Leaked draft of Commission copyright white paper based on flawed assumptions

Earlier this week the IPKat leaked what appears to be an internal draft of the European Commission’s white paper on copyright policy reform (“A copyright policy for Creativity and Innovation in the European Union”). Once finalized this white paper is supposed to sum up the current Commission’s position on making European copyright policy fit for the digital environment. As such the white paper will build on work that has been undertaken during the last couple of years, which included the Licenses for Europe stakeholder dialogue, a number of studies commissioned by the commission and a public consultation on a review of the European copyright rules that generated more than 11 thousand responses.

The white paper has been keenly awaited by anyone engaged in discussions about the future of copyright in the EU. Unfortunately, the document – at least in the form of the leaked internal draft – is a massive disappointment for anyone hoping for a serious review of copyright in the EU. This white paper clearly shows that at the end of one and half years of discussion those in the Commission who do not see a need for reform have managed to maintain their position. The white paper makes almost no mention of a need for legislative reform at the European level and instead presents a disjoined array of measures mainly consisting of recommendations for more harmonization between the member states and some extra guidance from the Commission to the member states.

After having been told by their own studies that a new balance between the rights of creators and the rights of users is both necessary and possible, and after having received literally thousands of responses to the consultation arguing in favor of more user rights, the commission has come full circle back to its initial position: At the core of the white paper lies the notion that copyright is not broken and that most problems created by the current copyright rules can be fixed through the reliance on licensing, minor, negligible changes to existing law, and reiteration of enforcement mechanisms. Coincidentally, this is perfectly in line with the position advocated by traditional publishers and other rights holder representatives throughout the entire process.

[Internet value tree to be inserted]

The authors of the white paper begin from a faulty premise. The entire paper seems to be based on the assumption that the primary function of copyright is to support the production of creative content against predatory business models of technology companies and other non-traditional intermediaries. This understanding is based on the deeply flawed analysis of the internet as a value tree. By now the Commission seems to be at least aware aware of the critique leveled against this analysis as evidenced by the following sentence:

While the distribution of copyright protected content is only one aspect of the wide array of activities taking place through digital networks today, it represents an important part of modern economics and at the same time, a pillar of cultural diversity and freedom of expression.

This passage clearly illustrates that the authors of the white paper do not have any desire to think about effects of copyright rules other than on the ‘production of creative content’. Instead the document further develops this line of thinking though a rather questionable analysis:

From a general economic perspective, policy-making in this area must take into account both static and dynamic effects. In principle lowering the level of copyright protection can, in the short term, have a static, downward effect on the cost of access to existing creative works for consumers and for institutional (e.g educational or cultural establishments) and corporate users (in particular the internet economy). It could lead to lower prices and possibly less costly innovation. However that would reduce creators’ ability to reap the gains from their work – and producers’ and publishers’ capacity to recoup the investment needed to bring works to the market. The economic incentive to create and to invest in new works could weaken, with the dynamic, medium- to longer-term effect being that the production of creative content could be reduced. The faster the rate of obsolescence of creative content, the more dominant the dynamic over the static effect becomes.

This is written to sound very well reasoned and grounded in theory1 but that thin veneer of complicated words can’t cover up the fact that this is (a) speculation (as evidenced by the frequent use of the word ‘could’) and (b) so generic that it bears little resemblance to reality.

While I have not analyzed all 11 thousand responses to the public consultation I am pretty certain that the vast majority of those in favor of changes to the existing copyright rules do not advocate a general ‘lowering of the level of copyright protection’, but rather advocate specific interventions aimed at making the system function better (such as new or adapted exceptions, registration or a shortening of the term of protection). By lumping all of these proposals together and claiming that they would benefit some stakeholders at the cost of others, the Commission makes it more difficult to asses the impact of specific proposals for change. Any good analysis needs to acknowledge that over the centuries copyright has evolved into a system that cannot be analyzed on the level of a binary opposition between more and less protection.

Weak analytical framework = weak outcomes

In the white paper, a very good illustration of the deficits of this approach is the discussion of an exception benefitting cultural heritage institutions. For some reason this discussion is split into two parts (‘Helping knowledge and heritage institutions to fulfill their public interest missions’ and ‘Solutions for mass digitization’). While the first section ends with a vague suggestion to clarify the preservation exception and to update the consultation exception, it completely sidesteps the demand made by cultural heritage institutions (and COMMUNIA) to grant them the right to make works that are not in commercial circulation available online.

The same is true for section on ‘solutions’ for mass digitization–basically a summary of existing EU initiatives in this field (the 2011 Memorandum on Out-of-Commerce works and the 2012 Orphan works directive). The white paper – instead of addressing the demands made by cultural heritage institutions – simply proclaims that

Further steps need to be considered to support the digitizing of European cultural heritage, without undermining the interests of rights holders2. solutions based on the digitization and dissemination of protected works without the rights holders’ consent would not achieve the desired balance and would be, in all likelihood, be contrary to the EU and Member States’ international obligations.

It is exactly the weakness of the Commission’s analytical framework that allows them to plainly state that solutions to making European cultural heritage available online will undermine rights holders (unspecified) interests. This can only be true if the Commission believes that any (new) exception is automatically contrary to rightholders interests because it ‘lowers the level of copyright protection’. It is hard to argue that a targeted exception – for instance, and exception that would permit cultural heritage institutions to make available works from their collections that are not commercially available anymore – undermines anyone’s interests unless one assumes that rights holders have a legitimate interest in absolute control over all uses of their works even if the rights holder is not exploiting those works anymore. According to all known traditions of copyright, this is not the case (the objective of copyright is a balance between the rights of creators and the rights of others).

Wherever you may stand in the discussions about the correct scope of copyright exceptions, it is rather worrisome that the white paper simply ignores the well reasoned demands by publicly funded cultural heritage institutions (including the European Commission’s own Europeana project) that include arguments why such an exception would be well within the parameters of existing international obligations.

A minimum consensus inspired by what is acceptable to rights holders

While the white paper contains some welcome proposals, such as more harmonization of exceptions and clarification of the fact that browsing and hyperlinking do not require permission from rights holders. However, these changes alone will not bring the European copyright rules anywhere near a system that embraces the opportunities offered by the digital environment.

The current draft reads as if the Commission did not manage to develop an understanding of the issues at hand that goes beyond a short-sighted alignment with the perspective of the self proclaimed representatives of producers of creative content. As such the current Commission appears ill suited to provide an outline for a copyright policy that adequately supports creativity and innovation in a radically changed environment.

In its current form the leaked draft of the white paper does not represent more than a minimum consensus that is inspired by the extent of changes to the system that are likely to acceptable to rights holders. It would be extremely dangerous if the next Commission would set out to implement this minimal consensus as this would most likely mean that the much needed discussion on more substantial reform will be buried once more. The current Commission dug itself into a hole by not addressing copyright reform before the end of its term. Let’s hope that the upcoming Commission (and the European Parliament as its watchdog) doesn’t let itself be fooled by whatever will be published later this summer.

Paul Keller

1 It is worth noting that the Rufus Pollock paper referenced in the footnotes (Forever minus a day? Some theory and empirics of optimal copyright) makes the claim that current copyright terms much too long mainly because most right holders stop exploiting their works shortly after publication. It is unclear how this is supposed to support the idea that a weakening of copyright will lead to less creative production.

2 Note that the EU orphan works directive allows ‘the digitization and dissemination of protected works without the rights holders’ consent‘. It may be defective in terms of scope and the burdens imposed on cultural heritage institutions, but illustrates that in many cases rights holders’ consent cannot be obtained because rights holders cannot be located.

Mercury spies on Herse and her two sisters from the sky. He falls in love with Herse. On the right the Temple of Minerva. In the lower margin a four-line explanation, in two columns, in Latin.
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