Online distrib'n sites unable to use copyrighted material

BRUSSELS — On the same day that a court of appeals ruled online music distributor Napster was infringing U.S. copyright laws, the European Union Parliament passed guidelines governing the distribution of digital content over the Internet.

“What happened to Napster will now happen in Europe,” exclaimed Italian member of the Parliament Enrico Boselli after the law was passed. “Copyright owners now have wider protection than in the U.S.”

The EU’s directive effectively means that online distribution sites such as Napster will not be able to use copyrighted material in Europe unless the artists are appropriately compensated.

After three years of making its way through the EU’s complex lawmaking process, the digital copyright directive — the most lobbied piece of legislation in the union’s history — will allow the EU to ratify the World Intellectual Property Organization’s 1996 copyright treaty. The U.S. managed this back in 1998, when it adopted its Digital Millennium Copyright Act.

Fighting pirates

The new law aims to curb high-tech online piracy of creative works such as music and video. Under the legislation, consumers will be allowed to reproduce material they already own, but will be prohibited from distributing or selling unlimited copies on the Internet. Exemptions will, however, apply to public institutions, such as libraries and museums, who will be permitted to copy freely from works distributed on the Net.

The directive for the first time allows publishers, and music and film producers, to use encryption technology to block the duplication of copyright-protected works. But although the directive has been slammed by a number of artists’ and producers’ groups, most recognize that the final deal hammered out represents a workable compromise.

“I think the rights-holders got more than they were expecting with this deal,” Dennis Oswell, an EU lawyer at law firm Ashurst Morris Crisp in Brussels tells Variety.

“The current European Parliament is much more business-friendly than the previous one, so it was pretty good timing for business that the directive came to legislation now instead of two years ago.”

According to media analysts, one of the biggest controversies surrounded the issue of archived material. Pubcasters in particular had feared that the new law would prevent them from fully exploiting their back-catalogs in an online environment.

“TV companies hold the TV distribution rights to the material, but the question was does this also cover alternative distribution channels, particularly the Internet,” says Thomas Tindemans, a media lawyer at the Brussels office of law firm White and Case. “Historically, copyright was a tangible thing. When you made a film, it was pretty straightforward — you sold the rights for that work to be shown in cinemas, to be reproduced on video and to be broadcast on TV.

“With the evolution of a digital distribution environment, the content industry was fighting to have the same level of recognition that it does in the analog environment. The challenge for the regulators was to produce a legal instrument outlining those rights.”

Ongoing battle

While the directive gives some legal certainty for now, the debate and lobbying is sure to continue.

“New technologies and other new developments, particularly in this industry, are going to eventually lead to a rethinking of the legislation,” Oswell points out, “and all the players involved here are already positioning themselves for the next round.”

Member states are expected to rubber-stamp the legislation this month, and it will be effective across the EU within 18 months.

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