Saturday 14 July 2012

How tech law principles are starting to mould copyright

This has been a hectic couple of weeks for copyright.  Ten days ago the EU Court of Justice published the UsedSoft decision, which will have us thinking in a completely new way about exhaustion of rights online.  On Thursday this week the Canadian Supreme Court delivered five separate copyright judgments on subjects ranging from fair dealing to communication to the public, each in its separate way reinforcing a more user-centric, less author-centric, approach to copyright. 

The Canadian decisions could have come straight out of the pages of the Hargreaves Review.  They stressed the need in copyright for:
“a balance between promoting the public interest in the encouragement and dissemination of works of the arts and the intellect and obtaining a just reward for the creator”, which requires recognising the “limited nature” of creators’ rights (SOCAN v Bell Canada [2012] SCC 36 at [8], quoting the 2002 SCC case of Théberge.)  
This reflected:
“a move away from an earlier, author-centric view which focused on the exclusive right of authors and copyright owners to control how their works were used in the marketplace … Théberge focused attention instead on the importance copyright plays in promoting the public interest, and emphasized that the dissemination of artistic works is central to developing a robustly cultured and intellectual public domain.”
The Canadian decisions also evince, in common with the ECJ’s UsedSoft decision, a desire to mould copyright in the digital and online area so that it applies in the way that it did (and still does) to physical copies.  “The traditional balance between authors and users should be preserved in the digital environment.” ESA v SOCAN  2012 SCC 34 at [8].

It is by now a commonplace observation that, thanks originally to the accident of technology that both accessing a digital copyright work and any dealings with it require the making of at least transient copies, copyright enjoys greater reach over digital copies than over hard copies. 
This extended ambit gives us the bizarre (to anyone other than techie copyright lawyers) spectacle of courtroom debates over exactly how many fragmentary milliseconds of what kind of copyright works are held in a memory buffer at any given moment (see e.g. FAPL v QC Leisure [2008] EWHC 1411 (Ch) and ITV v TV Catchup [2011] EWHC 1874 (Pat)).
It also gives copyright owners more far-reaching control over online consumer behaviour compared with offline and provides new opportunities to extract royalties.  It was an attempt to double-dip royalties for downloaded online games that provoked the disfavour of the Canadian Supreme Court in ESA v SOCAN.   

Both the ECJ and the SCC kicked back hard against what they perceived as imbalance between hard copy and digital copyright outcomes.  The ECJ strove to achieve ‘functional equivalence’ between a fully paid permanent download and a sale on physical media.  It said that what would otherwise be a communication to the public would be converted into a distribution to the public if a ‘transfer of ownership’ (defined in economic rather than legal terms) had taken place.  The ability to rely on the first sale doctrine in order to acquire second-hand software applied in equivalent situations, regardless of whether the transactions took place on physical media or by download. 
The SCC invoked a similar concept of ‘technological neutrality’ in several of its judgments, two of which together held that the right of communication to the public applied to streaming but not to downloads.  The principle of technological neutrality:
“requires that the Copyright Act apply equally between traditional and more technologically advanced forms of the same media. … In our view, there is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet.  The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.” (ESA v SOCAN)
It is, probably, no coincidence that these user-centric decisions were made in cases concerning tariff-setting and an attempt to control further dealings in legitimately purchased items.  In these cases the rightsholders’ positions could easily be portrayed as unmeritorious attempts to reap an advantage from an over-technical application of copyright.  In piracy cases, on the other hand, rightsholders can reckon on a more sympathetic audience for pleas that expansive rights and remedies are required in order to restrain unbridled infringement. 

Tech lawyers have for many years advocated that laws affecting technology should, all other things being equal, be technology neutral and should seek to achieve functional equivalence online and offline.  
As long ago as 1999 the US UETA model law for electronic transactions was based on the notion of achieving functional equivalence between electronic transactions and their paper counterparts. 
Technological neutrality is also a desirable goal, mostly as a guiding principle for drafting legislation.  The drafter should seek a level of generality that will ensure that the legislation does not become out of date or skewed in its effect as technology develops.  While it can be dangerous to elevate technological neutrality to a principle that overrides all other considerations, the Canadian Supreme Court's invocation of the principle was appropriate in order to correct a perceived legislative skew resulting from an unforeseen accident of technology.
Courts have previously shown themselves to be willing to reach outside the four corners of copyright statutes in order to beat copyright into better shape.  We can think of implied licence, non-volitional copying, the fundamental right of freedom of expression, public interest, public benefit, derogation from grant and principles extracted from the Electronic Commerce Directive. 
Now we can add to the list two technology law doctrines, the deployment of which at the highest judicial levels perhaps, along with Hargreaves, heralds a sea change in attitudes to the appropriate scope and function of copyright.

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