Brigitte Lindner and Ted Shapiro blog on the DSM Copyright Directive.

Almost 20 years ago, copyright law in the then European Community was made fit for the information society with a ground-breaking Directive, often referred to as the ‘Copyright Directive’, which is the subject of our book, published last year in its 2^nd edition. While the ‘Copyright Directive’ was conceived in a relatively future-proof fashion, the EU legislator saw the need to recharge its batteries to master the challenges of the Digital Single Market. To this end, Directive (EU) 2019/790 on copyright in the Digital Single Market (‘DSM Copyright Directive’) was adopted on 17 April 2019. The implementation process which must be completed by 7 June 2021 is now in full flow and it promises to provide a new era of copyright drama to complement that described in our book.  

The DSM Copyright Directive, which builds on the achievements of the Copyright Directive, is a mixed bag. With the focus of the new Directive being on the Digital Single Market and enhanced access to works and other copyright-protected material, it brings comfort to users and platforms alike by introducing additional exceptions and limitations as well as a specific liability privilege for certain online platform providers. With a view to maintaining a high level of protection, authors and performers are rewarded with a basic legislative framework regulating copyright contracts, the benefits of which remain to be seen. As the example of the nearly two decades’ old German copyright contracts law has shown, legislative intervention in the field of copyright contracts does not necessarily translate into improved income but certainly results in litigation.

One of the most controversial provisions of the DSM Directive is Article 17 which addresses the use of works and the like on YouTube-style online content-sharing platforms. Many authors and other creative contributors had high hopes that this provision would close the gap between the value extracted by online providers from uses of protected content on their platforms and the revenues obtained from such use by copyright owners. In reality, the effects of Article 17 as adopted may well turn out to be a disappointment. It is certainly emboldening new theories and even proposals which would actually reduce the level of protection for rightholders online.

The specific terms of Article 17 DSM Directive are intended to help rightholders insofar as they clarify the scope of communication to the public and making available in Article 3 of the Copyright Directive, confirming that the right extends to acts performed by online content-sharing service providers (OCSSPs) when they give the public access to protected works and the like uploaded by their users. Thus, Article 17 is clearly inspired by existing case law of the European Court of Justice in the so-called Dutch trilogy [the GS Media, Filmspeler and The PirateBaycases, further discussed in Chapters 2 (EU) and 22 (Netherlands) of our book]. Article 17(1) specifies that the right in Article 3 Copyright Directive covers certain preparatory acts performed by OCSSPs in addition to those already confirmed by the European Court. For rightholders, the price for this legislative clarification is high because the Directive creates an additional liability privilege specifically designed for OCSSPs in Article 17(4) and renders several previously optional exceptions mandatory. These backward steps for copyright protection online are coupled with a redress mechanism in Article 17(7) and (9). This mechanism is meant to operate as a safeguard for users. However, it falls just short of elevating exceptions to user rights in a manner that appears at odds with other recent case law from the European Court (the German copyright trifecta in Funke Medien, Spiegel Online and Pelham) as well as key principles of international copyright norms.

Unsurprisingly, implementation, in particular of Article 17, is shaping up to be quite a challenge. While some Member States have been cautious in exercising their discretion out of respect for the European project in general and the DSM in particular – not to mention the terms of the Directive itself, Germany has made a bold move with a recently released Discussion Draft which proposes a new sui generis legal regime for OCSSPs in a standalone law, clearly dissociated from Article 3 Copyright Directive and its implementation in the German Copyright Act [on the implementation of Article 3 Copyright Directive cf. Chapter 13 on Germany in our book]. The Federal Ministry of Justice and Consumer Protection considers Article 17 to be a new regulatory technique ‘not found elsewhere in European (or international) copyright law’ and justifies its proposal by pointing to an allegedly fundamental difference between the concept of communication to the public, including making available, in Article 3 Copyright Directive and Article 17 DSM Copyright Directive.

This approach away from rather than towards harmonisation may seem absurd, particularly when implementing legislation which is actually intended to avoid fragmentation of the internal market. However, there is some method to this selective madness. By freeing itself from the shackles of European and international law,  the proposal in the Discussion Draft purports to pave the way to restrictions outside the parameters of European and international obligations, seemingly making an attempt to live up to Germany’s declaration at the European Council to avoid so-called ‘upload filters’ at all cost. Indeed, the Discussion Draft sometimes seems to confuse the declaration with the Directive. It makes immediate use of this presumed new freedom by proposing an unprecedented de minimis exception to the proposed sui generis right which is outside the closed list of permitted exceptions of Article 5 Copyright Directive and comes close to a compulsory licence in contradiction of the Agreed Statement to Article 8 WIPO Copyright Treaty (WCT) regarding the making available right [for further details cf. Chapter 1 – The WIPO Treaties in our book] 

Germany, which currently holds the presidency of the EU, probably has high hopes that its Discussion Draft, which was also released in a handy English translation, may become a blueprint for implementation of Article 17 across the European Union. However, Member States would be ill advised to follow an approach which forgets that Article 17 is firmly rooted in the European copyright acquis. In the spirit of Recital 4 of the Directive, Article 17 is based on and complements Articles 3 and 5 of the Copyright Directive which implement the EU’s obligations under Articles 8 and 10 WCT respectively. As such, Articles 3 Copyright Directive and 17 DSM Copyright Directive form a symbiotic package which clarifies the individual aspects that come under the wider umbrella of Article 8 WCT in the EU’s implementation [on the umbrella solution cf. Chapter 1 – The WIPO Treaties in our book]. There is hence nothing novel nor revolutionary in Article 17 which would merit sui generis status. The provision simply establishes legal certainty with regard to acts of communication to the public and making available performed by OCSSPs.

Meanwhile across the Rhine, the other engine of European integration is chugging along; it provides a more reliably European source of inspiration than the German proposal (and a far less drastic approach than that of the UK which resorted to leaving the EU rather than implement the Directive). In France, an initial text was adopted by the Cultural Affairs Committee of the National Assembly in the spring but it also delegated to the Government the authority to implement the Directive by decree (ordinance), using that text as its starting point (France has also already managed to implement the press publisher right in Article 15 of the Directive). The Cultural Affairs Committee text provides a faithful, in many places verbatim, implementation of Article 17 that would be firmly embedded in the existing provisions of the French Intellectual Property Code as well as EU and international copyright norms. OCSSPs perform an ‘act of representation’ which corresponds to the French implementation of Article 3 of the Copyright Directive [on the implementation of Article 3 Copyright Directive cf. Chapter 12 on France in our book]. The relevant exceptions relating to parody as well as quotation for criticism or review are already part of French copyright law and France has long ago rejected the notion of compulsory licenses for Internet uses [on the so-called licence globale see Chapter 12 of our book]. Thus far, the French approach to implementation of the Directive would support a uniform interpretation of the Directive by sticking close to the terms of that instrument. It thereby supports the goals of the DSM and promotes the European project.

At the same time, the European Commission appears to position itself comfortably on the fence (with maybe a wink and a nod toward Germany). In a recent Consultation Document on the Guidance it must give on Article 17, the Commission muses that Article 17 might well be a lex specialis. The Commission thereby seems to retreat from its initial legislative intention expressed in the Digital Single Market Strategy and the related Impact Assessment. That intention was to encourage the negotiation of agreements between rightholders and online services that store and give access to user-generated content or alternatively to enable the prevention of the unauthorized use of their works via such platforms on the basis of a simple legal clarification rather than a new right. This intention is entirely consistent with the inherent nature of the communication to the public right (and other exclusive rights) under extant EU copyright law; there is nothing ’special’ or sui generis about that.

While the complexities of Article 17 will doubtless occupy the European Court of Justice for years to come, its characterization as a lex specialis or a sui generis right risks opening the floodgates even wider when the Court will be called upon to figure out the meaning of that new, unprecedented  notion of communication to the public.

Long live European integration!

Copyright in the Information Society: A Guide to National Implementation of the European Directive, Second Edition is out now.

Edited by Brigitte Lindner, Rechtsanwältin, Member of the Bar of Berlin, Germany, Registered European Lawyer, Lincoln’s Inn, London, UK and Ted Shapiro, Member of the Massachusetts and Brussels Bar, Solicitor, England and Wales, Wiggin LLP, Brussels, Belgium

Read Chapter 1 free on Elgaronline