reflecting fundamental freedoms, internal market considerations and the rights of European consumers.
  • Allow others, provided they comply with Berne 3ST (in a 'flexible and forward-looking manner') and do not detriment the Internal Market.


4-part clarification to aid harmonisation and alignment with WIPO obligations

  • Circumvention prohibition triggered ONLY where circumvention results in (C) infringement
  • Reduce scope of 'commercial dealings in devices and services' to apply ONLY where dealing leads to prohibited circumvention
  • Anti-circumvention provisions are NOT an exclusive right,
  • "The legal or physical person who applies the TPM on a work with the consent of the rights owner, i.e. usually the content provider or distributor, should be legally entitled to invoke protection against circumvention"
    •  ?

ALSO, clarify and simplify 6(4) > remove distinctions between types of TPM, and between interactive / non-interactive provisions ... (bit more here)

  • Introduce new European monitoring or observing body
  • Oblige content providers to disclose the scope and characteristics of DRM protection


"Private parties should be prevented from unilaterally derogating from ... statutory rights and limitations."

  • MS should declare null and void those unilateral contracts which deviate from those limitations which deserve mandatory status.
  • Develop and promote basic set of user freedoms in the form of codes of best practice for online copyright contracts.