(C) Trends in Licensing and Rights Management

119 The interplay between information technology, the digitization of content, the Internet and the exploitation of intellectual property rights is dynamic and it is particularly difficult to predict what the future will hold precisely. Notwithstanding, the following remarks can be made with respect to the future of licensing and management of rights in the digital environment, based on experience gained and lessons learnt in recent years.

(i) Approaches to managing intellectual property rights in the digital

environment, as well as the type of licenses reflecting these approaches, will need to take account of the malleable and vaporous nature of digitized content. Typical and by now well known features of such content include the ease with which it can be transmitted from one device to another, its global accessibility once it is made available on the Internet, and the ease with which it can be reproduced, in the absence of any technical protection measures. Because of the characteristics of digitized content and the Internet, users have certain expectations with respect to the manner in which they wish to consume such content. To the extent such expectations are reasonably legitimate, rightsowners’ market offerings (including the structures and terms of licenses), will be perceived as more attractive if they are consistent with them.

(ii) Increased reliance on licensing and contracts as a means of managing intellectual property is a likely future trend. As content has become more fluid and its means of delivery to users more variable, market offerings can now conveniently be tailored to suit the particular needs of individual users, or groups of users, sharing common requirements. A more diversified and adaptable range of products is reflected in a corresponding need for greater flexibility in the structure of legal relationships between content providers, intermediaries and consumers. Content providers, and, to an increasing extent, institutional users are of the view that contracts, licensing in particular, offer much needed flexibility in this regard. Accordingly, certain sectors of the intellectual property industry in recent years have increased their reliance on licensing as a means of making available content to users. An example of a sector in which this trend can be discerned is the scientific, technical and medical publishing industry.

(iii) Some have argued that information technology and the Internet are a threat to collective rights management organizations, because they would enable rightsowners to control and measure themselves directly the use of works. For a variety of reasons, however, the more informed view probably is that these phenomena will, in most cases, require collecting societies to re-engineer their business models and operating procedures, rather than jeopardize their very existence. In part, the difficulty results from the fact that collective rights management organizations, like much of the intellectual property system, are organized on the basis of territoriality. The entities in questions are often organized on a national basis, each of them having competence to grant licenses for their territory. However, if a person residing in a particular territority makes a work available on the Internet, it immediately becomes globally accessible (much more so than, for example, a broadcast originating from within a particular country). In an effort to resolve this problem, certain collective management organizations have been working towards enabling their system of mutual representation to make available to users global Internet licenses.¹⁹⁰

(iv) A topic of increasing interest concerns the future of exceptions and limitations in the digital arena. While the WIPO Internet Treaties state that “contracting Parties [are permitted] to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention,” the question has been raised whether the broad use of licensing as a means of providing access to works, as well as the widespread deployment of technological protection measures, will not result in a situation where exceptions and limitations are rendered practically meaningless. The interface between technological protection measures, licensing, and limitations and exceptions is a complex and, as yet, poorly understood issue that is likely to engage industry, users, as well as policy makers, for quite some time.

(v) One, rather radical, method of dealing with loss of revenue for rightsowners resulting from digital piracy is the imposition of levies to compensate for the losses incurred. Levies can apply to any number of items, including, for instance, the hardware and devices purchased by users to access the pirated works. Resort to such levies, as a means of dealing with widespread infringing content in the digital age, recently has been observed in a number of countries.¹⁹¹ Invariably, the imposition of levies is a highly controversial measure. Those who oppose them argue that they reflect a misguided attempt to find a “quick fix” to a complex problem, introducing market distortions and, ultimately, hurting consumers who suffer subsequent price increases. Others maintain that they are one of a few realistic and effective means of safeguarding the interests of rightsowners in the face of rampant digital and Internet piracy.