In a series of articles we will be focusing on 2 sets of issues which are relevant to the business of multimedia. First, intellectual property rights and rights clearance. Second, structuring and financing new businesses.


Overview - copyright under pressure
Almost every multimedia product will attract copyright protection of some form but copyright laws are struggling to keep up with technological change, to meet the phenomenon of digital convergence, and to suit the needs of an increasingly international marketplace. Technological change in itself is not new to copyright - questions such as whether a 1950's film rights licence includes video and cable/satellite transmission rights are common. What is new is the fact that products of all the copyright based industries can now be distributed globally in digital form on the identical carrier medium, such as CD-ROM or CD-I, or down a telephone line or fibre optic cable.

For over one hundred years reciprocal agreements have existed through which foreign works are protected by copyright in many countries. Best known of these are the Berne and Rome Conventions. This has been achieved on the basis of "national treatment" i.e. the rights which a foreigner obtains are the same as those of nationals. If nationals get less than, or something different from, the protection available in the foreigner's home country, the foreign work gets the same protection as the local products, rather than the greater or different protection to which it is entitled at home. National treatment is much better than nothing, but differences between the national systems can produce significant difficulties in rights clearance, control over distribution, and enforcement of rights. Examples of these national differences include the much greater emphasis on the moral rights aspects of copyright in France and a number of other European countries than in, say, the USA or the United Kingdom (see further below). At their extreme, these differences may even lead to wide variations in the extent of copyright protection available, such as the absence of adequate neighbouring rights protection in certain countries (1) and the wide divergences in the extent to which factual or functional items are protected by copyright in different countries. This is problematic for international trade.

Within Europe, it has been recognised that these differences have a distortive effect on trade between member states, contrary to the aims of the European Union. Consequently, the European Commission has initiated various legal measures aimed at harmonising specific areas where there were clear and significant discrepancies between the copyright laws of the member states. The first of these was the 1991 Software Directive (2). Since then, Directives have been adopted in the area of control over rental and lending and aspects of neighbouring rights (3), copyright aspects of cable and satellite broadcasting (4) and the duration of copyright (5). In the particularly complex area of protection of collections of factual data in the electronic age, a proposal has been pending since 1992 for harmonisation of the treatment of electronic databases and their contents (6). Other possible areas of reform include a "private copying" levy on e.g. blank tapes, moral rights, collecting societies and harmonizing the level of originality required for copyright protection in the Member States.

These harmonisation measures tend to facilitate some aspects of cross border activity. In other respects, they have only served to reinforce one of the current problems with copyright law - the fact that it has developed and evolved over time to suit the needs of new areas of industry as they have emerged by creating, to greater or less extent, specific rules for specific industry sectors. As copyright-based industries converge through the development of technology, the differences in copyright law as it apples to different industry sectors increasingly give rise to problems, aggravating the strains caused by the rapid pace of technological change. To give one example, the EC Software Directive does not give a definition of what is a computer program (save to say that it includes preparatory design materials). Most multimedia products will involve computer program elements, but may very well involve other elements which are not, or which may not be, computer programs. The Software Directive prescribes a series of rules specifically applying to computer programs, such as the so called "reverse engineering right" and the right to make back up copies where necessary. How do these rights apply to the extent that a multimedia product is not or may not be a computer program? The issue is unresolved, but potentially very significant. Similarly, national laws apply different tests to determine who owns the rights to a copyright work, depending on the type of work. Lack of national and international harmonisation can produce complex and sometimes surprising results in the area of rights ownership unless this issue is carefully addressed in appropriate contracts with all the potential rightsholders, so increasing the complexity and cost of rights clearance.

In Washington, Brussels, Geneva and elsewhere, legislators and technologists are considering how best copyright should evolve to address the needs of the information society. It seems inevitable that harmonisation both of the treatment of works at the national level, and internationally, must be the ultimate result. However, that leaves open substantial issues about how best to achieve this in the short and medium term, particularly while the emerging technologies continue to undergo rapid change. 1995 will be an important year for defining the future trends in copyright.

(1) i.e. protection for sound recordings, performances, etc.

(2) Council Directive of 14 May 1991 on the legal protection of computer programs (91/250/EEC).

(3) Council Directive 92/100/EEC of 19 November 1992 on rental and lending right and on certain rights related to copyright in the field of intellectual property.

(4) Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission.

(5) Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights.

(6) Proposal for a Council Directive on the legal protection of databases, as amended, COM (93) 464 final-SYN 393.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.