Companies may face a challenging regulatory environment following the EU-wide implementation of the Copyright Directive by 7 June 2021.

On 21 January 2020, the UK government confirmed that the UK will not be required to implement the Directive on Copyright in the Digital Single Market 2019/790 (Copyright Directive) and that it has no plans to do so.

The UK left the European Union on 31 January 2020 (Exit Date), and the implementation period will end on 31 December 2020. As the deadline for transposing the Copyright Directive into Member States’ national laws is 7 June 2021, the UK will not be required to implement the Copyright Directive, and the UK government has confirmed that it has no plans to do so. Furthermore, the UK government confirmed that any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.

What Does This Mean for Companies?

A divergence of EU and UK law may create a more challenging regulatory environment.

Whilst copyright law is generally dealt with at a national level, a patchwork of EU directives and regulations create a degree of harmonisation of copyright laws across Member States. The Copyright Directive is the latest in the line of these legislative instruments, and addresses three broad categories of issues.

The Copyright Directive aims to:

• Widen copyright exceptions/limitations to the digital and cross-border environment
• Provide for licensing practices that ensure wider access to creative content
• Clarify copyright rules to promote a well-functioning copyright marketplace

The UK government has previously advised that the existing EU copyright provisions will remain in place after the Exit Date in the UK. However, following the EU-wide implementation of the Copyright Directive by 7 June 2021, there will be a significant rift between the EU regime and the UK national regime, creating a potentially challenging regulatory environment. Companies with an EU and UK presence, such as UK-headquartered companies with operations in the EU or global companies with operations in both the EU and UK, could experience a significant impact. Such companies would have to consider both copyright regimes, especially when implementing controls and procedures that may be required to give effect to the Copyright Directive’s provisions. For example, service providers within the scope of Article 17 of the Copyright Directive, which currently rely on the hosting defence under UK law, may face operational challenges in seeking to comply with EU and UK law post-transposition.

Whether the UK will have the time or inclination to create new copyright laws to fix deficiencies in existing law and ensure the law is fit for the fast-developing digital sphere remains uncertain.

The national UK copyright law was originally drafted to address the concerns of an analogue, pre-internet world. Whilst it has been updated, to a degree, to cover technological developments, arguably, there remain deficiencies in light of the growing online world. The Copyright Directive has been subject to extensive lobbying and discussion, with the UK voting in support of the Copyright Directive in April 2019. However, the degree to which the UK government will look to update national copyright law in light of Brexit remains unclear.

On the flip side, certain aspects of the Copyright Directive have received significant criticism — including Articles 15 and 16 regarding press publishers claiming shares in the compensation for the digital use of their works, and the Article 17 obligation on online content-sharing service providers to take measures ensuring that there are agreements in place with relevant rights holders of the content they share. By not implementing the Copyright Directive, the UK will have more flexibility to choose which amendments it wishes to make at a national level going forward.

Looking Ahead

The UK government’s brief announcement does not clarify whether the UK government:

• Intends to implement its own legislation to address the items covered by the Copyright Directive
• Intends to maintain the current regime
• Is essentially delaying the need to address the issues covered by the Copyright Directive, due to other currently more pressing demands caused by the logistics of the Exit Date

Latham & Watkins will continue to monitor and provide updates on the situation.

This post was prepared with the assistance of Elva Cullen and Victoria Wan in the London office of Latham & Watkins.