YEAR 2019 N.º 2
Fernando Carbajo Cascón
Towards a new regulatory framework for copyright and related rights in the digital single market.
The unstoppable advance of new technologies requires a constant effort to adapt the legislation on intellectual property to the new problems and demands that arise in the European digital market. Requirements that come, in some cases, from the development of new business models based on the mass exploitation of content protected by copyright and related rights, and in other cases, from the need to favor access to information for educational purposes, research or cultural in general.
With each technological advance, new opportunities for transnational commercial exploitation arise in the European single market, as well as new possibilities for disseminating information among all citizens, but at the same time new risks appear for holders of intellectual property rights, worsening the natural relationship of tension between legitimate intellectual property rights and the needs of access to protected information by commercial users (music and video on demand services), institutional users (libraries, archives, universities, research centers) and end users (Internet users and citizens in general).
Directive 2001/29/EC, of May 22, on the harmonisation of certain aspects of copyright and related rights in the information society, was the first adaptation of intellectual property rights to the digital environment, incorporating the new provisions into the European legislation introduced at the international level by the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) signed in Geneva on December 20, 1996 (World Intellectual Property Organization Digital Agenda). Once the Directive has been incorporated into the national legal systems of the Member States, the national courts and the Court of Justice of the European Union have been making an important effort to interpret its provisions to the problems that have successively been raised by the expansion of digital technologies and advanced telecommunications.
It can be said that both the CJEU and national judges and courts have gone even further from mere interpretation to become authentic creators of law, given the insufficiency of the 2001 regulations, to adapt to all the new problems posed in the practice of the world digital. That is why a new legislative development was necessary to cover some of the needs for access to information that could no longer, in any way, be filled with judicial interpretation, and also to encourage access to information both for pro-competitive purposes for the full development of a European market for digital content, such as for the purpose of promoting access to science, culture and information by scientific, educational and cultural institutions and, ultimately, by all citizens, once the Information Society is consolidated thanks to the generalized access of the European population to digital media.
For some years now, various European Commission documents have suggested the convenience of recognizing and reaffirming a new freedom or community principle: Freedom of Information. It is about establishing the foundations to maximize the dissemination and accessibility of information of all kinds through digital networks in the European Union, encouraging the development of new business models based on the exploitation of digital content and promoting science, culture and education dissemination by universities, research centers and libraries, archives, museums and other assimilated cultural institutions. Also to favor the exchange of information between users on digital platforms, and, with it, business models based precisely on the promotion of this exchange between users from all over the world.
But the requirements for information access are always hampered by copyright and related rights that protect the legitimate interests of authors, performers and the culture industry; collectives that constitute the engine of creativity, innovation and socio-cultural development, while guaranteeing cultural diversity. Intellectual property is an incentive for innovation and creativity and its scope must be reconciled with the needs for access to protected information to stimulate the market (an information market) and knowledge. The incentive-access dilemma is regenerated with each technological advance and the system must gradually adapt to new requirements.
The need to adapt the regulatory framework of the European Union on copyright and related rights was already made clear in the Communication from the Commission of December 9, 2015, entitled "Towards a modern, more European copyright framework ". The result of this Communication, which came from a consultation process open to all sectors involved in intellectual property, is the two new European Directives that seek to advance in the regulation of copyright and related rights in the digital environment, further favoring access to information and the development of a single digital market seeking an adequate balance with the legitimate rights of the holders.
On April 17, 2019, Directive (EU) 2019/790 of the European Parliament and of the Council, on copyright and related rights in the digital single market, and amending Directives 96/9/EC (legal protection of databases) and 2001/29/EC (copyright and related rights in the information society), and Directive (EU) 2019/789 of the European Parliament and of the Council, laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programs, and amending Council Directive 93/83/EEC (on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission).
Directive 2019/790 on copyright and related rights in the digital single market, establishes rules to incorporate new exceptions and limitations to intellectual property rights in digital and cross-border environments in order to facilitate access to science and information as well as new practices in educational settings. It also incorporates measures aimed at facilitating certain licensing practices to encourage the dissemination of works and related services outside the commercial circuit (discontinued) and the use of content in the public domain, as well as making audiovisual works available online on video-on-demand platforms, all to guarantee greater access to content while promoting competition on digital content exploitation platforms. An important regulation of the use of press materials in the digital market is also established, in order to protect and establish incentives for the press sector in the digital environment and, with it, objective information and cultural diversity. The position of the information society services that act as intermediaries facilitating the storage and access to the content uploaded by users is regulated in great detail, undoubtedly one of the fundamental problems of intellectual property on the Internet. Finally, there are rules regarding contracts between authors and interpreters with the assignees of rights (publishers, producers) to promote transparency, adequate remuneration and the possibility of revoking the exclusive licenses granted in case of change in the contractual circumstances.
Title II deals with the measures to adapt exceptions and limitations to the digital and cross-border environment, incorporating "ex novo" exceptions or limitations for text and data mining for the purpose of scientific research by research organisations and cultural heritage institutions (art. 3) and for any other interested parties, although, in the latter case, on the condition that the use of the affected works and services is not expressly reserved by the rightholders in an adequate manner (art. 4). This exception of text and data mining affects the right of reproduction of works and services in general and the right of extraction of the database manufacturer. An exception or limitation to the rights of reproduction and making available of works and services is also regulated for the first time at EU level, as well as the rights to extract and reuse databases to facilitate digital use for the purposes of illustration for educational purposes by schools in its establishments or through a secure electronic environment accessible only by educational establishment’s pupils or students and teaching staff, provided that it is justified by a non-commercial purpose and is accompanied by the indication of the source, including the author’s name, unless this turns out to be impossible; Member States may provide for fair compensation for rightholders (as is already the case in some countries) and may provide that the exception or limitation does not apply to specific uses or types of works, such as material that is primarily intended for the educational market (textbooks, manuals and university treatises), or sheet music as long as they are easily available on the market (art.5).
Within the same chapter it is also established that Member States shall provide for an exception to the right of reproduction of works and related services (including the new protection of press publications concerning online uses, that is regulated in art .15), the right to extract databases and the right to reproduce computer programs, in order to allow cultural heritage institutions (libraries, newspaper libraries, archives, museums, film libraries, etc.) to make copies of any works or other subject matter that are permanently in their collection for purposes of preservation (art. 6).
All these new exceptions are mandatory and any contractual provision contrary to its effective application by the beneficiaries shall be unenforceable (art. 7).
Title III deals with measures to improve licensing practices and ensure wider access to content in the information society and in the digital single market.
Firstly (art. 8), it provides a complex legal regime to facilitate the use of out-of-commerce works and other subject matter by cultural heritage institutions, for which it resorts to the mechanism of the extended collective license (typical of the Nordic legal systems), whereby the Member States shall provide a collective management organisation that, in accordance with its mandates from rightholders (that is, in cases of voluntary collective management), may conclude a non-exclusive license for non-commercial purposes with a cultural heritage institution for the reproduction and dissemination of works or other subject matter that are permanently in their collection, irrespective of whether all rightholders covered by the license have mandated the collective management organisation. Furthermore, it is established that the Member States shall provide for an exception or limitation to allow cultural heritage institutions to make available out-of-commerce works or other subject matter for cultural purposes, in those cases in which there is no collective management organisation that can guarantee these uses through the mechanism of the extended collective license. In both cases (extended collective licenses or exceptions), the affected rightholders may exclude their works and services from the collective license or the exception at any time. The Directive also provides that the Member States shall ensure that extended collective licenses granted by collective management organisations may allow the use of out-of-commerce works or other subject matter by cultural heritage institutions in any Member State, thus enabling the dissemination and cross-border access to European cultural heritage (art. 9). Publicity measures for out-of-commerce works or other subject matter covered by this regulation are also made accessible on a public single online portal from at least six months before the works or other subject matter are communicated to the public or made available to the public (art. 10), providing the convenience of promoting dialogue between all affected parties (art. 11).
The mechanism of the extended collective licensing is also offered in a general way (beyond facilitating the dissemination and access of out-of-commerce works) for the Member States to include it in their national laws if they deem it appropriate (art. 12). It seems that the EU legislator intends, in the first place, to give a letter of nature and legitimize the mechanism of extended collective licenses traditionally used in Nordic systems (Sweden, Norway, Denmark) and for a few years in countries such as Germany or France for specific uses normally related to teaching, research and dissemination of discontinued works; and, secondly, to offer Member States a mechanism that may be useful to provide guarantees to certain users who handle large amounts of content for secondary uses (such as establishments that offer reprography and digitization services), as well as to encourage development of business models for making digital content available online in which individualized negotiation with the respective rightholders is not easy.
For cases in which it is not possible to resort to extended collective licensing, it is stated that Member States shall promote the creation of impartial bodies or mediators to facilitate licensing agreements for the purpose of making available audiovisual works on video-on-demand services (art. 13).
Finally, a very particular situation is regulated, regarding reproductions of works of visual art in the public domain (art. 14), noting that the Member States shall provide that any material resulting from an act of reproduction of that work is original in the sense that it is the author’s own intellectual creation (eg photographic work).
Title IV introduces measures to achieve a well-functioning marketplace for copyright, regulating the protection of press publications concerning online users (the most relevant aspect of this Directive).
Art. 15 establishes that Member States shall provide publishers of press publications with the rights of reproduction and the availability to prohibit or authorize the online use of their press publications by information society service providers. The aim is to make press editors participate in the value generated by parasitic business models of their content that generate significant advertising revenue, such as news aggregators (eg Google News). In this way, the survival of the traditional press and, thus, of objective and quality information services is guaranteed, also preserving cultural and informative diversity. But to guarantee the freedom of information among users, private or non-commercial uses by individual users and acts of hyperlinks are excluded from this scope (it is understood that as long as the links are not accompanied by fragments of text and images, except for single words or very short excerpts from a press release). This right shall expire two years after the press publication is published and Members States shall provide that authors of works incorporated in a press publication receive an appropriate share of the revenues that press publishers receive for the use of their press publications by information society service providers (which may well consist of contractual agreements or mere remuneration rights managed by collective management organisations).
Art. 16 attends to the problem raised in the Reprobel Case of CJEU, providing that the Member States may provide that when an author has transferred or licensed a right to a publisher, such a transfer or license constitutes a sufficient legal basis for the publisher to be entitled to a share of the compensation for the use of the work (included in publications) made under an exception or limitation to the transferred or licensed right, fundamentally thinking about the publishers' right to participate in the fair compensation for private copying.
Art. 17 regulates very extensively, and confusedly, the use of protected content by online content-sharing service providers. It is generally established that the providers that offer services consisting of facilitating users to share content online (eg YouTube) carry out an act of communication to the public or of making them available when they offer the public access to works or services protected by copyright and related rights that have been uploaded to its service or platform by the users. This new regulation constitutes a milestone in the regulation on information society services since it modifies the principle of apparent neutrality and passive action of the intermediaries of the information society, and, with it, the regulations on safe harbor that guarantee the exemption of responsibility of intermediaries for the infringing acts of the users of their service, which (especially art. 14 of Directive 2000/31/EC, on electronic commerce) will not apply to this specific type of services. The legislator considered the “Pirate Bay” case, where it is considered that the manager of a platform for the exchange of files between equals (“Peer to Peer”) does not act in a neutral, automatic way and passive, but rather performs an act of communication to the public understood "lato sensu" insofar as without their participation, users could not share content protected by copyright. We are, first of all, facing an important policy-legislative decision that wants to involve the rightholders in the value chain generated by the large service exchange platforms that, taking advantage of the network effects generated by the grouping of thousands of users, obtain notable benefits from advertising and other concepts such as the sale of personal data. Thus, those responsible for this type of services or platforms must obtain an authorization from the rightholders to communicate to the public or make works or services available; the authorization or license (which, it is assumed, must be granted by the collective management organisations) will also include the acts of making available carried out by the users of the service when they are not acting commercially or when their activity does not generate significant income. However, although service providers are in principle responsible for unauthorized acts of communication to the public, they may exonerate themselves from this responsibility if certain conditions (sections 4 and following): it seems that the legislator wants to leave out those platforms that demonstrate greater neutrality in the provision of their service and that have a lower impact on the digital content market.
Within Title IV, the third chapter, arts. 18 to 23, includes a series of provisions aimed at providing more transparency and equity in the contractual relations between authors and performers with the assignees of their rights, as well as fair remuneration in exploitation contracts, all with the aim of achieving a fair balance between the rights and interests of the different parties. On the one hand, Member States shall ensure adequate and proportionate remuneration for authors and performers who grant licenses for the exploitation of their exclusive rights (art. 18). On the other hand, Member States must establish adequate measures to provide transparency to contractual relationships, so that authors and performers receive regular and updated information on the exploitation results of their works and performances (art. 19). Member States must also regulate mechanisms to readjust contractual remunerations that are disproportionately low compared to all the subsequent relevant revenues derived from their exploitation (art. 20). To achieve these goals, Member States must promote an alternative dispute resolution procedure (art. 21) and guarantee a right of revocation in favor of authors and performers when works or services exclusively assigned are not being subject to effective exploitation (art. 22).
Regarding online transmissions of broadcasting organisations and retransmissions of television and radio programmes, the stated goal of Directive 2019/789 is to achieve a wider dissemination in Member States of television and radio programs that originate in other Member States, in order to facilitate the dissemination and accessibility of audiovisual content throughout the European territory to promote cultural and linguistic diversity and social cohesion, as well as an increase in access to information , while promoting business models based on the accessory transmission online (simultaneous or delayed) by the same broadcaster that broadcasts by other means, or on the simultaneous and unaltered online retransmission by a third party of television and radio programs broadcasts or broadcast by other broadcasting organizations in the same or different Member States.
In order to achieve these goals, the Directive seeks to facilitate the obtaining of licenses for the contents protected by copyright and related rights on works and services that are the object of broadcast in radio and television programs in different Member States. To this end, the EU legislator begins by establishing the "country of origin" principle for accessory services for the online transmission of radio and television programs, thus considering that the rights necessary to carry out this activity should only be acquired and liquidated in the Member State in which the broadcasting organization has its main establishment (art. 3). This will facilitate the acquisition of necessary authorizations to put online radio and television programs from different countries in other Member States and, with it, greater access for consumers and users to these programs throughout the EU.
In order to guarantee the existence and development of these new online transmission services for radio and television programs broadcast by broadcasting organizations, Member States shall ensure that the obtaining of authorizations from the rightholders included in the programs of radio and television take place exclusively through collective management entities, which extends to the online transmission or retransmission services of radio and television programs the model of mandatory collective management of exclusive rights established so far exclusively for the cable distribution (art. 4). However, this model will not apply to obtaining authorizations for related rights held by the broadcasting organizations over their own broadcasts or transmissions, which will have to be negotiated individually in good faith (art. 5). In order to solve possible conflicts and to facilitate negotiations for the online retransmission of broadcasts, Member States shall promote mediation services (art. 6). The same rules shall apply to retransmissions of an initial transmission from the same Member State (art. 7).
Member States may establish the same rules for the transmission of radio and television programs by direct injection, which takes place when a broadcasting organization transmits its program-carrying signals to another signal distribution organization, without the broadcasting organization simultaneously transmits these program-carrying signals directly to the public (art. 8). In these cases, the EU legislator considers that the broadcasting organization and the signal distributor participate in the same act of communication for which they must obtain the authorization of the rightholders, with the same rules established in arts. 4, 5 and 6.
In short, the EU legislator has established a new and complex regulatory framework to increase the possibilities of access to information to commercial users, institutional users and, ultimately, to users or end consumers of content protected by copyright, while guaranteeing respect for intellectual property rights and fair remuneration for legitimate rights holders.
The goal is clear: to promote access to protected content to encourage competition in the European digital market for the exploitation of content, to facilitate the work of educational and research organizations as well as cultural heritage institutions and, with this, to increase the possibilities of access to science, culture and information to all citizens of the Union, promoting cultural and linguistic diversity. Copyright and related rights are at the center of freedom of information, and it is not easy to achieve a fair balance of rights and interests between owners and users of intellectual property. Member States will have to make a significant effort, given the complexity of the regulations, to incorporate both Directives into their respective national legal systems before the final transposition deadline, set for June 7, 2021.
Fernando Carbajo Cascón is Professor Professor of Commercial Law at the University of Salamanca, Spain