Salient features of the new Copyright Directive - Part 1

Related Practice Area: Technology & IP Transactions

The EU’s current legislative framework governing copyright and related rights dates all the way back to 2001 - to a pre-historic digital landscape incredibly different to the present day. This was a time which pre-dated the emergence of the content consumption modes currently in vogue. Back in 2001 Spotify, Youtube, Netflix, Apple Music and the like had yet to make an appearance on our technological devices. In fact, mobile devices with internet access capabilities were about as commonplace as DVD rental shops are in 2019. Truth be told the cultural consumption landscape is unrecognisable and the need for a radical overhaul in this respect was undeniable. 

As part of its Digital Agenda, in 2016 the European Commission set out to update this grossly outdated framework, presenting a proposal for a Directive on Copyright in the Digital Single Market. Few legislative proposals have been subject to such widespread debate, across the EU and beyond. Various amended versions of the original text have been unsuccessfully presented for Plenary approval, until a text was finally adopted on the 26th March 2019. The bill now awaits final approval by Council before it officially enters into force.

Beyond the hype, the controversy, talk of meme bans and impending doom for the internet, what will the new law really change? 

Part 1 – The Truth About Article 13 (now Article 17)

The most controversial aspect of the proposal is without a shred of doubt, the now-infamous Article 13, which has now been renumbered as Article 17. It originally intended to impose a host of obligations on “information society service providers that store and provide to the public access to large amounts of works or other subject-matter uploaded by their users”. 

A vast array of different platforms would have fallen within its scope, including content-sharing platforms such as Youtube, but also cloud-storage platforms such as Google Drive and Dropbox, digital marketplaces such as Amazon and also online encyclopaedias. 

Its scope has now been narrowed down and “information society service providers” has been replaced by “online content sharing service providers”, thereby absolving certain online intermediaries from the obligations imposed by Article 13. 

A specific definition as to what this term actually means has also been provided, expressly excluding certain cloud storage platforms, open source software development platforms, online encyclopaedias and online market places from its remit.

Service providers that remain subject to Article 17, will now be bound by an array of onerous obligations in favour of rightholders. 

Article 13 had proposed that subject service providers should be expected, inter alia, to:

i.    Take measures to ensure the functioning of agreements concluded with rightholders for the use of their works, identified by rightholders, such as through the use of effective content recognition technologies;
ii.    Prevent the availability of works identified by rightholders;
iii.    Provide rightholders with adequate information on the functioning and deployment of the measures; and
iv.    Provide adequate reports to rightholders on the recognition and use of their works on the platform.

Essentially therefore, the original text went at direct loggerheads with articles 12 to 15 of the eCommerce Directive, which largely absolved online intermediaries from responsibility over acts and infringements committed by their users, often referred to as safe harbour provisions. For decades, rightholders have been forced to rely on the concepts of contributory and vicarious liability to take action against copyright infringement occurring via online platforms. 

Article 13 would have essentially required such online intermediaries to pro-actively police their platforms and ensure that any infringing content is removed, including, where appropriate, through the implementation of effective content recognition technology (so-called “upload filters”) to detect infringing content. 

Express mention of content recognition technology opened an entire can of worms, with widespread debate on its impact on freedom of expression on the internet, particularly the freedom to receive and impart information. Some went as far as saying that this provision was to make memes illegal, since content recognition software is not advanced enough to tell infringing works from legal parodies that benefit from an exception to copyright. After substantial deliberation, all mention of content recognition technology was effectively scrapped from the final text. 

Article 17 has also directly addressed the concerns related to memes, gifs and other permitted uses, by expressly stating that user-generated content for the purposes of quotation, criticism, review, caricature, parody or pastiche, should be allowed as exceptions to copyright.

The final text obliges subject online intermediaries to obtain authorisation from rightholders for protected content being made available on their platforms, covering also content uploaded by users. This could be done by concluding appropriate licensing agreements. 

Additionally, intermediaries are expected to take “appropriate and proportionate measures”, particularly through cooperation with rightholders, to take down infringing content and ensure that non-infringing works remain available. 

While it remains to be seen what qualifies as “appropriate and proportionate measures”, the final text is more technology-neutral and future-proof than the original Article 13. Rather than focusing on upload filters, more emphasis is seemingly placed on rightholders alerting service providers about infringing content, in line with prevalent notice and takedown procedures. Intermediaries are also obliged to report periodically and transparently to rightholders, on the use of protected content and measures taken to address infringing content. 

In line with the principle of proportionality, account must be taken of the size and specificities of the service provider in question, in assessing compliance with the obligations imposed by Article 17. Startups have also been granted certain concessions, whereby they are subject to less rigorous obligations under the Directive. 

In order to address public outcry relating to fundamental rights, the approved text has imposed an obligation on Member States to ensure that any measures taken pursuant to Article 17 strike the right balance between the fundamental rights of internet users and rightholder interests. Any measures taken pursuant to Article 17 must not result in overall monitoring of information transmitted and stored on such platforms, in line with Article 15 of the eCommerce Directive. 

Moreover, users and rightholders must be provided with effective and expeditious complaints and redress mechanisms, and decisions to remove content must be reasonably justified by rightholders. Access to appropriate judicial fora must also be in place to allow users to contest any decisions taken in this regard. 

Whether you love it or hate it, Article 17 provides legal certainty on the use of protected content online. It will effectively transform the online content consumption landscape, whereby subject online intermediaries must ensure that all protected content available on their platforms is either appropriately licensed or removed, while at the same time ensuring that non-infringing content remains available. Gone will be the days where rightholders are not adequately compensated for the availability of their works on such platforms. 

It is also a huge step to address the value gap between different online intermediaries, levelling the playing field between platforms which have consistently always paid for content, and those which have hitherto relied on safe harbour provisions to bypass licensing obligations. It will provide a much-needed boost to the livelihood of artists and rightholders, by generating additional revenue streams. 

At the same time, adequate protection for the fundamental rights of users have been introduced, to ensure that freedom of expression and due process are not unnecessarily curtailed. 

Beyond Article 17, the new Copyright Directive introduces numerous other much-needed updates to the current legislative framework, including new categories of right-holders, new mandatory exceptions to copyright and more control to authors and performers over their contributions in the cultural field. Stay tuned for a general overview of these measures in part two.



Author:  Timothy Spiteri
The information provided on this website is intended to convey general information only and does not, and is not intended to, constitute legal advice. Should you wish to obtain further information and advice on this subject we invite you to get in touch with one of our practitioners.


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