Copyright Protection in Digital Environment - Peer to Peer Networks

INTRODUCTION
Development of technologies, rise of Internet popularity and its availability have introduced new means of communication and transfer of various types of data (music, movies, photos, software, etc.) between the persons, which unavoidably is related to copyright protection issue. As a great example thereof digital music and decentralized peer to peer networks can be mentioned, which are very rapidly developing concepts, where copyrights are being exploited without the consent of the copyright holders and without the copyright holders receiving any compensation for the use of their works (according to WIPO Survey of the year 2001, 5.16 billion of illegal music has been exploited in peer to peer networks, a number that by the year 2005 will reach approximately 7.44 billion).
Thus the intent of this paper will be to examine the regulations and principles established on international, as well as national level applying to digital environment such as peer to peer networks and by examining the current development propose directions thereof.
Peer to peer technologies (both centralized and decentralized) inevitably involve exploitation of copyrights. First of all most of the digital files (copyrighted works, including digital music) are in “fixed” form (on the hard drive, on flash drive, on CD-R or on any other technological tool) for the purposes of copyright laws. Furthermore the above mentioned “fixed” copyrighted works are being transmitted from one user to another without authorization of the copyright holder, which constitutes an unauthorized reproduction and communication to the public of the respective copyrighted works. Subsequently these are the rights that are most directly related to copyright protection in digital environment. Therefore it would be necessary to evaluate how the above mentioned rights are protected in International treaties and EU Community law and what are the obligations for the states thereof.
Furthermore as an example with regard to copyright protection and enforcement in digital environments, the approach of the Republic of Latvia will be examined in this paper in order to see how Latvia has implemented the requirements of the EU and international treaties regarding the above mentioned rights.
In the years 2004 and 2005 International Intellectual Property Alliance issued a special report 301 on the copyright piracy in Latvia. Until this date Latvia remains in the “Special 301 Watch list” (list of countries where copyright piracy is excessively high). The report criticizes the existing copyright and related laws (administrative, criminal and civil law) laws of the Republic of Latvia. Although this report is dedicated to copyright piracy in general, it also briefly addresses the digital piracy issue in Latvia, stating that increasing use of peer to peer file sharing applications in Latvia is a further threat to already existing high level of copyright piracy in Latvia. Direct Connect++ (hereinafter referred to as DC++) is regarded as the most popular decentralized peer to peer file sharing application in Latvia, with approximately 20 000 active online users sharing more than 2 000 trilobites of copyrighted material, from which approximately 90 per cent is considered to be illegal (2 000 Trilobites would constitute approximately 400 000 000 digital songs being transferred from one P2P user to another).
Since the publication of above mentioned report, Latvia has amended its local Copyright Law in order to harmonize it with the World Intellectual Property Organization Treaties (the Internet Treaties) and with latest European Community law. Therefore it would be worthwhile to examine the currently developed trends in Latvia.
In addition the paper will contain the analysis of international and local laws shall provide existing gaps in the field of copyrights that hinder the evolution of digital copyright protection and examine the circumstances that restrict the right of the copyright holders to receive the compensation for illegal reproduction of his/her copyrighted works in digital environment.
Therefore the historical analysis of the right to reproduction and the right to communication to the public, as well as other problematic issues that play major role in the continuation and further grow of copyright piracy in digital environments (peer to peer networks and digital environment in general (online and offline) ) shall be identified, for example the issue of cryptology (legal or illegal) shall be discussed and the application of private copying exception in conjunction with the digital rights management and technological measures shall be analyzed.
After analyzing the current approach of protection of the above mentioned rights and other related rights and issues thereof, it will be necessary to establish the most efficient solution that would ensure an effective copyright protection in digital environments and solution that would ensure that copyright holders get compensation for the exploitation of their works in such uncontrollable and legal environments as decentralized peer to peer networks. The solutions and suggestions shall be based on the latest case law regarding decentralized peer to peer networks, while taking into account the effectiveness and legality of private copying levies as such and the methods of digital copyright enforcement currently exercised by copyright enforcement agencies like Recording Industry Association of America.
In order to provide more specific analysis on certain issues this paper shall have the following limits. For the purposes of this paper the phrase copyright holder shall refer only to the author of the copyrighted work, hereinafter referred to as the copyright holder/holders or author of the copyrighted work. Therefore the rights of performers and phonogram producers will not be addressed in this paper. Furthermore although the rights (reproduction right and communication to the public right) and related rights and principles (digital rights management systems and technological measures) discussed in this paper in theory could be applied to various copyrighted works, for the purposes of this paper only digital music will be used as an example thereof. Case law discussed in this paper will be limited to the cases regarding decentralized peer to peer networks, since after the Napster case, centralized peer to peer networks no longer pose any threat to the sphere of digital copyright enforcement and every other case after the Napster case where centralized peer to peer developers were tried (mp3.com case, audiogalaxy case, aimster case, etc.) for copyright infringements was decided on the same principles established by the Napster case.
GENERAL INTRODUCTION TO COPYRIGHTS
A copyright is set of exclusive rights “[…]that covers published and unpublished literary, scientific and artistic works, whatever the form of expression, provided such works are fixed in a tangible or material form[…]”. Area of copyright protected works include wide range of creative works such as drawings, movies, music, software, photographic works, choreographic works, graphic art and other. Copyright is a subdivision of intellectual property rights and the main purpose of copyright is to enable the copyright holder to control any use of his/her work (distribution, reproduction, communication to the public, and other) and most importantly the copyright enables the particular copyright holder to receive remuneration for the use of his/her copyright protected work. Most jurisdictions provide copyright holders with the bellow mentioned exclusive rights: “

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