Simon Stokes says that the new Digital Copyright Directive is a significant step in shifting the balance of power away from copyright infringers and back towards copyright owners

The copyright system has a long history. Laws preventing the copying of authors’ works go back to at least the early 18th century. From its inception copyright has had to accommodate technological developments – printing, engraving, photography, film, computer software, home video recording and satellite broadcasting have all been fitted into copyright law over time.
Since the early 1990s lawyers, industry lobbyists and governments have been looking critically at the copyright issues arising out of the internet – a medium that effectively works by copying. Key issues have been hotly debated such as the linking and making available of works on the internet, to what extent ISPs are liable for hosting infringing content and whether copyright protects the transmission.
The European Commission issued a Green Paper on the subject in 1995. Then at the end of 1996 the Berne Convention, which constitutes the main worldwide framework for international copyright protection, was supplemented by two treaties. These treaties, the Wipo (World Intellectual Property Organisation) World Copyright Treaty (WCT) and the Wipo Performances and Phonograms Treaty, deal specifically with certain ‘digital’ issues. The WCT will enter into force upon ratification by 30 states and will give impetus to reform of the law in Europe and the US. The scope of these treaties can be summarised as follows:
l They seek to clarify and adapt the scope the of exclusive rights of copyright owners, ensuring coverage of on-demand transmissions as well as storage of works in computer memory.
l They establish flexibility for countries to develop or extend exceptions and limitations as appropriate in the digital network environment.
l They contain ‘technological adjuncts’ to the exclusive rights with the goal of making the internet a safe place to disseminate and licence copyright protected material.
It is expected that all EU member states as well as the EC will ratify the WCT in years to come, following the implementation of the EU Digital Copyright Directive.
The EU’s Council of Ministers adopted the Digital Copyright Directive on 9 April. This directive was first proposed in 1997 and its final form is the result of a protracted lobbying during the legislative process.
The stated purpose of the directive is to harmonise the rights of reproduction, distribution and communication to the public, and the legal protection of anti-copying devices and rights management systems. Features of the legislation of particular relevance to online businesses are as follows:
l Introduction of a “communication to the public” right that will allow rights holders to control the availability of their works over the internet such as by placing a copy on a website.
l Transient or incidental copies on the net: an obligatory exception to copyright infringement applies to service providers, telecommunications operators and certain others in limited circumstances, for example, where necessary
to facilitate the transmission of copyright materials over a network.
l Exhaustive list of optional exceptions to copyright infringement: member states may choose to apply any or all of a detailed list of exceptions to the rights of reproduction and communication to the public but no other exception may be applied. In particular private copying is only allowed in certain limited cases.
l Fair compensation (this is to apply in three areas): reprography (photocopying), private copying and broadcasts reproduced for viewing or listening in certain social institutions.
l Legal protection of anti-copying devices and exceptions: rightholders are to have complete control over the manufacture and distribution of devices designed to circumvent anti- copying devices or protection.
l Community exhaustion: once a copyright protected product such as a CD or CD-ROM is marketed in the EU by or with the consent of
the rightholder, the distribution right is said to be ‘exhausted’ and there is no right to prevent further distribution in the community. Parallel imports throughout the community are therefore allowed with the rightholder retaining protection against parallel imports from third countries such as the US.