It could not be worse: Draft proposal for the copyright directive leaked  31/08/2016 by Till Kreutzer

We have just received the draft proposal of the European Commission for a new copyright directive. It shall complement – i.e. in general not amend – other directives inter alia the InfoSoc directive from 2001. As it had to be expected from the Impact Assessment that was leaked last week, the draft reads like an answer to the wish list of the publishing industry. Here comes a first assessment.

 

Neighbouring Right for Publishers

Worst of all, the draft directive contains a broad neighbouring/ancillary right for publishers of news (Art. 11). It shall be granted for the online use of “news publications” and have a duration of 20(!) years. What exactly is protected, who the rightsholders shall be or – most importantly – the addressed users is not defined. All the safeguards that were tried in Germany and Spain to keep the danger of such a right for the Internet at bay are neglected: The right is not restricted to the making available right but includes also the reproduction right. It is not restricted to certain users like aggregators or search engines, there is no snippet exception like in Germany and it is a full exclusive right not only a levy like in Spain. 

This proposal is the catastrophe that we have warned about. This right would affect everybody who communicates online. (Update) Since the proposal lacks any distinction in terms of the addressed users/uses and does not limit the scope of protection to excerpts of a certain size, any kind of link that contains a snippet will be covered. No matter of who sets the link. We wrote a lot about the potential consequences of such an “ancillary coypright on steroids” (see e.g. here and here).

Limitations and exceptions

There is a new exception for text and data mining (Art. 3). It is not explicitly limited to “non-commercial” uses but it privileges “research organisations” only and is restricted to “reproductions and extractions” made by such institutions. Thus its use will be quite limited.

The draft contains also a new – or rather a bit augmented - limitation for educational uses. On first sight it seems somewhat broader than the research and education exceptions in Art. 5(2)(c) and 5(3)(a) and (n) of the InfoSoc directive. Most notably it allows making protected material accessible to students through remote connections and not only “on-premises” as before.

However there is a number of restrictions that will curtail the usefulness of the limitation significantly. First and foremost it contains a limitation clause, which was most certainly lobbyied for by the (inter alia) German scientific publishers. It establishes a legal preference for licensing offers. I.e. if a license to use the respective material is “easily available” the exception does not apply. The practical experience in Germany shows that such a restriction devalues the statutory license immensely.

Also there is a very limited exception (Art. 5) for digital heritage institutions to copy (not: to make available) material from their collections.

That’s about it. No obligatory freedom of panorama. No right to remix, not to mention an open norm like fair use to keep exceptions up to date. So much for the mouthy announcement that the reform will adapt the European copyright regime to the digital world.

Statutory Content-ID obligations

According to Art. 13 the member states shall obligate “information society services storing and giving access to large amounts of works…uploaded by their users…” to implement and enforce content and rights management systems. In other words member states are supposed to introduce a legal obligation for content platforms and most likely user generated content host providers to implement and enforce technical control measures like YouTube’s Content-ID. The result would be an enhanced obligation of private enforcement against copyright infringements for a huge number of online services.

The silver linings: Licensing of out-of-commerce works and copyright contract law

One little silver lining is that the Commission obviously tries to safeguard schemes of Extended Collective Licensing for out-of-commerce works. Such are in place in some member states (among others Germany and France) and at the moment endangered by an upcoming decision of the ECJ. ECL schemes are really helpful to solve licensing issues for out-of-commerce works, so this is one aspect to be embraced.

Another positive element of the draft is that, for the first time in European copyright law, the Commission addresses the imbalance of power between the creators and exploiters with a copyright contractual rule. In Chapter 3 (Art. 14-16) the draft acknowledges a right to fair remuneration for the author and provides, inter alia, for some kind of a “bestseller clause” similar to the German example in Art. 32a UrhG. According to this provision the author shall have the right to claim an additional remuneration if the remuneration that he agreed upon with his licensor turns out to be too low compared to the benefits that were made from the exploitation of the work.

 

Verdict

If all this had not been foreseeable one would be very disappointed. The loud-mouthed fundamental copyright reform became a teeny-weeny adjustment of the long out-of-date European copyright acquis. The draft contains hardly any concession to any other interest group than the copyright industry. Under this framework Europe will fall back even more behind the USA and other areas of the world as a location for digital innovation.

Update: IPkitten just published another first analysis.

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