EU copyright reform for the Digital Single Market

Greater protection for rights holders and more cross-border access of content

The Commission published its proposed EU copyright reform package on 14 September 2016 as part of its Digital Single Market Strategy.  According to the Commission, the proposals are intended to promote “a fair, efficient and competitive European copyright-based economy“.  In contrast, critics have described the proposals as “a backward step for copyright in Europe”.

The legislative proposals include:

• A Directive on Copyright in the Digital Single Market – with the focus on granting rights holders and publishers of press publications greater protection against the online exploitation of their content; and
• A Regulation laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcastings organisation and re-transmissions of television and radio programmes – which is discussed further here.

The copyright reform package also includes a proposed regulation and directive that implement the EU’s obligations under the Marrakesh Treaty, which is intended to facilitate access to published works for persons who are blind, have other visual impairments or are otherwise print disabled.

The Directive on Copyright in the DSM (the Directive)

The most controversial measures in the proposed Directive are the creation of a new digital use right for publishers of press publications, and provisions that seek to place a greater onus on platforms to police content uploaded by their users for copyright infringements.

Press publishers’ digital use right

The Directive provides publishers of press publications with the ‘reproduction right‘ and ‘making available rights‘, set out in the Information Society Directive, for the digital use of their press publications (Article 11).  The intention is that granting these rights to publishers of press publications, separate from the copyright in individual articles, will provide them with greater leverage to negotiate licence agreements with news aggregators and other online service providers who make use of their content online.

Press publishers will themselves be able to file cease-and-desist claims against offenders, as opposed to having to prove an uninterrupted chain of rights from the author of the published content.

The European Court of Justice has recently ruled that merely linking to authorised content that is freely available on the Internet will not
constitute an infringement of the communication right (of which the making available right forms part), even if the content is framed within a third party
website (Svensson, Best Water).  However, news aggregators will often reproduce snippets of articles or headlines as part of their service and Court
of Justice case law (Infopaq) suggests that this may often be sufficient to infringe the reproduction right.

Comment: Press publishers’ associations have welcomed the digital use right and underlined that this right is in line with long standing parallel rights for film and phonogram producers, broadcasters and other media companies. However, in other quarters, this proposal has been criticised as supporting traditional business models and not meeting the requirements of the digital age. These critics cite the fear that publishers of news media will use this right to charge search engines such as Google to display excerpts from copyright works in search results, which in turn could inhibit access to news publications. The Commission’s proposal aims to put press publishers in a better negotiating position in their contractual relations with online services which use and
enable access to their content. In theory this better negotiating position could lead to press and publishes being better remunerated, but if the distributors refuse to pay, this could limit the distribution publishers obtain from these online services, so in practice this right may be of limited value.

Protected content uploaded by users

Platforms that host large amounts of content that has been uploaded by users, such as Google’s YouTube, have also been targeted by the Directive.

The liability exclusions in the E-Commerce Directive generally protect platforms and other ‘information society service providers‘ from liability for infringing content uploaded by the users of their service, provided they act expeditiously to remove such content when notified.  The Directive does not amend the E-Commerce Directive liability exclusions. However, it does seek to impose more onerous obligations on information society service providers that “store and provide access to the public to large amounts of works or other subject-matter uploaded by their users” (Article 13).  What counts as “large amounts” of works or other subject-matter is not currently defined by the Directive.

The obligations imposed by the Directive are also not well defined but would clearly provide ammunition for rights holders seeking to take actions against platforms they consider to be taking insufficient action to identify and remove infringing content. The Directive provides that information society service providers caught by the Directive shall:

“take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject-matter or to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers. Those measures, such as the use of effective content recognition technologies, shall be appropriate and proportionate.“

The Directive also requires service providers to provide rights holders with adequate information on the measures they are adopting and to put in place complaints and redress mechanisms for their users in case of disputes.

Comment: This provision will have very wide repercussions. “Information Society Service” is defined as “any service normally
provided for remuneration at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, at the
individual request of a recipient of the services“. It effectively covers ISPs, platforms and virtually every commercial website. This proposal effectively forces these actors to police content by taking appropriate and proportionate measures to prevent the availability on their services of works not covered by agreements with rightholders.

This introduces a technical burden to implement systems and procedures to prevent access to content that is not appropriately licensed. On the face of it, this proposal does not appear to erode the liability exemption in the E-Commerce Directive, however platforms and ISPs will presumably have “actual knowledge” of unlawful activity at an earlier stage as they now have an active statutory obligation to seek it out, as opposed to waiting to waiting to be told about it, so it appears to chip away at the concept of the hosting exemption.

Other provisions

The Directive also contains the following proposals:

• Provisions designed to improve transparency forauthors and performers as to how their works and performances are beingexploited, and a contract adjustment mechanism if the remuneration originally agreed is disproportionally low compared to the subsequent benefits derived from the exploitation of the works or performances (Articles 14-16). The provisions are short on detail and give a wide scope to Member States as to how they are implemented, so it is difficult to provide practical guidance at this stage as to how this will work.
• Relatively small changes to the current EUexceptions or limitations to copyright infringement, with mandatory exceptions andlimitations for:
  • Text and data mining by research organisations for the purposes of scientific research (Article 3);
  • Digital use of works for the sole purpose of illustration for teaching, to the extent justified by the non-commercialpurpose to be achieved (Article 4); and
  • Permitting cultural heritage institutions to make copies of any works that are permanently in their collections, in anyformat or medium, for the sole purpose and to the extent necessary for the preservation of such work (Article 5).
• Measures intended to make it easier for cultural heritage institutions to obtain licenses for the digital use of out-of-commerceworks (Articles 7-9).
• In an effort to provide greater access and availability of audiovisual works on VOD platforms, a requirement that MemberStates nominate an impartial body to provide assistance with negotiations if VOD platforms face difficulties relating to the licensing of rights. It is not clear how this will work in practice, particularly as the drafting implies that both parties must want to reach agreement which means that an aggregator could not use this provision to force a rights holder to license its rights. At present this seems like a rather toothless and unnecessary provision. A clue as to its real purpose lies in the Recitals and in the Commission’s communication, which suggests that this is part of a wider set of initiatives designed to make works available in territories where no distribution agreements have been signed, so it is probably a case of “watch this space”.

So What?

These proposals have not yet been finalised, so it remains to be seen whether they will be passed in their current form. The process for finalising the legislation is as follows:

The Commission submits the proposal to the European Parliament, which must approve it by simple majority.  The Council must then approve it by qualified majority. There is no legislative timetable for this. Both the European Parliament and the Council can propose amendments, which may trigger a second round of “reading” and voting. If the European Parliament and Council cannot come to an agreement than a Conciliation Committee is convened where they negotiate the final proposed amendments which are then voted on at a third and final reading.