Commissioner Frits Bolkestein said:
"The Parliament has been subjected to unprecedented lobbying onslaught on this Directive, and I regret that some of the parties concerned strived to obtain nothing less than total victory, using sometimes highly emotive arguments, rather than seeking a balanced compromise between the various legitimate interests involved. That is not the European way to move forward.”
He added that “the rapid implementation of this Directive will facilitate the development of electronic commerce and so increase the competitiveness of the European economy."
The new law covers the rights of reproduction, communication to the public, distribution, the legal protection of anti-copying devices and rights management systems.
The Directive provides, among other matters, that consumers will be allowed to reproduce material they already own but will be prevented from distributing unlimited numbers of copies or selling them.
In practical terms, this probably means that a computer user could take his or her music CD and convert a song to MP3 format then e-mail the MP3 file to a friend; but he or she would not be entitled to distribute that file on a service such as Napster that gives access to an unlimited number of music fans.
The vote by the Parliament comes just 48 hours after a decision by a US appeals court to uphold an injunction against Napster, subject to minor amendments to its terms, pending a full hearing later this year on the merits of the case.
Consumer rights groups have supported the move in Europe although there were complaints from some in the recording industry who said that the rules do not go far enough to protect it in its battle against digital piracy.
The directive will allow copyright owners to use “technical protection measures,” such as encryption, to prevent people making unauthorised copies of music and film. Circumventing such measures would become, in most cases, illegal.
Among the amendments rejected yesterday by the Parliament was a proposal that Member States should consult with the European Commission before introducing domestic levies on blank CDs or similar copying media or other changes in their domestic laws to copyright protection.
Both France and Germany recently introduced such copyright taxes on makers of high-tech equipment such as scanners and computers, an extension of existing rules in these countries which put a levy on the makers of photocopiers and blank cassettes.
According to Italian MEP Enrico Boselli, the Directive will render such taxes illegal, but not until technical protection measures become widely available. Until that time, Member States can impose such copyright taxes as they see fit.
The new Directive awaits ministerial approval over the next few weeks, although no significant changes are anticipated. It should then be implemented in the laws of the EU’s 15 Member States within 18 months’ time.
The Directive is in part an attempt by Europe to catch-up and overtake US legal protections for copyright holders. For the past two years, the US has had the Digital Millennium Copyright Act which, among other matters, protects ISPs in relation to actions by their users.
Labour MEP Arlene McCarthy is reported by FT.com as saying, “We’ve voted to neither legalise electronic theft nor to criminalise consumers, and no major amendments to UK copyright law will now be needed.”
The Directive provides rights to service providers, telecoms operators and certain others in limited circumstances for particular acts of reproduction which are considered technical copies.
There are many conditions to be fulfilled before the exemption applies. In particular, those acts of reproduction have to form an essential part of a technological process and take place in the context of a transmission in a network. The Directive aims to ensure therefore that there will be effective operation of the internet for those who place copyright material on the net and those who transmit or carry such material.
There is a list of exceptions to the reproduction right and right of communication to the public. All are optional and therefore Member States may choose to apply any or all of these exceptions. However, the list is exhaustive which means that no other exception may be applied. This proved controversial. Therefore, a "grandfather clause" has been included which allows Member States to continue to apply existing exceptions in minor cases for analogue (not digital use) only.
This was originally suggested by the European Parliament in relation to certain exceptions and taken on board by the Commission in its amended proposal. It applies to two of the exceptions, namely reprography (photocopying) and private copying. However, Member States are given flexibility in how to interpret this. In particular, in certain minor cases, there may be no obligation for payment.
The precise form of such compensation (which may, but does not have to, take the form of levies on copy shops, sales of blank tapes and equipment, as exists in many Member States) would be up to the Member States to decide in accordance with their own legal traditions and practices.
Member States would also have some flexibility concerning how they treat the question of fair compensation for time shifting i.e. private copies made off the air from radio or television for the purpose of viewing or listening to the broadcast at a later more convenient time.
This has been amongst the most political and controversial topics of the whole debate. The problem has been how to ensure that an exception e.g. an act of reproduction or copying for illustration for teaching can be made use of where a copyrightholder also has in place an anti-copying device e.g. a digital tracker designed to spot pirate copies.
Failure to address this would have meant that the exceptions could have been meaningless in some cases. Here too there has been a compromise. Firstly, rightholders have complete control over the manufacture, distribution etc. of devices designed to circumvent anti-copying devices. A more flexible solution in this regard would have carried a greater risk of abuse and piracy.
Secondly, the Directive provides that rightholders either voluntarily or by way of agreements with other parties have to provide those who would benefit from an exception e.g. schools, libraries in the case of teaching, with the means to do so. It will be up to Member States to ensure that such means exist.
However, as far as private copying is concerned, the quality and quantity of private copying and the growth of electronic commerce all mean that there should be greater protection for rightholders in digital recording media (whereby unlimited numbers of perfect copies may be made rapidly). In certain limited cases, where rightholders have made the means available, private copying may be carried out.
The Directive applies Community exhaustion and not international exhaustion for the distribution right. This is in line with previous Directives in the field of copyright. Therefore, once a copyright protected product such as a CD or CD-ROM is marketed in the Community by or with the consent of the rightholder, the distribution right is said to be "exhausted" i.e. there is no right to restrict further distribution in the Community. Parallel imports throughout the Community will therefore be permitted but the rightholder will retain protection against parallel imports from third countries.
This Directive deals with aspects of copyright law whilst the E-Commerce Directive harmonises various legal issues relating to the functioning of the internal market. This Directive supplements the liability provisions of the E-Commerce Directive by confirming that injunctive relief i.e. the ability to stop infringing activity by court or other action must also be available to rightholders against intermediaries when their services are used by third parties to infringe copyright or related rights.