DSM Watch: The new copyright directive – What will happen to the liability privilege of platforms?

by Hogan Lovells

Hogan Lovells

Since the first proposals for amendments to the European Commission’s draft copyright directive were leaked earlier this month, we have seen quite some discussion on what the Digital Single Market will bring about. The leaked report was drafted by the European Parliament’s Committee on Legal Affairs. MEP Therese Comodini Cachia takes responsibility over the subject. The paper puts forward an impressive total of 73 proposals for change.

Last week, we cast an eye on a highly controversial aspect of the new copyright directive: the introducing of new neighbouring right for press publishers (see our blog post). Whilst, the Commission is clearly in favour of such right, the Parliament rather prefers a mere assumption of press publishers acting on behalf of the authors when going against unauthorised use of press publications on the Internet. Today, we want to touch upon an equally important subject: Article 13 of the Commission’s draft directive holds a set of new obligations for online service providers.

Pursuant to Article 13 of the draft, online service providers storing and providing the public with access to large amounts of works uploaded by their users shall take measures in order to prevent infringements. Specifically, such platforms shall, in cooperation with rightholders, “take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject-matter or to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers.” According to the Commission, a possible measure could for instance be the implementation of content recognition technologies. However, the Commission has, as yet, failed to give any indication as to how such an obligation could work together with the liability privilege providers enjoy under the current e-Commerce Directive 2001/31.

Not surprisingly, the European Parliament’s criticism starts right there. Rightly, Therese Comodini Cachia’s report demands clarification as to how the applicable provisions of both directives have to be read in context. Article 13 in its present wording would inevitably lead to legal uncertainty.

Consequently, the leaked report suggests a significant change in the wording of said provision: Instead of referring to platforms that “store and provide access” the rapporteur argues for limiting the scope only to platforms that are “actively and directly involved in the making available of user upload“. Mere passive services shall not be deemed sufficient in order to fall under the provision. In essence, the Parliament wishes to go back to the definition of making a work available as set out in Article 3 of the InfoSoc Directive 2001/29 – a prudent and welcome proposal safeguarding consistency in terminology and approach of digital copyright law.

What is particularly noteworthy in this context is the fact that the Parliament’s approach would lead to a recognisable limitation in the scope of application of Article 13 of the draft directive. In this context, many platforms such as video-sharing websites are likely to be seen as not making available any works through their current services. At least in Germany, we have seen quite a number of court rulings suggesting such assessment. For instance, Case Ref.: 29 U 2798/15 of the Higher Regional Court of Munich which decided that videos featured a video-sharing website were made available to the public by the user who uploads the work, not by the website. The mere transmission of a work to other users by the platform as a consequence of the making available was not enough to fulfil the criteria of making a work available.

In conclusion, the Parliament’s proposal can be seen to point to the right direction. Copyright and e-commerce are closely related and intermeshed. Accordingly, the liability privilege and the measures to be taken in order to adequately protect copyright owners and other IP rightholders must work seamlessly together. This begins with the same terminology and the same definitions being used and continues with the avoidance of contradictive provisions at both ends. The Commission’s proposal was not ideal in that respect. The now leaked report of the Committee on Legal Affairs is valuable contribution to the discussion that will further continue in the course of the upcoming trilogue. We will follow this process closely.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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