Weekly T&IPs: Intellectual Property

What lessons can be drawn from the approval of the Directive on Copyright in the digital single market?

On Monday, April 15, 2019 the Council of the EU formally approved the Directive on Copyright in the digital single market which was adopted by the European Parliament on Tuesday, March 26, 2019.

According to the European Commission, the objective of this directive is to establish a global framework, within which intellectual creations, authors, content editors, service providers and users will all benefit from clearer, modernised rules adapted to the digital age. The directive aims in particular at improving the remuneration of online press editors and authors/artists when their articles or works are posted on major platforms, such as Google News or YouTube.

The directive was adopted following tough negotiations lasting over 2 years, particularly due to the lobbying of web giants. Two articles were at the heart of the debates: Article 15 (former Article 11) and Article 17 (former Article 13).

Creation of a related right for editors of press publications in Article 15 of the Directive

Under rules currently in force, editors of press publications are generally without recourse if their content is transferred to websites compiling and sharing news articles, such as Google News, as, subject to being the assignee of journalists' copyrights in published content, press editors must - in accordance with current legislation - demonstrate, for each of the articles concerned, that the news aggregation platforms have reproduced and placed online without prior authorisation an original portion of their article, which is not a simple extract or a short quotation. In practice, such a demonstration is not easy and many people simply give up opposing the online dissemination of their articles by news aggregators.

Article 15.1 of the directive aims to grant editors of press publications an exclusive right to authorise or prohibit the online use of their publications by "information society service providers" (the term referring to news aggregators such as Google News and media monitoring services). This right expires two years from January 1 of the year following the date on which the press publication was published (Art. 15.4).

Therefore, in the event of reproduction of their articles, editors of press publications will be able to negotiate remuneration with the news aggregation platforms concerned. The text of the directive also provides that an "appropriate portion" of the remuneration paid to editors must ultimately go to journalists (Art. 15.5).

In practice, will this really make a difference?

At this stage, pending national implementations of the directive, nothing is certain. In fact, Article 15.1 of the directive provides for several exceptions to this new related right for editors of press publications.

As a result, it will not apply to

• The private or non-commercial use of press articles by individual users
• Acts related to hyperlinks
• The use of isolated words or very short extracts from a press article

Creation of new obligations for providers of online content sharing services in Article 17 of the Directive

Currently, online content sharing platforms, such as YouTube or Dailymotion, benefit from a reduced liability regime for content posted by their users. They can only be held responsible if they are informed of the illegal content available on their site and they do not promptly suspend the publication of the disputed content.

Article 17.1 of the directive seeks to extend the liability of such platforms by providing that they perform acts subject to copyright by disseminating/uploading protected works and thereby encouraging them to obtain the authorisation of the holders of the rights concerned, for example by concluding a licensing agreement.

Article 17.2 further specifies that, in the event of authorisation, this also covers acts performed by users of platforms when they are not acting for commercial purposes or in the absence of significant remuneration. We understand that - in such case – such users benefit from a sort of "sub-license."

In the absence of a licensing agreement (which is possible since nothing in the directive obliges platforms and right holders to agree on such licenses), Article 17.4 provides that platforms will be exempt from liability only if they can justify

• Having done everything possible to obtain an authorisation;
• Having done their utmost, in accordance with the high standards of professional diligence in the sector, to ensure the unavailability of specific protected works/content for which the rights holders have provided them with relevant and necessary information
• Have acted promptly, upon receipt of a sufficiently reasoned notification from the rights holders, to block access to the works/protected content subject to the notification or to remove them from their sites   
• Have used their best efforts to prevent works / content from being uploaded again in the future

Moreover, not all platforms will be subject to the same obligations; the directive provides for a "lighter" regime for new market entrants. Thus, Article 17.6 specifies that platforms "less than three years old and with an annual turnover below €10 million" will only have to justify having done everything possible to obtain authorisation from the rights holders and act promptly, after receipt of a sufficiently reasoned notification, to block access to the works/content covered by the notification or to remove them from their websites. On the other hand, as soon as such platforms have an average number of unique visitors per month exceeding 5 million, they will also be required to demonstrate that they have used their best efforts to avoid further uploading of works/content already reported to them.

Finally, Article 17 specifies that

• The use and posting on the platforms by users of protected works for the purposes of quotation, criticism, review, caricature, parody or pastiche is permitted under exceptions or limitations to copyright (art. 17.7). This clarification is intended to "reassure" those who saw in this new Article 17 an obstacle to freedom of expression. It should also be noted that the parliament has gone further than in the existing rules since the implementation into national law of these exceptions is mandatory, whereas previously it was only optional.
• Its application does not give rise to any general monitoring obligation (art. 17.8). Here again, this clarification was made following the many controversies and criticisms raised by digital freedom advocates. Thus new Article 17 does not mean that automatic content control will be carried out by platforms prior to their publication by the use of filters.

Regarding this aspect, the European Commission was very clear in its press release published on March 26, 2019 (see Frequently Asked Questions ): “The text of the political agreement does not impose any upload filters nor does it require user-uploaded platforms to apply any specific technology to recognise illegal content. Under the new rules, certain online platforms will be required to conclude licensing agreements with right holders - for example, music or film producers - for the use of music, videos or other copyright protected content. If licenses agreements are not concluded, these platforms will have to make their best efforts to ensure that content not authorised by the right holders is not available on their website. The “best effort” obligation does not prescribe any specific means or technology.”

In practice, what will this Article 17 change? Other than the fact that rights holders will be able to conclude licenses with platforms, perhaps not as much as what would appear to be the case from the extent of the debate surrounding its adoption.

For example, Internet giants such as YouTube or Facebook have for quite some time implemented notification procedures for copyright infringement or content filtering systems. These actors are therefore certainly already in a position to comply with their "new" liability regime.

Nevertheless, debates regarding this article are likely to continue, as it is expected that stakeholders will have to initiate discussions after the date of entry into force of the directive in order to examine best practices of cooperation between platforms and rights holders.

Other contributions from the Directive

In addition to these two articles, which were the most discussed, the directive

• Allows exceptions and limitations to copyright to be introduced in the digital environment, namely the possibility of data mining for research purposes, teaching, education and protection of cultural heritage.
• Specifies that a work of visual art whose term of protection has expired falls into the public domain and any material resulting from an act of reproduction of that work may not be subject to copyright or related rights. This provision makes it possible to align in all Member States the treatment of the use of visual works of art once they have fallen into the public domain.
• Facilitates certain licensing practices by cultural heritage management institutions to disseminate to the public works and other protected objects not available in commerce.
• Provides for measures to extend the granting of collective licenses: Member States may authorise collective management organizations to conclude a license agreement for the exploitation of works and extend it to apply to the rights of right holders who have not authorised the collective management organization to represent them by way of assignment, license or any other contractual agreement.
• Proposes negotiation mechanisms such as the use of the assistance of an impartial body or intermediaries to help the parties to reach an agreement to make audiovisual works available on video-on-demand services.

What are the next steps?

The directive will enter into force on the 20th day following its publication in the Official Journal of the European Union, which should occur in the coming days. Member States will then have 24 months to implement the new rules into national law.

In the case of France, in addition to the debates that will certainly take place prior to the making of changes to the Intellectual Property Code into order to bring it into compliance with the directive, it will be interesting beforehand to pay attention to the reactions of the courts in the coming months. To be continued.

For further information

You will find the full text of the directive by clicking here.