POLICY LEVERS FOR BREADTH OF PROTECTION

This chapter directly follows from the previous Chapter 5, which analysed the issue of optimal scope of protection of broadcasters’ related rights, relative to copyright. Chapter 5 noted that the concept of ‘scope’ generally had two aspects – length and breadth of protection. This chapter focuses on the concept of ‘breadth’

of protection. In this regard, the underlying research question in this chapter is

“What are the practical policy dimensions that affect the scope of protection for the related rights of broadcasting organisations?”

[6]-1 INTRODUCTION

Following from the discussions on the relationship between the optimal scope of broadcasters’ rights relative to that of ‘primary’ copyright, Chapter 5 noted some issues in how this relationship is to be construed. Central to this relationship are the various parameters which affect the overall scope of protection for the given subject matter, i.e. the elements zi of the vector z, where ‘z’ is a parameter that represents the overall level of ‘propertisation’.

As noted previously, these parameters are normally separated into the concepts of (i) length and (ii) breadth. While the notion of length of protection is straightforward²⁴³, the concept of breadth of protection is complex as it groups together many different policy parameters and market characteristics. This chapter hence seeks to analyse the various constituent elements of the vector z – i.e., the various technical aspects of breadth and scope of protection, as they relate to the unique subject matter of broadcasting signals. This is done by analysing key features of both the copyright and patent law systems.

By analysing the various policy levers that affect scope of protection in other areas of intellectual property, this chapter concludes that that these levers for protection breadth²⁴⁴ simply have little (or special case) significance to the case of broadcast signals. Hence, it is argued that the element of ‘limitations and exemptions’ should have a very high weighting in the over index z’ (the scope of protection for broadcasters’ rights). Consequently, the discussion attempts to justify the conclusion of Chapter 5 that ‘exemptions and limitations for broadcasters’ rights should be set less than that for general copyright’ (i.e. that indeed zi’* should be less than zi*, where ‘i’ is the ‘restrictiveness of limitations and exceptions and/or fair use doctrines’). This strong focus on limitations and exceptions is also briefly supported through a market correction perspective.

243 See Denicolo (1996), at 251.

244 For an overview of some of the considerations that can affect protection breadth in the case of patent law, see Denicolo (1996).

[6]-2 ELEMENTS OF BREADTH OF PROTECTION

The following section will review some of the key elements that are considered as affecting this breadth parameter, as identified in the literature on copyright and patent law.²⁴⁵ It will then briefly discuss how each element can or cannot be applied as a policy tool in the case of constructing broadcasters’ rights, and manipulating the overall scope of protection

[6]-2.1 Substantive Qualifying Requirements

In order to understand the concept of breadth in patent law, it is important to recall the relevant requirements for patent protection.²⁴⁶ To be eligible for patent protection, an invention or innovation must fall within defined statutory patentable subject matter, and be deemed as having (i) novelty, (ii) non-obviousness or inventive step, and (iii) utility or industrial application.

The novelty requirement ensures that the innovation is indeed a new solution to some technical problem, and is in place to ensure that protection is not given to knowledge which already exists (either under separate protection, or within the public domain). This avoids creating a duplication of rights or deadweight losses which do not correspond to the creation of new knowledge. Similarly, the inventive step or non-obviousness criteria determines whether the technical solution proposed would be ‘obvious’ to a person skilled in the relevant art of the subject matter; this ensures that patent applications are granted only where there is substantial and demonstrable advancement in the technical field, as opposed to minor incremental innovations.²⁴⁷ The third criterion of industrial application or utility, is arguable the least important criterion in terms of impact and economic significance – it requires that the patent application can be demonstrated as having practical value and are implementable in real world environments.²⁴⁸ As patent protection is predicated on an application process, applications are examined to determine whether such requirements are met. Therefore, the

245 As noted previously, patents are construed as having a relatively short length of protection, while having a wide breadth. Copyright on the other hand has a relatively long term of protection and relatively narrower breadth. Given the nature of how these rights are structured, discussions on the concept of ‘breadth of protection’ are more developed in patent literature than for copyright, and as such, many of the factors discussed in this section are drawn from literature on the economic structure of patent law.

246 The case of copyright requirements is discussed in the below sections on subject matter and legal certainty.

247 In some jurisdiction, a separate legal entitlement exists for ‘utility models’ or ‘petty patents’ for incremental innovations that are not substantial enough to qualify for patent protection. However, Utility Models are generally not integrated into the system of agreements that underpins international harmonization of intellectual property policy. For an overview comparison between Utility Models and Patents, see Brack (2009).

248 A common example of an invention that would not meet this criterion would be a perpetual motion machine, as such a machine is not possible to implement, as it would be in defiance of the natural laws of physics.

‘strictness’ of these requirements and extent of examination effectively form a sort of delineation to determine which applications are granted and which are not.²⁴⁹ As such, one of the main factors that affect patent breadth is the stringency of requirements and prudency of examination. This is a function of both direct policy considerations, and institutional capacity. On the policy level, patent requirements are set out in the governing legislation and regulations, and are refined through precedents of the granting authority as well as case law where applicable.

Furthermore, institutional factors such as resource and expertise constraints may affect the prudency of examination, especially in smaller, less developed jurisdictions.²⁵⁰ Therefore, the ability to obtain a patent may differ between jurisdictions (or even subject matter) even where substantive law is relatively similar²⁵¹, thus affecting the scope of protection of the patent system as it determines what applications are able to actually obtain protection.

In the case of copyright, there is no requirement for formal registration to obtain protection.²⁵² As such, there is no notion of a formal examination ex ante to the granting of a right. Copyright is considered as being granted by mere virtue of original authorship of a literary or artistic work.²⁵³ Therefore, one of the main policy dimensions that affect the overall scope of the protection of the copyright

249 The principle of patent grants is the exchange of private exclusive rights for socially beneficial technical information. As such, central to the patent examination process is an evaluation as to whether there is ‘sufficient’ disclosure – i.e. whether the information provided in the claims and description allow for effective reproduction of the innovation. In some jurisdictions, the applicant is also required to disclose the ‘best method’ of executing the disclosed innovation, which may include supplementary information outside of the scope of protection. In such cases, there is a greater degree of information disclosure, which may imply a lower overall effective scope of protection, as such supplementary information if kept secret, may provide some competitive advantage for the innovator, even after the patent has expired (hence providing a form of residual protection by increasing the costs of duplication for competitors).

250 One extreme is to grant patents after applications are examined for formalities only, and no examination is done for compliance with substantive qualifying requirements. Such a system hence amounts to a registration system rather than a search and examination system, as technical validity examination ex post grant is fully delegated to the courts. For a brief overview of how this compares to other regimes, see WIPO (2014) - Policy Guide on Alternatives in Patent Search and Examination. Lemley (2001) goes as far to even suggest that the patent office may make a rational decision to be ignorant of the validity of patent applications, and that courts are able to determine validity more efficiently.

251 Bond and Zissimos (2010) provide a model of asymmetric equilibrium that should how optimal patent breadth can vary across countries, even if countries are identical. These differences arise from policy decisions regarding the role of innovation in overall economic development.

252 Article 5(2) of the Berne Convention states that “The enjoyment and the exercise of these rights shall not be subject to any formality”. This provision is incorporated into international trade law through Article 9 of the TRIPs Agreement. However, which formalities are not necessary for the grant of copyright, some jurisdictions operate voluntary registration systems. Under US copyright law for example, an incentive for registration is given through the provisions that make registration necessary for claims for statutory damages; as such, registration facilitates a wider range of legal remedies in addition to providing increased legal certainty and lower burden of proof in instances of litigation. For a discussion on various rationales for registration, including market-based incentives, see Oliar et al (2014).

253 The issue of the assumption of existence of copyright is discussed in the section below on legal certainty.

system, is the applicable standard for ‘originality’.²⁵⁴ The originality requirement in copyright law is generally considered to be low, particularly relative to the novelty requirement in patent law; in terms of this (which again reinforces the assertion that the cumulative effect of copyright is much broader than that of patents).

[6]-2.1.1 Application to Broadcast Transmissions

A broadcast transmission is generally not required to meet any formal requirements to enjoy protection as a related right. There is no requirement akin to the concepts of ‘originality’ in copyright law, or ‘novelty’ in patent law.²⁵⁵ Therefore, the applicable standards for such criteria do not form part of the policy dimensions which can be adjusted to affect the overall scope of protection.

This lack of qualifying criteria is related to the fact that broadcasting is a technical rather than creative or innovative act, and hence there is certainty in the nature of the subject matter and its characteristics. Furthermore, the nature of a signal itself, independent of the content embedded within, is such that its protection does not constitute a removal of material from any information commons; as such, the very idea of qualifying criteria would not necessarily make sense for this subject matter.

[6]-2.2 Certainty of Subject Matter

Following from the above discussion, it follows that some qualifying criteria in intellectual property rights are continuous in nature. For example, there is conceivably a spectrum of different ‘levels of inventive step’ for a given field of innovation, and the scope of the patent system is partially set by the given standards used by the examining office.²⁵⁶ Likewise, there is conceivably a spectrum of different levels of ‘originality’ for a given class of creative works, and the scope of the copyright system is partially set by defining the level of originality, where any works beneath that level are not able to qualify for copyright protection. Therefore, it can be said that there is some level of inherent uncertainty about the qualifiability of both patent and copyright subject matter.

However, there are more (relatively) discrete criteria that also affect the qualifiability of protection – the concept of protectable subject matter. In both patent and copyright law, the set of protectable subject matter is normally defined by statute. However, given the practically infinite nature of the varieties of

254 As discussed in Chapter 5, the standard of originality for copyright is not only relatively low, but there is a trend in case law in various jurisdiction which suggested that the standard is becoming periodically lower.

255 See Chapter 3 for discussion on this issue, particularly the lack of application of the functionality doctrine for broadcasters’ rights.

256 For example, non-obviousness or inventive step is measured with respect to what a ‘person having ordinary skill in the art’ of the relevant technological field would consider as an obvious technical solution. As such, the way in which this notion of ‘a person ‘skilled in the art’ is construed and interpreted would have implications for the stringency of the non-obviousness criteria. For a discussion on some of the considerations for this concept, see Meara (2002).

different technical and artistic fields, the set protected subject matter is often defined on a negative basis; i.e. it is common for statute to set out what is not protectable subject matter, rather than what is.²⁵⁷ These definitions of protectable subject matter therefore form an important element of the overall scope of both the patent and copyright systems.

Furthermore, the segmenting of different subject matter groups allows for various policy dimensions to be applied differently to different subject matter sub-groups, depending on public policy issues and the nature of the subject matter. While this is not common in patent law, it is practiced in some sub-fields of copyright law.²⁵⁸ In any instance, the policy dimension of defining subject matter groups depends on the degree to which the overall subject matter group is heterogeneous, and the ease of defining sub-groups which are relatively homogeneous. As such, there is an inherent trade-off in stratifying subject matter groupings; on one hand, there is a presumed increase in efficiency, as the system becomes more tuned to the nature of different subject matter classes, and their respective market characteristics and underlying incentives. On the other hand however, the more stratified the system becomes, the more arbitrary the delineations between different subject matter classifications, which necessarily introduces legal uncertainties and ambiguities which might even reduce the effective scope of protection in some cases.²⁵⁹

257 Article 2 of the Berne Convention (which is incorporated into the TRIPs Agreement though TRIPs Article 9) provided a non-exclusive list of the types of works that are included under the general definition of ‘literary and artistic works’. However, Berne Article 2(6) goes on to state that it is a matter of domestic policy “to determine the protection to be granted to official texts of a legislative, administrative and legal nature, and to official translations of such texts”.

Article 27(1) of TRIPs sets out that patents shall be available for “inventions, whether products or processes, in all fields of technology”, while 27(2) and (3) set out conditions and subject matter which may be excluded from patent protection.

258 Under TRIPs Article 12, the minimum length of protection is ‘life plus fifty years’; however, some jurisdictions may choose to offer longer terms, though this longer term need not necessarily be for all classes of works.

259 Consider for example the case of copyright subject matter. It is intuitive that there is substantial certainty in delineating between two very different types of subject matter - for example works of music and works of architecture. The copyright system can thus be fine-tuned to take into consideration the different market characteristics and production incentives of these two classes of works. However, if the subject matter classification of ‘musical works’ is to be further stratified, it might imply making a delineation based on some relative structural characteristic such as genres of music. This would therefore involve some sort of subjective judgment on what constitutes different sub-groups, and introduce legal uncertainties and ambiguity, which reduces the scope of effective protection in the parent subject matter group as a whole. This may be seen as an economic basis for the doctrine of aesthetic neutrality, which provides that in the context of interpreting copyright law, the courts should not make judgments on the artistic merit or social value of works.

This is partially the reason why extravagant symphonic orchestral composition and three-chord punk rock songs attract the same legal protection, despite their presumed differences in market characteristics and production incentives.

[6]-2.2.1 Applicability to Broadcast Transmissions

The technical nature of broadcasting means that there is a high level of certainty about what constitutes broadcast transmission, and hence the subject matter scope is relatively well defined. Furthermore, given that broadcasting is defined for public policy regulation, there is even more certainty as to who possible beneficiaries are. There are however different possible ways to stratify broadcasting signals into sub-groups. Some of the ways to make distinctions between types of transmission include the technology used, the market of the intended transmission, and the geographical basis of the transmission. As such, these distinctions can be used as policy dimensions in constructing the scope of protection for broadcasting organisations. However, given that these distinctions are technical in nature, they more accurately mirror the issue of beneficiary definitions rather than subject matter definitions.

[6]-2.3 Classes of Beneficiaries

The nature of the beneficiaries of a right can also be a policy dimension that affects overall scope of protection. While not generally practiced, it might be possible to legislate different terms of protection²⁶⁰ for different patent owners; for example, it can be stipulated that state or publicly funded research institutions enjoy a patent term shorter than that offered to their private counterparts.

In the field of copyright law, the beneficiary is generally understood to be the

‘author’ or a work; however, copyright may be vested in another party such as an employer under the ‘work for hire’ doctrine where there is an employee-employer relationship, and the work is created in the course of employment. Therefore it is, in principle, possible to define different terms of protection for different beneficiaries.²⁶¹

[6]-2.3.1 Applicability to Broadcast Transmissions

As discussed above, it is indeed possible to make distinctions between broadcast signals depending on technical and market characteristics. In terms of technical mode of transmission, different subject matter in this regard would relate to different types of broadcasters, and hence beneficiaries.

In terms of considering the scope of protection for broadcast transmissions, a key consideration is therefore the types of transmission and broadcasters that are

260 While this part of the discussion deals with different terms of protection, it is included as a factor affecting breadth of protection (as opposed to length), as the policy dimension is based on how the different possible groups of beneficiaries are partitioned. Furthermore, the differentiated treatment can also be on some other practical aspect of protection rather than term length.

261 This is done, as the basis for calculating the beginning of the fixed-protection time is different.

The standard case is to consider the life of the author and add on a fixed statutory length of protection (fifty years minimum), while a different basis for works-for-hire can be the date of publication or the date of production.

afforded protection.²⁶² This is indeed a very critical issue as it relates to the role

afforded protection.²⁶² This is indeed a very critical issue as it relates to the role