1997-1

Kopinor News No. 1
Volume 1 Summer 1997
ISSN 1500-0729

No. 1 Vol. 1 of English Newsletter "Kopinor News"

We welcome you as a reader of our new English newsletter

We have for a long time planned to publish an English newsletter, and here finally is the first issue. Kopinor News will be distributed at no cost to the reader.

This first issue is sent to all our foreign friends and contacts. If you do not wish to receive it, please let us know. Unless we hear from you, we will regard you as a subscriber. If you prefer to receive Kopinor News by e-mail, please e-mail us at: kopinor.post@kopinor.no.

Our Norwegian newsletter has appeared 8-10 times a year since 1990. We cannot promise that Kopinor News will appear with the same frequency, but our aim is at least 2-3 times a year. Please write to Kopinor News. We would like to print short letters from our readers.

Kopinor's 1996 Results:

$ 21 million, 12.5 % Increase

Kopinor's total revenues in 1996, including financial income, came to NOK 133.5 m (US$ 21 m), as against NOK 118.7 m in 1995, a 12.5 % increase.

Net operating expenses was 11.6 % (down from 12.6 % in 1995). A total of NOK 101.6 m ($ 15.9 m) was paid to Norwegian rightsholders, including NOK 4.2 m under reciprocity agreements with foreign RROs. NOK 21 m ($ 3.3 m) was paid to foreign rightsholders.

Kopinor distributes financial income together with collected fees to rightsholders. More details can be found in the English Summary of Kopinor's 1996 Annual Report, just off the presses.

Licensing Business & Industry:

13 500 Businesses

At the request of the Norwegian Confederation of Business and Industry Kopinor agreed to terminate the central reprographic agreement for the Confederation's 13 500 members as of 30 September 1996. The agreement had been in effect since 1990. When negotiations on a model agreement for individual members broke down Kopinor offered each company a standardised agreement. The Confederation's decision to terminate the central agreement was not popular with the member businesses. After pressure, particularly from major corporations, the Confederation on 23 December asked for negotiations to be resumed. On 4 March 1997 a new, four year central agreement was signed, and reprographic fees are once again paid directly to Kopinor by the Confederation.

Church of Norway:

Negotiations stalled

More than 90 % of Norway's population belongs to the Lutheran State Church. Kopinor has sought to license photocopying for 10 years without success.

Last year a model agreement for local church councils was negotiated. Kopinor insists, however, on payment of fees for copying in the past. Due to this demand, negotiations have stalled. To break the deadlock, Kopinor is seriously considering bringing the matter before the National Arbitration Tribunal in accordance with Art. 38 of the Copyright Act.

Article:

The Challenge of Closed Digital Networks

by Executive Director John-Willy Rudolph

(Abridged version of an article which appears in Norwegian in Kopinor's Annual Report 1996, and will appear in English on Kopinor's web site, with the title Cyberspace - Illusion and Reality.)

In 1995 Internet became a household word, and we were seduced by an exiting new notion: Cyberspace. We were told that we could travel freely between digital planets and acquire information and entertainment from millions of servers.

Digital technology posed new challenges to copyright, and governments and international bodies began producing green books and whitepapers on how to pave the way for commerce with copyright works on the digital superhighways. If creators and publishers are to sell on-line and off-line digital products they need protection. Solving this issue is clearly of paramount importance. And for good reasons much creativity and large sums are being invested in the development of Electronic Rights Management Systems (ERMS), in techniques for digital "fingerprints" or "watermarks", and in systems for encryption and payment on the net.

The closed networks

But the idea that cyberspace is a wide open space is an illusion, a fact that often is suppressed in the ongoing debate. Substantial and growing amounts of digital data flow through closed networks to which the general public does not have access!

Most of us have long ago acquainted ourselves in the work place with LANs - Local Area Networks. And in banks or at airports we have seen WANs - Wide Area Networks - in operation, WANs which frequently traverse the globe. WANs are effective, but also expensive. Over the years Kopinor has discovered that unauthorised digital duplication and storage of sizeable amounts of copyright works is taking place in closed information systems and digital archives. And we have pleaded the "White House Task Force" in Washington and the Commission in Brussels and others to deal with the issues of exploitation of copyright works taking place in closed LANs and WANs. We have pointed out that digital technology opens up for large scale, illegal reproduction which poses a threat to authors and publishers which is far greater than today's massive photocopying.

Intranet

In the autumn of 1995 the concept of intranet blossomed. It became known that Internet, with the help of "firewalls" and web technology, can be used as the backbone to establish cheap and cost-efficient closed networks. Articles in the specialised press illustrated that the development Kopinor had described over the years was gaining momentum. In 1996 corporations and institutions in all industrialised countries regarded Internet primarily as a vehicle to establish closed, internal networks, rather than as a tool for commerce for the general public. For instance, the shipping industry in Norway began developing Marlink, an intranet for approximately 10 000 users in 80 cities in 50 countries. A major corporation, Kværner, signed an NOK 40 m contract with Microsoft to develop an intranet, etc. Vendors in the USA estimated that 70 % of all Internet software sold in 1996 would be for intranet use. And it seems rather obvious: In the same manner as institutional users of all types photocopy from books, journals and newspapers, can we expect that they will make use of works and performances from various media in their intranets and internal digital archives and information systems - without seeking the permission of rightsholders. The many thousand small and large intranets now being established clearly represent huge potential financial losses for rightsholders and a major challenge for Kopinor and other centralised management bodies.

The main purpose of the closed networks is not to sell products to the public, but to convey information and knowledge to employees and other insiders. Such networks are excellent tools for training and education.

Not only literary works

What kind of unauthorised uses do we find in the closed networks, besides unlawful use of computer software? What traditionally is regarded as literary works seems to dominate. Scanning or keying in press clippings is a typical use. But with what we know of WWW technology we can be confident that users will not limit themselves to exploit texts. Photos and illustrations, as well as excerpts from phono- and videograms are also used.

What should be done?

1. The experiences of Kopinor and similar organisations in regard of reprographic reproduction are clear enough: In relation to internal, institutional exploitation of works the individual authors and publishers are powerless. Collective management of rights is the only option.
2. If effective and user-friendly management of rights in closed networks is to be achieved, governments must introduce legislation which makes this possible. The Extended Collective License employed in the Nordic legislations seems well suited. This view is also held by the Legal Advisory Board of the European Commission, as expressed in LAB's recommendation in its comments to the EU green book "Copyright and Related Rights in the Information Society" available at LAB's website.
3. The accelerating unauthorised use of works and performances in internal, closed networks represents a major challenge to rightsholders, particularly in relation to corporate and educational uses. As with reprography we cannot expect to be able to stop such uses. Which means that the maxim must apply: "If you can't beat them, license them." Joint action and consolidation by the collective management organisations is called for if creators, performers and producers - also the new multimedia producers - are to be able to secure their interests in the secluded and inaccessible parts of Cyberspace.
4. An important task for collective management organisations will be to conduct their work in a manner which does not prevent the closed networks from being real markets for rightsholders who develop products especially for this kind of use.

4 July 1997
Edited by J. W. Rudolph/Else Lie