1. The European « Extended Collective Licensing » Model Potential Incompatibilities with International Norms
Alain Strowel
Professor, Facultés universitaires Saint-Louis, Université de Liège and MIPLC (Munich),
Attorney, Covington & Burling LLP, Brussels
Kernochan Center for Law, Media and the Arts
Columbia Law School - 28 January 2011

2. Outline Existing problems and possible solutions ECLs in the EU:
What solution do the « extended collective licenses » (ECLs) offer?
ECLs in the EU:
Existing ECLs
Possible solutions for orphan works
ECLs under the international norms:
Prohibition of formalities under Berne Convention (BC)
Application of rights (under BC and WCT) to scanning and online display/communication
Exceptions and limitations under BC, WCT, TRIPs
Three-step-test

3. Existing problems, possible solutions
Management problems for « outsiders »:
National third-parties (non-members)
Foreigners from (i) EU origin or (ii) rest of the world
Unknown parents (orphan works)
Possible solutions when high transaction costs:
Individual « opt-out » (ex. Google Book Settlement)
Compability with Berne?
Collective « opt-in »: collective agreement
But ECLs are extended by law to include outsiders (non-members, foreigners, unknown parents)
Compability with international norms?

4. ECL Model Definition: Three core elements:
when a license agreement freely negotiated between a collective management organization (CMO) and a user by legal provision is extended to the works of outsiders
Three core elements:
Agreement on a « voluntary basis »
« Extension effect »
By virtue of the law
Outsiders retain their exclusive right until the « extension effect » takes place
Certain ECLs provide an opt-out for outsiders

5. ECLs in the EU ECLs are the existing solution for outsiders:
in case of cable retransmission of broadcasts (Cable-Satellite Directive)
ECLs could become a future solution for the:
(i) scanning/digitisation and
(ii) online communication to the public
of orphan works

6. ECLs for cable retransmission in EU
Article 9 Cable-Satellite Directive 93/83:
Exclusive right, mandatory collective management:
The right « to grant or refuse authorization to a cable operator for a cable retransmission may be exercised only through a collecting society »
Outsider and competition issues addressed:
« Where a rightholder has not transferred the management of his rights to a collecting society, the collecting society which manages rights of the same category shall be deemed to be mandated to manage his rights. Where more than one collecting society manages rights of that category, the rightholder shall be free to choose which of those collecting societies is deemed to be mandated to manage his rights. »

7. ECLs in the EU Existing EU framework:
Autorisation of Member States to create ECLs according to recital 18 InfoSoc Directive 2001/29:
« This Directive is without prejudice to the arrangements in the Member States concerning the management of rights such as extended collective licences. »
Recognition of ECLs as management systems, but in preamble
Existing national ECLs (Nordic countries, Hungary)
For specific uses: started in 1960s for broadcasters; today, for internal uses by educational institutions and businesses, for libraries and museums (archiving and making available), etc.
Since 2008, Denmark has an general omnibus provision (not restricted to a special field)

8. Options for orphan works law (EU)
EU Commission’s proposal in the « pipeline »:
Expected to be released in the next few months (Commissioner Barnier, 22 Jan. 2011)
Possible options:
Change of substantive EU copyright rules on exceptions:
New exception for archiving copies and online display
To build on art. 5(2)(c) for preservation and 5(2)(n) for online but on-site access of collections (InfoSoc Directive)
Redress mechanism for reappearing rightholders (but no claim for past)
No way! Not applicable before 10 years (adoption, then transposition of a directive)
Facilitation of copyright licences and management throughout the EU:
Specific pan-European cross-border licence for online display
Mutual recognition system of national systems (defining diligent search…)
Extended collective licensing (ECL)

9. ECL for orphan works at EU level?
Can for ex. the ECL-based national digital library in Norway (« Bokylla ») be exported at EU level?
Is it possible to have an « extension effect » at EU level?
ECL works at national level: no extension across borders because no EU copyright, only 27 national copyrights
The Bokylla ECL with Kopinor (CMO) covers Norwegian and foreign publications but only benefits Norwegians users (IP-addresses)
Can it be solved without an EU copyright title?
Is the negociation process not too complex for multi-language, -media libraries? How to define the tariffs?
Copyright license to be negotiated with too many groups of rightholders (already for books or journals: text and images)?

10. ECLs under international norms
Under Art. 5(2) Berne Convention (BC) : no formality
Prohibition of « any formality » for the « enjoyment and the exercise » of the rights within copyright
With regard to works of foreign origin
ECLs do not affect the enjoyment, but do affect the exercise
But do ECLs impose a « formality » on the « exercise »?
No need to fulfill any « written » formality or to become the member of a CMO
Are the conditions negotiated by private parties (for ex. CMOs), but later extended by law to be considered as a « formality »?
The statutory obligation to assert the « moral rights » under UK CDPA 1988 is a formality (even if done in a private instrument)
Are the obligations resulting from the intervention of a public authority to be considered as formality (judge in a class action settlement?)
Is the opt-out offered to outsiders a formality? No, because it redirects the right holder against the user (the full exclusivity is recovered)

11. Rights under BC and WCT
Scanning and downloading, as reproductions, are covered by Art. 9 BC
Online display/communication: does it fall under BC?
Art. 11bis (1)(i) which applies to literary and artistic works does not cover wire-originated communications
Are covered by Berne: the communication to the public of:
the performance of dramatic, dramatico-musical and musical works (art. 11(1)(ii));
the recitation of literary works (art. 11ter(1)(ii));
the cinematographic adaptations of literary/artistic works (art. 14(1)(ii))
the cinematographic works (art. 14bis(1))
Are those provisions applicable to pull/on-demand communication? When the public is separated in time?
Online display/communication falls under Art. 8 WCT

12. Exceptions/limitation under BC / WCT
Are ECLs an exception/limitation?
Exclusive right is preserved
But:
The author cannot exercise her right, only the CMO
The author cannot individually negotiate
The outsiders are affected in the absence of any mandate
If yes, does this exception/limitation respects the international constraints?
Scanning and downloading = reproduction under Art. 9 BC
Thus issue whether ECLs respect the « three-step-test » of Art. 9(2) BC
Online display/communication = communication to the public/making available under Art. 8 WCT
Are ECLs allowed? A fortiori argument: compulsory licence=allowed
Art. 8 is without prejudice to Art. 11bis(1)(ii) BC which allows compulsory licence (with remuneration) under Art. 11bis(2) BC

13. ECLs under the « three-step-test » (1) Art
ECLs under the « three-step-test » (1) Art. 9(2) BC; 10 WCT; 13 TRIPs; 5(5) Infosoc Dir
Limited to « certain special cases »:
Narrow in scope and reach, exceptional and precise (clearly defined), foreseeable scope, for specified purposes
Thus need to know: rights, works, beneficiaries, purpose
Question on the Danish omnibus ECL model: no beneficiaries, no categories of work defined, no defined field of operation, no purpose
With ECLs: the actual scope is determined by the agreements (contractual aspect), not by the statutory provisions on ECLs

14. ECLs under the « three-step-test » (2)
Limitations shall « not conflict with a normal exploitation» of the work:
« Exploitation » refers to the economic value
« Normal » exploitation indicates the limitation should not interfere with the usual way for exploiting a work (this is relative; it should take into account « potential, as well as current and actual, uses or modes of extracting value »)
Are ECLs compatible with this requirement?
They have been in place for decades in the Nordic countries without any major challenge (they might now be the « normal exploitation » in the Nordic countries)
They represent a potential way of extracting value
ECLs are based on a freely negotiated agreement and provide for a remuneration to the right holders

15. ECLs under the « three-step-test » (3)
Limitations shall « not unreasonably prejudice the legitimate interests of the author » (BC) or « of the right holder » (TRIPs):
« Prejudice » refers to « harm »
The «legitimate interests » language is more difficult to interpret (Does it refer to the economic and moral interests of the author? Is it normative or not?)
The term « unreasonably » brings the proportionality test in the picture
Are ECLs compatible with this third prong of the test?
Very probably
Indeed, the economic interests are less prejudiced if a remuneration is paid (compared to pure exceptions)
As right holders negotiate, ECLs can be presumed to be less prejudicial than compulsory/statutory licenses

16. A few concluding remarks
With the ECLs, the collective management model becomes the “normal exploitation”
With the increased use of ECLs, it becomes more important to have rules ensuring representativity, accountability, transparency of CMOs
ECLs solve the outsider (including the unknown parents) problem quite well. But in practice, they have been less convincing for the foreigner issue
Therefore, existing national ECLs are not entirely satisfactory
With increasing online uses, the challenge results more from the territoriality of copyright
In the EU: how to override the absence of an EU-wide title? ECLs might not offer the solution here 16