The Impact of Copyright Industries on Copyright Law

• Author: Anne Kalvi
• Position: Magister iuris, Lecturer of Private International Law, University of Tartu
• Pages: 95-104

Anne Kalvi

Magister iuris, Lecturer of Private International Law, University of Tartu

The Impact of Copyright Industries on Copyright Law

One of the driving forces that generated copyright industries as a phenomenon of the capitalist social order was the introduction of technologies that allowed for creative works to be used in ways different from the old¹. The new types of use resulted in changes of values in society. The changed values propelled interest in information and art, as well as new types of entertainment. The increased interest and the accompanying demand for information, art, and entertainment drove the activities that offered them to develop into an 'industry', and their importance in society grew.

Modern copyright industries provide the central information that is used in other sectors of the information society's economy. Copyright law and copyright are at the centre of economic development in the 21^st century². The status quo raises the question of whether and how copyright industries influence copyright law. The purpose of this article is to answer that question.

In the first part of the article, the author defines copyright industries, stressing the link between copyright and copyright industries as clusters of activities. Copyright industries are characterised on bases that allow for predicting their potential economic interest in copyright law. The author has made unconventional use of socio-philosophical and economic studies of the cultural and entertainment industries in her study of copyright industries. In the second part of the article, the author indicates that the economic indicators of copyright industries prove the indirect influence of these industries on copyright law. In the third part, the author gives examples of how the existence of copyright industries has influenced changes in copyright law. To assess the impact of copyright industries on copyright law, it is necessary to study the consequences of this impact for various interest groups (copyright industries, authors, the public), as well as for the development of society as a whole. Such an analysis requires more extended discussion that is beyond the scope of this article. The author provides a general overview instead of in-depth analysis.

1. Concept and nature of copyright industries

The concept of copyright industries³ can be defined in many ways, depending on the purpose of the definition. The author believes that the cornerstone of studies and descriptions of copyright industries is the idea of the industries as a function of socialisation⁴. Socialisation is understood by the author⁵ as adjustment to the needs of social groups. The needs of social groups change as their mutual relationships develop as regards the different aspects of social life. The approach from the socialisation function standpoint indicates that copyright industries emerge and develop in society at the time and in the ways determined by social relationships and the surrounding environment. Economic life, culture, the social sphere, and law influence the emergence and development of copyright industries; copyright industries in turn influence the changing of the economic sphere, culture, the social sphere, and law.

Based on the hypothesis of the study and the Estonian Copyright Act, the author defines copyright industries as economic activities closely related to the substantive rights of authors and other creative artists that are carried out as an independent industry or within a conventional industry, covering:

- printing and publishing of books, periodicals, etc., and music publishing;

- musical performances and sound recordings;

- theatre;

- film industries, cinemas, and video distribution;

- software industries;

- database and multimedia industries;

- online services;

- broadcasting;

- architecture;

- the visual arts;

- applied art;

- certain types of design (textile or clothing design);

- photography;

- advertising;

- other, similar production and distribution; and

- collective or individual management of rights and licensing⁶.

The author of the article uses 'industries' within the above definition of copyright industries in a special meaning as clusters of activities. The author's approach is based on the approach of WIPO (the World Intellectual Property Organization): 'industries' mean clusters of activities that can be identified and are statistically measurable, as well as activities that have a certain scale and structure⁷.

From the macroeconomic or statistical classification angle⁸, copyright industries are not industries or a branch of industry⁹, as this field cannot be delimited institutionally - i.e., as a set of independent industrial enterprises¹⁰. Instead of copyright industries with a single economic organisation, there is plurality of copyright industries¹¹. The differences in economic organisation arise from development of copyright industries based on the way the copyright-based product reaches the consumer¹². In view of these circumstances, the Ministry of Culture of the Republic of Estonia uses the term 'creative economy' instead of 'copyright industries'¹³. The creative economy is defined in Estonia on the following mainstays:

1. reliance on an idea, talent, skills, and/or verbal creative work and

2. the concepts of copyright and intellectual property¹⁴.

In the Estonian study, the creative economy covers ten sectors: architecture, design, the visual arts, museums, music, theatre, literature and publishing, audiovisual arts, advertising, and entertainment software (computer games etc.)¹⁵.

The mainstays and sectors of the Estonian creative economy directly refer to the UK definition of creative industries¹⁶. The Estonian concept of creative economy is not identical to that applied under the WIPO approach and by the author of this article to copyright industries or to WIPO's approach to the creative industries. According to WIPO, 'creative industries' is a broader concept, covering cultural industries and all live and industrial artistic and cultural production (including the production of single articles)¹⁷.

The majority of the economic activities of copyright industries are closely related to the use of authors' rights. The conditions of exploitation of an author's rights are prescribed by copyright law¹⁸. Consequently, copyright law influences the bases and conditions of the economic activities of copyright industries. To be more exact, copyright law is the legal framework for market transactions involving the results of creative work¹⁹. In the global economy, protection of copyright creates the basis for copyright industries. Copyright is thus a powerful source of economic growth, job creation, and trade stimulation²⁰. These arguments give rise to a hypothesis that copyright industries may have a potential interest in influencing copyright law in a direction beneficial for copyright industries.

Copyright industries have a certain function of a producer and communication intermediary. An author's work or a performing artist's performance becomes an ordinary commodity via the role of copyright industries. The role of copyright industries as communication intermediary allows such commodities to be distributed to the persons interested in those commodities. At the same time, the communication intermediary's role enables copyright industries to have control over what content is intermediated and to whom, especially in the Internet environment. These two roles of copyright industries are closely related to the exercise of the author's substantive rights - specifically, the right to reproduce and distribute the work or communicate it in an intangible form. The author's substantive rights are provided for by copyright law. One may presume that copyright industries have an interest in copyright law, owing to their position in society.

The economic activity of copyright industries as producers and distributors is mainly carried out in the private sector²¹. Because of the incidental nature of, and a certain non?elasticity in, the demand for cultural products²², copyright industry activities have always been considered a risky business. Despite the financing risks, investment in copyright industries or in some of their activities has grown popular and profitable as society becomes more prone to exploit and value information and symbols. Good examples can be found in the US copyright industries²³. Reduction of high risks through suitable legal regulation is the next potential presumption as to why copyright industries may be interested in influencing copyright law.

In examining the social dimension, it should be noted that it was thanks to copyright industries that social groups of authors and other creative artists emerged. Copyright industries cannot function without authors and performers. Hence, copyright law that completely inhibits the creative work of authors and performers could not be in the interest of copyright industries.

2. Impact of copyright industries on copyright law via economic effects

The author of this article sees the impact of copyright industries on copyright law in the enactment of legal rules that are beneficial, or the non-enactment of legal rules that are non-beneficial, to copyright industries. Lobbying among politicians and officials is an instrument of influence for copyright industries. Lobbying may be conducted on various territorial levels: domestic, regional, and global. Although lobbying is one of the backstage areas for development of today's copyright law and policy, it is usually not addressed by scientific sources dealing with copyright²⁴. Because of the scarcity of these sources, it is difficult to demonstrate the impact of copyright industries' lobby on...