A global license or levy is not approprate at this stage.
Money from online is very marginal. But growing…
Need a way to encourage the new business models. See Spotify, an interesting new model.

Must have incentive to develop newer and more compelling services. Like Nokia [see last panel, "Comes With Music" model] wants to have room to be creative.
Right now there is the Digital Britain Report. It is proposing a uniquely UK-focused solution: (1) Digital Rights Agency; (2) mechanism for dealing with disputes; (3) forum for creating standards; (4) encourage eveyone to work together — to educate.
It also supports rightsholders when people want to sue. Obliges ISPs to inform customers when they are misbehaving, and aslo to save data so it is available for rightsholders when they try to sue.

[Martin] When talking about these topics, we are talking about biz models. Doing do in the abstract …

Three business myths:

(Myth 1) that feature films are immune from the piracy that ravaged the music business. Used to be that quality and convenience saved the movie industry. But this is changing. Now, you can get a high quality handheld video recorder into theare. With ease of viewing, now streaming sites, high speed internet, very easy.

(Myth 2) One size fits all solution is available. It is a myth.
Key distinction from music. Several reasons:
(a) pre-release material getting out has a huge impact. (b) staggered release dates. With film, having multiple openings in different locations is key — different holidays in different countries; (c) distribution windows; (d) pricing. Competing with free is tough. Even tougher for films than music.

(Myth 3) That DRMs are consumer-unfriendly solutions.
Must think of difference between DRM and TPMs (technological protection mechanisms). DRM give consumers different choice of pricing and timing. Gives flexibility with windowing. DRMs are effective.

Without technological measures: site blocking, graduated response, DRMs, making these movies would not be possible.

[Luder] How can you think a staggered release on the Internet work? Isn’t it available everywhere at the same time on the internet?

[Audience Question] People are accustomed to paying for full length movie. But most people are used to hearing music for free …
Movies are much bigger productions, and people may attribute more value to them for this reason.
Music is in the background, whicle movies we pay attention to them. Are these unimportant differences?

[Martin] Yes. Movies are different than music. Some movies will still do well at the theatre even if pirated. ex. Wolverine, because it is theatrical event movie.
- – - -
[Grosheide] In earlier panel most of this was said before…
If we take E-commerce Directive, this gives immunity to ISPs.
Reasons why we should adjust system, or new biz models:
Technology has given ability to get ISPs interact with the rightsholders.

Options:
(1) Do nothing. probably not helpful.
(2) Looking at code of conduct / agreements between parties. Do without legislature involvement.
(3) Liability for ISPs. They are in the best position to detect and filter out infringement, at low cost. But it could be counterproductive to free and unrestricted access to the internet…
(4) Notice & takedown procedure. This should be instigated by a claimant. …

Graduated approach.
In France, it is suggested that there would be disconnect of service.
Human rights problem (ex. Art. 10 in Eurpoean Convention for the Protetion of Human Rights). Disconnect may violate this.
What is better is a reporting system. Black-listing system of those who have been infringing before.

[Luder] Another option: Internet re-admission fee (IRF). Not cut off forever, but you have to pay to get service back again.

- – - – -
[Callaghan] Balance in copyright seems to be a goal. That should be the leading consideration when thinking of ISP solution.
Having safeharbors is important. DMCA sec.512 or Art. 12-14 of E-commerce Directive.

Takedown procedures. Practical aspects are difficult.
Parties on both sides tend to abuse process.
Filtering and monitoring make the process more complicated. As an intermediary, you may want to invent a better way, but because of negligence-based liability, it could raise the standard of the duty of care!

Justifications for safeharbor. A deal struck when DMCA was formed. do we need to revisit that deal? Circumstances are different. The larger investment has already been made, now ISPs can carry the burden of liability.
If we dispense with it, it would not be a good thing.

[Evrard] What do you mean by Internet Readmission Fee? A global license?

[Luder] No, to stifle argument of human rights violation, you can buy your way back in. Not a global license — a hybrid solution.

[Q] So only poor people lose their human rights?
[*laughter*]

[Q] Is an ISP that disconnects a user for not paying bill a violation of their human rights?

[Grosheide] Yes. It could be a human rights violation, if it was not for any good reason. Like access to water…

[Q (Ficsor)] Is it a human right also to be able to use a car to commute to working place? Because if you drink & drive, you first get warning, then maybe next time you lose license. So in the case of the Internet, you go to an internet cafe, but you just can’t get your own?  It is more serious that you get your license suspended than lose your own Internet?

[Grosheide] Maybe in the Netherlands it is more lenient…

[Q] Can it be extended to “cloud” services? Can you go after them the same way you can go after ISP to get at the real pirate?

[Grosheide] We should take into account what they really do. Then, the certain cacheing activities fall within the infringement.

- – - -
[Ruikka] Levies. Copyright Directive provides that if a member state allows a Private Copy exception, then it must aslo provide “fair compensation”

Examples: (1) Buy legit content from Internet source. It doesn’t end there, it gets transferred to portable devices, or other hard drive. The first download is licensed. But there is a big controversy over the second stage! Is it licensed?
(2) Download from unauthorized source. then it gets copied into portable device. Is the second copy illegal? Or a private copy?

Are all secondary copies legitimate private copies under the exception? Huge impact on value of digital services.
For licensed downloads, does exception trump contract? Is this a monopoly for societies?
Is music funded through consumers or through societies? Impact on pricing…

Many copies per user. It is the same stuff for the user in different places, and not at the same time. Effect on valuation of the individual copies?

Should levy collection rise in proportion to gross count of copies? Economic theory of marginal value of goods …
Directive talks about economic relevance to rights holders …

Impact: Consumer behavior? Music monetization — transactiosn or societies? Single market?
- – - – -
[Shapiro] Premiere League decision [Football Association Premier League & others v QC Leisure & others [2008] EWHC 1411 (Ch)] stems from a TPM device card, and against pub owners buying the card. English football sells well abroad, and they are sold on a territorial basis, with exclusive rights. The pubs would get the cards at a much lower rate than the exclusive licensees in the UK. The exclusive licensees brought a case.

Conditional Access Directive [98/84/EC]. Judge thought the cards were legal in Greece, then when imported did they become illegal? Posited questions to the ECJ.

This case would affect the movie industry — they also license on a territorial basis. These companies joined into the case.

Copyright law operates differently for film. Rights centralized in the producer. Independednt film-makers often finance their films by selling off territorial exclusive rights!

The judge thought the directive applied (which it didn’t) — he asked if temporary copies were within the scope of the reproduction right.
then, does Art. 5(1) apply (temporary copies)?
Here, it didn’t. Plus, not made pursuant to a lawful use.

The directive didn’t apply because it was a transmission to the bars. …
Still a public performance under the Berne Convention.

- – - – -
[6:10]
[David Carson] There is an easy means to put the speech back up if it was taken down in a DMCA takedown. so the violation of the freedom of speech is only a violation for a few days, if anything.
The regime in the US is not a bad one. Not to say there is no abuses of the system — many over-claims of the process.

[Callaghan] No disagreements with that. In any effort to make safeharbor, must be cautious.

[Evrard] The French law (Three-strikes) is a monster. Politically driven. Does not take into account tech reasons:
(1) ability to falsify IP addresses.
(2) not always possible to cut out somebody — especially in areas where local loop has been unbundled.
(3) Filtering technologies are not what the rightsholders want to have. Tech moves fast. Hard to fix by decree the systems ISP must use.

This is based on administrative authority, so you need to have room for defense, appeal.

The solution must be based on sound technology, and not based on creation of a administrative authority.

[Shapiro] No specific tech chosen in French law…
In Sabam case, filtering was not mandatory either…

[Evrard] Right that there is nothing in the law, but you may mandate it by decree to set out list of what good filtering technologies would be.

[Luder] Who thinks three-strikes laws are a good idea? (*about 10% of people in audience raise hands*)

– – -
[Shapiro]
Surfthechannel, rapidshare, piratebay … there is all these sites that skirt the law. Hiding in safeharbors.
That is why it is so hard to draw the safeharbor when drafting.

[Martin] There is also a proposal to have a model where “extreme throttling” instead of cut-off after warnings. Where the speed of the connection would be capped at one slower than dial-up. Maybe this way we can avoid the human rights issue. However, this would not be a solution for music, because the files are so small.

[Luder] Who is in favor of this model? (*about 20% of audience raises hands*) So, we may be on to something…

[Q] There is a proposal floating to have a fee connected to devices that copy. Levies…

[Luder] What will that do to transaction-based business models? Would this be the end of copyright?

[Q (Ficsor)] It would just be another tax.

[Martin] It would be a good model for collecting societies, but not for content creators.

[Faulder] Collecting society in UK functions just fine without a levy system. It would be better to keep the transactional model.

[Shapiro] Even if there was a reduction in levies, there are other ways to fund. State budget, for example.

- – - -
[Luder] Should we compensate all copies that are made? Only legal copies? Or should we make a sophiticated distinction that Timo argued for — whitewash theory that illegal copies can become legal private copies?
(*most agree with option 2*)

This improves prospects for commercial uses — to receive multi-territorial licenses. This makes it easier to bring new products to market. By opening up market to new competition between society, the decision makes an incentive for societies to improve efficiency.

There is still a window for implementation by the collecting societies. Not yet at the point of enforcing noncompliance.

- – - – -
[2:47]
[Prof. Silke von Lewinski]
No big deal going on, no big idea coming out of the 2005 recommendation.
Final Report of the Inquiry Commission of the German Parliament “Culture in Germany” — inquiry established in 2005, report issued in 2007.
Consequences raises issue of fundamental difference between copyright system vs. authors rights system. The concept of CMOs … so it will make no more or less protection for popular works or less-popular works. So de facto protection for less popular works.
The recommendation: German parliament should defend the existing system of management.

We’ll see next year what comes out of the deliberations next year.
- – - -
[Louise (Nokia)]
Nokia has started some innovation in this area …
We need creativity and innovation.
“Comes With Music” is the model Nokia has launched in several countries. It delivers consumers music in a unique way. If you buy a device, you get a certain amount of free downloads on the phone and the PC. You don’t have to pay for downloads or individual albums — and it is completely legal.

How did it work? Signed up all the major labels as a consequence of this. Extensive licensing — can’t downplay that issue.

Nokia is creating benefits from the stakeholders. Have to make sure that the law encourages business investment and innovation in this space.

If a private copy levy model becomes a reality as a revenue source, then this sort of business model is at risk. Have to make the choice between the two.

- – - – - -
[3:05]
[Sebastien Evrard] Increasingly difficult for distributors of digital music.
In early days, clearing mechanical and performance rights were simple — ex. you go to SACEM in France, they give all the rights you needed. In the wake of the 2005 recommendation [on collective cross-border management of copyright and related rights for legitimate online music
services], it has been increasingly difficult: The major publishers have removed the rights from the agencies, and are administrating themselves.

Consequences. Need to enter into additional agreements to get music online.
This is likely to deter new entrants. contrary to the policy of promoting pan-european licenses.

Solutions? (1) Economic. Merge the collecting societies. Keep the biggest five. (2) Modify the regulatory framework; (3) Competition solution. force the major publishers to license their repetoires to the other agencies. So each one could be a one-stop shop. The application of Art. 82 would require a finding that they are dominant… Also, could have a partial inclusion of rights. Once user has acquired the rights from one country, it could use in the other countries.
(4) Industry solution. Sit down and make a new framework. This is what Commissioner Crue wants to happen.
- – - – - -
[3:15]
[Mihaly Ficsor] Discussing proposal that mandatory collective management is the solution to the internet problem:

Warning that there is a danger that the proponents of mandatory collective management will use tactics that will create big hurdles (a contrario?).

The idea that an owner of exclusive rights will be forced to license as a condition of the application of an exclusive right.
- – - – -
[3:28]
[Francis Lowe] Compliance with CISAC.
Must look to the interest of members. This might mean not licensing everything on a multi-territory basis.

Extent of decision, what does it mean for compliance? It can’t dictate how to amend the business practice. Practical issue, but must look for the most efficient and transparent way to license the rights mandated by the members.
Of course PRS has the right to license direct.

There will be further complexity: 24×24 mosaic reviews. Some societies will have global, some with conditions. Only applies to EEA repetoire. Some have included worldwide.
Many societies allege disruptive effect on diversity.
The publishers have withdrawn their Anglo-american mechanical rights for societies who don’t comply.

Must take account of the market developments. can’t see it as flowing independently. We have to allow time for the transition.

What is at stake? Economic benefits to the aggregation of rights. Providing a 2-sided market; reducing costs. Unlike classic clearinghouses, the societies owe a duty to the market.
- – - – -
[3:37]
[John Temple Lang]
Disagreement on what societies need to do to comply with CISAC decision.

Perception that decision only affects the CISAC model agreement, not the clauses in the bilateral reciprocal representation agreements. Accepted by Dutch court, being appealed.

Possible future procedural developments: May be a need to take action to enforce by commission. Unclear what action it would be.

Presumed Commission objectives: to ensure compliance. To ensure competition in multi-territory, multi-repetoire licenses for online use. To ensure users have a choice between one-stop shops. Prevent reprisals for competing aggressively.

Possible future substantive developments: Four possibilities. (1) Big Publishers may give different societies de facto exclusive rights. (2) Big publishers may give right to license to all societies that want it. (3) If societies do comply, they may set up a central agency to allocate licensing for online use. (4)societies that comply could agree to mandate each other reciprocally to grant multi-territory, multi-repetoire licenses for online distribution.

Author will probably not choose to sue in civil court. If the author chooses to report the infringement to the government, then the government foots bill.

[Prof. Peter K. Yu] Some misconception about whether China can really do everything even if they wante dto.
Ex. Olympic Games. Even if olypic games were so important, couldn’t stop piracy.

Political will. There is a tough time collecting taxes. If central gov’t cant get that, think about the other issues!
“Intellectual Property is always at the top — of the second list”… Do we really have the political will to make IP protection at the top of the priority list?

Sad that Hugh Laddie is not here today … He always talked about the issues, talking about how depressing this panel was. that it will be an issue every single year.

About the WTO case, always said that it has to be a “slam dunk” case. But wonder: why not use some of the stronger arguments by the US?
Some discussion of going from channel enforcement to general enforcement.
Some disagreement on how to proceed.
Penal law and criminal law is one of the most developed areas of China law — so why try to challenge on that ground?
The problem with China is that there are too many laws! Too many interpretations.

Benefits for US: content review process. they will find info they would not have; Info on how WTO will handle similar cases; shows US willingness to bring case — sends signal to dev. countries.

For China: brings certainty over negotiations. the issue is about how much time they have to reform system. In China there are more people who want to use WTO — so help them play the game better.

If US prevailed on all three claims, what would be the result? It would not have caused higher IP protection in China.

[Eric Smith] (Greenberg Traurig assisted the US gov’t on this case).
If you look literally at the language of Art. 4, it says “prohibited by law” — from the US point of view, it eliminated the biggest concern, that it prohibited the distribution because of the content.
And in the implementation phase, now China must alter the copyright law — this is about 5 years out from now.

The thresholds issue was central to the case. Doesn’t think the US lost on this issue. they only lost on one small point — that not all commercial scale piracy was covered. It was important because the panel said if any commercial scale piracy under the thresholds, it must go.
If US had introduced those facts, where could it have one?

The panel decided that provisions in Art. 61 were mandatory. There was always a debate on this issue.
China did not contest that their administrative law could also cover criminal… But the panel did not rule on that proposition.

Panel said not requiring particular kinds of legislation. Art. 41(5).
Most important, no requirement for specific allocations between general enforcement and IP enforcement.
Panel said this provision deals with prosecution of crimes in China.

[Panelists]
[Stanford McCoy] This case was never intended to be the sole solution to piracy and counterfeiting. It was only to address certain points.
Must fit it into the ongoing dialog with China.
Even though the US didn’t get all that they wanted in the case, can engage with China bilaterally to reach agreement.

[Justin Hughes] Disagree with Eric on one point. everyone expected it to be a split decision. Surprised that it was almost more in favor of the US. It was actually good they didn’t introduce the evidence …
As a legal realist, the baby needed to be split.

[Eric Smith]
The US position was that there are absolutely cases where you meet definition of “commercial scale” while falling under the 500 unit threshold. If the evidence was introduced, it would have met the test.

[Hughes] Just because country is on record in a WTO case stating what the law is, does it really help that much?

[Smith] If Chinese try to go back on the interpretation — denying copyright protection to content awaiting review, then they would be open to another action …

[Wang] As long as the content are not unlawful, they are protected by the Chinese government. Not the truth that the US doesn’t know the true meaning of Art. 4.

The threshold question, the outcome is very local in scale, differs depending on situation.

[Audience Question] What support does US have for a claim?

[Stanford McCoy] Not here to comment on the issue of content control by China govt’. It is not about getting rid of the content review process, only making it conform with WTO rules. The US will be prepared to accept solution if it conforms.
Hopefully have a good dialog between governments.

[Audience Question]
[Eric Smith] If you take definition and examples panel gives about “commercial scale” — if evidence had been presented, and the data was there, then there was a good chance that US could have met the test.
Panel said “you must cover all piracy on a commercial scale”.
there will be some infringement on the scale that is below threshold that meets the test.

[Audience Question] Howard Knomf:
Hugh Laddie pointed out that you don’t have to go to China for counterfeit goods … what is being done to stop piracy in Midtown Manhattan?

[Eric Smith] You can never stop it completely, but you can take steps to control.

[McCoy] J. Rakoff said in an earlier panel “the problem isn’t the guy on the street corner, a bigger problem is in China”. So the US can stop the flow of goods into the country.
Talk to anyone and they will say that the threholds basically gave a safe harbor to piracy. Now this is a good step to address that problem.

[Peter Yu] What is the piracy rate for the US?

[Smith] for software 22% in US, 80% in China. In Italy it is higher, maybe 40%.

[Peter Yu] So a country that has implemented the IP system for 40-50 years still has high infringement! Would you be happy if China reduced it to 40%?

[Hughes] Jump over to the WTO … Tell us, what do you see as current linkages between trade and IP?

[Hannu Wagner] Recent G20 declaration, so the Doha Round is not completely dead. (it may be a zombie …)
Geographic Indication (GI) issues. Protection of wine and spirits. Relationship between TRIPs and CCD. What has happened is that in July there was a ministerial meeting to decide on modalities — prior to the meeting there was a proposal of these issues. Realize it is difficult to compromise on any of these issues, so it is tough to get anywhere.

What lies beyond? the focus of the WTO members is on Doha round, but there is a further discussion about whether further issues are to be added. Some topics: labor, environment.
One issue that always comes up is enforcement. Many countries have put this on the agenda a number of times. always there was objection that it was not the right time to discuss. Another issue raised was the boder enforcement in the Netherlands, pharmaceuticals. this was discussed instead…

[Jason Albert] Talking about development agenda. Many rightsholders see it as a threat, diminishing value of IP.
Instead see it as an opportunity rather than a threat. Have developing countries engage with IP.

One of the interesting things is that it overemphasizes IP in the role of development. Maybe over-sold in one way. Need to take a more sophisticated view: There is much that IP can do for development. Tie between IP protection and getting technology, tech-transfer.

[Hughes] Do you think rights holder have wised up? Now they seem amenable to the development agenda?

[Jason Albert] The implicit point is that, if we look at the dev. agenda as an opportunity it is just marketing “spin” — But, there is an issue as to how IP is perceived; Also rights-holders engage in more sophisticated thinking. Looking at new business models, trading IP, take a more sophisticated view.
Not just a marketing slogan.

[Hughes] How do you think dev. agenda is playing out?

[Alice Pezard] Two key points: (1) how to adapt patent copyright to a new form of exploitation. Justice must take precedence over patents. (2) conflict between corporate rights and human rights. See the prison case in India.

[Hughes] Address the issue: what is the appropriate role of bilaterals and their impact as opposed to the multilaterals?

[Luc Devigne] True that multilateral negotaitions were slower than expected, so bilateral agreements were negotiated. EC remains attched to multilateral deals.

[Stanford McCoy] the idea of “competitive liberalization”. Bilateral and regional agreements as the tool to get countries to oen up new horizons for international trade. We look forward to political leaders to express their policy.

[James Love] One of the strategies of the governments is to have as little transparency as possible. they wont release the actual text, or the list of names. Because in US they have a system of advisors — those people are cleared. Only one consumer group among all of them! Big corporate guys have lobbyists in the advisory boards. This is a democracy deficit. They use the bilateral agreements to create norms that affect us!

In the developing country, it is a form of imperialism. Many countries don’t even negotiate. the lack of capacity to get their own terms — so it is very one-sided deals — things they would never agree to in multi-lateral deals. US just ramming these deals down the throad of developing nations. It is a disgrace that we’ve moved into these bilateral agreements.

[Hughes] Isn’t it fine for a sovereign state to agree to trade agricultural resources for IP?

[Love] It is a disgrace …

[Hughes] How does WTO react?

[Wager] Parties have the right to agree to additional norms & standards if they so wish. Some see as a positive stepping stone, but there is an issue of ill will. We need to have transparency and a way to discuss if people feel there is a problem. More info available to the public.

[Keplinger] Memer states can always negotiate. WIPO is a member-driven organization. In a situation where impossible to make progress in certain areas: ex. broadcasting treaty …
Not afraid of bilateral areements, they can be a way to advance the state of the art.

[Hughes] Are bilaterals too complicated? Making bad standards?

[McCoy] Jamie (Love) made contradictory points. In actuality they are hard-fought agreements.
On the transparency front Jamie makes a good point. There is room to consider transparency improvements. But also important to be able to continue to do the mission. But can’t take process over substance, need to get the results.
There should be more research done with the benefits of IP of developing countries. One anecdotal example: in India, suggested policy of licensing and more control of optical disc manufacturing, to get a hold of piracy. The piracy disproportionately affects the Indian artists, rather than the US ones.

[Devigne] There are some issues like access to medicine, but by now we have a good balance in the TRIPs agreement.
If you improve copyright protection for example in Brazil, you would be helping the local artists, because the majority of the music purchased is local.

Myth that the organization is open to the big corporations. It needs to be secretive. It is not simple.

[Hughes] Do you find Brussels adequately transparent?

[Pezard] There have been many improvements …
There is a balance between transparency and confidentiality. In Europe there is a good balance. Not as good of a success with the press, and the information there.

[Love] Once distributed the negotiation position to the parties negotiation, in ACTA, why shouldn’t the public have it? No justification for pretending it can’t be shared with public.

[Devigne] It is on the website…

[Audience Question] What is the motivation for other countries to join ACTA after it is started?

[McCoy] When talking about comprehensive free trade agreement, IP is a trading chip. When it is an IP focused agreement, can go to government and ask them if they will be strong on it because it is the right thing to do, and to create investment climate. ACTA would sell itself if we have a package of appropriate measures.

[Devigne] The value of ACTA is to bring the problem countries around to our side. We haven’t reached this step yet, because it is not final, but there are ideas on how to do it.
ACTA is not new substantial law, only enforcement. Who can be against enforcement?

[Jason Albert] Need to show it is in their economic interest. Ex. Juan Valdez …
If you find example of industries in countries, the countries will be just as agressive.

[Hughes] Once ACTA completed, does that become part of FTA?

[McCoy] That is already the case. It wouldn’t be a change. But ACTA also adds enforcement provisions, to give more tools.

[Audience Question] Criticism: The panel does not have a representative of a developing country!
Also, the dev. agenda stopped in the 60s then IP became political. In 70s the battle over revision of Paris Convention. Later in negotiation of GATT and TRIPs, dev. nations were totally against it — only signed it after Europe would reduce the subsidies in agriculture, but they never did.
With the multilateral agreements, NAFTA, only later on the issue came up to create free trade of americas (south america too).
Because of deadlock, the US moved to bilateral agreement.

[Devigne] Correct, there should be a representative of developing nation on the panel.
The main hang up of these negotiation is agriculture, not IP.
The dev. agenda in the WIPO — get away from idea that we impose this on dev. nations.

[Audience Question] Excessive concern with downstream output we lose sight of the development. Good thing about the WIPO agenda is that we can rethink.
Many dev. countries have rights but no limitations & excpetions. Why complain about it? Why not go back and just pass some national laws. Advocate from Geneva.

[Love] It is instructive to read US 301 list of countries basically slapped around for doing just this! They get singled out for exercising their rights.
If WIPO had encouraged it, maybe it would have happened. WIPO was hostile to that activit.

[Keplinger] It is not like Jamie has said in the WIPO. This has been going on for years. Studies done with the developing countries. They will continue to do it.

[Audience Question] In’l Publishers association:
Simply not true that the interests of the developing world is simply to have more exceptions & limitations.
Ex. Reason why publishing industry is so weak in sub-saharan Africa is because of the lack of IP protection. It is almost “colonial”.

[Love] With pressure on enforcement, countries who used to jsut ignore copyright must go on to a more legal regime — do so with pricing and limitations.

[8:55AM]
[Joel Lutzker (Ocean Tomo)] We try to be a leveler, try to provide an open and transparent marketplace for patent transactions. A number of platforms developed to do this — Most well known for patent auctions. But, something new in development: Unit License Right (ULR), offer through the intellectual property exchange.

Unit License Right is a right to make and sell a certain amount of covered product. Manufacturer can buy an anticipated number of ULRs to satisfy its production requirement — if under-buy, it can buy more later. If it over-buys, it can attempt to sell the ULRs later. You could have the ULR restricted to certain types of goods.
The ULRs could be offered in a series of tranches. As the market demanded, can roll out additional tranches.

ULRs will be traded on intellectual property exchange in Chicago, but also talks about doing a European exchange.
A way for traders to more directly place a bet on some technology space.

Original issue, 144A. Owner establishes a special purpose vehicle, which owns the ULR. Owners assigns rights to the SPV. An underwriter involved that will take down some quantity of the ULR. Also an IP adviser involved in the process, to help present the IP to the community. when offering made public, there is an offering memorandum. Issuer would enter into a management agreement with the exchange, IPXI. IPXI would oversee enforcement, as well as auditing the use of the ULR.

Secondary market — a qualified buyer would work through the exchange to be matched with buyer. In transparent bid/ask process, the sale proce would be determined.

Enforcement is a huge part of the process. Because the license is merely a covenant not to sue. Only way to settle is through the sale or purchase of ULRs on the secondary market. Enforcement is tied to market.

[8:04AM]
[James McEwen]
Defensive rationalization for having patents tends to falter … Patents have a purpose as an asset class. this is becoming apparent with these markets.
At the patent preparation stage, patent is only beginning to be formed. Have to apply for patent before it ever gets used–unlike trademark which is created by use, or copyright which gets protection after creation.
When writing a secification, have to have multiple examples; multiple ways it can be used.

In the prosecution stage, it sits in a drawer for a few years, then when it comes out, you are either practicing the patent, or you have given up. If you have a product, you could try to capture the standard. At that point the value of the original application is what you wrote in the application! If trying to target new licensing opportunities, you may not be able to successfully monetize what you have. Need to have the magic words to capture the new markets.
When you have a target that is acquired, you try to patent what someone else does.

Inequitable conduct is a massive problem in the US. If you bring up an argument or prior art you can be brought up on it — if you dont bring up argument or prior art, you still can be brought up on it!
Only affects litigators. While you can’t choose inventor, you can choose the prosecuting attorney. Must choose well — you are backing all ability to enforce on this person.

Continuations are taking the first application and basically just change the claim slightly — creating whole families of claims. If you know what you are going after, you can create multiple patents for individual licensing to different parties. If there are incorrect words in claims, which turns out to be harmful, you have to change the wording. Gold standard is to keep a continuation application open.

[Moderator] What strategy should Ocean Tomo be taking? Also, can we have exchange traded copyrights and trademarks?

[Panelist: Roya Ghafele]
Definitely a market for those other things, but haven’t taken off. Neither have exchanges for patents taken off yet.
Not a question of the business model or the ideas. It is the market.
Trying to create value for the client through litigation. But this is only one strategy! If you look at it as a property right, then a whole new paradigm opens up for strategic management of the assets. This whole conference should be about monetization of IP! [*laughter*] Must look at how can client create value.

About IP exchanges, seems to be very complicated…

[Lutzker] There are bells and whistles that are necessary for the securities laws.

[Ghafele] The market is basically for bringing buyers and sellers together, for an exchange. the Internet is enabling many different kinds of markets — eBay, dating sites …
Another challenge to patent exchanges is that people are very cautious. No one wants to tell who owns which patent — who has sold what to whom.

For trademark and copyright … as long as we have a perception that “IP = patent” we will have trouble setting up these other exchanges. It is a question of shifting the perception. No reason why trademark or design right couldn’t be traded on an exchange.

For any government who supports a knowledge-based economy, they should support this sort of undertaking.

[Lutzker] at least in the Us, there is prohibition of naked licensing of trademarks, so it does create challenges for the free trading of TMs. There are more challenges here.

[McEwen] There are other markets .. for example a bookstore! It is a market for copyrights.
But for trade secrets, not a huge market, so it wouldn’t take off as an exchange.
To get a trademark, you buy the entire company, and product line.
Patents have been unique because there is a need for intermediary to monetize.

[Question] Sandra Sherman:
Looking at the market for mortgages …
Is this creating another opportunity for another bubble, and crash?

[Lutzker] It is difficult to roill out new tradeable products in this environment. but we aren’t talking about derivatives …
ULRs would only be offered to companies who are purchasing for their own use (at least initially not open to speculators).

[Bloch] You have seen a large amount of speculation in some traditional markets — forum shopping with contingent fee law firms in Marshall, TX.
The issue is whether a more transparent and efficient market can reduce this behavior. It would allow inventors to monetize IP without gumming up the wheels with all these lawsuits.

What should be: the steps should be applied in order. If one has a statute of limitations that is expired, the whole fails.

Main point is: that neither the text or the interpretation is broken — contrary to what Munich Declaration alleges.
The test is sufficiently flexible.
- – - – -
[Jerome Reichman]
About sustaining science … in response to the EC Green Paper.
No justification for downstream uses of scientific publicatiosn past the first sale. Publishers should be able to charge reasonable rates for service. But, it should be done as an ex ante process. Not exclusive rights in published results. All government funded research should be available in a public repository.
With regard for exceptions and limitations, they are willfully insufficient in both US and EU formulations.

We have to have a variation of fair use to deal with all different cases. Strength of US fair use is that it is normatively well informed with the included exceptions. Weakness is that in close cases it is all or nothing — this leads to confusion.
The three step test does produce useful guidance. The US could adopt. eBay v. Merck decision would allow US courts to use equitable powers. The other one is TPM case.

Consider the reverse notice and takedown regime. this must be countered by a misuse doctrine.
Also data protection directive must be aligned, or else getting nowhere.
- – - -
[Lionel Bentley]
Since Nov. 2007, there was a consultation process and we have nothing to show … They have abandoned the exception for parody, deferred on issue of format-shifting, sying it was too difficult.

The do-nothing approach is actually better here.If a parody case did come before the UK court, there is great flexibility for it to be permitted.
Pushing for levys or payments for format-shifting. The best way to go is to let it happen without levy.
- – - – - -
[Reichman] If the Commission understood, they would make it easy for science to use these tools. The stakes are high, and it doesn’t pay to take an anti-intellectual stand.

[Question] Found the Munich declaration on 3-step test to be helpful, from library community’s perspective. Viewing it as a legislative tool for drafting, but that is it. However we see it appearing in legislation. Thoughts?

[Ficsor] Agree that 3Step test should be applied in different ways, for different situations. The only dispute is the structure. The dispute is really between Prof. Hily and Prof. Ulmer.
The test is suitable if it is applied appropriately. We shouldn’t take a new structure, contrary to Prof. Ulmer.

[Question] Jamie Love:
There is a US exception for government uses. Art. 44(2) of TRIPs has this provision.

[Ficsor] Art.44(2) is a general provision, it doesn’t apply specifically to IP. There are specific provisions in TRIPs that deal with IP.

[Reichman] Every government has the power, but it doesn’t have anything to do with At.44. Whether you can enlarge the use of Art.44 in this way is a very complicated question that we cannot answer.

[Question] To what extent does the 3Step test apply to an extensive collective license?

[Ficsor] Believes there is a similarity to the Goole Print settlement to the extensive collective license. There are some differences. Not collective management, although the registry to be established will act like one. Question of whether it will be a monopoly. this issue will be discussed tomorrow.

[Luder] Colecting societies cannot solve all the problems! Didn’t google pretty much just set up their own collecting society? With authors opting in or opting out. Saying that this society is dedicated exclusively to clear material for google uses!

[Aubert] You are misunderstanding the use. It will be open to competitors.

[Pallante] Remeber that photographs are not part of the settlement and these make up a significant part of works.

Places where this is happening:
Legislation. France – Creation and Internet Law. Allows agency to send 2 notices, then order a stop of internet service for a period of months.
Korea — passed legislation that will allow graduated response.
New Zealand — had passed a law from last government, which has been held off from in the new government.
US — in the DMCA there is a termination of user provision, but as a condition of safeharbor, not a requirement.

Consultations going on in the UK.
In Japan, and Hong Kong.
Finland, Spain, Italy, Netherlands
Brazil.
Belgium court has ordered ISP to make P2P impossible, found filtering to be adequate.
– — –
[Nils Bortloff]
Manager of U2 is a big fan of graduated response …
Music fans have the ability to easily download, most from illegal sources.
Illegal use eats up 70% of ISP bandwidth. So ISPs also should be concerned; they want to roll out paid services.
Increased production risk for record companies.
Limited enforcement of rights: Only for large scale infringement. more than 3000 tracks online.

ISP consumer protection program. (1) First warning. 70% will refrain from the illegal activity. (2) Second warning. 90% refrain. (3) Technical measures: temporary suspension // combination: filtering, port blocking, URL blocking.

We need governmental support, we need real sanctions, …
Data protection vs. protection of property. Must be balanced.
Counting on Promusicae v. Telefonica [Case C-275/06] and LSG v. Tele2 [Case C-557/07].
Only real sanctions provide deterrence.
Prevention instead of penalties; The fans are still on the legal path, plus they don’t have to pay legal fees.
For ISPs, the reduction of overloaded bandwidth is good.
For rights owners, also good. Chance of legal exploitations.
For citizens, less exposure to liability; less burden for prosecutors, courts.
- – - -
[Stanley Lai]
Safe Harbors in Asian countries:
In Hong Kong there is a proposed safe harbor. In Malaysia, there is a hybrid system.

Graduated response laws controversial. A challenge to implement.
New Zealand 92A didn’t really work because it was past administration.
S.Korea just passed a bill to come into force Sept 2009.

Imposition of Secondary Liability. the standards vary.
Malaysians talk about “causing another person to do”
Section 86 of Thai Penal Code.
Article 22(3) of China’s Regulations on the Protection of Information Network dissemination Rights.
Singapore: Odex v. Pacific Internet Ltd. [2007 SGDC 248]; [2008 SGHC 35], filesharing case. Agent of copyright owner could not apply for pre-action discovery to identify file-sharers.
IFPI v. Yahoo case.

Criticisms:
Safeharbors don’t necessarily discriminate on the type of content. Not sure if the three-strikes law in its current form will make difference.
ISPs may decide to take down rather than face the fight.
People may be concerned by the over-reliance on evidence and allegations by rights holders.
- – - – - -
[3:10]
[Justin Hughes]
Five years ago wrote an article saying “these issues are all settled” — and it is interesting seeing that it turned out to be completely wrong …

Should ask ISPs to take “responsibility” not more “liability”
Assume responsibility to comply with the DMCA, to limit the liability. Why reassess the responsibility now?
It is a quadrant of technological change, business changes…

Technological changes:
There have been technological determinists who say that tech will make enforcement impossible.
Transmissions ISP — if you look back at the E-commerce directive and the DMCA, there was no thought that ISPs could know what was going through the pipes in real-time. Since then we have heard of packet inspection. Now we can know what is on the pipes in real-time.
There has been some controversy; Some of the filtering tech used it is a question of how inspected (header, or deep-packet).
Disputes surrounding whether BitTorrent traffic has been throttled. No question that this already happens. Their ability to do this has nothing to do with deep-packet inspection, only traffic patterns.

Business Models changing — ISPs suddenly find their business interests aligned with content industry. It is this traffic that consumes most of their bandwidth.
This is a big problem in the US. In 1995, AOL moved from metered charging to all-you-can-eat. Now, can the ISPs move back to metered? NO! Because they may open themselves up to vicarious liability!

Hosting: In the past 5 years, a shift in tech. With filtering, now it is possible to ID where an audio-visual work comes from, whether an owner wants to get paid from it or not.
10 years ago the policy argument made was like defamation — can’t be sure, so you don’t want ISP to be a censor. Now, it has changed. Now argument is copyright materials looks like porn. Capable of detection and filtering, so why not?

What has also happened is that it is clear for which web sites are copyright exploiting sites. For these, courts find them and shut them down. Ex. Baidu case. China has been enforcing.
- – - – - -
[Carey Ramos]
There has been a series of infringement cases culminating in Grokster in 2005. Since then, the issues have continued to be litigated.
Napster was centralized. Easy to establish knowledge of songs on the service. Grokster and Streamcast were decentralized. They argued they didn’t know what users were trading. Judge reasoned in the Sony Betamax case, you had to demonstrate actual knowledge of specific instances by users of the product. In Grokster, S.Ct. created new theory, if actively promoting the infringing use on the site.
Then the case was remanded to district court. Sought a permanent injunction against Streamcast. Judge then said you have to use eBay standard (patent inducement standard). Court said you are only entitled to an injunction against the actual inducement! Now that the users don’t have to be educated on how to use for infringement, can’t enjoin! Special master appointed to determine if filtering was feasible.
Streamcast went out of business, but the state of the law was left unclear…

Where you can prove damages, case against Bertelsman: not enough to prove that songs were on peoples hard drives and on lists, but needed to prove actual distribution. Judge said that the circumstantial evidence could be used for damages.
The answer is what Judge Patel said: can you show through circumstantial evidence that they were actually being distributed? For individuals it will be much tougher.
- – - – - -
[David Carson]
Cablevision case: Direct infringement case; controversial. S.Ct. deciding now whether to take. The Court does not take many copyright cases. the court has agreed to take one this year already: Reed Elseviere – a question about sec. 411(a). A post-Tasini class action lawsuit.

CNN v. CSC Holdings. Solicitaor General invited to file brief on whether S.Ct. should take the case; No idea what position they will take…
The case involves a remote DVR system (“RS-DVR”). Part of the signal sent to subscribers, while at the same time a part is sent to a buffer. If subscriber decides to record, the buffer copy is saved. Questions: Is the buffer copy sufficiently fixed to be a “copy”? Who makes the copy? Is playback a public performance?

17 U.S.C. 106(1), Exclusive right to make copies. But it must be “fixed”. To be “fixed” — has to exist more than a transitory duration. Was the buffer copy existing for long enough?
2d Cir. said there was embodiment. However, it was not more than transitory.
But how long enough? the court gave no guidance.

Server copies: Cablevision provided the system, but in each case, the consumer pressed the button and started the copying. 2d Cir. drew on Netcom case, said that there needed to be “volition” — and Cablevision had no volition.

Public Performance: definition requires transmission to the public. Definition of “public” in sec.101 included people in different places, at same time or different times.
Court concluded that you have to look at particular transmission and determine what the potential audience for each is. Here, the transmission comes to the one subscriber only. It is a private performance; no infringement.

It must have been the policy choices driving the decision…
- – - – - -
[Allen Dixon]
Trying to enforce rights in face of data protection rules in the EU…
In Europe facing big hurdles for legal actions because data is protected! In the European charter there are fundamental rights — personal data protected, private life; Fundamental right to property, and effective judicial protection of that property.
Packet header information: Every bit of info on the internet has an IP address associated with it (sender and receiver).
The basic point is that ISPs assign the number, and it contains info about the computer — but the info on who uses that IP address is kept by the ISP.
Data protection rules cover identified or identifiable persons. Question is “is it an identifiable person?”
Restrictions on use of data, i.e., Have to have a legitimate use.
Additional restrictions of use for ISPs.

Fairly easy for notice & takedown. don’t have to know who person is. But when doing evidence collection for lawsuit, you need it! Who the ISP is, who is transferring files. Different countries have different effects.

A legitimate reason for data collection is being infringed upon. Sometimes rightsholders have to go to court to get permission.
Promusicae case waffled on issue — said you have to respect both privacy rights and IP rights, but EU rights don’t force either, so figure it out by yourselves…

Is the status quo working? Would a code of practice help? Is a legislative fix needed? Is a WTO TRIPs enforcement case required?
- – - – -
[Jerome Reichman] Willing to have reverse notice and takedown in the graduated response model? Can there be corrective legislation for the public performance issue (referring to Cablevision 3rd prong)?

[Shira] We have tried to get ISP involvement without government, not trying to get them to encourage.

[David] Not aware of any proposals to amend the law. If S.Ct. takes case we’ll know.

[Bridges] E-commerce companies, investors, innovators, etc. Created confusion because certain actions
Myer v. Holley, 537 U.S. 280 (2003) — when talking about federal statutory tort, we don’t take vicarious liability past where you traditionally found it. Now an unreality because we don’t take these principles from other aspects of law…
Maqking available issue: to what extent has it come into the copyright act. concerned about 106(3) distribution right. Arguably, the distribution right does not apply to the Internet at all! Courts have focused on if you need a transmission…but the statute says “copies or phonorecords to the public by sale or other transfer of ownership, renting leasing or lending”– which means material objects!
Interestingly in Art.6 of WIPO treaty, it applies only to physical copies. This area has not been explored.

[moderator] Does it bother you that Tasini talked about it?

[] In Tasini, it was assumed, without deliberation. In Grokster, the court went through eleborate analysis on “deemed distribution” but never addressed the “copies or phonorecord” part of the statute.

[Shira] The definition of distribution right in the WIPO treaty was made specifically so that it did not conflict with US distribution right.
- – - – -
[Question] Issue of equitable access to information?

[Ramos] This is the lesson: In the last 10 years, the record companies have been seriously injured by piracy. We are the losers because the number of artists have been cut due to the loss of funding. There would be much more expressive content if artists are able to be compensated. Artists would not be producing the content that we have has in the last 50 years without the ability to be compensated.

[Dixon] It is a fundamental right in Europe. Talking about any internet wrong, the data privacy laws effect that. How do we practically balance these issues?

[Question] Have you seen how many bands there are out there? It has nothing to do with copyright protection. Absurd to suggest that piracy has led to less expressive content.
Also the solution of graduated response sounds impractical because this suggests you care about your home connection and don’t want to go to Starbucks or use a University connection …

[Shira] There are a lot of issues, but what we are trying to do is find a practical and pragmatic solution.
Much better if it doesn’t involve litigation.

[Question] Can we mve one step further. Why not have a negligence standard?
Can we ask copyright owners?
Should we let private parties negotiate or involve government?

[Hughes] We should think of copyright laws in relation to other laws — for example tort law. We should think about it as the “least cost avoider” — impose the cost on the most efficient party. It cant be just the ISP itself, there needs to be interaction for filters to be built.
One problem is that tort law doesnt involve free-expression issues. Whatever position applied to spam filters should be the same position applied to copyright.
There is a big issue with the filters — need to be sufficiently lenient to do reasonable fair uses. Need more transparency, but not necessarily government regulation.

[Bridges] Many judges have begun to look at negligence as the standard. It is fine to go that way, but we do not need a statute for a negligence regime. Common law principles involved if we go all the way … Can’t pick and choose the best of both.

[Hansen] What about the economic crisis, with governments now thinking consumers need to actually be buying things — IP should be something governments need to focus on? Thoughts?

[Fricklas] The plight of the newspapers, which matters to a lot of legislators, highlights the IP problem. It seems in every area, there is more concern where before there was less.

[Hansen] Are newspapers not viable because they don’t fit with the new model? Can they do anything to fit?

[Cotton] We saw the AP come out and say they don’t see themselves as viable if they continue to go forward this way.

[Fricklas] A lot of the language used consists of “trying to protect a business model” — IP encourages investment. It actually encourages destruction of the old business models! What we are hearing is that if you invest in collection of news, you can’t control it — this is destroying the creation of news. It should be protection of ability to profit, encouraging them to build organizations that collect the news!

[Pentland] It has to be a balance. Be careful of double-dipping. Don’t want consumer to pay twice. But, we must be thinking of how different models can allow compensation model to take effect.

[Cappuccio] The newspapers is a good analog to other industries. Protecting social good. without IP, what are you left with? Unorganized, unprofessional, inaccurate Blogs! It is more and more difficult to rely on what you are reading online, because we have been loose on protecting content owners.

[Jacobs] Hoping ad revenue would increase … now advertising is not as efficient. Annoyed that people say “Once you give it away for free, you can’t get it back”. This is not true.

[Question] What is it about the lack of IP protection is destroying the newspaper industry? Isn’t it advertising’s fault?

[Jacobs] Demise of newspapers is reflective of the fact — economic pressure, organized labor — the incentive to invest is diminished. It is important not to undermine the incentive by widespread counterfeiting and piracy. This is really about driving home that protection is the vibrancy, in terms of jobs, and social goods.

[Hansen] Technology which threatens the core business, the courts creates new law — ex. Brandeis and the multiple performance doctrine; then people did pay after that. It is not that once it is free, can never come back, but it does take some effort.

[Jacobs] For some newspapers, as revenue decreased, the quality decreases, then readers fall off … but News Corp is continuing to invest in journalists, looking ahead to the economic recovery — thinking that there is room for newspapers.

[Hansen] Is the ideological divide driving us apart? It is almost like Google is an alien that does what it wants — a lot of it good; some it doesn’t care …

[Fricklas] Some of the issues, the copyleft side actually agrees with the content industry. EFF agreed with certain things that should be fair use, some things shouldn’t. there are leitimate issues made my these copyleft groups. But they have to understand that these markets are important for artists to be able to exploit their work. Must understand the users must be responsible. that IP protection is in everyone’s interest.

[Pentland] Balance between market forces and stakeholders. Support copyright holders being compensated, but it must not be double-dipping!

[Cotton] Criticism of the fair use argument — when argument used as a tool in the “no action” option. The copyright owners should be involved in the debate. Problem is when we just butt heads, when argument raised that you can’t do anything about wholesale piracy.

[Hansen] We had intended to have the General Counsels of Google and Apple, but unfortunately they couldn’t come. We did try to balance this panel …

[Question] Are we going to see a reduction of funding in anti-piracy with the advance of technological means?

[Cotton] We will see, in the US, an increase of funding of the FBI and state and local enforcement units. We are working on increasing funding in our border patrol and customs.

[Question] David Sweeny, Video Game Association:
The term “perception” used — people want to use the internet in many ways. In recent weeks there seems to be a change in attitude in Europe lawmaking — the three-strikes proposal has been struck down. How does panel feel about the “perception” issue.
[Hansen] There doesn’t seem to be a groundswell of public opinion that we need to do something about protection ,how do you address it?
[Cappuccio] Make sure you are on the right side of the perception phrasing — if it turns out that people see IP as restricting innovation, than it is bad — we need to stress that people can get what they want when they want it, TV on demand — Not between stealing and not stealing // The choice between stealing it, and getting it legitimately.

[Cotton] Look at “Lazy Sunday” on YouTube in 2006, that was the start. Now look at The Sara Palin impersonation from last year’s election — millions watched, but they were on legitimate sites like Hulu. This shows that people are willing to get it legitimately if it is easy enough.
Kids draw the conclusion that if it is so easy, it can’t be wrong. If the technology says that it will be hard to get to the illegitimate sites, then the population will move.

[Question] the challenge is not just for companies who may be on this panel … It is case of consumers who don’t realize they are infringing. Wrong to not recognize thet the internet took years to build, so when we put rules in, we should recognize that it was sharing that built the Internet …

[Fricklas] Not suggesting that .. only that at some level transactions in IP protected material can be done in a way that is more secure; through ISPs or other ways. Transactions that don’t compete with “free” also need to take place in a secure fashion on the Internet. Free from viruses, hackers, theft etc. Taking network to the next level.

[Jacobs] We are not winning the perception war. The theft of Wolverine model. Downloaded over a million times! that is a million people who think this is OK! We need to change the public opinion.

[Question] Ebay decision was the worst in history?
[Pentland] It was a decision that was needed …

[Question] The quote from [WSJ editor Robert Thomson] about Google being “parasites or tech tapeworms in the intestines of the internet”– Google news is an aggregator. The newspapers are not forced to put their papers online. How does Google aggregating the stories hurt? How is it copyright infringement?

[Hansen] Exactly the same thing was said for radio! But the S.Ct. (Brandeis) created the multiple performance doctrine! The idea that you should be thankful for it, or else we will destroy your business, is not a policy that courts or congress will accept.

[Question] We have here Viacom, News Corp. telling us we have a perception problem … [*laughter*]
Is it a perception problem or a technology problem?

[Cotton] The reality is that even though we are big corporations, there are employees. It extends to other industries. at least 12% of the GDP is the creative industries. this is where the traction comes from. It is right that the message from big corp. gets drowned …

The extent of personal views differs with the level of state’s constitutional protection. In the EU, the adoption of a new directive or regulation is very difficut, 6+ years. Often involves much tradeoff, little to do with the merits of the proposal. For this reason, the ECJ feels more comfortable with creating their own policies rather than UK courts. the UK courts consistently take the narrow view — they see as a whole, the IP system integrated with other aspects of the law. the EU judges tend to see only aspects of law in which there is a european dimension, like Trademark. They tend to be from diverse background, not necessarily IP trained. If not trained, you tend to decide cases on the facts, leave it up to others to determine the policy! Easy to rule on the policy; Hardest part of opinions is not to write things that mess it up for others!

Trademark: Major success of reducing registration fee by 44%. Two reasons: (1) the continuous increase in revenues of OHIM resulting from continuous rise of applications. (2) decreasing costs from efficiency gains by office.
Launched major evaluation of community trademark regulation. Issues that must be addressed: Relationship between national trademark and community trademark system. Use of community trademark? Should it be sufficient to use in one member state, for validity in whole community?

Patents: Patent fight is older than the European Union. More difficult to create a community-wide patent system than creating the EU itself! Trying to give it a new push, because of its importance to EU business.
Two fights on table. Community patent. Result in a significant reduction of cost, because it would do away with translation cost, and individual review by each national office. This is supported by business interests, but not supported by every member states. Language issue for a few member states. We may have to get to a system that involves not all of the member states.
Draft proposal, and draft agreement on European patent court system. Between EU, its member states, and 3d party countries who are part of the EC and who want to join th epatent syatem. Local and regional divisions. One single appeal court. ECJ would be permitted to answer questions put to it about the interpretation of the patent laws. The EC has formally adopted a proposal which would allow amendment to be adopted. But first the ECJ must weigh in. Hope that with ECJ approval, the hold-out member states will come to the table and agree.

Enforcement: Enforcment Directive in Europe deals with civila measures. A directive dealing with criminal measures is blocked so far. Now trying to focus on practical measures aimed on increasing enforcement. European observatory launched two weeks ago — collect and present data on economic and societal impact of counterfeiting and piracy. Hoping to sway public opinion and policy-makers. We have to show the implications.
Also, launched another stakeholder dialog about counterfeit products on the internet. Rapid changes in technology. the right approach is not legislative — rather a soft approach, bringing together parties and trying to reach inter-industry cooperation agreements. If reached, could operate on an international level, which would be most effective.
Intending to launch a second dialog dealing with illegal downloading over the internet. Intent to broker an inter-industy cooperation agreement.

[4:40] [Hansen] How much do you speak with other people in commission like DG Comp?

[Margot] There is a misperception that the segments don’t speak with one another. But, there is a dialog internally. There has been a request to nominate an IP czar, following the example of the US. This is not necessary. What is better is coordination between existing structures, not new ones, new beurocracy.
DG Comp we talk to a lot. Not the case that there is infighting with DG Markets trying to strengthen protection, DG Comp trying to weaken.

[8:50] [Panelists: Prof. Dr. Reto Hilty, Tilman Luder, Hon. Paul Maier, Prof. Dr. Peter Meir-Beck, Ted Shapiro]

[Hansen] Positive about the state of trademark protection?
[] Still a lot to do.

[Hansen] What extent is OHIM’s interaction — how much do you try to be consistent through the board of appeal, ECJ — how do you manage it all and still have examiners do day to day jon?

[Paul] There is room for interpretation of the judgments. Everything is not always consistent. There is a depertment of Intellectual Property policy — instruction could be issued. Also if there needs to be communication with public. there are levels of discussion. No absolute consistency, but some judgments obviously subverted to others.
There are people who think the review done by CFI is strange … Truth is, there are enough TM specialists in the CFI, but that does not mean they connot produce consistent and good judgments.
[MArgot] Aware with problems with the ECJ and trademarks. There are no trademark specialists. that is why responsive by businesses etc not to leave patents up to the ECJ, instead to create separate court an dleave ECJ for certified questions.

[Peter Meier-Beck] Court should be able to harmonize traditional practice of patent law and the existing body of law. Build the new system on the base of existing structures. Possible to conclude this proposal will be very good.
[Hansen] Isn’t it radical, the proposal to go ahead without all of the member states?
[Peter] Reluctant to go ahead without all of them, but possible.

[Hansen] what are the issues with exceptions? Is it possible that instead of specific exemptions & limitations, just go to a flexible fair-use system?
[Hilty] No one is talking about a fair use syatem.
[Margot] We may have to consider this is the future. Because the EU lawmaking process is so slow and complicated. the lawmaking cycle takes at least 6 years! It is more and more inept to keep up with technological development. May need a more plexible system.
[Hilty] But then you need to take a step back — the idea was to collect all of the limitations from the member states, and then stop there. Difficulty with harmonization.

[Hansen] What is going on?
[Ted Shapiro] The environment, especially in the EU perilament is not favorable for IP. so it will take a long time to open up to fair use. It simply won’t work in the EU. It is not necessary because of the three-step test implemented in the majority of member states! It is flexible enough. They are having enough trouble with term extension, should open up the directive for this change. The three-step test does work, like the US fair use you apply the factors and see if the use fits.
[Hansen] Isn’t there a negative public reaction? It fuels the fire that things that should be allowed aren’t.
[Ted] In the realm of exceptions, there is room for agreements between groups. Publishers should meet with groups for the blind, to facilitate the exceptions, etc. Various dialogs. Must assure that the voices are coming from all the groups together.

[Hansen] What will happen in copyright?
[Tilman Luder] Parliament will not allow the technological issues debated behind closed doors with stakeholders. What will happen is that there will be a fair about of stakeholder negotiation, but not giving up on legislation!
there will be something in the near future on the reproduction right. The broad interpretation — what happens inside the machine — there will be quite a lot of jurisprudence, then follow-up legislation to codify. Quite an open field.
A lot of people who want the commission to write interpretive guidelines on the 3-step test. But the task of brokering agreements, is that all we will do? Or are we going to actually open up and pass legislation?

[Question] [Knomf] How come you have disregarded the recommendation against term extension and pushed ahead?
[Tilman] We have good reasons for doing this. there may be an intermediate outcome that puts term more at the time of life of performer only. But if parliament goes along with it, it must be a major success in itself, must lend some credence to the idea.