[Ecommerce] speech to the EU parliament during IP Enforcement session

[Nick Ashton-Hart]

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[ Picked text/plain from multipart/alternative ]
Hello everyone!

Below is the speech delivered by me to the JURI committee of the EU
parliament last week, on behalf of 3 NGOs in the music sector. As
always, comments are welcomed. I would have attached it but this list
server doesn't allow attachments...

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Thank you Mr. Chairman

May I begin by thanking the Committee for the opportunity to speak in
this most important debate.

My comments today are representative of the views of:

FIA, The International Federation of Actors, represents more than a
hundred associations of performers around the world, working in film,
television, radio, commercials, new media, live performance, variety
and circus;

IMPALA, the international representative of 2500 independent record
companies in Europe, who are collectively responsible for 20 percent
of all sales of phonograms;

The International Music Managers Forum, who represent the
professional associations of managers in countries worldwide;
managers are the legal representatives their featured artist clients
for all aspects of their professional lives.

In other words, I speak today on behalf of people who create and
disseminate a key part of the culture that surrounds us all and
defines how we view ourselves, how we know who we are; the creators
of the culture of our nations and how we protect those who create it
and those who make it available is the question of the day. This is
about creative people=92s ability to continue doing something that has
driven them to enter a career knowing they face almost impossible
odds against ever making a decent living, yet their creative impulse
drives them to do it anyway. We all have a stake in helping as many
of them as we can be as successful as they can.


We completely agree that when intellectual property is exploited
commercially without proper remuneration of its creators and right
holders there should be a penalty.

We note that legal and natural persons are liable for infringement in
the current proposals. Since a legal person cannot be imprisoned, to
explicitly require higher economic penalties for legal persons than a
natural person would face seems sensible, as is preventing those
convicted of egregious violations from forming new corporate entities.

Since many Member States already provide for longer prison terms than
the current proposals require, wouldn=92t establishing the 4-year term
as a de minimis obligation be sensible?

Both Directive 2004/48/EC and the current proposals seem to have been
drafted with the main thought that pirates are those who engage in
the commercial exploitation of rights to which they have no legal
attachment. The assumption appears to be that those with licences are
assumed to be operating in good faith.

These are flawed assumptions.

We would define piracy as: any natural or legal person who exploits
intellectual property for commercial gain without proper recompense
to creators and rights-holders. A separate and explicit definition of
what constitutes =91commercial gain=92 is needed =96 we wouldn=92t support
grandmothers and children being dragged into court because they
downloaded some files, as some stakeholders seem to favour. Further,
it is essential that those who receive the protection of the law are
obligated to act reasonably in relation to others =96 the current
proposals do not address this fundamental point.

Some examples of what we mean may be helpful.

There are instances where rights-holders pay a royalty which any
reasonable analysis would see as grossly unfair. For example, the
major phonogram producers are currently paying even the largest UK
artists 4-5 pence per iTunes download sale =96 a royalty of 5% of
retail sale price =96 and there are all kinds of ways in their standard
contracts to withhold payment of all or part of even of that.

Is that piracy?

No =96 but it isn=92t legitimate either =96 and the law should not be blind
to it.

When a rights-holder refuses commercial exploitation of a creators
work on any terms whatever, or requires commercially impossible
terms, even when the creator themselves asks for the right to exploit
that work personally, is that acceptable?

Is that piracy?

No =96 but it isn=92t legitimate either =96 and the law should not be blind
to it.

Why is this important? Because at present approximately 90% of all
the sound recordings owned by the major phonogram producers are
locked in vaults and not available commercially on any terms
anywhere, to anyone. The creators of these recordings are powerless
to do anything about it.

Think about that for a second =96 that=92s a staggering amount of
cultural diversity! Imagine all the music you=92ve ever heard =96 that
you=92ve ever seen in a shop =96 and realise =96 that=92s the tip of the
iceberg!

Which brings us to a really big question:

If it is illegal in the EU to exploit IP without remuneration to
creators and rights-holders, shouldn=92t it also be illegal to refuse
to exploit it and to refuse to allow anyone else to do so, even the
creators themselves?

We say =96 yes =96 that should be illegal.

In such cases the IP should revert to the creator so they can arrange
for it to be exploited. Otherwise, you=92re preventing people from
making a living, and depriving the public of access to vast amounts
of culture.

You may be thinking that all this can be sorted out on a case-by-case
basis in the courts.

We are individual creators and small companies. Legal action is
frequently too complicated and expensive (especially when you are in
a David and Goliath battle with a large corporation) for most artists
and many small record companies to undertake.

You must understand =96 more than 95% of all musicians never =96 let me
repeat =96 never =96 make a living from their craft. Of those who do,
most only make a basic living =96 even those who have had quite
successful records generally live modestly. How are people living
modestly supposed to take people in faraway lands to court?

Some EU member states have creatively dealt with these problems. In
Germany, a law, entitled =93Law to improve the contractual position of
authors and artists=93, with a stated purpose of securing =93adequate
payment for the use of the artists=91 work=94 provides the possibility of
renegotiation of contracts if they appear to be unbalanced. Were this
to be harmonised upwards to the EU level, with an accompanying
obligation for the various stakeholders (performers unions, phonogram
producer trade lobbies, etc) to negotiate standard contractual terms,
which could be used to assess reasonableness of contracts when there
is a dispute, a great deal more transparency, healthy economic
activity, and =91systemic integrity=92 would result. It would also
recognise what the law and public policy have long recognised =96 legal
protection is necessary whenever a greatly unequal bargaining
position exists.

One cannot speak of enforcement of IP rights without addressing
digital rights management (DRM=92s) and technical protection measures
(TPMs).

Is it legitimate for a rights-holder to employ these technologies
without the consent of creators =96 or even against their wishes?

We say that the answer should be =91no=92.

The vast majority of musicians and a large number of independent
record labels hate copy protection. They are horrified by the idea of
someone buying a CD and being unable to play it or use it anywhere
they wish, in any non-commercial way they wish. Do you know that the
major producers charge a hefty deduction to artists royalties for
=91new formats=92 of sound recordings, like digital distribution =96 so
effectively major label artists are financing technology both they
and the public dislike.

This is why we submit that private copying levies remain the fairest
system on balance for everyone =96 after all, whether or not levies
exist, private copying of music will still occur which would not
qualify as =91fair use=92 =96 but without the levies, a large number of
performers will lose a big chunk of their income from this activity.
How big? In France it averages 25% of musicians=92 IPR income.

It is a very unfortunate fact that currently DRM and TPM technologies
are used mostly to prevent access =96 or to reduce access to a level
that is below what is available when the same products are delivered
in physical formats. This is a perversion of what these technologies
could provide =96 fairer, more flexible and accountable access as well
as the foundation of new, innovative revenue streams for creators and
rights-holders.

DRMs as a technology are something like a hammer =96 you can use a
hammer to build a house, or you can use a hammer to hit someone over
the head. Unfortunately we see DRM being used far more as a weapon
than as a tool. We are not against DRM per se =96 we are against the
use of DRMs as a TPM, or with one. DRM which tracks usage so that
creators and rights-holders get paid and the consumer has the access
they want, when they want, to whatever they want =96 that we=92re all for.

Clearly, the use and development of DRM and TPM technologies cannot
be left completely to the market =96 there must be some oversight to
remedy and prevent current and future abuses. Lack of
interoperability between systems continues to make life difficult for
everyone, and hardware and software vendors, as well as sectoral
forces such as the major entertainment producers and telecom
companies are simply not managing the development and deployment of
these technologies properly. Current EU law in this area is clearly
insufficient. Remedying this is inextricably linked with the
enforcement development efforts we=92re discussing today. After all, if
the current legal situation is being abused, and you apply more
enforcement to that regime, the logical outcome is further (and
greater) abuse.

Our final points on the proposals concerns sustainable development =96
believe it or not! First, wherever infringing goods are destroyed,
they should also recycled if possible. Second, confiscated office
equipment such as computer terminals could be given to registered
charities.

In closing, and in brief since my time is up, these harmonisation
proposals need quite a lot of work.

Fundamentally, the principle behind them should change to incorporate
a simple concept: anyone who commercially exploits =96 or indeed fails
to exploit =96 intellectual property without fairly remunerating
creators and rightsholders is acting illegally =96 whether they have a
licence to do so or not.

They must address the abuses of the regimes that are the object of
the enforcement provisions. Preventing access on any reasonable terms
shouldn=92t be any more acceptable than providing unauthorised access is.

They should take into account the creative solutions to market
problems member states have developed regarding relations between
stakeholders =96 and obligate stakeholders to take a more central role
in the healthy development of their sectors.

They should encourage technological development that is constructive,
interoperable, and healthy, and discourage regimes that provide a
product digitally which has more restrictive access provisions than a
physical copy of the same product, as we cannot build the economy of
the future on such a basis.

We look forward to any questions you might have; there are
representatives of the associations above-referenced available to
speak with you.

Thank you for your kind attention.


CONTACT INFO:

FIA =96 Dominick Luquer            dluquer@fia-actors.com
IMPALA =96 Paloma Pertusa            ppertusa@kernnet.com
IMMF =96 Peter Jenner                        office@immf.net
Nick Ashton-Hart                        nashton@spamcop.net



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Regards,

Nick Ashton-Hart
PO Box 32160
London N4 2XY
United Kingdom
Tel: +44 (20) 8800-1011
Fax: +44 (20) 7681-3135
mobile: +44 (7774) 932798
email: nashton@spamcop.net
Win IM: ashtonhart@hotmail.com / AIM/iSight: nashtonhart@mac.com /
Skype: nashtonhart

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