The new EU copyright directive: a detailed analysis
Yesterday, the EU Parliament approved a new copyright directive (Directive on copyright and related rights in the Digital Single Market). What does this new legislation mean in practice?
Copyright Directive: European copyright update
The last major European copyright legislation dates from 2001. In the meantime, the Internet has evolved a great deal (Facebook, YouTube and other platforms did not yet exist in 2001). The overall objective of the new directive is to modernise copyright law for the digital single market in Europe.
The new Copyright Directive places great emphasis on the rights of authors and other holders of copyright (often authors transfer their rights to other parties such as publishers, etc.).
In the discussion around this new copyright directive, there was a big focus on Articles 11 (in relation to press publications) and 13 (in relation to online platforms). See in this respect also our previous blog post. The numbering of the articles has been adjusted in the meantime. The provisions on press publications are now in Article 15, and the provisions on online platforms are now in Article 17. However, the new Directive goes beyond these two topics.
Below you will find a detailed (first) analysis of the various provisions:
Articles 3 and 4: text and data mining
According to Article 3, an exception to copyright (i.e., from the right of reproduction) is to be provided for “research organisations” (universities etc.) and “cultural heritage institutions” (museums, libraries, archives etc.) to conduct text and data mining for scientific research. When such research involves making copies of works, these must have an adequate level of security.
Article 4 also provides for a general exception for text and data mining (apart from scientific research). This article, too, only concerns the reproduction right. In the previous versions of the draft text, there were doubts whether data mining for non-scientific purposes would be a problem under the new Copyright Directive. These fears now seem unjustified.
Article 5: Digital and cross-border educational activities
Article 5 provides an exception to the reproduction right and communication right for the digital use of copyrighted works for the purpose of illustration in teaching. However, the source and the author’s name must always be mentioned.
This exception only applies to non-commercial use in education and on the condition that the use takes place under the responsibility of an educational institution via a secure electronic environment that is only accessible to students or staff. Importantly, such use for teaching illustration purposes via secure electronic environments must be limited to use in the Member State where the educational establishment is located (i.e., not cross-border).
National Member States may choose not to transpose this exception for specific uses or for specific works, such as for works intended for the educational market (textbooks) or sheet music. Appropriate licences must then be available to allow use by educational establishments.
National Member States may establish a system of “fair compensation” for this exception for the benefit of copyright holders.
Article 6: Preservation of cultural heritage
Member States must also provide for an exception to the reproduction right to allow cultural heritage institutions (museums, libraries, archives, etc.) to make copies of works in their permanent collections where the aim is the preservation of these works.
Article 8 ff.: use of works that are no longer available by museums and libraries
Member States have to provide that a collective management organisation (e.g., Sabam, Sofam, etc.) can conclude a non-exclusive and non-commercial licence with cultural heritage institutions (such as museums, libraries, archives, etc.) for the reproduction, distribution, communication or making available to the public of works that are no longer commercially available and that form part of their permanent collection. The consent of the rightsholders is not required for this. These are collective management organisations which are representative in the Member State where the cultural heritage institution is situated.
Where there is no collective management organisation, the Member States should provide for a separate exception allowing cultural heritage institutions to make available to the public works from their permanent collection that are no longer available on the market. This should be for non-commercial purposes, such as on non-commercial websites, and provided that the author’s name is mentioned.
Member States should also provide for rightsholders to exclude their works from this collective licensing regime at any time if they wish so.
The question arises as to when a work is “no longer on the market”. The Copyright Directive provides that this is the case when “it may be assumed in good faith” that the work is not available to the public “through the usual commercial channels” and “after reasonable effort has been made to verify its availability to the public”. These are vague concepts that are open to interpretation. Member States may provide for specific requirements in their national legislation, such as an end date.
This exception does not apply to sets of works that are no longer on the market if these sets consist principally of (1) non-cinematographic or non-audiovisual works first published or broadcast in a third country; (2) cinematographic or audiovisual works whose producer is established in a third country; or (3) works of third-country nationals if, after reasonable effort, it was not possible to determine a Member State or third country on the basis of the two preceding points.
Article 9 also provides that licences granted by collecting societies under Article 8 must allow cultural heritage institutions to use works from their permanent collection that are no longer on the market in other Member States (cross-border use). This does not apply to uses under Article 8 where there is no collective management organisation (in which case the permitted uses are limited to the Member State in which the cultural heritage institution is based).
Article 10 requires certain publicity measures to be taken when a cultural heritage institution wishes to make use of the licence or exception provided for in Article 8 for works that are no longer on the market. This information must be made available through a public portal to be managed by the European Union Intellectual Property Office (EUIPO).
(For the sake of clarity, the provisions on press publications are no longer in Article 11 but in Article 15).
Article 12: Measures to facilitate collective licensing
Article 12 provides the possibility for EU Member States to facilitate collective licensing for use on their territory. This is done through collective management organisations (such as Sabam, deAuteurs, etc.), also for rightholders who are not specifically affiliated to those management organisations. Such a licensing system should ensure that the interests of rightholders are sufficiently safeguarded (e.g., rightholders can always opt out).
Article 13: Negotiation mechanism for video-on-demand platforms
Article 13 provides that parties negotiating the use of audiovisual material on video-on-demand platforms must be able to rely on the assistance of an impartial body or mediators.
(The provisions concerning online platforms are no longer in Article 13 but in Article 17).
Article 14: Visual arts in the public domain
If a work of visual art is no longer protected by copyright (because the term of protection has expired), the material resulting from an act of reproduction can also no longer be covered by copyright (unless this concerns a new original work).
Article 15: Online press publications
Article 15 of the Copyright Directive concerns the “protection of press publications in relation to online use”. In the previous version of the text, this was covered by Article 11.
This article grants publishers of press publications an exclusive right (namely the right of reproduction and the right of making available to the public) for the online use of their press publications “by information society service providers”.
These rights of press publishers do not apply to private or non-commercial use of press publications by individual users. Nor does this protection apply to hyperlinking. Finally, this protection does not apply to the use of single words or “very short fragments of a press publication”.
The Copyright Directive thus adds publishers to the list of actors protected by copyright. Publishers join authors, performers, producers of phonograms, producers of the first fixations of films, and broadcasters in a separate “publisher’s copyright”.
The article explicitly states that these rights are without prejudice to the rights of authors (in practice: journalists). It also provides that “authors of works included in a press publication shall receive an appropriate share of the income received by publishers of press publications for the use of their press publications by information society providers.” The question is, of course, what the impact of these newly granted rights to press publishers will be for journalists. There is also the question of what exactly is to be understood by the vague concept of an “appropriate share” of revenue.
The exclusive right of the press publishers is valid for two years after the publication of the press publication. This period is calculated as from 1 January of the year following the publication. A protection period of two years seems long enough in the context of news reporting. Incidentally, it is striking that the “normal” copyright protection is valid up to 70 years after the death of the author, but that this “publisher’s copyright” is limited to 2 years. One can ask the question whether this is really a copyright… Conversely, one can also wonder whether this proves that the “normal” term of copyright protection has gone too far…
This “copyright for press publishers” allows newspaper publishers to charge a fee to platforms such as Google and Facebook for the use of their articles or photos.
There are often warnings that this would be a “link tax”, but these fears seem unjustified. Article 15 of the new Copyright Directive literally states that this protection does not apply to “acts of hyperlinking.” Previous versions of the draft directive gave more cause for concern.
Scientific works or academic publications are not covered by this protection.
It remains to be seen whether this system will effectively help press publishers to survive in an advertising market where revenues are shifting from newspaper publishers to online platforms such as Google and Facebook. A few years ago, similar systems were introduced in Germany and Spain, but the success was rather limited. In Germany, various proceedings are pending, and the ultimate licence revenues are (for the time being) limited. In Spain, Google has discontinued its Google News service, which apparently has a negative impact on the visitor figures of Spanish newspaper websites. We saw a similar development in our own country after the legal victory of the French-language newspaper publishers in the Copiepresse v. Google case in 2011. Meanwhile, the French-language Belgian newspapers are once again indexed by Google News.
Article 17: Online Content Sharing Services
Article 17 of the (new version of the) Copyright Directive deals with the sharing of content by online services such as Facebook, Google, etc. In the previous version of the text, this was included in Article 13.
The text of Article 17 refers to “online content-sharing service providers”. These are providers whose main purpose (or one of the main purposes) is to store and give the public access to a large amount of copyright-protected works uploaded by users, which they organise and promote for profit. This currently primarily concerns platforms such as social media (Facebook, Instagram, etc.) and video services (YouTube, etc.).
The following providers are explicitly excluded from this definition: non-profit online encyclopaedias (e.g., Wikipedia), not-for-profit educational and scientific repositories, open source software-developing and-sharing platforms, providers of electronic communications services as defined in Directive (EU) 2018/1972, online marketplaces (for online sales), B2B cloud services, and cloud services allowing users to upload content for their own use.
Article 17 provides that “online content-sharing service providers” fall within the definition of “communication to the public” or “making available to the public” and therefore require authorisation to communicate or make available works to the public. Such consent may be granted, for example, through a licence agreement. The consent to be obtained by the platforms must also cover the activities of the users (when they are not acting on a commercial basis or where their activity does not generate significant revenues).
For these activities, platforms will not benefit from the limitation of liability provided for in Article 14(1) of Directive 2000/31/EC.
If no authorisation is obtained, the platform providers themselves will be liable for infringements, unless they can prove that they have: (1) made best efforts to obtain authorisation, (2) made best efforts to ensure the unavailability of specific works for which rightsholders have provided them with the relevant and necessary information and (3) in any case, acted expeditiously to disable access to or to remove such works following the notification of infringements and have made best efforts to avoid future uploads.
The following elements should be considered: (1) the type, audience and size of the services and the type of works uploaded by users; and (2) the availability of suitable and effective means and their cost for service providers.
For “new” services that have been available in the EU for less than three years and have an annual turnover of less than €10 million, liability is limited to “best efforts to obtain authorisation” and “act expeditiously” following notification of infringements. If these providers have an average of more than 5 million monthly visitors, they must also show that they have made best efforts to prevent further uploads of works for which the rightsholders have provided information.
Article 17 also states that:
- Users must continue to enjoy the existing exceptions or limitations to copyright, such as by way of quotation, criticism, review, caricature, parody or pastiche.
- The obligations should not lead to a general monitoring obligation (which is rather contradictory to the liability obligation imposed on platforms).
- Providers of such services must also establish a quick complaints and redress procedure for users regarding the removal of works.
- Complaints and decisions to remove or disable access to uploaded content must be subject to human review.
- Member States must provide for out-of-court dispute resolution (arbitration) procedures, in addition to the possibility of court action.
- None of the provisions must lead to the identification of individual users.
The Copyright Directive provides for a dialogue between the European Commission and stakeholders to agree on best practices. In particular, the European Commission will issue a set of guidelines for the application of this article.
As mentioned before, this is a very controversial article. After all, it leads to the direct liability of Internet platforms such as Facebook, Twitter and YouTube for content uploaded by their users. Proponents applaud the fact that rightholders finally have the possibility to claim compensation for online use of their work. Opponents fear that the Internet platforms will apply filters that are too strict, which could lead to censorship and make it more difficult to be creative with existing works.
The truth undoubtedly lies somewhere in the middle. At present, there is indeed the problem that a lot of material is used via platforms such as Facebook and Google (YouTube), and that authors (or other rightholders) do not benefit from the advertising revenue that this generates. Article 17 tackles this problem, but there is a risk that the pendulum will swing too far. Much depends on how this will be applied in practice. In the music sector, for instance, it is likely that the necessary permission will be granted through interest groups, against payment of fees. In other sectors where there are fewer organised interest groups, this is less obvious, and there is therefore a greater risk of “over-blocking” or censorship.
Anyway, the wording of this article is rather vague. For example, what is the scope of “making best efforts” to obtain permission or remove material? We look forward to the best practices and guidelines that will be issued by the industry and the European Commission. It is also to be hoped that the differences between the Member States will not be too great (this directive must be transposed into national law).
The Copyright directive builds in a concern to allow use for parody, quotation, criticism, etc. It remains to be seen how the platforms will deal with this. The directive also states that decisions to remove content must be subject to “human review”. Some degree of automation of decisions will be unavoidable.
Article 18: Appropriate and proportionate remuneration
Member States must ensure that, when authors and performers transfer or license their exploitation rights, they are entitled to “appropriate and proportionate remuneration”. Member States may use different mechanisms to achieve this in their national legislation and must consider the principle of contractual freedom and a fair balance of rights and interests.
Article 19: Transparency
Member States must ensure in their national legislation that authors and performers receive, at least once a year, information about the exploitation of their works from the parties to whom they have transferred or licensed their rights (or from sub-licensees where the rights have been further licensed). Such transparency shall cover, inter alia, the modes of exploitation, the revenues generated and the remuneration due.
Article 20: Contract adjustment mechanism
Member States must provide for a mechanism allowing authors and performers to obtain from the parties with whom they have concluded a contract for the exploitation of their rights “additional, appropriate and fair remuneration” if the remuneration initially agreed upon “turns out to be disproportionately low compared to all the subsequent relevant revenues derived from the exploitation of the works or performances.”
If there are applicable collective agreements that provide for such a mechanism (e.g., collective management of music for online use), Member States do not need to provide for a separate system by law.
Article 21: Alternative Dispute Resolution
Disputes concerning the transparency obligation under Article 19 and the contract adjustment mechanism under Article 20 may be submitted to a voluntary alternative dispute resolution procedure (arbitration).
Article 22: Right of revocation
If a work is not exploited after a certain (reasonable) period, the author or performer must have the right to revoke the licence or the transfer of rights. The author must then give notice and propose an appropriate deadline by which the exploitation of the work is to take place. After the expiry of that deadline, the author or performer may choose to terminate the exclusivity of the contract instead of revoking the licence or the transfer of the rights. The specificities of sectors or types of works should be considered. Where a work is comprised of contributions from several authors or performers, the relative importance of each contribution and the interests of all authors or performers concerned should be taken into consideration. Works which are generally composed of contributions from a large number of authors or performers (e.g. films) may be excluded from the right of withdrawal.
Transposition of Copyright Directive into national law
Now that the Copyright Directive has been approved by the European Parliament, it still must be transposed into national law. The Member States have 2 years to do this.
It is to be hoped that there will be no major differences between the EU Member States in the transposition of this directive. After all, the ambition of the Copyright Directive is to promote the “digital single market”, and it would be unfortunate if the Member States were to record significant differences in the transposition into national law.
It is worth noting that for the time being there is no European body that can issue licences for the entire European Union. Companies like Google and Facebook will therefore have to negotiate with various management companies (and other parties) in the 28 (or 27) Member States.
For further questions about copyright, please do not hesitate to contact us.
Author: Bart Van Besien