Ministry of Culture Ms. Thorhild Widvey Brussels, 26 June RE: New Copyright Act in Norway. Dear Ms.

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1 Ministry of Culture Ms. Thorhild Widvey Brussels, 26 June 2015 RE: New Copyright Act in Norway Dear Ms. Widvey: Reference is made to the seminar held by the Ministry of Culture 9 June this year and the invitation to submit input to the Ministry in connection with the Ministry's upcoming work with a new Norwegian Copyright Act. The Motion Picture Association (MPA) is a trade association representing the interests of six major international producers and distributors of movies, home entertainment and television programs. 1 MPA appreciates the invitation to present the most important matters to MPA's members in connection with the revision of the Copyright Act. The members of the MPA have for a number of years produced many of the most popular movies in Norwegian cinemas and in the homes of the Norwegian people, and is thus an important contributor to the commercial cultural industry in Norway. MPA's members have many years of experience developing a sustainable industry based on private funding that delights, inspires and moves a large audience in Norway. There are several matters that are important when a 50 years old act regulating an area that has been subject to rapid technological development is being revised. MPA would in this submission like to focus on the protection of the exclusive rights of the rights holder, as well as copyright enforcement. Key elements in this regard are 1) clear and unambiguous implementation of the exclusive rights in accordance with international conventions; 2) that exceptions and limitations applicable to the exclusive rights do not unreasonably prejudice the legitimate interests of the rights holders, ref. 1 Paramount Pictures Corporation, Sony Pictures Entertainment Inc., Twentieth Century Fox Film Corporation, Universal City Studios LLC, Walt Disney Studios Motion Pictures and Warner Bros. Entertainment Inc.

2 among others the three-step test; 3) that what is considered loopholes in the legislation are closed in a clear and unambiguous way, and 4) effective enforcement and sanctions in case of infringement of copyright and related rights. 1. SANCTIONS AND ENFORCEMENT 1.1 Amendments in line with the industrial property acts The penal and indemnity provisions of the Copyright Act are important signals from society about the seriousness of copyright infringement. It also determines the risk taken when breaking the law and is thus an important means of discouraging copyright infringement in general. Furthermore, it determines the level of compensation the rights holders can get when being exposed to such infringements. In 2013 the industrial property acts in Norway (patent, design and trade mark) and the Marketing Act were amended, among others with reference to the Enforcement Directive (2004/48/EC) even though not part of the EEA agreement. The penalties were raised and the rights holders' right to be compensated was clarified and strengthened by implementing statutory provisions on the rights holders' right to claim the most favourable of: compensation corresponding to a reasonable license fee for the exploitation, as well as damages for any loss resulting from the infringement that would not have arisen in connection with licensing; damages for any loss resulting from the infringement, or compensation corresponding to the gain obtained through the infringement. Furthermore, a right for the rights holders to claim compensation corresponding to double a reasonable license fee in case of infringements resulting from a wilful or gross negligent act, was introduced. In addition provisions on preventive measures were implemented. As the same considerations in favour of strengthening the enforcement of industrial property rights applies to the copyright field, MPA and its members urge the Ministry to propose similar legislation with regard to infringement of copyright in order to bring the Copyright Act in line with the industrial property rights legislation. 1.2 Chapter 7a of the Copyright Act For a long time the rights holders have been helpless spectators to the infringement of their rights on the Internet due to a legislation that has not kept up with the rapid development of new technology. In 2013 a broad majority of the Parliament adopted important amendments to the Copyright Act with the intention to strengthen the enforcement of copyright on the Internet. It is still too early to conclude that the amendments will work as intended. If the provisions are not used or practiced as intended and the infringements continue with the same dramatic consequences for the rights holders' basis of income, is an important signal that copyright enforcement on the Internet still is too burdensome, i.e. that the rights holders loose more than they gain by trying to enforce their rights. It is therefore important that the Ministry follows the developments in this area closely and propose any amendments necessary to make the exclusive rights a reality also on the Internet. 2. STREAMING FROM ILLEGAL SOURCE The number of illegal streaming services offering movies and other copyright protected content without the consent of the rights holders is increasing. The currently most popular service, Popcorn

3 Time, is based on a combination of BitTorrent and streaming technology. The combination of user friendly interfaces and high penetration of fast broadband amongst Norwegian consumers have made services such as Popcorn Time and other illegal streaming services very popular. According to a survey made by TNS Gallup on behalf of NRK earlier this spring 315,000 Norwegians are using Popcorn Time every week. According to Section 12 fourth paragraph downloading from an illegal source is prohibited and illegal. When it comes to the act of streaming content from an illegal source the legislation is less clear and has thus amongst many in the general public created the impression that streaming due to the fact that only temporary and not fixed copies are stored in the memory of the computer is legal. This has led to an incomprehensible distinction between similar situations i.e. consumption of creative content without the authorization of the rights holders that 1) causes the rights holders great loss; 2) undermines legal services and 3) threatens the livelihood of many in the creative industry. The recent and ongoing debate about Popcorn Time illustrates the need for a clarification with regard to the illegality of streaming. Clear legislation is necessary in order to maintain respect for the legislation and in order to shape an attitude amongst users of creative content based on respects for the fundamental rights of the author. MPA and its members therefore emphasize the importance of clarifying that streaming from illegal source is illegal and thus making the legislation technology neutral which is a clearly stated objective with the legislation when it comes to consumption of creative content without authorization from the rights holders, ref. also Denmark where streaming from illegal source is illegal according to the Danish Copyright Act. 3. USE OF AUDIOVISUAL CONTENT IN CLASSROOMS ETC. Today there are great uncertainties associated with the extent to which a school can use audiovisual content such as movies and TV series without remunerating the rights holders. Such ambiguity makes it difficult for rights holders to obtain fair compensation for the use of audiovisual works in the education sector. According to statements in the existing Copyright Act's preparatory works (ref. among others Ot.prp. nr. 15 ( ) p. 126) communication of works within the "ordinary classroom situation" is considered private and hence outside the scope of the rights holders' exclusive rights set out in Section 2 of the Copyright Act. MPA's members are of the impression that such a general statement is not applicable in today's society and the existing media reality. Relevant in this regard is both the technological development which due to the intensity of the exploitation has blurred the lines between communication of works and copying of works (the latter being subject to licensing), and that the perception of what is regarded as a school class has changed significantly. Today the number of students in one class is often higher than it used to and it is normal that school classes are split into new classes and courses depending on the students' choice of subjects and so on. The close ties which are presumed to exist between the participants in the classroom will therefore not necessarily be present. This makes it difficult to know use of audiovisual works in schools is dependent on additional authorization from the rights holder or not. An assessment based on whether a movie is watched in conjunction with an "ordinary classroom situation" or bigger and looser groups of students creates large uncertainties both for the schools and the rights holders. This suggests that use of movies in schools should be regarded as a means of making available to the public regardless of individual factors.

4 4. GENERAL EXTENDED COLLECTIVE LICENSE 15 June this year the Parliament adopted the Ministry of Culture's proposal to implement a general extended collective license (general ECL) in the Copyright Act. MPA raised on behalf of its members their concerns during the public hearing referring among others to the possibility that the exclusive rights and the contractual freedom of the rights holders might be undermined, as well as the unknown impact on the market. MPA also emphasized that compliance with international conventions (including the three-step test) would depend on how the Ministry of Culture implements the regulation in practice. The majority of the members of the Standing Committee stated in their remarks that the general ECL shall not cover areas where individual rights clearance can take place. They furthermore stated that authorization from the Ministry is needed within each relevant area that the provision will be used, and that the authorization scheme used shall ensure that the requirements applicable to new ECLs are fulfilled. To help ensure that the Ministry does not authorize agreements that cover areas where individual licensing is possible and thus authorize agreements that will compete directly with individual licensing (which both the Ministry and the Standing Committee have stated that it shall not do), it is important that affected parties, such as producers/distributors of audiovisual works, have the opportunity to provide the Ministry with sufficient information about the existing situation before the Ministry decides whether an extended collective license should be approved in order that any ECL that does not meet the Ministry s criteria should not be approved. In addition to prevent that the general ECL is used in areas where individual licensing is possible, compliance with international conventions is dependent on an effective opt-out right. A clear, easy and effective opt-out right is necessary in order to protect the exclusive rights of the rights holders who choose to exercise their rights individually. The key elements of an effective opt-out right are, as mentioned in MPA's submissions during the public hearing, that the rights holders are notified in advance of any intended license agreements prior to any authorization by the Ministry, and that the opt-out right is construed in a way so that it applies for any platform operator to the entire repertoire of the rights holder(s) exercising the opt-out right, if so desired by the rights holder. Compliance by licensees with opt out instructions should be enforceable without requiring rights holders to resort to legal action. MPA has previously suggested that notification to affected rights holders of an intended license agreement and the possibility to opt-out may be practiced by the Ministry of Culture maintaining a list of stakeholders that wish to be notified. MPA proposes that the Ministry of Culture adopts regulations and/or guidelines related to the new general ECL provision to ensure an effective opt-out right and to ensure that relevant stakeholders are notified prior to the approval of new extended collective licenses in order to safeguard that the general ECL is practiced as intended and in compliance with international conventions. Regulations addressing this approval process should thus also be adopted.

5 5. PRIVATE COPYING FAIR COMPENSATION Rights holders compensation for legal reproductions made for private use is funded through yearly allocations in the government budget. According to the Ministry of Culture, only rights holders that are citizens or domiciled within the European Economic Area (EEA), or companies with a registered office in the EEA, are entitled to such compensation. MPA is of the opinion that this violates Norway s international obligations according to the Berne Convention among others, and therefore urges the Ministry to propose that this practice is amended in connection with the revision of the Copyright Act. We appreciate this opportunity to share our views and remain at the Ministry's disposal to answer any questions or provide further information on the points raised above. My best regards, Okke Delfos Visser Vice President Head of the Legal Department MPA EMEA