First off, please consider this a spoiler alert for non-US readers. In the latest series of Once Upon a Time, available on video streaming service Netflix in the US, the protagonist undergoes a transformation that shocks viewers.
That spoiler (it wasn’t that bad, was it?) alert was directed at non-US viewers because they may not be aware of this character development, or of any other show only streamed via the US Netflix service, due to the geographical nature of copyright.
Copyright, particularly when it protects TV, movies and music, tends to be licensed geographically, be it because the rights are national or because the licensees do not cross-borders.
But in the age of the internet, when those borders become blurred, consumers of that content are being frustrated in their attempts to consume everything, everywhere, all the time, forcing licensees to take extreme measures to stay in accordance with their licensing deals.
At the start of 2016, Netflix announced plans to block those using a virtual private net work (VPN) from accessing its content, while PayPal confirmed in February that it would cut off payment services to websites that promote VPNs to get around so-called geo-blocking, the act of enforcing geographical restrictions on content.
Hillary Wucherer, associate at Quarles & Brady, comments: “With the internet, the ease of digital distribution necessarily comes with it risks for content owners that they will need to continue to try and mitigate. That said, copyright owners necessarily still have the right to place different restrictions on content as they see fit, especially since different markets may present different opportunities for growth and profit.”
Joel Tragesser, also partner at Quarles & Brady, adds: “Infringers will always seek ways to further their activities—the question is that by making that activity as costly and difficult as possible, the copyright owner can at least restrict the number of potential infringers.”
Where geographical restrictions are seemingly unacceptable is the EU, which has a history of breaking down national barriers between intellectual property rights. Just look at the valid-in-28-member-states community trademark, the bundle of national rights that is the European patent, and the soon-to-be-implemented unitary patent, minus Spain of course. Next up in the EU’s cross-hairs is a cross-border portability right.
Indeed, the union of 28 European countries was founded on the Treaty on the Functioning of the EU, of which Article 101 stipulates that any “limit or control production” is “prohibited as incompatible with the internal market”, so the breaking down of barriers where intellectual monopolies are concerned makes political sense.
Step forward the Digital Single Market initiative, outlined last year, proposing new rules to make cross-border e-commerce easier, create a more modern European copyright system, and end “unjustified” geo-blocking.
The European Commission argues that geo-blocking leaves many Europeans “unable to use the online services available in other EU countries [or redirects them to a local store with different prices]. “This is often done without any justification. Such discrimination cannot exist in a single market,” according to its website.
The European Commission also estimates that one in three Europeans are interested in watching or listening to content from their home country when abroad, and one in five Europeans are interested in the content from other EU countries.
Under the Digital Single Market initiative, a regulation has been proposed that would allow consumers to take their digital files or online subscriptions from one EU country to another. It has been dubbed the cross-border portability right.
Andrus Ansip, vice president for the Digital Single Market, said in a statement issued in March 2015: “Our strategy is an ambition and necessary programme of the initiatives that target areas where the EU can make a real difference. They prepare Europe to reap the benefits of a digital future.”
Heather Buchta, partner at Quarles & Brady, says the EU proposal, which would only apply to paid subscription services and those that have verification mechanisms in place, could be welcomed by copyright owners because it “increases the ease with which content can be distributed cross-border, as long as it does not cut into their revenue”.
Mattias Bjärnemalm, board member of the European Pirate Party, however, says the proposal is “quite restrictive, and unfortunately very unlikely that it will lead to global cultural portability”.
“It is hard to categorise copyright owners as a collective and a vast majority of copyright owners do not commercialise their copyright, but in fact share pictures they create freely online, via social media sites such as Facebook, Instagram and Twitter.”
“Those that enforce their copyright per jurisdiction therefore benefit from the current copyright protections in place.”
The European Pirate Party has received comments of concern from members of the movie industry over cross-border portability, because they have built their business models on the current copyright system, which limits access to content per jurisdiction.
Bjärnemalm says they do not need to be concerned about the cross-border portability proposal because it is so narrow. Only those who currently pay for a service in a European member state will be affected by the change, he explains.
“Companies are worrying that this is a slippery slope towards a more unified European copyright that will harm their business model. It’s not necessarily the portability package that’s a problem, but the notion of going towards a harmonised copyright that problematic for copyright holders.”