International Law Summer Course IVi R 7 July

International © Law Summer Course IVi. R, 7 July 2016 The EU Copyright Reform Package Prof. Martin Senftleben Vrije Universiteit Amsterdam Bird & Bird, The Hague

Commission initiatives • 2013/2014 – Consultation EU © Review • May 2015 – Communication Digital Single Market Strategy • Dec 2015 – Regulation Cross-Border Portability of Online Content Services • Dec 2015 – Communication Modern, More European ©

Commission initiatives • Mar 2016 – Consultation Publishers in the Copyright Value Chain • May 2016 – Regulation Geo-Blocking and Other Forms of Discrimination • May 2016 – Communication Online Platforms Opportunities and Challenges

EU Copyright Reform

Towards a Modern, More European © • Commission Communication Dec 2015 • broad range of issues – cross-border access to content – education, research and access to knowledge – fair distribution of value – notice-and-action enforcement mechanisms – single EU © code and title

Towards a Modern, More European © • overarching approach ‘Copyright rewards creativity and investment in creative content. A copyright framework that offers a high level of protection is the basis of the global competitiveness of Europe’s creative industries. ’ (p. 2)

Fair distribution of value

Towards a Modern, More European © • interdependence of diverse creative content and innovative online services ‘A precondition for a well-functioning market place for copyright is the possibility for right holders to license and be paid for the use of their content, including content distributed online. The production of rich and diverse creative content and innovative online services are part of the same equation. Both — creative content and online services — are important for growth and jobs and the success of the internet economy. ’ (p. 9)

Towards a Modern, More European © • but: risk of a value gap ‘There is, however, growing concern about whether the current EU copyright rules make sure that the value generated by some of the new forms of online content distribution is fairly shared, especially where right holders cannot set licensing terms and negotiate on a fair basis with potential users. This state of affairs […] means the playing field is not level for different market players engaging in equivalent forms of distribution. ’ (p. 9)

Towards a Modern, More European © • problem areas – ‘certain’ online platforms – ‘certain’ aggregation services • corresponding legal issues (p. 9 -10) – ‘contentious grey areas’ in the definition of communication to the public – ‘solutions’ for news aggregators – safe harbour for hosting and mere conduit – bargaining power of authors and performers

Communication to the public (Hyperlinking)

Infringement? BGH: Paperboy

BGH, 17 July 2003, case I ZR 259/00, ‘Paperboy’ • publisher of ‘Handelsblatt’ and DM – invokes copyright to articles – offers articles on own internet platform • www. paperboy. de – search engine for news on current topics – searches and indexes contents of several hundred news providers – search result contains deeplinks and short text fragments taken from articles

BGH, 17 July 2003, case I ZR 259/00, ‘Paperboy’ ‘Ohne die Inanspruchnahme von Suchdiensten und deren Einsatz von Hyperlinks (gerade in der Form von Deep-Links) wäre die sinnvolle Nutzung der unübersehbaren Informationsfülle im World Wide Web praktisch ausgeschlossen. ’ (p. 25) • hyperlinking is essential to safeguarding freedom of information • without hyperlinking no functioning internet

BGH, 17 July 2003, case I ZR 259/00, ‘Paperboy’ ‘Wer einen Hyperlink auf eine vom Berechtigten öffentlich zugänglich gemachte Webseite mit einem urheberrechtlich geschützten Werk setzt, begeht damit keine urheberrechtliche Nutzungshandlung, sondern verweist lediglich auf das Werk in einer Weise, die Nutzern den bereits eröffneten Zugang erleichtert. ‘ (p. 20) • only reference to material that has already been made available

BGH, 17 July 2003, case I ZR 259/00, ‘Paperboy’ ‘Nicht er, sondern derjenige, der das Werk in das Internet gestellt hat, entscheidet darüber, ob das Werk der Öffentlichkeit zugänglich bleibt. Wird die Webseite mit dem geschützten Werk nach dem Setzen des Hyperlinks gelöscht, geht dieser ins Leere. ‘ (p. 20) • no control over material • no relevant act of making available • reproduction carried out by users

Infringement? CJEU: Svensson

CJEU, 13 February 2014, case C-466/12, Svensson • Svensson and other journalists – wrote articles for Götenborgs-Posten – published in the newspaper and on freely available website – assert copyright against use of links • Retriever – is a news aggregator – exploits a website with lists of links to articles on other websites, including Svensson’s articles

Available options • comparable with traditional footnote • act of secondary communication to the public • mere reference • no control • other organisation • broader public

CJEU, 13 February 2014, case C-466/12, Svensson • intervention? ‘In the circumstances of this case, it must be observed that the provision, on a website, of clickable links to protected works published without any access restrictions on another site, affords users of the first site direct access to those works. ’ (para. 18) • thus: relevant intervention, the work is made available • first criterion is fulfilled

CJEU, 13 February 2014, case C-466/12, Svensson • new public? ‘…where all the users of another site to whom the works at issue have been communicated by means of a clickable link could access those works directly on the site on which they were initially communicated, without the involvement of the manager of that other site, the users of the site managed by the latter must be deemed…’

CJEU, 13 February 2014, case C-466/12, Svensson ‘…to be potential recipients of the initial communication and, therefore, as being part of the public taken into account by the copyright holders when they authorised the initial communication. ’ (para. 27) • thus: no new public, making available has no independent relevance • second criterion not fulfilled

CJEU, 13 February 2014, case C-466/12, Svensson • universal rule for all kinds of hyperlinks? ‘Such a finding cannot be called in question were the referring court to find, although this is not clear from the documents before the Court, that when Internet users click on the link at issue, the work appears in such a way as to give the impression that it is appearing on the site on which that link is found, whereas in fact that work comes from another site. ’ (para. 29)

A closer look at the ‘new public’ criterion

CJEU, 7 December 2006, case C-306/05, Rafael Hoteles ‘Thus, such a transmission is made to a public different from the public at which the original act of communication of the work is directed, that is, to a new public. ’ (para. 40) • unclear whether this is a subjective or rather objective criterion – subjective: intentions of copyright holder – objective: comparison of groups of recipients

CJEU, 13 October 2011, cases C-431/09 and C-432/09, Airfield ‘…a new public, that is to say, a public which was not taken into account by the authors of the protected works within the framework of an authorisation given to another person. ’ (para. 72) • in this case: subjective criterion • inquiry into intentions of the copyright holder seems decisive

CJEU, 7 March 2013, case C-607/11, TVCatchup ‘…a new public which was not considered by the authors concerned when they authorised the broadcast in question. ’ (para. 38) • again: subjective criterion • inquiry into intentions of the copyright holder seems decisive

CJEU, 13 February 2014, case C-466/12, Svensson ‘…to be potential recipients of the initial communication and, therefore, as being part of the public taken into account by the copyright holders when they authorised the initial communication. ’ (para. 27) • assumption of intention to reach entire internet community • still subjective?

Important shift from subjective: to objective: which public had the copyright holder in mind? Is there any difference between the initial and the hyperlink public?

Why important? illegal source not covered: illegal source covered: which public had the copyright holder in mind? Is there any difference between the initial and the hyperlink public?

Links to illegal content

CJEU, case C-160/15, GS Media

CJEU, case C-160/15, GS Media Playboy makes photos of Britt Dekker. Photos are uploaded illegally to Filefactory. GS Media uses hyperlinks to refer to leaked photos.

CJEU, case C-160/15, GS Media AG Wathelet, 7 April 2016 • departure from new public criterion ‘…hyperlinks posted on a website which direct to works protected by copyright that are freely accessible on another website cannot be classified as an “act of communication” within the meaning of Article 3(1) of Directive 2001/29. ’ (para. 60) = outright exclusion of hyperlinks from the concept of communication to the public • measures against source websites instead

CJEU, case C-160/15, GS Media AG Wathelet, 7 April 2016 • inclusion of hyperlinking requires legislative action ‘…extending the concept of “communication to the public” to cover the posting of hyperlinks to protected works freely accessible on another website would require action to be taken by the European legislature. ’ (para. 79)

Solution in copyright law desirable?

Complex phenomenon • positive/negative impact on source website? • general or specific content aggregator? • impact on freedom of information? content aggregators copyright holder consumers

Copyright appropriate at all? • copyright • primary and secondary acts of communication • intervention, new public, profit motive • prohibition of formalities • unfair competition law • undermining another’s advertisement model • taking unfair advantage (free riding) • misleading consumers

Breathing space in international law • Basic Proposal WIPO ‘Internet’ Treaties: ‘It seems clear that, at the treaty level, the term ‘communication’ can be used as a bridging term to ensure the international interoperability and mutual recognition of exclusive rights that have been or will be provided in national legislations using either the term “transmission” or the term “communication”. ’ = right of communication to the public can be implemented as right of ‘transmission’

Breathing space in the EU acquis • Recital 23 Information Society Directive: ‘This Directive should harmonise further the author's right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts. ’ = no transmission, no exclusive right

CJEU offers unnecessary WCT-plus protection • hyperlinking = reference to content • hyperlinking ≠ transmission of content • thus: no obligation to apply copyright • application in case of new public is optional expansion of protection • unfair competition law more flexible – individual assessment case-by-case – no prohibition of formalities

Content aggregators (neighbouring right for publishers)

Solution in ‘certain’ Member States • Germany: § 87 f(1) Copyright Act • exclusive right to prohibit the use of content fragments by search engines and comparable content aggregators • Spain: Art. 32(2) Intellectual Property Act • compulsory obligation to pay remuneration for the use of content fragments • scope and reach not clearly defined

NERA Study highlights corrosive effect • Google News and smaller news aggregators discontinued their service • decline in website visits during the first three months after entry into force (Jan 2015) – 6, 1% on average – 5, 8% in the case of big publishers – 7, 1% in the case of average size publishers – 13, 5% in the case of smaller publishers = loss of market expansion effect of search results indicating newspaper contents

A model for EU legislation? • Consultation Publishers in the Copyright Value Chain (Mar 2016) ‘…whether publishers of newspapers, magazines, books and scientific journals are facing problems in the digital environment as a result of the current copyright legal framework with regard notably to their ability to licence and be paid for online uses of their content…’ (p. 6)

A model for EU legislation? ‘In particular the Commission wants to consult all stakeholders as regards the impact that a possible change in EU law to grant publishers a new neighbouring right would have on them, on the whole publishing value chain, on consumers/ citizens and creative industries. ’ (p. 6) • harmonization pressure because of national forerunners? • risk of digital market fragmentation?

Neighbouring right for publishers in general desirable?

Research project • Dutch Publishers’ Association – which business models? – which protection needed? • approach – law and economics (collaboration with team of Prof. Klaus Heine, University of Rotterdam) – qualitative: interviews with selected publishers in different sectors – use of existing data material and studies

Broader media experience • community building – combination with training and information events • content aggregation – intelligent information platforms with added value for specific groups of professionals

Broader media experience • user-generated content – toolkits for users that can be adapted to individual needs • tailor-made content offers – recordal of use patterns to provide exactly the news and information preferred at a given time of the day

General trends

Important shift from focus on individual information unit to creation of complex content platforms

Changing role of publishers? • traditional selection function obsolete? • or added value of reducing search costs? • and identifying information gaps? supply pre-selection of content no longer necessary? demand

Convergence • past: protection of individual information unit (individual work) • future: ensuring a well-functioning information platform – database infrastructure – individual collection of works – content acquisition questions – liability issues? – branding and superstars

Relevant legal regimes

Protection needs reputation = decisive factor in platform competition collection = decisive factor in platform competition individual work? not decisive, unless non-substitutable

Protection regimes trademark law = protection of reputation (function theory) sui generis database right and copyright = protection of collection copyright? distinction between input and output side

A closer look at copyright

Still relevant to the same extent? input factors: output factors: contracts with individual authors and freedom of use less relevant to protection of platform as a whole

Still appropriate incentives? from work-based competition to platform-based competition

Still appropriate incentives? encourage publishers to create platforms with added value copyright delaying this process? Or impeding this transition?

Potential impact of a neighbouring right

Appropriate incentives? • driver’s seat • publishers creating search tools and information platforms themselves • chance of premium offers • dependant position • extra revenue from search engines likely? • incentive to enter into competition? • risk of innovation outside the sector

Safe harbour for hosting

Art. 14 E-Commerce Directive 2000/31 • burden of monitoring placed on IP holders • online platforms hosting content provided by users are exempted from liability if – no actual knowledge of illegal activity – not aware of facts or circumstances from which the illegal activity is apparent – upon obtaining knowledge, take expeditious measures to remove illegal content

Safe harbour for hosting no general monitoring notice takedown

Application to online platforms

Content platforms

Content platforms

Online market places

CJEU, 23 March 2010, case C-236/08, Google/Louis Vuitton • Google = host eligible for safe harbour? ‘…it is necessary to examine whether the role played by that service provider is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores. ’ (para. 114) • financial interest which Google has in its advertising service is not decisive (para. 116)

CJEU, 12 July 2011, case C-324/09, L’Oréal/e. Bay • new standard of ‘diligent economic operator’ ‘. . . it is sufficient, in order for the provider of an information society service to be denied entitlement to the exemption [for hosting], for it to have been aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality in question. . . ’ (para. 120) • still no general monitoring obligation • but own investigations relevant

CJEU, 12 July 2011, case C-324/09, L’Oréal/e. Bay • imprecise or inadequately substantiated notifications may also become relevant ‘. . . the fact remains that such notification represents, as a general rule, a factor of which the national court must take account when determining [. . . ] whether the [service provider] was actually aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality. ’ (para. 122)

Nuanced approach from general exemption from investigations to obligation to seriously consider even imprecise notifications

Notice and takedown

Which procedural steps? notice takedown ?

Injunctions

CJEU, 12 July 2011, case C-324/09, L’Oréal/e. Bay • injunctions against online platforms ‘. . . to order an online service provider, such as a provider making an online marketplace available to internet users, to take measures that contribute not only to bringing to an end infringements committed through that marketplace, but also to preventing further infringements. . . ’ (para. 131) • basis: Art. 11 EU Enforcement Directive, Art. 14(3) EU E-Commerce Directive

CJEU, 12 July 2011, case C-324/09, L’Oréal/e. Bay • no general and permanent prohibition on the use of specific material • but measures against repeat infringers ‘. . . if the operator of the online marketplace does not decide, on its own initiative, to suspend the [infringer] to prevent further infringements of that kind by the same seller in respect of the same trade marks, it may be ordered, by means of an injunction, to do so. ’ (para. 141)

Filtering

CJEU, 24 November 2011, case C-70/10, Scarlet/Sabam • copyright holder: rights eroded? • internet service provider: too heavy a burden • users: encroachment upon fundamental rights freedom of expression, privacy freedom to conduct a business guarantee of property, including intellectual property

Blocking of websites preferable? • CJEU, 27 March 2014, case C-314/12, UPC Telekabel Wien = obligation to safeguard fundamental rights and refined proportionality test • pending: CJEU, C-610/15, Stichting Brein • why not procedures against individual users? • industry roundtables deciding on online contents?

Value gap?

Content platforms

Towards a Modern, More European © • safe harbour for hosting as a backdoor to obtain website contents? ‘…platforms can also consider that […] their activities are of a merely technical, automatic and passive nature, allowing them to benefit from the liability exemption of the e-Commerce Directive. This has prompted a growing debate on the scope of this exemption and its application to the fastevolving roles and activities of new players, and on whether these go beyond simple hosting or mere conduit of content. ’ (p. 10)

Purpose of the Study • changes to current EU legislation ‘enabling the effective enforcement of copyright and related rights in the digital environment, particularly on platforms which disseminate protected content. ’ (p. 2) • strategy: focus on specific nature of © • leaving general rules of the E-Commerce Directive untouched • instead: creation of specific copyright rules

Outcome of the Study • proposal to make it clear in EU copyright legislation that ‘information society service providers that give access to the public to copyright works and/or subject-matter, including through the use of automated tools, do not benefit from the limitation set out [in the safe harbour for hosting of the ECommerce Directive 2000/31/EC]. ’ (p. 11) = neutralization of safe harbour for hosting with regard to copyrighted content

Impact on EU © Reform? • Communication Online Platforms Opportunities and Challenges (May 2016) ‘The second issue concerns the allocation of revenues for the use of copyright-protected content. New forms of online content distribution have emerged that may make copyright-protected content uploaded by end-users widely available. While these services are attracting a growing audience and gain economic benefits from the content distribution, there is a growing concern…’

Impact on EU © Reform? ‘…as to whether the value generated by some of these new forms of online content distribution is fairly shared between distributors and rights holders. The Commission intends to address this through sector-specific regulation in the area of copyright. ’ (p. 8) • sector-specific regulation = regulation following the French proposal? • impact in practice?

More general measures • Communication Online Platforms Opportunities and Challenges (May 2016) – further encourage coordinated EU-wide selfregulatory efforts by online platforms respecting users’ fundamental rights (p. 9) – provide more clarity to online platforms with regard to the exemption from liability in light of voluntary measures (p. 9) – review the need formal notice-and-action procedures, in light of the results of, inter alia, self-regulatory and co-regulatory initiatives (p. 9)

Further reform topics

Open questions • text-and-data mining – UK example (only right of reproduction) – focus on public non-profit research • Marrakesh Treaty implementation – less room for exceptions for disabled persons? – cross-border exchange of copies – commercial availability proviso • single EU © act and title – harmonization via CJEU case law – abolishment of national collecting societies?

Cross-border portability

Towards a Modern, More European © • objective to achieve broad availability of online content services ‘without frontiers’ • deliver more choice and diversity to people ‘However, when it comes to copyright-protected content crossing borders, the digital single market is not yet a reality. When people travel to another Member State, they frequently cannot access content they have subscribed to or acquired at home (i. e. the content is not “portable”). ’ (p. 3 -4)

Solution: a new Regulation • on ensuring cross-border portability of online content services in the internal market ‘The provider of an online content service shall enable a subscriber who is temporarily present in a Member State to access and use the online content service. ’ (Art. 3(1)) • but no particular quality requirements

Solution: a new Regulation • rights clearance in one single Member State ‘The provision of an online content service to, as well as the access to and the use of this service by, a subscriber, in accordance with Article 3(1), shall be deemed to occur solely in the Member State of residence…’ (Art. 4) = mandatory provisions • stipulations contrary to Arts. 3(1) and 4 unenforceable

Towards a Modern, More European © • general model to be applied to internet situations? ‘For television and radio broadcasting services, the Satellite and Cable Directive already includes rules that aim to facilitate the rights clearance required for certain cross-border activities. These rules were devised well before the advent of the internet as a distribution channel for broadcasters and only apply to satellite broadcasting and to cable re-transmissions. ’

Towards a Modern, More European © ‘The Commission is currently carrying out a review of this directive for its potential application in the online environment. ’ (p. 5) • possible to link online activities with one specific territory? • so far sorcerer’s stone not found • country of origin debate in the context of WIPO Copyright Treaty

And: a further Regulation • on addressing geo-blocking and other forms of discrimination based on – customers’ nationality – place of residence or place of establishment • within the internal market ‘…give customers better access to goods and services in the Single Market by preventing direct and indirect discrimination by traders artificially segmenting the market based on customers’ residence. ’ (p. 2)

And: a further Regulation • core objective: equal access to online interfaces ‘Traders shall not, through the use of technological measures or otherwise, block or limit customers’ access to their online interface for reasons related to the nationality, place of residence or place of establishment of the customer. ’ (Art. 3(1)) = any software, including a website and applications, which serves to give customers access to a trader’s goods or services

And: a further Regulation ‘Traders shall not, for reasons related to the nationality, place of residence or place of establishment of the customer, redirect customers to a version of their online interface that is different from the online interface which the customer originally sought to access, by virtue of its layout, use of language or other characteristics that make it specific to customers with a particular nationality, place of residence or place establishment, unless the customer gives his or her explicit consent prior to such redirection. ’ (Art. 3(2))

The end. Thank you! contact: m. r. f. senftleben@vu. nl

Annex

Marrakesh Treaty • concluded in Marrakesh on 27 June 2013 – signed by almost 70 countries – including the EU – ‘Miracle of Marrakesh’ • broader picture – UN Convention on the Rights of Persons with Disabilities 2007/2008 – WIPO Development Agenda 2004 -2007 (45 Recommendations)

Book famine 7%

Marrakesh Treaty • first international treaty dealing specifically with a copyright limitation • but not the first international treaty regulating copyright limitations – other mandatory limitations in older treaties – idea/expression dichotomy (Art. 2 WCT) – exclusion of news of the day (Art. 2(8) BC) – right of quotation (Art. 10(1) BC)

Core features country differences concept of ‘beneficiary persons’ concept of ‘accessible format copies’

Cross-border exchange ‘Contracting Parties shall provide that if an accessible format copy is made under a limitation or exception or pursuant to operation of law, that accessible format copy may be distributed or made available by an authorized entity to a beneficiary person or an authorized entity in another Contracting Party. ’ (Art. 5(1) Marrakesh Treaty)

Marrakesh Treaty implementation • implementation without prejudice to potential other limitations – Art. 12(2) MT • also relevant: freedom of adopting other limitations for beneficiary persons – Art. 12(1) MT • interplay with existing EU limitation infrastructure?

Pre-existing EU limitation • Art. 5(3)(b) EU Information Society Directive – Member States may provide for exceptions or limitations to the rights of reproduction and communication to the public, including making available, with regard to ‘uses, for the benefit of people with a disability, which are directly related to the disability and of a non-commercial nature, to the extent required by the specific disability; …’

Interplay with the Marrakesh Treaty EU provision Marrakesh Treaty • disability in general • specific kind of disability • work in different forms • work in the form of text, notation • cross-border not regulated • cross-border regulated

Implementation strategy Keeping scope of pre-existing provision as is Adding Marrakesh features as specific use privileges

For instance… • Art. 5(3)(b) EU Information Society Directive ‘uses, for the benefit of people with a disability, which are directly related to the disability and of a non-commercial nature, to the extent required by the specific disability…’, including – making/importing/disseminating special format copies for Marrakesh beneficiaries; – exporting copies for Marrakesh beneficiaries in other countries.

The very end. Thanks again! contact: m. r. f. senftleben@vu. nl