Max Planck comments on draft directive on collective rights management

IPKat's friend Peter Munkacsi has brought to this Kat's attention the comments that the Max Planck Institute has just made available as regards the "Proposal for a Directive of the European Parliament and of the Council on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market" [don't worry, says Merpel: if that was ever possible, the text of the proposal is actually longer than its title].

As readers will remember (here and here), the proposal was released last summer, following the Commission's announcement of a legislative initiative in respect of collective rights management in its 2011 blueprint for intellectual property rights to boost creativity and innovation. There it was highlighted that

While the substantive scope of copyright has been largely harmonised, rights are still licensed on a national basis. In view of the digital Single Market, streamlining copyright licensing and revenue distribution is one of the most important challenges that must be addressed. 

A somewhat similar spirit seems to have informed also the very recent initiative on Licences for Europe which is aimed at identifying, among other things, specific solutions to address the difficulties experienced by small businesses and users in obtaining the necessary licences for all rights.

Going back to the proposed directive on collective rights management, its key objectives seems to include:

1.  The promotion of greater transparency and improved governance of collecting societies through strengthened reporting obligations and rightholders’ control over their activities, so as to create incentives for more innovative and better quality services.

2.  The encouragement and facilitation of multi-territorial and multi-repertoire licensing of authors' rights in musical works for online uses in the EU/EEA.

Subliminal message to EU policy makers?

So, what does the prestigious Max Planck Institute think of the proposed directive? Apparently, the overall assessment seems to be slightly below the percentage required to get a First Class Honours mark.

While it welcomes the initiative to adopt a binding legal instrument on collective management of copyright and related rights in the EU and praises numerous provisions, the Max Planck Institute holds the view that 

"the Commission seems to fail to take account of the full legal framework and factual circumstances that have structured the current system of collective rights management.

Disposing of natural monopolies in a two-sided market ..., collecting societies ... should not refuse to grant access to their services to rightholders and users. Hence, it is strongly recommended that the European legislature follows the experience of numerous Member States and proposes an obligation to contract with rightholders ... as well as with users ...

The critique in the Commission's approach to cross-border licences for online rights on musical works as set forth in the Recommendation of 2005 ... has unfortunately not been duly considered and the Commission's assessment of the practical effects of the Recommendation is mistaken ...

He is famous for creating the illusion
 that substantive copyright is
sufficiently harmonised
(but possibly he can make also
other entertaining tricks)

Differences of substantive copyright law among Member States still constitute an obstacle to the establishment of an internal market for works. This is why the Institute [and Merpel] deems the Commission's sectorial approach to the regulation of cross-border licensing to be problematic. Also such regulation would require further harmonisation of substantive copyright law [according to the Max Planck Institute the Commission has to be criticised, among other things, for creating the impression that substantive copyright law has sufficiently been harmonised] ...

Moreover, the Proposal fails to take account of statutory remuneration rights and cases of mandatory collective management ... Both pursue specific protection of original rightholders. In this regard the Proposal's refusal to distinguish between different categories of rightholders raises concerns ...

Since collecting societies manage copyrights and related rights arising from national law, and considering the benefits of an authorisation system ..., which can be found in several Member States, the Institute advises the European legislature to clearly state that the intellectual property exception of article 17(11) of the Service Directive applies to collecting societies ...

The Proposal endangers the balance both between different categories of rightholders and between rightholders and users that the established system of collective management of copyright in Europe traditionally seeks to achieve ... It thereby compromises the laudable goal to foster the establishment of an internal market for online uses of works across Europe ..."

Will the Commission take due account of what look like most sensible recommendations? Merpel bets that this will be indeed the case …