At LawBite our IP LawBriefs always stay on top of major changes, news or implications to our clients. After a lengthy process that has been ongoing across Europe and the UK one of our experts, Laura Symons has some informed commentary that you should be aware of if your business operates online.
Following over two years of deliberations and fierce industry lobbying, EU Parliament has now officially approved the proposal for the Directive on Copyright in the Digital Single Market (as we previously reported on here). This means that the EU is now one step closer to a dramatically overhauled set of copyright laws and a shake up in internet regulation.
The impetus for the overhaul came about following an acknowledgement by the European Commission that the creative industry was not getting its fair dues for use of its work by online platforms. The EC has tried to redress this injustice and seek a balance so that rightsholders receive fair compensation for use of their work, still with a view to upholding freedom of expression online.
What does the latest version of the Directive say?
The focus of the new law has been on the controversial Articles 11 and 13. The former requires payment to publishers by information society services providers (e.g. news aggregators) for sharing news articles. The latter requires sharing platforms featuring user-generated content to filter out copyright-protected works unless they have permission in the form of ‘fair and appropriate’ licensing agreements with the authors/creators for use of those works online. It also includes a ‘stay down’ provision requiring platforms to prevent unlicensed content resurfacing.
Article 11 (known as the ‘link tax’) will not, however, apply to ‘snippets’ of news articles (e.g. individual words or very short extracts). Nor will it apply to non-commercial organisations like Wikipedia. Legislators have also clarified that Article 13 will not apply to cloud storage services or open source software platforms, which are automatically excluded from its remit and can still benefit from safe harbour protection. Various exceptions apply too, including use of materials for teaching and education, text and data mining and preservation of cultural heritage.
Reactions and criticism
Tech companies have been up in arms about the reforms, arguing that they are simplistic, will lead to prohibitively expensive obligations, threaten the free internet, and would result in blocking non-infringing content. This is because filter algorithms are not sophisticated enough to differentiate genuinely infringing material from legitimate use of copyright works (e.g. memes, GIFs, quotes, remixes and parody). However, Article 13 (renumbered to Article 17 in the latest text) has now been watered down so that it will not be unlawful to share or publish content for the purpose of ‘quotation, criticism, review, caricature, parody and pastiche’. Nevertheless, questions still remain over how realistic it is in practice to expect automated filter technologies to recognise these types of work.
Much of the criticism has been aimed at the risk of the new law capturing unintended victims and ensuring that SMEs and smaller companies are not disproportionately targeted where curbing the big tech companies is the real objective. Some even argue that the laws will have a paradoxical reverse effect, by stamping out the competition as only the big conglomerates will have the resources necessary to fund the filtering technologies required, and will therefore be entrenched in their dominant positions.
The filer obligations are targeted at large ‘online content sharing service providers’ (OCSSPs’) (e.g. Facebook, Instagram, YouTube and Google). Whilst all OCSSPs will be required to make best efforts to ensure the unavailability of unauthorised content where rightsholders have provided necessary and relevant information, only organisations operating for at least 3 years, with an annual turnover of EUR 10 million and at least 5 million monthly users will have additional responsibilities. These include making best efforts to obtain authorisation, acting expeditiously to remove any unauthorised content following a take-down notice and making best efforts to prevent future uploads. More detail is required though before it is absolutely clear how Article 13 will be enforced.
Authors, musicians, journalists and other creative artists, on the other hand, are rejoicing. It looks as though the internet tech companies will no longer be able to reap huge profits off the back of their efforts without adequate remuneration. This ‘value gap’ will finally be addressed and artists will have better leverage to negotiate fair licence fees from web platforms that allow users to distribute their content.
The reforms were backed by 348 votes to 274. Focus now shifts to the Member States to approve the decision (it could still be voted down), following which the Directive will come into force. It must then be transposed in each Member State’s laws within 2 years and that is when the final details will be established.
If the UK has left the EU before the Directive is implemented, it is then up to us whether to adopt the same law. As with most things Brexit-related, it is unclear how this will play out but it would be surprising if we didn’t conform, as it would leave the UK’s internet laws very out-of-sync with the rest of Europe.
To speak to the author of this article, Laura Symons, or for expert advice on any business legal matter please do enter an enquiry or call us today on: 020 7148 1066 and speak to a member of our friendly Client Care Team.