Title of the citizens' initiative Bringing sense to the Copyright Act Date of the initiative January 23, 2013 Form of the initiative Bill Case number of the Ministry of Justice Subject Card OM 14/52/2013 Contents of the initiative BILL TO AMEND THE COPYRIGHT ACT AND THE CRIMINAL CODE OF FINLAND MAIN CONTENTS OF THE LEGISLATIVE PROPOSAL The main goal of the legislative proposal is to amend the legislation in force concerning excessive network surveillance and damages. The purpose of the legislative proposal is not to make downloading [sharing] content under copyright legal, but to make downloading [sharing] content protected by copyright by individual people punishable as a copyright violation. A more serious form of the act, a copyright offence, enables house searches, seizures, and large damages. Those guilty of commercial or broad distribution of content protected by copyright would still be convicted of copyright offences. Secondarily, the legislative proposal aims to improve the status of artists and other content producers as well as the development of new services based on network technology. The most important effect of the bill is the dismantling of the confrontation between citizens and artists and the awakening of a constructive discussion on the further development of copyright legislation. INTRODUCTION 1. Current situation The copyright legislation of Finland was significantly amended on 14 October 2005 with the adoption of the Act on the Amendment of the Copyright Act (821/2005) and the Act on the Amendment of the Criminal Code of Finland (822/2005). The legal amendments are based on the Government bill 28/2004, by which the Copyright Act [was proposed] to be amended according to the required

amendments in the directive adopted in 2001 on the harmonization of certain features of copyright and rights related to copyright in an information society. In addition, the Copyright Act [was proposed] to be amended with certain other amendments not provided by the directive as well as with technical revisions. These other amendments not provided by the directive aroused broad public discussion when the Act was being enacted and after its entry into force. They included the definition of downloading content under copyright for private use as a copyright offence. The following describes problematic situations caused by the current legislation and its legal practice. 1.1 The obscurity of the Act and the application of the principle of legality When enacting the current Act, the Constitutional Law Committee stated (Statement of the Constitutional Law Committee 7/2005 vp) that "As a result of numerous partial amendments made to it for various reasons, the Copyright Act has become quite complicated and obscure, and the bill under consideration does not in every respect tend to increase the clarity and understandability of the regulation. This is problematic because, in a modern society, copyright legislation applies to almost all people. As a result of the development of communications technology, private persons, as well as non-governmental organizations and the like, may ever-increasingly be not only recipients and users but also producers and publishers of messages protected by copyright. During the development of an information society, communications with various technical tools have become practically incessant, and communications may nowadays be involved in a large part of a person's daily activities. For these reasons, copyright legislation is subject to particular requirements of clarity and understandability." In addition, the Constitutional Law Committee states that "The obscurity of the Copyright Act may become problematic from the point of view of the specificity requirement included in the principle of legality in criminal cases enacted in section 8 of the Constitution of Finland. According to it, the constituent elements of each offence must be expressed in law with sufficient specificity so that whether an action or omission is punishable can be anticipated based on the wording of the provision. This requirement is not fulfilled in the best possible way when the provisions on the copyright offence and the copyright violation receive their essential contents through an obscure Copyright Act. According to the Committee, this circumstance must be paid particular attention to when applying penal provisions in individual cases." (Statement of the Constitutional Law Committee

7/2005 vp, http://www.eduskunta.fi/faktatmp/utatmp/akxtmp/pevl_7_2005_p.shtml ) 1.2 Juvenile delinquency On 12 December 2012, the National Research Institute of Legal Policy subject to the Ministry of Justice published a study (Youth delinquency and victimization 2012), according to which 79 percent of 15-16-year-old youth have downloaded illegal content under copyright from the Internet. 71 percent of the respondents reported that they had downloaded illegal content within the preceding 12 months. There are not yet research results on the consequences of labelling an entire age group as criminals. 1.3 Excessive coercive measures The current Copyright Act enables sizeable coercive measures limiting the protection of privacy and the sanctity of the home, such as house searches, seizures of devices, and the determination of personal data on the basis of IP addresses from an Internet service provider. On 10 December 2012, the Parliamentary Deputy Ombudsman gave the decision Dnro 4565/4/12, according to which the sensational house search and seizure of a laptop computer by the police caused by the suspected offence of a 9-year-old girl (so called "chisugate") was permitted according to the current Act. In order for similar actions deemed unjust to be considered excessive in the future, the Act must be amended. 1.4 Excessive damages After the copyright reform entered into force on 1 January 2006, the courts have sentenced numerous people to pay sizeable damages to organizations representing copyright holders. The claims for damages have been based on calculations by these organizations, based on which a price in euros has been determined for each download based on the normal retail price of the work. Therefore, the calculations make the assumption that each download would have caused a loss of income for the artists represented by the organization. The assumption has widely been criticized as unrealistic, and research data according to which content downloaded for free has promoted the sales of paid content has even been presented.

Sentences for sizeable damages directed at individual people have been used to strive to cause a deterrent effect that resembles the American-style punitive damages model, which has previously been foreign to the legal system of Finland. In punitive damages, the defendant is sentenced to pay the plaintiff additional damages in addition to the actual damages, the purpose of which is to act as a deterrent to get the defendant and other potential damaging parties to obey the law. 1.5 Restrictions on use for teaching and research The Copyright Council made a decision in the 1980s (against its own established interpretation and the opinion of the presenter), according to which teaching in classrooms is considered public use of works in terms of copyright. The desire of copyright organizations to collect levies from schools, particularly for the use of audiovisual works, was behind the decision. However, it also made teaching media skills very difficult. The use of all AV works requires a permit, which, for example for commercials, can only be obtained by requesting it from the advertising agency that made the commercial. Similarly, for the most part, the use of foreign material for translation exercises was made illegal by the decision of the Copyright Council. From the point of view of scientific research, the problem with the current situation is that even if abundant current research material was easily available on the Internet, its use is in principle not allowed because the copyright legislation of Finland does not include an exception for research activity. In the USA and in those EU countries that have a (broad) special provision for research activity, researchers and those researchers and companies that do research and development work have a significant advantage compared with their Finnish counterparts. The situation is further exacerbated by our small language area: Finnish-language material cannot be found on many research topics, so the English-language material found through the Internet is needed in order to promote quality research. Therefore, the current copyright legislation in force also puts a strain on Finnish scientific work and innovation potential. 1.6 Freedom of expression of the producers of works The Finnish legislation has so far not taken a position on the acceptability of parody and satire. Previous court practice supported the view of the acceptability of the mentioned forms of art, but the decision of the Copyright Council 2010:3 and a

judgement of a court of appeal based on it called the situation into question. However, the EU Copyright Directive allows an exception involving parody and satire. For example in the United Kingdom, an exception is currently being planned to be included as an express part of the law of the country. 1.7 Negotiating position of the producers of works Even though the copyright system was originally born to protect - at least in theory - particularly the authors of works, the publishing companies in the background have in fact benefited the most from the system. There is reason to wonder to what extent companies with significant market power in Finland have taken advantage of their position by pressuring the actual producers into unreasonable contract terms. This problem has also been recognized in the Government Programme in force: More specific provisions than currently will be enacted in the Copyright Act on the reasonable terms and equitable remuneration that are required for copyright transfer. (Government Programme 2011, p. 36) The phenomenon occurs widely in various areas of the media sector (the media, record companies, etc.), so it cannot be solved with solutions such as narrow individual provisions on book publishing contracts. 2. Goals and main propositions of the legislative proposal The legislative proposal aims to clarify the contents of the Copyright Act (404/1961) so that the Act will return to the state that prevailed before the reform of the Criminal Code and the Copyright Act in 2005 to the extent that the directives regulating the matter allow national latitude for Finland. The legislative proposal also proposes improvements to the rights of the authors of works. In addition, the legislative proposal takes into account the development of network technologies, tackles the problems in teaching and research, removes the possibility of network surveillance, and proposes the adoption of a legal provision enabling the modification of contract terms. The right of artists to prohibit organizations from taking legal action against individual citizens is also added to the Act. 3. Effects of the legislative proposal 3.1 Effects for citizens

The most important effect of the bill is the increase in the legitimacy of the copyright system. As a result of the bill, copyright returns to being a positive phenomenon that protects the justified rights of authors to works, but does not prevent the use of works for public good. 3.2 Effects for content producers The bill improves the position of freelance content producers as a contracting party by bringing a requirement of reasonableness into contract terms. The authority of content producers is also improved by giving them the right to prohibit interest groups from taking legal action against individual citizens. 3.3 Effects on the operation of copyright organizations The bill has economic effects for copyright organizations. For example, the exemption of use for teaching and research from copyright levies reduces the revenue stream of the organizations. The reduction of court-ordered damages also affects the revenue stream of copyright organizations. However, copyright organizations at the same time save on monitoring resources, which can be directed, for example, to information and education activities. 3.4 Effects on business The bill has positive effects on the development of Finnish business. Unclear and restrictive provisions have tended to slow innovations, for example on the part of digital content services. By clarifying regulation, for example on the part of technical intermediate copies and network-attached storage, the bill enables, among others, startup companies that work with digital content to develop internationally competitive and interesting services that operate via the internet. Finland would be one of the global pioneers in this field, which could lead to, for example, the concentration of the industry. 3.5 Effects on the operations of authorities and economic effects The bill has effects first and foremost on the operations of the police and the judicial system. The investigation of copyright offences takes up a significant

amount of police resources, which, as a result of the bill, would become available for the investigation of more serious offences. Since the threshold of a copyright offence is low, the police have used sizeable resources to investigate cases and enforce coercive measures regardless of whether they involve downloading a single song from the Internet or extensive commercial piracy. Furthermore, judicial system resources are spared when the organizations monitoring copyright do not burden district courts with their petitions to get user IP address information or to disconnect user subscriptions. The bill has positive economic effects on the teaching and research activity of the public sector. As a result of the bill, copyright levies would no longer be paid for the use of content for teaching and research. 4. Relation to the Constitution The purpose of the bill is to narrow the gaps that have been created in the Constitution with the current copyright legislation. This bill is especially meant to narrow the gap related to confidential communications protected in section 10 of the Constitution. The bill would improve the application of the principle of legality in criminal cases (section 8 of the Constitution) by clarifying and limiting the criminal liability of private persons. The bill can also be considered to support the application of freedom of speech protected in section 12 of the Constitution. As a result of the bill, copyright would become somewhat more limited than currently, but since it involves a purely statutory right and not "classic property", this cannot be considered to be problematic in relation to the protection of property in section 15 of the Constitution. For these reasons, the bill can be considered according to the normal procedure. 5. Preparation of the matter The citizens' initiative aiming to amend the copyright legislation has been prepared in an open and participatory manner within the framework of the Open Ministry service. The campaign was published on 21 November 2012, and the first draft of the bill was published on 28 November 2012. Comments and suggestions on the draft law were requested by email from copyright organizations on 10 December 2012. The draft law has been amended based on public discussion and received feedback. The legislative proposal has on purpose departed from the recommended format for Government bills in order to make the legislative proposal more clearly understandable for citizens, Members of Parliament, and the media.

The citizens' initiative was officially instituted on 23 January 2013, and the collection period ends at the latest after 6 months on 23 July 2013. The initiators of the initiative are Joonas Pekkanen, Aleksi Rossi, Timo Vuorensola, Roope Mokka, Alf Rehn, Alex Nieminen, Tarmo Toikkanen, Tanja Aitamurto, Dan Koivulaakso, Taneli Tikka, Kari A. Hintikka, Saku Sairanen, and Ville Oksanen. The representative of the initiative is Joonas Pekkanen, joonas.pekkanen@avoinministerio.fi, 050-5846800, and the substitute is Aleksi Rossi, aleksi.rossi@avoinministerio.fi. 6. Consideration in Parliament The Government bill for a Citizens' Initiative Act (46/2011) states that In the parliamentary procedure, the citizens' initiative could, however, be comparable to a bill signed by at least a hundred members, which has actual priority in the debate in committee over other private member's bills. The legislative proposal should, therefore, be considered in Parliament without delay, and the representatives of the initiative should be heard in all committees. Since it is a citizens' initiative and it involves a strong public interest, the debates in committee should, against customary procedure, be held as public events. The decision on the publicity of the debates can be made in a committee in accordance with section 50(2) of the Constitution. The demand for the publicity of the debate is supported by the fact that the officials who prepared the matter are normally present in debates in committee through expert hearings. In the case of more than 50,000 citizens, this is naturally not possible, but the need is the same. The legal amendments involving the Copyright Act have usually been debated in the Education and Culture Committee. However, the main points of this amendment proposal involve computer networks, which is why a more appropriate primary committee for debates would be the Transport and Communications Committee. On the other hand, based on the subject matter, the Committee for the Future would also be suitable for debating the bill, and it should request a report on the matter from applicable Committees (the Education and Culture Committee, the Constitutional Law Committee, the Legal Affairs Committee, and the Transport and Communications Committee). The Committee for the Future is likely to have the best knowledge of the subject matter, and the committee is also the most experienced with crowdsourced projects.

DETAILED RATIONALE 1. Commentary to the bills 1.1. ACT ON THE AMENDMENT OF THE COPYRIGHT ACT Section 3(2) (Right to parody and satire) The wording of section 3(2) of the Copyright Act is proposed to be amended as follows: "A work may not be altered in a manner which is prejudicial to the author's literary or artistic reputation, or to his individuality; nor may it be made available to the public in such a form or context as to prejudice the author in the manner stated. This right does not, however, limit the use of works for independent new parody or satire." The wording of the subsection in force is as follows: "A work may not be altered in a manner which is prejudicial to the author's literary or artistic reputation, or to his individuality; nor may it be made available to the public in such a form or context as to prejudice the author in the manner stated." The purpose of the amendment is to add to the Copyright Act a clear mention that parody and satire are permitted, notwithstanding the moral rights of the author. The need to clarify the legal provision appears, for example, from the decision of the District Court of Helsinki (R 09/2761), which was affirmed by the Helsinki Court of Appeal and by the Copyright Council. The decision created categories for acceptable and unacceptable parody. After the proposed amendment, the moral rights of an author cannot be used to censor any form of parody or satire. However, a precondition is that the parody or satire itself cross the threshold of a work, which must be markedly low. For example, already changing one word to another throughout the text may fulfill this criterion if the change creates a decisive parodization of the message of the work. Section 4(2) (Technical intermediate copies) The wording of section 4(2) of the Copyright Act is proposed to be amended as

follows: "If a person, in free connection with a work, has created a new and independent work, his copyright shall not be subject to the right in the original work. The making of technical intermediate copies needed to create a new work is permitted, notwithstanding the provisions of section 2 on the right to make copies of a work, when it involves acts that are an inseparable and necessary part of the technical process needed to create a new work." The wording of the subsection in force is as follows: "If a person, in free connection with a work, has created a new and independent work, his copyright shall not be subject to the right in the original work." The amendment facilitates the creation of so-called transformative works by leaving the technical intermediate copies created during the process of creating the work outside the protection. The amendment streamlines and increases the efficiency of the creation of new copies of works. The definition of technical copies would be the same as the one used for technical intermediate copies in section 11a. Section 11(5) (Private copying) The bill proposes to repeal section 11(5). The wording of the subsection in force is as follows: "A limitation on copyright as provided in this Chapter does not permit the reproduction of a copy of a work which has been made or made available to the public contrary to section 2 or whose technological measures have been circumvented in violation of section 50a(1). The provisions of this subsection shall not, however, pertain to the use of works under sections 11a, 16, 16a16c or 22 or under section 25d(2) or (5)." The purpose of the amendment is to restore the legal state that prevailed before the amendment of the Copyright Act (821/2005) on the part of the so-called lawful source. According to the bill, the lawful use of a copy of a work would not be tied to a lawful source. The most significant effect of the amendment is that, in the future, the making of private copies for one's own use would be allowed regardless of the quality of the used source. The amendment is also essential from the point of view of the application of the principle of legality: it is often difficult for a user to assess whether the content of online service providers (YouTube, for example) is lawful or

not. The Netherlands, among others, has decided to clarify the law with similar contents on the part of private copying. Section 12(2) (Network-attached storage) The wording of section 12(2) of the Copyright Act is proposed to be amended as follows: "It is also permitted to have copies made by a third party for the private use of the party ordering the copies. Private use also includes saving works in online services managed by the user, but maintained by third parties." The wording of the subsection in force is as follows: "It is also permitted to have copies made by a third party for the private use of the party ordering the copies." The purpose of the amendment is to clarify the interpretation of the section. The wording in force gives the consumer the opportunity to have a private copy made by a third party, but as services operate more and more often through the Internet, the provision must be specified. The amendment enables, for example, the development of various lawful network-attached storage services (TV-kaista, for example). The contents of the provision must be interpreted expansively so that services fall in the scope of private copying whenever a user defines the contents of the material being saved in them. The definition may also be given as general descriptions ("save all news broadcasts"). The amendment does not affect the public use of works, and it does not, therefore, affect the operation of, for example, services involving the open network distribution of photographs (Instagram, for example). The amendment significantly expands the scope of lawful private copying, which must be taken into account in planning the magnitude and the method of collection of a levy. Section 12(3) (Having a private copy made) The wording of section 12(3) of the Copyright Act is proposed to be amended as follows: "The provisions of subsection 2 shall not apply to the reproduction of utility articles or sculptures, or the reproduction of any other work of art by artistic means."

The current wording of the subsection is as follows: "The provisions of subsection 2 shall not apply to the reproduction of musical works, cinematographic works, utility articles or sculptures, or the reproduction of any other work of art by artistic means." The purpose is to clarify the interpretation of the Act so that digital services may be used to have all kinds of works made or so that identical criteria would be used for various types of works. Section 14(2) (Use for teaching and research) The bill proposes to add a new subsection 2 to section 14 that would read as follows: "Teaching activity in a classroom or in a similar space is not considered public use of works. The use of works created for other purposes than teaching or research is permitted for the purposes of teaching or research, notwithstanding the provisions of section 2." The amendment clarifies the limits of teaching and research related to the law of copyright. A classroom may also be a virtual space if it involves similar established teaching activity as in normal teaching. However, the amendment does not affect the use of works produced specifically for use for teaching or for research purposes, maintaining the current state in this respect. In other words, the principles involving the use of, for example, textbooks or software produced for research use remain unchanged. Authors are also still able to ban the use of works if the use would violate the moral rights to the works referred to in section 3. Section 26(3) (Artists' right to parallel licensing and prohibition) The bill proposes to add a new subsection 3 to section 26 that would read as follows: The conditions of approval also include 1) that organizations must allow for their members parallel licensing of their own works with open licences; 2) that organizations must offer for their members a way to prevent legal proceedings against individual citizens; and 3) that organizations must offer a client contract where the levy paid for the public performance of a work covers the re-mechanization of the work required for this purpose.

It is a three-part addition that, first of all, forces copyright organizations to allow for their members the use of open licences. Open licences in the meaning of the section include, for example, various Creative Commons licences and all licences approved by the Open Source Initiative. Various licences enabling free use for DJs also fall within the definition. Secondly, copyright organizations must offer for their members a way to prevent legal proceedings against individual citizens (cf. so-called Chisugate, where the artist had not even been notified that her rights were being used to charge a 9-year-old girl. In practice, this can be implemented with an opt-in register where members can register if they want to allow such activity. Thirdly, organizations that license works with a mechanization levy must offer a client contract especially for use by DJs/VJs where the mechanization levy is covered by the levy paid for the public performance of works. Section 29 (Requirement of reasonableness) The wording of section 29 of the Copyright Act is proposed to be amended as follows: "When an author further transfers rights of use or a licence for a work, he has a right to remuneration agreed to in a contract. If the magnitude of the remuneration has not been defined, an equitable remuneration is considered to have been agreed upon. If the agreed remuneration is not equitable, the author may demand from his contracting party such an amendment of a contract term that ensures equitable remuneration for the author. If the contracting party does not agree to the application of the amendment, the author has a right to cancel the contract. A remuneration based on the common remuneration standard (section 29a) is equitable. A remuneration is equitable also if it corresponds to what in business at the time of entering into the contract can be considered a common payment, taking into consideration the content and scope of the granted right of use, especially the duration and timing of use as well as the circumstances in their entirety. When a contract departs from the above provisions of subsections 1 and 2 to the detriment of an author, the author has a right to cancel the contract. The same applies also when the provisions have been evaded with other kinds of actual actions. The author may, however, transfer a non-exclusive right of use without remuneration. This statute does not affect the right of an author to issue open licences for his works.

An author does not have a right to the remuneration referred to in sentence 3 of subsection 1 if the remuneration to be paid for the use of his work has already been agreed to in a collective agreement. Otherwise, the adjustment of an unreasonable condition in an agreement involving copyright shall be governed by the provisions of the Contracts Act (228/29)." The wording of the section in force is as follows: "The adjustment of an unreasonable condition in an agreement on a transfer of copyright shall be governed by the provisions of the Contracts Act (228/29)." The purpose of the amendment is to add to the Copyright Act a requirement of reasonableness written based on section 32 of the German Copyright Act that guarantees an equitable level of remuneration for an author for the use of works. The equitableness is determined by common practice in the industry. What is considered common practice could become apparent, for example, from a collective agreement or a general standard of remuneration published by the Copyright Council. Other contract terms would still be governed by the general provisions of the Contracts Act on the modification of contracts. Section 28a (General standard of remuneration) The bill proposes to add a new section 28a to chapter 3 that would read as follows: "In order to be able to define the equitableness of remuneration in a manner referred to in section 29, the organizations of authors and the organizations representing industrial users or individual industrial users will among themselves affirm a general standard of remuneration. The general standard of remuneration must take into account the distinctive characteristics of the regulated industry, particularly the structure and size of the user base. A collective agreement takes precedence over a general standard of remuneration. The organizations referred to above in subsection 1 must be representative and independent, and they must have the necessary authority to affirm a general standard of remuneration. A general standard of remuneration is affirmed in the Copyright Council if the parties so agree. The matter can be taken to arbitration referred to in section 54 in accordance with a written demand of a party if

1. the other party has not started negotiations within three months of when the other party demanded in writing to start them, or if 2. the negotiations are still unsuccessful a year after the written demand to start them, or when 3. one party declares that the negotiations have definitively ended without success." The legal provision defines the procedures pertaining to the contents of the general standard of the level of remuneration. The Copyright Council acts here as the primary organization for the consideration of the matter that registers the propositions made by the parties. If, however, the parties cannot reach agreement, an arbitration process will be resorted to in the matter. Section 54(1) (Taking the requirement of reasonableness into account in arbitration) The bill proposes to add a new paragraph 7 to the list in section 54(1) that would read as follows: 7) a dispute pertaining to the reasonableness of a contract referred to in section 29a A dispute pertaining to the reasonableness of contracts is added to the legal provision to the list pertaining to arbitration. Arbitration has thus far become the main procedure in copyright disputes. Once a special copyright court begins operations as part of the Market Court, it must be considered whether it might possess the required knowledge that could in the future replace the use of the expensive and non-public arbitration procedure. Section 55(1) (The composition of the Copyright Council) The wording of section 55(1) of the Copyright Act is proposed to be amended as follows: "The Government shall appoint a Copyright Council to assist the Ministry of Education in the handling of copyright matters and to issue statements regarding the application of this Act. The council must include a balanced representation of

authors, the commercial users of works, educational organizations, and the representatives of consumers. The council must use the best scientific research data in the field as support for its decisions." The wording of the subsection in force is as follows: "The Government shall appoint a Copyright Council to assist the Ministry of Education in the handling of copyright matters and to issue statements regarding the application of this Act." The amendment updates the composition of the Copyright Council to correspond to the changed reality that there are more main parties than before. In addition to traditional publishers, commercial users also include, for example, Internet service providers and companies offering network-attached storage services. Representation from the software and gaming industry must also be included. A duty to use research data that satisfy academic standards as broadly as possible is also added to the Act. In practice, this requires that scientific experts also be chosen as members of the council. Section 56a(5) (Decriminalization of use for teaching and research) The wording of section 56a(5) of the Copyright Act is proposed to be amended as follows: "The making of single copies for private use of a computer-readable computer program or a database which has been published or copies of which have been sold or otherwise permanently transferred with the consent of the author, or the making of single copies for private use of a work contrary to section 11(5) shall not be considered to constitute a copyright violation. Actions contrary to this Act that occur for the non-commercial purpose of teaching or research shall also not be considered to constitute a copyright violation." The wording of the subsection in force is as follows: "The making of single copies for private use of a computer-readable computer program or a database which has been published or copies of which have been sold or otherwise permanently transferred with the consent of the author, or the making of single copies for private use of a work contrary to section 11(5) shall not be considered to constitute a copyright violation." The amendment excludes the violations of the Act occurring in connection with non-commercial use for teaching and research from the copyright violation. Other civil sanctions (compensation and damages) may still be considered when these

conditions are met. The amendment would not change, for example, the existing established interpretation regarding "single copies". Section 57(1) (Determination of the duty to compensate) The wording of section 57(1) of the Copyright Act is proposed to be amended as follows: "Anyone who in violation of this Act or a direction given under section 41(2) uses a work or imports a copy of work into the country or brings a copy of work onto the territory of Finland for transportation to a third country shall be obliged to pay a reasonable compensation to the author. The illegal reproduction of a work for private use shall be subject to compensation only in the case that the maker of the copy has known or should have known that the material copied has been made available to the public in violation of this Act. The duty to compensate applies only to a person who has himself performed the making of a copy of work." The wording of the subsection in force is as follows: "Anyone who in violation of this Act or a direction given under section 41(2) uses a work or imports a copy of work into the country or brings a copy of work onto the territory of Finland for transportation to a third country shall be obliged to pay a reasonable compensation to the author. The illegal reproduction of a work for private use shall be subject to compensation only in the case that the maker of the copy has known or should have known that the material copied has been made available to the public in violation of this Act." The amendment limits the levy to only those copies that the person has made himself. This clarifies the liability of system administrators in particular. After the amendment, system administrators would no longer be liable to pay compensation for copies made by users. The amendment, therefore, prevents the levies of hundreds of thousands of euros that are now sentenced in trials involving peer-to-peer networks. Even after the amendment, it is possible to claim damages from a system administrator that has violated the Act, but it must be based on actual evidence of resulting damage. Sections 60a-c (Delimitation of private network surveillance) The initiative proposes to repeal sections 60a-60c of the Copyright Act.

The amendment removes the sections that were added to the Act in the Legal Affairs Committee after three days of preparation when the amendment of the Copyright Act (821/2005) was considered in Parliament and that make it possible for rightholders to have a civil opportunity to determine the IP number of a user and to demand the disconnection of the network connection. A more appropriate law to define the duties of a service provider on the part of the illegal material of users is included in the Information Society Code (http://www.lvm.fi/tietoyhteiskuntakaari) under preparation that should define general rules concerning the matter regardless of the title of the offence. The claim that EU directives required the inclusion of these sections was commonly circulated during the preparation of the amendment of the Copyright Act (821/2005). It should be noted that on this part the application for precautionary measures in chapter 7, section 3 of the Code of Judicial Procedure meets the requirement regarding the application for an injunction set forth in the directives. The requirements of the legal provision in question are certainly quite high, but it is indisputable that it in any case enables the possibility of the application required by the directive (2001/29/EY). The directive does not define the grounds for granting the application. 1.2 ACT ON THE AMENDMENT OF CHAPTER 49 OF THE CRIMINAL CODE OF FINLAND Chapter 49, section 1(4) The initiative proposes to repeal chapter 49, section 1(4) of the Criminal Code of Finland. The wording of the subsection in force is as follows: "Also a person who uses a computer network or computer system to violate the right of another to the objects of protection referred to in subsection 1 so that the act is conducive to causing considerable detriment or damage to the holder of the right that has been violated, shall be sentenced for a copyright offence." The bill restores the copyright offence of the Criminal Code of Finland involving network distribution to the state that prevailed before the amendment of the Criminal Code of Finland (822/2005) in connection with the amendment of the Copyright Act (821/2005). In connection with the amendment, the requirement for a commercial purpose for an act occurring in computer networks was removed from

the provision of the Criminal Code of Finland involving the copyright offence. In other words, according to the current law, the constituent elements of a copyright offence do not include a requirement for a commercial purpose, meaning that offences for non-commercial purposes are also punishable as copyright offences. The purpose of the bill is to abandon this: according to the bill, only offences for commercial purposes are considered copyright offences. Therefore, non-commercial copyright offences would in the future be sanctioned as copyright violations. 2. EFFECTIVE DATE OF THE LAW The implementing provisions of the bills included in the legislative proposal propose that the legal amendments enter into force on 1 January 2014. ______________________________________________________________ Rationale BILLS 1. Act on the amendment of the Copyright Act In accordance with the decision of Parliament sections 11(5), 60a, 60b, and 60c of the Copyright Act enacted on 8 July 1961 (404/1961) are repealed, as sections 11(5), 60a, and 60b are in law 821/2005, and section 60c is in law 679/2006, sections 3(2), 4(2), 12(2 and 3), 29, 55(1), 56a(5), and 57(1) are amended, as sections 12(2 and 3) are in law 446/1995, section 29 is in law 960/1982, section 55(1) is in law 442/1984, and sections 56a(5) and 57(1) are in law 821/2005, and a new subsection 2 is added to section 14, as it is in law 821/2005, a new subsection 3 is added to section 26, as it is in law 821/2005, a new section 28a is added to the Act, and a new paragraph 7 is added to section 54(1), as it is in law 821/2005, as follows Section 3 -----------

A work may not be altered in a manner which is prejudicial to the author's literary or artistic reputation, or to his individuality; nor may it be made available to the public in such a form or context as to prejudice the author in the manner stated. This right does not, however, limit the use of works for independent new parody or satire. Section 4 ---------- If a person, in free connection with a work, has created a new and independent work, his copyright shall not be subject to the right in the original work. The making of technical intermediate copies needed to create a new work is permitted, notwithstanding the provisions of section 2 on the right to make copies of a work, when it involves acts that are an inseparable and necessary part of the technical process needed to create a new work. ---------- Section 12 ---------- It is also permitted to have copies made by a third party for the private use of the party ordering the copies. Private use also includes saving works in online services managed by the user, but maintained by third parties. The provisions of subsection 2 shall not apply to the reproduction of utility articles or sculptures, or the reproduction of any other work of art by artistic means. ---------- Section 14 ---------- Teaching activity in a classroom or in a similar space is not considered public use of works. The use of works created for other purposes than teaching or research is permitted for the purposes of teaching or research, notwithstanding the provisions of section 2.

---------- Section 26 ---------- The conditions of approval also include 1) that organizations must allow for their members parallel licensing of their own works with open licences; 2) that organizations must offer for their members a way to prevent legal proceedings against individual citizens; and 3) that organizations must offer a client contract where the levy paid for the public performance of a work covers the re-mechanization of the work required for this purpose. ---------- Section 28a In order to be able to define the equitableness of remuneration in a manner referred to in section 29, the organizations of authors and the organizations representing industrial users or individual industrial users will among themselves affirm a general standard of remuneration. The general standard of remuneration must take into account the distinctive characteristics of the regulated industry, particularly the structure and size of the user base. A collective agreement takes precedence over a general standard of remuneration. The organizations referred to above in subsection 1 must be representative and independent, and they must have the necessary authority to affirm a general standard of remuneration. A general standard of remuneration is affirmed in the Copyright Council if the parties so agree. The matter can be taken to arbitration referred to in section 54 in accordance with a written demand of a party if 1. the other party has not started negotiations within three months of when the other party demanded in writing to start them, or if 2. the negotiations are still unsuccessful a year after the written demand to start them, or when 3. one party declares that the negotiations have definitively ended without success.

---------- Section 29 When an author further transfers rights of use or a licence for a work, he has a right to remuneration agreed to in a contract. If the magnitude of the remuneration has not been defined, an equitable remuneration is considered to have been agreed upon. If the agreed remuneration is not equitable, the author may demand from his contracting party such an amendment of a contract term that ensures equitable remuneration for the author. If the contracting party does not agree to the application of the amendment, the author has a right to cancel the contract. A remuneration based on the common remuneration standard (section 29a) is equitable. A remuneration is equitable also if it corresponds to what in business at the time of entering into the contract can be considered a common payment, taking into consideration the content and scope of the granted right of use, especially the duration and timing of use as well as the circumstances in their entirety. When a contract departs from the above provisions of subsections 1 and 2 to the detriment of an author, the author has a right to cancel the contract. The same applies also when the provisions have been evaded with other kinds of actual actions. The author may, however, transfer a non-exclusive right of use without remuneration. This statute does not affect the right of an author to issue open licences for his works. An author does not have a right to the remuneration referred to in sentence 3 of subsection 1 if the remuneration to be paid for the use of his work has already been agreed to in a collective agreement. Otherwise, the adjustment of an unreasonable condition in an agreement involving copyright shall be governed by the provisions of the Contracts Act (228/29). ---------- Section 54 ---------- 7) a dispute pertaining to the reasonableness of a contract referred to in section 29a

---------- Section 55 The Government shall appoint a Copyright Council to assist the Ministry of Education in the handling of copyright matters and to issue statements regarding the application of this Act. The council must include a balanced representation of authors, the commercial users of works, educational organizations, and the representatives of consumers. The council must use the best scientific research data in the field as support for its decisions. ---------- Section 56a The making of single copies for private use of a computer-readable computer program or a database which has been published or copies of which have been sold or otherwise permanently transferred with the consent of the author, or the making of single copies for private use of a work contrary to section 11(5) shall not be considered to constitute a copyright violation. Actions contrary to this Act that occur for the non-commercial purpose of teaching or research shall also not be considered to constitute a copyright violation. ---------- Section 57 Anyone who in violation of this Act or a direction given under section 41(2) uses a work or imports a copy of work into the country or brings a copy of work onto the territory of Finland for transportation to a third country shall be obliged to pay a reasonable compensation to the author. The illegal reproduction of a work for private use shall be subject to compensation only in the case that the maker of the copy has known or should have known that the material copied has been made available to the public in violation of this Act. The duty to compensate applies only to a person who has himself performed the making of a copy of work. ---------- This act enters into force on 1 January 2014.

2. Act on the amendment of chapter 49 of the Criminal Code of Finland In accordance with the decision of Parliament chapter 49, section 1(4) of the Criminal Code of Finland (39/1889) enacted on 19 December 1889, as it is in law 821/2005, is repealed. ----------