Politech: FC: Electronic Frontier Finland criticizes EU on patents, copyrights

[Declan McCullagh <declan () well com>]

---

Date: Tue, 27 May 2003 16:12:02 +0300
From: Kai Puolamaki <kaip () james hut fi>
To: declan () well com
Subject: [to Politechbot] Statement on the proposed IPR enforcement 
directive by EFFI
X-PGP-Key: http://www.iki.fi/kaip/pubkey.asc

Hello,

Electronic Frontier Finland ry (http://www.effi.org/, EFFI) has
submitted a statement regarding the proposed EU directive on IPR
enforcement. The proposal has been described "too lenient" by media
industry groups and, unfortunately, by many MEPs. Please find the
following for consideration for publication in Politechbot.

Best regards,
Kai Puolamäki

PhD, Researcher
Helsinki University of Technology

Electronic Frontier Finland ry (member of the board)


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http://www.effi.org/julkaisut/lausunnot/ipr_enforcement_lausunto.en.html

EFFI: STATEMENT ON THE PROPOSED IPR ENFORCEMENT DIRECTIVE

Abstract:
The EU Commission proposes a new directive that would increase the
monitoring of copyrights and patents. The proposed directive is based
quite unilaterally on studies made for the media industry. For
example, the proposal compares piracy to drug trade and terrorism,
punitive damages are proposed and it is proposed that defendants
should pay the publication of judgements in the newspapers. Electronic
Frontier Finland ry (EFFI) has submitted a statement on the proposed
directive.

**********

[Translated to English on 27th May 2003.]

To the Ministry of Transport and Communications

Statement on the proposed IPR enforcement directive

Electronic Frontier Finland - EFFI ry

General remarks

   EFFI considers the proposed directive mainly unnecessary since the
   current legislation on intellectual property rights requires already
   that sufficiently efficient judicial protection is incorporated into
   national legislations (e.g. TRIPS). However, because it seems apparent
   that the directive is really attempted to be made into force we want
   to comment some parts of it.

   We are especially concerned of digital products, which the directive
   compares to e.g. medicines, alcohol, toys and car parts. We naturally
   wish that piracy and counterfeits are efficiently weeded out when it
   is a matter of safety and the health of individuals. However, we
   cannot agree with the assumption that the same rules should apply also
   to digital products.

   Notably the "studies" behind the proposed directive are not about
   safety or health but of digital products. The most used source seems
   to be the statistics of the Business Software Alliance (BSA) regarding
   the possible markets and employing effects of computer software.
   Generally speaking, using material produced by various interest groups
   indicates bad administrative practice. EFFI thinks the commission
   should have first conducted politically neutral background studies
   with impartial research institutions.

   The BSA statistics have among other things severe methodological
   problems. For example, the alleged loss figures of software and media
   industries are based on assumptions that one pirated copy would
   correspond to one purchased copy and that these imaginary profits
   would be used to hire new employees. In reality the media industry
   also benefits significantly from piracy in Eastern Europe e.g. because
   of network effects and brand dispersion. On the other hand, the media
   industry does not really employ directly others than administrative
   people and lawyers lobbying new laws like this one. Moreover,
   alternative business models for digital products that are not based on
   license fees (e.g. open source computer software, various marketing
   strategies) have not been taken into account when calculating the
   alleged losses.

Law making cannot be word play

   The language used in the proposed directive is especially worrying.
   The official documents are widely referenced and they should therefore
   be written using appropriate language and claims should be supported
   with references to neutral studies. If the only available statistics
   and studies are from various interest groups (for example because of
   monopoly situation) one should be especially careful with the source
   critique.

   This directive does not fulfill these minimum requirements. The
   strangest thought in this proposal is connecting piracy to organized
   crime and terrorism. A word play like this is nothing new to the media
   industry interest groups. The proposed directive claims without any
   reference (p. 12) that e.g. "piracy - - goes hand-in-hand with
   organized crime", "...laundering earnings", "...are even said to have
   become more attractive nowadays than drug trafficing" and "...factor
   in promoting crime, including terrorism". These allegiations have not
   been accounted for in any way. We can only wonder the courage of the
   drafters of the proposed directive to rely so strongly on the
   political rhetorics of only one party.

   To exaggerate a bit, we could argue that one should have more severe
   penalties for travelling without a valid ticket in public transports
   since the current small penalties for free riding encourages crime.
   Let us also remember that drug trade and terrorism are crimes and see:
   travelling without a ticket is connected to terrorism and drugs! With
   this kind of reasoning it is of course easier to gain political
   support for the legislative initiative. Of course, it was not
   mentioned that if the price of the ticket is too high and if the
   penalties are unreasonable a part of the passengers will walk or cycle
   - which might have beneficial health effects for the society as a
   whole.

   The choice of words create impressions and impressions become in time
   "truths" unless they are questioned. Even though the language of the
   directive is in some parts quite humorous it is still a serious and
   far reaching matter. Therefore EFFI thinks that Finland should point
   out the language and at least suggest that the flagrancies in pages
   12-13 are written anew.

Detailed comments

Punitive damages (article 17)

   Finland and other EU countries have so called full compensation
   principle. The occured damage is compensated fully, no more and no
   less, unless there are special reasons to settle down the
   compensation. For example in copyright violations the starting point
   has been the normal licenced price of the product and the damages have
   been settled down if the compensation would have been unreasonably
   high (e.g. piracy BBS cases). It is also important to remember that
   the copyright holder benefits more from compensation than license
   sales since in the case of compensation there has been no need to pay
   the production costs or taxes.

   The proposed directive diverges from this principle significantly.
   According to article 17 the basis for compensation should be two times
   the regular licensing fee. There is no mentioning of any settling
   principles. Alternatively the article proposes a compensation that
   would be based in addition to the licensing fees to the incomes that
   would possibly have been earned without the copyright violation. A
   proposal like this would lead to the strange situation that opposing
   piracy could become a profitable business. In this form article 17
   would "legalize" the calculations of BSA that could apparently be used
   as such for the basis of compensation in legal judgements.

   The idea of punitive damages is therefore not only unreasonable but
   also possibly against the principles of the criminal law. EFFI
   proposes the article to be written totally anew.

Publication of judgements paid by defendant (article 19)

   Article 19 introduces a questionable punitive method: the one who
   infringes intellectual property rights should pay for the publication
   of the judgement in a newspaper selected by the rights owner. As a
   punitive method this conviction of shame is most likely against the
   principles set in human rights treaties. The proposed article does not
   define how severe the infringement must be and how expensive the
   publication may be. Obviously the rights owner has the power to decide
   these details. This can not be said to be neither fair nor according
   to the principles of criminal law (it must be clear what kind of
   penalty follows from particular crimes)

Patented technical protection measures (article 21)

   Article 21 would create without sufficient justification one more
   legal protection layer to digital products. We don't see any category
   of digital works which would need this new protection layer. At the
   moment copyright, technical measures (as in copyright directive) and
   patents cover digital products and computer programs. With the
   proposed article 21 the circumvention of technical protection systems
   could be intrepreted once again as criminal activity without any
   defense options left to those who circumvent.

   Obviously the legislator does not understand what technical protection
   measures are. In practise e.g. different file formats (Microsoft
   Office) and security algorithms (DVD and CD copy protections) include
   a number of patents. There is a lively and ongoing EU-wide debate on
   e.g. when a private person may circumvent technical protection if
   legal use of a work is not possible. Copyright directive and national
   legislation has currently defenses to hackers though the legislator
   tried a same kind of trick: it is allowed to circumvent DVD- and
   CD-protections if it is not possible to play the record legally in e.g
   cars and portable devices. It is also legal to decompile a file format
   if the aim of decompilation is for example interoperability. What
   happens to these important exemptions if the proposed article 21 is
   accepted?

   In essence, does article 21 mean that DVD- and CD-copy protections may
   not be hacked just because they include patents? In that case article
   21 would be in conflict with the basic principle that this directive
   would have nothing to do with the contents of patent and copyright
   laws. EFFI thinks that Finland should first and foremost demand the
   dropping of article 21. Second, and at the minimum, Finland should
   require the clarification of the criteria for circumvention of
   patented technical protection for legal purposes. In addition, we can
   only understand that particular uses of hacking devices may be in some
   circumstances illegal but the possession and manufacturing should be
   always allowed since they have also legal uses (compare to guns and
   regarding copyright photocopying machines, videos and peer-to-peer
   networks).

Summary

   Finally, we stress that the directive proposal is extremely political
   instead of its technical harmonizing goals. Its implications are not
   limited to "industry" but it also affects individuals, small and
   medium size firms and all kinds of hobby activity.

   It is hardly a coincidence that the directive proposal comes out just
   before EU enlargement to Eastern Europe is completed. The requirements
   set in this directive concern mostly the new member states, which have
   not been negotiating on the contents of the directive. To compare, the
   beneficiaries of the proposed directive are mostly multinational
   companies whose domicile is either within the current EU or North
   America.

   In the EU parliament the directive is unfortunately on the table of
   only the committees of industrial and legal affairs. The draft by
   Janelly Fourtou, chairman of the legal affairs committee, reflects
   quite to the point where the directive aims at. Fourtou repeats media
   industry arguments and concludes in her draft that the proposal would
   be "too soft to some forms of piracy". EFFI's stand is exactly the
   opposite: the directive proposal is first of all too strict and too
   inaccurate. Therefore it should be dismissed. At the minimum we
   require that a substantial part of the proposal is written anew
   without promoting any particular interest group.

   Helsinki 9th May 2003

   Mikko Välimäki
   Chairman
   Electronic Frontier Finland - EFFI ry
   phone +358 50 598 0498
   mikko.valimaki () effi org
   fax. +358 9 694 9768

   Ville Oksanen
   Vice-chairman
   phone +358 40 536 8583
   ville.oksanen () effi org

   Electronic Frontier Finland - EFFI ry was founded in 2001 to defend
   active users and citizens of the Finnish society in the electronic
   frontier. EFFI influences legislative proposals concerning e.g.
   personal privacy, freedom of speech and fair use in copyright law. We
   make statements, press releases and participate actively in actual
   public policy and legal discussions. EFFI has been featured in the
   national media including TV, radio and leading newspapers. EFFI also
   works in close cooperation with organizations sharing the same goals
   and values in the Europe, United States and elsewhere. EFFI is a
   founding member of the European Digital Rights and a member of Global
   Internet Liberty Campaign. More information from EFFI's home pages:
   http://www.effi.org/


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--
Kai Puolamäki  |  Kai.Puolamaki () iki fi  |  http://www.iki.fi/kaip/
NNRC & Informaatiotekniikan laboratorio | PL 9800, 02015 TKK (huone CA503.11,
HTC, Tammasaarenkatu 3, Helsinki) | PGP key http://www.iki.fi/kaip/pubkey.asc
(09) 451 8206 (työ) | 050 522 8111 (koti) | (09) 755 4892 (faksi, työ)




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