Certain documents published by the European Commission have referred to the possibility of preparing a "European Copyright Code" and establishing a "unitary copyright title." The paper (a partly modified and updated version of the paper presented at the 2012 Forham IP Conference) discusses the reasons for which the idea of such a "Code" does not seem to be timely (in particular, not in the form presented by the Wittem Group) and for which the creation of a separate "European title" is both unncessary and unjustified. The paper contains detailed comments on the so-called "European Copyright Code" published by the Wittem Group pointing out that (i) it would result in a decrease of the level of copyright protection which would not be the interest of the EU and its Member States; (ii) some of the draft provisions suggested in it are not in accordance the existing acquis and certain international norms; and (iii) some of them would not necessarily lead to harmonization but rather to disharmonization.

The three-step test has proved to be a well-functioning means for balancing of interests in the field of copyright and related rights by offering sufficient flexibility and, at the same time, determining the limits thereof to be respected in order to guarantee sustainable creation and production of works and objects of related rights needed by the society. In recognition of this, the international community has found it advisable to extend its application from the exceptions to or limitations of the right of reproduction as provided in the Berne Convention to any exceptions to or limitations of any economic rights under the TRIPS Agreement, the WCT and the WPPT and quite recently also under the BTAP. In spite of this, certain theories are presented time and again aimed at limiting the scope of application of the test in an unjustified manner. One of such theories is that the specific exceptions and limitations permitted in the Berne Convention are not subject to the three-step test under Article 13 of the TRIPS Agreement and Article 10 of the WCT. The paper presents the reasons for which this assertion is wrong. This is a timely issue since such unfounded allegations have also been made in connection with the proposed WIPO instrument (now it seems to take the form of a treaty) to promote trans-border availability of accessible-format copies for the visually impaired. Due to the important cause of the visually impaired, it is indispensable to make it sure that the specific rules on the reproduction, distribution and making available of accessible-format copies are in accordance with the existing international treaties and in particular that the exceptions or limitations facilitating the availability of such copies are subject to the three-step test as required by the above-mentioned TRIPS and WCT provisions. After all, it is also an evident interest of the visually impaired that the rules to be adopted do not conflict with the normal exploitation of the works concerned – as required by the test – since such conflict would endanger availability thereof. It also would hardly be a reasonable objective to apply exceptions or limitations that, also contrary to the test, would not only reasonably but unreasonably prejudice the legitimate interest of the rightholders.

The author was the Chairman of the Working Group which, in 1982, adopted the Model Provisions. The study - on the basis of the reports published at that time in the WIPO monthly review "Copyright" - reviews the preparatory work in the Working Group and the debates at the sessions of the Executive Committee of the Berne Union which dealt with this project before and after the adoption of the Model Provisions. In the study, in particular, the principles on which the Model Provisions were adopted are described and analyized pointing out that they were very much similar to the principles on which a draft instrument/treaty on the same issue is under preparation in the WIPO Standing Committee on Copyright and Related Rights (SCCR).

Those who try to promote such a provision wrongly imply that the fair use system is not in accordance with (the correct interpretation of) the three-step test and suggest that the international norms be adapted to allow fair use also where it is allegedly in conflict with the (correct interpretation of the) test. There is no well-founded reason to allege that a well-established fair use or fair dealing/fair practice system would not be in accordance with the three-step test. The introduction of fair use (or fair dealing) in a country without relevant legal tradition and well-established case law may create conflicts with the three-step test. Such a provision would create a triple danger: (i) This kind of provision – according to which fair dealing/fair practice and fair use systems may be used to implement the exceptions foreseen in the would-be instrument/treaty – has never been necessary for the applicability of these systems where they are based on appropriate tradition and duly developed case law; at the same time, it would create a potential danger since it might suggest that now such systems may and should be introduced also in countries without such tradition and case law and, as a result, it could lead to conflicts with the international norms, in particular those on the three-step test. (ii)This potential danger would be aggravated and made more probable by the fact that those who insist on the inclusion of such a provision do so on the basis of the badly founded theory that a fair use or fair dealing/fair practice system would offer “more flexibility” and would make more and broader exceptions possible than what is allowed under the three-step test. (iii) Such a provision with the danger of undermining the adequate balance of interests guaranteed by the three-step test might have an impact on the application of other exceptions too; first, it might be presented as a standard for any new norm-setting activity in WIPO; and, second, it might be claimed that the “new interpretation” reflected in the proposed provision could and should serve also for the interpretation and application of any other exceptions allowed by the existing international norms.

The paper is based on the author’s keynote power-point presentation made in September 2013 at the ALAI Congress held in Cartagena, Colombia. First, it reviews the international norms that are relevant from the viewpoint of exhaustion of rights. Then, it discusses how the Kirstaeng decision of the U.S. Supreme Court – partly, but not consistently, based on its earlier Quality King decision – got in conflict with the Copyright Act and government policy of the U.S., and what kinds of legal-political consequences it may have. After this, the paper analyzes the reasons for which the preliminary ruling of the Court of Justice of the European Union (CJEU) in the UsedSoft case consisted in no less than de facto modification of the acquis communautaire (to which the Court’s competence does extend). The CJEU introduced “online exhaustion” of the right of distribution (but also of the right of reproduction) which is not allowed under the WIPO Copyright Treaty, the Information Society Directive – and equally not allowed under the Computer Programs Directive (into which the CJEU tried to include lex specialis elements that, in reality, are not part thereof in order to support the legal construction on which its ruling was based). Finally, the paper presents the key aspects of the ReDigi order adopted by the District Court of the Southern District of New York which rightly found that there is no such thing as “digital exhaustion.” The paper is closed by considerations on the possible role of the three-step test with respect to exhaustion as limitation of rights.