Copyright and the three-step test: Are broadband levies too good to be true?

Abstract

In response to the explosion of unlicensed sharing of films, songs and other copyrighted material over the Internet through peer-to-peer networks, several legal scholars have argued for the introduction of a statutory licence scheme to legalize the non-commercial use of peer-to-peer systems. Under this licence scheme, rights holders would be compensated by imposing a levy on peer-to-peer related services and products, such as Internet service providers. This article argues that the introduction of the proposed statutory licence would not comply with the first two steps of the three-step test as included in several intellectual property treaties, such as the Trade-Related Aspects of Intellectual Property Rights (TRIPs). The statutory licence scheme is too wide in its scope, in regard to the number and types of work covered. Furthermore, the exempted acts (ie file sharing) would compete with the normal exploitation of works by the copyright industry.

Notes

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2. Engadget, The Engadget Interview: Chris Gorog, CEO of Napster, available at http://www.engadget.com/entry/1234000210035724 (accessed 23 March 2005).

3. Wired ‘The answer to piracy: five bucks?’, available at http://www.wired.com/news/digiwood/0,1412,62434,00.html (accessed 23 March 2005).

4. J Spoor, ‘General aspects of exceptions and limitations to copyright’, Paper delivered at ALAI Study Days—the Boundaries of Copyright: Its Proper Limitations and Exceptions (‘ALAI Study Days’), Cambridge, 1998, p 1.

5. P Goldstein International Copyright: Principles, Law, and Practice, Oxford University Press, Oxford, 2001, p 293.

6. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society (Infosoc Directive) recitals 14 and 31.

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8. Gervais, op cit, note 7, p 27; S J Liebowitz ‘Alternative copyright systems: the problems with a compulsory license’ IP Central Review Vol 1, No 2, 6 May 2004, http://ipcentral.info/review/v1n2liebowitz.html (accessed 16 March 2005); R Kasunic ‘Solving the P2P “problem”—an innovative marketplace solution’, http://fairuse.stanford.edu/commentary_and_analysis/2004_03_kasunic.html (accessed 16 March 2005); P Eckersley ‘Virtual markets for virtual goods: an alternative conception of digital copyright’, http://www.ipria.org/publications/workingpapers/ipria%20wp%2002-03.pdf (accessed 21 March 2005).

9. ‘Agreement on Trade-Related Aspects of Intellectual Property Rights’ (adopted 15 April 1994) 33 ILM 81 (TRIPs), art. 13.

10. IFPI ‘IFPI digital music report 2005: facts and figures’, http://www.ifpi.org/site-content/press/20050119b.html (accessed 23 March 2005).

11. Ku, op cit, note 1, p 8; N Negroponte Being Digital Hodder & Stoughton, London, 1995, p 58.

12. Ku, op cit, note 1, p 8.

13. Ibid; Martin Kretschmer ‘Digital copyright: the end of an era’ European Intellectual Property Review Vol 25, No 8, pp 333–341, 2003; C A Alberdingk Thijm, Het Nieuwe Informatierecht: Nieuwe Regels voor het Internet, Academic Service, 2004; Netanel op cit, note 1; Fisher, op cit, note 1.

14. Kretschmer, op cit, note 13, p 2.

15. Netanel op cit, note 1; Fisher, op cit, note 1.

16. Netanel op cit, note 1; Fisher, op cit, note 1.

17. Netanel op cit, note 1, p 2.

18. Fisher, op cit, note 1.

19. Netanel op cit, note 1, p 17.

20. Ibid, p 26; Fisher, op cit, note 1, p 16.

21. Netanel, op cit, note 1, p 16.

22. Fisher, op cit, note 1, p 4.

23. It should be noted that literature on this subject uses very different terms: statutory licence, compulsory licence, levy systems, tax and royalty systems, etc.

24. For a thorough analysis of the history and aims of the private copying exceptions: F Christie and K Gaita ‘Principle or compromise? Understanding the original thinking behind statutory licence and levy schemes for private copying’ Intellectual Property Quarterly Vol 4, pp 422–447, 2004. For an overview of reprography levies across the EU: L Guibault ‘The reprography levies across the European Union—introduction and conclusion’, http://www.ivir.nl/publications/guibault/introconcl.htm (accessed 16 March 2005).

25. Infosoc Directive art 5(2)(b).

26. Alberdingk Thijm, op cit, note 13, p 96; I van Hunen ‘Een nieuwe gedaagde voor de muziekindustrie?’ Juridisch Tijdschrift voor Internet en E-Business, No 6, pp 211–217, 2004.

27. Rb. Haarlem, 12 May 2004, LJN AO9318.

28. Cour D'Appel De Montpellier 3ème Chambre correctionnelle, 20 March 2005, Dossier 04/01534.

29. Gervais, op cit, note 7, p 27.

30. N Helberger ‘It's not a right, silly! The private copying exception in practice’ INDICARE Monitor, No 7 October 2004.

31. Netanel, op cit, note 1, p 3; Fisher, op cit, note 1, p 4.

32. Infosoc Directive Art 5(2)(b).

33. Berne Convention for the Protection of Literary and Artistic Works, 8 September 1886, completed at Paris (1896), revised at Berlin (1908), completed at Berne (1914), revised at Rome (1928), at Brussels (1948), at Stockholm (1967), revised at Paris (24 July 1971), amended 28 September 1979 (Berne Convention).

34. P Johnson ‘One small step or one giant leap’ European Intellectual Property Review Vol 26, No 6, pp 265–272, 2004, see p 265.

35. S Henry ‘The first international challenge to U.S. copyright law: what does the WTO analysis of 17 U.S.C. § 110(5) mean to the future of international harmonization of copyright laws under the TRIPs agreement?’ Penn State International Law Review Vol 20, pp 301–327, 2001, see p 307.

36. S Ricketson The Berne Convention for the Protection of Literary and Artistic Works: 1886–1986, Kluwer, Deventer, 1987, p 482.

37. D J Gervais The TRIPs Agreement: Drafting History and Analysis Sweet & Maxwell, London, 2003, p 144; Gervais, op cit, note 7, p 15.

38. S Ricketson ‘The boundaries of copyright: its proper limitations and exceptions: international conventions and treaties’ Intellectual Property Quarterly Vol 1, pp 56–94, 1999.

39. WIPO Copyright Treaty, WIPO Doc. CRNR/DC/94, Dec. 20, 1996, 36 I.L.M. 65, art 10.

40. WIPO Performances and Phonograms Treaty, Dec. 20, 1996, 36 I.L.M. 76, art 16(2).

41. Infosoc Directive, art 5(5).

42. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society, art 6(3).

43. Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases, art 6(3).

44. P B Hugenholtz ‘De Wettelijke Beperkingen Beperkt. De WTO Geeft de Driestappentoets Tanden’ Tijdschrift voor Auteurs-, Media & Informatierecht (AMI) No 10, p 2, 2000.

45. TRIPs art 9(1).

46. J Oliver ‘Copyright in the WTO: the panel decision on the three-step test’ Columbia Journal of Law and the Arts Vol 25, pp 119–170, 2002, see p 132.

47. Henry, op cit, note 35, pp 317–319; Gervais, op cit, note 37, p 146.

48. Oliver, op cit, note 46, p 151.

49. WTO United States: Section 110(5) of the US Copyright Act—Report from the Panel (15 June 2000) WT/DS160/R (Panel decision).

50. Panel decision, para 2.1.

51. Panel decision, para 2.2–2.17.

52. Panel decision, para 7.1.

53. Johnson, op cit, note 34, p 2.

54. Oliver, op cit, note 46, p 133. Compare: A Chua ‘The precedential effect of WTO panel and appellate body reports’ Leiden Journal of International Law Vol 11, No 1, pp 45–61, 1998; and R S J Martha ‘Precedent in world trade law’ Netherlands International Law Review Vol 45, pp 346–377, 1997.

55. TRIPs art 13.

56. Panel decision, para 6.112.

57. Ibid.

58. Ibid.

59. Panel decision, para 6.109.

60. Ibid.

61. Ricketson, op cit, note 36, p 482.

62. Panel decision, para 6.105

63. Panel decision, para 6.111–6.112

64. Oliver, op cit, note 46, p 150; J C Ginsburg ‘Toward supranational copyright law? The WTO panel decision and the ‘three-step test’ for copyright exceptions', http://ssrn.com/abstract = 253867 (accessed 16 March 2005), p 12.

65. Oliver, op cit, note 46, p 154; Ginsburg, op cit, note 64, p 5.

66. Panel decision, para 6.112.

67. Henry, op cit, note 35, p 320.

68. Panel decision, para 6.133

69. Panel decision, para 6.134

70. This in itself is a limited approach because P2P is possible trough a dial-up connection. Fisher, op cit, note 1, p 19: Fisher's tax and royalty system includes dial-up users, but Fisher questions whether they should be taxed.

71. Panel decision, para 6.127.

72. Ibid.

73. Johnson, op cit, note 34.

74. Telecom.Paper, Research Report—Dutch Broadband 2004, http://www.telecom.paper.nl/Reports/reportinfo.asp?id = 140 (accessed 20 March 2005).

75. Ibid.

76. Panel decision, para 6.148.

77. Ginsburg, op cit, note 64, p 6.

78. Netanel op cit, note 1, p 16.

79. Senftleben, op cit, note 7, pp 158–168; contra: C A Alberdingk Thijm ‘Fair use: het auteursrechtelijk evenwicht hersteld’ Tijdschrift voor Auteurs-, Media & Informatierecht (AMI) No 9, pp 145–154, 1998.

80. TRIPs art 13.

81. Oliver, op cit, note 46, p 155.

82. Ibid; Hugenholtz, op cit, note 44, p 295.

83. Panel decision, para 6.166.

84. Panel decision, para 6.167.

85. Ricketson, op cit, note 38, p 56.

86. Ricketson, op cit, note 38, p 58; S von Lewinski ‘Mandatory collective administration of exclusive rights—a case study on its compatibility with international and EC copyright law’, http://portal.unesco.org (accessed 16 March 2005), p 7.

87. Christie and Gaita, op cit, note 24, p 426.

88. Alberdingk Thijm, op cit, note 13, p 96.

89. Hugenholtz et al, op cit, note 7, p 46.

90. Alberdingk Thijm, op cit, note 13, p 95.

91. Netanel op cit, note 1, p 8.

92. Ibid., pp 1–2.

93. Ricketson, op cit, note 38, p 70.

94. Panel decision, para 6.177.

95. Panel decision, para 7.178.

96. Panel decision, para 6.183.

97. A Zetner ‘Measuring the effect of music downloads on music sales, Symposium: Does file sharing hurt record sales?’, http://www.law.upenn.edu/polk/dropbox/zertner.pdf (accessed 24 March 2005). Contrast: C Oppenheim and M Robinson ‘Loughborough University students’ attitudes to P2P music file sharing' http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/2003_2/oppenheimandrobinson (accessed 21 March 2005).

98. For a thorough analysis of copyright implications of music download websites see Hunen, op cit, note 26.

99. IFPI, IFPI fact sheet—The legitimate online music market, www.ifpi.org/site-content/press/20041007 k.html (accessed 23 March 2005).

100. Panel decision, para 6.209.

101. Hugenholtz, op cit, note 44.

102. Panel decision, para 6.180.

103. R Dhamija and F Wallenberg ‘A framework for evaluating digital rights management proposals’ http://www.sims.berkeley.edu/∼rachna/papers/EvaluatingDRM.pdf (accessed 21 March 2005), p 2.

104. Ginsburg, op cit, note 64, p 15.

105. Eckersley, op cit, note 8, p 51.

106. J Jackson ‘International law status of WTO dispute settlement reports: obligation to comply or option to buy out?’ American Journal of International Law Vol 98, p 109, 2004.

107. EFF ‘A better way forward: voluntary collective licensing of music file sharing’, http://www.eff.org/share/collective_lic_wp.php (accessed 21 March 2005).