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Copyright Law and the Facts of Life Joel Rothstein Wolfson Blank Rome Comisky & McCauley The Farragut Building 900 17th Street, N.W., Suite 1000 Washington,

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Presentation on theme: "Copyright Law and the Facts of Life Joel Rothstein Wolfson Blank Rome Comisky & McCauley The Farragut Building 900 17th Street, N.W., Suite 1000 Washington,"— Presentation transcript:

1 Copyright Law and the Facts of Life Joel Rothstein Wolfson Blank Rome Comisky & McCauley The Farragut Building 900 17th Street, N.W., Suite 1000 Washington, D.C. 20006 Phone: (202) 530-7488 Facsimile: (202) 463-6915 Email:

2 2 Enron Venture Capitalism u You have two cows. u You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, u then execute a debt/equity swap with an associated general offer so that you get all four cows back, u with a tax exemption for five cows. u The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who u sells the rights to all seven cows back to your listed company. u The annual report says the company owns eight cows, with an option on one more.

3 3 Topics  European Union (EU) Law  U.S. Law  Are Contracts and Copyright at War??

4 4 EU Directives u Partial List: Database Protection e-Commerce Directive (w/ WIPO Treaty Implementation) Distance Contracting Unfair Terms Electronic Signatures Privacy Financial Services to Consumers Computer Program

5 5 U.S. Law 1. Statutes Copyright Digital Millennium Copyright Act with Digital Rights Management Systems Trademark Trade Secret Patent Computer Crime Statutes 2. Contracts—for Ray to discuss Common Law UETA/UCITA 3. Technology Anti-piracy Limits use (not let 11 th user in on a 10 user license)

6 6 EU Directives u They are say, “ Member States shall lay down in their legislation that ” u Entire EU Legislative Structure u ndex.htm# ndex.htm# u Worldwide Fights--U.S. Needs an Agenda

7 7 Database Directive—Article 1 u ‘Database` shall mean a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means u As long as the database is the author's “own intellectual creation” it “shall be protected as such by copyright. u “No other criteria shall be applied to determine their eligibility for that protection.”

8 8 Copyrightable Databases-- Article 5 u If database is protectable by copyright: l Usual exclusive rights (reproduction, adaptation, distribution, first sale, communication, display, performance) l Usual fair use defenses (private copies of non-electronic data, non-commercial teaching or scientific research, for judicial procedure, etc.) as long as they don’t “unreasonably prejudice the rightholder's legitimate interests or conflict with normal exploitation of the database”

9 9 Sui Generis—Article 7 u If database is not copyrightable: u 1. Database is protectable if there is “qualitatively and/or quantitatively a substantial investment in obtaining, verification or presentation of the contents” u Against “extraction and/or re-utilization” of a substantial part, qualitatively and/or quantitatively, or repeated insubstantial takings u The right may be conditioned or governed by contract

10 10 Other Topics—Article 10 u Same copyright fair use defenses: u 15 (and a little) years from completion or first made available to the public. u Any substantial change, evaluated qualitatively or quantitatively, from the accumulation of successive additions, with substantial new investment, qualifies for its own term of protection.

11 11 Who Can Be Protected— Article 11 u Individuals: l nationals or habitual residence in the Community. u Companies: l formed in a Member State and having their registered office, central administration or principal place of business within the Community; l where such a company or firm has only its registered office in the Community, its operations must be genuinely linked on an ongoing basis with the economy of a Member State u For Those From Other Countries: l “Agreements with…third countries … shall be concluded by the Council acting on a proposal from the Commission”; “The term of any protection shall not exceed that available” in the EU”

12 12 E-Commerce Directive u Most Know About Its WIPO Treaty Parts l ISP non-liability, caching, etc. u Article 9—Electronic Contracts l 1. Member States shall ensure that their legal system allows contracts to be concluded by electronic means. Member States shall in particular ensure that the legal requirements applicable to the contractual process neither create obstacles for the use of electronic contracts nor result in such contracts being deprived of legal effectiveness and validity on account of their having been made by electronic means

13 13 E-Commerce Directive-Articles 10 u Order Information and Error Correction (Who provider is, how to make a contract, who will fill order, means for correcting errors prior to the order, codes of conduct) u Must permit contract terms to be stored and reproduced u Above does not apply to electronic mail or equivalent individual communications. u Acknowledge the receipt of the recipient's order (deemed received when able to access)

14 14 Other Topics in the e- Commerce Directive u Registration of (And Non-Interference With) Information Society Service Providers (ISSP--Content and ISPs) u Advertising Information and Junk Mail Identification Information u Regulated Professions Advertising (Codes of Conduct and “Dignity and Honor” and “Fairness to Clients”) u Mere Conduit u Caching u Hosting u ISSP No Duty to Monitor u Arbitration Between ISSP and User u Fast Court Injunctions Against ISSP for IP Infringements

15 15 Distance Contracting—What Is It? u “Distance contract” means any contract concerning goods or services concluded between a supplier and a consumer that makes exclusive use of one or more means of distance communication; u “means of distance communication” is any means that is without the simultaneous physical presence of the supplier and the consumer

16 16 What is Required for Process? u Article 4—Certain Information (identity of the supplier, characteristics of the goods or services, the price, right of withdrawal, minimum duration) u Article 5 –Written Confirmation (“in a durable medium”, before contract or delivery [of goods?], not applicable for one time transactions where billing also by “distance communications”) u Article 6–Right to Withdraw l Consumers only l Seven working days l Exceptions (if performance of services has begun with consumer consent, goods which by reason of their nature cannot be returned, audio or video recordings or computer software which is unsealed by the consumer, or newspapers and magazines)

17 17 Financial Services Distance Contracting Directive u Different Look and Feel: u Durable Medium for Terms u Silence Not Acceptance u 14-30 Day Right of Withdrawal u Unavailability of Service u Unsolicited Communications u “FTC-like” Redress of Complaints

18 18 Unfair Terms Directive-- 93/13/ECC u "consumer" means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession

19 19 Unfair Terms--Article 3 u 1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

20 20 Annex u The Annex contains an indicative and non-exhaustive list of unfair terms: l Unfair terms are non-binding but rest of contract continues l Consumer Choice of law l Excluding or limiting damages for death or personal injury; l “Inappropriately” excluding or limiting damages for breach or high liquidated damages l Supplier can terminate but not consumer l Automatic extensions when deadline is unreasonably early; l Unilaterally alter the terms of the contract without a valid reason l Unilaterally alter the characteristics of the product or service without a valid reason; l Right to increase price without giving consumer right to cancel

21 21 Electronic Signatures-- 1993/93/EC u Levels of electronic signatures u Provides for “advanced electronic signatures” (based on a certificate and a “secure-signature- creation device”) get same legal effect as a hand- written signature u Any level of electronic signature is not to be denied legal effectiveness solely because it is in electronic form, not based on a certificate, or not created by a “secure signature-creation device”.

22 22 Other Topics in the Electronic Signature Directive u Regulation l No Authorization Needed For Signatures But May Setup Accreditation Authorities l Must Recognize Other Countries’ Authorizations u Liability of Certificate Authority To Third Parties Who Rely u Data Protection

23 23 The EU Privacy Directive u "personal data" very broad—any information relating to an identified or identifiable natural person ("data subject") who can be identified, directly or indirectly u Applies to personal data wholly or partly by automatic means

24 24 Principles Relating to Data Quality u Personal data must be: u (a) processed fairly and lawfully; u (b) collected for specified, explicit and legitimate purposes u (c) adequate, relevant, and not excessive u (d) accurate and, where necessary, kept up to date;

25 25 Reasons For Collection u (a) the data subject consents unambiguously; u (b) processing is necessary for the performance of the contract u (c) necessary for legal compliance or u (d) necessary to a protect the vital interests of the data subject; u Except where such interests are overridden by the interests or fundamental rights and freedoms

26 26 Other Provisions u Member States shall prohibit the processing of personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade-union membership, and the processing of data concerning health or sex life. u Article 10-Detailed Disclosures to a Direct Data Subject u Article 11-Detailed Disclosures to an Indirect Data Subject u Export to third country only if it ensures an adequate level of protection (U.S. Safe Harbors nor EU Approved) u Privacy Boards for monitoring the application

27 27 Computer Directive u Grants U.S.-like Copyright Protection for Computer Programs l Exclusive Rights l Exceptions l Duration u Ideas Not Protected Under Copyright u Provides for Reverse Engineering for Interoperability Only

28 28 U.S. Law u Copyright l Expression not ideas l Infringement is access plus similarity l Registration not required u Trademark l Mark or symbol that identifies single source or geography as mark of quality l Usage gives protection l Registration not required u Trade Secret l That gives competitive advantage l Must be kept secret l Contact is usually a necessary component

29 29 U.S. Law u Patent l Inventions, processes, designs l Infringement is equivalent result and method l Registration is required (and expensive) l Independent creation not a defense u Computer Trespass l Unauthorized access u Computer Fraud and Abuse Statute l Unauthorized Access

30 30 Data Base Protection Legislation u Feist v. Rural Telephone u Not Sui Generis Protection as in EU u Coble--H.R. 354—Unfair competition u H.R. 1858—Much more limited protection, lots of fair use rights, governmental suits only l Title II deals with “real-time” stock market data u Cases l Key Publications l Schoolhouse, Inc.

31 31 Are Copyrights and Contract at War? u No— l They have always been used together l Contracts define the product l Permits Uses and Prices to Libraries Tailored to Their Uses l Not “unilateral legislation” because— u With few exceptions, there is choice and the market works u Legal safeguards like unconscionability. and UCITA’s Fundamental Public Policy u First Amendment—(Eldred v. Ashcroft) u Fair Use and Other Defenses u Consumer legislation, unfair trade practices, FTC, AGs, Anti-trust

32 32 Web Site u For EU Directives u

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