Agreement on a compromise text for the new Copyright Directive was reached between Member State government representatives, EU Parliament representatives and the EU Commission last week (see our “Breakthrough” post). On 20 February 2019, EU Governments formally voted, by a majority, to approve that compromise text: Italy, Poland, Luxembourg, the Netherlands and Finland opposed it; Belgium and Slovenia abstained.   However, it is not yet law despite some headlines which one may see in the popular press. But now that the draft text has stabilised, at least for the time being, DSM Watch takes a step back from the detail and looks at the whole picture.   We’ll also be posting deeper dives on the key provisions too.

What’s in the draft?

Regular readers of DSM Watch (and other reliable publications) would be forgiven for thinking that there was little else of interest or importance in the draft EU Copyright Directive beyond the proposed (and controversial) press publishers’ right (Article 11) and the content sharing service provider liability regime (Article 13).   But that is far from the case; it also contains important new mandatory exceptions benefitting the scientific research sector, help for museums and the like, as well as new rights and protections for authors and performers. Here’s a complete run-down.

Exceptions to permit text and data mining (TDM) for scientific research

• Non-controversial, mandatory Article 3 will allow universities, other research organisations and cultural heritage institutions to more easily extract and reproduce copyright-protected works for scientific research (both natural and human sciences).
• Slightly more controversial Article 3a also requires a mandatory exception for TDM for other purposes, but may have limited impact because rightholders can opt out in relation to particular works.
• Each TDM exception is aimed at fostering AI research throughout the EU and cannot be excluded by contract.

Exceptions to permit use of digital works in teaching, including across EU borders

• Non-controversial Article 4 creates an exception and a framework for the use of copyright-protected material in digital classrooms and for cross-border distant teaching, by deeming that the relevant permitted acts occur solely in the Member State where the relevant educational establishment is located. The exception cannot be excluded by contract, but may be restricted by Member States if suitable licences are already easily available.
• Similar exceptions already exist in UK law, for example, but of course this is limited by national boundaries.

Preservation of cultural heritage

• Non-controversial Article 5 gives cultural heritage institutions an exception to make copies of works in their owned or permanently-held collections in order to preserve them.

Licensing mechanisms for use of out-of-commerce works

• Non-controversial Article 7 sets up mandatory licensing mechanisms to permit non-commercial use of out-of-commerce works in the possession of cultural institutions via collective rights management schemes.
• Under Article 8, licences can be granted under such schemes so as to cover uses in any EU country, but they are not mandatory. Such licences will work by virtue of a provision that (using a ‘legal fiction’) deems any such use to occur only in the Member State where the relevant institution is established. This is similar to the current legal mechanism facilitating cross-border TV broadcasting, which is soon to be extended to ancillary online activity.

Optional extended collective licensing

• Article 9a allows, but does not require, collective right management organisations without a direct mandate from every relevant rightholder to extend their schemes to the rights of rightholders who initially did not mandate the organisation concerned.
• Such schemes will only take effect within the borders of each Member State choosing to enact the provision, and will not be available at all unless obtaining authorisations from rightholders on an individual basis is onerous and impractical.

New mediators to help inbound licensing for VOD platforms

• Moderately controversial Article 10 requires Member States to set up or designate independent bodies to support parties negotiating licenses for audiovisual works on VOD platforms.

No new copyright for reproduction of an out-of-copyright work of visual art

• There has been limited legislative consideration of this mandatory Article 10b, because it has been extracted at the last minute from an earlier proposal by the European Parliament on Article 5.
• On its face, it seems aimed at ensuring that copyright protection is not perpetuated by virtue of a reproduction (for example by a photograph or replica) when copyright protection for the underlying visual art work has expired. ‘Work of visual art’ is not defined in the draft.

New neighbouring right for press publishers

• This is the controversial and mandatory Article 11 provision, which as it now stands will give press publishers new rights for a potential period of just under three years post-publication. It has been clarified so as not to cover use of individual words or ‘very short extracts’ of a press publication, but what a very short extract is remains undefined. DSM Watch will be covering Article 11 (and related Article 12) in more detail soon.

New content sharing service provider liability regime

• This is the well-known, highly controversial and mandatory Article 13. Covering a mammoth 5 pages of legislative text, its recent legislative history is explained in a number of our earlier DSM Watch blogs – latest here.
• DSM Watch will be covering Article 13 as it stands today in more detail very soon. Those lobbying against it are hoping to de-rail it at the (final) European Parliament stage. Those in favour of it say that it now strikes a fair balance between rightholders, content service providers and users.

Fair treatment for authors and performers

• Articles 14 through 16a give the following mandatory rights and protections to authors and performers who licence or transfer their exclusive rights of exploitation (but software is excluded).
  • Appropriate and proportionate remuneration for the exploitation of their work, not limited to online (Art. -14)
  • A right to receive regular information about the exploitation of their works from licensors or transferees: the “transparency obligation” (Art. 14). An optional mechanism for relieving the potential of a high administrative burden on smaller businesses which has recently been introduced into the text.
  • A remedy for authors and performers at a disadvantage by way of a “contract adjustment mechanism” (Art. 15). This allows them to renegotiate their remuneration if the original contract terms provide disproportionately low remuneration compared to the revenues generated by their work(s).
  • These fair remuneration, transparency and contract adjustment rights are backed up by a mandatory provision for alternative dispute resolution schemes, and also by a no contracting out provision.
  • Finally, and arguably controversially (at least in some Member States), a ‘use it or lose it’, provision whereby rights in a work can be reclaimed in whole or in part by the author or performer where there is a lack of exploitation by the licensee or transferee of the rights in question (Art. 16a). This “right of revocation” seems to have been overshadowed by the more highly charged debate around Articles 11 and 13, but it may have a significant impact on some sectors whose business models are based on a buy-out of authors’ or performers’ rights, at least in those jurisdictions, such as the UK, where an assignment of rights is currently non-revocable.

This ‘sleeper’ issue in the tail end of the draft Directive may receive more widespread attention from stakeholders in the coming months, and DSM Watch will be examining it in more detail soon.

What’s next?

The EU Parliament’s Legal Affairs (JURI) committee will look at the draft Directive on 26 February 2019, after which it will go to a full vote by MEPs, most likely in late March or early/mid April 2019. If the whole or part of the draft is passed by the European Parliament this spring, Member States will have two years to implement its provisions into national law, by mid-2021.

*Wesley Horion (Research Assistant) has also contributed to this article

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