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Copyrights and Copywrongs: Reforming Irish Copyright Law to bolster the digital economy

 

Oisin Tobin and Philip Nolan examine the current copyright regime, the key points of conflict surrounding copyright law, and the potential for changing Irish copyright law.

 

Business, and by extension the economy, is fundamentally about buying and selling things. Historically, those things have been tangible commodities, like food or consumer products. However, in a “knowledge” or “creative” economy the focus is no longer on selling tangible goods; the focus is on selling content. From a legal perspective, when one buys content, one is buying copyright. As a result, copyright lies at the very heart of the knowledge economy.

This new found economic importance has seen copyright taken out of dusty law libraries and thrust into the centre of heated political debates about piracy, the rights of creators, the legitimate expectations of users and the best way to promote innovation and economic growth. The EU has released numerous reports, the most recent being published on May 24 2011, containing proposed amendments to the copyright regime. Our neighbours in the UK have also focused intense political energy, including that of the Prime Minister, on possible reforms to their copyright system.

Brian Cowen, then Taoiseach, announced in December 2010, that the Government was of the view that the existing copyright regime was outdated and said that “the Digital Media sector requires copyright laws that are flexible and suitable for the modern internet environment”. This position is shared by the current Government which was demonstrated on May 9 2011 when the Minister for Jobs, Enterprise and Innovation, Richard Bruton, TD announced the establishment of an expert committee to investigate whether the current copyright regime poses a barrier to innovation. In particular, the Committee is to consider the possibility of introducing a US style “fair use” exemption to copyright protection. The purpose of this article is to explain the key points of conflict surrounding copyright which the Committee, and by extension the Oireachtas, will have to tackle should it decide to reform the Copyright and Related Rights Act, 2000.

 

The basic tension: Creation vs. use

The debates around copyright are often presented, somewhat misleadingly, as being a clash between authors and creators and online IP pirates. While copyright piracy is a fundamental economic problem which needs to be tackled, the controversies surrounding copyright are much more complex.

The law of copyright, like all laws, fundamentally aims to strike a balance between two sets of competing interests; those of the people who create content and those who seek to use it.

Broadly speaking, copyright is created whenever one creates a sufficiently substantive original work which is fixed in some permanent form. This is usually a literary work, though other sorts of work such as sound recordings and performances are covered. The scope of copyright is actually far wider than most people realise; an email or handwritten note is likely to be protected by copyright.

There is no general requirement that the work be meritorious or artistic in some way.

Copyright is a property right as a matter of Irish law. The essence of this right is the ability to exclude others from using the copyright protected work in certain ways without the permission of the creator. This prohibition obviously includes copying the work, but making the work available to the public or adapting the work without permission is also illegal.

Consequently, copyright imposes considerable restrictions on the access and use of creative content. While this is obviously highly beneficial for the creator of the work, it is detrimental to persons who wish to use the work in a certain way. In the absence of any exceptions to copyright, the budding user will either have to buy the copyright outright from the author (this is called an assignment) or get the author’s permission to use the work (known as a licence).

From the perspectives of users of copyright, their view is that the current regime is too favourable to creators and is at the expense of people who wish to use existing content in new and innovative ways. This has come to a head in the area of internet for two reasons.

Firstly, the technical design of the internet means that accessing any information on the net requires that the information be copied. Consequently, nearly every action online potentially infringes copyright and will either require a statutory exemption (such as those used by internet service providers such as UPC) or permission from the copyright holder.

Secondly, the culture that has grown up around the web, and the business models that the web fosters, are largely based around “remixing” existing content and making it available in new and more accessible ways. An excellent example of this is provided by YouTube, business model of which is fundamentally based on hosting and distributing copyrighted works created by third parties.

When Minister Bruton expressed the opinion that copyright may be hampering innovation he most likely meant that Irish companies, and international companies considering setting up operations in Ireland, may be deterred from engaging in the sort of innovation that potentially breaches Irish copyright law. While the Minister’s position may have merit, it must not be forgotten that having strong copyright laws can protect creative industries and encourage them to base their operations in Ireland. The creative sector is another potential plank of economy recovery, as evidenced by the proposals to set up an International Content Services Centre.

This is our policy conundrum; how do we strike a balance between encouraging innovation based on the creation of new content or by having content hosted in Ireland (by having strong copyright laws) whilst at the same time encouraging innovation based on the new and creative use of existing content (by having weak copyright laws). This is a much more vexing issue than is often presented. It is made more difficult by the fact that any substantive reform of copyright poses acute legal, as well as political and economic, difficulties.

 

Working within boundaries

When tackling any problem one needs to lay down from the outset, the restrictions within which one must work. When it comes to reforming Irish copyright law, the Committee and the Oireachtas will have very little space for manoeuvre. There are three legal (as opposed to merely political) barriers that any reform of copyright will need to tackle.

Firstly, in Ireland copyright is protected as a human right of the author under the Constitution. While the exact scope of the constitutional right to copyright is somewhat unclear, it is very likely that any reduction in the scope of the protection afforded will be met with a constitutional challenge.

Secondly, Ireland is obliged, under international trade law, to maintain a certain level of copyright protection. The Berne Convention, TRIPs Agreement and WIPO Treaty all provide that exceptions to copyright cannot conflict with the “normal exploitation of the work” and cannot “unreasonably prejudice the legitimate interests of the author”. Any reform which resulted in a breach of these international obligations would carry grave reputational consequences.

Thirdly, and most importantly, much of Ireland’s copyright regime comes from European law, most notably the Copyright Directive. Of particular note here is the fact that the Copyright Directive provides a seemingly exhaustive list of exemptions to copyright protection. These exemptions are quite limited and defined (e.g. the making of copies for research) and it is highly questionable whether, as a matter of European law, Ireland could introduce new categories of exemption, such as the “fair use” doctrine which is to form the centre of the Committee’s work.

 

What is fair use?

As noted above, European copyright law (and by extension Irish copyright law) contains a large number of specific, but narrow, exemptions to copyright protection. This approach has the advantage of providing legal certainty; both creators and users of copyrighted material know what is and is not permitted. Conversely however, this approach may prevent the use of copyrighted material, without permission, in ways that could be seen as socially beneficial.

In contrast, US law offers a broad “fair use” copyright exemption. This is a general exemption from copyright for “purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research”. In determining whether a use is “fair” a judge is required to consider:

1. The purpose and character of the use, including whether the use is of a commercial nature or is for non-profit educational purposes;

2. The nature of the copyrighted work;

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. The effect of the use upon the potential market for or value of the copyrighted work.

The obvious advantage of fair use is that it gives the copyright regime a great degree of flexibility, and may allow an innovator to use copyrighted material without the author’s permission or a clear statutory exemption, in ways which they can prove to a court is socially beneficial and does not unduly impinge upon the copyright holder’s rights. Conversely, the clear disadvantage of this regime is its acute uncertainty. It can be exceptionally difficult for a specialist IP lawyer, let alone a potential entrepreneur, to determine whether or not the proposed use, and by extension business model, is protected or not. In addition, a fair use approach would have certain constitutional consequences particularly given that the ability to shape the scope of copyright would shift from the legislature (both in Brussels and Dublin) to the Courts.

 

Conclusion

The future direction of Ireland’s creative and technology sectors will depend on the copyright law we adopt. Individuals, particularly in business, respond to incentives. If our copyright regime incentivises the creation and location of content in Ireland by offering strong protection, then we will likely see an increase in this sort of activity. If, on the other hand, our regime encourages the use of existing copyrighted material in innovative ways by non-creators, then we will likely see a surge in the number of enterprises focusing on this. The challenge is to strike the correct balance between these two competing, and perhaps conflicting, objectives. It is a challenge which is made much more onerous by the fact that Ireland’s copyright regime is largely governed by laws outside of the control of the Oireachtas. It is into this difficult mire that the Committee must venture. We wish them the best of luck.