COPYRIGHT AND ANTI-SPAM

Introduction
Recent legislation from the Israeli parliament, strives to cope with constantly developing technological advances.The new Copyright Law (the “Copyright Law”) repeals the old copyright law of 1911 (as amended) and the Copyright Ordinance of 1924. The Copyright Law recognizes new types of copyrights, adopts established standards for the “fair use” doctrine, and expands authors’ rights while making the work itself more available to the public.

The new Anti-Spam Law was adopted by the Israeli parliament as part of the 40th Amendment to the Communication Law (Bezeq and Broadcasting) 2008 (the “Spam Law”). The Spam Law implements the “Opt-in” model, practiced in the European Union, rather than the “Opt-out” model, practiced in the US. According to this model, subject to certain exceptions, it is prohibited to send advertisements by direct mail, unless the addressee’s consent had been obtained in advance. The new Israeli legislation is part of a broad global trend that is seeking to diminish one of the most invasive Internet nuisances. The Israeli Spam Law came into effect on December 1, 2008, soon after the ruling by the US Federal District Court in San Jose, California in the case of
Facebook v. Guerbuez. In this ruling the US Federal Court ordered Adam Guerbuez and his company, Atlantis Blue Capital, to pay US$ 436.2 million in statutory damages and an additional US$ 436.2 million in aggravated statutory damages for violations of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”).[1]

Taking into account the impact of such legislation on our international clients, while conducting their business locally, we take this opportunity to provide a short review of these new laws.

Copyright
The new Copyright Law recognizes new types of copyrights in Israel, including the general right to produce a derivative work (e.g., book dramatization) and the right to place an existing work in the public domain (e.g. uploading such work to the Internet). The Copyright Law refers to works that are architectural, artistic, dramatic, literary, sculptural, photographic or cinematographic.

Although the general principle under the Copyright Law remains the same as on the eve of its enactment (i.e., that the author is the owner of the work), the Copyright Law provides two exceptions. The first – work created by an employee in the course of his/her employment and as a part of his/her service – remains the property of the employer, unless agreed otherwise by the parties; the second – in the case of work that is a portrait or photograph of a family or other private event made pursuant to a commission, the first owner of the copyright therein shall be the commissioning party.

The Copyright Law extends the “fair use” doctrine by overwriting the narrow definition under the previous legislation, allowing the courts more flexibility
in deciding what constitutes “fair use” on a case-by-case basis.

The Copyright Law stipulates standards for the “fair use” doctrine, including the purpose and manner of the use, the nature of the protected work, the amount and substantiality of the portion used in relation to the work as a whole, and the effect of the use upon the value of the work and its potential market. For example, use of the work for purely educational use or for electronic backup purposes shall be considered as “fair use.”

The Copyright Law differentiates between copyright and moral right, limiting the type of works over which authors are entitled to exert their moral right. Software applications and records, for example, are specifically excluded. As a moral right cannot be assigned or transferred under the Copyright Law, but can only be waived, it is important to explicitly address the issue of the author’s waiver of his/her moral right in any assignment or transfer of copyrights.

The Copyright Law raises the upper limit for “compensation without proof of damages” to NIS 100,000 (to date, approximately US$ 25,000) as well as abolishes the lower limit (which used to be NIS 10,000). Pursuant to the Copyright Law, the courts may consider several factors, such as the scope, duration, and severity of infringement, actual damages benefit to defendant due to infringement, the nature of the defendant’s activities and the defendant’s good faith.

The Copyright Law requires a written instrument to execute the transfer of a copyright or to grant an exclusive license to use a protected work, and provides that both the owner of a copyright and the exclusive licensee of a copyright shall have standing to file a claim relating to the copyright against third parties.

Anti Spam
In general, the Spam Law prohibits the distribution of commercial advertisement by Advertisers via electronic mail, short text messages (SMS), fax and automatic dialing systems, when these actions are aimed to induce purchasing of goods or services, or other means of consumption, without obtaining the prior written consent of the addressee. However, the distribution of a single Advertisement to a business entity, requesting the business’ consent for future distribution of Advertisements, shall not be deemed a violation of the Spam Law.

For the purpose of the Spam Law, an Advertiser would be the entity that appears to have sent the message, and also the commercial entity whose business interests the Advertisement is likely to promote.

The Advertiser may distribute Advertisements without obtaining the Addressee’s Consent, provided that all the following conditions are met: (i) the Addressee provided the Advertiser with the Addressee’s contact details, while purchasing de facto, or negotiating the purchase of, goods or services, and was notified by the Advertiser that the Addressee’s details may be used for delivery of Advertisements, (ii) the Advertisement concerns similar goods or services, and (iii) the Advertiser provided the Addressee with an option to refuse receipt of such Advertisement.

Violation of the Spam Law may result in both criminal and civil proceedings against the violator and its officeholders. In a criminal charge, fines may be up to NIS 202,000 (to date, approximately US$ 50,000), and where the violation is intentional, the Addressee may be entitled to receive up to NIS 1,000 compensation without proof of damages (to date, approximately US$ 250) for each Advertisement that Addressee received. In addition, it is noted that the Spam Law enables Addressees to file a class action, if applicable, vis-à-vis any Advertiser that violated the Spam Law.

The Spam Law provides two refutable presumptions. In the first, in the event that a corporation violates the Spam Law, the presumption is that the corporation’s officeholders neglected their duties under the Spam Law and violated same. The second presumption is that the distribution of Advertisements was done intentionally. Accordingly, the Advertiser shall not be entitled to a defense under the Spam Law if: (i) an Advertisement was sent after receiving the Addressee’s refusal for such advertisement, or (ii) the Advertiser had previously sent Advertisements in violation of the Spam Law, or (iii) the Advertisement was sent to Addressees by using a list of addresses or phone numbers, compiled through a random sequence of letters and/or digits.

Summary
This new legislation of the Israeli Parliament is considered innovative, yet not flawless. Ambiguous provisions and vague definitions in the Spam Law are awaiting the Israeli courts’ interpretation through case law. Questions concerning jurisdiction (would a foreign Advertiser sending Advertisements to Israeli Addressees be liable under the Anti-Spam Law?), the purpose of the Spam Law (does the circulation of Advertisements by non-profit organizations, asking for donations, constitute a violation?), and others, remain outstanding at this point. The novel Copyright Law expands authors’ rights while providing additional exceptions for use of protected work and making authors’ work more available. However, the Copyright Law does not relate directly to up-to-date issues such as file sharing, management of digital rights, and online commerce, which will undoubtedly require the attention of the courts.