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Copyright reform is a key part of the European Union’s package of measures designed to create a Digital Single Market in the EU. The European Commission’s view is of nothing less than a modernisation of EU copyright law to reflect the digital age. In this Alert, we give an overview on the Commission’s progress towards its vision of a broad reform of EU copyright laws.

EU Copyright Reform Update - How Far Have We Come?

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SummaryCopyright reform is a key part of the European Union’s package of measures designed to create a Digital Single Market in the EU. The European Commission’s view is of nothing less than a modernisation of EU copyright law to reflect the digital age. For the past two years, the Commission has been pushing forward with a series of proposals designed to achieve its aim of a more modern copyright law that takes account of the features and potential uses of digital technology and widens the degree of European cross-border access to protected works online.In this Alert, we give an overview on the Commission’s progress towards its vision of a broad reform of EU copyright laws.As part of the European Union <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt7ca6fae4bd1791f3/6273195723c6cf2a1c3af651/160808digitalsinglemarketstrategy.pdf">Digital Single Market</a> (DSM) strategy, the Commission has issued proposals for a new directive on Copyright in the Digital Single Market (Copyright Directive), the Regulation on online transmissions of broadcasting organisations and retransmissions of television and radio programs (Sat-Cab Regulation), and an evaluation of the Directive on the enforcement of intellectual property rights (Enforcement Directive). The following is an update on the current status of these complex and eventful legislative proceedings.COPYRIGHT DIRECTIVEWhat is it all about?Extensive discussions on the initial EU Commission’s draft proposed in September 2016 <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt9712ffd95d3daf58/6273eba14886af2aa2be266d/161006-eu-copyright-law.pdf">(which we have previously summarised)</a> have prolonged the legislative process, but it appears that, under the Estonian presidency, some provisions have been agreed upon to a certain extent. These include, for example:<ul><li style="margin-bottom: 7px;">copyright exceptions for text and data mining (although limited to TDM by research organisations for scientific purposes);</li><li style="margin-bottom: 7px;">a negotiation mechanism to facilitate the availability of audiovisual works on Video on Demand platforms; and</li><li>the introduction of a right to fair remuneration and to information claims of authors against respective contract partners and, if member states wish to so implement them, against distributors. </li></ul>This leaves two of the most contentious issues (i.e., ancillary copyright for press publishers; and the monitoring and filter obligations of online service providers) remaining as the main open questions.Status Quo?Article 11 – Ancillary Copyright for press publishers:Article 11 of the draft Copyright Directive obliges member states to provide publishers of press publications with remuneration for the digital use of their press publications (especially thumbnails or “snippets”). It has been argued that this provision will interfere with freedom of speech, harm small publishers and start-up companies, and favour large U.S.-based online news providers to the detriment of information diversity.A draft proposal by the European Parliament’s Committee on Legal Affairs (“JURI”) in March 2017 opposed such an ancillary copyright and instead proposes a press publisher’s right to bring proceedings in their own name before tribunals against infringements of rights held by authors.A proposal by the Estonian presidency from December 2017 sets out two alternatives and requests political guidance for subsequent discussions: either press publishers shall be rewarded with a (20 year) digital reproduction and making available right (“Option A”), or else a rebuttable presumption in favour of credited press publishers would be introduced, assuming them to be entitled to license digital publications (“Option B”).Article 13 – Monitoring obligations for online service providers:Under Article 13 of the draft Copyright Directive, information society service providers that store and provide the public with access to large numbers of works uploaded by their users would be required to take measures to ensure the functioning of agreements concluded with rightholders. The Commission proposed content recognition technologies to be implemented by the providers in order to prevent copyright infringements. It has been argued that this provision is incompatible with the limited liability privilege set out in the E-Commerce Directive as well as in the Charter of Fundamental Rights and will foster and privatise online censorship.A draft document by JURI issued in March 2017 supports a limitation to platforms that are actively and directly involved in making available user’s content.In the latest proposal by the Estonian presidency, political guidance is expressly requested on the issue of whether:<ul><li style="margin-bottom: 7px;">certain acts of online service providers making user uploaded content available should be clarified as an independent act of “communication to the public.”</li><li style="margin-bottom: 7px;">services pursuant to Article 13 should be taken out of the limited liability regime of Art. 14 E-Commerce Directive; and</li><li>these service providers still should be made subject to the obligation of applying preventive measures. </li></ul>Currently, however, the official proposals still include a clarification regarding the qualification as an act of communication to the public as well as a reference to Art. 14 E-Commerce Directive.What will happen next?The proposed Copyright Directive is still under consideration in the Parliament and Council without any noticeable progress. Notably, the EU Commission issued a statement on 1 March 2018, encouraging online service providers and EU member states to introduce notification and correction measures as well as proactive protective tools related to infringing content made available via online platforms. The results of such voluntary measures by online service providers will likely influence the Commission’s decision on the need to introduce legally mandated upload filters. Regarding ancillary copyrights for press publishers, unpublished EU studies outlining the failure of such ancillary right were recently leaked and are likely to increase pressure on the Commission to justify and defend their proposal for the introduction of these rights.SAT-CAB REGULATIONWhat is it all about?In September 2016, alongside the draft Copyright Directive proposal, the Commission also proposed the Sat-Cab Regulation. We have <a href="/resources/publications/180417-eu-tv-and-radio-transmission-rules.html">written separately and in more detail about the proposed Sat-Cab Regulation</a>. The proposal was originally aimed at facilitating access to certain online content from other EU countries by applying the “country of origin” principle – already applied to the “traditional” broadcast of programs on the basis of the Sat-Cab Directive (98/83/EWG) – to all online transmissions “ancillary” to such broadcasting (e.g., online linear distribution, certain media library content). This would have required only one license for one territory for permission to EU-wide distribution. Also, the proposal extends the compulsory collective management applicable to cable retransmission to other equivalent digital transmissions (e.g., IPTV).Status Quo?While the first proposal would have supported the goal of barrier-free access to EU content, producers pointed out that territorial licensing was of foremost importance to the financing of audio-visual productions.<ul><li style="margin-bottom: 7px;">European Parliament and its Legal Affairs Committee (JURI): Based on these considerations, JURI amended the proposal in November 2017, rejecting a general extension of the “country of origin” principle. Instead, it proposed to narrow the scope of the regulation to cover only online services ancillary to the broadcasting of “news and current affairs content”. The European Parliament confirmed this position in December 2017.</li><li>European Council: The Council agreed on a common position shortly after the JURI proposal, also materially reducing the scope of the application of the “country of origin” principle. Regarding TV programs, the application of the “country of origin” principle shall be limited to works that are financed and controlled by the broadcasting organisation. Additionally, the Council’s proposal also expressly excludes sports events.</li></ul>What will happen next?The first three inter-institutional negotiations (“Trilogue”) for a final text in February,March and April 2018 took place without any progress being made. In December 2017, the presidents of the three EU institutions had signed a joint declaration on EU legislative priorities and declared their intent to deliver results before the election of the EU Parliament in 2019. Still, some fear that the Commission may protract the process to further its chances of enforcing the original version of the Sat-Cab Regulation after the 2019 European parliament elections remains.ENFORCEMENT DIRECTIVEStatus Quo?The existing Enforcement Directive harmonised the minimum means for ensuring the enforcement of IP rights across the EU, requiring member states to provide for effective, proportionate, and dissuasive measures, procedures, and remedies. As part of the DSM strategy, the Commission announced that it would review that directive.Where are we at?In November 2017, the Commission issued a “Communication” as part of a broader package to improve the application and enforcement of IP rights, containing (i) detailed guidance on the interpretation of some aspects of the current Enforcement Directive and (ii) a report evaluating the Enforcement Directive. The evaluation report still found the Directive to be fit for its purpose in the current fast-developing digital environment. But it also revealed that member states were applying the Directive’s wording in different ways. Based on this, the Commission did not see the need to amend the current provisions; instead, it decided to issue non-binding guidelines to clarify provisions of the Directive regarding the interpretation of:<ul><li style="margin-bottom: 7px;">the Enforcement Directive’s scope; </li><li style="margin-bottom: 7px;">the requirement to ensure that proceedings are inter alia “fair and equitable” and strike a fair balance between the fundamental rights of the parties concerned; </li><li style="margin-bottom: 7px;">the presentation and preservation of evidence (including digital evidence);</li><li style="margin-bottom: 7px;">the right of information;</li><li style="margin-bottom: 7px;">the scope of injunctions (proportionate, compliant with fundamental rights, and of the minimal scope to still be effective); and</li><li>the calculation of damages and legal costs. </li></ul>What happens next?The Communication is non-binding, but national courts of member states are likely to follow the guidance, especially as it summarises CJEU case law.DIGITAL SINGLE MARKETFor more information about the Digital Single Market:<ul><li style="margin-bottom: 7px;">Overview and Summaries: DSM at its <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blta8a9799d75acde0d/627317c60cffdf1eb1369e0d/150514eudigitalsinglemarket.pdf">inception in 2015</a>, <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt7ca6fae4bd1791f3/6273195723c6cf2a1c3af651/160808digitalsinglemarketstrategy.pdf">one year in (2016)</a>, and following a <a href="/resources/publications/170608-eu-digital-market-strategy.html">mid-term review in 2017</a></li><li style="margin-bottom: 7px;"><a href="/resources/publications/180109-regulatory-changes-europe.html">2018 EU Work Programme</a></li><li style="margin-bottom: 7px;">Key Action 1 – <a href="/resources/publications/180118-european-e-commerce-reforms.html">regulating cross-border e-commerce</a></li><li style="margin-bottom: 7px;">Key Action 2 – <a href="/resources/publications/180202-eu-new-consumer-protection.html">enforcing consumer protection rules</a></li><li style="margin-bottom: 7px;">Key Action 3 – <a href="/resources/publications/180208-eu-cross-border-parcel-delivery.html">Cross-border Parcel Delivery</a></li><li style="margin-bottom: 7px;">Key Action 4 – <a href="/resources/publications/180308-eu-regulation-geo-blocking.html">Ending Geo-blocking</a></li><li style="margin-bottom: 7px;">Key Action 5 – <a href="/resources/publications/180315-european-e-commerce-markets.html">European E-Commerce Markets: Competition Initiatives</a></li><li>Key Action 7 – <a href="/resources/publications/180417-eu-tv-and-radio-transmission-rules.html">Tune in, catch up: EU changes to TV and radio transmission rules</a></li></ul>EUROPEAN COPYRIGHT REFORMRead previous Alerts in our series “Copyright: Europe Explores Its Boundaries”:<ul><li style="margin-bottom: 7px;"><a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltb0ba977729554aab/6273eea77198441d81b3bea9/161005-copyright-europe-hyperlinking.pdf">European Court Rules That Hyperlinking May Constitute Copyright Infringement</a></li><li style="margin-bottom: 7px;"><a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt738584473a00aeb0/6273eea823c6cf2a1c3b0e1c/161005-european-copyright-wifi.pdf">What’s the Cost of Free Wi-Fi?</a></li><li style="margin-bottom: 7px;"><a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt7d790688335c1774/6273eeac5f7b601eaaebea9f/150507eucopyright.pdf">EU Expands Principle of Pan-European Jurisdiction over Copyright to Online Materials</a></li><li style="margin-bottom: 7px;"><a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt458a2681d6f75f58/6273eea70d4d8e1d7f110aee/150203eucopyright.pdf">No Resale of Digital Content Except for Software? How Does the European Court of Justice Decision on Exhaustion of the Distribution Right upon First Sale Impact the Resale of Digital Copies?</a></li><li style="margin-bottom: 7px;"><a href="https://www.mofo.com/~/media/Files/ClientAlert/2014/07/140714CopyrightEuropeExploresitsBoundaries.pdf">“Meltwater” – EU rules that browsing does not need a licence – a victory for common sense (or for pirates)?</a></li><li style="margin-bottom: 7px;"><a href="https://www.mofo.com/~/media/Files/ClientAlert/140612CopyrightEuropeExploresBoundaries.pdf">New UK Infringement Exceptions – The Ones That Got Away (and Came Back Again)</a></li><li style="margin-bottom: 7px;"><a href="https://www.mofo.com/~/media/Files/Newsletter/140521SociallyAware.pdf">The Umpire Strikes Back: European Court Rules That ISPs Can Be Forced to Block Pirate Websites </a></li><li style="margin-bottom: 7px;"><a href="https://media.mofo.com/files/Uploads/Images/140415-Socially-Aware.pdf">Hyperlinking and Link Hubs</a></li><li><a href="/resources/publications/161028-copyright-europe-resale-back-up-copies.html">Copyright in the Sale of Back-up Copies</a></li></ul>