1. Directive on Copyright in the Digital Single Market
« Changing IP in Changing Europe »
Trilateral Seminar of the French, German and Polish AIPPI Groups
Maison du Barreau
Paris, Thursday, April 4, 2019
Stefan Naumann
Hughes Hubbard & Reed

2. THE BIG PICTURE
Exceptions to copyright protection for text and data mining (i) for the purposes of scientific research by research organizations and cultural heritage institutions and, (ii) unless reserved by the right holder, by other users of lawfully accessible works
Exception or limitation to copyright protection for the use of works for the sole purpose of illustration for teaching by educational establishments on their premises or online
Exception to copyright protection for copies made for the preservation of cultural heritage by cultural heritage institutions

3. THE BIG PICTURE
Measures to improve licensing practices: (i) use of out of commerce works by cultural heritage institutions, (ii) negotiation mechanisms for VOD platforms, (iii) optional extended effect of collective licensing agreements to cover rights holders who are not members of the representative collective management organization, and (iv) exclusion of copyright protection for reproductions of works of visual art in the public domain

4. THE BIG PICTURE
Creation of a neighboring right for publishers for the online use of press publications (Article 15) and an obligation for online content-sharing service providers (OCSSPs) to obtain authorizations from right rights holders or face enhanced liability for unauthorized content posted by users (Article 17)
A right to receive appropriate and a proportionate remuneration for authors and performers, including transparency obligations, contract adjustment mechanisms and an alternative dispute resolution procedure, as well as a right of revocation

5. THE OBJECTIVES
The Directive is intended to have a deep and far ranging impact on the actors involved in the online exploitation of copyrighted works. At the forefront, the intent is to redistribute revenue generated by the online exploitation of works between rights holders and large OCSSPs, and between authors and performers and content producers. A further economic purpose is to facilitate the negotiation of collective rights management agreements, as well as the work of text and data mining businesses, research organizations, and cultural heritage institutions.

6. THE OBJECTIVES
The legal mechanisms to achieve these economic objectives appear straightforward:
New or expanded rights for copyright owners (press publishers), authors and performers;
New obligations for large OCSSPs (licenses for copyrighted works posted by users; enhanced liability);
Easier use and facilitated licensing of copyrighted works by non- commercial actors, for non-commercial purposes and/or for works out of commerce;
New and/or expanded rights and role of collective management organisations. This mechanism already exists in Nordic countries, but not in France.

7. THE OBJECTIVES
Achieving the Directive’s economic objectives depends on the actions of the market participants. OCSSPs could reduce access to copyright content (willfully or due to the shortcomings of automated content filters). Press publishers may license their rights at no or low cost. Users may be frustrated by the effects of automated filters that cannot correctly manage exceptions and limitations to copyrights, blocking lawful content.

8. SOME ISSUES
The recognition of OCSSPs as a special category of ISPs is arguably a significant development in EU copyright law. By substantially restricting the limitation of liability of Internet Service Providers (ISPs) who are large OCSSPs, the Directive would in time lead to a redistribution of the value gap. It could however also lead to an excessive reduction of user generated content beyond what copyright protection requires.

9. SOME ISSUES
Article 17(8) provides that the authorization requirement for OCSSPs shall not lead to a general monitoring obligation of user content, nor the identification of users or the processing of personal data except in accordance with the RGPD. As practical matter, OCSSPs would likely use automated content filters.

10. SOME ISSUES
Article 15(1) provides that the new right of press publications does not apply to hyperlinking, individual words or very short extracts of press publications.

11. TIMING
The Directive is scheduled to be approved by the EU Council on April 15, and must then be published in the Official Journal of the European Union to enter into force 20 days later. Member states have 2 years from the date of entry into force to transpose the Directive into national law. France plans to move ahead with the transposition of the new neighboring right for press publications well before the deadline, with a proposal of law implementation of Article 15 to be submitted to Parliament in May 2019, and a draft law on audiovisual services implementing Article 17 to be submitted to the Council of Ministers this summer.

12. DINNER DISCUSSION TOPIC
In a nutshell, Article 17 provides (i) that an OCSSP performs an act of communication or making available to the public when it gives the public access to copyright protected works, and (ii) that the limitation of liability under the e-commerce directive does not apply. At first glance, this significant change requires a transposition. Some commentators have argued that the Directive’s provisions on OCSSPs do not require transposition and could be immediately enforced.

13. DINNER DISCUSSION TOPIC
The commentators point out that Recital 64 (out of 85 recitals) of the Directive states that: « It is appropriate to clarify in this directive that online content sharing service providers perform an act of communication to the public or of making available to the public when they give the public access to copyright protected works … Consequently, online content sharing service providers should obtain an authorization, including via a licensing agreement, from the relevant right holders. … » Based on the terms of this Recital, they argue that Article 17 does not change existing law : it merely clarifies existing law. Under this view, no transposition of Article 17 is required to allow copyright holders to immediately enforce their copyrights against large OCSSPs for user uploaded content, whether by licensing demands and/or litigation, where the OCSSPs only comply with the limitation of liability requirements of ISPs.

14. DINNER DISCUSSION TOPIC
The proponents of this view interestingly argue that a pending referral by the German federal court of justice in the YouTube case (C- 682/18) has become moot or at least largely irrelevant.
They also argue that this position would have an impact in the context of Brexit.
If the UK leaves the EU after the Directive enters into force but before the deadline for national transpositions has passed, would it have to transpose the Directive into its own law?
Under the above interpretation of Recital 64, no transposition in the UK would be required with respect to Article 17 which is (one of the two core provisions of the Directive) for it to apply in the UK.

15. Thank you for your attention