The copyright environment consists of three main aspects: rights (what can be protected by copyright) and exceptions (e.g. copies for private use or for public libraries); enforcement of rights (sanctions for making illegal copies and for trading in circumvention devices); and management of rights (exploiting the rights). In the online world, management of rights may be facilitated by the use of technical systems called digital rights management (DRM) systems. The paper sought to provide policy guidance on the use of technology at an important time.
DRMs consist broadly of 2 elements: the identification of intellectual property and the enforcement of usage restrictions. The identification consists in the attribution of a (standard) identifier (such as the ISBN numbers for books) and the marking of the property with a sign (such as a watermark). The enforcement works via encryption, by i.e. ensuring that the digital content is only used for purposes agreed by the right holder. DRMS have not yet proved widely acceptable to all players as not all the problems associated with technical protection measures and DRMs have been ironed out.
By way of example, conventional encryption and digital signatures operate effectively for the transmission to the consumer, but once he has received authorisation of use, as he necessarily must, it is very difficult to control to which uses he puts the content. Most techniques currently under way try to prevent illegal copying by inserting watermarks or other signs which signal to the hardware whether they are original. The hardware should then work only with legitimate copies, sometimes by itself, sometimes by verifying with a database of the right holder.
The Commission’s policy in this area is defined by the Copyright Directive. In particular, the Copyright Directive requires Member States to provide for “fair compensation” for private copying (and certain other exceptions). Although, fair compensation is left to Member States to determine, it should take into account the application or non-application of technical protection measures. It also provides legal protection against the circumvention of any effective technical protection measures. The Directive also encourages the compatibility and interoperability of different systems and considers it highly desirable that global systems be developed.
For the technology to succeed, it should be operational, of wide application and accepted by all players in the market i.e. content providers, commercial users and consumers. The design and deployment of DRMs should be sufficiently open and flexible: open to ensure interoperability and accessibility, and flexible to allow the use of different business models by content owners.
Effective management of digital rights depends both on the legal framework and the widespread availability of operational technology. The legal framework supports use of DRMs by protecting technical measures, and by requiring Member States to take into account the application or non-application of technological measures when providing for fair compensation in the context of the private use exception for which fair compensation is required.
Technological protection measures and control systems, can facilitate the effective management of rights and exceptions. Where technological measures are operational and effective, rightholders should be able to ensure appropriate exploitation and enforcement of their rights as well as adequate revenues by using DRMs. The legal framework provides for the possibility to avoid double compensation where copyright levies and DRMs would be used in parallel.