Challenger Defeated - Article 17 of the Digital Single Market Directive remains valid in light of the Freedom Expression

The EU is currently working on, or passing, big legislative changes in order to address issues within the digital marketplace and in relation to "Big Tech". This includes the Digital Single Market Directive and the forthcoming Digital Services Act, which will make sweeping changes to how companies operate in the digital space. One hotly contested point within this package is Article 17 of the DSM, which was challenged by Poland in a hotly awaited case within the CJEU. Following an opinion from Advocate General Øe as far back as July last year, the Court handed down its decision very recently on this, which sets the scene for the application of the DSM in the near future.

The case of Republic of Poland v European Parliament concerned an action for annulment brought by Poland in relation to Article 17. What the provision does is introduce liability for platforms that allow users to upload digital content onto the platform, such as YouTube, for copyright infringement if that user-uploaded material infringes copyright. However, platforms can avoid liability by making "best efforts" to either acquire a license or block the infringing content, and an obligation is placed on the platforms to act expeditiously following any notification by rightsholders to remove or disable the content and to use "best efforts" to prevent any future uploads, for example through the use of content filtering.

As is clear, Article 17 is set to change the landscape for platforms like YouTube and introduces strict measures and steps that need to be taken by the same in relation to infringing content. Poland challenged the provision on the grounds that it infringed Article 11 of the Charter of Fundamental Rights of the European Union, which enshrines the freedom of expression in EU law. 

What they specifically argue is that in order to be exempted from all liability for giving the public access to copyright-protected works or other protected subject-matter uploaded by their users in breach of copyright, online content-sharing service providers are required to carry out preventive monitoring of all the content which their users upload. This imposition of these mandatory measures, without appropriate safeguards put in place, would breach the right to freedom of expression.

The Court discussed their decision in YouTube and Cyando, which sets out that "the operator of a video-sharing platform or a file-hosting and ‑sharing platform, on which users can illegally make protected content available to the public, does not make a ‘communication to the public’ of that content, within the meaning of that provision, unless it contributes, beyond merely making that platform available, to giving access to such content to the public in breach of copyright". In addition, the same service providers will be specifically exempt from infringement provided that they do not play an active role of such a kind as to give it knowledge of or control over the content uploaded to its platform.

Article 17, as discussed above, is set to change this position and introduce new liability provisions and obligations on platforms. 

As set out by the Court, Article 11 of the Charter and Article 10 of the European Convention on Human Rights guarantee the freedom of expression and information for everyone, including in relation to the dissemination of information which encompasses the Internet as a key means of dissemination. Therefore, courts have to take due account the particular importance of the internet to freedom of expression and information and ensure that those rights are respected in any applicable legislation. 

In considering whether Article 17 has an impact on peoples' freedom of expression, they initially noted that the provision assumes that some platforms will not be able to get licenses from rightsholders for the content that is uploaded by users, and the rightsholders are free to determine whether and under what conditions their works and other protected subject matter are used. If no authorization is received the platforms will only have to "...demonstrate that they have made their best efforts... to obtain such an authorisation and that they fulfil all the other conditions for exemption" in order to avoid liability.

The conditions include acting expeditiously when notified by rightsholders in order to disable access to, or to remove the potentially offending content, to put in place appropriate measures to prevent the uploading of infringing content (e.g. through the use of automatic recognition and filtering tools), and to prevent future uploads. The Court does accept that these early measures can restrict an important means of disseminating online content and thus constitute a limitation on the right guaranteed by Article 11 of the Charter. They, therefore, concluded that "the specific liability regime [under] Article 17(4)... in respect of online content-sharing service providers, entails a limitation on the exercise of the right to freedom of expression and information of users of those content-sharing services".

However, the next piece of the puzzle the Court addressed was whether the limitation could be justified. 

The Charter does allow for legislation to impact the freedoms it contains, however, any limitations of those rights must be proportionate and made "... only if they are necessary and genuinely meet objectives of general interest recognised by the [EU] or the need to protect the rights and freedoms of others". If there is a choice between several different measures the least onerous one has to be chosen over the others and the disadvantages caused must not be disproportionate to the aims pursued. Finally, adequate safeguards need to be put in place within the legislation to guarantee the protection of those rights from abuse. 

The Directive and Article 17(4) do specify the limitations placed on the freedom of expression, it does not specify the means through which it should be done, only that they need to use their 'best efforts' in doing so. Although, as set out above, the Charter does require that these need to be specified, the Court noted that the limitations can be formulated in terms that are sufficiently open to be able to keep pace with changing circumstances. 

The Court also mentioned that the legislation, in Article 17(7) (and similarly in Article 17(9)), requires that other expression not be limited if it does not infringe copyright, so it is specific well beyond mere "best efforts". The Court accepted that both Articles 17(7) and (9) protected the right to freedom of expression and information of users of online content-sharing services adequately. They confirmed that this struck an adequate balance between both parties' interests. Looking at the liability mechanism itself, the Court agreed that it was not only appropriate but also appears necessary to meet the need to protect intellectual property rights. 

Also, the platforms are protected by the provision somewhat due to the notification requirements it sets, and without notification, broadly speaking, they would not be held liable for any infringing contents. Article 17(8) also specifically excludes a general monitoring obligation on the platforms. Any notification also has to contain sufficient information to remove the infringing contents easily. Article 17(9) contains several other procedural safeguards that should protect the right to freedom of expression and information of users where the service providers erroneously or unjustifiably block lawful content.

In summary, the Court set out that "...the obligation on online content-sharing service providers to review, prior to its dissemination to the public, the content that users wish to upload to their platforms, resulting from the specific liability regime established in Article 17(4)... and in particular from the conditions for exemption from liability... has been accompanied by appropriate safeguards by the EU legislature in order to ensure... respect for the right to freedom of expression and information of the users of those services... and a fair balance between that right, on the one hand, and the right to intellectual property, protected by Article 17(2) of the Charter".

The decision is undoubtedly correct and, although a bitter pill to swallow for many platforms that will be impacted by it, the aim of the legislation seems to not be to unduly burden them with monitoring obligations and to stifle the freedom of expression, but attempts to balance that with the protection of legitimate copyrights held by other parties. It will remain to be seen what filtering measures will be considered adequate by the EU courts in the future if they are challenged, but one can imagine sufficient measures already exist, such as Content ID for YouTube. The DSM is the first big step in the new IP regime in Europe, with more changes set to be made in the near future. 

I'm Offended! - Advocate General Bobeck Opines on When a TM is Contrary to Morality or Public Policy

Morality seems to be the topic of the day on this blog, having recently written about the US Supreme Court case relating to the registration of immoral trademarks. While this writer will is not by any means the 'morality police', it is an important topic to discuss, albeit unusually so in connection with intellectual property. Similarly to US legislation, many other jurisdictions prevent the registration of trademarks that contravenes morality, including in Europe. In the light of this, what makes a trademark contrary to morality, and when can the courts reject those marks? Luckily the CJEU is facing this very question, and Advocate General Bobeck gave his take on the matter very recently.

The case of Constantin Film Produktion GmbH v EUIPO concerned the registration of the name "Fack Ju Göhte" (EUTM 13971163) by the film company, which is a very successful German comedy. The company, naturally, wanted to register the mark due to this success, but the application was rejected by the EUIPO due to it being contrary to "accepted principles of morality". Constantin then appealed the rejection, which ended up going all the way to the CJEU.

A trademark application can be rejected under Article 7(1)(f) of the CTM Regulation if it is "...contrary to public policy or to accepted principles of morality". The Advocate General therefore had to opine on when a trade mark application is contrary to public policy or to accepted principles of morality, and what the relevant test is in determining that.

The first thing considered by the AG was the relationship between trademarks and the freedom of expression. The AG set out that, even though the registration of trademarks is a commercial activity by nature, it by no means limits the applicability of the freedom of expression to trademarks, and is further codified by the Regulation as a part of trademark law. He further set out that "…although freedom of expression, as well as other fundamental rights potentially at stake, must be taken into account in the overall balancing exercise, the protection of freedom of expression is not the primary goal of trade mark protection". One can agree with this, since trademarks, while clearly an important expression of a particular brand, are primarily focused on showcasing the quality of a product and ensuring its origin to the consumer; not to make statements for the sake of it.

The AG then moved onto consider the relationship between public policy and accepted principles of morality. In practice, the terms have been considered both interchangeably and separately, which leaves the option open for the CJEU to determine how exactly they should be considered.

In defining public policy, the AG set out that it means "…a normative vision of values and goals, defined by the relevant public authority, to be pursued now and in the future", i.e. the legislature's attempt to solidify the normative values of society at that time. Accepted principles of morality, however, are "…values and convictions currently adhered to by a given society, set and enforced by the prevailing social consensus within that society at a given time", which contrasts as a less guided sense of what is right, but how society at large feels about issues. The distinction therefore is a top-down v bottom-up approach to public morality, with the former being a more objective measure, and the latter a subjective one.

When relying on either one of the above grounds, the AG considered that the EUIPO must therefore establish, with references to the prevailing perception among the relevant public, why they believe that a given sign would offend those principles.

The AG considered that the public relevant to the matter at hand would be a general and German-speaking one, and that any public policy or morality considerations would have to be made in the light of that fact. Vulgarity in one language, here English, would not therefore necessarily be considered such by non-English speakers. Additionally, any assessment by the EUIPO cannot be made solely and exclusively looking at the word sign, in isolation from the broader societal perception and context, if any evidence for such exists.

In this matter the name "Fack Ju Göhte" was fully authorized to screen with the name by the German authorities with no age restrictions. They clearly therefore considered the name to not be vulgar; contrary to the findings of the EUIPO. This national context is important, which should be taken into account by the EUIPO. If the EUIPO wants to depart from this the standard of proof is raised, and in this case they failed to prove otherwise. The first ground of appeal consequently failed according to the AG.

The AG also criticized the EUIPO for a lack of consistency in its decision-making, and for failing to explain why this application's outcome was different to previous decisions (including in Die Wanderhure).

The opinion is very thorough and convincing, and it is very likely that the CJEU will follow the AG's well-reasoned view on the matter. Any rejections by the EUIPO over a contravention of morality should be consistent in their approach, and the CJEU's clarification will hopefully bring them to this outcome. This writer will wait for the CJEU's ultimate decision patiently.