Reform of EU copyright is the core of the Commission’s Digital Single Market strategy. Various legislative initiatives have been proposed but the “heart” of the reform is without a doubt the proposal for a new copyright directive. While there appears to be a growing consensus on the wording of most articles, a few key provisions remain under debate. In this article we comment on the current 23 April and 17 May 2018 draft proposals published by the Council of the EU (Member State governments’ representatives).
Originally the hope had been to have this legislation finalised by now. However, many provisions have proved controversial. The final vote in the EU Parliament’s committee on legal affairs has recently been postponed to the end of June. The Council published a draft proposal on 23 April 2018. This summarises the main outstanding issues as being: (a) the scope of an additional, optional exception for text and data mining; (b) the scope and term of protection of the press publishers’ right and (c) the scope liability and monitoring obligations for certain service providers (labelled by some the “value gap” provisions). Following a meeting on 27 April, the Council published further draft on 17 May 2018.
Article 3a: Optional Exception for Text and Data Mining
Article 3 of the draft Directive lays down a mandatory exception for reproductions and extractions made by research organisations and cultural heritage institutions in order to carry out text and data mining (TDM) of lawfully accessible works for scientific purposes. In November 2017 the Council introduced a supplementary optional exception for temporary reproductions and extractions of lawfully accessible works that form a part of the process of text and data mining. This optional exception would extend to TDM carried out by investigative journalists and individual researchers and not just research organisations. However, in contrast to the mandatory exception, it only covers temporary reproductions and extractions arising from the process of TDM and would not permit any storage of copies of works. It does not apply if the rights holder has expressly reserved their rights (meaning it can be overridden by contract). Some Member States were concerned that the scope of this optional exception was too broad. However, in the current draft proposal the Council does not propose to limit the scope further.
Article 11: Ancillary Right for Press Publishers
Article 11 of the draft Directive has been the subject of much debate. As recently as February of this year, two alternatives were being discussed: the creation of a standalone ancillary right for press publishers or a statutory presumption that press publishers may enforce certain rights. The 23 April draft has dropped the alternative presumption and includes the ancillary right for press publishers to prevent the online use of their press publications by information society service providers without consent. The right does not apply to the use of insubstantial parts of press publications. The test for insubstantial can be either (i) the part used does not express the intellectual creation of author (i.e. does not meet the test for subsistence of copyright); or (ii) the part used has no independent economic significance. The test for economic significance is not set out in Article 11 itself but the corresponding Recital (34a) speaks of an affect on the economic investments made by publishers. Importantly, under the current draft proposal, the term of protection has been reduced to 1 year (down from the Commission’s original proposed term of 20 years).
Article 13: Use of Protected Content by Online Content Sharing Service Providers
Primary Liability for OCSSPs
Article 13 has proved to be the most controversial aspect of the proposed copyright reforms. The current draft proposal provides that online content sharing providers (OCSSPs) perform an act of communication to the public when they give the public access to works uploaded by users. The requirement that the OCSSP had knowledge of the consequences of its actions has been removed in this latest draft. This is the first time that the meaning of “communication to the public” has been defined for a particular type of provider and it clarifies that certain online platforms are directly liable for copyright infringement in relation to acts of uploading by their users (unless they meet the conditions set out in Article 13).
Where an OCSSP gives the public access to works uploaded by users, the OCSSP needs to obtain a licence from rightholders or prevent the availability of specific works identified by rightholders. If the OCSSP does not have a licence it will be liable for copyright infringement unless it fulfils certain conditions (ie it can demonstrate it has made best efforts to prevent the availability of specific works by implementing effective and proportionate measures and on notification by rightholders it has acted expeditiously to remove those works and made best efforts to prevent their future availability). OCSSPs carrying out acts of communication to the public will not be eligible for the hosting defence under Article 14 of the E-Commerce Directive. Burdensome obligations
In our view, if Article 13 is agreed in its current form, this introduces a complex and potentially onerous set of obligations on OCSSPs (defined as “the provider of an information society service whose main or one of the main purposes is to store and give the public access to a large amount of works or other subject matter uploaded by its users which it organises and promotes for profit-making purposes”).
The 17 May draft introduces amendments to clarify that a lighter regime applies for micro and small-sized enterprises (within the meaning of Commission Recommendation 2003/361/EC). However, a lot of uncertainty and complexity remains. There will certainly be arguments about whether a provider falls within the definition of an OCSSP (although the 17 May draft adds helpful clarification that the Article 13 regime does not apply to any service whose main purpose is piracy). It is also unclear what is required to demonstrate “best efforts” to prevent the availability of works by implementing effective measures. Is implementing effective measures in accordance with the provisions enough to demonstrate “best efforts”? If so, a “best efforts” obligation may not be needed at all. This ambiguity may be resolved in the next draft.
Gap in the drafting?
We can also foresee problems arising for an OCSSP where a rightholder has not provided the OCSSP with details of specific works. In that case, the OCSSP will be liable for infringement unless it has consent from the rightholder. If rightholders choose not grant a licence, or provide details of specific works for the purposes of the effective measures, OCSSPs may not be protected under the current Article 13 provisions, despite the corresponding Recital 38a having been recently amended to add the following (apparent) reassurance:
“As long as no data for the application of the measures or no notification concerning removal or disabling access to specific unauthorised works or other subject matter has been provided by rightsholders and, as a result, online content sharing providers cannot take the measures or expeditious action as set out in this Directive these providers should not be liable for unauthorised acts of communication to the public…”
It is hoped that the Council will address this apparent gap in the next round of negotiations on this provision.
The regime relies heavily on OCSSPs and rightholders cooperating with each other to ensure the measures are effective. The 17 May draft introduces further such obligations on both OCSSPs and rightholders and states that Member States should endeavour to put in place independent bodies to assess complaints and establish mechanisms to assess the effectiveness and proportionality of the measures and report back to the Commission. It is not clear who should bear the costs attached to this. Given that the most recent draft proposal clarifies that the regime does not apply to services whose main purpose is piracy, the Article 13 regime does seem to have become overly complex and burdensome for both OCSSPs and rightholders. Disappointingly, the most recent 17 May draft does not simplify the provisions.
The current draft is likely to be discussed at a meeting of COREPER on 25 May. Separately, a final vote in the EU Parliament’s committee on legal affairs (JURI) on the Copyright Directive is due to take place around the 23 June, so one would expect to see a final view on it by the Council before then. However, this legislation has been mired in controversy, so it would not come as a huge surprise to see these timings pushed back yet again. Stay tuned to DSM Watch for further developments.