Taking a Step Forward Toward Achieving Harmonization And Cooperation Between Technology and Law

The term "ECMS" has rapidly gained popularity in the last few years. ECMS, which stands for Electronic Copyright Management System, is a generic term for systems in which copyrights are cleared electronically when works are to be exploited.
Works are intangible by nature. Thus, a work can exist and simultaneously be exploited in many locations (the "ubiquity" of works). But in order to exploit a work, its copyright must be cleared. ECMS is the system that carries out copyright clearance electronically.¹

The Traditional Collective Administration System
Of course, necessity of copyright clearance is nothing new. There have long been collective societies to carry out copyright clearance. For example, the Japan Society for Rights of Authors, Composers and Publishers (JASRAC) is a collective society for music copyrights that collects royalties from users of music and allocates them to composers and other copyright holders. However, a number of problems have been pointed out concerning such collective administration.
The first problem is that since copyrights are cleared very comprehensively in collective administration, they undergo a change in nature from private and exclusive rights to remuneration rights. The second problem is that collective administration does not deal at all with moral rights.
Despite these problems, recent progress in digital and network technology has made this an era in which "anyone can be a publisher." This has suddenly increased the subjects, types, and scope of copyright exploitation and, as a result, a strong demand to clear copyrights efficiently and appropriately has developed.

The Merits of ECMS
These are the circumstances under which ECMS arrived on the scene. My view is that ECMS is a solution to the previous problems of collective administration. In this paper, I attempt to make the following two points. First, that ECMS supports the free and exclusive exercise of rights by copyright holders. In this way, copyrights will hark back to private and exclusive rights. Second, that ECMS supports the individual specific manifestation of intention by authors. In this way, moral rights are more fittingly protected and exercised.
Through such investigation of ECMS, I would like to prospect cooperation of "technology" and "law."

This chapter provides a broad overview of the characteristic features of conventional collective administration and of ECMS.

Section 1: Collective Administration

(1) Background to the Appearance of Collective Administration

Collective administration of copyrights has traditionally been practiced mostly for musical works. The following circumstances are behind this. As mentioned above, a work is simultaneously exploited in many places. This makes it very difficult for authors to actually ascertain by themselves where and how their works are being exploited. Collective administration was thus developed to monitor acts of performance of musical works, which are particularly difficult to ascertain. The world's first collective society for musical works was established as early as 1850 in France.²

(2) Specific Examples

Let us now examine the three types of collective administration available in Japan.

(2-1) Collective Administration Organizations for Musical Works
The collective society for musical works is the most traditional type of collective administration. This is because the act of performing a musical work takes place more often, and in more places, than the act of publishing a book, and it is difficult to ascertain such acts of exploitation. In fact, JASRAC is the only musical copyright administration society active in Japan.³ Thanks to such collective societies, right holders to musical works are now able to receive compensation for performances of their works all over the world. On the flip side, users are freed from having to independently investigate who holds the rights to the works that they would like to exploit and having to later obtain their consent.

(2-2) The Compensation System for Digital Private Recording
There is also a compensation system for digital private sound or visual recordings. This system, which was introduced by the 1992 revision of the Copyright Law, imposes the obligation to pay compensation for private digital sound or visual recordings. However, ascertaining private acts of sound or visual recording by individuals is more difficult than ascertaining acts of performance. This compensation system therefore uniformly collects compensation in advance from those who purchase recording equipment and media. That is, when an MD, DAT, CD-R, or other video recorder or medium specialized for sound recording as designated by Cabinet Order is purchased, a reasonable amount of compensation is added to the sales price.⁴ The compensation thus collected is distributed by the Society for the Administration of Remuneration for Audio Home Recording (SARAH) to the three organizations representing copyright holders, performers, and phonogram producers.

(2-3) Reproduction of Rights Organizations
Finally, there are reproduction rights organizations. Acts of reproducing books at companies and schools are similarly difficult to ascertain. Thus, a reproduction rights organization collects compensation for such acts of reproduction, mainly under blanket contracts, and distributes the proceeds to right holders. In Japan, this role has been played by the Japan Reprographic Rights Center, which was established in 1991. Two methods of consent are available: individual consent, for which two yen per page is collected, and blanket consent, which is calculated based on a sampling investigation and the number of employees and copiers, etc.

Section 2: ECMS

(1) Background to the Appearance of ECMS

The foregoing consisted of the traditional forms of collective administration. Why, then, did ECMS come on the scene?
The development of digital, network, and other technologies made it possible for any individual to engage in an act of exploiting a work, which previously could only be carried out by certain parties such as publishing companies. As a result, many works are often exploited in the production of a multimedia work. This has meant a sudden expansion in the parties, types, and scale of work exploitation.
Under these circumstances, it has become necessary to efficiently deal with copyrights when exploiting works. ECMS has been developed as an answer to this need, offering a way to clear copyrights electronically.

(2) Definition and Classification

Just what is ECMS? ⁵
A clear definition of ECMS has not yet been adequately considered. In this paper, ECMS is defined in a generic manner as: "a system in which copyrights are cleared electronically when works are to be exploited."⁶ Therefore, the term "ECMS" is not used to refer to a system in which rights are not cleared simply by so-called "copy protection" or by simply providing information about who owns the rights.⁷
In addition, ECMS is classified into two categories depending on the stage at which rights clearance takes place. First is "the database type." In this type of system, a catalog of works that can be exploited and the contract conditions for exploiting them are recorded into a database. Rights can be cleared by having the user of a work look up the desired works and their exploitation conditions, and having them obtain consent for exploitation of such in return for a consideration.
Next is "the embedded type." This is a type of system in which digital works are encrypted to allow only specified users to exploit them, and the key for decrypting the code is sold separately in return for a consideration, or a type of system in which rights administration information including conditions for exploitation of a work is embedded in the work itself using a technology known as an "electronic watermark." Under this system, the user of a work can clear the rights when the work is exploited.

(3) Specific Examples

The following specific examples of ECMS can be cited.

(3-1) Database Type of ECMS
In a database type of ECMS, the user of a work looks up the conditions under which the work he or she wishes to exploit may be exploited, and then pays a consideration for obtaining or exploiting the content, which enables him or her to perform rights clearance.
A typical system of this type is the "Copymart" advocated by Professor Zentaro Kitagawa.⁸ The Copymart consists of two databases (a copyright database and a works database). A right holder can freely set and register any conditions of exploitation for each of his or her works onto Copymart. When the user looks up a registered work and obtains reproductions of the desired work from the Copymart, the royalty is automatically sent to the right holder. This is the basic Copymart model.⁹
Another service seen in the database type of ECMS is to provide digital content via the Internet. For example, Uncover of the United States is a database that provides magazine Article contents.¹⁰ The user can look up titles over the Internet free of charge and can, for a fee, have the contents of any desired selections within the database sent to him or her by fax. In this system, the right holder sets the copyright fees for each Article. For some articles, the right holder may withhold consent for fax transmission.
Also included here is music.co.jp.¹¹ With music.co.jp, music content is provided by either streaming or downloading. The number of such content providing services has increased greatly in recent years.¹² Of course, there are also cases in which only copyright clearance is carried out, without providing the content itself.¹³ For example, CLARCS (CLA Rapid Clearance Service) of the British reproduction rights organization CLA (Copyright Licensing Agency) gives licensees consent for reproduction but does not provide the content itself.¹⁴ Thus, in some existing types of collective administration, we see the phenomenon of a transition to a database type of ECMS, with the active use of technology. This will be of relevance in considering the future of collective administration.

(3-2) Embedded Type of ECMS
In an embedded type of ECMS, rights clearance takes place not when the user of a work obtains the contents, but when the work is exploited. This type of rights clearance is carried out by controlling the act of exploitation by the user based on information embedded in the content (an electronic watermark or key), or by allowing the user to directly contact the right holder.
The embedded type of ECMS is further divided into two types according to the method by which the information is embedded. The first embedding method employs an "electronic watermark" (also known as "electronic tattooing" or an "electronic fingerprint"), in which administrative information is embedded in an invisible, irremovable form. For example, the American "Digimarc" method is an electronic watermark in which difficult-to-remove data is invisibly embedded into a digital image.¹⁵ The information embedded as a watermark makes it possible to track illegitimate exploitation, and based on the embedded author identifier information, a user can access Digimarc's Locator Service (MarcCentre), which is an author database, and negotiate with the author directly.¹⁶
The "Superdistribution" advocated by Professor Ryoichi Mori should also be mentioned here.¹⁷ In this system, the contents that are distributed have "Superdistribution labels" invisibly embedded inside which contain such information such as the contents identifier, the provider of the contents, and conditions for their exploitation (the royalty set by the right holder, the obligation to report the exploitation, the conditions on the user, etc.). A Superdistribution Label Reader (SDLR) mounted onto the hardware (a Superdistribution machine) keeps track of the use of the contents, and accounts are settled based on these records. What is notable about Superdistribution is that it collects royalties not on the "ownership" of digital contents, but on their "use."¹⁸ In the second type of embedding method, the contents are distributed in encrypted form, and exploitation is restricted unless one obtains a "key."
There are also systems in which encrypted restricted content is distributed by, for example, cd-roms, while the key to removing the restrictions is sold through a separate network. The distribution system for programs known as "Shareware" follows this pattern.¹⁹
Rights clearance is carried out in an embedded type of ECMS in this manner. With the embedded type of ECMS, rights clearance can be implemented at the stage when the contents are exploited, even if the contents are distributed unrestrained. This distinguishes this type of system from the database type of ECMS.

The foregoing consisted of an overview of collective administration and ECMS.
How will ECMS affect copyright clearance in traditional collective administration? To clarify this issue, this chapter will begin by examining the problems associated with traditional collective administration.

Section 1: Copyrights in Collective Administration

(1) The Problems

(1-1) Legal Fictions in Comprehensive Licensing
First, comprehensive licensing is often given in traditional collective administration. For example, with JASRAC, annual comprehensive licensing contracts (blanket licenses) are often concluded for exploitation in broadcasting and at places of entertainment based on broadcast income or floor space for seats, regardless of the actual state of exploitation of the musical works.²⁰ And at the Japan Reprographic Rights Center, comprehensive licensing is granted with calculations based on sampling investigations or the number of employees or units of equipment.²¹
With comprehensive licensing, however, royalty is not determined in accurate correspondence with the state of exploitation of works by users. Comprehensive licensing is a way to calculate royalties roughly by means of a fiction. This is the first problem.

(1-2) Diminution of Right of Decision
Also, in the case of JASRAC, if a right holder entrusts any rights to JASRAC, as a general rule there is no choice for the right holder other than to entrust all copyrights of all of his or her works, including foreign rights, all together.^22/23 Thus, the copyright holder is left being unable to decide which individual musical works to entrust.
Moreover, the royalty charged by JASRAC for a musical work is determined by a fixed formula based on its category (serious music / light music), its method of use (performance / broadcast / publication, etc.), its format (concert / entertainment, etc.), its length, and capacity of the hall.²⁴ Therefore, as a rule, the right holder is left being unable to set the respective royalty for each musical work.
This means that in the royalty collection aspect of traditional collective administration, a problem exists in that the copyright holder is unable to determine the amount of the fee for each work or to forbid exploitation of a work. On the other hand, it is, in fact, difficult if not impossible to ascertain how one's works are being exploited unless one entrusts them to a collective society. Therefore, to that extent, although copyright is an exclusive licensing right, the copyright holder is unable to determine the conditions for exploitation of his or her works. This signifies the transformation of copyright from a licensing right to a remuneration right, and this is the second problem.

(1-3) Legal Fictions in the Compensation System
In addition, in the royalty collection aspect of the private sound or video recording compensation system, no demand is made for remuneration for the user's actual act of sound or video recording, but rather a lump-sum fee is collected beforehand for the act of purchasing equipment or medium for making sound or video recordings. The result is that anyone who buys such equipment or medium must pay compensation, even if the user never makes a copy of the other's work.²⁵
Considering that the method of collection in the compensation system is based on a legal fiction, in the distribution of the compensation the designated association shall allocate an amount corresponding to twenty percent of the compensation received to the "activities for common purpose."²⁶ This payment is not directly distributed to the right holder, however. Therefore, at the very least, it cannot be said to have the character of a consideration for the exploitation of a work. Thus, one cannot say that under the compensation system the compensation is collected and distributed as a consideration for exploiting of works. This indicates that copyrights are undergoing a transformation from private rights to civil rights.²⁷ This is the third problem.

(2) Cause of the Problems

Hence, in traditional collective administration, the copyright holder is unable to determine whether to allow for the exploitation of contents on an individual basis or to set the consideration for its exploitation. The collection of royalties is often carried out on a blanket basis, and in many cases, a complete fiction is adopted in the form of compensation. Furthermore, the distribution of the consideration that is collected does not accurately reflect the ways in which works are exploited.
Here, the cause is the fact that it is difficult to ascertain how works are exploited. And given that there is no realistic way to ascertain how works are exploited, we must resort to legal fictions in collecting and distributing royalties. Herein lies the cause of the problems.

Section 2: Copyrights in ECMS

(1) Features of Rights Clearance Under ECMS

Then what solutions does ECMS provide for these problems associated with collective administration? Rights clearance under ECMS is generally considered to have the following characteristics.
First, under ECMS, the copyright holder has the right to exploit consent for each content. Therefore, if the contents are distributed by ECMS, the copyright holder is never forced to make all of the contents available. The copyright holder may select only the contents he or she wishes to distribute and make them available to ECMS.
Second, under ECMS, the right holder has the right to determine the consideration for each content. Therefore, he or she may set the consideration for exploitation of each content.
Third, under a number of ECMS schemes, apart from the consideration, the right holder may set various conditions of exploitation conditions for each content, such as specifying the type of exploitation or prohibiting certain acts of exploitation.
As is clear from these three points, ECMS allows the copyright holder to exercise copyrights with far more freedom than under collective administration. It could be said that copyright functions as an exclusive license right. ECMS therefore provides an effective solution to the problem with traditional collective administration in that copyrights are undergoing a transformation from exclusive licensing rights to remuneration rights.
Fourth, under ECMS, the collection and distribution of royalties and consideration is carried out in correspondence with the exact state of exploitation of the content and according to the individual exploitation conditions set by copyright holders.
As is clear from this fact, the copyright holder receives consideration far more accurately under ECMS than under collective administration. In this respect, copyrights function as private rights under ECMS which, therefore, provides an effective solution to the problem under traditional collective administration that copyrights are undergoing a change in character from private rights to public rights.

(2) Remaining Problems

ECMS thus provides effective solutions for the problems associated with traditional collective administration.²⁸ It may be said that ECMS serves to restore the character of copyrights as private rights and exclusive licensing rights that has been undergoing diminution under traditional collective administration. Behind the significance of ECMS is the fact that digital and network technologies have made it possible to ascertain how contents are being exploited: what contents are being exploited, where, and how.
ECMS is therefore considered to be of great significance for copyrights.
To be sure, while recognizing that this "technological approach may be quite difficult for some time"²⁹ and by emphasizing the nature of information as a "public domain", it has been powerfully argued that in the digital era we should have a "paradigm shift" in which the nature of copyrights as private rights and exclusive rights should indeed be attenuated rather than strengthened.³⁰
Recently, however, it appears that even those making such assertions have come to evaluate quite positively the application of technology to the protection and management of copyrights.³¹ This is a trend that deserves attention. A number of problems with ECMS still remain, however. The main problems can be listed as follows.
First, there is the problem of technical limitations. The fact that digital technology has made it possible to ascertain the state of exploitation of some forms of contents does not mean that it has become possible to ascertain the state of all exploitation of all contents, particularly analog contents. Therefore, collective administration will continue to play an important and essential role, especially in acts of analog exploitation. It thus appears that traditional collective administration and ECMS will continue to coexist, with the scope of activity divided between them.³²
Second, there is the problem of cost. If ascertaining the state of exploitation were to involve enormous costs, then ECMS would not be a system that would pay overall.
Third, there is the problem of privacy associated with ascertaining the state of exploitation.³³
Finally, there is the problem of overprotection by technology. This is because, with the ability to ascertain and control how contents are exploited, it becomes possible through the use of technology to exercise a monopoly even over contents that, properly speaking, should be freely exploitable, such as contents in the public domain and content that lacks copyrightability. This creates the problem that technology overrides the balance between protection and exploitation of copyrights that is prescribed by the Copyright Law. We thus have the problem of whether it is necessary to impose some sort of regulation on overprotection by technology.³⁴ However, in order to call some protection "excessive", there is no way to avoid the conceptual question of why copyrights are protected at all in the first place. This problem remains as an issue that must be addressed.

Section 3: Summary

I believe that ECMS is of immense significance for copyrights. Various problems have been pointed out in traditional collective administration. Specifically, in collective administration, the nature of copyrights is changing from private rights to public rights and from exclusive licensing rights to remuneration rights. In contrast to this, under ECMS, the copyright holder can exercise his or her copyrights much more freely than under collective administration. Thus, it can be said that copyrights function as exclusive licensing rights. ECMS is therefore considered to have the possibility of restoring copyrights as exclusive licensing rights and private rights.
With this as a background, it has become possible to ascertain how copyrighted works are being exploited, which was previously considered unrealistic. This possibility is gradually being actualized through the development of technology, especially with ECMS-related databases and network technology. In this way, technology is playing an important role in restoring the nature of copyrights as exclusive license rights and private rights.
To be sure, the technology known as ECMS could also give copyrights too much protection. The question of what to do about this involves the fundamental idea of how, looking toward the future, we should think of copyrights. These problems remain to be tackled.

How does ECMS affect the handling of moral rights? To answer this question, in this chapter we begin by discussing the problems with handling moral rights in traditional collective administrations.

Section 1: Moral Rights in Collective Administration

(1) The Problems

Traditional collective administration does not deal with moral rights.
For example, even if a musical work is used with the consent of a collective society, moral rights (right of preserving integrity) could still be injured if the work is performed in modified form or if it is used, even without any modification, in a way that injures the honor or reputation of the author (Copyright Law § 20, § 113(3)).³⁵ But traditional collective administration does not directly touch upon moral rights even in cases where such exploitation is carried out.
For example, this applies to JASRAC. Although the JASRAC Stipulations for Copyright Trust Contracts specifies that "all copyrights" shall be transferred from members to JASRAC, the right to consent to musical arrangements, translations, and other forms of exploitation in which a work is modified is not transferred to JASRAC. JASRAC is therefore not given any consent concerning such exploitation.³⁶ And if a user uses a managed work for the purpose of advertising, JASRAC advises the user who produces the advertising publication to obtain prior agreement from the author, on the grounds that it goes against the wishes of the author and might injure his moral rights.³⁷ Thus, JASRAC is not directly involved with the handling of moral rights. The same applies to GEMA, which is a collective society for music copyrights in Germany.
In Germany as well, there is debate about the limits of GEMA's management of the partial exploitation of musical compositions, adaptations, and combinations with other works.³⁸ A Munich district court decision of July 25, 1994 acknowledged a preliminary injunction against an act in which the boxing champion, Henry Maske, used as an entrance march tune for a boxing match "O Fortuna" from the stage cantata "Carmina Burana" by Carl Orff.³⁹
Hence, even if one obtains consent from GEMA and uses a musical work, moral rights are a separate issue. In other words, GEMA does not handle moral rights.

(2) The Cause

There is a reason why traditional collective administration has not directly dealt with moral rights. That is, a moral rights belong exclusively to the author and cannot be assigned (Copyright Law § 59). This is why it is can generally be said that contractual treatment does not lend themselves to moral rights.
To be sure, it is not the case that a contract covering modifications to a work in some detail is meaningless. There are many precedents in which an infringement of the right of preserving integrity was denied, on the grounds of a situation in which the author had agreed to modifications.⁴⁰ It is thus considered possible to have a contract that has some degree of validity over moral rights.
However, recognizing the validity of all cases of consent given before the fact would clearly conflict with the unassignability and unwaivability of moral rights. The question then is what form of consent or contract should be recognized as valid.⁴¹
Concerning this matter, I believe it is necessary that consent by the author be precise and concrete. That is, in order to deem prior consent concerning the right of preserving integrity to be valid, it is generally required that the contents of the modification be set forth precisely and concretely.⁴² Intraditional collective administration, however, right holders' copyrights are generally administered in a blanket, all-embracing way. This makes it impossible for the right holder to make an individual, specific declaration of intent concerning the type of exploitation of his or her works. For such reasons, traditional collective administration is unable to deal with moral rights, and questions of moral rights lie outside the scope of collective administration.

Section 2: Moral Rights in ECMS

(1) Effects

Then does ECMS offer any solutions to the problems of collective administration concerning the handling of moral rights? Let us take another look at the features of rights clearance under ECMS.
Under ECMS, the right holder has the right to consent to exploitation and the right to set the consideration for each content. Moreover, under a number of ECMS regimes, apart from the consideration for exploitation, various conditions of exploitation may be set for each content, such as prescribing or prohibiting specific types of exploitation. Thus, under ECMS, the right holder may make a declaration of intent that is far more precise and concrete than under collective administration.
Consequently, insofar as such a declaration of intent is made by the author, this may be deemed to be consent or a contract that is valid for moral rights as well.

(2) Remaining Problems

I therefore believe that ECMS makes a major contribution in dealing with moral rights. However, ECMS will hardly be able to completely handle all of the issues concerning moral rights by itself. The unassignability and unwaivability of moral rights makes it impossible to find prior consent to be completely enforceable, making it necessary to find after-the-fact solutions. Here, one also encounters the advocacy of legislative proposal restricting moral rights or limiting them to rights that can be waived to a certain extent.⁴³
Nevertheless, so long as moral rights are seen as personality rights, the conclusion is unavoidable that the prior disposition of moral rights cannot eliminate uncertainty. At the same time, this is something that must not be avoided.

Section 3: Summary and Evaluation

I think ECMS has great significance for the handling of moral rights.⁴⁴ Moral rights are not dealt with at all in traditional collective administration, and dealing with the problem of moral rights has been outside the scope of such administration. Under ECMS, on the other hand, the right holder is able to make a precise and concrete declaration of intent. This is why ECMS is considered to be able to handle moral rights within a certain scope.
Recently, many types of adaptive exploitations of works have been carried out in the production of multimedia content. Because of this, the user of a work wants to be ensured that the problem of moral rights is handled effectively in its exploitation. On the flip side, the author wants his or her work to be exploited in a way that does not go against his or her intent.
Under ECMS, the author can make an expression of intent about the precise and concrete type of exploitation, and deeming such consent to be valid for the handling of moral rights is desirable for both the right holder and the user.

What does the Electronic Copyright Management System (ECMS) mean for copyrights and moral rights? In this paper I have considered the significance of ECMS in comparison with traditional collective administration. The argument has led to the following two conclusions.
First, under ECMS, the copyright holder can freely exercise his or her copyright. Thus, it can be said that copyright functions as an exclusive licensing right. ECMS provides an effective solution to the situation under traditional collective administration in which copyrights undergo a transformation in nature from private rights to public rights and from exclusive licensing rights to remuneration rights.
Second, under ECMS, the right holder can make a precise and concrete declaration of intent. ECMS therefore provides a solution with a certain level of effectiveness for the situation under traditional collective administration in which moral rights are not dealt with at all.
It seems that the need for the protection of rights and the support of distribution can be realized to a considerable extent by an appropriate utilization of technology, rather than by a transformation of copyrights into remuneration rights.
I therefore believe that ECMS has great significance for copyrights and moral rights. Behind this significance is the major role played by ECMS-related digital and network technologies. Hence, if we are to assess the significance of ECMS in its totality, we can view it as "technology" supporting the "law".
To be sure, this "technical approach" is not always positively evaluated; some observers insist that in the digital era we should have a "paradigm shift" in which the nature of copyrights as private rights and exclusive rights is diminished rather than strengthened. Additionally, there is legislative proposal that calls for restricting moral rights beforehand.
As we have seen in this paper, however, by making appropriate use of technology, highly effective solutions can be realized to meet the demands for the protection of copyrights and moral rights as well as support for the distribution of copyrighted works.
Therefore, copyrights, which formerly were under constant threat from the development of technologies that produced a flood of copying machines, have now found an ally in ECMS technology and are beginning to protect themselves through active use of it.⁴⁵
To be sure, a new problem of overprotection will arise if copyrights go beyond a certain balance and abuse technology. To do nothing as to this problem may someday lead to the hollowing out of the Copyright Law. What is needed here is a harmonization between technology and law. A constant task imposed on technology and law, it may be said, is that both should develop in "cooperation" with each other.
Let me close this paper by emphasizing the need to move on to the next problem; namely, the "cooperation of technology and law".