On 5 July 2007, the German Parliament (Bundestag) passed the so-called “Second Basket” of copyright law reform which still has to be approved by the Federal Council of Germany (Bundesrat). The Second Basket is intended to follow-up the first reform enacted in 2003 and to adapt German copyright law to the “digital age”. The key reforms include the following:

Private copying of technically non-copy-protected material will continue to be permitted. However, there is no “right of private copying” at the expense of rights holders. Therefore, the new law contains an important clarification: if it is obvious to the user of a peer-to-peer file-sharing network that a particular film or music recording is being offered unlawfully on the Internet – for example because it is clear that no private internet user owns the rights to offer a current feature film on the internet – then the private copying of that material is not permitted.

The actual lump-sum payment which copyright holders receive as compensation for permitted private copying derives from a levy imposed on equipment and storage media and is distributed by collecting societies. Pursuant to the new law, levy rates will be negotiated in the future between the collecting societies and the equipment and storage media producers. This market-oriented model is designed to to facilitate a more flexible response to new technological developments and to allow agreements on levy rates to be reached more quickly.

The reform will also expand the freedom of authors to grant copyrights: Up to now, the scope of rights which an author was able to grant to third parties was restricted to existing exploitation methods. For example prior to the “digital age” even an all-embracing granting of rights did not include the unkonwn future online use via internet. For the use of “old” works in a “new” way the authors or their heirs had to be asked and had to agree to the new method of exploitation. Under the draft bill, authors and copyright holders will be able to dispose contractually of their rights with respect to any kind of future use whether known or unknown at the time of the signing of the contract.