Brazil’s Leaked Copyright Reform Draft Bill Shows Latest Thinking

By Pedro Paranaguá

Another chapter of the Brazilian copyright reform is out. The third version of the draft bill leaked a few days ago to a major newspaper in the country, and a handful of academics (including myself) had access to it.

After a delay of more than four months, the third version of the copyright draft bill was forwarded from the Ministry of Culture to the President’s Office in late November 2011. For an overview of past events connected to Brazil’s copyright reform, see this, and this (including a timeline).

While major newspapers in Brazil (O Globo, and Folha de SP) had a concurring opinion that the leaked draft bill follows 85 percent of the previous (Lula) administration’s draft, making clear that that was a positive factor, I understand that the remaining 15 percent that were subject to change are of vital relevance. Quantity here is not the main issue. The quality of drafting, and what provisions are included (or left out), are much more important.

In the leaked letter that Mrs. Ana de Hollanda, Brazil’s Minister of Culture, addressed to President Rousseff, she mentioned that copyright law is an “important factor for lowering social inequalities, and for enhancing basic principles of democracy, such as social inclusion and strengthening of citizenship.” Mrs. de Hollanda also makes reference to the Constitutional fundamental right of copyright – Article 5(XXVII), while at the same time recalling that other Constitutional rights, such as the right to education (Articles 6 and 205), the right to access to information (Article 5(XIV)), and the right to access to culture (Article 215), should be taken into account when balancing all the interests at stake.

Two issues in the letter, however, make some raise their eyebrows. While Mrs. de Hollanda acknowledges that when addressing the issue of copyright one should take into account the social right of access, she then states that the digital world and the internet are posing risks to the copyright regime, and that authors and copyright holders need more control in the digital world.

While this is certainly true for some major corporations and for several artists, this is equally absurd for several other authors, from well-established to beginners. Radiohead and Nine Inch Nails are well-known examples. In Brazil, just to mention a few, we have Paulo Coelho, O Teatro Mágico, BNegão, and Mombojó, amongst several others that freely and willingly distribute their works on the internet – and exactly for that reason (and for the great demand for their works) these artists are making more money. Control is not always the best option. Other ways of doing business are promising. The Nigerian film industry, and the Tecnobrega and Forró Eletrônico music scenes in Brazil, are great examples of ways of doing business that turn the copyright regime upside down.

Not only former Minister of Culture Gilberto Gil says that a stringent control over copyrighted works are not always the best option (or that it may serve as a way to keep the status quo), but also William Patry in his “Moral Panics and the Copyright Wars”. No one is advocating for copyright infringement. In the digital world, however, control is not always the best option – besides being very costly, and having adverse effects in an unequal society.

And that is exactly where Mrs. de Hollanda makes some raise their eyebrows again, when she asserts that copyright is a “private right,” ignoring all the discussions heralded in the past decades on public goods. I will not get into this complex, yet very important, discussion here. On this, see Nobel Prize laureate Elinor Ostrom’s work on the commons.

While the letter to the President and the third draft bill have imperfections, they seem to be well intended. According to the letter, Brazil’s copyright reform focuses on three issues: i) to correct conceptual errors that are further sources of uncertainty and legal misinterpretations, ii) to implement new provisions, such as on orphan works, on works for hire, on the supervision and oversight of the collecting society, and on exceptions and limitations to copyrighted works, and iii) to clarify the Constitutional principles and objectives that apply to copyrighted works, and make sure that other principles and objectives of the Brazilian legal system found in the country’s Civil Code are directly applied to copyright issues in order to strike a balance in the interests at stake.

The good: new or modified provisions found in the leaked draft bill (non-exhaustive list)

1. works for hire: not dealt with in the current Act, this provision addresses the issue, and limits the control by the employer up to ten years
2. exhaustion of rights (first sale doctrine): the copyright in a work is exhausted after its first sale in a WTO member country by the copyright holder or with his/her authorization (not valid for rental of audiovisual works and for computer programs)
3. collecting society (ECAD): the government will have the right to oversee the collecting society’s management
4. dispute resolution: the Ministry of Culture will serve as mediator in disputes involving collecting societies
5. social function of the contract and excessive burden: the new Act will explicitly make reference to these general principles of law found in Brazil’s Civil Code, and that should be applied to copyright law
6. public domain: authors will be able to put their works into the public domain during their lives (something new in a country following the author’s rights regime)
7. other uses without authorization (compulsory licenses): a) for use of orphan works; b) if there is denial of granting a reprographic license for large numbers of copies in Universities, and c) if the heirs or successors exceed the limits imposed by the economic and social ends of the copyright regime, or by good-faith
8. circumvention of protection measures: copyright holders will be liable if preventing or hampering the uses authorized under Article 46 (exceptions and limitations to copyright)
9. exceptions and limitations:
i) space-shifting and interoperability
ii) reproduction, translation, adaptation, distribution, communication, and making available exclusively for persons with impairment
iii) private copying
iv) incidental use (background use, mashups, and so on)
v) citation for criticism and study
vi) certain uses for rehabilitation or therapy purposes
vii) musical public performances within religious activities
viii) public performance within film-society associations
ix) reproduction, translation and distribution for educational purposes
x) reproduction for conservation and archival purposes
xi) communication and making available within libraries
xii) public display of broadcasts and public performance of sound recordings by liberal professionals and micro-companies
xiii) general clause: what some erroneously call “fair use” is a general clause that gives power to the Judiciary to authorize other similar uses that are not considered to be a violation of copyright law under the national public policy priorities, and that observes, cumulatively, the following three requirements: a) the use should not be commercial nor for profit, b) the use should not conflict with the commercial exploitation of the work, and c) the use should not unjustifiably prejudice the interests of the author.

All the above-mentioned provisions are much welcome to the Brazilian copyright regime. Most of them, however, should be re-written in order to better represent the interests of society at large. Several provisions are further narrowed beyond what the Berne Convention for the Protection of Literary, Artistic and Scientific Works mandates, or beyond the requirements of the World Trade Organization’s (WTO) TRIPS agreement.

The general clause found in Article 46 on exceptions and limitations, for instance, requires that all the three conditions set forth under that Article be met in a cumulative fashion. That provision is based on Berne’s three-step test. A progressive interpretation given by some academics to the three-step test, however, is that the three steps should not be assessed in a cumulative basis, but rather as an indivisible entirety, in a case-by-case basis, just like the “fair use” clause is applied under the United States law. As a matter of fact, US courts have correctly allowed the use of copyrighted works, including when there was a commercial purpose (see the U.S. Supreme Court case Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994)).

The bad: new or modified provisions found in the leaked draft bill (non-exhaustive list)

1. Internet service provider (ISP) liability: notice and take-down (with counter-notice)
2. works not protected: technical standards “per se” (such as the US’ BlueBook)
3. copyright duration: life of the author plus seventy years – i.e., twenty years beyond the required by the WTO, and according to Brazil’s Central Bank, the country pays virtually 100 times more copyright royalties to the US than it receives from the US.
4. anti-circumvention measures: [updated] the liability of copyright holders for preventing or hampering the uses set forth in Article 46 (exceptions and limitations to copyright) as mentioned under #8 above will not be applied if the technical measures are essential for the commercialization or the licensing of works in the digital format, i.e., the copyright holders will most likely argue that technical measures are essential, and thus they may not be held liable for using technical measures. Users will continue to be allowed to circumvent technical measures, however, for the purposes of making a use as authorized under Article 46 or when the work is in the public domain.

In regards to #2 immediately above, technical standards such as citation for academic works should not be protected by copyright at all. Not even in themselves, regardless of what would be the meaning of “per se”. No legislation should protect any type of technical norms or standards, for they are general rules of public interest, and therefore should not receive copyright protection.

On ISP liability, the Ministry of Culture argues in the technical report sent to the President’s Office that this is the best option available, and it explicitly mentions the United States as a good example to be followed. The Ministry of Culture does not mention, however, that there is heavy criticism in regards to the loopholes existing in the US notice-and-take-down scheme. It omits from the report, as well, that there is even a proposal for a reverse notice-and-take-down scheme put forward by some renowned academics.

The Ministry of Culture further rejects the approach taken under the called “Marco Civil da Internet” or civil rights framework for the internet, which is a bill presented to the Brazilian Congress that has been built collaboratively with society, and that states the principles underlying the Internet in the country. Under the “Marco Civil” provisions, content may be taken down if, and only after, a court order is granted.

The Ministry of Culture argues that the “Marco Civil” allows other cases (such as copyright issues) to be treated differently by different legislation. In any case, the notice-and-take-down scheme adopted by the US does not seem to be the best option available – as time and experience evidence. Another possible approach could a notice-and-notice scheme under which the copyright holder notifies the ISP which then notifies the alleged infringer, who ultimately is the one who will take the content down or not – subject to further liability and court orders that could follow.

As can be seen, the issues at stake are not simple. Drafting a good legislation is not easy. Having multiple stakeholders agreeing at all times may be even harder. What’s for sure is that Brazil urgently needs copyright reform. Brazil needs a copyright act that will foster creativity and remunerate authors, while at the same time providing access to education, culture, and knowledge, and also promoting a lively and competitive technology industry.

All these must be done with one goal in mind: the sustainable socioeconomic development of the country.

Pedro Paranaguá is an IP & Internet policy consultant with 10+ years experience. He has advised Brazil’s Ministry of Culture (Gilberto Gil’s mandate) in drafting the 2010 copyright draft bill, and has aided former Senator Mercadante (now Minister of Science, Technology and Innovation) in drafting the country’s cybercrime bill, and collaborated in the drafting of the country’s civil framework for the Internet. He is a Lecturer in Law at Fundação Getulio Vargas (FGV), and a doctoral candidate (on Brazil’s copyright reform) at the Duke University School of Law, where he has taught Brazilian Portuguese for Legal Studies. He holds a Masters in Law (cum laude) from University of London.