During the legislative proceedings for the Second Act on Copyright Law in the Information Society – the so called “Second Basket” – which has been in force since January 1, 2008, many interest groups and lobbyists insisted that the legislator should timely attend to the preparation of a “Third Basket”. This should, in particular, contain aspects and approaches for matters which have not been regulated by the Second Act. Thereupon, the German Bundestag and Bundesrat passed resolutions and entrusted the Federal Ministry of Justice to examine whether there is a need for action in certain fields of copyright law.

In its Consultative Paper, the Federal Ministry of Justice offered the involved parties and lobbying groups the opportunity to comment on problematic topics at issue and to answer particular questions posed by the committee of inquiry on “Culture in Germany” and by the European Commission. Some involved organizations made their opinions available to the general public on the Internet.

The Consultative Paper includes a set of familiar questions which have already been discussed in the “Second Basket” but for which no agreement was struck between the different interest groups.

Limitation of private copying to copying only from original works and prohibition of copying by third parties

According to Sec. 53 para. 1 German Copyright Act, it is permissible to make single copies of a work on any medium for private use as long as the copies are made neither directly nor indirectly for commercial purposes and the material used for copying is not unlawfully made or illicitly made publicly available. A person authorized to make such copies may also cause such copies to be made by another person if no payment is received or if the copies are made on paper or on a similar medium by means of any photomechanical method or other method with similar effect.

It is now being discussed that the right to make private copies could be limited in such a way that it should only be permitted to make copies from original works. This is problematic, though, since the user is not always able to verify whether the master copy is an original. This is, in particular, impossible to verify with regard to an electronic master copy as in such cases it is unclear what is to be defined as an original work. Furthermore, it is being discussed whether the right to have the copies made by a third party be established. Here again, however, it appears questionable whether this could be successfully enforced.

Prohibition of intelligent recording software

Intelligent recording software is computer software which is able to automatically filter out and record music works broadcast by online radios. Moreover, the software can selectively pick out the metadata of the work, e.g., title, author, interpreter or album. The software stores the copy on the user’s hard drive. By this means, the intelligent recording software can be used for making private copies which are generally permitted by Sec. 53 para. 1 Copyright Act. However, many claim that these recordings can affect the copyright exploitation of works. Thus, right holders and the music industry request the prohibition of such software.

Selling of used software

According to German law, the distribution right of an author is exhausted if a physical copy of a specific computer software has been put into circulation with the author’s approval. The so-called “principle of exhaustion” says that the right holder can not claim his right with regard to a particular product once it has been put into circulation with his approval. That means that the purchaser can sell the copy of the software. However, nowadays, software is increasingly sold online without a physical medium. It is arguable whether the right of the author is also exhausted if the software was put into circulation online or several licenses have been granted while only one medium (master copy) was delivered. It should be clarified whether the principle of exhaustion can be applied by analogy to online sales and whether this should include copies from a master. So far, there has been no decision from the German Federal Court of Justice on this matter. Whether the application of the principle of exhaustion to online sales is consistent with European and international law is controversially discussed.

Film author’s right of revocation for unknown forms of use

Currently, in cases of doubt, a film producer acquires the right from the film authors to exploit the film through all known forms of use, including the forms of use being unknown at the time of acquisition. As a rule, copyright holders can revoke this right when their works are exploited through a new form of use. This, however, does not apply to the film copyright holders. Thus, film producers have a better position in comparison to other rights exploiters. On the one hand, it is argued that film producers bear a higher economic risk compared to other rights exploiters. With regard to future rights exploitation, it is said, producers need sufficient planning dependability, which could be affected by a right of revocation. Further, typically, a large number of persons are involved in making a film so that locating the authors or their heirs and reaching an agreement regarding the exploitation of such works is complicated. On the other hand, it is claimed that the German film industry is to a large extent subsidized, and television film productions by order of broadcasters hardly carry commercial risks for film producers. Apart from that, film producers have a better negotiation position than copyright holders and, as a rule, contractually acquire all the rights to exploit the film. Thus, the discussion about this topic which started with the “Second Basket” continues.

“Orphan works”

Another special topic are the so called “orphan works.” These are works protected by copyright where the right holder is not known or it is impossible to discover him. This problem arises in particular due to the long term of protection of 70 years after the death of the copyright holder. Since, except for some exceptions provided by law, the use of a work is only possible upon the consent of the right holder, libraries and archives refrain from distributing and making such works publicly available. With regard to the possibilities of right exploitation which arise due to increasing digitalization, the situation becomes even more problematic. The European Commission took up this topic in its so-called “Green Paper Copyright in the Knowledge Economy,” adopted in July 2008. Some countries have already introduced different models for the regulation of the use of “orphan works.” It remains to be seen which path Germany will choose.

Outlook

The legitimacy of copyright in its present form is being increasingly put into question. The “Third Basket” may be able to contribute to a reasonable balance, with respect to certain provisions in German copyright law, between the interests of authors, performers, the high-tech industry, internet providers, users and the general public. After the evaluation of all submitted opinions, the Federal Ministry of Justice will make a decision on the areas from the catalogue of questions in which there is further need for legislative action.