1The present work represents the expanded outcome of the conversation held during the 3^rd “NEXA Wednesday” meeting, Turin (Italy), 12^th November 2008 (for more information on “NEXA Wednesdays” see: http://nexa.polito.it/events). This English translation was prepared by Thomas Margoni in April 2009.

2Exchanging digital files in peer-to-peer mode by using the potential of spontaneous collaboration and sharing of resources among users reduces the cost of dissemination of content (see Y. BENKLER, Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production, in The Yale Law Journal, 2004, 272 ss. and Y. BENKLER, The wealth of networks: how social production transforms markets and freedom, Yale University Press, 2006, New Haven and London, especially 83-90). The Internet is based on the end-to-end principle (see “RFC 1958 - Architectural Principles of the Internet”- http://www.ietf.org/rfc/rfc1958.txt) and thus is structurally suited to enable peer-to-peer communications.

3The analysis deals only with copyright. Nonetheless, the same rationale holds true for the related rights, as contemplated e.g. by the Italian Copyright Act (phonogram producers rights: art. 72, cinematographic and audiovisual works and sequences of moving images producers' rights: art. 78-ter, broadcasters’ rights: art. 79, performers’ rights: art. 80, etc), as well as other rights that limit the dissemination of the content of digital files (such as the rules governing the circulation of “cultural goods” provided for by arts. 106 et seq. of the Legislative Decree 42/2004 – “Code of Cultural goods and of landscape”).

4Global licence here means a licence that covers a variety of typologies of works and for each typology the generality of works of that kind.

5“Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits”.

6See W. PAGE, K. MCMAHON, D. TOUVE, Shadow pricing P2P’s: economic impact, in Economic Insight, MCPS-PRS Alliance, 12 of 30.10.08 (for an article reporting its content see A. ORLOWSKY, A new economics of P2P file sharing, in The Register, 30.10.08, http://www.theregister.co.uk/2008/10/30/shadow_pricing_p2p/).

7In Italy, art. 171, sec. 1, lett. a-bis, of the Copyright Act as introduced by the Act 43/2005 (“Conversion into law, with modifications, of the law decree 31 January 2005, n. 7, introducing urgent dispositions for university and research, for cultural goods and activities, for the accomplishment of great strategic public works, for the mobility of civil servants, and for the simplification of the fulfilment of stamp duty and franchise taxes. Act of indemnity of the effects of art. 4 sec. 1 of the Law Decree of 29 November 2004, n. 280”), charges with criminal sanctions “anyone, who unlawfully, for any purpose and in any form […] makes available to the public, by putting in a system of telecommunication networks, through any kind of connections, a protected subject matter or part thereof”. Even harsher penalties are set forth by art. 171-ter sec. 2 lett. a-bis of the Copyright Act, concerning persons who carry out the same activity for profit. The Act 43/2005 has been enacted to partially amend norms already introduced by the Act 128/04 (“Conversion into Law, with modifications, of the law-decree of 22 March of 2004, n. 72, enacting measures to contrast the telecommunication based abusive diffusion of audiovisual material, and to support cinematographic and entertainment activities): the first legislative intervention that introduces in Italy criminal sanctions for file-sharing activities.

In Europe, the original proposed Directive 2004/48/CE on the respect of intellectual property rights envisioned criminal sanctions for file-sharing, which were removed from the final draft.

The European Directive proposal on criminal sanctions for the protection of intellectual property rights (COM/2006/0168 final – COD 2005/0127), not yet approved, provides for criminal sanctions in cases of infringement on international scale for commercial purposes of copyright, and thus applies also to acts of file-sharing of protected content.

8The most prominent example of such normative model is the French bill “loi favorisant la diffusion et la protection de la création sur Internet”, also known as “Création et Internet”, that after a long and tormented legislative history has finally been enacted by the French Parliament on May 13^th, 2009. It creates a “gradual replay” mechanism to punish those users that exchange protected works, and constitutes the result of recommendations elaborated by the “Olivennes” report, titled “Sur la lutte contre le téléchargement illicite”. The Act also institutes an administrative independent Authority (HADOPI) to which the right holders could address their claims of (supposed) copyright infringement. The Authority, by investigating the log files stored by the service providers (ISP), would communicate to users the danger of being sanctioned. In case of reiteration the HADOPI could apply sanctions including the disconnection form Internet. Shortly after final enactment, the Act has been brought to the attention of the Constitutional Court, on the 10th of June 2009 issued the Decision n° 2009-580 DC (http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/2009/decisions-par-date/2009/2009-580-dc/decision-n-2009-580-dc-du-10-juin-2009.42666.html) stating, among others, that the right to Internet access is a fundamental right and that the sanctions provided by the “Création et Internet” law violate French Constitution.

9Right of privacy, of access to knowledge and of information; see  besides the Decision of the French Constitutional Court mentioned in note 8, the decision of the Italian Privacy and Data Protection Authority of 28 of February 2008 in the so called Peppermint Case - http://www.garanteprivacy.it/garante/doc.jsp?ID=1495246- where it was established that private entities cannot perform systematic monitoring activities with the scope of identifying those users who exchange music file or games on the Internet, as well as the decision of the European Court of Justice of 29 January 2008 C-275/06 Productores de Música de España (Promusicae) / Telefónica de España SAU that reads:“Member States must, when transposing the directives mentioned above, take care to rely on an interpretation of the directives which allows a fair balance to be struck between the various fundamental rights protected by the Community legal order. Further, when implementing the measures transposing those directives, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with those directives but also make sure that they do not rely on an interpretation of them which would be in conflict with those fundamental rights or with the other general principles of Community law, such as the principle of proportionality”, see http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=en&Submit=Rechercher&alldocs=alldocs&docj=docj&docop=docop&docor=docor&docjo=docjo&num-aff=C-275/06&datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100 .

10See J.A. POUWELSE, P. GARBACKI, D.H.J. EPEMA, H.J. SIPS, Pirates and Samaritans: a decade of measurements on peer production and their implications for net neutrality and copyright, in Telecommunications Policy, 2008, 701 ss. See also W.W. FISHER III, Promises to keep. Technology, law, and the future of entertainment, Stanford University Press, Stanford, 2004.

11The right of reproduction consists in the multiplication in copies in any form, thus including digital ones, of the work and is harmonized in all European countries. For instance, in Italy, the right of reproduction is provided for by art. 13 Copyright Act, and accordingly with art. 12 sec. 2 of the same Act, is one of authors' exclusive rights. It must be borne in mind that there are norms that permit the reproduction of the work without the authorization from right holders. For example, art. 71-sexies authorizes the private reproduction of sound recordings and audiovisuals on any device, if performed by a natural person for pure personal use, provided there is no profit or any direct or indirect commercial scope.

12Art. 16 Italian Copyright Act states that the making available to the public in such a way that members of the public may access works from a place and a time individually chosen by them, is a form of public communication, and according to art. 12 sec. 2 same Act, represents an exclusive right of the author.

13With particular regard, the Trade Related Aspect of Intellectual Property Rights (the TRIPs agreement) art. 13, the Berne Convention arts. 9.2 11.2, and the World Copyright Treaty (WCT) signed under the auspices of the WIPO, arts. 8 and 10 (and see also the agreed statements n.9 regarding art. 8 and n. 10 regarding art. 10).

14Particularly the European Directive CE of 22-05-2001 n. 2001/29 on the harmonization of certain aspects of copyright and related rights in the information society (Directive 2001/29/CE), see footnote 19.

15For example, such has been the chosen path, i.e. applying a general taxation system, in the case of the remuneration of the right holders for the loan by public libraries and state record-archives (see art. 2 sec. 132 of the 286/2006 Act).

16For instance, in the case of file-sharing, a legislative intervention could subordinate users' Internet access to a fee, by identifying the ISP as the withholding agent, and earmark the corresponding amount for the right holder.

17Through a mandatory licence system, the collective negotiation is imposed by law. In such a case the exclusive right looses its exclusive nature and becomes a right of remuneration. Downgrading an exclusive right into a remuneration right may not comply with EU and international law.

18Collective extended licences do not conflict with art. 5.2 Berne Convention (prohibiting formalities that limit the exercise of rights): even assuming that the opt-out communication represents a formality, which probably is not the case to begin with, it must be borne in mind that such a communication is optional and not mandatory, in absence of which right holders may still exercise their rights through the collective management bodies without any formality.

19As a matter of fact, the European Directive 2001/29/CE, after stating at art. 2 the principle of exclusivity of the right of reproduction, at art. 5.2(b) affirms that:

Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the following cases:

(omissis)

b) in respect of reproductions 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 which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned[.]

This exemption could be used, within the foreseen limits, in order to authorize the reproduction carried out by the use of legitimate file-sharing activities. However, it is necessary to take into consideration the limits imposed by the same Directive at art. 5.5, which reads:

The exceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the right holder.

20Art. 3 of European Directive 2001/29/CE states that the right to communication to the public, including the right to make available to the public in such a way that members of the public may access them from a place and a time individually chosen by them, is an exclusive right. However, the possibility for Member States to provide for exceptions or limitations to this exclusive faculty, similar to those contemplated by art. 5.2(b) for the reproduction right, is not admitted.

21In Nordic countries extended collective licences are used, for example, to licence broadcasting rights of literary and musical works, to authorize the re-broadcasting, the reproduction of works for educational scopes, the distribution of digitalized works by libraries, etc.

For a description of the extended collective licence model in Nordic countries, see T. KOSKINEN-OLSSON, Collective Management in the Nordic countries, in D. Gervais (Ed.), Collective Management of Copyright and Related Rights, Kluwer Law International, BV, The Netherlands, 2006, 257 ss.; H. OLSSON, The Extended Collective License as Applied in the Nordic Countries (http://www.kopinor.org/layout/set/print/content/view/full/2090); and V. A., Extended Collective License. The Nordic solution to complex copyright questions, (http://www.kopinor.org/layout/set/print/content/view/full/1605).

22See paragraph “Collective extended licences”, supra.

23The necessity to strike a balance between these two principles is clearly expressed by art. 27 of the Universal Declaration of Human Rights of 1948. In fact, whilst art. 27 sec. II of the Declaration states that “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author”, the first section of the same article reads “Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits”.

24See http://ec.europa.eu/information_society/activities/digital_libraries/doc/hleg/reports/copyright/copyright_subg roup_final_report_26508-clean171.pdf

25Recital 18 of the Directive 2001/29/CE reads: “This Directive is without prejudice to the arrangements in the Member States concerning the management of rights such as extended collective licences”.

*The licence is available at http://creativecommons.org/licencses/by-sa/3.0/.