Too right: government proposes amendments to the Finnish Copyright Act

Authors: Pessi Honkasalo and Jussi Latola (Krogerus)

Finnish Copyright Act, HE 181/2014 vp 9 October 2014

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv013, first published online: February 26, 2015

The Finnish government has proposed that new provisions on online storage services, amendments for reasons of equity and blocking injunctions be added to the Copyright Act.

Legal context

Currently, online storage services of television programmes are operating in a somewhat grey area in terms of their legal basis. No non-appealable case law has emerged so far.

The provisions for adjusting a contract are found in s 29 of the Copyright Act (404/1961, as amended) which generally refers to the provisions of the Contracts Act (228/1929, as amended). Apart from s 29a of the Copyright Act, stating that the author may not waive his or her right to remuneration for the rental of a copy of a film or a sound recording, there are no supplementing provisions.

Unauthorized internet sharing may currently be addressed by suing the infringer. The court may order the intermediary, in connection with the principal case, to discontinue making copyright-infringing material available to the public. Precautionary measures may also be taken by seeking a temporary injunction against the intermediary prior to suing the infringer. However, in this case the actual infringer must be sued within a month or the court order lapses.

Facts

In October 2014 the Finnish government proposed several amendments to the Finnish Copyright Act. The proposal is currently under consideration by the Finnish parliament and is, if passed by the legislature, intended to become applicable from 1 January 2015.

The main points in the proposal are the following:

• adding provisions for the extended collective licence concerning online storage of television programmes;
  
• revision of unfair contract terms whereby the original author has transferred his or her rights to the work; and
  
• improving the possibilities of fighting unauthorized internet sharing.

Analysis

Extended collective licence concerning online storage of television programmes

The main objective of the proposed new provision is to remove the legal uncertainty associated with the currently operating service providers. The proposal strives, it is declared, to consider equally the benefits of the service providers, television stations, copyright holders and consumers by statutorily striking a balance between various stakeholders and their legitimate interests.

A so-called citizens' initiative, based on the proposal that online file storage services be deemed in law to fall under the scope of private use, was previously submitted to the parliament, but it was rejected. The government's proposal, by contrast, is based on the Nordic model of an ‘extended collective licence’ whereby the provider of online file storage would first agree on the usage of the signal as well as the remuneration and the technical implementation of such usage with television companies. The provider would then agree on the right to use the particular works with a copyright management organization. The authorization of individual authors would not be required, and an individual author does not have the right to forbid the recording of his or her work even if he or she is not a member of the management organization.

Revision of an unfair contract

The intention to add provisions regarding the revision of an unfair contract was set out in the government programme of the (still) incumbent government. The proposed amendments do not change the current situation per se, but the objective is to improve the possibilities for revising a contract especially as regards self-employed authors.

Section 36 of the Finnish Contracts Act, which provides for adjustment of unfair contract terms, is proposed to be added to the Copyright Act together with a reference to prevailing good practices in the field which would act as a crucial yardstick for determining whether a contract or its term is unfair or not. The proposal does not, however, set out any levels of compensations or specific terms that are or are not considered reasonable, these being issues that would remain for case law to establish.

The new provisions would only apply to situations where the original author of the work transfers his or her rights (or parts of such rights) to the work. Contracts entered into by other right holders than the original author would, therefore, not be covered.

Actions against unauthorized internet sharing of copyright-protected works

The provisions concerning intervention to unauthorized internet sharing of copyright-protected works are proposed to be amended to make it possible for the right holder to seek a blocking injunction against an online service from which copyright-protected works are shared without the right holder's authorization. This injunction would be directed at the intermediary and would be available when the infringer is unknown or where it is not possible to sue the actual infringer.

A blocking injunction would be subject to the applicant doing the following:

• providing sufficient evidence that copyright-protected works are used in the service without authorization; 

• proving that it is the right holder of the works that are made available in the service or that it represents the right holder; 

• giving reasoning to the court to point out why the injunction would not be unreasonable; 

• providing information of the applicant's efforts to find out the identity of the infringer; and 

• providing information regarding the amount of works available and the user amounts of the service.

IP addresses should also be stated, so that the court is able to give a precise and executable injunction order to the relevant telecommunications company.

Under the proposed provision, it would be necessary to assess the effects of the blocking injunction to the users of the service as the injunction should not be unreasonable to the users of the service. The users' basic rights, chiefly the freedom of expression, would have to be taken into consideration as a factor when assessing the reasonableness of the injunction. The injunction could be considered unreasonable in a situation where, for example, a significant number of right holders who are Finnish, or who live in Finland and are copyright holders in the European Economic Area, use the service to distribute their works.

These injunctions would, in the main, be in force temporarily for a fixed term and could be renewed or amended if necessary. A temporary injunction order would be in force for a maximum period of two months, but the maximum duration for the blocking injunction would be a year.

The costs of an IP/DNS block, according to the government's proposal, are estimated to be around EUR 10,000. This estimate is based on information provided by the telecommunications companies that were earlier ordered to block access to the Pirate Bay website in Finland. These costs would primarily be covered by the telecommunications companies, unless, for example, the applicant withdraws the application or fails to appear at the court hearing or if the application has been unfounded.

Practical significance

By adopting the extended collective licence model in respect of online storage of television programmes, the government, by implication, holds in its proposal that such storage constitutes a prima facie infringement—an issue not yet evaluated by the Court of Justice of the European Union. The amendment would enable television companies to agree with the service providers on an earnings model that best suits the business. This could be the sale of advertisements, for instance. The flip-side is the financial impact on service providers, who would have to pay remuneration for the use of copyright-protected works and possibly be forced to implement technical changes to their existing services. On the consumer side, this amendment would most likely result in an increase in the fees paid by the consumer, especially in relation to services purely based on online file storage. The government argues, however, that the service providers, television companies and the right holders of the television programmes will all benefit from these amendments in the long run, as the extended collective licence would lower the transaction costs in comparison to individually agreeing with each copyright holder for the use of the works. Time will tell.

The practical significance of the proposed amendments relating to revision of assignment contracts likewise remains unknown, but they could certainly lead to more claims for revision of contracts. Existing case law in this area is somewhat scarce. On the other hand, the idea behind introducing more effective adjustment mechanism is its deferent effect, so it is questionable whether the amendment will open the floodgates to litigation. In any event, seeing that only a general provision is proposed, there is no guarantee that the amendment would be a sufficient means for attaining the objective of securing a fair remuneration for the original authors.

As regards the proposed amendments concerning the possibilities of fighting unauthorized internet sharing, it can be expected that there will be an increase in the applications for injunctions due to the new possibility of filing for a blocking injunction when the infringer cannot be identified. The government estimates in its proposal, however, that the yearly amount of such applications would not be more than a few.