German Parliament Reforms Copyright Law, Leaves Unfinished Work

By Monika Ermert for Intellectual Property Watch
After four years of evermore controversial debate the German Parliament late Thursday passed another reform of the German Copyright Law intended to make updates for the digital age. But some are already planning for the next round of changes to the law.

Referred to as the “second basket” (after a first round of reform transposing the European Union Copyright Directive and the “Internet treaties” of the World Intellectual Property Organization), this reform dealt with the German levy system and various adaptations of the over 40-year-old law to the digital age. It confirms that private copies of digital content are allowed, but does not allow users to break technological protection measures, even in case a copy would be allowed. Critics call some more impractical aspects of the reform, like limits on emailing of scientific articles by libraries, “grotesque.”

Several members of the ruling Christian Democratic Union/Social Democratic Party (CDU/SPD) coalition joined by the Liberals, the Free Democratic Party (FDP) opposition are already asking for more restrictions to private copying announced a “third basket.”

Mainly “there had been three controversial points,” said Justice Minister Brigitte Zypries: the regulation of contractual handling for new and even unknown forms of content use, exemptions from copyright for libraries and for electronic document delivery services, and the German levy system.

The contractual handling of “unknown use forms” “might sound futuristic,” said Zypries. Yet it was a tribute to the digital revolution and will allow exploitation of content for new services not yet on the market at the time when authors sell works to publishers.

“Had such a provision been in place it would be a lot more easier to market a DVD of an old theatre production today,” said Zypries. In an earlier version, authors and actors were not give a right to oppose the new exploitation, but it would have automatically fallen to publishers. But now they can stop exploitation according to a complicated set of rules.

The most heated discussions in Parliament and in the multistakeholder working groups set up by the ministry were on the levy system. For years, after consultations with industry, the government regulated the levy rates that hardware manufacturers have to pay on their hardware in order to remunerate authors and artists via collecting societies. Yet the negotiations to find consensus on the rates got more and more intense over the years. Hardware manufacturers warned against burdening sales with undue levies. Collecting societies accused hardware manufacturers as broadband providers were capitalising on content available over their products and services.

The new law brings the withdrawal of the government from the battlefield. The “shift of paradigm,” as Zypries called it, accounted for the more dynamic market and more flexibility in the system to accommodate market developments. The Ministry of Justice originally had proposed a cap on levies to a maximum five percent of the sales prices of copying machines, PCs, DVD-burners and recordable CDs and DVDs. But the cap pushed for by information technology industry failed because it would cause authors’ remuneration to go down with declining prices for hardware.

“Rights holders and hardware manufacturers now can meet at eye level,” said Zypries. “There is no cap. Yet the levy has to be proportional,” she said and also conceded: “It will be difficult after all these controversial debates to come together at the table.” She said she is available to act as moderator.

In case the new self-regulatory approach fails, government will step in again, Zypries added. Günter Krings, copyright law rapporteur for the ruling CDU, said the government would act should the levies result in the hardware industry going abroad.

How difficult the situation is may be seen from one of the more recent clashes. The German collecting society GEMA (Society for musical performing and mechanical reproduction rights) a week ago cancelled an agreement on blanket copyright levies for ringtone usage and the streaming of musical works with Germany’s biggest IT industry association, BITKOM (Association for Information Technology, Telecommunication and New Media).

“Controversy in these negotiations is inevitable,” said Volker Kitz, researcher at the Max Planck Institute for Intellectual Property, Competition and Tax Law and former legal expert at BITKOM. “Interests differ too widely and there’s too much money involved.”

The bigger problem of the new law lies elsewhere, said Kitz. “It’s a pity that the German Parliament did not follow proposals coming for example from the Bundesrat (the upper house of the German Parliament populated by the governments of the states) to promote open access models for research publications,” he said. “It’s in the interest of the general public that research can be accessed easily over the Internet.”

Rainer Kuhlen, professor at the Department of Computer and Information Science at the University of Konstanz and spokesperson for the “Coalition for Action ‘Copyright for Education and Research'” is more blunt: “The law cares for a permeation of obsolete business models, instead of opening the space for innovation and open access models,” he said.

The criticism of scientists and representatives of the opposition in the Parliament – the Green Party and the left – mainly is addressed at “exemptions from copyright for research and education” that are so tightly restricted that the coalition calls them “grotesque.”

Libraries in the future will be allowed to offer their readers electronic versions of books but are restricted to offering only as many electronic copies as they have on their shelf in order not to hamper publishers’ business. The principle of the so-called “double asset accessoriness” applauded by some members of the coalition and the German liberals shall prevent, for example, universities buying a book once and making it electronically available to every student. This was reintroduced overnight on Tuesday by the Legal Committee after being taken out because of protests. Members of Parliament only got the final draft Wednesday evening.

The second “exemption,” intended to introduce a form of “fair use” in German copyright law, addresses the possibility of ordering copies of documents available from other universities. The electronic document delivery service of research libraries in Germany, Austria and Switzerland, Subito, might have to be restricted to fax and old-fashioned mail delivery, depending on whether there is a reasonable offer from the publisher. His business should not be harmed, according to the logic of the law. But this will lead to a price for an email-delivered article of about 15 euros in the future, warned Kuhlen.

While scientists themselves might be able to route around the problems and ask their colleagues for a private email of the article, Kuhlen said, the price increase might add up to the costs for students, on top of recently introduced fees. Students also have started to solve the problem their way by just using what they can find through Google or Wikipedia, he said, adding that the crux is, “making information a scarce resource creates the wrong attitude and will have bad effects in the long run.”

Open access models now are on the list of some who declared a third basket was necessary. The “coalition” in a press release welcomed the third basket.

Yet there are also other topics on the agenda of the ruling CDU and the liberal opposition. Krings demanded to have another look at private copying. “We need clear-cut boundaries,” he said, for example, a cap for the number of private copies one could make of a piece of music or software he bought. Moreover, recording software that helps to search thousands of webstations for a certain title had to be banned. Krings also said he was in favour of granting private parties the right to access personal data of Internet service providers in looking for pirates of copyrighted works. Other EU countries in transposing the EU Enforcement Directive had introduced such access rights.

Monika Ermert may be reached at info@ip-watch.ch.