Management of Copyright and Related Rights in the Internal Market (COM(2004) 261) Call for comments.

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1 Mr. Jörg Reinbothe Internal Market DG European Commission Management of Copyright and Related Rights in the Internal Market (COM(2004) 261) Call for comments. Considering the dramatic changes brought on by digital technology it is possible that a fundamental philosophical change to the system of regulating intellectual products is required and this needs to be instigate at the highest level and the issues studied in the broadest sense. If it is not within the commissions remit to look further afield the commissioners should at least be recommending that more needs to be done before laws are changed. I call on the commission to take a broader view. The opening paragraph of section (page 14) of the commission's report states: Due to the number of uses and users as well as rightholders involved, licensing certain rights individually has been impractical, as previously seen. This is particularly the case for rights of remuneration. Consequently, rightholders have appointed agents to engage in the joint licensing of their works. Similarly, users have preferred to have a single point of reference when seeking a licence both in terms of authorisation and payment. Although collective management of intellectual products will still be important for some I believe the traditional limitations that made the above statement true in the analogue world do not hold in today's digital environment. Just as digital communications and the Internet have revolutionised distribution of content so can the digital environment enhance and support the commercial activities of individual right holders. The digital environment not only has the potential to support individual remuneration it can also be used to resolve rights and licensing terms at one single point of contact. In fact, the commission partially recognises this argument in section 3.3. (page 16) when it goes on to report; From their perspective, in facilitating the watermarking, identification and tracking of the use of works, digitisation has in principle empowered rightholders to individually control the licensing and royalty payment process, so that the role of collective rights management is questioned. Limits of the commission's response. As it is, the communication limits its response to the management of copyright and related rights in the internal market to three main areas: harmonising the collecting societies, harmonising individual rights, and considering one single digital solution, that of digital rights management (DRM). These initiatives are important and rationalisation in these areas may be required, however, more should be done. Licensing (permission to read) is no substitute for owning the book. I would like to offer one such approach that abandons the concept of 'copies' as the medium for

2 trading intellectual works and instead assigns rights of access to the work. The assigned rights are then traded, not licensed, thus maintaining an equable system for all that is much more closely aligned with the original objectives of copyright than the drift towards controlled copying in DRM systems or arbitrary flat rate levies. This change in philosophy avoids all the problems of trying to make intangible digital bits appear to be physical manifestations of an equally intangible creative work. The Distributed Intellectual Property Rights [1] system treats all users as equal partners in the chain from creator to the consumer, thus restoring the social balance. Implemented on the Internet, a duel set of 'offices' using persistent identifiers act as 'digital agents' for authors, promoters, and consumers. Rights of access are regulated rather than the traditional control of copies. I have attached a brief introduction to the Distributed Intellectual Property Rights system and a second document analyzing the allocation and distribution of rights to intellectual products. Further information is available at (Please note that any reference to 'collective rights' in this documentation refers to rights distributed between all persons in the media chain and has no relationship to the collective rights of collecting societies referred to in the commission's communication.) Considering the fundamental and substantial changes brought about by the information society revolution new approaches to regulating intellectual products should be vigorously sort after, researched and proposed. I ask the commission to consider my proposed solution to some of the issues raised by digital content. Sincerely, Nicholas Bentley nicholas@commonrights.com L'Ecole de la Combe Rémuzat France 20 th June 2004 [1] Attachments: 1. This letter - (Copyright and related rights call 1.doc) 2. Distributed Intellectual Property Rights, Summary (DIPR summary.doc) 3. Common Rights v. Collective Rights (Common Collective3.doc)

3 By: Nicholas Bentley Summary Collective Rights and the Distributed Intellectual Property Rights System Distributed Intellectual Property Rights is a proposed system for regulating intellectual property that replaces the copy-based model of Copyright with a rights-based model. A new regime for our digital world that still grants the original author some singular rights for a limited term but also allows consumers to acquire rights to the intellectual product and protects the common right of access for all. Copyright originated in an age where the expression of the intellectual product in physical form, such as a book, intrinsically helped to limit and regulate the copying of the creative product. This allowed the copyright regime, where society grants sole reproduction rights to the author for a limited term, to function successfully over the last two centuries. Today the situation is changing; in this information age where digital information can be easily copied at minimal cost this natural physical limitation to unauthorised copying is removed. It is therefore time to reconsider the principle of the copyright model. Copyright, by definition, regulates the physical copying of the intellectual product not the use and access to the intangible intellectual content itself. The system proposed here changes the regulatory emphasis to identifying and protecting the creative content, the intangible intellectual component of the intellectual product. This new regime will grant collective rights to an intellectual product and the Distributed Intellectual Property Rights (DIPR) system will regulate access to these collective rights. The 'social contract' is upheld by ensuring common rights to the intellectual content both during the term of the authors controlling interest and after the product passes into the public domain. The DIPR regulatory environment is created by two sets of administrative offices on the Internet with the interests of those who create intellectual products represented in the 'Author Rights Office' and users rights represented in the 'Consumer Rights Office'. Persistent identifiers, attached to any physical manifestation of an intellectual product, identify the offices that record the rights of these creators and consumers and also locate metadata for the product and even copies of the product. This dual independent office structure provides protection of personal information while at the same time forging the important social links between the author and the consumer. The change in priorities under DIPR to protecting the identification of an intellectual product rather than the physical copies makes the regulatory task easier and the rules for using the products simpler. The DIPR system also avoids some of the problems and pitfalls of any scheme that attempts to restrict the flow of digital information with controls and encryption. Some of the advantages of the DIPR system would be: Clearly defined rules for using identified digital products. Registered consumer rights to intellectual products. Protection of all personal information. Protection of the common right of access to intellectual works for education and social purposes. Automatic and permanent archives of intellectual works. Avoidance of technically complicated and expensive centralised access control systems.

4 Avoids the need for systems of non-discriminatory taxes on digital media and services that would then be used to provide funds to reward artists. Many new marketing strategies for the rights holders who can form peer-to-peer partnerships with consumers. A technical framework to support all other rights management and metadata systems. Adopting this new regime does not necessitate abandoning copyright it merely offers authors or their agents the opportunity of publishing their work in a new environment designed for digital products. There are already examples of authors relinquishing some of their copyrights such as the Free Software Foundation and the Creative Commons. There is even evidence that P2P file sharing is not all bad news for authors and media companies; for instance it produces valuable publicity that in turn attracts new customers after they have sampled a product. The collective regime and the DIPR system formalises and extends these developments, emphasises the benefits of group responsibility for a product, produces a whole new field of business models and has the potential to limit damaging third party abuse of intellectual products.

5 Common Rights / Collective Rights Applying Collective Rights to Intellectual Products We all have rights, rights are good. For example, one of the most sort after common right is the right to free speech. There is sometimes a negative connotation to the word 'right' when it is applied to intellectual property and this stems from the fact that in most copyright regimes rights are focused on an individual who is granted exclusive reproduction rights to a resource which has no naturally limitations in the physical world. Unlike a parcel of land, which can only support a limited number of individuals, many people can access an intangible intellectual product without physically taking anything away from other users. Therefore, why give individuals rights over this unlimited common resource? The answer has always been that these rights will provide incentives for authors to create new works and then publish them for the good of all. I propose that we maintain this incentive but that we apply rights to intellectual property in a new and more just way, while still granting the author some singular rights for a limited term others should also be able to obtain rights to the creative product. Here I examine the common rights to intangible intellectual products and how society might apply collective rights to these products once they have been mined by an individual 'creator'. The potential store of intellectual products waiting to be discovered is infinite and therefore everyone can truly have a common right of access to that infinite store without impinging on anyone else's access to the field. Under our current copyright regime, once an individual discovers or mines one of these products society grants this person sole reproduction rights to the physical expression of this product for a limited time. In theory, the idea or concept contained in this expression rests in the common domain and is available to everyone who can obtain a copy but no one else is allowed to reproduce the product in any form except for some 'fair use' exemptions. After the copyright term expires the expression of this intellectual property passes into the public domain and the intellectual product as a whole regains its common status. I propose an alternative and, I believe, a more logical approach. Once an individual mines their intellectual product they should be granted a controlling interest in a collective which has rights to this intangible intellectual product. To claim this collective right the author has to produce at least one tangible representation after which he or she has a controlling interest in this collective product for a defined term. From then on they can invite others to share in this product and so join the group which has collective rights to the product. As for any collective group there are rules for each member and I lay these out in detail in my proposal for the Distributed Intellectual Property Rights system. One of the rules of this collective regime is that only the original author can use the product commercially unless they choose to pass on this right to another member of the collective. This, of course, could mean that the author stipulates that others have to pay to join the collective. Where does this leave the common right of access to this particular product for the rest of society? Well, others are still free to rediscover the product completely independently (although this is unlikely to happen for complex intellectual products), or they can join the collective under the terms offered by the author, or any member of the collective can donate 1 common access to the product to any other member of society. If common access is donated in this fashion society as a whole has to adopt the rule that the recipient of this 'donated common access' has no rights to the product other than access, they can not copy it, pass it on, or do anything else with it. Each member of the collective has individual and exclusive property rights over their, uniquely identified, physical manifestations of the product. Therefore they are free to make any number of copies of this physical product to protect their interest in the collective intangible product and to protect their access to the product. Note that an individual group member's exclusive control over their uniquely identified physical copy does not conflict in any way with the tangible interests of other members of the collective who have their own unique physical copies. (See: 'Rights in the Copyright System.' for further discussion of the difference between collective rights to the intangible portion of the product and tangible rights to an identified manifestation) 1 By 'donate' I mean that they give away a copy of the product totally for free to an acquaintance. They do not charge for time or materials or accept any payment or trade in exchange.

6 At the end of the term of special controlling interest in the collective the author will remain in the collective, as do the other collective members, but access to the collective becomes publicly available and restrictions on the use of the product by collective members are relaxed. Effectively the product reverts to the public domain of common rights of access with the advantage over copyright that the system continues to make the product available by ensuring archive copies. Summary of rights under copyright and collective regimes: Type of Action which can be performed on Intellectual Product Who has rights under each regime Copyright Regime Collective Rights Regime Create a new intellectual product Everyone Everyone Access the intangible content Everyone Everyone Access to a tangible copy Group who purchase copy Everyone (if known to a collective member) Reproduce an intangible copy Author Collective members Reproduce a tangible copy Author Collective members Commercial use Author Author Non-commercial derivatives Author Collective members Commercial derivatives Joint Authors Joint Authors Broadcast Author Author The differences between a collective rights regime and a copyright regime are sometimes subtle and sometimes significant. Under the collective scheme the exclusive rights of the author are diminished which gives the impression of not improving the rewards for creative effort but if there are rewards to be had they still go to the author. Also, the common right of access for society as a whole is increased which achieves one of the main aspirations of our intellectual property systems but this still does not appear to benefit the author. The important difference is that the rights of the group which buys into the collective product are vastly increased in comparison to the users who purchase copyrighted works and it is this which will encourage collective membership and in turn improve support for the author. It can be argued that the individuals who obtain legal physical copies under the copyright regime form a collective group but members of this collective have only one right, namely, to do what they like with their one physical copy. A very small incentive. The individual who obtains an illegal copyrighted work, especially when we consider digital products, has the same or even increased incentives (lower purchase cost) and only a limited risk of legal penalties (how many MP3 file swappers have been prosecuted?). It is important to make the legal product worth having, by granting wide ranging collective rights, and not rely solely on penalties to discourage illegal copies. In my paper on Distributed Intellectual Property Rights 2 I provide a list of benefits for collective members and examples of how the advantages of collective 'ownership' of an intellectual property can be extended, even to the extent of providing commercial incentives to the group as a whole. All of which would benefit the author and promote creative effort. 2