This Presentation is based on the joint IFRRO WIPO Publication on Collective Management in Reprography  written by Tarja Koskinen-Olsson, April 2005

International Legislation

The foundation of modern copyright law is the Berne Convention. The right of reproduction is often said to be the cornerstone of copyright.
According to Article 9 of the Berne Convention, the author of a literary or artistic work has the exclusive right of authorising or prohibiting the reproduction of his work in any manner or form. Reproduction, or copying, takes place in many different forms, such as:

  • printing
  • photocopying
  • scanning
  • digital copying (for instance on CDs and DVDs)
  • electronic storage in databases.

The exclusive right to authorise or prohibit the reproduction of a work may be subject to limitations or exceptions under the Berne Convention. According to Article 9 (2) of the Berne Convention 'It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author'.

The scope of exceptions and limitations is also restricted by the contents of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The TRIPS Agreement is administered by the World Trade Organization (WTO). Article 13 of the TRIPS Agreement states: 'Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the interests of the right holder'.

The new WIPO Copyright Treaty (WCT) states the same principle in its Article 10.
In the light of these regulations, limitations or exceptions are only allowed if three conditions are fulfilled (so called three-step-test), namely:

  •  Limitations or exceptions concern only 'special cases', and are not generalised;
  • They do not conflict with the normal exploitation of the work;
  • They do not unreasonably prejudice the legitimate interests of the right holder.

The above criteria for restricting exclusive rights are cumulative; they must all be met in order for restrictions to be permissible.

The effects of photocopying may be different to those of digital copying. Consequently, the proper legislative solution for each of these two cases of copying may be different.

European Union Legislation

The Directive on the harmonisation of certain aspects of copyright and related rights in the information society (Directive 2001/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 May 2001) deals with the reproduction right and possible exceptions and limitations.
The relevant Articles are:

  • The reproduction right (Article 2);
  • Exceptions and limitations (Article 5).

According to Article 2: ?Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part for authors, of their works...?

Article 5 states that Member States may provide for exceptions or limitations to the reproduction right among others on reprography: 'in respect of reproduction on paper or any similar medium, effected by the use of any kind of photographic technique or some other process having similar effects, with the exception of sheet music, provided that rightholders receive fair compensation'.
The Directive introduces the concept of fair compensation to certain exceptions and limitations, including reprography. This is a minimum requirement, and Member States may provide for an exclusive right, and arrangements concerning management of right.

Preamble 18 of the Directive mentions 'extended collective licences' as management arrangements.
Preamble 35 of the Directive offers guidelines for national legislators on this new concept of fair compensation. It states: ?In certain cases of exceptions or limitations, rightholders should receive fair compensation to compensate them adequately for the use made of their works (emphasis added)?.  The Directive leaves the determination of the form, detailed arrangements and the level of such fair compensation to the Member States.

National Legislation

National copyright legislation needs to be in harmony with commonly accepted international and regional norms.
Since the right of reproduction is an exclusive right, limitations or exceptions should not jeopardise this point of departure in national legislation. Consequently, wide-spread photocopying should not be left unremunerated in cases of mass exploitation.
National legislations may include 'free uses' i.e. no consent and no remuneration only in carefully designed special cases. General 'fair use' or 'fair dealing' provisions may lead to a situation where licensing and/or remuneration become impossible. For instance, massive photocopying takes place in universities and other educational premises. If photocopying in these institutions takes place without the consent of, and remuneration to, rights holders, it may prejudice their legitimate interests.

There should be a balance between the legitimate interest of rights holders and that of users. RROs play a major role in society, facilitating rapid and lawful access to information in a relatively inexpensive way. They are also guardians of a propitious environment of  creativity, i.e. fair remuneration to rights holders and incentive for future creations.

Voluntary Collective Licensing

In voluntary collective licensing, the RRO issues licenses to copy protected material on behalf of those rights holders who have given it a mandate to act on their behalf.
Since the right of reproduction is an exclusive right, it is natural to establish the collective management of reprographic reproduction rights on a voluntary basis. 
RROs obtain licensing authority from mandates given by national rights holders, and the international repertoire through bilateral agreements with RROs in other countries. These bilateral agreements are based on the principle of reciprocal representation.
Many RROs, especially in the Anglo-American (common law) tradition, base their activities generally on voluntary contracts.
In the United States, collective licensing through Copyright Clearance Center (CCC) is based solely on non-exclusive contracts. Authors and publishers determine which works are to be included in different licensing programmes. In some programmes they can set the prices individually for each work.
Even in the case of voluntary licensing, copyright legislation may include stipulations that govern the activities of the RRO. Copyright Licensing Agency Limited (CLA) in the United Kingdom operates under the following provisions of the Copyright Act:

  • CLA must be officially recognised as the national RRO.
  • In cases where licences are available, free use provisions ? such as in the field of education (?fair dealing?) ? cease to apply.
  • A Government Minister oversees licensing schemes and licensing bodies, and may extend the scope of existing licensing schemes.
  • A Copyright Tribunal adjudicates in disputes between users and licensing bodies.

In Japan, the Copyright Law provides for the author's right of reproduction with certain limitations on this right. The Special Law on Management Business of Copyright and Neighbouring Rights has been in effect as from October 2001. Under this law, the Japan Reprographic Rights Center (JRRC) was registered and designated as a management business operator in 2002.
In Colombia, Centro Colombiano de Derechos Reprográficos (CEDER) obtained  governmental recognition as a collective management organisation in 2000, and the necessary authorisation for operation was granted in 2002 by the relevant government authority (Dirección National de Derecho de Autor). These allow CEDER to act as a reproduction rights organisation in Colombia.
There are countries where legislation clearly encourages rights holders to establish reproduction rights organisations. For instance, the Jamaica Copyright Act of 1993 allows for certain limitations and exceptions in the right of reproduction, in cases where voluntary licensing is not readily available. After the establishment of Jamaican Copyright Licensing Agency (JAMCOPY) such photocopying became subject to a licence.

Voluntary Licensing with Legislative Support

Voluntary licensing is, in some countries, supported by legislation. The underlying idea is to guarantee a fully covering licence vis-à-vis users. Since no collective management organisation can represent all rights holders in its own country, let alone all countries of the world, legislative support covers the situation of non-represented rights holders. RROs operate under two legislative support mechanisms: extended collective licence and compulsory collective management.

Extended Collective Licence

An extended collective licence extends the effects of a copyright licence to also cover non-represented rights holders. The RRO issuing the license must also distribute the remuneration to non-represented rights holders.
It is important that licensing negotiations take place on a voluntary basis, and there is a possibility of either authorising or prohibiting the use of works. This is the very nature of exclusive rights. However, users may have a legitimate interest in securing their situation vis-à-vis such rights holders as are not represented by the organisation.
During the 1970s the Nordic countries adopted a legislative solution called the extended collective licence. Under these laws, agreements between users and organisations representing a substantial number of rights holders in a given category of works will be extended by virtue of the law to cover all rights holders in that category (the extension effect). The system is best suited to countries where rights holders are well organised.
The characteristics of an extended collective licence are:

  • The RRO and the user conclude an agreement on the basis of free negotiations.
  • The RRO must be nationally representative.
  • The agreement is by law made binding on non-represented rights holders.
  • The user may legally use all materials, without the possibility of receiving individual claims from outsiders or having to face criminal sanctions.
  • Non-represented rights holders have a right to individual remuneration on the basis of the law.
  • In most cases, non-represented rights holders have a possibility of prohibiting the use of their works.

In Denmark, collective management organisations must be approved by the Danish Ministry of Culture. To qualify as an organisation under the extended collective licence system, Copy-Dan has to represent a substantial number of rights holders of a certain type of work used in Denmark. An agreement concluded between users and Copy-Dan gives the user the right to exploit the works of represented and non-represented rights holders.
Starting originally in the Nordic countries, this legal technique has also been adopted in Malawi  and Russia, and is under consideration, inter alia, in Canada.

Compulsory Collective Management

Management of the right of reproduction as an exclusive right is a voluntary act, but in cases of compulsory collective management rights holders cannot make claims on an individual basis.
In 1995, the legislation in France introduced, for the first time, the concept of compulsory collective management in the area of reprographic reproduction rights. Even though the management of rights is voluntary, rights holders are legally obliged to make claims only through a collective management organisation. This safeguards the position of users, as an outsider cannot make claims against them.  The agreements with users can only be made by an organisation approved by the Ministry of Culture.
Compulsory or obligatory collective management is used in other licensing areas besides reprography. This legal technique forms the basis for the management of cable retransmission rights in a number of European countries.

Legal Licence

The licence to photocopy is given by law and consequently no consent from rights holders is required. They have, however, a right to remuneration which is collected by an RRO.
If the royalty rate is determined by statute, the system can be called ?a statutory licence?. If rights holders can negotiate the royalty rate with the users ? although they are not able to refuse authorisation ? the term ?compulsory license? can be used. Both statutory and compulsory licences fall under the broader term of legal licences, and the management of rights is non-voluntary.
Reproduction for private use is a special case. Traditional licensing systems would not be workable. In many countries? legislations, copying for private use is free. However, reproduction for private use can be compensated indirectly, and should be compensated in cases of high copying volumes. Equitable remuneration or fair compensation through levies on equipment is a feasible solution. There can, in addition, be a levy on the underlying material, i.e. photocopying paper.

Such indirect remuneration through levies on carriers and equipment is widely used in the field of private audio and audiovisual copying. For reprography, it has been applied since 1985 when it was introduced in Germany. The levy system can be complemented by an operator levy, reflecting the high copying volumes by some user groups.

Non-voluntary System with a Legal Licence

The permission to photocopy is given by law. Rights holders have a right to receive equitable remuneration or fair compensation. The remuneration is collected by an RRO and distributed to rights holders.
In some countries, a legal licence is only introduced for education and for government copying. In others, a legal licence covers all copying.
In Australia, an educational statutory licence and government copying provisions are part of the Australian Copyright Act of 1968. Copyright Agency Limited (CAL) is the declared collecting society for the administration of the educational statutory license and the government copying provisions.  For other sectors, such as businesses, voluntary licences are offered.

A similar legislative approach was introduced in the Netherlands. Educational institutions, libraries, government agencies and other institutions working in the public interest have been able to issue photocopies for internal use to students, mutual lending between libraries and to civil servants respectively, provided that fair compensation is paid to the national RRO, Stichting REPRORECHT. The reproduction right fee is set by statute.   An amendment of the Dutch Copyright Act of 1912, accepted in March 2002, extended the effect of the legal licence. After a legislative process lasting some years, it now covers the public sector and the business sector.

In Switzerland, a legal licence covers schools, public administration, libraries, copy-shops, services, industry and trade. Tariffs are negotiated between the national RRO, ProLitteris, and users? associations. Thus, tariffs are agreed and not fixed by statute. They are, however, subject to ratification by the Federal Arbitration Commission.

Private Copying Remuneration with a Levy System

A small copyright fee is added to the price of copying equipment such as a photocopying machine. Producers and importers of equipment are liable for paying the fees (levies) to the RRO, which then distributes the collected revenue to rights holders.
Much photocopying takes place by private individuals. Private copying remuneration through a levy system guarantees payment to rights holders.
The levy system is often composed of two elements:
1. Equipment levy on hardware, such as copy-machines, fax machines, reader printers, scanners, multifunctional devices and CD and DVD burners;
2. Operator levy (a ?user fee?), payable by heavy photocopiers such as schools, colleges, universities, libraries, and government and research institutions.

In most countries, there is a combination of an equipment and operator levy. In a few countries only an equipment levy is payable (Czech Republic, Greece and Romania). There are also two countries where legislation provides for a levy on the underlying material, i.e. photocopy paper (Nigeria and Poland, in principle but not operational).

In Belgium, to take an example from a country with an equipment and operator levy, the system functions as follows: Producers, importers and (EU) intracommunity purchaser have to pay a fixed amount for all photocopying devices that come onto the Belgian market. The law considers these devices ?contribution debtors?. Photocopying devices are: copying and fax machines, duplicators, office offset machines and scanners. The operators? levy functions as follows: All natural and legal persons copying copyright works on a machine under their charge, supervision or control, have to pay remuneration proportional to the number of copies made of copyright works. The law considers them ?remuneration debtors?. They are mostly enterprises, copy shops, government institutions, schools, associations, independent workers, professionals and individuals.

In Spain the law provides only for an equipment levy. Article 31 of the Spanish Copyright Act states: ?The reproduction of the work may be carried out with no specific and prior permission of the right holder when it is made for the private use of the copier and these copies are made neither for profit nor for collective use.? Article 25 provides for compulsory remuneration to the rights holders in order to compensate these copies for private use (emphasis added). The fee is established by law and covers photocopiers, multifunctional devices and scanners (September 2004).  Since no operators? levy is included in the Spanish legislation, Centro Español de Derechos Reprográficos (CEDRO) operates a voluntary licensing system outside private copying. It is thus a mixed system that is run in parallel: an equipment levy to compensate rights holders for private copies, and voluntary licences for users who need to make non-private copies.
The levy system has also been introduced in a number of other countries, such as Bulgaria, Ecuador, Italy, Peru, Republic of Korea and Slovenia.

In Summary

All the different legal systems have proven to be functional, and substantial earnings have been collected to the benefit of authors and publishers around the world.
During the year 2003 the total domestic collection for reprography and certain digital uses by RROs around the world was 380 Million euro. Division under different operating systems  is as follows:

  • Voluntary collective licensing: 156 million euro
  • Voluntary licensing with legislative support: 83 million euro
  • Legal licenses: 141 million euro

Whichever option is chosen, the establishment of an RRO will provide an important support mechanism for copyright legislation and increase the earnings of national rights holders, thus encouraging and supporting their creative input and investment.