In 1995 "Internet" became a household word, and we were seduced by an exciting new notion: cyberspace. We were told that we could travel freely between digital planets and acquire information and entertainment from millions of servers.

Digital technology posed new challenges to copyright, and governments and international bodies began producing green books and white papers on how to pave the way for commerce with copyright works on the digital superhighways. If creators and publishers are to sell on-line and off-line digital products they need protection. Solving this issue is clearly of paramount importance. And for good reasons much creativity and large sums are being invested in the development of electronic-rights management systems, in techniques for digital "fingerprints" or "watermarks," and in systems for encryption and payment on the net.

The closed networks
But the idea that cyberspace is a wide open space is an illusion, a fact that often is suppressed in the on-going debate. Substantial and growing amounts of digital data flow through closed networks to which the general public does not have access!

Most of us have long ago acquainted ourselves in the work place with LANs -- local-area networks. And in banks or at airports we have seen WANs -- wide-area networks -- which frequently traverse the globe. WANs are effective but also expensive. Over the years we at Kopinor, the Norwegian reproduction rights organization, have discovered that unauthorized digital duplication and storage of sizable amounts of copyright works is taking place in closed information systems and digital archives. And we have pleaded with the White House Task Force in Washington and the European Commission in Brussels and others to deal with the issues of exploitation of copyright works taking place in closed LANs and WANs. We have pointed out that digital technology opens up for large scale, illegal reproduction which poses a threat to authors and publishers which is far greater than today's massive photocopying.

lntranet
In the autumn of 1995 the concept of intranet blossomed. It became known that Internet, with the help of "firewalls" and World Wide Web technology, can be used as the backbone to establish cheap and cost-efficient closed networks. Articles in the specialized press illustrated that the development Kopinor had described over the years was gaining momentum. In 1996 corporations and institutions in all industrialized countries regarded Internet primarily as a vehicle to establish closed, internal networks, rather than as a tool for commerce for the general public. For instance, the shipping industry in Norway began developing Marlink, an intranet for approximately 10,000 users in 80 cities in 50 countries. A major corporation, Kværner, signed a US$6.6 million contract with Microsoft to develop an intranet, etc. Vendors in the United States estimated that 70 percent of all Internet software sold in 1996 would be for intranet use. And it seems rather obvious: In the same manner as institutional users of all types photocopy from books, journals and newspapers, we can expect that they will make use of works and performances from various media in their intranets and internal digital archives and information systems -- without seeking the permission of rightsholders. The many thousand small and large intranets now being established clearly represent huge potential financial losses for rightsholders and a major challenge for Kopinor and other centralized management bodies.

The main purpose of the closed networks is not to sell products to the public but to convey information and knowledge to employees and other insiders. Such networks are excellent tools for training and education.

Not only literary works
What kind of unauthorized uses do we find in the closed networks, besides unlawful use of computer software? What traditionally is regarded as literary works seems to dominate. Scanning or keying in press clippings is a typical use. But with what we know of World Wide Web technology we can be confident that users will not limit themselves to exploit texts. Photos and illustrations, as well as excerpts from phono- and videograms, are also used.

What should be done?

1. The experiences of Kopinor and similar organizations in regard of reprographic reproduction are clear enough: In relation to internal, institutional exploitation of works the individual authors and publishers are powerless. Collective management of rights is the only option.
2. If effective and user-friendly management of rights in closed networks is to be achieved, governments must introduce legislation which makes this possible. The extended collective license employed in the Nordic legislations seems well suited. This view is also held by the Legal Advisory Board of the European Commission, as expressed in LAB's recommendation in its comments to the European Union green book Copyright and Related Rights in the Information Society available at LAB's Web site.
3. The accelerating unauthorized use of works and performances in internal, closed networks represents a major challenge to rightsholders, particularly in relation to corporate and educational uses. As with reprography we cannot expect to be able to stop such uses. Which means that the maxim must apply: "If you can't beat them, license them." Joint action and consolidation by the collective management organizations is called for if creators, performers and producers -- also the new multimedia producers -- are to be able to secure their interests in the secluded and inaccessible parts of cyberspace.

An important task for collective management organizations will be to conduct their work in a manner which does not prevent the closed networks from being real markets for rightsholders who develop products especially for this kind of use.