Legal Protection: European Union Within the EU's goal of establishing a European single market also intellectual property rights are of significance. Therefore the European Commission aims at the harmonization of the respective national laws of the EU member states and for a generally more effective protection of intellectual property on an international level. Over the years it has adopted a variety of Conventions and Directives concerned with different aspects of the protection of industrial property as well as copyright and neighboring rights. An overview of EU activities relating to intellectual property protection is available on the website of the European Commission (DG Internal Market): http://www.europa.eu.int/comm/internal_market/en/intprop/intprop/index.htm

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The Piracy "Industry" Until recent years, the problem of piracy (the unauthorized reproduction or distribution of copyrighted works (for commercial purposes)) was largely confined to the copying and physical distribution of tapes, disks and CDs. Yet the emergence and increased use of global data networks and the WWW has added a new dimension to the piracy of intellectual property by permitting still easier copying, electronic sales and transmissions of illegally reproduced copyrighted works on a grand scale. This new development, often referred to as Internet piracy, broadly relates to the use of global data networks to 1) transmit and download digitized copies of pirated works, 2) advertise and market pirated intellectual property that is delivered on physical media through the mails or other traditional means, and 3) offer and transmit codes or other technologies which can be used to circumvent copy-protection security measures. Lately the International Intellectual Property Alliance has published a new report on the estimated trade losses due to piracy. (The IIPA assumes that their report actually underestimates the loss of income due to the unlawful copying and distribution of copyrighted works. Yet it should be taken into consideration that the IIPA is the representative of the U.S. core copyright industries (business software, films, videos, music, sound recordings, books and journals, and interactive entertainment software).) Table: IIPA 1998 - 1999 Estimated Trade Loss due to Copyright Piracy (in millions of US$) Motion Pictures Records & Music Business Applications Entertainment Software Books 1999 1998 1999 1998 1999 1998 1999 1998 1999 1998 Total Losses 1323 1421 1684 1613 3211 3437 3020 2952 673 619 Total Losses (core copyright industries) 1999 1998 9910.0 10041.5

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DMCA The DMCA (Digital Millennium Copyright Act) was signed into law by U.S. President Clinton in 1998 and implements the two 1996 WIPO treaties (WIPO Performances and Phonograms Treaty and WIPO Copyright Treaty). Besides other issues the DMCA addresses the influence of new technologies on traditional copyright. Of special interest in the context of the digitalization of intellectual property are the titles no. 2, which refers to the limitation on the liability of online service providers for copyright infringement (when certain conditions are met), no. 3, that creates an exemption for making a copy of a computer program in case of maintenance and repair, and no. 4 which is concerned with the status of libraries and webcasting. The DCMA has been widely criticized for giving copyright-holders even more power and damage the rights and freedom of consumers, technological innovation, and the free market for information.

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Royalties Royalties refer to the payment made to the owners of certain types of rights by those who are permitted by the owners to exercise the rights. The rights concerned are literary, musical, and artistic copyright and patent rights in inventions and designs (as well as rights in mineral deposits, including oil and natural gas). The term originated from the fact that in Great Britain for centuries gold and silver mines were the property of the crown and such "royal" metals could be mined only if a payment ("royalty") were made to the crown.

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Liability of ISPs ISPs (Internet Service Provider), BBSs (Bulletin Board Service Operators), systems operators and other service providers (in the U.S.) can usually be hold liable for infringing activities that take place through their facilities under three theories: 1) direct liability: to establish direct infringement liability there must be some kind of a direct volitional act, 2) contributory liability: a party may be liable for contributory infringement where "... with knowledge of the infringing activity, [it] induces, causes or materially contributes to the infringing activity of another." Therefore a person must know or have reason to know that the subject matter is copyrighted and that particular uses violated copyright law. There must be a direct infringement of which the contributory infringer has knowledge, and encourages or facilitates for contributory infringement to attach, and 3) vicarious liability: a party may be vicariously liable for the infringing acts of another if it a) has the right and ability to control the infringer's acts and b) receives a direct financial benefit from the infringement. Unlike contributory infringement, knowledge is not an element of vicarious liability.

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