Ottawa, ON

--- Upon commencing on Wednesday, October 3, 2007 at 3:14 p.m.

MR. OXLEY: We are going to go pretty much directly into the next session. It's on Confidence and Competition in the Internet Economy.

Stream B is just starting right about now, and Hugh Stevenson, the deputy director of the Office of International Affairs for Federal Trade is leading a conversation on Confidence, Privacy and Security.

Now, in this room, we have got the luxury of having a great conversation which sort of follows the user content creation with Creation, Access and Competition.

The chair of this panel, editor‑in‑chief, Intellectual Property Watch, William New.

So make your way over to Session B, for those that are going, and for those that are staying, I turn you over to the lovely hands of William.

Go ahead.

MR. NEW: Thanks very much.

I don't see any reason why we shouldn't begin immediately. For those of you who are leaving, you may get ensnared in the interest of our panel.

I'm William New. I'm at Intellectual Property Watch in Geneva, Switzerland. It is a non‑profit media organization. We are covering international intellectual property policy‑making.

We are a new media method. We are a fusion of blog and traditional journalism model using creative comments licence. I'm happy to talk more about our project in another forum or after the event.

Let me tell you a little about the panel you have today. We have a terrific panel. I can't help, because I'm feeling it myself, to throw out there that if I'm not mistaken, this is a European, and further, much further, group and I'm sure it must be at least closing in on, I don't know, 10 or 11 at night for most of them. For at least one of them, it's already tomorrow. So I hope we will be lively, though, and I look forward to a lot of participation from the audience. I think we should not let this opportunity go by.

You know, a topic doesn't really become, it doesn't really exist, until the OECD holds a conference on it, in my estimation. We need to address the key elements of these issues, and these issues for this panel are creation, access and competition. These are three of the core issues, I think, from a policy standpoint, from a legal standpoint, from a consumer and user standpoint and from a business standpoint, and it's going to be very important that we try to hit the key elements of these topics.

During this short time that we have, I plan to ask each of the speakers with us, I plan to introduce them before they speak and ask each to speak for about 10 to 12 minutes, after which we will take questions. We have possibly some questions coming in on the web, but we will see about that.

The topic of access, creation and competition is fairly widespread. It definitely involves intellectual property rights, but access reaches far beyond that, and competition could be seen as a business issue as much as a consumer issue and reaching into technologies and beyond intellectual property rights, so you will have a wide range of ideas being presented to you.

I couldn't help but throw out one or two quick anecdotes and then I'm going to move on to the real speakers here. Today, actually, was the conclusion of a world intellectual property organization assembly. One of the issues there was related to copyrights, and in that committee they are going to address in the coming year possibly new proposals, new ideas. I think that this may be a turning point at the international level for a discussion on some of the new and other ideas that haven't been addressed on the copyright front when it comes to access to knowledge, and you might be hearing more.

But a film industry representative at that event told me, he's still there and he's working hard to try to control the use of their material that's showing up in user‑generated or user‑created formats, but many of his colleagues are leaving now to join companies or start companies that are getting involved in mesh‑ups, and this was sort of the way it's going for him.

The old models seem to be under some stress, but maybe there's enormous new opportunities for those models. I hope some of those questions come out today.

And then I couldn't help but paint two other quick anecdotal images. One was in the old days I recall that if you made a home movie with famous brands or borrowing copyrighted material, your only chance of widespread attention there was with your family, friends and pets, as you showed it on the livingroom wall. But now, of course, you have the opportunity or the prospect of massive popularity worldwide should it strike the right kind of cord. Things have changed.

And the other thing I would point out is we are going to, on this panel, also address the concept of a generation of people for whom living in an Internet environment, an Internet‑driven world, is their only reality.

I recall that my six‑year‑old, I was worried that perhaps he was behind the curve because he didn't' send his first email until he was almost four and he was already five before he said, before I didn't know the answer to something, Daddy, why don't we just Google it?

Anyway, I bring your our panel. We are going to begin with a very distinguished speaker. We have the vice‑minister of Policy, Coordination at the Ministry of Internal Affairs and Communications in Japan, Vice‑Minister Kiyoski Mori.

Thank you.

MR. MORI: Thank you, Mr. Chair.

My name is Kiyoshi Mori, Vice-Minister for Policy Coordination, Ministry of Internal Affairs and Communications in Japan.

It is my pleasure to be here at the Technology Foresight Forum on the Participative Web with all of my friends from around the world, friends who are among the most influential in the ICT field. I really appreciate the efforts taken by the OCED Secretariat and Industry Canada in realizing this wonderful forum.

Today let me just briefly mention the status of and the future issues facing the participative web in Japan. The upper shows the transition in the Broadband penetration rate in Japan. Recently, while DSL services, shown as the blue, are reaching a ceiling, fibreoptics shown by the orange, which allow more high-speed and large sized communications are rapidly increasing.

Also, as shown by the graph at the bottom, the mobile phone use, specifically high-speed Internet use by 3G, that means IMT-2000 is also growing rapidly.

Under these circumstances, participative web services such as SNS, blogs, on-line games, and net auctions are also growing. For the development of participative webs, as in the case of video sharing sites, for example, a Broadband environment is essential.

As participative web services increase in quality and quantity their power to affect the society becomes stronger.

The benefits of the participative web are as follows:

Firstly, it leads to glutting of the society. Everybody becomes able to possess social and economical influence to a certain extent through the interactive exchange of information. Wisdom of crowds and collective intelligence may change the society.

Secondly, it leads to a change in the business model. User-generated, or user-created contents may well make the market more user-oriented.

Lastly, services like SNS and websites that share video clips allow the simultaneous and interactive exchange of valued information. They enable the realistic communication and close long distances.

To expand these benefits of the participative web I think the following issues will be considered:

The first issue is an increase of traffic. It comes to a matter of traffic congestion. I'll explain this in the next slide.

The second is the need to build a new registrative scheme. Discussions have just started in Japan whether and how to introduce so-called layer-type regulations which would open up the platform functions of the network and also could respond to the emergence of new business and the convergence of telecommunication and broadcasting.

The third is to ensure the information distribution legally. To expand the participative web free flow of information is important. However, there is a concern of infringing copyrights or intellectual property rights and disclosing personal information. And there is also a concern that illegal and harmful contents are distributed to the youth. To cope with these issues appropriate legislative and technological measures should be considered.

Concerning traffic congestion, I have some data to show. The left graph shows the amount of downstream traffic of a major provider during 24 hours in November 2005.

The right graph is that of April 2006, six months later.

I can point out four things: First, there was a significant increase in overall traffic over the six months.

Second, according to the data of April 2006 its traffic occupancy rate sometimes reached nearly 90%.

The third, peer-to-peer, so called P2P traffic -- the colour is red, purple and brown, was larger than streaming and web surfing -- that is blue and green. This means that P2P traffic has a major significant impact on network than streaming and web surfing.

The fourth, the average P2P occupancy rate increased by 30% at the peak level and the at 10% at off-peak level for the half year.

Next shows upstream data. We see that there was network congestion in both upstream and downstream traffic. And the P2P occupancy rate was higher in upstream than in downstream. And it is almost clear that P2P users was a major cause of network congestion.

Maybe movie sites such as u-Tube and fibreoptics enabled and accelerated the growth of upstream P2P data flow.

How should be cope with this problem? The advisory study group submitted the report to the government on the network neutrality on September 20th this year. It covered a wide range of matters on the telecommunication competition policy. As for the equitable cost allocation of networks it reported the easing network congestion by the active us of P2P was a powerful way to make efficient content delivery. It also recommended that in order to keep a certain level of quality of service of the network some guidelines for a basic framework on packet shaping should be developed.

As for the equitable access to network, it recommended to make interconnection dues regarding energy and developed my MTT and to review the existing dominant regulations.

So, we are now planning to do a joint experiment between government and industry on P2P to find the best way to disperse traffic, and also other necessary measures will be taken soon.

The participative web, due to its nature, causes problems out of the traditional regulatory framework and that close quarters. To solve these problems I believe it is necessary for people to consider and cooperate at forums such as the OECD. I would like, therefore, to recommend two ideas:

The first point is that we should include program awareness and the policy challenges in dealing with the participative web in the Seoul Declaration which will adopted in the Ministerial Conference next June and to facilitate program awareness in OECD member states and non-OECD countries.

The second point is that we should continue to hold this forum to encourage future discussions and to create a global scheme for cooperation.

I hope that we can move on with the things we have discovered and the relationships we have built that this forum, and we can build participative relationships in the future.

Thank you all for listening.

--- applause

MR. NEW: Thank you, Vice-Minister. That was very interesting. Thank you.

I would like to invite Professor Urs Gasser, the Director for the Research Centre for Information Law at the University of St. Gallen in Switzerland and a Fellow at the Harvard Berkman Centre for Internet & Society, to address us.

MR. GASSER: Good afternoon, everyone.

Please let me take two steps back and approach this panel's topic from a slightly different perspective by reporting about joint and ongoing research project between the Berkman Center at Harvard Law School and University of St. Gallen, Switzerland, called the Digital Natives Project.

If you want to learn more about the project, we're here with a stand.

This project aims to explore how the first generation of kids born digital, children who don't know or couldn't imagine a life without Google, live their lives on how they use the Internet.

So my remarks are more about the question: What kind of issues are emerging once children got access to the Web, because these experiences in turn will also affect a kid's willingness to go online in the first place, as we know from several surveys.

At the core of the lives of digital natives is, to one extent or another, as Shenja van der Graaf pointed out today, what we discussed today, an increased level of participation.

In our view, and I believe also in the OECD's view, it is important to frame participation in a broad way. Participation is not only about creating fancy mashups featuring George W. Bush or creating your own Web blog or contributing to Wikipedia. It is also a story about increased social participation, as we learned today, and social networking sides, as well as virtual worlds and social spaces are probably only the tip of an iceberg.

It also means increased opportunities for economic participation of young people. The key word here might be young digital entrepreneurs who are coming up with probably the next wave of cool applications. Maybe we will have an opportunity to discuss that later on.

And, as we heard in this morning's session, of course it also means new forms of political participation and activism.

This broad understanding of participation also makes clear that the challenges associated with the participatory Web go far beyond intellectual property rights issues and competition law issues. These two issues, especially IPR issues, have gained so much attention in the past and they are still such a dominant theme in the room, but I think in the years to come we need to shift our attention a little bit to other very important issues as well.

In our research on digital natives we propose three clusters of issues.

The first one is to question how the participatory Web changes the very notion of identity, security and privacy. This was mentioned in the previous panel. If you talk to kids, they have a completely different relation to personal information and a different understanding what it means to disclose personal information.

Second, the second cluster is about the implications of the participatory Web for creativity, for creative expression, for free speech, but also for the business of creativity.

Third, we are interested in how digital natives navigate cyberspace, how they get their way through billions of Web sites, how they find the information they are looking for, how they access the quality, the credibility of information.

The role of governments in these three clusters is very different from cluster to cluster and even from issue to issue. It may even change over time.

So what we are looking into right now is, how could we define the role of governments based on a case‑by‑case analysis? I will give you a couple of examples.

Today we learned that digital natives have multiple identities. They have their profiles, for instance, on MySpace or Facebook, but they also have their virtual representations in Second Life, and so forth. All these profiles, these virtual representations are parts of their identities.

Now, in this area of multiple online identities, we currently don't see an obvious need for governments to step in and regulate. However, this morning someone mentioned that there is probably an emerging regulatory issue there, for instance to ensure the interruptability between different platforms that provide identity.

In the area of online privacy, another very important policy area, we see a clear role of the government in contrast. Probably the role is less about making additional laws, enacting new laws protecting privacy, but about implementing and enforcing existing rules about international collaboration and also harmonization to a certain extent.

In the creativity cluster we generally believe in the power of market forces and bottom‑up approaches. Innovative business models, as well as new and more permissive licensing regimes such as creative comments, to name just one example, are key elements of this bottom‑up approach.

However, there may be a very specific role of governments at the margins. For instance, when governments legislate about technological protection measures, so‑called anti‑circumvention legislation, they may use their leeway under the different international contracts to create the conditions for a more participatory environment.

Or when it comes to limitations and exceptions to copyright, there too governments may play an important role in shaping the legal framework.

My colleague, Professor Senftleben, will talk in great detail about the options and possibilities regarding limitations and expectations in a few minutes.

With regard to information quality issues and the participatory Web, identified actually in this OECD report, we see only a very limited role of governance, for instance by providing some minimum quality requirements, either the ban of child pornography or certain forms of hatred speech, or a more active role by providing high quality information in the context of digital service publique.

But otherwise, as far as information quality is concerned, the emphasis should be on education, on learning, on media and information literacy.

Here of course the private sector plays a very important role too. It can make important contributions.

These few remarks also illustrate certain trends when it comes to policy issues in the context of the participatory Web on the one hand side and digital natives on the other hand side.

First, multiple stakeholders are shaping our kid's online experiences in the future, ranging from peers, parents, teachers, coaches, the companies and policy‑makers. The challenge of course is to coordinate the different roles and contributions of each group of stakeholders.

The second point is the challenges we have identified and discussed during this day, and will continue to discuss, are global in scope, which calls for a harmonized legal framework in some instances and in other instances for other forms of coordination.

I hope we will get the chance to talk a little bit about the question as to what extent do we want to harmonize legal frameworks and as to what extent is it a bad idea.

Third, I believe that we need a more flexible approach in understanding what regulation means in this place. I use the term "regulation" in a very broad sense. It goes far beyond command and control regimes.

Someone mentioned today, incentive‑based regulation which is an important element in the policy mix I think, but the emphasis in our research is currently education and learning with special attention to media and information literacy.

I think if we map these challenges and trends it becomes clear that the OECD's work is increasingly important because I think, as you pointed out, Bill, OECD has an awareness‑raising function and an agenda‑setting function and contributes to our understanding of the digital environment and of the use of the Internet by different populations.

It also clearly plays an important role in international coordination and harmonization efforts and makes great contributions to alternative forms of regulations such as soft law by providing recommendations, guidelines and best practice approaches.

That's it for my side. Thank you.

--- Applause

MR. NEW: Thank you, Urs.

I would like to invite Anne Bucher, head of unit for the Information Society and Media Director‑General of the European Commission, to give us her remarks.

MS BUCHER: Good afternoon.

I'm going to take the general question on the role of governments and I will say some words on competition.

On the role of governments, I'm not going to present a European Commission line because we don't have one. I mean, what I will tell you is what I tell my bosses internally when they ask me: what should we do about participative web?

Basically, if you take that question, my reply is policy‑makers have largely not anticipated the development of participative web, they have not anticipated the business models, the size of the communities, the purpose of the exchanges that take place. This has happened with the current legislation. This has happened with the current legislation on IPR, on privacy, on protection of minors, on liability of service providers.

When governments are confronted with disruptive trends and with things which change very quickly, it is wise and cautious to try first to understand the long‑term implications before rushing into legislation and policy changes.

In the meantime, what you see is that a lot of the social networking which is happening is basically ruled by self‑regulation, and self‑regulation has a role to play, and will probably keep a role in the future development of the participative web.

Self‑regulation is a fairly adequate tool. I mean, if you think, it is able to respond very fast. It is innovative. If you think of the creative common licence, it is an innovative way of licensing content specific to the participative web. It is coping with millions of users, spread across different jurisdictions, with different legislation and you can say one thing is that we do not have massive court cases.

So my recommendation is be very cautious before moving. It doesn't mean do nothing. I mean, there's a certain number of areas, and it's been mentioned. I mean, I have heard several advisors and warnings from the audience this morning and this afternoon, as well, we have to. IPR is certainly an area where there are long‑term challenges.

The other challenges which we are coping with is the fact that self‑regulation interacts with legislation, and in some cases it potentially could raise problems. I mean, you go on SecondLife. Now SecondLife has started to give copyrights to the creators under the U.S. legislation. I mean, enforcing this for users who are not in the U.S. will be an interesting issue.

I mean, there are some cases, for instance, and it happens on games online, where users invest a lot of time in defining their identities and in creating virtual objects, and then suddenly, I mean, they could be expelled from this community by the service provider just because they are suspected of having breached the rules. In that case, they are still on their objects, but they have no right to use them and they have no system of appeals.

So there are some areas where the legitimate interest of the users will need to be protected. But as I said, it's a bit prospective because we do not have real cases, not that many. Therefore, the recommendation in the short term is try to figure out what are going to be the long‑impacts of what we are seeing now as innovations, and then think how to integrate this into the policy.

As I said, I wanted to say a word on competition. Competition is definitely an area where policy‑makers might have to step in earlier than they think. The participative web, it's true, it's really a typical case for network effect. I mean, if we believe that the value of the network is the square of its size and if you see the business model relying on capturing advertising income, there will be continuous incentives for developing horizontal or vertical integration and further concentration.

We saw it from the beginning. I mean, Yahoo! and Google had a first move advantage when they developed the business on search engines. They diversified the services available with the chatting, with the videos, and maybe they will move into IPTV and other services, and this will carry on.

The way we see it in the European Commission is that it's not new compared to the other networks' effects we have seen, and we know that anti‑trust policy has the means of restoring competition. I think, on participative web, I mean, our first test is in fact already there because last week we have been notified of the takeover of DoubleClick by Google, and it's one of the first cases of, really, vertical integration in that business. So we can rely on anti‑trust policy, and these are rather classical network effects.

At the same time, I wanted also to say that maybe we should not underestimate the competitive forces which are also at work in this area, and I would mention two.

One is the long‑tail argument, and the second one is the demand of users for open environments. On the long-tail arguments, I think the long-tail argument definitely applies to the participative web. In Europe, we are very keen on cultural diversity, on multilingualism, and we see a lot of the communities which exist are in fact local, with local cultural preferences and local languages.

Similarly, you can say that the participative web has not extended very much yet to professional purpose. I mean, we see some medical communities, some education communities, but just think of the communities which could develop with specific interest.

It's not obvious when you look at these communities that there would be an interest for one or two major players to put all these communities on one platform to channel, for instance, advertising revenues. I mean, the logic is not very strong on this.

The other argument here on the demand of users for openness, I think we have heard this morning that all this marvellous participative web exists because they are all open standards and they are open‑sourced. True, but it is not unusual in our environment, as well, to have had more innovation models which have developed on the basis of walled gardens.

And the participative web operates on the basis of walled garden. You belong to a platform and you exchange your communities within that platform and you are not exporting your community outside and you are not exporting your profile outside that platform.

But this is a rather typical form of innovation. And then when the market develops and then it reaches a level of mass market, there's an increasing pressing of users for interoperability and for openness. I think what we have seen in the last 24 months, for instance, on the music industry, the music download, is quite representative of this.

I mean, Apple has been very successful with the iTunes Store as an innovative model, but there has been some resistance of the users to the lock‑in of the model. Now what you see, you see the competition of the music service providers being exactly on business models, DRM Free or with other types of DRM, but responding to the demand of the users to be able to migrate content from one platform to the other. So this model for interoperability exists.

And we see the trend in the participative web happening. I mean, the technology is there for having open identities, for having social graphs. Facebook, for instance, has announced that they will make the profile of the users public. Google will probably follow. So there is a trend for making this environment more open, and that should favour competition in the medium term.

I see have zero minutes left, so I'll stop there.

I didn't talk about net neutrality which I think has more important implications for competition than just the participative web as such, but I assume that will come in the discussion.

Thank you.

--- Applause

MR. NEW: Thank you very much. I wonder what double-click Google's chances are? I won't ask you that.

Finally, wrapping us up before we move to questions I would like to invite Martin Senftleben, Professor of Intellectual Property at the Free University of Amsterdam, to join us. Thank you.

MR. SENFTLEBEN: Thank you, Mr. Chair. Ladies and gentlemen, good afternoon. Welcome to the fascinating world or intellectual property.

We already touched upon this issue today, already in the first presentation, when I remember it correctly. So, I would like to add some thoughts to the general questions regarding intellectual property rights, and the participative web.

I would like to place this issue in a broader context in order to approach it. In fact, many of the questions that I discuss now, at the moment, are not necessarily new. From the very beginning when the Internet emerged, there have been two approaches:

The first approach saying well, listen, the Internet is a perfect medium for collaborative efforts for increased autonomy, participation, diversity. So, an instrument of the free flow of information. And this argument is a valid one, I submit.

Another argument was that if we really want to encourage content providers, the media industry, the information industry, to offer content on-line, then, of course, we have to offer protection as well, otherwise this will never happen. And this is a valid argument, as well.

So, the question here is how to reconcile these two approaches, and the participative web is just another phenomenon raising this issue another time.

How to reconcile the two approaches? I think participative web is rather about the freedom and the free flow of information part. So what are potential interfaces of this new instrument with the protection of IP rights?

To approach this question, let's first look at the stakeholders, what is at stake in this context?

First of all, we have on the Internet, of course, right-holders, copyright holders are very prominent and then, again, database rights, people holding rights in databases. And, there, again, we see that we can't draw a black and white picture.

Platform providers in the field of user-created content, for example, are very keen on intellectual property protection when it comes to protecting their databases. So we can't just say intellectual property protection is something that is not valid in a participative web context.

Then we have lots of trademark issues arising here, as well. I do not concentrate on this one, the issue gets too complex. I only raise certain issues like giving the false impression of sponsorship or offering inaccurate information about certain branded goods. But, as I said, I don't focus on this issue here. So, this is the side of right-holders.

Then we have users who want to transform, not themselves, but content, pre-existing works, material. I submit that these users are predominantly private users.

And then we have users who add value to something that is already there. Users that build some new services on pre-existing work, some material that is there that might be protected by intellectual property rights, like search tools, content aggragators, recommendation engines. And, here, we have also a mix of users. Some of them might be private users, others will certainly be commercial users.

And then finally we have platform providers and, as the slide indicates, we cannot draw a clear boundary line. Platform providers might, to a certain extent, also end up offering something that can be regarded as a value-added product. So, in this sense they are users that add value themselves.

So, what is the answer? The answer to the question I raised: How to reconcile the world, the fascinating world of the participative web with the protection of intellectual property?

Let's answer the question step-by-step. The first group, transformative use. Users who transform pre-existing material want to know "Can I be sued for infringement? Copyright infringement, for example?"

What are the factors to be considered?

I think there are three main points to make here:

These users engage in an activity that is related to freedom of expression and democratic participation, so we have a very strong human rights underpinning here.

Then we have the idea of inter-general equity among creators. In fact, we can say that every creator, every author, builds to a certain extent upon pre-existing material as a source of inspiration, or he uses building blocks from something that is already there. So, this idea of inter-general equity also adds a strong argument.

Then, finally, as we got to the participative web we have to admit that there is a promising creative potential out there, a promising creative potential of individuals who just wait for a platform to offer their ideas, and I think we should try to use and realize this potential. And so I think we have strong arguments in favour of saying there should be copyright limitations.

These users, transformative users, should be exempted from copyright liability, and they also have traditional solutions, traditional answers to this problem, limitations for quotation, parity criticism review. We find that in international conventions that have been in place for more than a hundred years. So this idea is not new.

I think what we can do now is to broaden and diversify the already existing rules in this area. And, also, this idea is not necessarily new, if we look at the UK Gowers Review, there we find similar recommendations.

I want to add another point. All these limitations, quotation parody, are based on one basic idea, and this is that intellectual debate takes place. A quotation necessarily implies that the user adds some critical comment. That he uses the reference to a work as a reference point. And I think this is the criteria that should necessarily -- that should in any case be maintained because this can also help to solve the problem of content quality. So, in order to qualify for this kind of limitations, users should really make an effort to enter into an intellectual debate and not just to free write on pre-existing work and not just to engage in mere copying.

The second group: Value-added products. Also, these users want to know is there infringement. And the factors to be considered here, according to my insight, is:

First, these value-added products are important engines of competition and innovation. They create more and more demand and so they are important players in the field of the participative web.

A second argument is they are important because they help to disseminate information. We see that information is diverse and fragmented in the participative web, so we need services who filter, who bundle information.

And, thirdly, and this is the most important point, you may not overlook that it is about the distribution of markets. Basically, a valued added product is the new secondary market that is built on the primary market of the original product. So, in any case, value-added products should not kill demand for the original product. This is one of the basic rules.

We find traditional solutions also in this area. There have for a long time been limitations for press summaries, press reviews, library services who offer value-added products as well. So, the recommendation here would be that limitations for value-added products are a good thing, but only if they do not erode the primary market, the demand for the original work, and if equitable remuneration is paid, because many of these users are commercial users and in this case I think it is fair to impose an obligation to give some payment in the form of a flat rate or levies, to the content providers.

Finally, platform providers, they want to know "Am I liable?" There might secondary liability, contributory liability factors to be considered here. They are indirect beneficiaries of limitation. If a limitation exempts the user from liability, then of course the content -- the platform provider is also not liable.

Then I already mentioned this connection with value-added products. Many of the platforms may be regarded as a value-added product itself, so in this case, the rules for value-added products should apply. But then the hot potato here is the heavy burden of general monitoring. Who should spend time and money on sifting through all the material that is placed on the participative Web every day?

There is a traditional solution, this is notice and take down procedures. Basically it says that the platform provider in this case would only have to take action if he receives a notice saying "Listen, on your platform there is some content that is infringing".

These notice and take down procedures have been used in the field of Internet service providers, to a certain extent also in the field of trademarks, the uniform dispute resolution policy refers to this one. I think that to platform providers this mechanism applies only to certain extent.

I think notice and take down procedures should be introduced only if the platform plays a rather passive role, so the closer the platform provider is to the content offered on the platform, the more it should be under an obligation to check what is on the platform.

If there is a platform provider who redistributes, who restructures the Web page anyway, I think then it is fair to say he should have a look at the material that he finds and, in any case ‑‑ this goes for all platform providers ‑‑ proper precautions should be taken. I think it's fair as a minimum standard to offer information to users pointing out the risk of infringement, and in case some kinds of use are typically infringing the platform providers could take action.

I think YouTube for example reduced the time for video clips that can be placed to 3.5 minutes, so you can't find entire Hollywood movies any longer one week in advance on YouTube. This is a very basic measure that could be used as a precaution.

Finally ‑‑ I'm already at zero minutes ‑‑ two horizontal issues.

Technological protection measures. These are a good thing also in the field of the participative Web, but in any case limitations should prevail. If they don't, then there is no need in introducing new limitations. There are rather bad examples in current legislation. I refer to article 6.4 of the European Copyright Directive where we don't find the means for beneficiaries of quotation and parity limitations to assert these limitations against rightsholders, whereas other types of limitations, for prisons for example and for hospitals, can be asserted against rightsholders.

I think that core limitations like these freedom of expression limitations in any case should give a strong position and in this case limitations should in any case prevail.

Second, we have to enhance legal certainty in order to have limitations be efficient so we can encourage contractual solutions, solutions like creative comments licences, and we should in any case reduce the impact of abstract control mechanisms, abstract legal rules that are imposed as an additional control on limitations. An example here is the famous three‑step test of international law.

The influence of these kinds of regulatory means should be reduced in order to have more legal certainty.

Thanks for your attention.

‑‑‑ Applause

MR. NEW: Thank you, Martin.

Well let's move to questions.

Unfortunately, we don't have a great deal of time. I would put it at about 20 minutes, if I'm not mistaken. So I would ask the floor if there is anyone who would like to ask a question at this time and, if not ‑‑

Oh, sorry. Yes, please.

QUESTION: Jonathan Taplin from the University of Southern California, directed Minister Mori.

I was astonished by your slides of the growth of bandwidth. If you pardon the pun I might posit a new Mori's law that the amount of content expands to the amount of bandwidth possible in the network.

Obviously we all look to Japan as the leader in fiber optic, but to see that astonishing growth in content leads me to wonder: Do you feel that the principles of new network neutrality are still possible given this experience that you have in Japan with the amount of streaming video, peer‑to‑peer traffic and yet you can still allow open access to various networks by anybody who is a content provider so to speak?

MR. MORI: Thank you very much.

Just I mentioned the discussion in Japan of net neutrality has just begun. The advisory group's report said the same principle as the FCC said for ‑‑ FCC four principles and our country has three principles ‑‑ and the discussion will be in the future maybe, but at least the more we install fiber optics or broadband environment, the more the network condition happens.

How should we cope with that is a very big problem. Tomorrow I will talk to this matter with Martin so I will find an extreme answer later.

MR. NEW: Thank you.

I think we have a question at the back.

QUESTION: Hi there, my name is Danielle Par(ph) and I am from the Entertainment Software Association of Canada, so I represent video game publishers in Canada.

One of the issues I guess we touched on a little bit in some of the presentations was about technological protection measures and digital rights management and the ability of content creators to control access to content and I would be interested to hear a little bit more from the panellists about the concept.

Because I know our industry I think has taken a fairly innovative approach in terms of, you know, having technological protection measures but allowing some user manipulation I guess of the intellectual property.

MR. NEW: Would anyone like to take that?

Perhaps, Martin, you could say little something on this.

MR. SENFTLEBEN: I'm not sure whether I understood the answer correctly. So it's about the question of digital rights management technological protection on the one hand and creating new content on the other or transforming content?

QUESTION: No. I was just saying, I would be interested to hear your views about the rights of the creator to control access to their own content.

Because we have talked a lot about the participative Web and all the benefits, you know, from being able to manipulate content, but what about the rights of the creator and their ability to control access to that content.

MR. SENFTLEBEN: Well, I think this is a fair claim.

As I pointed out there have been traditionally two cultures, the free flow of information culture and also the traditional approach of protection of works of creative effort, and I think both sides are valuable and there is a good point on both sides.

I think creators should have the choice and nowadays you have the choice. You can opt for a creative comments licence if you want to make your content available, also for informative use and other sources.

But there are also users who just want to exploit their works. I think this is perfectly understandable and should also be accepted.

So what I was proposing are certain limitations, offering transformative use options, but to the extent that intellectual debate takes place and that you really depend on pre‑existing works in order to express your own thoughts.

MR. NEW: Madam Bucher, do you have a remark on this?

MS BUCHER: Yes, maybe an additional remark.

I mean, first of all, in a lot of game environments users own their content only on the platform and it's not something they can export to other platforms. So already this problem of how a user ‑‑ what are the real rights of using his own creation.

What is the right of using your own creation? It's not very clear always in the terms of use of the end user licence agreements of games. So it's something which needs to be clarified before even thinking of DRM solutions which would be more for cases where you would really be able to make your content freely available everywhere.

I mean, on the DRM aspect, I think there were ‑‑ we still have to have the debate on DRM's, yes? There was a lot of hopes that the DRM technology will enable the migration of traditional content online and this is not happening. This might happen maybe for films, but now DRM have lost their credibility. They are seen as very rigid technologies.

I'm not an expert in technology, but what I understand from my colleagues who do with that is that there are some forms of DRMs which are quite more flexible than what we have been seen used by the traditional content owners, that in fact you could have solutions and some software providers have thought about that, of having a DRM, which you would have as part of your normal package of software in your office, on your desktop, where you could decide to DRM any document you wanted to define the conditions of use.

I mean, if such a solution existed, and apparently it is technologically feasible, it would be wonderful and would solve, I mean, partly the problem you mentioned for content creation in a games environment.

MR. NEW: Yes, Urs.

MR. GASSER: I will jump in here and be a little provocative.

I believe DRM and technological protection issues are dead. It just failed as a response to piracy. So if you look around, even industry representatives are acknowledging today that the role of DRM is no longer about the fight against piracy rather than supporting new business models, but more like the accounting part of it, to measure the use and, you know, to do some price discrimination and so forth, so....

But as a means to an answer to piracy, I believe, I strongly believe, DRM's dead.

MR. NEW: Okay, thank you.

It raises a question that I'm going to try to fit in quickly, but I will ask it after this, to discuss just for a moment what are these new business models. Maybe we can get that out in the open a little bit more.

Please.

QUESTION: Eddan Katz, from the Information Society Project at Yale Law School.

I wanted to ask the question about who owns this stuff or, better put, who should own the stuff, or whether we should be thinking about it differently entirely. Especially from the Europeans, we heard three different perspectives, one of which is about the liability of the platform, sort of underlying that an assumption that the platform would probably own everything that takes place on these networks.

There's also moral rights, which I would expect, especially from a largely European panel, that this is owned individually by people contributing to these networks, and for it to be taken away from them is sort of degradation of their rights.

Then we hear from Urs that people have multiple identities and exist in this post‑modern world where they are a mix of self and community, and all of that, and I'm wondering if, in trying to address the intellectual property part, whether there's some real big challenge here going on in regards to authorship that requires a fresh look and whether or not government regulation can contribute and nudge along in one way or another.

MR. NEW: Did you get that question? It looks like Martin.

MR. SENFTLEBEN: Well, this is, in fact, a very good question, who owns the stuff.

I think it's basically a problem of bargaining power as regards certain platforms. If you want to have your material placed on a specific platform, then you certainly have to subscribed to the terms you find in the licence that is offered by that platform. This is, of course, a big problem, potentially, if there are only specific platforms for the kind of use you want to offer in the participative web.

But, again, this is a problem which we also have in the traditional world: the kind of buyout contracts where authors just simply throw away their works and all the rights that have been given to them, originally by law, and then with only one signature everything is gone. But government policies could perhaps step in here, to a certain extent, as regards laws.

As regards laws in Europe, for example, one way would be to ask how to control these general contractual agreements which you find, and there we have already, if I'm not mistaken, some European legislation, at least in the member states, you find legislation. I think in the U.S. this could be a question of preemption and doctrines in the different states.

Of course, there you can say that some very specific issues, where you really give away, for example waive your moral rights in the field of copyright, that this should be reserved, that you can't give that away just by subscribing to a general contractual agreement, that this can only be achieved on an individual basis. So this could save some ground for the users.

Then another possibility is, of course, the switch. I mean, the participative web, as far as I understood, is evolving every day, new services every day, so if there is one platform offering really bad conditions, then perhaps the next day somebody will offer another platform that offers more generous conditions.

I think this is, then, a more market‑based approach, that you say, Well, finally, we will end up with many different platforms, offering different contractual solutions.

MR. NEW: Anne.

MS BUCHER: Yes, this is a general problem on the ownership of the virtual objects or identities.

Users sign end user licence agreements. It is our experience in the Union that a lot of these end user licence agreements do not conform to the legislation on licensing, but users still sign them. So if they would go to court, they could make their case, because that would make the provisions of a licence not valid. In practice, they never go to court, so this is not seen.

And his is a problem which is not specific to the participative web. It is something which also is seen for software licences, it is seen for services online. I mean, there has been a recent study by the German consumer organization, which has reviewed end user licences for more than 50 services of music online, and they have found that none of them was compliant.

Then what is the role of government for this? I think, then, the role of government is really to educate people, is really to tell them what are their rights. I think we are coming back to what Urs was saying, you need to tell people what are their rights: rights to privacy, rights to ownership, and then afterwards, when they sign a licence, they know what they are doing.

I think that's the main action at that stage that we can take. I mean, you could think of, also, some guidelines which could be given. But in areas where there's much more experience, like in the area of software, I mean, the software providers tell us, But what's the problem, there's no case law, after how many years of using software. They are right, there's no case law.

So this also applies to this problem of ownership. We can anticipate the problem. We can know the problem is there in the terms of condition of the licences. It doesn't mean that the users will not accept the rules and live with them.

My additional point is when you start giving rights to the creator in an online environment, like it is done, for instance, now with SecondLife, then the creator has a right, and a copyright you have it in the place where the content is.

Where is the content? Is it on the server? Is it where the user is? I mean, you will get into discussions which are also very complicated, which we need to have, but it's very early in the process for identifying completely the implications.

MR. NEW: It seems like it must be difficult to communicate to the public what their rights are, and to encourage them to work within their rights and not to be afraid to do these things when there are so many questions revolving around these issues. But nobody wants to be the case law.

Do we have any other questions? Yes, please.

QUESTION: My name is Taylor Reynolds, from the OECD. I have a follow‑up question from Mr. Katz here.

I have stopped putting my own content on uTube just recently after reading through the end user agreement that I agreed to, because I felt like I was giving too much control to Google for the videos of my own children that I was posting on the web.

What I would like to do instead, is actually host that content at home, on a home server, so that I maintain copyright and control over that, but I can still send it out to people.

The problem is most ISPs limit me and I'm not allowed to run server software from my home, and the other problem is I don't have a very fast upstream.

So in countries like Japan, where we do now see 100 megabits per second upstream and we see home servers that are being developed, it seems like this could be an answer to making more content available to other people. I was interested to see how that's happening in Japan; if having 100 megabits per second and a home server is actually putting mor content up on the web for people to see.

MR. MORI: Yes, I first thought that if we install fibreoptics or a wider Broadband environment the flow of information will go on very smoothly, but the result was different. The more we install, the more condition happens, not only downstream, but upstream also.

But, as I said, there is a -- we are now going to make experiments how to make active use of P2P. That may be the result or may be a good answer to that question, because there are so many P2P softwares, and to make over a network, maybe it will help this kind of question.

But, one more thing is, how to make package shaping. We have to admit that each carrier or ISP's have the right to limit their Bandwidths, because -- and the problem is that on what condition the limitation is done from the consumer protection point of view. That's the problem. And we will discuss this matter from now on, in Japan.

MR. NEW: Thank you. Yes?

QUESTION: Michael Hennessy(ph) with Telus.

Just to follow up with Vice-Minister Mori, a question on, you had suggested that there were two recommendations from the September 20th report, one being, as you discussed, the packet-shaping guidelines and the other being interconnection tariffs, non-discriminatory interconnection tariffs. But I didn't understand quite who is to pay the interconnection tariffs? Is this the idea that it would be on large Bandwidth users? Is that the idea?

MR. MORI: Yes. In a short word, the person who uses the network should pay much more. But there is a problem. How can we measure the charges? And, the program is that Internet is -- best efforts service, itself. So, on what condition is the service good or not? But, anyway, the network carrier has to pay -- has to invest their networks, so someone should pay for that. So we are now -- began discussion what kind of payment, charging, is suitable for this situation.

Thank you.

MR. NEW: Thank you. Yes?

QUESTION: Good afternoon. My name is Michael Shapiro. I'm with US Patent and Trademark Office. But in this informal, non-deliberative session, my views are my own and do not necessarily reflect those of the Untied States Government.

I'm always delighted to hear from eminent professors of law from the European Union and other nations in Europe, that the US notion of transformative use is being embraced so wholeheartedly -- delighted, but also somewhat confused.

I think it is fair to say that notion took US courts by storm, since the seminal Acuff-Rose case in 1994, the results have been somewhat uneven and certainly uncertain and unpredictable.

In the words of one leading commentator "a transformative use is largely a beauty in the mind of the beholder."

Given this background, I'm curious how this notion would comfortably map onto European Union law that is largely a more categorical approach. The transformative use doctrine under US law is part and parcel of our fair use doctrine, which I take it is rather open-ended and quite different from the European categorical notion of enumerated exceptions and limitations.

Moreover, I'm curious, given the US experience on unpredictability and uncertainty of this doctrine, how perhaps you've given some thought, that this would build the stable and certain legal environment necessary to continue this flourishing of user-created content?

Your thoughts would be welcome.

MR. NEW: Thank you. Who would like to take that question? Okay, Martin?

MR. SENFTLEBEN: Well, as regards the first part of your question, how can this idea, this concept of transformative use be translated into EC legislation or the European Copyright tradition? Well, the answer is, it has already been there for quite a long time.

If we look at international treaties that underlie European legislation, the Berne Convention, for example, we find that in Article 10 the right to quotation is really regarded as a right. "Member states shall prove for limitations for quotations." So, what you find in EC legislation and also in the legislation of Continental European Member states is, of course, not the transformative use doctrine in the shape of a fair use doctrine. Instead, you find clearly stated limitations, statutory limitations saying that it is not an infringement of copyright to make quotations, or to engage in parody.

And the requirements that have been developed in this context then are, as I pointed out, that really something like intellectual debate takes place. For example, the High Court in Germany, the Bundesgerichtshof has stated that if you want to make a quotation then you have to show that you really need the other work to make reference to this work in order to make your own statement. And the same goes for parody. And you would be surprised at solutions that have been found by judges in Germany, come very close to what we have seen in US court decisions like Acuff-Rose.

So, we have the transformative use doctrine already for quite a long time in Continental Europe, I would say, but of course in the shape of Continental European laws.

And, as regards your second point, I think at the moment Continental European laws are becoming more and more fair use type laws because of European legislation, and this is a topic that is very dear to my heart, it's about the three-step test at the international level that is a very open-ended norm, very close to the use of fair use doctrine, and what EC legislation has done is it has translated this international norm directly at the community level, and now we find it at the national level. So, I would say what we see in Europe at the moment is an emergent EC unfair use doctrine because these flexible norms are used not the determine whether a use is fair, but whether a use if unfair.

So, if you want, we have two approaches: The fair use doctrine in the US, and the unfair use doctrine in the EC that end up in the middle, and the middle is legal uncertainty that users seeing something in the law just don't know how courts will finally apply the rules.

So, I think, for the time being, we face very much the same problems here in the US, in Canada and also in Europe.

MR. NEW: Well, I don't think I see -- oh, would anyone else like to answer this? I don't think I see any other questions in the audience. And, in fact, we, I believe, have come to the end of our time. And, so I would like you to please thank the panel.

--- Applause

MR. OXLEY: That was wonderful, William. Thank you so much.

We've come to a really good part of the day, a nice coffee break. It's getting to the end of the day and I'm not sure if everyone is feeling the same way I am; I could really use that cup of caffeine right now.

‑‑‑ Upon recessing at 1630