R e s e a r c h

Ongoing project

A General Legal Framework for
Contracts for the Supply of Digital Content or Data

FWO Research Foundation Flanders — Universiteit Gent
Project running from 1 October 2019 to 30 September 2022

Summary

We encounter increasingly more economic transactions involving data (aka digital content): corporations purchase raw data, SMEs subscribe to cloud services, consumers stream/download content. Nonetheless, there is no express legislation on these ‘data contracts’. Because of this, the current law on data contracts lags behind compared with other frequently-used contracts. This leads to eroded contractual freedom, inefficiency, uncertainty, fragmentation of laws as well as privatised law-making and enforcement. Due to the rise of artificial intelligence and smart contracting, these trends are likely to persist. On top of that, the transposition of new EU consumer protection legislation will lead national legal orders to promulgate lex specialis rules without even providing lex generalis rules! Hence, we are in need of a general framework that spells out default rules for data contracts on the one side, and targeted, policy-effective mandatory rules on the other.

Calls for a better digital contracting balance are being issued by important actors in multiple fields of law. They pop up in topical debates on copyright and on consumer law as well as on potential data economy regulation. In spite of this, competent lawmakers like the EU are reluctant to take action. This projects aims at assessing the feasibility to enact EU legislation that provides a general framework that governs all types of contracts for the supply of data, whether IP-protected or not, and, if so, to reveal what it should look like.

 

Concluded project

Exhaustion of copyright in a digital environment

An analysis of the disposition capabilities of the first purchaser of a copyright protected digital work,
particularly from the consumer’s perspective

Special Research Fund (BOF) — Ghent University
Under supervision of prof. dr. R. Steennot (Ghent University – promoter),
prof. dr. H. Vanhees (Ghent University – additional supervisor) and prof. dr. M.C. Janssens (KU Leuven)
Research concluded on 31 March 2019
Thesis succesfully defended on 28 May 2019
Commercial edition (by Intersentia) expected Fall 2019

Summary

Only authors have the right to distribute their work or copies of it. However, after the first transfer of ownership, this right to control that copy's further distribution is said to be “exhausted”. Regarding material copies, most issues are cleared. Yet, how does exhaustion apply to digital copies? Can buyers freely dispose of their on-line purchased eBooks and MP3 files, like they can dispose of real books and CD's?

In layman's terms

The digital world gives rise to lots of challenges regarding copyright law. Many legal issues remain unsolved. Of particular interest notably are the questions on the exhaustion of the author's exclusive rights.

In a nutshell, the main issue can be summarised thus. In principle only the author of a work has the right to distribute his work or a copy to the public. Only (s)he can for instance market a CD with a song or a book copy. However, after the first lawful transfer of ownership in the European Union, the author's distribution right is “exhausted”: (s)he can no longer control the further distribution of that copy within the EU. The first purchaser (buyer) and all next purchasers can thus either export that good to other EU member states or resell them to professionals or consumers.

As to “material” copies (or “hard” copies) like books or CDs, most exhaustion issues are cleared. The current research however intends to analyse whether such an exhaustion principle also plainly applies to digital copies that were “purchased” on line. Can buyers freely dispose of legally obtained eBooks, MP3 and movie files as well as cloud access accounts in the same way as they can dispose of a real, material book, CD or DVD?

Despite its major importance to consumers as well as enterprises, no clear answers on this “digital exhaustion” and the consequences of its (non)existence are available. Consumers are largely protected by the law; however, when it comes to copyright, it seems like authors' interests always prevail. Is this justified? How can both interests be better balanced?