File Sharing

Justyna Janicka
Jagiellonian University of Cracow
Poland
Erasmus student
Aristotle University
Faculty of Law
justyna@jagkancelaria.eu




FILESHARING

INTRODUCTION. HISTORY OF FILE-SHARING

In last few years the file-sharing computer programmes has become increasingly popular with Internet users and has caused concern for lawyers and the representatives of rightholders.
The term file-sharing refers to the providing and receiving of digital files over the Internet network by using the networks of a special architecture.

USENET was the first global file-sharing network, although main idea of Tom Truscott and Jim Ellis, who conceived USNET network in 1979 was to create a network for exchanging news and communicate with other users. In USENET network users can read and post public messages (called articles or posts, and collectively termed news) to one or more categories, known as newsgroups. In USENET network files can be posted to newsgroups by users and copies are propagated to all hosts that carry that particular group. Requests for a file relies on people asking other users to post them, and users save them if they want those files.

In 90s the first generation of peer-to-peer(p2p) file sharing networks was developed. The first generation of peer-to-peer file sharing networks had a centralized server system, which controls traffic amongst the users. It was called server-client protocole.
The servers store directories of the shared files of the users and are updated when a user logs on. In the centralized peer-to-peer model, a user would send a search to the centralized server of what they were looking for. The server then sends back a list of peers that have the data and facilitates the connection and download. Programs marked themselves by inquiries to a server, either the data to the download held ready or in appropriate different Peers and so-called Nodes ( an active electronic device that is attached to a network, and is capable of sending, receiving, or forwarding information over a communications channel ) further-obtained, so that one could download there.
The example of first generation of peer-to-peer file sharing network was Napster, created by Shawn Fanning, operating between June 1999 and July 2001. The music industry made the following claims against Napster :that its users were directly infringing the plaintiff's copyright; that Napster was liable for contributory infringement of the plaintiff's copyright; and that Napster was liable for vicarious infringement of the plaintiff's copyright. The court found Napster guilty on all three claims. Napster lost the case in the District Court and appealed to the U.S. Court of Appeals for the Ninth Circuit. Although the Ninth Circuit found that Napster was capable of commercially significant non-infringing uses, it affirmed the District Court's decision. On remand, the District Court ordered Napster to monitor the activities of its network and to block access to infringing material when notified of that material's location. Napster was unable to do this, and so shut down its service in July 2001.
After that date it was changed into a fee-based service. Another example is Soulseek, which is still operating.

Second generation of file-sharing networks was decentralized. One of the first was Gnutella. In Gnutella network all nodes were equal, which cause problems of overload of the network (so called bottlenecks). To solve this problem, Niklas Zennström from Sweden, Janus Friis from Denmark and Estonian programmers headed by Jaan Tallinn created FastTrack peer-to-peer protocol.
By electing some higher-capacity nodes to be indexing nodes, with lower capacity nodes branching off from them, FastTrack allowed for a network that could scale to a much larger size.

The third generation of peer-to-peer networks are those that have anonymity features built in. The example of that networks is I2P network (originally short for Invisible Internet Project)
A degree of anonymity is realized by routing traffic through other users' clients, which have the function of network nodes. This makes it harder for someone to identify who is downloading or who is offering files. Most of these programs also have strong encryption to resist traffic sniffing.

Fourth generation of peer-to-peer network consist of services that send streams instead of files over a P2P network. Thus one can hear radio and watch television without any server involved the streaming media is distributed over a P2P network. It is important that instead of a treelike network structure, those networks are using a swarming technology. It means that instead of connecting with only one peer, which is indexed in the searching engine of the network, the client connects to the tracker, from which it receives a list of peers currently transferring pieces of the file(s). The client connects to those peers to obtain the various pieces. Such a group of peers connected to each other to share a file is called a swarm.

Proliferation of high-speed Internet connections and small, compressed files, offering high quality audio and video formats increased the popularity of file sharing networks.
Using those networks is legal, however many users are using it for violating copyright and related rights. Peer-to-peer networks can be used for transferring audio and video files, text files or computer software, or even databases files. Some of them might be protected under copyright or related rights, moreover databases might be protected under sui generis protection rights.
Downloading mp3 and avi files from peer-to-peer network has become very popular nowadays. Internet users have got possibility to have the latest movie, e-book or CD without paying any costs and even without leaving their homes. People has adopt the attitude that the latest works are available for free, and buying CDs or DVD and even books is no longer popular. That kind of situation has become incredibly dangerous for people involved into music and movie showbusiness and has a great impact to investors from placing their money into the production of works which may not return a profit .
However, not every kind of work is protected. Economic copyright right as well as related rights are limited by time. Moreover, some files may be not protected, because they are not fulfilling all the requirements, which are needed for a work to be protected under copyright or related rights. Furthermore some of artists want to give the access for their works for free, because they want to gain popularity and become famous, but they can not find an investor to promote their works. Some of them want to share their works, but only on certain conditions.
For that artist peer-to-peer networks are giving a lot of opportunities and might be really useful.

ADVANTAGES OF FILE-SHARING NETWORK

After the act of creation a work, which meets the requirements of a copyright law to be protected, every author, who created that work is the holder of two types of rights: copyright economic rights and copyright moral rights. The same thing should be said about the holders of neighbouring rights.

Moral rights can not be transferred into another person, but that situation is possible while taking into consideration economic rights. According to the general conception of copyright and related rights, author and the holder of neighbouring rights are the holders of several different rights, connected together. That linked rights are called sometimes as a “bunch of rights”.The author can transfer all the rights together, or can remain the holder of some of them and allow other people to use his works under some conditions. This allowance is done by a contract which is called licence.
Licence agreements may be constructed in a various way, depends on the aim, which parties want to achieve. In the most popular form of the contract copyright holder may grant another party a non exclusive or exclusive license to copy, distribute or use in a different way, for example for making an adaptation of his work in a particular region or for a specified period of time.

Requirements about the form of a transfer of copyrights or a contract of licence, for making the contract void are various, depends on the national law. As far as I know the general tendency is to require written form, signed by both parties or just by transferor to make the transfer of rights void.
The same rule is applied for exclusive licence. Non exclusive licence usually does not meet formal requirements and usually is concluded by silent behaviour of the parties ( without signing any document). Usually an author or a holder of neighbouring rights expects to gain a honorarium because of license the other party to use his works. However, the honorarium is not a necessary requirement for the contract of licence, in other words there is a category of free licences.

The most popular types of free licences was prepared by non government and non-profit organisation called Creative Commons, founded in 2001 in San Francisco.
The aim of this organisation is to increase the amount of creativity and to increase the flexibility of copyright by helping the creators to change their copyright terms from the default of “all rights reserved” to “some rights reserved”.
The organization in 2002 has released first version of several copyright licenses known as Creative Commons licenses. These licenses allow creators to communicate which rights they reserve, and which rights they waive for the benefit of other creators. The original set of licenses all grant the "baseline rights". The details of each of these licenses depends on the version, and comprises a selection of four conditions:
- Attribution (by): Licensees may copy, distribute, display and perform the work and make derivative works based on it only if they give the author or licensor the credits in the manner specified by these.
- Noncommercial or NonCommercial (nc): Licensees may copy, distribute, display, and perform the work and make derivative works based on it only for non commercial purposes.
- No Derivative Works or NoDerivs (nd): Licensees may copy, distribute, display and perform only verbatim copies of the work, not derivative works based on it.
- ShareAlike (sa): Licensees may distribute derivative works only under a license identical to the license that governs the original work. (so called copyleft).
Work licensed under a Creative Commons License is protected by copyright applicable national law. Moreover, all European Union legislation is applicable to that work. This allows Creative Commons licenses to be applied to all work protected by copyright law.
However, the license may not modify the rights allowed by fair use or fair dealing or exert restrictions which violate copyright exceptions. Furthermore, Creative Commons Licences are non-exclusive non-revocable. Any work or copies of the work obtained under a Creative Commons license may continue to be used under that license.
Taking into consideration all mentioned above, it is easy to notice that peer-to-peer networks seem to be perfect medium for sharing works under Creative Commons Licences. Networks gives cheap and really fast opportunity to make works accessible for other users, so that the author may became well known easily and without any expenses for promotion and advertising.
Works protected under the terms of Creative Commons Licences can be uploaded and downloaded without violating copyright rules. That situation is profitable not only for authors, but for the audience as well. Peer-to-peer networks users can easily gain the access for sometimes really valuable and artistic works, such as books, films, music, articles, photographs and so on, without paying for it.
Moreover, it can stimulate young authors to create derivative works, which can improve the quality and value of original one. It is also a great possibility for creative cooperation of artists all over the world. Peer-to-peer networks can give the opportunity for them to contact and cooperate, without knowing each other live, so because of it they can be involved together into a development of an artistic project, even if they do not have a possibility to meet. While sharing files, artists can find somebody who has similar artistic interest and share not only their works, but experience and pieces of advice as well.
The positive impact of cooperation can be really easily noticed while taking into consideration computer programmes, called as well software. The process of writing new software lasts long, requires great knowledge and experience, so that huge software corporations are the place of work for a lot of highly skilled and qualified programmers. Because the costs of creating a new software is really high, software producers are trying to sell their products on very high prices. The way how is the source code of program ( the human-readable form of the program ) is written is the matter of copyright since 1980, when copyright law was extended to computer programs.
Computer programs are basically protected as a literary works according to Article 1 of Directive 91/250/EWG. It can be the cause of the problems with development of software, because when one software corporation face the difficulties with writing a new software they have to search for the solution only inside their corporate team. What is more, the strict and closed system of copyright protection of source code of software gives a lot of advantages for the software producers, and because of it it has a huge economic impact into consumers and very often can be used to the detriment of consumers interests.
However, in the past the regime of protecting software was different. In the 1950s, 1960s, and 1970s, it was normal for computer users to have the freedoms that are provided by free software. Software was commonly shared by individuals who used computers and by hardware manufacturers who were glad that people were making software that made their hardware useful. In the 1970s and early 1980s, the software industry began using technical measures (such as only distributing binary copies of computer programs) to prevent computer users from being able to study and modify software. In 1980 copyright law was extended to computer programs.
Because of reasons mentioned above, some individuals starts to be against that kind of software producers behaviours and they were thinking that in order to improve software products cooperation between software programmers is needed. That thought has made Richard Stallman to launch a new movement called “The Free Software Movement”(abbreviated FSM), by founding the GNU Project in 1983.
The Free Software Movement is a social movement which aims to promote user's rights to access and modify software. The alternative terms "libre software", "open source", and "FOSS" are associated with it. To support the new movement, The Free Software Foundation(FSF) was founded in October 1985.
Free software is software that can be used, studied, and modified without restriction, and which can be copied and redistributed in modified or unmodified form either without restriction, or with minimal restrictions only to ensure that further recipients can also do these things and to prevent consumer-facing hardware manufacturers from preventing user modifications to their hardware.
The first formal definition of free software was published by FSF in February 1986. That definition, written by Richard Stallman, is still maintained today and states that software is free software if people who receive a copy of the software have the following four freedoms:
- Freedom 0: The freedom to run the program for any purpose.
- Freedom 1: The freedom to study and modify the program.
- Freedom 2: The freedom to copy the program so you can help your neighbour.
- Freedom 3: The freedom to improve the program, and release your improvements to the public, so that the whole community benefits.
Freedoms 1 and 3 require source code to be available because studying and modifying software without its source code is highly impractical. Thus, free software means that computer users have the freedom to cooperate with whom they choose, and to control the software they use. The antonym of free software is "proprietary software" or "non-free software.
Later on in 90s, the similar definitions where given by other groups, involved into the development of free software movement, that is Open Source Initiative and Debian Project, which published Debian Free Software Guidelines.
It is important to make a distinction between free software and freeware, which is proprietary software made available free of charge. Users usually cannot study, modify, or redistribute freeware.
It is noticeable while analysing the definition of free software given by Richard Stallman, that free software have to be purchased under special type of copyright licence, in order to guarantee the users of the software freedoms mentioned in the definition.
Peer-to-peer networks are giving enormous possibilities for free software programmers as well as for users. Programmers can use source code written by somebody else to create a new program, to solve a problem with already written software or to find an inspiration for creating completely new software. They can ask for help in order to improve their software, so that people all around the world can cooperate together, without any expenses. What is more, programmers by making their works available in peer-to-peer networks can cooperate with consumers as well. Users of peer-to-peer networks can download the recently designed software and help programmers to check it in order to find possible bugs. The advantage for consumers is huge, because they are provided with recently designed software, which gives new possibilities while using it, and because of cooperation with a lot of people might be of better quality and with bigger chance of eliminating all possible mistakes during the checking of the code for so many users. Finally, free software is usually provided to its users for free or at really little costs.

FAST EXCHANGE OF INFORMATION

Another significant aspect of peer-to-peer networks is the fact, that those kind of sharing files provides the possibility of really fast and efficient exchange of information among network users. Because of the structure of peer-to-peer networks and aforementioned mechanism of operating of that kind of networks, it gives really cheap and fast access to networks resources. What is more, peer-to-peer networks protects shared files in case of failure of centralized server or accidental file deletion.
An important goal in peer-to-peer networks is that all clients provide resources, including bandwidth, storage space, and computing power. Thus, as nodes arrive and demand on the system increases, the total capacity of the system also increases. This is not true of a client-server architecture with a fixed set of servers, in which adding more clients could mean slower data transfer for all users. In a file sharing environment, a large number of users can access a program as though it were on their local machines, when actually the program resides on a single file server. This is a great benefit to small workstations, where disk space is at a premium. A user can have access to a much larger program repertoire than could fit on a private disk.
The distributed nature of peer-to-peer networks also increases robustness in case of failures by replicating data over multiple peers, and in pure P2P systems by enabling peers to find the data without relying on a centralized index server. In the latter case, there is no single point of failure in the system. By having a resource reside physically on a single server, then distributed throughout the network, one can greatly simplify administration. First of all, one reduces the number of copies of various programs that need to be maintained on the network. Secondly, one reduces the problems involved in performing backups for a number of machines dispersed over a wide geographical area. By keeping files in a single location, this task becomes comparable to backing up a single machine. Centralizing files on a few file servers not only simplifies administration, it helps maintain consistency of shared data files. When changes are made to a shared file, they become available to all users immediately.
Because of it, peer-to-peer networks might be useful for educational purposes, for example in University peer-to-peer network academics and students may use this technology to share their work in order that others can provide critical comment. Moreover, a lecturer might use peer-to-peer network to make material available to his or her students. Finally students may share their own notes in order to help others to prepare for an exam. That system does not require a lot of expenses, because there is no need to buy an expensive centralized server of big capacity and the architecture of the network helps to reduce other costs (the costs involved in such a network are hardware, cabling and maintenance ). Same reasons are good justification for applying peer-to-peer networks for associate people who are sharing same interest (for example artists, graphic designers, musicians) and help them to exchange their experience and develop their skills.


THE LEGAL FRAMEWORK

Among EU legislation, following directives may apply to file-sharing acts:

- Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
- Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs
- Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases.
- Directive 2006/116/EC of the European Parliament and of the Council of 12 December 2006 on the term of protection of copyright and certain related rights (codified version, which repealed Council Directive 93/98/EEC of 29 October 1993)

Moreover, Member States of European Union signed a lot of international conventions and agreements, concerning copyright and related rights. The most significant and signed by all Member States are :

- Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886, revised several times, last time in Paris in 1971.
- Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) of 1994

Neither Directive 2001/29/EC nor other directives and international conventions are giving an exact definition of copyright. Even the subject of copyright in Directive 2001/29/EC is not defined precisely. Usually definition of a subject of copyright can be found in national law.

In general copyright is a legal concept, which gives a person, who created an original work, being the author's own intellectual creation reflecting his personality, certain exclusive rights. According to article 9 of TRIPS, copyright does not cover ideas and information themselves, only the form or manner in which they are expressed.

Related rights are exclusive rights which are similar to authors' rights but which are not connected with the authorship of the work, for example certain rights of performers, phonogram producers, film producers and broadcasting organisations.

Those exclusive rights can be divided into economic rights and moral rights.
Moral rights are a subset of the rights of creators of copyrighted works, including the right of attribution, the right to have a work published anonymously or pseudonymously, and the right to the integrity of the work. An author is rightholder of moral rights even when economic rights were transferred.
Performers, phonogram producers, film producers and broadcasting organisations have similar subset of moral rights as authors, depending on their role in creating a subject of related rights (for example when performance is recorded and published as a DVD record, performer can not published it anonymously, even when he do not inscribe his name on DVD record, he can be recognised.)
According to point 19 of preamble of Directive 2001/29/EC , moral rights remain outside the scope of that Directive. Definition of moral rights is given in article 6 bis of Bern Convetion. According to it, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honour or reputation.

Economic rights mentioned in Directive 2001/29/EC, important while concerning file-sharing are:
- Reproduction right (article 2 of Directive and art 9 of Bern Convention)
- Right of making available to the public other subject-matter (article 3 of Directive and article 11bis of Bern Convention)

Reproduction right in copyright according to Directive 2001/29/EC is the exclusive right of author to authorise or prohibit direct or indirect, temporary or permanent reproduction of his works by any means and in any form, in whole or in part.
Similar regulation is provided for related rights: related rights rightholders have exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction of fixations of performances, phonograms, original and copies of films and fixations of broadcasts.

Right of making available to the public is the exclusive right to authorise or prohibit any communication to the public of authors works, by wire or wireless means, including the making available to the public of works in such a way that members of the public may access them from a place and at a time individually chosen by them.

During the process of file-sharing two acts can be distinct: the downloading, which allows the user to retrieve the file made available by another user, and make a copy of it into users hard disk, and the making available of the file, which gives third parties the ability to access it. Usually file-sharing software does not allow users only to download files, without sharing anything.
It is easy to notice that during the process of file-sharing files protected under copyright or related rights, downloading, which allows user to create the copy of protected work may affect the reproduction right of authors and the holders of neighbouring rights, while the act of making the file available to download can affect the right of making available to the public.

However, sometimes on some specific conditions, file-sharing may be considered as not affecting the rights of authors and the holders of related rights, even if files are generally under protection.
To explain that point of view, one have to analyse the exception in art 5 2. b of Directive 2001/29/EC, which states that Member States may provide for exceptions or limitations to the reproduction right in case of reproductions of work or subject-matter concerned on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation.

To analyse the possibility of applying private use exception ( called as well private copy exception) for downloading first of all such an exception has to exist in national law.
This exception is not mandatory, so Member States can choose, if they want to provide legal provisions for that exception in their national laws or not. It may cause enormous problems, concerning different regulations in different countries. In one Member State the same act may be concerned as a violation of copyright and related rights, in another Member State that act may be legal. Because of that reason, sometimes the rules of private international law has to be applied in order to answer the question, which law should govern the act of downloading file.
In some specific cases, without applying private international rules, it is not possible to decide if downloading will be an infringement of copyright and related rights. For example downloading file in peer-to-peer network, from computer in one Member State, which allows in their national law to apply private use exception for downloading, even when the downloaded file was made available to public without authorisation of author or holder of related rights, and making a copy in a hard disk in another Member State, where the behaviour described above is an infringement of copyright and related right and the rightholder is from another Member State which allows application of private use exception, but on certain conditions can cause problems, because it has to be decided which law is applicable to this case. To make the case more complicated, person who is downloading the file from another persons computer, may create the copy for private use not in his own hard disk in his Member State, but in the hard disk of another computer in another country, for example while using shell accounts.

General rule of European private international law, according to the article 8 of the Regulation number 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) is that the law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed. However, in the case of a non-contractual obligation arising from an infringement of a unitary Community intellectual property right,the law applicable shall, for any question that is not governed by the relevant Community instrument, be the law of the country in which the act of infringement was committed. Parties can not agree to submit non-contractual obligations to the law of their choice by an agreement entered into after the event giving rise to the damage occurred.
Taking into consideration aforementioned, the general rule is that in relation to peer-to-peer services, it is not lex fori that applies but the law of the country where the infringement of the right occurs. In other words, the laws of the country where the download occurs.
This problem has to be noticed, however, analysing those specific aspects is beyond the subject of this essay, as it is the matter of private international law.

Furthermore, according to Directive 2001/29/EC, for application of the private use exception, person who is downloading file has to be natural person and do it just for private use and for ends that are neither directly nor indirectly commercial.
When concerning file-sharing is really difficult to imagine a legal person, which is downloading files using peer-to-peer networks. Another requirement of directives provision is more problematic. Sometimes deciding if a copy is used just for private use and not in commercial purposes, even indirectly, can face a lot of difficulties. It is obvious, that downloaded file can not be used for financial benefits. However, sometimes for example music file, downloaded from peer-to-peer network can be used in an office of the lawyer, just for his own needs, to listen it while he is writing a law suit to help him to concentrate.
But on the other hand, music in his office can as well influence his clients, and make them convinced that a lawyer is trustworthy. Psychological influence of musing in commercial areas on behaviour of customers was scientifically proved, so the line between non commercial and indirectly commercial use of downloaded music files is difficult to define in general. Every single case has to be examined separately, taking into account all the details and specific circumstances.

One of the difficulties linked to peer-to-peer software is that it implies by definition an exchange of files and in this case, protected works. Most of the systems does not allowed just downloading, but users automatically has to upload file in order to be able to use peer-to-peer network. If the system automatically and unavoidably makes the works downloaded available to other users, it is impossible to define this download as a private copy as the reproduction is not just for the private use but also made available for all other users, which is an infringement of copyright and related rights.

It is very significant, that Directive 2001/29/EC does not required from the Member States to provide in their national laws legal requirement for lawfulness of the source while concerning the private use exception. The theory of lawfulness of the source is based on the assumption that in order to apply the provisions about private use exception and decide that downloading is an legal act and it is not the infringement of copyright and neighbouring rights, file has to be made available to public legally.
In national laws of Member States after implementation of Directive 2001/29/EC situation is various. Some countries have transferred the idea of lawful source into their legal system. The basic assumption for it is the fact that the downloaded file is unlawful when it was made available without authorisation of the authors and owners of neighbouring rights, the act of downloading is tainted by the unlawfulness and thus does not allow the user to rely upon the private copy exception.
That point of view is understandable, because it would be inconsistent to conceive that as an lawful act –making a private copy could have its origins in an infringement and follow in its wake. This theory has its origins in common law countries, especially in United Kingdom, and in Polish doctrine it is called “the theory of fruits from poisoned tree”, similar to a doctrine of criminal law which provides that evidence seized through a violation of constitutional rights is so fundamentally tainted that it cannot be the foundation of a prosecution. In other words, the fruit may be beautiful and juicy and perfect - yet it is still rotten to the core, because from the root to the branch it is poisoned with evil.

However, after applying that theory, the user would not be able to benefit from the private copy exception unless he was sure that the rightful owner had given permission to make the work available. It is not difficult to remark, that in file-sharing networks users can have difficulties in being sure if files were lawfully uploaded, especially if users are downloading digital music, e-books, movies of not so well known artists. A lot of young authors at the beginning of their career is publishing their works on Internet, giving the possibility to download it and sometimes to use it without paying any honorarium. Very often Digital Rights Managements, which will be mentioned in another part of this essay, might be helpful to decide if downloading file from peer-to-peer network is lawful or not. However, sometimes the origin of a file in the peer-to-peer network might be misleading for users who are downloading it, because not every author or neighbouring rights rightholder is attaching appropriate licence to his digitalised work. Sometimes it is caused by the lack of awareness of authors about the copyright law and types of licences which can be applied, while making their works available to the public and because of it users do not have certainty if downloading and sharing a file is legal or not.
Furthermore, the copyright does not entitle its holder to control all possible uses of a work. Reading books, watching movies, viewing artwork or listening to music are not things that copyrights holders may legally prohibit, especially when these activities take place in private. Reproducing works for private non-commercial purposes is allowable on similar grounds. These activities are permitted not only because they interfere minimally with copyrights holders legitimate economic interests, but more importantly because they occur within the individual users private sphere. The liberty to experience works in private is important for personal development and effective participation in a democratic society. The inviolability of ones private sphere requires freedom from copyright holders claims of infringement for private copying. Controlling private copying with locks, licenses or litigation threatens to put individuals privacy at risk and is dangerous for privacy as a social value.

Moreover, it is enough to penalize users, who are making files available to the public, because it is obvious infringement of copyright and related rights and it is more significant affection of authors and rightholders rights. Because of it authorities can concentrate on penalizing only serious cases. Furthermore, if acts of making files available to the public will be eliminated and will not occur, rights of authors and rightholders of neighbouring rights will not be affected, because peer-to-peer users will not have the access to protected files.

Because of reasons aforementioned, polish Government decided to provide into the national law private copy exception. The exception in polish Copyright and Related Rights Law on 4 February 1994 was provided before entering into the force the Directive 2001/29/EC, so Polish legislator do not have to change the content of polish law in this case. According to Article 23 of Polish Copyright and Related Rights Law, it is allowed to use a work, without paying any honorarium for the author, if the work was communicated to the public and if it is used only for private purposes. Moreover, the exception can be applied for sharing protected works, but only if a work is making available to persons who are in personal relations with a person who is sharing a work, especially those who are relatives, affinitives or friends. Furthermore, in article 26 of this Law, Polish legislator has provided “escape clause”, according to which the private copy exception can not affect the most significant, justified interests of an author.
It is worth to notice, that Polish Copyright and Related Rights Law do not require the lawfulness of the source, if a work is used for private purposes. It means that even if a file was published for example on Internet site without authors permission to make it available to the public, downloading it and using just for personal purposes is not an infringement of copyright law and will not be penalised. However, as aforementioned, this exception usually can not be applied to file-sharing, because the majority of file-sharing programs do not allow just downloading but also requires making files available to the public in order to use file-sharing network.

According to article 5 2. b) of the Directive 2001/29/EC, private copy exception can be applied only on condition that the rightholders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned. Before analysing the problem of fair compensation for authors and rightholders, I would like to focus myself into the problem of technological measures mentioned in article 6 of Directive 2001/29/EC.

For the purposes of this Directive, the expression "technological measures" means any technology, device or component that, in the normal course of its operation, is designed to prevent or restrict acts, in respect of works or other subject-matter, which are not authorised by the rightholder of any copyright or any right related to copyright as provided for by law or the sui generis right provided for in Chapter III of Directive 96/9/EC (legal protection of databases according to the Directive of 11 March 1996 on the legal protection of databases ). Technological measures shall be deemed "effective" where the use of a protected work or other subject-matter is controlled by the rightholders through application of an access control or protection process, such as encryption, scrambling or other transformation of the work or other subject-matter or a copy control mechanism, which achieves the protection objective.

Furthermore, according to Article 6 paragraph 4 of Directive 2001/29/E , in the absence of voluntary measures taken by rightholders, including agreements between rightholders and other parties concerned, Member States make take appropriate measures to ensure that rightholders make available to the beneficiary of the private copy exception provided in national law , the means of benefiting from that exception, to the extent necessary to benefit from that exception and where that beneficiary has legal access to the protected work or subject-matter concerned, unless reproduction for private use has already been made possible by rightholders to the extent necessary to benefit from the exception, without preventing rightholders from adopting adequate measures regarding the number of reproductions in accordance with these provisions. The technological measures applied voluntarily by rightholders, including those applied in implementation of voluntary agreements, and technological measures applied in implementation of the measures taken by Member States, shall enjoy the legal protection provided for in Article 6 paragraph 1 of Directive. The provisions about appropriate measures taken in order to ensure that rightholders make available to the beneficiary of an exception or limitation provided for in national law shall not apply to works or other subject-matter made available to the public on agreed contractual terms in such a way that members of the public may access them from a place and at a time individually chosen by them (for example putting mp3 files on website or on services such as youtube, but only in case when such a publication was agreed with rightholders).
The on-line distribution of content presents significant opportunities and challenges to copyright owners, users and intermediaries such as search engines. It also raises crucial questions in areas such as ownership, licensing and management of IP as well as regarding the tools used to manage creative content and identify users and owners.
The most known technological measures mentioned in article 6 of Directive 2001/29/EC are so called Digital Rigths Managements (DRM). It is digitalised form of Rights Management Information. The WIPO Treaty define 'rights management information' (RMI) as 'information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public. DRM is increasingly relevant and important. The technological tools used to manage rights information have been improving in recent years through growing sophistication in metadata schemes and development of standards. DRM is increasingly used by copyright industries in the network environment, enabling users to customise their searches and engage in effective and flexible licensing agreements with right owners. Moreover, the rise of User Generated Content (UGC), the rise of new on-line licensing tools such as Creative Commons mentioned above, and the growing popularity of blogging and social networking, offer new horizons for use of DRM in increasing copyright compliance while providing users greater functionality and flexibility to access and use content.
Although the use of DRM technologies place authors and rightholders into advantage position, the use of digital rights management is controversial. The advent of personal computers as household appliances has made it convenient for consumers to convert media (which may or may not be copyrighted) originally in a physical or analog form or a broadcast form into a universal, digital form (this process is called ripping) for location or timeshifting, combined with the Internet and popular file sharing tools, has made unauthorized distribution of copies of copyrighted digital media much easier. In effect, copyright-dependent organizations regard every consumer with an Internet connection as a potential node of a distribution network that could be used to distribute unauthorized copies of copyrighted works. Although technical controls on the reproduction and use of software have been intermittently used since the 1970s, the term 'DRM' has come to primarily mean the use of these measures to control artistic or literary content. DRM technologies have enabled publishers to enforce access policies that not only disallow copyright infringements, but also prevent lawful fair use of copyrighted works, or even implement use constraints on non-copyrighted works that they distribute; examples include the placement of DRM on certain public-domain or open-licensed e-books, or DRM included in consumer electronic devices that time-shift (and apply DRM to) both copyrighted and non-copyrighted works.

As mentioned above, private copy exception can be applied only on condition that the rightholders receive fair compensation. One of the possible way of providing fair compensation for rightholders is a system called private copying levy.

A private copying levy (also known as blank media tax or levy) is a government-mandated scheme in which a special tax or levy (additional to any general sales tax) is charged on purchases of recordable media. Such taxes are in place in various countries and the income is typically allocated to the developers of "content". (A distinction is sometimes made between "tax" and "levy" based on the recipient of the accumulated funds; taxes are received by a government, while levies are received by a private body, such as a copyright collective.) In other words, instead of allowing copyrights holders to extract licence fees from actual private copiers, some countries authorize a tax on blank media such as recordable CDs and DVDs and recording devices to generate compensatory revenues.
Levy system may operate in principle as a system of collectivisation, partially replacing a property approach of sale of individual units.
Under most private copying schemes, levy revenues are collected by an organization representing a large number of copyrights holders who have designated the organization to act on their behalf. Distributing revenues to the creators and companies entitled to receive remuneration is a long, complex and controversial process. In free market capitalist societies, popularity as measured by consumer demand is generally seen as the fairest way to allocate levy revenues. Techniques for measuring consumer demand are, however, imprecise. Revenues can be distributed on the basis of the popularity of artists, for example measured on basis of the radio airplay and retail sales. These are unreliable indicators of consumer preferences, especially in a digital environment. Consequently, most proponents of levies as alternative compensation schemes suggest using tracking mechanisms or other technologies to improve the accuracy of revenue distribution. For example DRMs embedded into digital files can be used to facilitate monitoring of consumers consumption of music.

VIOLATION OF COPYRIGHT AND RELATED RIGHTS DURING THE PROCESS OF FILE-SHARING

To summarize information mentioned above, it is necessary to point out possibilities of violation of copyright and neighbouring rights during the process of file-sharing. As aforementioned, one have to make distinction between two acts during those process – uploading and downloading.
According to the Directive 2001/29/EC, uploading can violate economic right of rightholders, right of making works available to the public if the file content is protected under copyright and the author did not licence the use of his work by allowing the users to use his work on conditions provided in licence agreement. In this cases uploading will be an infringement of copyright and related rights. In other words, we can point out two situations in which uploading files into peer-to-peer networks will be legal.
First of all uploading files which have entered public domain and are not protected, because the time of protection has expired ( this situation will be rare, because even when the rights of author are not protected, still the rights of performers and phonogram producers may be affected, for example if taking into consideration mp3 file with symphony of Wolfgang Amadeus Mozart, the rights of author has entered public domain because of expiration of copyright, however, if the performance of orchestra was fixed years ago onto the phonogram, the rights of the members of orchestra and the rights of the producer of the phonogram will be violated, if somebody will upload mp3 into a file-sharing network.)
Second situation is uploading file under the allowance of author and rightholders, given by the contract of licence, in which author has stated that making the file available to the public is permitted.

If taking into consideration downloading, which can violate reproduction right, the infringement of copyright and neighbouring rights can occur if three conditions are fulfilled.
First of all, the protection did not expired, which means that the work did not entered the public domain (the same factors like in uploading case about the rights of performers and phonogram producers should be taken into consideration). Secondly, the allowance of the author and rightholders was not given by the contract of licence, and finally the private copy exception could not be applied to the act of downloading.

CONCLUSION

All information mentioned in previous parts of this essay are showing that it is really difficult to decide if a development of peer-to-peer file-sharing network can be concerned as a positive or negative phenomenon.
The development of the information society and new technologies such as Internet network has caused a lot of new problems for copyright and neighbouring rights protection. Peer-to-peer networks and the phenomenon of file-sharing can be considered as a big threat not only for authors, rightholders and performers, but also for the whole cultural industry, because authors or performers in order to continue and develop their creative and artistic work, have to receive an appropriate reward for the use of their work. Producers and other persons involved into showbusiness industry are in the same situation, they also need a reward in order to be able to finance this work, because the investment required to produce products such as phonograms, films or multimedia products, and services such as "on-demand" services, is considerable. Easy access to creative works, without any costs can be tempting for the whole society, so that people would commit copyright and neighbouring rights infringements in order not to pay for a music and films they want to use. Because of mass infringements the progress in cultural industry may be strongly affected, so that the society will not be provided with new works.
The arguments mentioned above are of a great importance and the question about the influence of peer-to-peer networks into culture and showbusiness has arise. Should the use of peer-to-peer networks be illegal in order to protect artists, performers, producers and the whole cultural industry ? Probably the majority of people connected with music and film industry would answer “yes”, however it is answer, which is not the result of deep analysis of the phenomenon of file-sharing.
Positive aspects of new technology has to be taken into consideration. Possibilities for young artists given by peer-to-peer technology could not be forgotten. The cheap way of advertising and promoting works of young, not well known artist can have huge impact in encouraging them to further creative work. A critic given by the people from different countries can help the creators to achieve higher level in creating their works and improve their skills. International cooperation between artists as well as between software programmers can result in creating works of new value, quality and huge importance and can be concerned as a benefit for the whole community.
Furthermore file-sharing networks are a fast, easy and efficient channel of distribution for the works of Creative Commons creators and people connected with Free Software Movement. Works of those communities may be useful for large amount of people as an alternative for commercial software and art.
Finally, the private copy exception combined with the right of artists to receive fair compensation is a reasonable way of keeping balance between economic interests of rightholders and rights and freedoms of private users. This exception can be concerned as an application of principle of proportionality, according to which acts of no economic significance should not be penalised.
Reasons mentioned above can not be left without appropriate attention if talking about the impact of file-sharing networks into modern society. Because of it, in my opinion, the idea of delegalization of file-sharing network is not appropriate measure to fight with copyright and related rights infringements. The lobbies which are trying to convince the society that peer-to-peer technology is affecting the rights of artists and is harmful for the culture industry should concentrate their attention in just one aspect – the effect of making files available to the public, no matter in what kind of way. By making the society aware of the impact of such behaviour organisations which are involved into protection of artists and rightholders rights can achieve their goals.
Furthermore, the system of collective management of rightholders copyright and neighbouring rights should be developed and improved. Appropriate way of dislocation of money received from private copy levy payers should make the system of levy fair and efficient tool for satisfying economic interests of artists and producers.
Not allowing the members of European society using the peer-to-peer networks and potential penalizing the use of it will be in contradiction with the principle of proportionality and “de minimis” rule. That is why the lobbies should concentrate themselves into educating and informing the society instead of fighting about creating more severe penal provisions.



BIBLIOGRAPHY

Legislation
- Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
- Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs
- Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases.
- Directive 2006/116/EC of the European Parliament and of the Council of 12 December 2006 on the term of protection of copyright and certain related rights
- Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886
- Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) of 1994
- Regulation (EC) No 864/2007 of The European Parliament and of the Council on 11 July 2007 on the law applicable to non-contractual obligations (Rome II)
- Polish Copyright and Related Rights Law on 4 February 1994

Books

- Copyright and Related Rights Janusz Barta, Ryszard Markiewicz Wolters Kluwer 2007 r. (in Polish)
- Copyright and Related Rights – Commentary of Polish Law Barta Janusz, Czajkowska Dąbrowska Monika, Ćwiąkalski Zbigniew, Traple Elżbieta and others, Zakamycze 2005 r.

Internet resources

http://en.wikipedia.org
http://www.wipo.int
http://creativecommons.org/
http://www.fsf.org/