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Copyright in European Union

CopyrightThe Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society (“the Directive”) has harmonised the right of reproduction, the right of communication to the public, the right of making available to the public and the distribution right. The basic principle underlying the harmonisation effort was to provide the rightholders with a high level of protection; hence the scope of exclusive rights was very broadly defined. Some stakeholders question whether the introduction of exclusive rights translates into a fair share of income for all the categories of rights holders. Authors (such as composers, film directors, and journalists) and, in particular, performers argue that they have not earned any significant revenue from the exercise of the new “making available” right in relation to the online exploitation of their works.

Apart from adapting the exclusive rights to the online environment, the Directive introduced an exhaustive list of exceptions to copyright protection, although there was no international obligation to do so. The primary reason for having such a list of exceptions appears to be to limit Member States’ ability to introduce new exceptions or extend the scope of the existing ones beyond what is allowed under the Directive. Gradually, in the legislative process, Member States introduced the current list of one mandatory exception and 20 optional exceptions.

The conditions of application of the exceptions are drafted in rather general language. Arguably, the approach chosen by the drafters has left Member States a great deal of flexibility in implementing the exceptions contained in the Directive. Apart from the exception on transient copying, national legislation can be more restrictive than the Directive as to the scope of exceptions. The list of exceptions as contained in the Directive has achieved a certain degree of harmonisation: creating an exhaustive list of exceptions does not allow Member States to maintain or introduce exceptions which are not listed.

In addition, Article 5(5) of the Directive provides that the exceptions and limitations permitted by the Directive are to be applied in certain special cases, which do not conflict with the normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the right holder. This provision is known as the “threestep test”.

The formulation of Article 5(5) reflects the Community’s international obligations in the area of copyright and related rights. The three-step test is set out in similar terms in Article 9(2) of the Berne Convention [Although the Community is not a party to the Berne Convention (and indeed could not be, since membership of the Berne Union is confined to States), it is required to comply with the Convention by virtue of Article 9 of the TRIPS Agreement.] and, most importantly, Article 13 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“the TRIPS Agreement”) [That Agreement is found in Annex 1C to the Agreement establishing the World Trade Organisation.], to which Community is a party [Article 13 of the TRIPS Agreement, entitled “Limitations and Exceptions”, is the general exception clause applicable to exclusive rights of the holders of copyright. Article 13 of the TRIPS Agreement has been interpreted by a ruling of the Dispute Settlement Body of the WTO concerning Section 110(5) of the US Copyright Act. The Panel held that the scope of any permissible exception under Article 13 should be narrow and should be limited to de minimis use. The three conditions, namely (1) certain special cases; (2) no conflict with the normal exploitation of the work; and (3) no unreasonable prejudice of the legitimate interests of the right holder are cumulative.]. The three-step test is therefore part of the international copyright framework which the Community and its Member States are bound to respect. It has become a benchmark for all copyright limitations [See the ruling of the Dispute Settlement Body of the WTO United States – Section 110(5) of the US Copyright Act, WT/DS160/R, of 15 June 2000.].

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