The Digital Copyright Directive - does this protect the creator?

In an attempt to “make copyright rules fit for the digital age”, the final version of the Digital Copyright Directive (the “Directive”) was published in the European Union (“EU”) Official Journal on 17 May 2019, and entered into force on 6 June 2019. EU Member States will have until 7 June 2021 to incorporate the Directive into national law.

The aim of the Directive is to harmonise EU law in relation to copyright and related rights, with a specific focus on digital and cross-border uses of content. It is expected that many internet and online businesses will be significantly impacted due to the changes affecting a wide range of content currently being produced online.

Is the Directive necessary?

The previous position in Europe enabled an individual to take legal action against someone who uploads or publishes content online which infringes their copyright. However, there were no cost effective mechanisms in place to pursue individual users. Furthermore, hosting platforms would be granted immunity provided that infringing content was removed in timely fashion in response to “take down” notices. As a result, EU legislators have argued that a greater balance of fairness in favour of creators was required.

EU legislators have asserted that the primary aim of the Directive is to protect content produced by creators including authors, musicians and journalists. Despite this, the Directive has been deemed highly controversial and has resulted in mass demonstrations against its introduction stemming from concern that it is an attempt to restrict free speech and the distribution of content online.

Two provisions of the Directive in particular have attracted the most criticism, firstly, Article 15 concerning the reproduction of online news headlines and other news content by press publishers and secondly, Article 17 concerning content posted by users for publication or circulation on digital platforms. Both of these Articles are intended to provide right holders with a more effective means of enforcing their rights online and a stronger negotiation position to ensure they receive a greater share of the profits through licensing arrangements with content sharing platforms and content hosts.

The arguments supporting and opposing these two contentious Articles are considered below.

Article 15: Protection of press publications concerning online uses

This Article seeks to prevent infringements of copyright by media monitoring services, news aggregators and search engines.

Article 15 provides publishers of press publications established in an EU Member State, rights for the online use of their press publications by information society service providers (“ISPs”), granting a two-year right to enforce copyright against infringing ISPs. This means that electronic services that are provided remotely and paid for by the user or advertising will be caught.

The protection does not extend to private or non-commercial uses of press publications by individual users. Furthermore, hyperlinks and the use of individual words or “very short” extracts of a press publication are permitted.

Arguments in Support

It is essential to provide creative protection to those individuals that generate reliable content that is circulated online. As journalists and publishers should be able to profit from the works they produce and in an era where the online news format is becoming the norm, it is likely that if these creators continue to have their rights infringed, the diversity and range in content will be reduced greatly.

Online services have been notorious for providing all the information which a user requires in a few sentences. This has impacted publishers’ revenue as readers have no need to visit the original publication. However, the use of short extracts and hyperlinks by online services to enable users to locate the information they require may still be acceptable.

Arguments Against

Whilst the ability for publishers to negotiate licences with online services to show short extracts is an enticing concept in principle, the fact remains that this will be an arduous and complex process for publishers resulting in increased costs.

Additionally, if the objective of the Directive is to promote the free flow of content, it is possible that the requirement for online businesses to enter into licenses with publishers will result in these businesses no longer seeking to acquire content from a range of sources. This will inevitably result in the diversity of content online being reduced.

The vagueness of Article 15 in relation to the length of the permitted extracts presents greater difficulty for publishers as “very short” could be any number of words which will not become clearer until rulings are given on a case by case basis as claims arise.

Article 17: Use of protected content by online content-sharing service providers

The most controversial element of the Directive has been the use of protected content by online content-sharing service providers (“online providers”).

Article 17 determines that an online provider performs an act of communication to the public or an act of making content available to the public, when it gives access to copyright protected works or other subject matter uploaded by its users.

This means that any large tech company including for example, Twitter, Yahoo or Facebook, will be required to first obtain authorisation from right holders.

If unable to obtain authorisation, the online provider will be required to show that:

• it made "best efforts" to get permission from the copyright holder
• it made "best efforts" to ensure that material specified by rights holders was not made available
• it acted quickly to remove any infringing material of which it was made aware

How this system will be enforced remains to be discussed within the EU Commission and (non-binding) guidance is likely to be issued shortly on how the above mechanism will operate in practice.

Arguments in Support

Creators have been at the mercy of large tech companies resulting in them being unable to receive adequate revenue from their works. Article 17 aims to achieve fairness for creators, to maintain diversity of content online and incentivise creators to continue to produce content. Copyright still subsists in the material as it did before, however Article 17 grants creators a mechanism through which they can enforce their rights in their work.

Quite notably, there are exclusions for smaller online providers. The more onerous provisions only apply to online providers that have been available in the EU for more than three years, or have an annual turnover of more than €10m (£8.8m, $11.2m).

Arguments Against

The greatest difficulties will be faced by smaller online providers. Whilst larger tech companies may be able to sufficiently put in place the proprietary technology to prevent or block access to copyrighted works, it is unlikely for smaller online providers to have the means or funds to do this.

Furthermore, whilst there are exclusions for smaller online providers, there remains a requirement to enter into licensing deals with creators and remove access to copyrighted works if they have not obtained such licences.

It is important to note that the Directive does not impact legitimate uses of content, such as uses under exceptions or limitations (i.e. quotation, criticism, review, caricature, parody or pastiche) and will not lead to any general monitoring obligation. However, the possibility of infringing rights remains as the exceptions are not entirely definitive and will depend on how well online providers can distinguish between infringing acts and non-infringing acts.

Next Steps?

The Directive continues to face opposition and it remains to be seen how EU Member States will be able to achieve the desired results from this vague yet complex legislation.

If the UK leaves the EU with a deal, the Directive will apply to the UK during any transition period. However, the UK Government has noted that it is in support of the changes and intends to implement them so it is likely the changes will also apply after Brexit.

Regardless of the changes made within the UK the Directive is expected to bring about a change in industry practice within and outside of the EU in terms of how online content is administered.

If you have questions in relation to this article, please contact one of our intellectual property experts by emailing info@leathesprior.co.uk or calling 01603 610911.