Determinación del punto muerto

4.1 Introduction

The previous two chapters have considered the restrictive and encouraging functions of public interest defence through the integrated aspects of public policy and freedom of expression. The need for flexibility in copyright law has now become very important for our society to further develop and keep pace with rapidly-developing information technologies. As copyright strives for a fair balance between short-term incentives and long-term benefits,⁷⁷⁴ a flexible copyright L&Es system may help achieve the balance. The two aspects incorporated into the scope of the proposed defence provide ample space for those competing interests to be accommodated within the international copyright framework. This would in turn help complete the missing pieces of the L&E jigsaw that are not clearly spelled out, nor properly protected in the digital era.

At the international level, all L&Es for copyright are subject to the so-called three-step test. The test is an international doctrine recognised in several treaties,⁷⁷⁵ and consists of three abstract criteria used to govern limits to copyright.⁷⁷⁶ Like other L&Es, the proposed public interest defence should come under the three-step test scrutiny as a prerequisite to its international recognition. The test’s open-ended character has led to doubts over how much room the test will allow for new L&Es to emerge. Some assert that the test is more likely an author-friendly doctrine⁷⁷⁷ that should be interpreted as providing strong safeguard to rightsholders’ interests to the expense of L&Es, but it is designed to be sufficiently flexible to reconcile divergent interests.

774 Irini Stanatoudi and Paul Torremans, EU Copyright law: A commentary (Edward Elgar 2014) para 11.63.

775 Berne Convention, Art 9(2), TRIPS, Art 13, WCT, Art 10 and WPPT, Art 16.

776 The original wording in Art 9(2) Berne Convention reads ‘It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author’.

777 Annette Kur, ‘Of Oceans, Islands, and Inland Water: How Much Room for Exceptions and Limitations under the Three Step-Test?’ Max Planck Institute for Intellectual Property, Competition & Tax Law Research Paper Series No 08-04 <http://ssrn.com/abstract=1317707>

accessed 22 October 2014, 46; Thomas Dreier, ‘Shaping a Fair International IPR-Regime in a Globalized World : Some Parameters for Public Policy’ in Inge Govaere and Hanns Ullrich (eds), Intellectual Property, Public Policy, and International Trade (PIE 2007) 73-4.

This chapter will begin with an introduction of the three-step test’s background and its function as an umbrella term regulating all types of L&Es to copyright.

The focus then shifts to the effect of the rapidly-developing information society on copyright law, which calls for more flexibility to be added into its L&Es regime. After that, attention is drawn to the restrictive interpretative approach mistakenly embraced by numerous international and national judicial authorities. In Section 4.2, the interpretations handed down by the WTO panel and those by the ECJ and some national courts in the EU will be examined as examples of how the test’s restrictive interpretation could jeopardise copyright’s delicate balance with the public interest. This section also examines some prominent decisions delivered by national courts in other EU member states, which had recourse to different external measures to avoid undesirable outcomes caused by the restrictive test against their social, economic and cultural needs.⁷⁷⁸

Section 4.3 suggests a revision of the test’s legislative and contextual backgrounds in light of relevant treaties⁷⁷⁹ and prominent case law, and argues that the three-step test is inherently furnished with the balancing tool needed to perform its enabling function to provide room for flexibility in the copyright L&Es system. To safeguard such inherently flexible nature of the test, section 4.4 proposes that the test should be interpreted with some reference points and section 4.5 will illustrate step-by-step how the flexible interpretation of the three-step test in light of the proposed reference points would allow the public interest defence to pass.

The proposed defence, consisting of the two important aspects of public policy and freedom of expression, would be impractical without passing the universal three-step test scrutiny. The relationship between the test and the proposed defence is interdependent. The test generally functions to determine the outer scope of all L&Es to copyright, and this means that, whether or not the proposed defence could guarantee its legitimacy in the copyright L&Es, the regime depends on how much room the test provides for accommodating other

778 Kur (n 777) 4.

779 Berne Convention, Art 9(2), TRIPS, Art 13, WCT, Art 10.

societal interests including freedom of expression, within the copyright framework. The basis under which the test could be interpreted to permit such new flexible defence can also be intensified by taking into account other public policies and fundamental freedoms when interpreting the test. Thus, it is important for the entire copyright regime that the test is understood to be, not a straitjacket, but flexible and welcoming whatever the future development of L&Es will bring.

The free flow of information in the online environment has affected copyright’s delicate balance between rightsholders’ and users’ interests, and greater flexibility is required to promote the public interest.⁷⁸⁰ Such technological advance has led to the arrival of a number of emerging unauthorised uses of copyright works, such as user-generated content, search engine services, social networking and journalistic activities. Not only have these activities contributed to a stimulus for further creativity, they have also served the public as a prerequisite for a healthy democratic society. They have become essential parts of economic, social and cultural growth.⁷⁸¹ It is no longer only grants of exclusive rights that are incentives to the creation of more works, as L&Es are also becoming more important in ensuring the freedom to create and to use the works to fulfil and promote the public enrichment.⁷⁸² These types of unauthorised uses do not necessarily undermine rightsholders’

economic interests but are parts of what technological advances may entail.

Some are exercised to keep the entire public away from harm or to keep them informed about matters affecting their general interest, serving objectives such as uses for public policy and freedom of expression. Given these merits, more flexibility is needed within the L&E system to guarantee the legitimacy of uses that represent other important values in society. The proposed public interest defence is one of those L&Es that would benefit from a flexible &E system, as its purpose is to provide safe haven for those important uses mentioned above.

780 Martin Senftleben, Copyright, Limitations and the step test: An analysis of the three-step test in international and EC copyright law (Kluwer Law International 2004) 35.

781 Martin Senftleben, ‘Fair Use in The Netherlands – A Renaissance?’ (2009)

<http://ssm.com/abstract=1563986> accessed 15 November 2014, 6.

782 Stanatoudi and Paul Torremans (n 774) para 11.63.

Until now, there has been no sufficient breathing space within the L&E system where they can be safeguarded. The three-step test is an international doctrine designed to allow member states to devise L&Es according to their domestic requirements. It is therefore useful to examine to what extent the test can provide flexibility to open up the L&E system and allow emerging L&Es, such as the proposed public interest defence, to play a role in protecting other competing interests needed for copyright to develop and keep pace with the changing environment.

4.2 Restrictive interpretation of the three-step test

When considering the interpretation of the test at the international level, the guiding principle of restrictive interpretation has been handed down by the WTO Panel in its report concerning the compatibility of Section 110(5) of the US Copyright Act with Article 13 TRIPS.⁷⁸³ The case analysis that follows will examine why such an interpretation, given that it is the first and only international interpretation of the three-step test thus far,⁷⁸⁴ is too restrictive to be followed by regional or national judicial bodies in this rapidly-changing copyright environment.

4.2.1 United States – Section 110(5) of the US Copyright Act

In April 1999, the European Communities (EC) requested the establishment of a WTO panel to deal with their complaint regarding the inconsistency of the US Copyright Act with the obligations under Article 9(1) TRIPS to comply with Articles 1 to 21 of the Berne Convention.⁷⁸⁵ The dispute was centred on whether the two copyright exceptions,⁷⁸⁶ namely homestyle and business exceptions, enshrined in Sections 110(5)(A) and (B) of the US Copyright Act respectively, were compatible with the three-step test. Sub-paragraph A provides for the so-called homestyle exception, exempting the broadcasts of works other than nondramatic musical works in small commercial

783 WTO Panel – Copyright (2000) (n 374).

784 The three-step test was incorporated into Art 13 TRIPS by reference under its Art 9(1), which obliges member states to respect Arts 1-21 of the Berne Convention.

785 WTO Panel – Copyright (2000) paras 3.1-3.2.

786 Although the word ‘exemption’ was used throughout the original text, it is as a matter of consistency of this chapter to use the word ‘exception’ instead to refer to all doctrines that impose limits on copyright claims.

establishments using homestyle receiving apparatus.⁷⁸⁷ The business exception in sub-paragraph B allows food, drinking and retail establishments to amplify the communication of nondramatic musical works with no authorisation or royalty fee, provided that they do not exceed a particular floor area.⁷⁸⁸ For those not conforming to this requirement, amplification is still permissible as they can use other equipment and comply with additional conditions.⁷⁸⁹ The EC argued that these exceptions permitted free use of copyright works with the types of conditions that would entitle a considerable number of establishments to be exempted to the detriment of the EC right holders; thus, they were at odds with the three-step test.⁷⁹⁰ The US contended that the rationale behind Section 110(5) was that ‘the secondary use of the transmission by turning on an ordinary receiver in public was so remote and minimal that no further liability should be imposed’; therefore, a small commercial establishment that was not large enough to subscribe to a commercial background music service could be exempted from copyright liability.⁷⁹¹

Article 13 TRIPS was also of importance in this case because it contained the three criteria under which the legitimacy of the two exceptions must be tested.⁷⁹² In introductory statements, the Panel stated that the three criteria should be subject to cumulative application, but independent consideration for each step.⁷⁹³ What is interesting is the fact that the Panel made reference to the predecessor provision of the three-step test in Article 9(2) of the Berne Convention before taking the view that ‘Article 13 cannot have more than a narrow or limited operation’; in fact, types of L&Es for which this provision would allow are only those having limited scope.⁷⁹⁴ This is a strong indication of the Panel taking the narrow route in applying the test. This became even more evident in their subsequent step-by-step interpretation.

787 WTO Panel – Copyright (2000) para 2.3.

788 Ibid. para 2.3.

789 Ibid. paras 2.14 and 2.3.

790 Art 13 TRIPS reads ‘Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work in question and do not unreasonably prejudice the legitimate interests of the rightsholder’.

791 WTO Panel – Copyright (2000) para 2.5.

792 Ibid. para 6.71.

793 Ibid. para 6.97.

794 Ibid.

Step 1: special cases