European Commission’s Proposals for the Modernisation of Copyright

On 14 September 2016, the European Commission published a Communication on promoting a fair, efficient and competitive copyright-based economy, alongside the following legislative proposals:

• Proposal for a Directive on copyright in the Digital Single Market which would: introduce mandatory exceptions to copyright for teaching activities, text and data mining, and the preservation of cultural heritage; introduce a new right for press publishers covering reproduction and making available for digital use; reinforce copyright holders’ negotiating position as regards payment for the exploitation of their content via user upload platforms; and improve the remuneration of authors and performers via new transparency rules.

• Proposal for a Regulation on the exercise of copyright and related rights applicable to online transmissions of broadcasting organisations and retransmissions of TV and radio programmes. This aims to make it simpler and faster to clear the rights that are needed for programmes transmitted online by broadcasters at the same time as their broadcast, and for re-transmission services via means such as IPTV (Internet Protocol Television).

• A draft Directive and Regulation designed to implement the Marrakesh Treaty by making certain copyright protected works more accessible and available to persons who are blind/visually impaired.

The proposals aim to, in the words of the Commission, ‘help European copyright industries to flourish in the Digital Single Market and European authors to reach new audiences, while making European works widely accessible to European citizens’.

More details on the proposed Directive and Regulation are set out below.

Proposal for a Directive on copyright in the Digital Single Market

New copyright exceptions

Text and data mining – This exception will apply to reproductions made by research organisations (commercial and non-commercial) in order to carry out text and data mining of works for the purposes of scientific research.

Teaching – An exception to cover digital use of works for the sole purpose of illustration for teaching.

Cultural heritage – An exception to permit cultural heritage institutions (e.g. museums and cinematheques) to make copies of works that are permanently in their collections, in any format or medium, for the sole purpose of their preservation.

Licences for use of out-of-commerce works

The Proposed Directive facilitates the licensing of European audiovisual works and their digitisation, and making available of out-of-commerce works. It does this by providing that when a collective management organisation concludes a non-exclusive licence for non-commercial purposes with a cultural heritage institution, for the making available of out-of-­commerce works, that licence may be extended to rightholders of the same category as those covered by the licence who are not represented by the collective management organisation.

Where such a licence is granted, the Proposed Directive provides that the cultural heritage institution may use the work in all EU Member States.

Measures to achieve a well-functioning marketplace for copyright

Right of reproduction and making available right for digital use of press publications – The Proposed Directive gives the press a related right of reproduction and “making available by wireless means” for digital use of their press publications. This right will expire 20 years from the end of the year of publication.

Agreements on storage and making available of content by information society service providers – The Proposed Directive addresses the use of protected content by organisations that store and give access to large numbers of works uploaded by their users (user upload platforms such as YouTube). Platforms will be required ensure the functioning of agreements concluded with rightholders for the use of their works or to prevent their works being made available. The measures taken to achieve this, such as content recognition technology, will have to be appropriate and proportionate.

Fair remuneration in contracts of authors and performers – The Proposed Directive would introduce a transparency obligation, requiring Member States to ensure that authors and performers receive sufficient information on the exploitation of their works from those to whom they have licensed or transferred their rights, including modes of exploitation, revenues generated and remuneration due. Additionally, the Proposed Directive provides that authors and performers ‘are entitled to request additional remuneration from the party with whom they entered into a contract for the exploitation of the rights when the remuneration originally agreed is disproportionately low’.

Proposal for a Regulation on the exercise of copyright and related rights applicable to online transmissions of broadcasting organisations and retransmissions of TV and radio programmes

The Proposed Regulation provides for wider, cross-border dissemination of TV and radio programmes originating online by facilitating licensing of copyright and related rights in broadcasts of programmes.

Existing rules under the Satellite and Cable Directive (93/83/EEC) facilitate the clearance of rights for radio and TV programmes provided by satellite transmissions and cable retransmissions, but do not extend to new digital technologies used for transmission and retransmission of TV and radio programmes. This makes it difficult for broadcasters to make their content available on the internet for users in other EU Member States.

The Proposed Regulation addresses the difficulties related to the clearance of copyright by extending two principles in the Satellite and Cable Directive to TV and radio programmes provided over the internet:

• Country-of-origin principle – The rights required for online services of broadcasters that are directly related to their broadcasts (e.g. simulcasting and catch-up services) are to be cleared for the broadcaster’s country of principal establishment. This will help broadcasters make the vast majority of their content available online in other Member States. However, as the country-of-origin principle applies to services strictly related to broadcasts, it does not apply to VOD services which are legally treated as having different characteristics.

• Compulsory use of collective management organisations (CMOs) – The Regulation will also extend the system of compulsory CMOs, currently applicable to cable retransmission, to other equivalent digital retransmissions. This will make it easier for retransmission operators to clear rights in programmes from other Member States, and to offer their users more channels from across the EU.

Comment

Industry reaction has focused on the Proposed Directive, particularly the measures to achieve a well-functioning marketplace for copyright.

Copyright holders (and their representative bodies) have praised the measures for addressing the “transfer of value” issue and the intention to redress the current imbalance of interests between user upload platforms and rightholders – they argue upload platforms such as YouTube should ensure the functioning of agreements with rightholders to make works available. Furthermore, a rightholder’s remuneration should be proportionate to the revenue upload platforms generate by exploiting that content. Google’s response is that this would effectively turn the internet into ‘a place where everything uploaded to the web must be cleared by lawyers before it can find an audience’. If the proposal is adopted, it will mark a significant win for the copyright industry.

The other element of the Proposed Directive that is likely to generate industry interest in the coming months is the proposal to give authors and performers the right to request “appropriate remuneration” where the agreed remuneration is disproportionately low compared to the revenue and benefits derived from exploitation. It remains unclear how such a principle will be applied in practice and to what extent recording artists, composers, writers and other creative individuals might be able, in the future, to challenge the terms upon which they are remunerated.

Finally, as with all current EU legislative proposals, implementation of the Directive in the UK is not only subject to adoption by the European Parliament and the Council of Ministers, but specifically, in a post-Brexit world, UK government approval of all the relevant provisions.

Karim Amijee, Trainee Solicitor