By Dugie Standeford for Intellectual Property Watch
In a flurry of intellectual property-related activity, the European Commission this week ordered copyright collecting societies to loosen their stranglehold on cross-border music licensing, proposed extending the term of copyright protection to 95 years, and launched debate on copyright exceptions on the internet.

The Commission also adopted a new strategy on industrial property rights and published draft revisions to the European Interoperability Framework (EIF).

Landmark Competition Case

In a case arising from complaints by broadcaster RTL and digital music provider Music Choice, the Commission said 24 collecting societies in the European Economic Area are violating antitrust law by forcing artists to sign on with their national collecting organisations, and/or by colluding to prevent commercial users from obtaining licences outside their respective domestic territories. It ordered the societies to remove the “membership” and “exclusivity” clauses from their agreements within 120 days.

The decision will allow authors and composers to choose collecting societies, wherever located in the EU, on the basis of quality of service, level of management fees collected, efficiency of royalty collection and other factors rather than location, the Commission said. Removing the exclusivity clauses will make it easier for internet, cable and satellite broadcasters to obtain licences from a single collecting society instead of having to clear rights in many countries, it said.

The decision will not bar agreements between collecting societies which allow each to licence the repertoire of the other, the Commission said. It will not prevent organisations from agreeing bilaterally to limit the territorial scope of their licences, but they cannot decide among themselves that they will all restrict the licences to the same basis, forcing commercial users to deal with a monopoly provider in each territory.

Music Choice, which filed its complaint about territorial restrictions in reciprocal agreements in 2003, said the landmark decision is the first time competition law has been applied to collecting societies.

Cable operators welcomed the ruling but said the industry wants a simpler, more streamlined system for clearing rights. The current copyright regime is outdated and inefficient, and the Commission ruling only addresses the territorial restrictions between collecting societies, Cable Europe said.

The International Confederation of Societies of Authors and Composers expressed disappointment with the ruling on territorial delineations in reciprocal representation agreements, saying it will fragment the music repertoire and create legal uncertainty for commercial users. The MCPS-PRS Alliance, the UK’s two royalty collecting societies, said multi-territorial licensing decisions are best left to the market. It is mulling an appeal.

Longer Copyright Term Sought

In a “forward-looking” package of actions, the Commission proposed lengthening the period of copyright protection for sound recordings from 50 to 95 years. The term will help ageing artists bridge the income gap they face when their early performances lose protection, it said. It will also generate more revenue for producers from the sale of recordings in shops and online, allowing them to adapt to the fast-changing music business environment.

Term extension has been eagerly sought by the music industry and just as strongly opposed by digital rights activists and others. An independent study of Britain’s IP framework urged the Commission to reject the idea (IPW, Copyright Policy, 8 December 2006), but the Commission said this week that the report was based solely on economics and overlooked performers’ moral rights in their works.

In June, Europe’s leading IP policy research organisations called the move a “spectacular kowtow to one single interest group, the multinational recording industry… hiding behind the rhetoric of ‘aging performing artists.’”

The researchers told European Commission President Jose Manuel Barroso that term extension will only serve incumbent owners of large back-catalogues of sound recordings; reduce the supply of historically significant recorded music; hamper competition and hike consumer prices; and adversely affect the EU balance of trade.

Long terms of protection are counter-productive because the higher licence fees will raise prices to consumers, said the European Consumers’ Organisation (BEUC). The proposal will help the Beatles but young music performers will not be guaranteed better remuneration, particularly for online services where unfair licence terms keep royalties low, it said.

The second part of the package is a discussion paper [pdf] aimed at kick-starting debate on whether changes to copyright limitations and exceptions are needed to spur online dissemination of research, science and educational material. The green paper focuses on exceptions for the benefit of libraries and archives and for the disabled, the dissemination of works for teaching and research, and a possible new exception for user-generated content.

Industrial Property Rights

Industrial property rights include not only patents and trademarks but also industrial designs, geographical indications and plant variety rights, the Commission said in a Communication published on 16 July [pdf]. Talks are already underway on a Community patent and a patent litigation system, but the Commission said it wants a high-quality industrial property rights system that complements the patent regime. High quality rights support businesses, facilitate knowledge transfer and boost efforts to fight counterfeiting and piracy, it said.

Among other actions, the Commission said it will launch a comprehensive study on patent quality to determine the risks of low quality rights, and study the extent of problems with unused patents. It will assess the overall functioning of EU and national trademark systems with a view toward a possible future review of the Community regime. It will publish a green paper this year on agricultural product quality policy that will cover geographical indications (product names derived from places).

The strategy also includes a fact-finding study to analyse the interplay between IP rights and standards in fostering innovation, and a consultation on standardisation in information and communications technologies (ICTs). The Commission promised to consider how the EU patent fee structure could be designed for easier access by small and mid-sized firms, and to try to provide IPR support services for small companies in their countries.

In the enforcement arena, the strategy includes ensuring that all EU states adopt its Enforcement Directive and seeking stronger global enforcement of IP rights, including an anti-counterfeiting treaty. The Commission said it will prepare the ground for Europe’s accession to the Singapore Treaty on the Law of Trademarks and work toward the harmonisation of international patent law. The strategy also calls for the Commission to participate actively in international talks aimed at helping the developing world realise the potential of their industrial property rights.

The plan garnered praise from Association for Competitive Technology President Jonathan Zuck. Small business inventors, who drive growth and job creation in the EU, need high quality patents, he said.

European Interoperability Framework

Also this week, the Commission published for comment a draft of its revised EIF. The framework is intended to encourage governments to increase information-sharing by, among other things, adopting open standards and specifications (IPW, European Policy, 2 July 2008). The draft is a more balanced and practical effort to achieve interoperability between the information and communications technologies of European governments, according to Zuck. Instead of prescribing strict technology mandates, the draft heads in the direction of focussing on the goals of interoperability, he said.

Dugie Standeford may be reached at info@ip-watch.ch.