Template:ConsultCE2014:Giving legal recognition to the non-market sharing of digital works between individuals through the exhaustion of rights doctrine

1. Giving legal recognition to the non-market sharing of digital works between individuals through the exhaustion of rights doctrine
Fighting against the non-market sharing of digital works between individuals has been a constant obsession during the past fifteen years. All legislative, technological and policy means have been used to eradicate or hinder what is not only unavoidable but legitimate and useful. Peer-to-peer file sharing, a practice that was thought of from the start as culture sharing was stigmatized and repressed. It was described as stealing, despite all evidence that at most a small part of the difficulties of the traditional cultural industries to adapt to the digital era has anything to do with sharing. Since 2002, researchers, civil society organizations and creative communities have been searching for the means of a legal recognition of non-market sharing. Many approaches have been tabled: exceptions to copyright, compulsory collective management, extended collective licences, etc. These proposals face various obstacles, as any innovative policy does, in particular when some specific interests have tried for years to multiply them. To succeed, the legal recognition of non-market sharing of digital works between individuals will have to rest on a simple and clear solution. What better approach is there than to revisit what was and still is widely recognized for works on carriers such as books, and adapt it to the specifics of the digital world?

The exhaustion of rights is the legal doctrine according to which when one enters in possession of a copy of a work, some exclusive rights that previously applied to it no longer exist. It becomes possible to lend it, to give it, to sell it, and sometimes to rent it. The exhaustion of rights is not an exception nor a limitation to copyright, even though it was codified or described as an exception or limitation in some countries through a form of rewriting of the past. Indeed, the exhaustion of rights defines situations where exclusive rights no longer exist.

What to do of it in the digital sphere, where work and carrier become separable? Two opposite approaches exist. The exclusive rights dogmatists aimed at cancelling the whole idea of exhaustion of rights for digital works. The European legal framework went in this direction, restricting in article 3.3 of the 2001/29/CE directive the scope of application of the exhaustion of rights. This article states that "The rights referred to in paragraphs 1 and 2 [exclusive rights of authors, performers and producers of phonograms, videograms and cinematographic or radiophonic works] shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article." One should note that this article was in no way made necessary by the 1996 WIPO treaties which the directive was supposed to implement. Accepting to cancel the exhaustion of rights amounts to annihilate the elementary cultural rights of individuals to use as they wish what they have acquired. Recently, the European Court of Justice reached an important decision that recognizes the exhaustion of rights for works obtained by downloading, though restricting it to a given file that one would not be authorized to copy but only to transmit under a number of constraints.

The alternative approach builds from the activities that justified the exhaustion of rights for works on carriers (lending, exchanging, circulate, in other terms sharing). It explores paths to serve the same activities in the digital world. This calls for recognizing the new potential opened by digital technology, that depends entirely on the possession of a copy of the work and the ability to multiply it through making it available or transmitting it. One is led to a definition of the exhaustion of rights for digital works that is at the same time wider and narrower than for works on carriers. Wider, because one has to apply exhaustion to the reproduction right, narrower because one can restrict the exhaustion of rights to non-market activities of individuals without weakening too much the cultural benefits. It can even be useful to accept this limitation in order to organize a synergy with the cultural economy. One can refer to this blog post for a precise definition of the perimeter of non-market sharing of digital works between individuals.

By this application of a specifically tuned version of the exhaustion of rights to the digital sphere, one obtains some essential results:
 * To acknowledge again that copyright has nothing to say of the non-market sharing of digital works between individuals.
 * To open the door to the recognition of new social rights to remuneration and access to financing for contributors.

Many policy reformers who share the same objectives than us pursue today other approaches, based on an exception to copyright or putting in place a form of compulsory collective management for non-market sharing. These approaches face some obstacles. Contrary to what some opponents state, these obstacles lie not so much in the Bern convention and TRIPS three-step test but rather in the exhaustive character of exceptions and limitations in the 2001/29/CE directive. Moreoever, these approaches would have the adverse effect of importing in a new model many of the undesirable features of the present copyright (capture of a large part of benefits by heirs of rights or players to which they have been transferred, unfair distribution). Despite this, it is important for all reformers to work in synergy: one can not know in advance which paths will be open.