Page 54 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 2 Copyright in the Pre-Internet Age: An Intermediary-oriented Approach
An Intermediary-oriented Approach

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work, such as filmmakers’ public performance of dramatised novels, VCRs’ (video cassette
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recorders’) reproduction of films and the distribution of copyrighted works by ISPs (Internet
service providers’). The DAR manufacturers, however, asserted fair use as the VCR
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manufacturers had done.
The Congress again reached a sophisticated compromise in the 1992 Audio Home
Recording Act (AHRA). To preserve the copyright owners’ incentive, the AHRA required
DAR manufacturers, importers and distributors to remunerate the record labels. However,
to promote technical advancement, the amount of remuneration was pre-determined by
Congress: a statutory levy of 3% of the ‘transfer price’ of each digital audio tape or 2% of
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the ‘transfer price’ of each digital audio recording device. Two thirds of the levies would
flow to the Sound Recordings Fund, which would be shared between the record labels and
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the performers. One third of the levies would be incorporated into the Musical Works Fund
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shared by the music publishers and composers. Because DAR produced perfect copies in
each successive generation, the 1992 AHRA required each DAR device to be installed with
the Serial Copy Management System (SCMS). This allowed the first-generation copies to be
made from the original but prevented the device from making additional copies of the first-
generation copy. This was the first time technological protection measures (TPMs) entered
the copyright arena. In exchange for regulating distributors, the 1992 AHRA explicitly
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exempted the end users from making analogue or digital audio copies for ‘private, non-
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commercial use’.
Through the levy scheme, the 1992 AHRA promised sustainable development of the
new technology, secured the copyright owners’ revenue from the new distribution channel
and preserved the end users’ freedom to take advantage of the latest technology to consume
copyrighted works. Canada has adopted a similar but much broader levy that incorporates
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any ‘audio recording medium’ ‘onto which a sound recording may be reproduced and that is
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of a kind ordinarily used by individual consumers’. The levy on audio recording devices
has also been widely applied in Europe, with 22 out of 27 member states adopting it so far

153 Section 2.3.3.1.
154 Section 2.3.3.3.
155 Section 3.2.
156 Debeer (n 149) 159; Section 2.3.3.3.
157 17 U.S. Code § 1004(a)(1) & (b). 17 U.S.C. § 1001(12) defines the ‘transfer price’ of a digital audio recording device or a
digital audio recording medium as ‘the actual entered value at United States Customs’ in the case of an imported product, or
‘the manufacturer's transfer price’ in the case of a domestic product.
158 Audio Home Recording Act of 1992. Goldstein (n 36) 132. 17 U.S. Code § 1006 (b)(1).
159 17 U.S. Code § 1006 (b)(1).
160 17 U.S. Code § 1001 (11).
161 17 U.S. Code § 1008.
162 Goldstein (n 36) 132-133.
163 Copyright Act, R.S.C. 1985, ch. C-42, § 79.

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