25 April, 2017

Copyright Usurped - EU Proposal for a New Copyright Directive

This article was kindly drafted by Axel Beelen, who writes the blog IP News (focusing on EU and Belgian IP developments). He can also be found on Twitter here. He is also a data protection specialist.

In September 2016, the European Commission published a proposal on a new EU Copyright Directive. This new proposed Directive follows the InfoSoc Directive, drafted in the wake of the European Commission's review on the modernization of the EU copyright rules. The European Commission has presented legislative proposals to make sure that consumers and creators can make the most of the digital world, and will aim to help European copyright industries to flourish in a new Digital Single Market and authors to reach new audiences. The proposal is still fiercely discussed at the European Parliament, with plenary vote set for late 2017 or early 2018.

This article aims to set out the key points of the proposed Directive, and to discuss its impacts in the EU legal landscape.

1. The EC Proposal

1.1 A new publishers' right (Art. 11 of the proposal)

Because press publishers are facing difficulties in licensing their publications online and obtaining a fair share of the value they generate (which could ultimately affect citizens' access to information), the EC wants to provide publishers with the same reproduction and communication to the public rights that the InfoSoc Directive provide for authors. 

These new rights for publishers (so-called "neighboring rights" or an "ancillary copyright") would apply for 20 years after each publication.

Some fear that these provisions would generate more income for European publishers by allowing them to charge internet platforms for displaying snippets of their content to users. In fact, anyone using snippets of online content would first have to get a license from the publisher responsible for the content. 

The new neighboring right has been sharply criticised by Google and other businesses sharing online content. News aggregators argue that they provide online publishers more visitors on their websites (in turn increasing revenues from, for example, ads), and are not substituting the publication of the original works.

Sometimes it's easier to not bother with copyright
The EC's proposal is a clear response to uncertain and temporary national solutions to tackle this phenomenon, resulting in either the conclusion of agreements between Google and local press publishers (Belgium, France, Italy) or the adoption of legislative initiatives (Germany, Spain) in relation to news content forcing news aggregators to pay publishers when their headlines and news snippets appear in the news aggregators services. In Germany and Spain, right after the adoption of the regulation, Google Inc. stopped its local Google News tool. As a result, German and Spanish publishers said they lost significant traffic.

1.2 The value gap (Art. 13 of the proposal)

As legal access to streaming movies, music and literary works has become more ubiquitous and easy for consumers in recent times, there still is a clear gap in the remuneration (or the lack of increase thereof) of rightsholders through these services. 

The gap is between what service providers like YouTube, DailyMotion, Vimeo and others are willing to pay for e.g. music licenses and their real market value. The difference between rightholders' income and YouTube revenue is profoundly immense and the latter have limited appetite to properly or sufficiently remunerate rightsholders for copyright-protected content online. 

In place of talking about a “value gap”, we should focus more on the big 'transfer of value' between the value that certain digital platforms extract from music, movies and other works and the smaller value that is returned to related rightsholders. These digital platforms are clearly under-licensed or not licensed at all. 

Following Article 13 of the proposal, internet platforms hosting “large amounts” of user-uploaded content must monitor user behavior to identify and prevent copyright infringement. It will mean that intermediaries will have to attain proper licences and will have to implement filtering technologies to proactively prevent infringing activities. As raised by many, one of the most concerning aspects of the EC’s proposed legislation is the complete lack of detail provided on how the suggested policies would be implemented.

Note that, beside the use of not defined terms (e.g. what qualifies as “large amounts” of content), this part of the proposal could be in breach of existing EU law. Indeed, the safe-harbor provisions of the E-Commerce Directive forbid general monitoring obligations that Article 13 would establish, which was confirmed by the CJEU in SABAM v Netlog.

1.3 A limited text and data mining exception (Art. 3 of the proposal)

Article 3 of the EC Proposal (“Text and data mining”) aims to establish a new EU-wide copyright exception for the modern research method of text and data mining, but only for “research institutions” and “for the purposes of scientific research”, and only when the research institutions “have lawful access for the purposes of scientific research”. 'Text and data mining' means any automated analytical technique aiming to analyse text and data in digital form in order to generate information such as patterns, trends and correlations. 

One can criticize the limits of this new exception, in that why should “data mining' not be permitted for research conducted in a commercial context, for purposes of journalism and for any other purpose? 

2. Publishers' right to disappear and be replaced by a presumption of representation

The adoption of the Directive requires several European Parliament (EP) Committees to draft opinions that will then need to be taken into account in the Report by the lead Committee of the EP on this matter, namely the Legal Affairs (JURI) Committee.

The draft report of the JURI Committee written by rapporteur MEP Comodini (EPP) was published in March 2017. 

It does not mention the publisher neighboring right anymore as discussed above on point 1.1. The report rejects the Commission’s premise and clarifies that using snippets to make news discoverable is not necessarily harmful to publishers’ financial interests, and thus shouldn’t be subject to licensing. 

The paper proposes to replace the neighboring right with a right that "…provide[s] publishers of press publications with a presumption of representation of authors of literary works contained in those publications and the legal capacity to sue in their own name when defending the rights of such authors for the digital use of their press publications". It has to be seen if this would also mean that publishers can still sue for non-licensing.  

Moreover, the draft report proposes to remove the obligation for automated monitoring for online service providers, leaving electronic platforms to ensure the functioning of agreements with rightholders without prescribing how to do so. Only information society service providers that are actively and directly involved in the making available of user uploaded content to the public should take appropriate and proportionate measures to ensure protection of works or other subject-matter.

Those measures, such as the use of effective content recognition technologies, have to be appropriate and proportionate. The service providers have to provide rightholders with adequate information on the functioning and the deployment of these measures, as well as, when relevant, adequate reporting on the recognition and use of the works and other subject-matter on their platforms.

The Legal Affairs Committee also wants to extend the text and data mining exception to all people considering that if you have the right to access/read content, you also have the right to mine it.

3. Deadline

Amendments to the draft report were accepted until 12 April 2017, after which the report and the amendments will be debated again and voted on in June 2017. The plenary vote at the European Parliament on the Directive text is expected at the end of 2017 of at the beginning of 2018.

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