The new EU copyright law that copyright lawyers, artists, management and media companies have been waiting for was passed on 17 April 2019 as Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC. The directive is not law as is (although some of its provisions are mandatory); most of its provisions will have to pass into the local law of member states by 2021. Other provisions will need to be implemented by 2022.

The diverse cultural differences across EU member states will mean its implementation is likely to be different across the EU.

The copyright law build up

The new directive builds on Directive 2001/29/EC and complements several previous directives seeking to tackle the digital world and harmonise (the so-called digital single market) copyright law in all EU member states.

The current copyright directives are:

• The Database Directive (Directive 96/9/EC)
• The Copyright Directive on harmonisation of certain aspects of copyright (Directive 2001/29/EC)
• The Rental and Lending Rights Directive (Directive 2006/115/EC)
• The Computer Programs Copyright Directive (Directive 2009/24/EC)
• The Orphan Works Directive (Directive 2012/28/EC)
• The Collective Rights Management Directive (Directive 2014/26/EU).

The new copyright directive specifies that the current copyright directives are not affected by its provisions. It aims to provide clarity in what was a fragmented copyright regime under the 2001 Directive, promote the European culture, and consolidate the proper functioning of the digital single market.

The reasons and objectives for the directive are summed up in the preamble to the proposal, which refers to rapid technological developments, new business models, and legal uncertainty for rights holders and users, as regards specific uses, including cross-border applications, of works and subject matter in the digital environment.

Stakeholders in the copyright battle

The two principal stakeholders affected by the directive are Information Society Services (ISSs), also known as Online Service Providers (OSPs), and Content Creators (CCs).

OSPs are online platforms that store, index, transmit, cache or distribute content including infringing copyright content on or through their servers, system, network, or website. These organisations include video sharing websites like YouTube, social media websites like Facebook, blogs and blog networks, search engines, and other platforms that disseminate content. OSPs do not include Internet Service Providers (ISPs). An ISP primarily provides internet access enabling internet usage products like cloud services or data management services; for example, Web.com would be an ISP. OSPs are digital platforms on which to build other businesses; so Facebook, Instagram, YouTube are all OSPs.

An ISP can be an OSP, but not vice-versa. The directive recognises the distinction by exempting electronic communication services, i.e. ISPs, B2B Cloud Services and Cloud Services from its scope.

Content that is capable of copyright created and disseminated through the platforms provided by OSPs are the work of CCs. This copyrighted content can be user-generated, owned media or third-party creative works including text, images, film, photographs, audio, illustrations, or a combination of any of them, together commonly known as “works”.

Educational and commercial effects

The directive focuses on both the educational and the commercial effects of copyright within the EU. Firstly, it acknowledges that the use of materials protected by copyright is essential to the learning process. In the words of the explanatory memorandum to the directive, to “enhance cross-border access to copyright-protected content services [and] facilitate new uses in the field of research and education.”

Second, it compels OSPs to give a fairer deal to CCs by encouraging the negotiation of licensing agreements to publish their content. In the words of the explanatory memorandum, to “clarify the role of online services in the distribution of works and other subject matter.”

The wording of the directive is that OSPs shall obtain “authorisation” from CCs, suggesting a licence as an example of consent. In practice any authorisation of intellectual property is either a license or an assignment; this and fair remuneration and transparency provisions make it clear that what the EU wants is an outcome of fair value commercial licences for copyright content in the EU single digital marketplace.

The balance of power

Arguably, the balance of power has been in favour of OSPs since the start of the commercial internet.

The safe harbour provisions passed in Europe and the United States in the 1990s and early 2000s favoured OSPs over CCs.

Without the balance of copyright protection falling in favour of OSPs we would probably not have YouTube, Amazon and thousands of other platforms that have benefited from the less stringent copyright regime.

The call for the balance to be fairer by content creators has been going on for two decades, and the directive seeks to facilitate more cooperation among OSPs with CCs to detect and deal with online copyright infringement.

Anyone following the development of the context of the law in this area will be aware that the directive is the evolution of the battle of copyright politics between culture and competition.

The changes in the directive are severe. They will affect OSPs by increasing the costs of policing copyright infringement and negotiating better deals with CCs. OSPs will need to acquire more effective content filtration software and hire specialists in accounting for royalties and other licensing-related financial matters. Whilst digital music sites may already be familiar with licensing, publishers and other OSPs will be entering new territory.

However, in my view, the improved new copyright regime will also empower CCs which will lead to better quality content.

While the copyright directive comes with better provisions for a creator’s intellectual property, it provides for several reinforced copyright compliance regulations for small, medium and large OSPs.

Controversial articles in the directive

The directive’s most controversial and relevant provisions, now superseded, were the former Article 11 (now Article 15), Article 13 (now Article 17) and Article 14 (now Article 18).

Article 15

Article 15 relates to protection of press publications concerning online uses.

Article 15(1) states that press CCs shall receive the protections for the digital use of their works as set out in Article 2 (copyright reproduction rights) and Article 3(2) (copyright broadcasting rights) of Directive 2001/29/EC. In other words, press publishers are given the right to negotiate licensing for their works with news aggregators.

Small snippets are permitted although there is no clear definition of “very short extracts”. Google current short news snippets will probably be exempt but there will be uncertainty as different members states decide what exact amount will be “very short”.

Hyperlinking does not require a licence, so linking to part of a press article on a blog or social media is not caught by the directive.

Actual authors should share in publishers’ revenues, subject to contractual arrangements and employment contracts.

There is an expiration timeline of two years after the press publication is published by the news aggregator.

Article 15(1) is also subject to the exceptions in Article 5 to 8 (exceptions and limitations) of the earlier directive.

Press publications do not include blogs or sites not under the editorial control of a news publisher.

Where a news publisher owns legal and beneficial title to the works, then the publisher should be entitled to a revenue share of licensed non-commercial activity, eg from text and data mining, scientific research, cultural research, teaching.

Article 17

Article 17 is contained in Chapter 2 (certain uses of protected content by online services).

Its straightforward aims are:

• to clarify the status of OSPs’ responsibility for the copyright content on their websites without the consent of the actual copyright holder; and
• to provide rightsholders with greater control of the use of their copyright content and their ability to negotiate licensing agreements with OSPs without OSPs being able to unilaterally decide the terms of the licensing agreements (eg there can be no fixed license fee).

Article 17’s main effect, to make OSPs liable for copyright infringement on their platforms, met with significant resistance from OSPs like YouTube.

Companies like Universal Music Group Vivendi weighed in on the side of CCs.

Other stakeholders like the global music industry agencies and publishers as well as small individual artists were also vocal in support of Article 17.

OSPs are compelled to strengthen the protection of user-generated copyright content from copyright infringement, and they must put in place complaints procedures and other best practice processes.

OSPs must make best efforts in accordance with high industry standards of professional diligence. However, there is no general monitoring obligation on OSPs and no clear definition of “best efforts”. Article 14(1) of Directive 2001(29)/EC that gives safe harbour to hosting platforms will no longer apply.

Incidentally, on the 8 April 2019, the Department for Digital, Culture, Media & Sport published a Code of Practice for providers of online social media platforms. If implemented into company procedures and policies, the code could assist OSPs in complying with the directive.

Article 18

Chapter 3 of the directive features Article 18 on fair remuneration in contracts of authors and performers and Article 19 on the transparency obligation.

OSPs are compelled to ensure that artists and performers receive clear and transparent information about the exploitation of their works and performances. This obligation focuses on revenue generated and monies due to artists from the use of such copyright works and performances. Digital music sites will already be familiar with accounting for royalties and other revenue stream models for CCs, but it will be new for other audio visual sites like gaming.

Who is affected by the directive?

Artists

The directive supports independent artists. Previously, large musical, digital or print artists received adequate copyright protection, namely being able to afford the representation that is needed, but previous copyright laws did not necessarily protect independent artists.

The directive ensures that OSPs will have greater accountability for the distribution of copyrighted material.

OSPs

With the increasing constraints on reusing the material of others in the EU, some influential OSPs may lose some copyright material.

The directive exempts open source development sites and not for profit sites that may contain copyright content like Wikipedia from authorisation requirements.

To comply with the restrictions in the directive, small to medium size OSPs will most likely need to employ filtering software. These software solutions are expensive and they will be costly for smaller internet platforms.

There has been a fair amount of pushback by OSPs on the costs of complying with the directive. Some compromises allowed these smaller internet companies to be exempt if they met three specific criteria.

• under €10m in revenue per year;
• fewer than 5 million users; and
• younger than three years old.

News agencies

The directive will also benefit news agencies and other publications by giving them increased control over their copyrighted created content. The so-called “link tax” in Article 15 accomplishes this.

The link tax does not immediately charge people for using a hyperlink as the pseudonym implies; it empowers the press to exercise their rights over their articles.

Big tech companies

As you can probably imagine, some of the most significant opponents of the directive are the big tech companies like YouTube, Google, Facebook and Twitter.

Not only will big tech companies need to ramp up the amount of filtering that they are doing, but the directive also opens them up to potential lawsuits for removing content incorrectly or publishing content mistakenly.

The artists argue that the problem is not that they get too little, but that big tech companies get too much of the revenue from their works. The prevailing sentiment amongst artists is that the directive will level the playing field.

The legislation applies to organisations doing business in the EU or that are EU residents. While each specific country of the EU will need to decide how stringent they will be when implementing the copyright directive, you can be sure of its implementation.

Peter Adediran is a copyright lawyer, owner and principal solicitor at PAIL Solicitors. His specialist niche is copyright law for SMEs, artists and management. Email peter@pailsolicitors.co.uk. Twitter @peteradediran.

Image cc zero from needpix.com.