International comity ... or triple error?

Professor Blomqvist

The 1709 Blog has just received the following commentary by Professor Jørgen Blomqvist (University of Copenhagen) on a draft piece of EU legislation that requires no introduction – the proposed Directive on copyright in the Digital Single Market – and, more specifically, its provisions on out-of-commerce works.

Here’s the thoughtful analysis by Professor Blomqvist:

“The proposed European Directive on copyright in the Digital Single Market provides in its Article 7(5) that the provisions on use of out-of-commerce works by cultural heritage institutions “shall not apply to the works or other subject-matter of third country nationals except where points (a) and (b) of paragraph 4 apply”. The two said items set up points of attachment to identify the representative collective management organization from which licenses should be sought for the use, referred to in paragraph (1), ie the digitization, distribution, communication to the public or making available of out-of-commerce works or other subject matter permanently in the collection of a cultural heritage institution. Such use is proposed to be covered by an extended collective license (ECL) system. The points of attachment are, respectively, the country of first publication or first broadcast and the country of headquarters or habitual residence for producers.

It is rather unclear what is meant by saying that those items ‘apply’. The statement in item (26) of the Preamble, however, give reason to assume that it is supposed to mean that the ECL will only apply in cases where the work or other protected subject matter “belongs to” the European Union and does not enjoy protection under the otherwise applicable international treaties, such as Berne, Rome, TRIPS, WCT or WPPT.

Item (26) of the draft Directive Preamble further clarifies that this narrowing down of the scope of application of the ECL is motivated by “international comity”. In reality, it entails a decrease of the protection of works and other protected subject matter of EU origin. They will be subject to a licence scheme that does not apply to works and other such subject matter from third countries. This raises three interesting questions: is it necessary; is it correctly done; and it is permitted at all?

Is it necessary?

The first question may be discussed at length, and I shall not go into details. I would just mention that in my view the proposed provisions appear to be drafted in a reasonably precise and narrow way. They deal with out-of-commerce works and other protected subject matter and should normally not collide with any ongoing normal exploitation. Possible future exploitation of hitherto unexploited works, etc may be safeguarded by the rightsowners by prohibiting the use under the provisions in Article 7(1)(c). Finally, an ECL is probably the gentlest possible way of establishing a limitation or exception to copyright and related rights: the protected subject matter will only be used without permission under conditions, which a significant part of other rightsowners, or their appropriately appointed representatives, have considered acceptable. Accordingly, in my view, the proposed ECL it is not obviously incompatible with the three-step-test of TRIPS Article 13, WCT Article 10 and WPPT Article 16, and it is not obvious why it has been considered necessary to limit the international scope of application.

Is it correctly done?

Be that as it may, the way in which international comity has been safeguarded raises questions, too. According to Article 7(4) and (5) of the draft Directive, as paraphrased in paragraph 26 of its Preamble, the ECL mechanisms “should not apply to works or other subject-matter that are first published or, in the absence of publication, first broadcast in a third country or, in the case of cinematographic or audiovisual works, to works the producer of which has his headquarters or habitual residence in a third country. Those mechanisms should also not apply to works or other subject-matter of third country nationals except when they are first published or, in the absence of publication, first broadcast in the territory of a Member State or, in the case of cinematographic or audiovisual works, to works of which the producer’s headquarters or habitual residence is in a Member State.”

International rules governing which works, performances, phonograms and broadcasts are protected tend to be complicated, and this attempt to regulate them all in a joint provision seems to add analytical complexity, rather than simplify things.

Let us first recall the multilateral “interface” to which these rules should fit: under Article 5(1) of the Berne Convention, the obligations to grant national treatment and minimum rights under the convention applies “in countries of the Union other than the country of origin”. Congruently, under paragraph (3) of that Article “[p]rotection in the country of origin is governed by domestic law” (and thus not subject to the requirements of the Convention). The concept of ‘country of origin’ is defined in paragraph (4). The country of origin is the country of first publication and, if the work is simultaneously published in several countries, the country granting the shortest term of protection. For unpublished works, the country of origin is the country in which the author is a national, or, where the film producer has his headquarters or habitual residence, or, where a work of architecture is erected or another artistic work is incorporated in a building or other structure. In accordance with Articles 1(4) and 3 of the WCT, these provisions also apply in relation to that Treaty and they also apply under TRIPS according to its Articles 1(3) and 9(1).

The Rome Convention may also come into play in this context. While the minimum rights under that Convention are more limited than those under the Berne Convention, it still grants a general right of reproduction for producers of phonograms (Article 10) and, for performers, a right of reproduction of unauthorized fixations as well as reproduction for other purposes than those for which fixation was permitted or otherwise lawfully made (Article 7(1)(c)). The ECL provision deals, inter alia, with the reproduction for purposes of making recorded performances available to the public, and thus it is at least to some extent covered by the rights of the Convention. As regards broadcasting organizations, they are, more or less like the performers, granted rights of reproduction of unauthorized fixations and of reproduction of lawful, but unauthorized, fixations for purposes different from those for which the fixation was permitted (Article 13(c)).

Furthermore, the making available of recordings and recorded performances is covered by exclusive rights for both performers and producers of phonograms which are covered by Articles 10 and 14 of the WPPT. In addition, general rights of reproduction are granted for both performers (Article 7) and producers of phonograms (Article 11). In terms of beneficiaries of protection, WPPT refers to national of other Contracting Parties (Article 3(1)), but defines those by reference to the criteria established under the Rome Convention (Article 3(2)). A similar model is used in Article 1(3) of the TRIPS Agreement, which grants rights of reproduction for performers and producers of phonograms in Article 14(1) and (2) and, albeit optionally, for broadcasters in Article 14(3).

The Rome Convention does not operate with a concept of ‘country of origin’ and therefore does not contain points of attachment corresponding to Article 5(4) of the Berne Convention. Instead, we need to look for such criteria regulating the obligation to grant the minimum rights under the Rome Convention. In this respect, the points of attachment in Article 2(1) are clearly not relevant. They indicate the criteria that apply when identifying which level of protection under national law that is to be granted for foreign performances, phonograms and broadcasts in the cases where the Convention requires national treatment. Additional points of attachment are contained in Articles 4 through 6 which, for performers, producers and broadcasting organizations, respectively, establish in which cases national treatment is to be granted.  Since the Convention contains no criteria establishing the same as regards the minimum rights, it would seem that the criteria for national treatment should be applied mutatis mutandis also in relation to those rights. Actually, the limitation to national treatment seems to be a drafting slip, not least in view of the General Report of the Conference (Records of the Rome Conference, page 41ff) which discusses those criteria in relation to the protection under the Convention in general and not only in relation to the rules on national treatment. Otherwise, there would be no criteria for the application of the minimum rights at all, or the criteria would differ from those applicable to the national treatment, and such results would be highly unlikely.

The rules under Articles 4 through 8 of the Rome Convention are rather complex, but looking away from details that are less relevant in this context we may state that:

performances are protected if they took place in a Convention country or if they have been recorded on a protected phonogram or simultaneously broadcast in a protected broadcast (Article 4);
phonograms are protected if the producer is a national of a Convention country; if it was first fixed in a Convention country; or if it was first or simultaneously published in such a country (Article 5); and
broadcasts are protected if the broadcaster’s headquarters are situated in a Convention country; or the broadcast was transmitted from a transmitter situated in a Convention country (Article 6).
(For further details on the points of attachment, see my Primer on International Copyright and Related Rights, page 31ff.)

Overall, these points of attachment under Berne and Rome seem much more sophisticated and detailed that the corresponding provisions in Article 7(5) of the draft Directive. Paraphrasing Article 7(5), the draft Directive does not apply to works or other subject-matter of third country nationals, unless such non-audiovisual works  or phonograms were first published or, if unpublished, first broadcast in a Member State, or unless such audiovisual works are produced by producers having headquarters or habitual residence in a Member State. Even without analyzing all modalities in details, we can see that if the intention is that the Directive should match the points of attachment of the international Conventions and Treaties, as is suggested by the reference to ‘international comity’, it errs to both sides.

It is too generous in that it would exempt from the ECL, for example, an unpublished phonogram featuring a performer who is a third-country national and which is produced by a third-country headquartered and domiciled producer, provided the recording took place in a Union country. Under Rome and the WPPT, the Union country would not be obliged to grant minimum rights for such a recording.

It is too restrictive in that it makes subject to the ECL a recording made in a third country by a Union national performer and a third-country producer, first published in a third country. Likewise, it would subject to the ECL an unpublished architectural work, erected in a country of the Union, and created by a non-union author. In both these cases, the recording or work enjoys protection under the international Conventions and Treaties and they should have been exempted as covered by minimum rights under international instruments.

Apart from that, the provision is also puzzling in that, like the preceding parts of Article 7, it addresses the protection of works and other subject matter, but it fails to address any safeguarding of the rights of third-country broadcasters.

Would it be permitted at all?

Let us now for sake of the argument assume that the level of protection under the proposed ECL would be below the conventional minimum rights. Then the situation would be that, with effect for the nationals of Member States and for others encompassed by the points of attachment linking to those states, an international arrangement had been made between the Member States of the EU regarding their protection, not only in their home country (country of origin), but also in other countries of the EU. This agreement would establish across the Union a minimum level of protection below the level of the Berne and Rome Conventions.

Such ‘special agreements’ are dealt with in Berne Article 20 and Rome Article 22. According to those provisions, countries of the Union/Contracting States may enter into special agreements among themselves, but only in so far as such agreements grant to authors or other beneficiaries more extensive rights than those granted under the Conventions, or otherwise contain no provisions contrary to the Conventions. (For more discussion of those Articles, see Primer on International Copyright and Related Rights, page 20f.)

The proposed Article 7(5) of the draft Directive would mean that, for example, a third country national first publishing his work or phonogram in a Member State would suffer substandard protection not only in that particular state, but also in all other EU Member States. That is clearly forbidden by Berne Article 20 and Rome Article 22, because the EU as such is not, and under the convention acts in force cannot become, party to those Conventions.

Here, of course, one may discuss whether the EU in relation to the WCT, the WPPT and the TRIPS Agreement could be considered a single country, because the EU is admitted as party to those agreements in its own right, but that would not remedy the problems under the Berne and Rome Conventions.

It seems that a similar problem exists in relation to Article 1(2) of the Orphan Works Directive as well. Obviously, it may not be a problem at all, if the limitations and exceptions in question are compatible with the three-step-test, but what then is the purpose of exempting third-country works and other subject matter?”