The internet and digital technologies are indispensable for individuals and businesses across Europe and globally. It is estimated that by eliminating major barriers and fragmentations within the European digital market, an additional EUR 415 billion could be generated for the European GDP. One of the most important fields of law in this respect is copyright law, which has been subject to EU rules and case-law by the ECJ for many years. However, compared to other areas in IP law (i.e. trademarks or Unified Patent Court/unitary patent), copyright has only been selectively harmonized and market conditions as we know them from the physical Single Market have yet to be established.
In 2015, the European Commission ("the Commission") launched its Digital Single Market Strategy ("DSMS") which will have implications on European copyright law, among other areas. The DSMS touches upon many different policy areas with rather vague and superficial policy suggestions. Yet, on December 9, 2015 the Commission issued a detailed Communication entitled "Towards a modern, more European copyright framework" ("Communication") outlining specific initiatives to achieve a Digital Single Market by modernizing EU copyright rules. On the same day, the Commission also submitted a Proposal for a Regulation on ensuring the cross-border portability of online content services in the internal market ("proposed Regulation"). On May 18, 2016 the Council of the European Union adopted a general approach on the proposed Regulation and generated its latest version.
A more European copyright framework
The title of the Communication already clarifies that the aim is not to establish one European copyright regime but rather one that is more suited across jurisdictions. The objectives can be summarized as follows:
- Ensure "portability" of online content services: Online content which is accessible in one's home country shall also be accessible in other Member States. Access and circulation of creative content shall be encouraged, yet at the same time resources supporting diverse productions are required.
- Align national exceptions of copyright rules: Exceptions are only partly harmonized by EU rules and Member States. Exceptions are especially relevant in education, research and access to knowledge.
- Establish a well-functioning marketplace for copyrights: A fair and adequate compensation is required for the different owners of copyright-protected works, including a transparent compensation system for authors and performers.
- Provide an effective enforcement system: Commercially relevant infringements have to be effectively pursued (also across the borders).
The ultimate goal is to have a European copyright regime by which authors, performers, the creative industry and users are all subject to the same rules. While this is a complex and ambitious project, the above mentioned short term adjustments should follow this long-term goal of ensuring a Digital Single Market. The policy suggestions outlined above are yet to be defined by the Commission, but the proposed Regulation of ensuring "portability" of online content services is the first tangible step towards a Digital Single Market.
The proposed Regulation
The objective of the proposed Regulation is to allow consumers access to online content services such as music, films, games and sporting events, not only when they are in their country of residence but also when they are in another Member State.
In essence, content which has been legally subscribed for or purchased in the consumer's county of residence shall equally be accessible by the consumer whether they are in their country of residence or in another Member State. This is commonly referred to as content which is "geo-blocked" due to copyrights. In this respect, the term "portability" is inaccurate as the content has not been downloaded on a device in order to access it offline once in another Member State, rather the proposed Regulation wants to ensure that publicly available digital content which is copyright protected can be accessed regardless of the location within the EU.
The provisions of the proposed Regulation effectively require the provider of a paid online content service to enable a subscriber to access and to use the online content service also when temporarily in another Member State (Art. 3). Providing, accessing and using the online content service is deemed to occur in the Member State of residence only (Art. 4). Contractual agreements between copyright holders and service providers stipulating anything different to the above mentioned provisions are to be considered unenforceable (Art. 5(1)).
The approach is comparable to the Directive on satellite broadcasting and cable retransmission by which the uploaded content is subject solely to the law of the Member State where the upload occurred (Art. 1 para 2 lit. b Dir. 93/83/EEC) allowing a union-wide transmission once approved in the originating country.
The legal effect of the proposed Regulation is limited as it only focuses on one aspect of copyrights in the digital market. However, it is questionable if this is the most pressing issue to solve in achieving a Digital Single Market for copyrights. During the legislative process of the European Council and the European Parliament, the proposed Regulation may still experience major changes before the Proposal becomes legally binding Regulation.
The policy areas reviewed in the Communication are important copyright issues to address and although not comprehensive, and it will be likely that the Commission will draft additional legal proposals with implications for the Member States.