The Legal 500

On November 19th, 2007, the Israeli Knesset passed a new Copyright Law, 5768 - 2007 (the "New Law"), repealing the Copyright Law, 1911 (as amended) and the Copyright Ordinance, 1924 (together the "Old Laws"), although they remain in effect until the New Law comes into force in May 2008. The New Law reinforces existing rights and provides new rights and protections to reflect new major technological and legal developments over the past 100 years.

The New Law expressly recognizes certain new copyrights for the first time in Israel, including the general right to produce a derivative work, which is work based on previously existing work (e.g., a book dramatization) and making work available to the public, which means "performing an action with work so that people from among the public can have access to such work from a place and time of their choice" (e.g., placing work on an Internet website).

Additional issues addressed in the New Law are:

• Extension of the "fair use" defense which was narrowly defined under the Old Laws, thereby providing courts with more flexibility when applying this defense to specific cases. Particularly, the New Law provides that the Old Law list of "fair use" is no longer exclusive and exhaustive, leaving the courts free to further develop the definition of "fair use" through its case law.
• The New Law adopts established standards for the "fair use" defense, similar to those under U.S. copyright laws, namely: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the value of the copyrighted work and its potential market.
• Permitting making legal copies of computer software for certain specified purposes.
• While the basic principle, that the author is the owner, has not changed, the New Law provides two exceptions to this general rule, in relation to a work product of an employee, and commissioned work. Work product created by an employee during the course of employment, and as part of his work, remains the property of the employer and the employer shall be considered as the owner of such work, unless otherwise agreed by the parties. Commissioned work however, shall belong to the author of the work, unless otherwise agreed by the parties, explicitly or implicitly, except for private portraits or photographs of a private event, such as a family celebration, where the work shall be the property of whoever commissions such work.
• The New Law limits the type of works over which authors and creators are entitled to exert their moral right, specifically excluding software applications and records.
• The New Law establishes the standards of reasonableness that will determine whether an act amounts to an infringement of the author's moral rights, including specified factors that will enable the courts to balance between the personal interests of the author and other legitimate interests, such as the public interest. As a moral right cannot be assigned or transferred but can only be waived, it is important to explicitly address the issue of an author's waiver of his moral right in any assignment or transfer of copyrighted works.
• The New Law defines both direct and indirect infringement of copyright and moral rights. In general, direct infringement is dealt with similarly to how it was in the Old Laws. Conversely, the indirect infringement doctrine has been extensively debated in courts and the New Law specifies a number of situations in which an indirect infringement may occur, all of which relate to the commercial use of a copy of a copyrighted work (selling, offering, distributing, performing, importing, etc). Surprisingly, in its definition of indirect infringement, the New Law does not address certain technological developments.
• The New Law has raised the upper limit for "compensation without proving damage" to NIS100,000.

The New Law provides a more suitable framework for copyright policy in the technological age in which we are living. However, a number of issues remain open and it is yet to be seen how case law develops in these areas when the New Law comes into force.