By Dugie Standeford for Intellectual Property Watch

Editor’s Note: The National Assembly adopted the legislation on 21 March by a vote of 286 in favour and 193 against. It will now go to the Senate in May, according to reports.

In the global search to find a balance between copyright protection and consumer rights in the digital age, France recently has emerged on the front lines with a possibly precedent-setting approach.

The French National Assembly completed work 16 March on a legislative package aimed at aligning France’s intellectual property law with the European Union Copyright Directive. Debate closed on 400-plus amendments to the proposed measure on authors’ and related rights in the Information Society (DADVSI) ahead of a 21 March vote on the entire bill, according to a parliamentary spokesman. Because some provisions have proven so controversial, content owners and civil liberties advocates will likely continue to monitor the bill closely as it moves to the Senate.

Debate on the amendments began in the lower house in December. A brouhaha broke out between powerful consumer groups and the recording industry over a proposal to ban unencrypted peer-to-peer (P2P) transfers. Discussion then bogged down over a compromise proposal to allow consumers to pay a monthly “global licence” for unlimited downloads from P2P networks – in effect legalizing P2P. The assembly rejected that measure and talks on the bill resumed in March, said Olivia Regnier, deputy regional director and regional legal counsel for the International Federation of the Phonographic Industry (IFPI).

Soon more contention arose – this time over plans to require online music sellers to make their content available in files compatible with any music player, or interoperable. The media reported that Apple would be forced to provide its popular iTunes music download service to competitors’ devices and speculated the company might pull its music out of France.

Interoperability and i-Tunes

Americans for Technology Leadership, a free-market industry group with members such as Microsoft, blasted the proposal. Its immediate effect could be the removal of iTunes from France, said ATL Executive Director Jim Prendergast. In the long-term, he said, consumers will lose even more if the trend continues and “other countries can dictate what technology companies do with their own intellectual property and how they can design their own products.”

IFPI members, who favour interoperability, support the goal of the provision, Regnier said. However, interoperability should not be mandated at the expense of the integrity and security of digital rights management (DRM) technology, and hacking should not be permitted under any circumstances, she said. DRMs are used by rights holders to control use of digital content.

Imaginons un Reseau Internet Solidaire (IRIS), non-profit organization that seeks to defend and expand the rights of noncommercial Internet users, also supports interoperability of platforms but would prefer that DRM not exist, said IRIS’s Meryem Marzouki. However, some amendments to the DADVSI showed movement on the part of lawmakers. In December, they approved language saying DRMs should not prevent interoperability, so long as the interoperability does not violate intellectual property rules, Marzouki said. A related provision allowed the French competition authority to mandate access in open standard form to technical information to ensure interoperability. “This is progress, since interoperability is now required by law,” she said.

Last-minute negotiations resulted in changes to the interoperability provisions. The new version bans hacking but puts the responsibility on technology providers to give third parties the essential information they need to enable interoperability, Regnier said. Instead of the competition council, courts now have the authority, under emergency procedures and the threat of a daily fine, to require that information needed for interoperability be made available, said Marzouki.

It is unclear at this point whether Apple will interpret the revised interoperability clause as obliging it to make its files compatible with other platforms, Regnier said. The text is long and very technical, and IFPI is digesting it to assess its possible impact. “But at this stage, as far as the music industry is concerned, the text of this measure will respect the security of technology and does not seem to open the way to abuses,” she said.

The interoperability proposal is revolutionary, Ovum Research Analyst Jonathan Arber wrote on 15 March. The success of iTunes is that it is closely tied to – and works as a marketing tool for — the iPod, Apple’s ubiquitous portable player. Apple is not likely to be willing to make an exception to that symbiosis for France, and there would be nothing to stop non-DRM-protected files from being downloaded in France and shared around the world.

An Apple pull-out from France “may be bad news for Steve Jobs [Apple’s CEO]” but it is “great news for French consumers” seeking more choice in digital content, Arber said.

The draft bill may also still contain two major modifications over earlier versions, Marzouki said. One incorporates many of the exceptions to copyright and related rights contained in the EU directive, though not the optional ones.

Progress on Penalties

A second sign of progress appears in the bill’s penalty provisions, Marzouki said. Although downloading remains an infraction rather than lawful private copy exception, noncommercial downloads are subject to the lowest fine in France’s penal code, €38 (about US$46), instead of the threatened high sanction for counterfeiting. Unauthorized uploading could now be subject to a €150 (or US$183) fine instead of the three years’ imprisonment and €300,000 (US$366,000) fine for counterfeiting.

Illegal commercial downloading and uploading remain subject to the high penalties, Marzouki said. Distribution of DRM circumvention software now carries a penalty of €30,000 (US$36,600) and six months’ jail time, while possession of hacking software is punishable by a €750 (US$915) fine. Those caught trying to hack DRM technologies could be fined €3,750 (US$4,574). These penalties were “downsized” from earlier proposals where they were punished as counterfeiting, she said.

But lawmakers also adopted one “very dangerous” provision that makes the penalty for counterfeiting applicable to any editor of P2P software who purposely encourages illegal file-swapping, Marzouki said: “This creates a major insecurity and objectively criminalizes P2P software.”

DADVSI’s interoperability provision has reportedly provoked a rift between the Assembly and the Senate. Senator Michel Thiolliere, the designated speaker for the bill, was recently quoted as saying the proposal will likely be squelched. However, he also criticized Apple for abusing DRM to protect its market share.