© Olav Torvund - INSTITUTT FOR RETTSINFORMAIKK UNIVERSITETET I OSLO Contract law and IPR.

© Olav Torvund - INSTITUTT FOR RETTSINFORMAIKK

UNIVERSITETET I OSLO

Contract law and IPR



Disposition• Traditional role of contract law in

relation to IPR (with focus on copyright).• Role of collecting societies• Major issues with respect to licensing in

online environment.• New role of contract law – and possible

problems this raises.



Traditional role of contract• Licensing vs assignment/transfer• Licensing:

– Permission to use– How much do the licensee get?

• Assignment/transfer– How much do the transferor have left?

• Moral rights



TRIPS Art 40• 1. Members agree that some licensing

practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.



TRIPS Art 40• 2. Nothing in this Agreement shall prevent Members

from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member.



TRIPS Art 40• 2. Nothing in this Agreement shall prevent

Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member.



Software directive Art 5 (2)• 2. The making of a back-up copy by a

person having a right to use the computer program may not be prevented by contract insofar as it is necessary for that use.



Software Directive art 5(3)• 3. The person having a right to use a

copy of a computer program shall be entitled, without the authorization of the rightholder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to do.



Software Directive art 5(1)• 1. In the absence of specific contractual

provisions, the acts referred to in Article 4 (a) and (b) shall not require authorization by the rightholder where they are necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including for error correction.



Software Directive art 5(1)• 1. In the absence of specific

contractual provisions, the acts referred to in Article 4 (a) and (b) shall not require authorization by the rightholder where they are necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including for error correction.



Software directive art 9(1)• 1. The provisions of this Directive shall

be without prejudice to any other legal provisions such as those concerning patent rights, trade-marks, unfair competition, trade secrets, protection of semi-conductor products or the law of contract. Any contractual provisions contrary to Article 6 or to the exceptions provided for in Article 5 (2) and (3) shall be null and void.



Software direkctive art 6(1)• 1. The authorization of the rightholder

shall not be required where reproduction of the code and translation of its form within the meaning of Article 4 (a) and (b) are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs, provided that the following conditions are met:



Cable and sattellite art 9• Exercise of the cable retransmission

right 1. Member States shall ensure that the right of copyright owners and holders or related rights to grant or refuse authorization to a cable operator for a cable retransmission may be exercised only through a collecting society.



• 2. Where a rightholder has not transferred the management of his rights to a collecting society, the collecting society which manages rights of the same category shall be deemed to be mandated to manage his rights. Where more than one collecting society manages rights of that category, the rightholder shall be free to choose which of those collecting societies is deemed to be mandated to manage his rights….



• … A rightholder referred to in this paragraph shall have the same rights and obligations resulting from the agreement between the cable operator and the collecting society which is deemed to be mandated to manage his rights as the rightholders who have mandated that collecting society and he shall be able to claim those rights within a period, to be fixed by the Member State concerned, which shall not be shorter than three years from the date of the cable retransmission which includes his work or other protected subject matter.



• 3. A Member State may provide that, when a rightholder authorizes the initial transmission within its territory of a work or other protected subject matter, he shall be deemed to have agreed not to exercise his cable retransmission rights on an individual basis but to exercise them in accordance with the provisions of this Directive.



Database directive art 6(1)• 1. The performance by the lawful user

of a database or of a copy thereof of any of the acts listed in Article 5 which is necessary for the purposes of access to the contents of the databases and normal use of the contents by the lawful user shall not require the authorization of the author of the database. Where the lawful user is authorized to use only part of the database, this provision shall apply only to that part.



Database directive art 8(1)• 1. The maker of a database which is

made available to the public in whatever manner may not prevent a lawful user of the database from extracting and/or re-utilizing insubstantial parts of its contents, evaluated qualitatively and/or quantitatively, for any purposes whatsoever. Where the lawful user is authorized to extract and/or re-utilize only part of the database, this paragraph shall apply only to that part.



Database directive art 15• Any contractual provision contrary to

Articles 6 (1) and 8 shall be null and void.



Regulation in national law• German and French laws

– revocation of licence when exclusive licensee fails to adequately exercise rights under licence;

– licence purporting to grant rights with respect to unknown means of usage, will be null and void.

• UK (and French) law – assignment/licensing of rights must be in writing



Role of collecting societies• They are either assigned rights of

author or given licence to administer these.

• Main tasks: – issue licences; – collect payment; – enforce rights; – represent and lobby on behalf of

authors/members.



Some models• Mandate to collecting society• Compulsory license• Extended collecitve licenses• Exclusive of non-exclusive rights for the

collecting society



Under threat in Europe• Commission sceptical of their role,

particularly with respect to digital distribution etc



Major issues with respect to online environment• Does author waive ©? Unlikely.• Does author give implied licence to

copy? More likely, but …• What is extent of implied licence?



Validity of open source licensing• Uncertain status – how do we best

characterise ag• Courts may void contract for lack of

certaintyreement?



Validity of online licensing modes• “shrink-wrap” licensing• “click-wrap” licensing• “browse-wrap” licensing



New (and problematic?) role of contract law• Contract is fast displacing copyright law

as means of controlling information, at least in online environment: see further Hugenholtz 1999.

• Online environment (Internet) highly conducive to regulation by licensing.

• Contract is being applied in conjunction with ©-tech (DRMS): see further Hugenholtz 1999.



Consequences?• Lack of checks and balances –

important issue here is extent to which contract can override copyright law:

• Diminishment of “public domain”.• Diminishment of end-user freedoms –

“freedom for the pike is death for the minnow” (Tawney).

• Diminishment of end-user privacy – DRMS potentially as virtual Panopticon



• Contract also supplemented by legal doctrines on, inter alia, undue enrichment and trespass to chattels (refer to the previous lecture on database protection)



But note possible limitations on freedom to contract:• Rules on duress etc.• Rules in ©-laws – but these only touch

lightly on contractual freedom• Competition rules – abuse of dominant

position• Freedom of expression• Right to privacy

© Olav Torvund - INSTITUTT FOR RETTSINFORMAIKK UNIVERSITETET I OSLO Contract law and IPR.

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