Apparently, summer season is over in Brussels. Already last week, a comprehensive staff working paper was leaked dealing with the European Commission’s aim to modernize copyright law within the EU. (see our respective blog post). Then on Wednesday, a first draft of the new Copyright Directive became public. It deals with, among other points, new and mandatory limitations to copyright (text and data mining, cross-border teaching, and preservation of cultural heritage). Furthermore, a new neighbouring copyright for publishers of news publications is about to be established at European level. The draft also contains provisions concerning the use of out-of-commerce works. The Commission further cautiously touches upon regulating video-on-demand platforms and their use of audiovisual works. Last but not least, the fair remuneration of authors and performers is part of the draft directive.

Background

On 6 May 2015, the European Commission announced its comprehensive Strategy for a Digital Single Market. In December 2015, a first action plan for modernizing European copyright followed (see blog post). This plan already contained several – although still vague – proposals which we now see as more detailed regulations in the draft directive. On 9 December 2015, the Commission also published a draft regulation on cross-border portability of lawfully acquired contents. This piece of legislation is currently under revision and will be subject to a first plenary discussion on 17 of January 2017 in the European Parliament.

The now “leaked” draft directive is part of the implementation of the earlier action plan for modernizing European copyright.

Main Provisions

At the heart of the new directive is the creation of three new limitations to copyright which the Member States have to implement into domestic law within one year from its enactment. Contrary to the limitations already set out in Article 5 (3) of the InfoSoc Directive 2001/29, these new limitations will be mandatory. Previously, the Member States had discretion whether or not to implement a limitation. If a Member State went for such implementation, the related legislative action had to be coherent with European law. The mandatory nature of the new limitations is therefore a truly remarkable change in Commission’s approach.

Article 3 of the draft deals with the so-called text and data mining. Research organisations will be permitted to carry out text and data mining for the purposes of scientific research in a legally secure environment.

Further, Article 4 of the draft directive includes a limitation entitling educational institutions to use digital works for the purpose of illustration for teaching. However, such use is limited to non-commercial purposes only. Moreover, the rights under Article 4 may only be exercised on the premises of the educational establishment or through an online network accessible only by pupils, students and/or staff.

Article 4(2) includes a fairly significant exemption. Member States could provide that the entitlement under Article 4(1) may not apply if the works can be obtained by way of a contractual license being “easily available in the market“. It may already be anticipated that this phrase will cause difficulties in practice.

Article 5 carries the heading “Preservation of Culture Heritage“. This means that public libraries, museums, archives and similar institutions shall receive the right to make digital copies of their works in stock to the extent necessary for the preservation of such works. Obviously, this limitation builds on the decision of the European Court of justice rendered in a case TU Darmstadt vs. Eugen Ulmer Verlag.

The next chapter of the draft directive deals with the use of out-of-commerce works by culture heritage institutions (Article 7). It is the Commission’s aim to widen the access to digital content including such out-of-commerce works. However, it is up to the Member States to establish specific criteria qualifying a work as out-of-commerce. Interestingly, the use of such works by cultural heritage institutions shall be justified throughout the entire European Union (Article 8(1)).

As regards the regulation of audio visual works on Video-on-Demand platforms, the Commission’s proposal is rather cautious. Article 10 of the draft merely holds a negotiation mechanism that aims to bring together right holders and Internet service providers.

Article 11 pp. includes provisions on the new neighbouring right for publishers of news publications. According to Article 11(1), those publishers shall be equipped with the same rights as set out in Articles 2 and 3 (2) of the InfoSoc Directive 2001/29. Those rights shall expire after 20 years from the publication of the news publication. Thus, the scope of the new right is recognizably broader than what we currently see in Spain and Germany. The term “news publication” is defined in Article 2(4) of the draft. There, a news publication is specified as “a fixation of a collection of literary works of a journalistic nature (…)“. Whether this definition will resonate in practice, is still to be proven.

What should be noted is that so-called information society services are obliged to ensure “the functioning of agreements concluded with right holders and to prevent the availability on their services of works or other subject-matter not covered by such agreements” (Article 13 (1)). This means a new obligation being imposed by the European Commission on Internet service providers.

Eventually, Article 14 shall ensure that authors and performers receive sufficient information on the exploitation of their works and performances. The respective transparency obligations set out in the draft shall ultimately lead to an appropriate remuneration which authors and performers may claim based on the information they are entitled to receive.

Outlook

The current draft directive covers – despite a rather moderate 24 articles in total – quite a number of controversial topics. Mandatory limitations to copyright, new options for educational institutions, libraries and archives, a new neighbouring right, new obligations for Internet platforms, and new transparency obligations – hardly any area of the existing copyright law remains untouched. Accordingly, we may already anticipate that the discussion will be equally broad and controversial. It may also be assumed that the current draft will be subject to quite some revision throughout the further legislative process. Nonetheless, the European Commission has now laid the cornerstones that form a basis for further discussion.