Azim-Khan, Rafi --- "Comment on conference: 'Copyright, Media and Digital Technology'" [1999] DigTechLawJl 7; (1999) 1(1) Digital Technology Law Journal 7

Comment on conference: `Copyright, Media and Digital Technology'

Held on Friday 20th February 1998, London.

Rafi Azim-Khan
Solicitor
Theodore Goddard (London)
[e-mail]

[1] In February of this year, a conference was held at the Strand Palace Hotel London to discuss the growth of digital technology and the implications for copyright law. It was attended by a host of legal and media industry personnel and covered topics such as the growing nature of digital technology and in particular the imminent launch and expansion of digital television and digital music. Whilst the move to digital media brings many advantages to both consumers and industry, with its improved quality and interactive potential, it also brings with it new risks concerning content management and piracy. At present copyright laws struggle to keep up with modern digital technology advances, and the courts and legislators must try to find an adequate response to deal with the issues thrown up.

[2] Digital television, launched in Europe in April 1996 and currently offering more than 200 digital TV channels to viewers in France, Germany, Spain and Italy was one of the main topics of interest. In the UK, the digital TV revolution is set to start as soon as the current dispute over the `set top boxes' are resolved. Essentially, this dispute centres on BSkyB's claims that the boxes being produced by BDB (British Digital Broadcasting, the Carlton/Granada TV digital terrestrial consortium) are not fully compatible with BSkyB's equipment, and that this is a breach of an agreement between the parties that any boxes produced by BDB would be fully interoperable. The BSkyB boxes are produced by News Corporation's subsidiary, News Datacom, whilst the BDB boxes are produced by Seca, the Canal Plus/Bertelsmann joint venture.

[3] Digital TV brings many advantages such as improved quality and capacity, and allows interactivity but who is likely to be interested? It was commonly thought by industry delegates and legal commentators alike that there are several likely purchasers of digital rights, with the main competitors likely to include cable television, digital terrestrial pay services such as BBC and ITV, and also the Internet. Digital TV brings new opportunities for broadcasters and rights owners such as targeted programming (eg. sports, news and movies) and potential exists for new types of special or local interest programming, pay per view and even interactive services.

[4] One of the questions raised was `What will the content of new digital television programmes include?' Analogue satellite and cable experience has shown that viewers are not interested in a large number of channels, but prefer to be selective. Also recent release films and live sport are of key interest. Research also indicates that access to information and other content, for example home shopping is also popular. The broadcasting of recent release films and live sport leads to a number of broadcasting rights issues and the competition for the exploitation of films and sports also has some negative implications. Video hire and sales will still be given priority over pay per view, and the PPV window will be set six months after video release, putting back the TV release date. The exploitation of sport has also shown that there is a real risk of overpayment to secure content with only a low audience being reached. There is still also concern regarding access to gateways, and although encryption makes unauthorised access difficult, it is not impossible. Regulators will have to regulate access effectively to guard against dominance.

[5] Another major area of discussion centred on the implications for the music industry. A significant feature of the new technology, in particular the Internet, is music delivery on-line. Cerberus operates what is referred to as a `digital jukebox' that allows the customer to download music onto computer hard-drive and then onto minidisc that can be reused and played in any conventional minidisc system. When downloaded to the user's CD-Rom the resulting disc is virtually identical in sound quality to a normal CD. With such technology and accurate reproduction methods the threat of piracy is much greater than that posed by analogue copying.

[6] New measures will be needed to deal with this threat. Whilst copy management schemes have proved relatively successful for video and computer software, they have not been comprehensively tested on audio. Bilateral schemes which have been the backbone of copy management were agreed in an era where digital distribution was not well understood, and do not favour computer industries. A number of new initiatives exist which are designed to deal with the new copying technology. One of the most significant developments in the European community is the introduction of the IMPRIMATUR programme. The MCPS (the Mechanical Copyright Protection Society) is currently testing a model whereby a copyright work is indexed then uploaded to the IMPRIMATUR server and given an invisible watermark, which ties the work to a system where its use can be regulated. Other methods of protection include encryption (converting plain text/data into unreadable text/data). Encryption safeguards against mass distribution of songs downloaded from Cerberus' `digital jukebox', due to the fact that if a Cerberus player distributes pirated audio files, those files can be traced.

[7] The consensus of most delegates was that whilst technological improvements limit the scope of piracy to a certain extent, in order to manage the threat posed by digital technology new legislation is required. One such possible improvement is the proposed European Commission Copyright Directive which aims to harmonise and add to certain aspects of copyright and related rights. Article 2 of the new directive proposes a new reproduction right, Article 3 a communication to the public right and Article 4 a new distribution right relating to tangible copies. The proposed Directive would also require Member States to provide adequate legal protection against any activities including the manufacture or distribution of devices or the performance of services, which would enable or facilitate, without authority, circumvention of encryption or other rights management systems.

[8] The IFPI (International Federation of the Phonographic Industry) however is not entirely happy with the proposals. In particular, one fear is that the present provisions regarding circumvention equipment limits protection against such machines or facilities to separate `black box' devices at a time when we are seeing more and more consumer electronic equipment evolving into complex multimedia platforms and indeed converging with the computer equipment itself. In other words, the concern is that machines that can do a variety of jobs will slip through the net. Further, the protection against circumvention is limited to controlling suppliers and does not extend to controlling the users (ie. the consumers or more professional individuals engaged in copying) of the decoding equipment or services.

[9] The final main issue, and one which I touched upon in my own presentation, concerned audio piracy on the Internet, namely, where does the violation of the copyright occur and who should take the blame? The user, the computer service provider and the person who established the website could all be considered responsible for infringing copyright. In order to resolve this, the courts need to decide the boundaries of their jurisdiction. Although UK law pre-dates the Internet, it appears the UK courts will apply legislation irrespective of a specific statutory reference. This was clearly demonstrated in the case of R -v- Fellows 1997 2 ALL ER where the Court of Appeal dismissed an appeal claim based on the fact that the statute made no specific mention of the Internet. With regards as to who can be prosecuted for an offence, in the case in the US of Playboy Enterprises -v- Chuckleberry Publishing heard in the US District Court New York 1996, the court held that an injunction preventing infringement of a trade mark in the US was valid to prevent activities based on a website in Italy. This was applied in a later case and it appears that activities on the Internet will be subject to UK law irrespective of where the server is located if those in the UK are able to subscribe to it.

[10] The overall conclusion from the day's discussions was that digital and media technology is moving at a rapid pace and it is clear that legislation struggles to keep up. This being the case, interested companies are nevertheless advised to take a commercial view on the risk involved in exploiting what is certain to be an increasing market and one which offers the most dynamic interaction with the end consumer. The major record companies are currently in an `observe, wait and see' mode, realising that there is still some way to go technologically and legally before on-line commerce and the distribution of content is realistically viable. PolyGram has recently become the first major UK record company to offer music for sale on the Internet and it is clear that such steps are very much `in the dark' at the moment with real fears over lack of adequate copyright protection from the threat of on-line piracy. For those interested in exploiting the digital landscape the choice is currently a difficult one of balancing up a desire to perhaps snatch the initiative from competitors whilst at the same time not exposing themselves as easy prey for the content pirates.