Is the current EU copyright regulatory framework sufficiently fit for purpose in a digitized world?

The European Commission (the "Commission") has recently raised this question.1 It invites all kinds of stakeholders, e.g. end user/consumer, right holder (such as authors, performing artists, publishers, producers or broadcasters) as well as service providers engaged in the distribution of copyright-protected content, to submit responses to its questionnaire by 5 March 2014.2 This public consultation is part of the Commission's on-going effort to review and, if required, modernize the EU copyright legislative framework. The Commission intends to complete its review in spring 2014.

The Commission notes that consumers still face difficulties in accessing services offering access to audio-visual content across national borders of various Member States.3 The Commission thus wants to find out the origin of these difficulties and whether legislative intervention is required to overcome these.4 Increasing cross-border availability of online services in the EU would be another facet of the Commission's efforts towards a single internal market. The Commission in particular asks right holders to explain why they deem territorial restrictions imposed on distributors necessary or justified although they hold all necessary rights for all territories in question, which enables them to grant multi-country or pan-European licenses.5 The Commission points out that it does not question the territoriality of rights as such6, thus following the Court of Justice of the European Union's (CJEU) statements in the Murphy-case, which dealt with the question whether an English pub owner could use a Greek decoder and decoder card to broadcast live matches of the English Premier League.7 It will be interesting to see if right holders respond to this question by putting forward economic reasons rather than stressing legal arguments like compliance with consumer protection laws8.

The Commission also addressed the legal framework currently applicable to the resale of end user licenses for digital content that was received through digital transmission.9 For software, the CJEU has recently held in its much-noted UsedSoft decision that digital transmission of the work could trigger exhaustion10 of the software owner's distribution right, which contradicts the traditional concept of exhaustion being confined to the distribution of tangible copies of a copyrighted work11. The consequences of that ruling for the second-hand marketing of other digital content, such as e-books or music files, are heavily debated in the legal community and the media industry. One of the principal arguments put forward against applying the CJEU's UsedSoft-reasoning in a non-software-related context is that the scope of the Computer Program Directive12, which is the basis of EU copyright law for computer programs, is limited to computer programs. To the contrary, the Information Society Directive13 generally harmonizes copyright throughout the European Union. That Directive specifically limits the scope of the right to distribute a copyright-protected work, and the principle of exhaustion, to those works that are embodied in a tangible object.14 The Computer Program Directive does not require that a tangible copy of a computer program is released to the market in order for exhaustion to apply with regard to that copy. The CJEU, consequently, held that exhaustion could apply even where the market release of a copy occurred via digital transmission, in particular the download of a purchased copy of a computer program.15 In addition, the CJEU argued that from an economical perspective putting a work onto market in tangible or intangible form would not mean a difference in substance since both ways allow the right holder to obtain a fair compensation.16 While it is difficult to see how the latter argument would not apply regarding other works than computer programs17, the outcome of the discussion remains to be seen. It will be interesting to observe the impact of the responses of consumers and right holders as well as service providers to the Commission's questions on the discussion and the Commission's conclusions thereupon respectively.

To sum it up: The Commission has (re-)sparked the discussion on copyright in the digital world and mid-term changes in EU copyright law may be on the horizon.