IPR in software
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This document appears to be a thesis submitted by Azamat Gimranov to the School of Law in partial fulfillment of an LLM degree. The thesis analyzes and compares intellectual property rights regimes for software in the European Union and Kazakhstan. It provides an overview of international agreements governing copyright of computer programs. It also examines relevant EU directives and the legal framework in Kazakhstan. The thesis concludes by discussing recommendations to improve intellectual property regimes with a focus on innovation and competition.
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European directives grant somewhat broader protection to databases. The Database Directive11
outlines two methods. Where the contents or organization of the contents of a database represent
the author’s original intellectual creation, copyright rules apply. However, if there is no original
work, some protection is still granted provided that a significant effort was employed in the
obtaining, verifying or presenting of data through a sui generis right limited to a span of fifteen
years.12
Since the foundation of the World Intellectual Property Organization (WIPO), one of its main
goals has been to foster a globally accepted framework of copyright and intellectual property rights
in general. In this regard, developing and adapting the provisions of the Berne Convention has
been one of its foremost activities. However, political and economic circumstances and diverging
interests have obstructed the achievement of this goal13
, so the focus of the institutional
development of an international framework of copyright and neighbouring rights shifted in the
early 1990s to the World Trade Organization and, in 1994, to its TRIPS Agreement. This finally
led to new initiatives in WIPO where two treaties, the WIPO Copyright Treaty (WCT) and its
sibling, the WIPO Performances and Phonograms Treaty (WPPT), finally came into being in 1996.
Their provisions, ending almost thirty years of obstruction14
, especially regarding technical
protection measures and digital rights management15
, represent widely accepted legal standards in
comparative copyright law. While there has been a number of criticisms of these Treaties from
various sources pertaining to, among other things, the perceived expansion of certain rights,
11
Council Directive 96/9/EC 27 March 1996 on the legal protection of databases [2002] L 77.
12
Council Directive 96/9/EC art10.
13
For example, the actions of the Non-aligned movement, representing a significant number of UN member states
(and WIPO members). The Movement has systematically obstructed the modernization and global application of
intellectual property rights acting out of short term economic interests of its members, mostly developing countries.
See C. May, The World Intellectual Property Organization: Resurgence and Development Agenda (Routledge 2007)
90.
14
A. Bogsch, 'The First Twenty-Five Years of the World Intellectual Property Organization 1967 to 1992' (1992),
International Bureau of Intellectual Property, WIPO Publication No. 881(E), 71-72.
15
WCT (WIPO, Copyright Treaty) art 11, 12 accessed 9 January 2017.](https://image.slidesharecdn.com/iprinsoftwarecomparisoneuvskzllmagimranovfinal-180216161338/85/IPR-in-software-13-320.jpg)
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Bibliography
Treaties and Legal Text
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter
TRIPS Agreement];
World Intellectual Property Organization. 1982. Berne Convention for the Protection of Literary and Artistic Works:
texts. [Geneva]: World Intellectual Property Organization;
World Intellectual Property Organization, and United States. 1997. WIPO Copyright Treaty (WCT) (1996) and WIPO
Performances and Phonograms Treaty (WPPT) (1996): message from the President of the United States
transmitting World Intellectual Property Organization Copyright Treaty and the World Intellectual Property
Organization Performances and Phonograms Treaty, done at Geneva on December 20, 1996, and signed by the
United States on April 12, 1997. Washington: U.S. G.P.O. No. 105-17 (1997); 36 ILM 65(1997);
Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs Official Journal L 122,
17/05/1991 P. 0042 – 0046;
Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of
computer programs (Codified version) (Text with EEA relevance) OJ L 111, 5.5.2009;
European Patent Convention October 5, 1973 TRT/EP001/001;
Directive 2012/28/EU of the European Parliament and of the Council of 25 October 2012 on certain permitted uses of
orphan works OJ L 299, 27.10.2012, p. 5–12;
Law of the Republic of Kazakhstan No. 6-I of June 10, 1996, on Copyright and Related Rights (as amended up to Law
of the Republic of Kazakhstan No. 419-V of November 24, 2015)
Books and Articles
J. J. Perritt: Rejecting WIPO Treaties, Government Information Quarterly, Vol. 14, No. 2, 2006, pp. 201 – 205;
T. A. Lipinski: The Myth of Technological Neutrality in Copyright and the Rights of Institutional Users: Recent Legal
Challenges to the Information Organization as Mediator and the Impact of the DMCA, WIPO, and TEACH,
Journal of The American Society for Information Science and Technology, Vol. 54, No. 9, 2003, pp. 824 – 835;
J. S. Sheinblatt: The WIPO Copyright Treaty, Berkeley Technology Law Journal, Vol. 13, No. 1, 1998
P. Magnani and M. L. Montagnani: Digital Rights Management Systems and Competition – What Developments
Within the Much Debated Interface Between Intellectual Property and Competition Law?, International Review
of Intellectual Property and Competition Law, Vol. 39, 2008
R. M. Stallman: Free Software, Free Society: Selected Essays of Richard M. Stallman, GNU Press, Boston,
Massachusetts, 2010.
A. Bogsch: The First Twenty-Five Years of the World Intellectual Property Organization from 1967 to 1992,
International Bureau of Intellectual Property, WIPO Publication No. 881 (E), 1992
C. May, The World Intellectual Property Organization: Resurgence and Development Agenda, Routledge, New York,
2007
C. Seville: EU Intellectual Property Law and Policy, Edward Elgar Publishing, Cheltenham, 2009](https://image.slidesharecdn.com/iprinsoftwarecomparisoneuvskzllmagimranovfinal-180216161338/85/IPR-in-software-35-320.jpg)
IPR in software
- 1. The Ministry of Education and Science of Republic of Kazakhstan School of Law Azamat Gimranov ID#20133381 INTELLECTUAL PROPERTY RIGHTS IN SOFTWARE: A Comparative Analysis of the European and Kazakh Intellectual Property Regimes A Thesis submitted to the School of Law in partial fulfillment of the requirements of an LLM degree Main Thesis Supervisor: Dr. Sergey Sayapin, Dr. iur., Assistant Professor Almaty, 2018
- 3. iii Acknowledgment First of all I would like to express my deep appreciation to my professor Joseph Luke, who dedicated his time and energy for providing the recommendations, also for his continuous support, for his patience, and great knowledge and invaluable input. Of course I would like to give applouds to professor Sergey Sayapin who motivated me in improving my work and make it more brilliant, moreover spent his time for evaluating my work. Also I would like to thank my mentor Jiang Guangying for continious support and help me with sharing some experties and knowledge of subject and some cases. In addition I would like to thank some of my ex-colleagues who supported me and also gave some recomendations and shared ideas with me. Last but not least I would like to thank professor Kozik who is an expert of his subject in Copyright and CyberSpacer Law.My accomplishment would not be possible without all people, which I mentioned above. So, I thank all people who indeed made this work possible and unique.
- 4. iv Table of Contents ABSTRACT ....................................................................................................................................................5 ABBREVIATIONS ........................................................................................................................................6 INTRODUCTION..........................................................................................................................................7 1 THE LEGAL FRAMEWORK ON COMPUTER PROGRAMS ...........................................................9 1.1 Overview ................................................................................................................................................9 1.2 Copyright for computer programs........................................................................................................10 1.3 Computer Programs in International Agreements and Treaties ...........................................................11 1.4 Computer Programs in WIPO Copyright Treaty.................................................................................14 1.5 Computer Programs in EU ...................................................................................................................19 1.5.1 The Computer Programs Directive, 91/250/EEC..............................................................................21 1.5.2 Directive 2009/24/EC on the legal protection of computer programs and Directive 2012/28/EU on certain permitted uses of orphan works......................................................................................................24 1.6 Patenting Software ..............................................................................................................................25 1.7 Enforcement .......................................................................................................................................25 2 KAZAKHSTANI LEGAL FRAMEWORK ON IPR.............................................................................26 2.1 Kazakhstani Intellectual Property Rights in Software..........................................................................26 2.2 Cases.....................................................................................................................................................28 2.3 Comparison and Findings.....................................................................................................................30 2.4 Recommendations ................................................................................................................................31 BIBLIOGRAPHY ........................................................................................................................................35 Books and Articles .....................................................................................................................................35 Links...........................................................................................................................................................36 APPENDIX ....................................................................................................... Error! Bookmark not defined.
- 5. 5 Abstract The current thesis identifies and analyses the current development of legislation in the sphere of Intellectual Property Rights in Kazakhstan, and comparison of intellectual property rights law in software in European Union. Furthermore there will be an overview of concept of a IPR law development in software industry. The provided literature review will draw readers attention to the essence of Intellectual Property and related to Software Industry with a quick view on latest changes and trends. Also there will be an analysis of cases that took place in Kazakhstan. So the case which will be provided to a reader will give another perspective and a better understanding of the theory presented. The thesis concludes by discussing the ways of improving the intellectual property regimes. Also the current thesis analyzes and identifies the relationship between the managing of innovation, intellectual property rights and competition law in the EU software industry and Kazakhstani one. Of course, this work is more like comparative analysis of EU IPR and Kazakhstani IPR and further ammendment based on analysis. Lastly, the current thesis concludes by recommendations and the consequences of strong intellectual property regimes and shows that innovation happens without patents, they are not directly needed to encourage innovation.
- 6. 6 Abbreviations IP Intellectual property IPR Intellectual property rights OS Operating System OTA Office of Technology Assessment PTO Patent and Trademark Office (United States) SOFTIC Software Information Center TRIPS Trade Related Aspects of Intellectual Property agreement WIPO World Intellectual Property Organization WTC WIPO Copyright Treaty WTO World Trade Organization DRM Digital Rights Management EPC European Patent Convention EPO: European Patent Office EU: European Union ECU: Eurasian Customs Union (CU) ICT: Information and Communication Technology IE: Internet Explorer IDC: International Data Corporation OS: Operating System OSS: Open Source Software R&D: Research and Development SIPO: State Intellectual Property Office SME: Small and Medium sized Enterprise BSA: Business Software Associations MCI: Monthly Calculation Indicators
- 7. 7 Introduction In our rapid and turbulent knowledge i.e. information and techonology era, the protection of intellectual property is becoming crucially important and valuable for developing the innovation and creativity, and increasing the competitiveness of economies. The world community including WIPO and the European Commission work on improvement of current situation with Intellectual Property issues. So they make somewhat harmonisation of laws related to intellectual, industrial property rights in EU and other countries to avoid obstacles with trade of IP works and to create a united uniformed efficient and wide systems for the protection of such rights. Of course if there is a discussion on IPR on software there is a fight on piracy and counterfeiting and aims to help businesses, especially small businesses, to access and use intellectual property rights more effectively. Nowadays there are many talks about the information technology business and industry with regard to intellectual property issues. However, how to classify them? How they could be applicable to software technology? Moreover, should they be protected and how? Indeed the Intellectual property issues/ rights are at the basis of the computer industry. The term refers to a variety of intangible ownership rights in an asset such as software (IT program). International law provides different methods for protecting these rights of ownership. Within the legal and protection point of view, Microsoft and WIPO made a huge progress in making the Intellectual Property Rights in Software work as it is practiced nowadays. So those organizations made a huge contribution and futher development of the law as it is. The main objectives of intellectual property rights (IPR) is to protect a company‘s intangible assets, to allows businesses to gain profit from their creativity and wide innovative activities. In our world, where western and some eastern tech companies compete more on innovation, creativity and quality, intellectual property is the most powerful tool because the core is soft which is considered as the IP. And CIS countries including Kazakhstan and Belarus has more or less same IPR Law, which was adopted in early 90-s.
- 8. 8 According to an IDC study from 2005, China spent over $30 billion on IT in 2005 and was expected to exceed $51 billion by 2009. As a part of the five-year plan, software has been recognized as an important strategic sector for growth, which also involves the implementation of Linux. Statistics by the Chinese government‘s Beijing Software Industry Productivity Center (BSTC) have shown Linux sales increasing more than 40% a year – from $6.3 million in 2002 to $38.7 million by 2007.1 Regarding the European studies it may be added that majority of the software that is developed today is solely used for increasing efficiency, functionality and quality of production and distribution processes. Furthermore, the European software industry is a key enabler for innovation, growth and employment in almost all sectors of the European economy. In the US and the EU, this mixed nature of software is another reason for the great number of ad hoc decisions made in cases of IPR in software technologies (van Wendel de Joode, de Brujin & van Eten, 2002). Moreover, it also should be mentioned that American copyright system is based on dual interests: intellectual promotion and property rights. In modern world of IT infrastructure development and industry innovational move it is really crucial to meet International Law standards and follow the guidlenes on WIPO within the WTO. By moving businesses to countries like China and Kazakhstan is a logical choice for many multinational/international companies in IT sector. However, considerations for matters of IPR risk being neglected in the urge of setting up the business as quickly as possible. The legal culture in China, Kazakhstan and Russia is in many aspects totally different to what we are used to in the Western countries. Actually, IP lawyers have less control over the procedures and legal framework and are more dependent on less conventional. Industrial companies can assist each other in this task. By standardizing the IPR it will enable the company to exercise control over the IPR. Clear guidelines can be filtered out in the corporation, which prevents the loss of the company’s IPR in the outsource process. 1 Kirk St. Amant and Brian Still, Handbook of Research on Open Software: Technological, Economic, and Social Perspectives (IGI Clobal 2007) 103.
- 9. 9 1 The Legal Framework on Computer Programs 1.1 Overview Copyright Protection of Computer Software So according to WIPO and it’s topic on Copyright Protection of Computer Software in early 70s and 80s of the last century there were many solid and deep concerns among Intellectual Property experts about the the patent, so they were discussing is the patent system, the copyright system, or a sui generis system, should provide protection for computer software. Furthermore as an aftereffect brought about the for the most part acknowledged guideline that workstation projects ought to be secured Toward copyright, inasmuch as mechanical assembly utilizing PC product or software-related inventions ought a chance to be ensured by patent. Copyright law Also patent law gatherings give diverse sorts of insurance. Copyright security extends best should expressions, What's more not should ideas, procedures, systems from claiming operation alternately scientific ideas Concerning illustration such, while a patent will be a select right allowed for an invention, which will be an item alternately a methodology that gives another method for finishing something, or offers another specialized foul answer for an issue. Copyright insurance will be formality-free clinched alongside nations party of the berne gathering to those insurance for artistic and aesthetic meets expectations (the berne Convention), which implies that insurance doesn't rely on upon agreeability for At whatever conventions for example, such that Enlistment or store of duplicates. A patent will be by conceded following finishing an examination methodology by An legislature ever-enduring. Copyright security of machine product is created clinched alongside the vast majority nations What's more corresponded by universal settlements to that impact. Those theory identifying with those patentability of programming will be at present not corresponded internationally. Anyway a portion nations have grasped the patentability of machine
- 10. 10 programming also how have embraced methodologies that remember inventions helped by machine product. 2 What is Intellectual Property? So according to WIPO the definition of Intellectual property (IP) alludes to creations of the mind, for example, inventions; artistic and aesthetic works; designs; also symbols, names and pictures utilized within trade.3 Software is the term usually used to describe a set of programmes, procedures, rules and all associated documentation pertaining to the operation of a computerised system. Usually it comes with instructions for its use and maintenance, particularly if the software is for space systems. It may also be related to the hardware on which it resides.In general there are three basic types of software: system software, also called operating system, is a set of programmes that manages all the concurrent tasks performed by a computer utility software is a collection of programmes that perform routine tasks such as copying, compressing data, etc application software performs specialised functions not directly related to the computer itself. These distinctions are important because a software is a creation that may qualify for both patent and copyright protection. 1.2 Copyright for computer programs And in accordance with European Space Agency and on the issue of Intellectual Property in Software the copyright is the majority regular strategy used to secure the programming. An programmer naturally claims the copyright about any programme they compose Also there is no system will take after or expense will pay. However, it is prudent will affirm the date from claiming production and name of the maker (i.e. name of the creator(c) and date of the creation) 4 2 WIPO (World Intellectual Property Organization) <http://www.wipo.int/copyright/en/activities/software.html> accessed 15 January 2016. 3 WIPO (World Intellectual Property Organization) <http://www.wipo.int/about-ip/en/ > accessed 15 January 2016. 4 ESA, (European Space Agency) <http://www.esa.int/About_Us/Law_at_ESA/Intellectual_Property_Rights/Copyright_and_software/ > accessed 9 January 2017.
- 11. 11 Typically, the EU technical assistance programmes dedicated to IPR focus on: -Completing the legal framework to make the IP laws in the countries/regions concerned in line with, at least, the minimum TRIPs requirements;-Encouraging those execution of worldwide ip obligations, specifically the individuals coming about because of reciprocal Also multilateral agreements;-Improving the organization from claiming IPR, including supporting those station alternately support of the skillful household work places Also offices and the preparing from claiming staff;-Improving the implementation from claiming IPR, What's more specifically battling against infringements thereof; -Raising consciousness in the country/region around the vitality about IPR for those investment advancement. What's more with programmes particularly committed with pushing IPR, there would more extensive ventures in the zone from claiming exchange or traditions that coordinate IPR components.5 1.3 Computer Programs in International Agreements and Treaties The Berne Convention does not contain specific provisions concerning computer programs or, for that matter, digital rights management. Focused on providing universally accepted ground rules for copyright, the numerous adopted amendments do not specifically refer to computer programs, software, digital rights management or technical protection measures. While this can be easily explained by the relatively recent development of information technology, the last amendment of 1979 is recent enough to include at least a reference to the status of computer programs. Why this was not done at the time is left to interpretation of legal scholars and bears little practical concern. However, it does reflect a consideration we will revisit later on. On the other hand, the TRIPS6 Concurrence unequivocally manages those statuses for workstation programs, calling to the requisition of the gathering provisions, with the impact about allowing workstation projects 5 ECT ( European Commission and Trade ) <http://trade.ec.europa.eu/doclib/press/index.cfm?id=327> accessed 9 January 2017. 6 The Agreement on Trade-Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization during the Uruguay round of trade negotiations in 1994.
- 12. 12 privileges equal should the individuals of artistic works, including those procurement on the least expression from claiming security for fifty years.7 Unless changed by a special provision considering specifically computer programs, this term will usually (in most legal systems) run significantly longer. When TRIPS introduced new rental rights regulating that rightsholders may accept or deny commercial renting of their works, the Agreement stipulated that signatories allow rightsholders to reach that decision by themselves, except when the computer program itself is not the fundamental object of rent.8 This solution is the only logical solution if the nature of computer programs is considered. The distribution and sales of computer program licences, distribution of programs themselves and the process of installation of computer programs onto an information system render the renting of protected commercial software hazardous in terms of the usual commercial model – free access to installable program archives would naturally lead to a widespread unlicensed use contrary to conceivable interests of the rightsholder. The only foreseeable context in which the alternative solution has practical value is a situation where software is protected by a digital rights management technology that prevents use without the distribution media or a hardware device. Solutions like these used to be widespread in the software industry; however, the development of more convenient distribution methods (cloud services, distribution of software through vertically integrated distribution models like iTunes or Google Play service) has made this form of protection increasingly rare. TRIPS also regulates protection of databases regardless of the character of their content9 , whether protected by copyright or not, under the condition that the selection or layout of the content, its organization and search ability represent a creative element.10 7 TRIPS (Trade Related Aspects of Intellectual Property Agreement), art 10. 8 For example, when a multimedia work consists of an audiovisual work and an additional computer program, a video player or a DRM solution in order to prevent unauthorized reproduction and distribution. 9 TRIPS (Trade Related Aspects of Intellectual Property Agreement), art 10. 10 C. Seville, EU Intellectual Property Law and Policy (Edward Elgar, 2009) 19.
- 13. 13 European directives grant somewhat broader protection to databases. The Database Directive11 outlines two methods. Where the contents or organization of the contents of a database represent the author’s original intellectual creation, copyright rules apply. However, if there is no original work, some protection is still granted provided that a significant effort was employed in the obtaining, verifying or presenting of data through a sui generis right limited to a span of fifteen years.12 Since the foundation of the World Intellectual Property Organization (WIPO), one of its main goals has been to foster a globally accepted framework of copyright and intellectual property rights in general. In this regard, developing and adapting the provisions of the Berne Convention has been one of its foremost activities. However, political and economic circumstances and diverging interests have obstructed the achievement of this goal13 , so the focus of the institutional development of an international framework of copyright and neighbouring rights shifted in the early 1990s to the World Trade Organization and, in 1994, to its TRIPS Agreement. This finally led to new initiatives in WIPO where two treaties, the WIPO Copyright Treaty (WCT) and its sibling, the WIPO Performances and Phonograms Treaty (WPPT), finally came into being in 1996. Their provisions, ending almost thirty years of obstruction14 , especially regarding technical protection measures and digital rights management15 , represent widely accepted legal standards in comparative copyright law. While there has been a number of criticisms of these Treaties from various sources pertaining to, among other things, the perceived expansion of certain rights, 11 Council Directive 96/9/EC 27 March 1996 on the legal protection of databases [2002] L 77. 12 Council Directive 96/9/EC art10. 13 For example, the actions of the Non-aligned movement, representing a significant number of UN member states (and WIPO members). The Movement has systematically obstructed the modernization and global application of intellectual property rights acting out of short term economic interests of its members, mostly developing countries. See C. May, The World Intellectual Property Organization: Resurgence and Development Agenda (Routledge 2007) 90. 14 A. Bogsch, 'The First Twenty-Five Years of the World Intellectual Property Organization 1967 to 1992' (1992), International Bureau of Intellectual Property, WIPO Publication No. 881(E), 71-72. 15 WCT (WIPO, Copyright Treaty) art 11, 12 accessed 9 January 2017.
- 14. 14 unclear and broad provisions regarding the Digital Rights Management (DRM)16 , and the fact that they apply the same standard to all signatory countries despite their varying stages of economic and further sustainable development of information society17 , these Treaties actually represent the foundation of the globally accepted copyright framework for the digital age. European directives and national laws of the member and candidate states have considered the position of computer programs, digital rights management technologies and related data on the basis of this framework. 1.4 Computer Programs in WIPO Copyright Treaty According to WIPO Internet Treaties there are both of the so-called WIPO Internet Treaties, the WCT18 and the WPPT have been developed in order to respond to challenges to the international system of intellectual property raised by the proliferation of information technology.19 There is an issue contained therein warrants comparison with TRIPS. Whereas TRIPS reflects to references of moral rights completely and only refers to the Berne Convention with regard to substantive rights, the WCT explicitly confirms the provisions of the Berne Convention, moral rights included.20 The WCT goes on to give a more precise and encompassing definitions of distribution right and rental right, and institutes the right to communicate the work to the public.21 And in comparison with the 16 J. J. Perritt, 'Rejecting WIPO Treaties, Government Information Q (2006) 14, 201-205; T. A. Lipinski, 'The Myth of Technological Neutrality in Copyright and the Rights of Institutional Users: Recent Legal Challenges to the Information Organization as Mediator and the Impact of the DMCA, WIPO, and TEACH' (2003) 54, Journal of The American Society for Information Science and Technology, 824-835. 17 These agreements came to be known as WIPO Internet Agreements, being prepared through the WIPO Digital Agenda program. 18 WCT (WIPO Copyright Treaty, signed on December 20th 1996 in Geneva, Switzerland. Original text of the Agreement is available at: <http http://www.wipo.int/treaties/en/text.jsp?file_id=295166> accessed 1June 2017. 19 J. S. Sheinblatt, 'The WIPO Copyright Treaty' (1998) 13, Berkeley Technology Law Journal, 535-550. 20 WCT (WIPO, Copyright Treaty) art 1, accessed 9 January 2017. 21 WCT (WIPO, Copyright Treaty) art 8, accessed 9 January 2017.
- 15. 15 corresponding provisions of the Berne Convention22 and TRIPS23 , and it’s obviously that the distribution right, with regard to the joint statement following the adoption of the WCT, now refers to all categories of literary and artistic works (computer programs included, since Article 4 of the WCT finally defines computer programs as protected literary works). With regards to rental rights, first instituted in TRIPS, the WCT further broadens its scope to include authors of phonograms24 , as well as computer programs and cinematographic works as stipulated in TRIPS.25 Perhaps the most important and valuable contribution by the WCT to the international system of copyright has been the launch of the new right to communicate the work to the public, regulated in Article 8 of the WCT.26 As the matter of fact that the WCT explicitly numbers computer programs as literary works, authors of computer programs have the exclusive right to authorize any communication of the work to the public, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them – in other words, to publish and allow downloads of their program to internet users over a hosting service. And Indeed these provisions were crucial for sustainable development of state copyright laws regarding computer operating software/programs, which have been served as the basis for European Directives with regards to copyright issues, as well as the information society and related services. It is these provisions that have spurred the advent of alternative rights management approaches, most notably the various 22 WCT (WIPO, Copyright Treaty) art 14.1, accessed 9 January 2017. 23 TRIPS (Trade Related Aspects of Intellectual Property agreement) art 9.1 indicates application of the Berne Convention provisions, with an optional reservation regarding art 6bis on moral rights of the author as a concession to common law legal systems among the TRIPS signatories. 24 C. Seville, EU Intellectual Property Law and Policy ( Edward Elgar, 2009) 20. 25 TRIPS (Trade Related Aspects of Intellectual Property Agreement) art 11. 26 WCT (WIPO Copyright Treaty) art 8.
- 16. 16 free software, open source and similar licence agreements and the more refined and ambitious Creative Commons system of licence agreements.27 ” According to WIPO Copyright Treaty there are several provisions. For instance, beside that there are important provisions of Article 11 prohibiting circumvention of technical protection measures or so called digital rights for managing technologies.28 There is a debates and furthermore criticisms raised during the discussions that preceded the adoption of this provision was that adopting a wider scope of liability against those who circumvent technical protection measures might in some cases include the liability of those who produces the devices that can be used to circumvent technical protection measures (contributory liability) – for instance, the compact disc or digital versatile disc copiers (“burners”) which might in turn slow down the development of optical storage systems and related technologies.29 From nowadays’ view, it is obvious that these fears were grounded in business reality and practices of the period, but ultimately unfounded in terms of technological development. Least but not last there are provisions against imports, manufacture and use of technology that might be used to circumvent technological protection measures existed in state laws as far back as the 1980s.30 These provisions actually were ruined either to curb the proliferation of digital piracy or, for that matter, act against technological development and development.31 Article 12 of the WCT contains a definition of data important for digital rights management, as well as sanctions for disabling or circumventing DRM (Digital 27 The terms Commons and Creative Commons represent certain ideas and values regarding the extent of copyright protection and enforcement of copyright and related rights by the rightsholders. Creative Commons licensing agreements do not displace the classic legal framework of copyright law in force regarding the management of rights on a protected work. Instead, these agreements manage the rights in a way that allows users more access and more liberal terms of use. 28 WCT (WIPO Copyright Treaty) art 11. 29 J. S. Sheinblatt, 'The WIPO Copyright Treaty' (1998) 13, Berkeley Technology Law Journal, 535. 30 WCT (WIPO Copyright Treaty) < http://www.wipo.int/treaties/en/text.jsp?file_id=295166#P87_12240> accessed 3 May 2017. 31 WCT (WIPO Copyright Treaty)< http://www.wipo.int/treaties/en/text.jsp?file_id=295166#P87_12240> accessed 3 May 2017.
- 17. 17 Rights Management) technology32 which are the first sanctions regarding DRM management in contemporary copyright treaties. Naturally, the provisions regarding DRM technology and sanctions for its disabling or circumventions have become one of the more interesting topics in contemporary copyright law. It may also be added that the there is a mismatch and the controversial is their impact and influence on the development and protection of market competition.33 And so based on the provisions of the treaties which were mentioned above, we can finally form a classic or traditional definition of what DRM technologies are in the legal and technical sense. In other words DRM technologies showcase the complexed measures and resources installed on or imbued into a technical medium – computers, game consoles, mobile phones, DVD players, smart television sets and all other kinds of digital content reproducing machines – used by rightsholders to manage and regulate the way their works are used by the users. The term DRM implies not only technical protection measures like encryption or using proprietary devices to authorize access, but also data on rights management used to identify the rightsholder, the author, the work, the rules and conditions of access and use etc. Also it could be added about the commercial use of DRM by the publishing industry and its legal regulation in the twenty years following the adoption of the WCT which have produced important and valuable legal, economic and social influences. The legal effects are, primarily, the development of European and national regulations regarding sanctions against the unlawful disabling or circumvention of DRM technology. The economic effects are the development of novel distribution methods, especially over the Internet. Legal regulation of DRM has allowed and fostered the development of delivery services such as iTunes, a vertically integrated delivery model protected (at least initially) by DRM both on the hardware as well as the software level. When working properly, DRM technology prevents unlawful distribution and reproduction while 32 Contrary to the relatively straightforward provisions of the WCT regarding the duty of the signatories to implement penal and civil measures against perpetrators of actions prohibited in art 11 and 12 of the WCT, there are opinions that the legal framework of the convention only implies a very general duty to implement said provisions without providing a concrete mechanism to verify that signatories have actually done so. 33 P. Magnani and M. L. Montagnani: Digital Rights Management Systems and Competition – What Developments Within the Much Debated Interface Between Intellectual Property and Competition Law (International Review of Intellectual Property and Competition Law, Vol. 39, 2008) 83.
- 18. 18 allowing rightsholders to effortlessly distribute works to millions of users without additional investment or expenses per copy. This has had a significant impact on the development and position of creative industries. According to the French consultancy TERA Consultants, the total economic contribution of various creative industries to the European GDP in 2013 was 6.8%, i.e. a little over € 850 billion. At the same time, the industry employed 6.5% of the workforce, or over 14 million people.34 Finally, the regulation of DRM has had profound practical social and political effects. Opposition to legal regulation of DRM has been present decades before the WIPO Internet treaties.35 However, incidents like the Sony DRM incident36 , the Johansen case37 or the Apple DRM case38 have both incited and catalysed the creation of novel rights management schemes like Creative Commons, dedicated to creating simple licence agreement templates regarding the use of works in the digital domain within the current copyright legal framework, as well as political and activist movements like The Pirate Party39 , campaigning to abolish intellectual property laws on general principle. And in fact the WIPO Internet treaties are significant for another reason – the solution adopted regarding the term of protection for neighbouring rights. The protection term extension to fifty years is a solution symptomatic of the response to issues presented in the preamble of the Treaty and is in line with the provisions of TRIPS. However, the expected positive effects of this solution, from the perspective of the rightsholder, have been in doubt. The notion that copyright term extension will somehow substantially improve the position of 34 < http://www.teraconsultants.fr/en/issues/ The-Economic-Contribution-of-the-Creative-Industries-to-EU-in-GDP- and-Employment,> accessed 12 June 2017. 35 R. M. Stallman: Free Software, Free Society: Selected Essays of Richard M. Stallman (GNU Press, Boston, Massachusetts) 2010. 36 As a part of its digital rights management, in 2005 Sony used a rootkit, a self-concealing program to prevent users from copying digital music distributed on CD and DVD media. This software in turn made possible to create malware to specifically target users using Sony’s products and gain unauthorized access to their systems. Sony was targeted by class-action lawsuits and eventually settled out of court. <https://www.schneier.com/blog/archives/2005/11/sonys_drm_rootk.html> accessed October 2017. 37 Norway v Johansen, Oslo Court of the first instance, Case no. 02-507 M/94. 38 G. Mazzioti: Did Apple’s Refusal to Licence Proprietary Information enabling Interoperability with its iPod Music Player Constitute an Abuse under art 82 of the EC Treaty (World Competition Vol. 28, No. 2, 200) 253 – 275. 39 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52017DC0707>, accessed November 30, 2017.
- 19. 19 rightsholders in relation to widespread digital piracy is more a statement of ethical or moral standards than a practical solution. With regard to orphaned works, it was clearly to the detriment of users. Almost twenty years later, it is clear it has not had a desired effect on piracy.40 For instance, the digital piracy is not merely a widespread activity. It is the second leading activity users undertake when using broadband Internet.41 In accordance with LDRD, Interestingly enough, research shows that this activity is, in sheer volume, the most widespread in highly developed and connected countries, all signatories of the WIPO Internet treaties. The volume of transferred data whose character is consistent with the pattern of unlawful distribution is significantly higher in countries with higher penetration of broadband Internet. Despite the fact that these countries have signed and are members of all relevant international treaties and agreements, and while some of them have even introduced penal law provisions in an effort to curb digital piracy, this has not forestalled hundreds of millions of internet users to distribute and reproduce protected content on an unprecedented scale.42 1.5 Computer Programs in EU As it was mentioned before, content industry such as music, movies, software i.e. computer programs is one of the leading businesses of the European economy. The European Commission and the Council of Europe have intensively studied the effects of information technology revolution on the system of intellectual property for the better part of the last fifty years. The interface between the legal framework of intellectual property in general, and copyright in particular, with other legal disciplines, most notably competition law and consumer protection, has often been characterized as an evergreen of European private law, mostly due to the fact that 40 Council Directive 2004/48/EC, of 29 April 2004 on the enforcement of intellectual property rights, art 2. 41 Research available at: <http://www.cisco.com/c/en/us/solutions/ collateral/service-provider/ip-ngn-ip-next- generation-network/white_paper_c11- 481360.html>, accessed June 12, 2017. 42 LDRD (Laboratory Directed Research and Development Program ) In concrete numbers – the annual volume of unauthorized distribution through peer-to-peer networks has grown into the trillion terabyte range (long scale syntax).< www.ipd.anl.gov/anlpubs/2012/04/73086.pdf> accessed 3 May 2017.
- 20. 20 progress in the formation of the common European digital content market is practically negligible (ECJ cases such as FA Premier League v QC Leisure and others (C-403/08) and Karen Murphy v Media Protection Services (C-429/08) notwithstanding. Problems the EU faced in the field of copyright protection stemmed from an uneven level of copyright harmonization between the member countries. Diverse legal traditions, different views regarding the role of copyright, different legal practices (one such practice was the common law requirement of formal registration of work before granting protection) and diverging interests are still significant obstacles to EU- wide copyright harmonization and the creation of the common market. According to European Commission Report “One of the earliest documents drafted by the Commission regarding the status of computer programs in copyright law was a 1988 Green Paper Copyright and the Challenge of Technology. Even this early document observed how different state provisions concerning copyright affect the common market”.43 Furthermore, the document revealed that the Commission had understood the need for explicit protection of the new categories of works (computer programs and databases) and its importance for the developing industries as early as in the 1980s. And in fact, this document completely been dismissed the Internet development, however it was already widespread in the academic and education systems, focusing instead on the unauthorized reproduction and distribution of classical magnetic media as the prevailing model of digital piracy at the time. The initial reception of the paper was understandably critical and hostile, mostly due to the perceived accent on competition issues instead of copyright harmonization.44 Nevertheless, the paper was used as a basis for an extensive utilization undertaking in the next two decades, starting from Directive 91/250/EEC on legal protection of operation systems and was followed by several other Directives which came 43 European Commission report: Copyright and the Challenge of Technology, 10, available at: <http://ec.europa.eu/green-papers/pdf/green_paper_copyright_and_chanllenge_of_ thecnology_com_%2888%29_172_final.pdf>, accessed 12 June 2017. 44 C. Seville, EU Intellectual Property Law and Policy (Edward Elgar 2009) 27.
- 21. 21 along with the Berne Convention, TRIPS and WIPO Internet treaties represent the European legal framework of copyright. 1.5.1 The Computer Programs Directive, 91/250/EEC The Computer Programs Directive initially was introduced as software for copyrightable work into the European legal system. At the time of its original inception, the question of harmonizing the protection of computer programs and fostering the growth of the nascent European software industry was an obvious priority. And back to 1991, only five of the member countries had regulated software as a copyrightable work. Software industry in Europe was just a pale shadow of Silicon Valley giants, and unfavourable trade indicators incited the Commission to reflect on the position of the software industry compared to US. The main goals of the Directive were to offer a sound legal framework for copyright protection of computer programs to be applied in national laws in line with the provisions of the Berne Convention.45 The legal definition of a computer program as a copyrightable work was to include all computer programs regardless of their form, including those industrially built into hardware, along with any preparatory documents and other materials that preceded the development of the program provided that the nature of the preparatory work could result in a program at a later stage.46 These provisions have established the legal status of computer programs in European law, which was the main goal of the Directive. Indirectly, this reaffirmed the position mentioned in the European Patent Convention regarding the possibility of software patent protection.47 The Directive has, for the first time on the European level, harmonized the holder’s rights concerning computer programs, including the exclusive distribution 45 Berne Convention, art 2. 46 Computer Programs Directive, 91/250/EEC art 1. 47 European Patent Convention. Meanwhile, the patent systems of the United States, Japan and other countries have, in certain cases, allowed software patents creating an efficient legal barrier for outside competition when entering their respective markets, art 52,2.
- 22. 22 right48 , translation and adaptation right and the exclusive right to authorize reproduction.49 While the Directive does not explicitly define the status of decompiling50 , the provisions of Article 6 and the general provisions of the Directive and of the Berne Convention imply that the author has an exclusive right to prevent decompilation of a computer program, except in certain cases. The criteria for allowing decompilation are laid down in Article 6 of the Directive, which states that the authorization of the rightholder shall not be required where reproduction of the code and translation of its form are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs, provided that certain conditions are met – that these acts are performed by the licensee or by another person having a right to use a copy of a program, or on their behalf by a person authorized to do so, that the information necessary to achieve interoperability has not previously been readily available to the persons referred above and that decompilation is confined to the parts of the original program which are necessary to achieve interoperability.51 Furthermore, paragraph 2 of Article 6 forbids decompilation methods to be used for goals other than to achieve the interoperability of the independently created computer program, forbids the decompiled code to be given to others, except when necessary for the interoperability of the independently created computer program and prohibits it to be used for the development, production or marketing of a computer program substantially similar in its expression, or for any other act which infringes copyright.52 Finally, in accordance with the provisions of the Berne Convention for the protection of Literary and Artistic Works, the provisions of this Article may not be interpreted in such a way as to allow its application to be used in a manner which unreasonably prejudices the right holders legitimate 48 Computer Programs Directive, 91/250/EEC, art 4. 49 ibid, art. 4,1. 50 Decompiling is a procedure of translating the executable version of a computer program back into the source code it was compiled from. Decompiling is usually done when access to the source code is needed to clarify a program function, discover the true purpose of the program or develop a way to interface the program. Decompiling is not a precise and exact procedure – the source code is extrapolated and differs from the original. 51 Computer Programs Directive, 91/250/EEC Directive, art 6. 52 ibid, art6,1.
- 23. 23 interests or conflicts with a normal exploitation of the computer program. The question this provision poses is how to define a normal exploitation of the computer program. Do criteria established for other categories of works apply? What about the three-step test? As regards establishing authorship of a computer program, the Directive regulates that the person or persons who have written the program (its source code, not merely compiled the executable code) should be considered authors, unless the program was developed by employees in which case the economic rights belong to the employer.53 The Directive also introduces certain limitations to the exclusive right concerning the reproduction of a computer program by the licensee allowing him to create a backup copy for reasons of data security.54 Alongside the Computer Programs Directive, additional Directives that harmonized and regulated aspects of copyright were Directive 2006/115 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (Rental Directive), Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the internal Market (Electronic Commerce Directive), Directive 2001/29 on Copyright and related rights in the Information Society (Information Society Directive), Directive 2006/116/EC of the European Parliament and of the Council of 12 December 2006 on the term of protection of copyright and certain related rights (Copyright Term Directive), Directive 2004/48/EC of the European Parliament and of the Council on the enforcement of intellectual property right (The Enforcement Directive), and the new Directive 2012/28/ EU on certain permitted uses of orphan works (The Orphan Works Directive). The objective of the Rental. Directive with regard to computer programs is summed up by the provision which leaves the Member States free to decide how to deal with the issue.55 When one considers the utilitarian nature of the computer program, the manner and the reason why computer programs are developed in contrast to other categories of copyrighter works, the business model of publishers and developers, and the fast pace of development, this is, of course, the only logical 53 Computer Programs Directive, 91/250/EEC, art 2,3. 54 ibid, art 5. 55 ibid. art 6,3.
- 24. 24 solution. The Computer Programs Directive itself was amended in 1993 (Directive 93/98/EC on harmonising the term of protection of copyright and certain related rights), only to be repealed and replaced in 2009 (Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs). 1.5.2 Directive 2009/24/EC on the legal protection of computer programs and Directive 2012/28/EU on certain permitted uses of orphan works With respect to the questions raised earlier, the 2009 Directive lays out the provisions regarding beneficiaries of protection, exclusive rights of the rights holder specifically in the case of computer programs, exceptions to the restricted rights, and the cases and conditions where users are allowed to decompile the protected program.56 According to European Union Law (LEX) The 2012 Directive, on the other hand, regulates certain aspects of use of orphan works by publicly accessible libraries, educational establishments, museums, as well as archives, film or audio heritage institutions and public service broadcasting organizations in the EU Member States in order to achieve aims related to their public-interest missions.57 The Directive applies to three distinct categories of work: works published in the form of books, journals, newspapers, magazines or other writings, cinematographic or audiovisual works and phonograms and cinematographic or audiovisual works and phonograms produced by public-service broadcasting organizations, under the condition that they are protected by copyright or related rights and first published or, in the absence of publication, first broadcast in a Member State.58 The Directive does not mention computer programs as a category of work eligible to be considered an orphan work. 56 Council Directive 2009/24/EC, art 3,4,5. 57 Council Directive 2012/28/EU, art 1. 58 European Union Law <http://www. eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016SC0301> accessed 9 March 2017.
- 25. 25 1.6 Patenting Software Modern society relies heavily on computer technology. Without software, a computer cannot operate. Software and hardware work in tandem in today’s information society. So it is no wonder that intellectual property protection of software is crucial not only for the software industry, but for other businesses as well. The intellectual property protection of computer software has been highly debated at the national and international level. For example, in the European Union (EU), a draft Directive on the Patentability of Computer-implemented Inventions has been discussed in order to harmonize the interpretation of the national patentability requirements for computer software-related inventions, including the business methods carried out via the computer. These discussions show divergent views among stakeholders in Europe. Furthermore, the Internet raises complex issues regarding the enforcement of patents, as patent protection is provided on a country-by-country basis, and the patent law of each country only takes effect within its own borders. And according to WIPO, this article does not attempt to clarify all the questions and uncertainties surrounding software patents but rather provide five tips or suggestions which should be kept in mind when considering patent protection of software-related inventions.59 1.7 Enforcement At the European level, Directive 2009/24 seeks to harmonize Member States’ legislation in the field of legal protection of computer programs by defining a minimum level of protection. Member States protect computer software as such by copyright, by analogy to the protection given to literary works within the meaning of the Berne Convention for the Protection of Literary and Artistic Works. Copyright will protect only the computer program in the form written by a 59 WIPO (World Intellectual Property Organization) Patenting Software <http://www.wipo.int/sme/en/documents/software_patents_fulltext.html> accessed 9 March 2017.
- 26. 26 programmer i.e. its source code. Neither the functionality of a computer program, nor the programming language or the format of data files used in a computer program in order to exploit certain of its functions constitute a form of expression of that program, and thus, those are not protected by copyright. Article 52 of the European Patent Convention excludes software from patentability to the extent that a patent application relates to a computer program as such. A distinction is, however, made between “software patents” which are excluded according to Article 52 EPC and so called computer-implemented inventions which are accepted at the European Patent Office. In this respect, “computer-implemented inventions” can be defined as inventions whose implementation involves the use of a computer, a computer network or other programmable apparatus, having one or more features realized by means of a computer program. It seems therefore that patentability must not be denied merely because a computer program is involved. You could seek patent protection if the subject matter of your invention as a whole, i.e. a machine with related software, has a technical character - this technical character must be present in all variants covered by the patent claim60 2 Kazakhstani Legal Framework on IPR 2.1 Kazakhstani Intellectual Property Rights in Software Actually Kazakhstani IPR were subscribed from soviet IPR law, and after getting an independence Kazakhstan inherited the IPR of Soviet Union however after independence there was an updated law in 1996, it was a first update. After a while there were a few updates in 2007 and 2015. While in 2015 there was an ECU IPR update. According to Article 1p.9 of Copyright and related rights 60 EC (European Comission) Enforcement of Intellectual Property Rights <http://ec.europa.eu/growth/industry/intellectual-property/enforcement_en> accessed 8 May 2017.
- 27. 27 “Database - a collection of data (articles, calculations, facts, etc.) that represent the result of creative work in the selection and (or) location of materials, systematized in such a way that these data can be found and processed with the help of an electronic computer (hereinafter referred to as "computer"). The concept of a database does not apply to a computer program, through which electronic access to database materials can be made;61 However Articles 40-43 states about what is considered to be the Software/Computer Program, they call it Electronic Counting Machine. So according to the following articles you may see what they mean.” Article 40. A computer program is a set of instructions expressed in the form of words, diagrams or in any other form of an expression that when recorded on a machine-readable physical medium the fulfillment or achievement of a computer of a certain task or result is ensured, including preparatory materials, the nature of which is such that the program for The computer is their result at a later stage; Article 41. Decompiling a program for a computer is a technical technique involving the transformation of the object code into the source text in order to study the structure and coding of the computer program; Article 42. Adaptation of a computer program or database - modification of computer programs or databases carried out solely to ensure the functioning of a computer program or database on specific technical means of the user or under the management of specific user programs; Article 43.Modification (processing) of a computer program or database - any changes to a computer program or databases that are not an adaptation; About the enforcement actions it is stated that Illegal use of objects of copyright or related rights, as well as the acquisition, storage, transfer or manufacture of counterfeit copies of copyright and (or) related rights for sale, or the attribution of authorship or coercion to co-authorship - shall be 61 Zakon Respubliki Kazakhstan “Ob avtorskikh i smezhnih pravakh” from June10 1996 № 6-I (Authors and Related Rights Law) < http://online.zakon.kz/Document/?doc_id=1005798#pos=143;-199> accessed 8 May 2017.
- 28. 28 punished with a fine of up to one hundred monthly calculation indicators (MCI) which is 2269 KZT for the current year 2017 or correctional labor In the same amount, or by enlisting in public works for up to one hundred and twenty hours. The same acts, if committed in a significant amount or caused significant damage or substantial harm to the rights or legitimate interests of the author or other right holder, or committed repeatedly - are punished with a fine of up to three hundred monthly calculation indicators, or corrective labor in the same amount, or by recruiting To public works for up to two hundred and forty hours, or by arrest for up to seventy-five days. Acts committed: 1) by a group of persons by prior agreement; 2) on a large scale or causing major damage; 3) by a person using his official position - shall be punished with a fine of up to five thousand monthly calculation indices, or corrective labor in the same amount, or by restraint of liberty for a term of up to five years, or by imprisonment for the same term, with deprivation of the right to hold certain positions or engage in certain activities for up to three years or without it. Acts committed by a criminal group are punishable by imprisonment for a term of three to six years.62 So recently there was some amendment with regards to violation of those rights under the Criminal Code of Republic of Kazakhstan. So under the article 198 of Criminal Code (July 2014) it can be strictly punished and a person might get to jail and sentenced from 3-6 years. 2.2 Cases Combating piracy Microsoft Corporation is actively working in this direction. They see a clear task in informing users about the benefits of using legal software and about the most convenient and effective options for its acquisition. Those who are not affected by purely positive arguments, it is important to inform about the inevitability of punishment for the use of unlicensed software. Every company 62 Zakon Respubliki Kazakhstan “Ob avtorskikh i smezhnih pravakh” from June10 1996 № 6-I (Authors and Related Rights Law) <http://online.zakon.kz/Document/?doc_id=1005798#pos=143;-199> accessed 10 May 2017.
- 29. 29 should be aware of the legal risk that it takes, deciding to use counterfeit. Our measures are aimed primarily at unscrupulous distributors of pirated copies. And this position is also characteristic of the Internet. For example, we are not interested in combating peer-to-peer technology in torrent- networks. But we are careful to ensure that it does not illegally distribute objects protected by copyright. As for ordinary users, Microsoft does not initiate their prosecution, except for single cases related to the continued refusal to enter into negotiations on licensing used software. Over the past 6 years, the level of piracy in our country has decreased from 85 to 76%. To a large extent, such results were achieved due to the efforts of the state, companies that produce and distribute computer programs.63 The situation with the protection of intellectual property rights in Kazakhstan is improving noticeably. Already, changes have been made in the legislation: from January 1, 2015, violation of intellectual property rights carries a criminal responsibility in the form of imprisonment for up to 6 years. The fight against piracy in Kazakhstan is in full swing. For 10 months of this year. 273 criminal offenses under Article 98 of the Criminal Code of the Republic of Kazakhstan (violation of copyright and related rights) were registered in the Unified Register of Pre-trial Investigations in the Unified Register of Pre-trial Investigations; for the same period in 2014, only 126 facts were filed in criminal cases, which indicates a trend towards improving indicators and quality of work. Since the beginning of the year, 221 thousand items of counterfeit products have been withdrawn from illegal circulation, incl. 866 carriers with unlicensed software, identified 10 facts of manufacturing and 3 channels of wholesale supply of such products from other regions of the country. On an ongoing basis, the Internet is monitored for signs of violation of legislation on copyright and related rights64 Actually it is just publicly available information but in fact BSA and legal company Great Yassa as its official representative in Kazakhstan may provide with tons of cases. BSA has a bunch of giants in software such as Microsoft, Apple, Adobe, Cisco, Intel, IBM, Oracle and many others. The Business Software 63 <http://www.microsoft.com/kazakhstan/antipiracy/struggle/piracystruggle.aspx> accessed 9 March 2017. 64 DVD (Departament Vnutrennikh Del Respubliki Kazakhstan) <http://mvd.gov.kz/portal/page/portal/zhm/activity/fight_against_crime/avtor_smezhnye_prava> accessed 9 March 2017.
- 30. 30 Association of Australia was founded in 1989 with the support of the commercial software industry. The group educates businesses and consumers on software management and copyright protection. In January 2007, it was replaced by BSA | The Software Alliance. BSA | The Software Alliance (www.bsa.org) is the leading advocate for the global software industry before governments and in the international marketplace. Its members are among the world’s most innovative companies, creating software solutions that spark the economy and improve modern life. With headquarters in Washington, DC, and operations in more than 60 countries around the world, BSA pioneers compliance programs that promote legal software use and advocates for public policies that foster technology innovation and drive growth in the digital economy.65 “Thus back to 2011 there was one of the big cases with businessman from Aktau. After signing peacefull agreement he paid a compensation for Microsoft Corporation of $27000“ 66 A few years ago (2015) there was an agreement between Russia Kazakhstan and Belarus (Customs Union) to have coordinate common actions to improve the situation with authors rights. However, there was not a crucial change in current IPR law.67 2.3 Comparison and Findings After carefull analyzing of laws both Kazakhstani and European it might be observed that Kazakhstani Law specifies the description of the term Electronic Counting Machine/Computer programs and Database. Obviously it may be reffred to a time when it was developed back to Soviet time. However, since that time everyting was changed as in World as in technology and law. There is no such 65 BSA (Business Software Alliance ) <http://ww2.bsa.org/country/BSA%20and%20Members.aspx> accessed 9 March 2017. 66 <http://www.microsoft.com/kazakhstan/antipiracy/about/video.aspx> accessed 9 March 2017. 67 <https://tengrinews.kz/zakon/mejdunarodnyie_organyi_i_organizatsii/evrazes/id-H14EV000104/> accessed 9 March 2017.
- 31. 31 understanding of Eletronic Counting Machine right now. And there is a separate law for database in EU IPR and there is certain difference in terminology and in enforcment actions dramatic one. As long as for violation of Authors right a person may get to jail! And the interpretation of vialotions may differ in range of damage and there is a doubt in how they evaluate damage and count fines and refer in cases for jail. In addition it might be summarized that the attitude towards terms and conditions and attitute towards violations issues is completly different. For sure there is a lack of professionals in current sphere, and lack of lawyers who can update the law and update the current existing law with out of dated terms, conditions and enfocement for violations. During analyzing the laws it was observed the need for improvements several articles in Kazakhstani IPR, Copyright and Related rights. By summaryzing the differences it might be added that the lack is als related to two different systems of understanding what is Operating System and the ways to combat. Since frist release of this law everything changed and the current ammendments and changes which was made in 2007 and in 2015 didn’t change the core which is understanding of what is Software and other terms related to Software, which was indicated in articlees 40, 41, 42 and 43. Basically terminology was separated into subparts with further descriptions. Enforcemnt actions are so “wild“ and too vague. 2.4 Recommendations It might be strongly recommended to review the current existing law with all amendments and updates in 2007 and special agreement on common actions which was made in 2015 for Customs Union countries. As far as even after certain changes in legislation still there is a room for further development. Thus for instance, in current Copyright and Related rights Law there are 3 separate articles about the term Electronic Counting Machine (ECM) which could be “transmitted” to Computer System which is called Software in modern EU IPR law. So in those three articles it was indicated what is ECM and what is decompiliation, modification and adaptation. So it was mentioned in 3 different articles. Actually it might be suggested to remove ECM term at all as
- 32. 32 well as the Computer System is better to call it Operating System or Software. And call modification, decompiliation and adaptation as the piracy actions. So, it is better just to put to one article terms like Decompiliation, Modification and Adopation state them in one and name the article like Piracy in Sofware/Computer Program. With regards to Enforcment it shall be suggested to look the best practices in world first of all EU unified enforcment actions which doesn’t indicate to follow the Criminal Code but rather count damages on a carefull evaluation in economic sense. First of all economic damage should be evaluated fairly, not just saying from 1-100 MCI and putting enforcemnt under the Criminal Code. Moreover, it might be suggested to take not only the best principles and practices but to look trhough Bern Convention on Copyright. Check the principles and main provisions in this Convention. Last but not least WIPO takes a control in harmonizing and unifying many principles worldwide. So Kazakhstani Copyright must be updated within both EU IPR and WIPO one as long as always there are some ammendments even in WIPO. But first of all it must be eliminated the understanding the term ECM which is morally outdated. Replace it by Computer System/Operating System finally Software. Conclusion The volume of counterfeit software in Kazakhstan reached a critical point. Unlicensed software - it's a double edged sword. On the one hand, users of counterfeit software at risk of losing data, confidential information and catch a virus that could eventually lead to a halt of all business processes. According to research in the field of information security experts and statements in this sector, there is a direct relationship between the counterfeit software and malware. On the other hand, we must not forget that the most obvious risks associated with the illegal use of software - it is the legal responsibility. The software is protected by intellectual
- 33. 33 property laws, and unauthorized production, distribution and use of unlicensed or pirated software is a violation of copyright. The question of mentality Today it is difficult to find an area that is not associated with information technology. Modern software has improved business processes and simplify the work of the organizations. Few people really realize that software is intellectual property and is protected by current legislation on copyright and related rights. Many residents do not pay attention to the legal requirement, preferring to use pirated copies. Users looking to get the software for free or for the lowest price, and this applies not only to individuals but also to large companies. His "piracy", they justify the post-Soviet mentality. "To include copyright infringement action to the illegal use, including manufacturing, distribution, provision for use, in order to obtain the use of copyright income (including software) without authorization (license) from the copyright owner. In addition, criminal liability for copyright infringement range from fines and corrective work up to imprisonment for up to 6 years ", - said Azamat Chinetov, BSA external legal advisor in Kazakhstan. As it turned out, in addition to the criminal responsibility of the offender may be subject to civil liability, which provides for the payment of compensation to the right holder in the amount of up to 30 million tenge. How easy is it to become a criminal? CEOs often have information about what their organizations are using counterfeit or unlicensed software, but do not take action to address these facts. fully Employees of the companies are not always aware of the fact that they are breaking the law by using counterfeit or unlicensed software. It happens that the negative consequences of using unlicensed software organizations learn the hard way. For example, there was a media holding "Shygys Akparat". The investigation, carried out by law enforcement agencies, was revealed the misuse of company products Microsoft. The
- 34. 34 company has purchased computers installed on the hard drive unlicensed copies of software products. "The authenticity of these programs has not been tested, because the computers were supplied with new and no suppliers have informed us that the installed software was unlicensed copies. The fact that the software is counterfeit, our company found out only at the time of check law enforcement agencies. Employees Economic Investigation Service of the State Revenue Department filed against our organization a criminal investigation into the illegal use of unlicensed software, "- says an employee of the media holding" Shygys Akparat ". Legal advisers BSA explained that "copyright infringement was recorded in connection with the use of pirated versions of Microsoft Windows and Microsoft Office programs on the 19 computers in the enterprise. This criminal case illustrates the possibility of criminal liability in connection with the use of unlicensed software in accordance with the legislation of Kazakhstan. Representatives of law enforcement agencies regularly participate in various trainings, dedicated to the protection of copyright and is able to investigate and bring to trial cases involving violation of the rights holders. " With regard to the specific case in respect of the above-mentioned companies, the parties managed to reach an amicable agreement and close the criminal case. Computers with unlicensed software works unstable - potential viruses, trojans, phishing adversely affect the performance and result in data loss and operating time. It might be concluded that EU IPR and KZ IPR is completely different in its matter as far as Kazakhstan still use an old interpretation of what is software. Moreover, there is a doubt why they putted a violation of IPR into Criminal Code. There a room for further development and research of current IPR in Kazakhstan. Also within WTO framework there will be changes as far as Kazakhstan will need to work together with WIPO harmonized principles.
- 35. 35 Bibliography Treaties and Legal Text TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS Agreement]; World Intellectual Property Organization. 1982. Berne Convention for the Protection of Literary and Artistic Works: texts. [Geneva]: World Intellectual Property Organization; World Intellectual Property Organization, and United States. 1997. WIPO Copyright Treaty (WCT) (1996) and WIPO Performances and Phonograms Treaty (WPPT) (1996): message from the President of the United States transmitting World Intellectual Property Organization Copyright Treaty and the World Intellectual Property Organization Performances and Phonograms Treaty, done at Geneva on December 20, 1996, and signed by the United States on April 12, 1997. Washington: U.S. G.P.O. No. 105-17 (1997); 36 ILM 65(1997); Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs Official Journal L 122, 17/05/1991 P. 0042 – 0046; Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs (Codified version) (Text with EEA relevance) OJ L 111, 5.5.2009; European Patent Convention October 5, 1973 TRT/EP001/001; Directive 2012/28/EU of the European Parliament and of the Council of 25 October 2012 on certain permitted uses of orphan works OJ L 299, 27.10.2012, p. 5–12; Law of the Republic of Kazakhstan No. 6-I of June 10, 1996, on Copyright and Related Rights (as amended up to Law of the Republic of Kazakhstan No. 419-V of November 24, 2015) Books and Articles J. J. Perritt: Rejecting WIPO Treaties, Government Information Quarterly, Vol. 14, No. 2, 2006, pp. 201 – 205; T. A. Lipinski: The Myth of Technological Neutrality in Copyright and the Rights of Institutional Users: Recent Legal Challenges to the Information Organization as Mediator and the Impact of the DMCA, WIPO, and TEACH, Journal of The American Society for Information Science and Technology, Vol. 54, No. 9, 2003, pp. 824 – 835; J. S. Sheinblatt: The WIPO Copyright Treaty, Berkeley Technology Law Journal, Vol. 13, No. 1, 1998 P. Magnani and M. L. Montagnani: Digital Rights Management Systems and Competition – What Developments Within the Much Debated Interface Between Intellectual Property and Competition Law?, International Review of Intellectual Property and Competition Law, Vol. 39, 2008 R. M. Stallman: Free Software, Free Society: Selected Essays of Richard M. Stallman, GNU Press, Boston, Massachusetts, 2010. A. Bogsch: The First Twenty-Five Years of the World Intellectual Property Organization from 1967 to 1992, International Bureau of Intellectual Property, WIPO Publication No. 881 (E), 1992 C. May, The World Intellectual Property Organization: Resurgence and Development Agenda, Routledge, New York, 2007 C. Seville: EU Intellectual Property Law and Policy, Edward Elgar Publishing, Cheltenham, 2009
- 36. 36 G. Mazzioti: Did Apple’s Refusal to Licence Proprietary Information enabling Interoperability with its iPod Music Player Constitute an Abuse under Article 82 of the EC Treaty?, World Competition, Vol. 28, No. 2, 2005, pp. 253 – 275. Bentley & Sherman, Intellectual Property Law, Oxford University Press, Third edition, Oxford University Press, 2009 Cornish and Llewelyn “Intellectual Property, Patents, Copyright, Trademarks and Allied Rights”, 6th edition, London & Maxwell 2007. OECD,The Economic Impact of Counterfeiting and Piracy, OECD 2008, at page 87 Stephen M.McJohn, Chapter 3, p.91 F. R. Lewell, 2009 “The role of Intellectual Property Rights” Report on EU Customs Enforcement of Intellectual Property Rights, European Commission Wistam Henrik, “IP Infringement penalties ruling will have sweeping effect”, World Trademark Review, March/April, at p.14, 2007. Links http://ec.europa.eu/green- papers/pdf/green_paper_copyright_and_chanllenge_of_tecnology_com_%2888%29_172_final.pdf http://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation- network/white_paper_c11- 481360.html http://europa.eu/youreurope/business/start-grow/intellectual-property-rights/index_en.htm http://www.bmflegal.com/language/ru-RU/Podrobnee/ArticleId/49/-Intellectual-Property-in-KAZAKHSTAN.aspx http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/statistics/201 4_ipr_statistics_en.pdf http://beijing.usembassy-china.org.cn/protecting_ipr.html http://www.forbes.com/sites/jackperkowski/2012/04/18/protecting-intellectual-property-rights-in-china/ http://www.wipo.int/about-ip/en/ http://web.a.ebscohost.com/ehost/detail/detail?sid=5c6e0f9f-d6b6-41cb-92bd- bcb82884f5ed%40sessionmgr4002&vid=0&hid=4201&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=eric&AN =EJ782163 http://web.a.ebscohost.com/ehost/detail/detail?vid=1&sid=2426f837-ebc8-4849-8743- a1e9ba7046e9%40sessionmgr4004&hid=4201&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=eric&AN=ED548 914 http://web.a.ebscohost.com/ehost/results?sid=379da46a-71f3-43f1-a900- c646e2d44ec3%40sessionmgr4003&vid=0&hid=4201&bquery=intellectual+property+of+software&bdata=JmRiPWV yaWMmdHlwZT0wJnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d
- 38. 38 APPENDIX A Total worldwide piracy rate Source: http://globalstudy.bsa.org/2011/
- 39. 39 APPENDIX B North American piracy rate Source: http://globalstudy.bsa.org/2011/
- 40. 40 APPENDIX C Central and Eastern Europe piracy rate Source: http://globalstudy.bsa.org/2011/
- 41. 41 APPENDIX D Kazakhstan within the CEE(Central and Eastern Europe) region, piracy rate Source: http://globalstudy.bsa.org/2011/