Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 2 WIPO NATIONAL SEMINAR ON INTELLECTUAL PROPERTY FOR FACULTY MEMBERS AND STUDENTS OF AJMAN UNIVERSITY Dubai, May 5-6, 2004 INTELLECTUAL PROPERTY ON THE INTERNET: OPPORTUNITIES AND CHALLENGES FOR CREATORS, BUSINESS AND THE PUBLIC Dr. F. Willem Grosheide Professor at Law, Utrecht University The Netherlands

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 3 OVERVIEW QUESTIONS OF LEGITIMACY DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE OPPORTUNITIES AND CHALLENGES NATURE OF EXPLOITATION PROCESS

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 4 QUESTIONS OF LEGITIMACY Use of the Internet for communication of copyright law protected content raises various legitimacy questions such as –Should copyright law equally apply to individual copyright owners (e.g. authors, artists, composers), and entrepreneurial copyright owners (e.g. AOL/Time Warner, Corbis or Bertelsmann) –Should claims of individual consumers to access and use of copyright-protected material also be considered as legitimate

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 5 DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE 1 Online distribution of digital content in general, and of digitised music and text in particular, differ principally in at least four aspects from distribution in an analogue environment, having major consequences for the protection and enforcement of copyright on such content –Vulnerability to unauthorized use –No distinction between ownership of content and ownership or carrier –Users of content are part of the exploitation process –Contract terms even in mass market transactions can be individualised in the Internet environment.

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 6 DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE 2 VULNERABILITY –follows from the fact that modern digital technology permits the reproduction and dissemination of digitised content within seconds and without any loss of quality, while the supplier still disposes of the content

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 7 DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE 3 No distribution between ownership of content and ownership of carrier - whereas reproducing and distributing of content in the analogue world require the effort and cost of producing a physical copy, in the online world providing access is all that is needed - transactions (i.e. e-commerce) can be executed using the Internet (i.e. the computer network) simultaneously to form the contract and to deliver the goods.

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 8 DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE 4 Users of content are part of the exploitation process –the Internet (i.e. computer networks) enable content providers (e.g. music industry, publishing companies, software producers) to engage themselves in contractual schemes with their customers, and to protect their content against unauthorised use by a combination of contractual provisions and technological measures.

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 9 DISTRIBUTION OF COPYRIGHTED CONTENT ON LINE 5 Contract terms even in mass market transactions can be individualised in the Internet (i.e. computer networks) environment –Next to mass exploitation of digital content on the basis of non-negotiated contracts in the form of click-wrap licenses, individualised contracting has become possible on the Internet

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 10 NATURE OF EXPLOITATION PROCESS 1 EXPLOITATION 1EXPLOITATION 2 (upstream relationship) (downstream relationship) authorexploiterthird parties 1 (-natural person(intermediary) -legal entity)

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 11 NATURE OF EXPLOITATION PROCESS 2 Legal instrument for downstream exploitation of copyright: contract –Contract provides for transfer of prerogatives copyrightowner to intermediary Assignment Transfer License

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 12 NATURE OF EXPLOITATION PROCESS 3 Two forms of transfer - Assignment (i.e. assignee becomes copyright owner) - Main legal consequence = erga omnes effect (i.e. effect against third parties/infringers) - License (i.e. assignor remains copyright owner) - Main legal consequence: relational effect (i.e. no effect against third parties/infringers)

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 13 NATURE OF EXPLOITATION PROCESS 4 Characteristic elements exploitation - Reliance (fiduciary element) - Partnership (cooperation) - Profit making (exclusivity)

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 14 NATURE OF EXPLOITATION PROCESS 5 Object of transfer - Grant of rights (i.e. all or some of the rights belonging to the bundle of rights e.g.) - Publishing (right(s) – filmrights - Translation right(s) – music right(s) - (non-)Exclusivity - Warranties/indemnities - Territory - Term/termination - Remuneration (e.g. royalty, outright fee) - Infringement/enforcement - Disputes (e.g. competent court) - Governing law

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 15 NATURE OF EXPLOITATION PROCESS 6 Additional considerations for transfer - Materialiter - purpose restricted/ultimate purpose - Future works - Future modes of exploitation - Time-limit - Extent (totally/partially) - (non-) waiverability - Formaliter - Writing/deed

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 16 NATURE OF EXPLOITATION PROCESS 7 Case study UniversityProvider*Library (individual lending) Workuniversitysale on linereader Madepressavailable For hire AuthorExploiterDistributorUser/consumer Scholar sale PublisherBooksellerIndividual commercialoff linereader Assignment/publisher License * Publisher maybe off line offeror (CD Rom)

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 17 OPPORTUNITIES AND CHALLENGES OF THE INTERNET Creators: exploitation without intermediaries (e.g. Stephen King; George Michael) Business: access to new markets using new business models (e.g. amazon.com) Public: availability of customized (individualised) products (e.g. music by the track; books composed according to individual wants)

Dubai Conference May 2004 Molengraaff Institute Center for Intellectual Property Law (CIER) 18