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Friday, 12 August 2016

Compulsory collective management of copyright for images displayed by search engines: a French cultural exception to EU law

Olivia Klimis
A few weeks ago this Blog explored the possible of implications of a case currently pending before the Court of Justice of the European Union (CJEU), Marc Soulier C-301/15, in particular should the Court follow the Opinion of Advocate General (AG) Wathelet. This reference for a preliminary ruling from France concerns the compatibility with EU law of the 2012 loi (Law No 2012-287 of 1 March 2012) adopted to allow and regulate the digital exploitation of out-of-print 20th century books. 

The AG held the view that such law is not really compatible with EU law because it envisages a mechanism that, contrary to Articles 2 and 3 of the InfoSoc Directive, gives approved collecting societies - rather than authors - the right to authorise the reproduction and the representation in digital form of out-of-print books.

In my comment to the Opinion, I highlighted how the law on out-of-print books might not be the only case of potential incompatibility with EU law. In particular, in early July France introduced Loi No 2016-925 on la liberté de la création, l'architecture et patrimoine (freedom of creation, architecture and cultural heritage), which introduces new provisions into the French Intellectual Property Code (IPC) to regulate the publication of a plastic, graphic or photographic work by an online communication service. In particular, new Article 136-2(1) IPC provides that the publication of a plastic artwork, graphic or photographic work by an online communication service is subject to the consent, not of authors, but rather ... one or more collective management organisations (CMOs) appointed to this end by the French Ministry of Culture. 

But what are the exact principles and provisions governing the arrangement envisaged by new Article 136-2 CPI? Is there really a risk of incompatibility with EU law?

Katfriend Olivia Klimis (senior counsel at De Gaulle Fleurance & Associés, working between Brussels and Paris and specialising in IP and EU law), with the help of Nicolas Lescot (also at De Gaulle Fleurance & Associés), provides a thorough and thoughtful analysis.

“The great ride of [French] posterity”
(B Roubaud)
Here's what Olivia writes:

"As readers of this blog already know [here and here], on 7 July last the French Parliament passed the Bill no 2016-925 on freedom of creation, architecture and cultural heritage. Article 10 quater introduces Articles L 136-1 to L 136-4 into the IPC which provide for the compulsory collective management of copyright on images displayed by search engines.  
  
The exact meaning of Article L. 136 of the IPC

Article L.136-2 of the IPC can be translated as follows:

I. The publication of a plastic artwork, graphic or photographic work from an online communication service shall entail the right of reproduction and the right of representation [i.e. communication to the public] of this work by automated images referencing services to be managed by one or several [collective management organizations] approved to this end by the Ministry of Culture. In the absence of designation [of a CMO] by the author or his successors in title at the work publication date, one of the CMOs is deemed to be in charge of the management of those rights.

II. The approved [CMOs] are solely entitled to conclude any agreement with automated images referencing services operators to authorize the reproduction and representation of plastic artworks, graphic or photographic works by these services and perceive the corresponding fees according to article L. 136-4 [Article L. 136-4 provides that the remuneration scheme and terms of payment will be set in agreements between CMOS and referencing services operators or, in the absence of such agreements,  by a commission composed equally of representatives from CMOs and referencing service operators]. The agreements concluded with the operators shall also specify how the operators will comply with their obligations to provide the CMOs with the works exploitation records and any information necessary to the distribution of the fees to the authors or their successors in title”.

This means that the referencing and display by search engines of all plastic artworks, graphic or photographic works made available online [by whom? The author? The law does not say…] is subject to the consent, not of authors, but of one approved CMO [whether it was appointed by the author as his or her representative of not…]. The CMO will set the remuneration scheme in agreement with the search engine operator, calculate the fees based on the records that will be sent by those operators regarding all copyright protected uses and distribute the fees collected to the authors.

This provision is another example of the French “cultural exception”. Whether it actually protects French culture, by depriving authors of the possibility to decide how they want to manage their rights and making their content more difficult to find, remains to be seen.

Can the French Senate crow
louder than the EU legislator?
The corridors of power – How the French Senate passed article 10 quater

When Article 10 quater was submitted to the Parliament, it was the subject of tremendous debates, rejected several times by the National Assembly at the request of government and restored each time by the Senate [see in particular here and here]
The French government opposed to that provision on the ground that it was contrary to EU law, in particular Svensson and the limitations of liability provided by the E-Commerce Directive. In their view, that question should be discussed in the context of the European copyright package.

The senators rebelled against the state of EU law regarding search engines and the slowness of the European Commission to “address boldly the Google issue across Europe”. In their view, it was urgent to protect artists and in particular photographers against misappropriation of theirs works by search engines.


Contrariety to EU law

As a matter of fact, Article L. 136 IPC appears to be incompatible with both the InfoSoc Directive and the E-Commerce Directive.

First of all, the compulsory collective management system provided violates the requirement set by Article 2(a) and Article 3(1) of the InfoSoc Directive of a prior express consent by the author for any reproduction and communication to the public of his work. As highlighted by AG Wathelet’s Opinion in Marc Soulier, that consent is an essential prerogative of authors and, in the absence of EU derogating legislation, a tacit consent cannot be presumed. This harmonized rule applies not only to the assignment of rights stricto sensu but also to the collective management thereof (see previous post here).

HOW to record
copyright-protected
uses by search engines?!?
Secondly, by automatically empowering the CMOs to collect fees on behalf of the authors, Article L. 136 IPC is incompatible with Article 3 (1) of InfoSoc Directive whether in its current interpretation by the CJEU in Svensson and BestWater [here and hereor in its potential future interpretation following AG Wathelet’s Opinion in GS Media:

·   Either the work is publicly (and lawfully according to Svensson) available online, the referencing of the work by the search engine is not an act of communication to the public and thus may not be subject to the payment of a fee;
·       Or access to the work online is subject to restrictions which are circumvented by the search engine (or is unlawfully made available according to Svensson), the referencing is an act of communication to the public and thus requires the author’s prior express consent.

Moreover, since search engines usually display the results as thumbnails, this implies a resizing of the pictures, ie an adaptation which might also require the author prior express consent under the right of reproduction (Article 2 (a) of the InfoSoc Directive)As observed during the debates at the Parliament, this question has not yet been clarified by the CJEU, so that the hyperlinking saga is far from over.

Last but not least, having search engines pay for all natural results displayed by their automated referencing services appears to be incompatible with the safe harbour set by Article 14 of E-Commerce Directive, as interpreted by CJEU in Google France.

The qualification of Google Images as a hosting service was acknowledged by the Paris Court of Appeal and French Supreme Court in the Aufeminin case. Here, the resizing of images  was held to be an automated technical act required by the functionnality of the search engine.

A Google Images’ Kat worried
of being tracked
by a French CMO
And how to record copyright protected uses in practice? Not even the CJEU is quite sure about what is lawful or not. In the absence of notifications by right holders, the recording obligation may place an excessive burden on search engines and therefore be contrary to Article 15 of the E-Commerce Directive, as interpreted in the SABAM/Netlog case. This is supported by the Supreme Court judgment in the Aufeminin case.
  
Do we have to worry?

Whatever the CJEU decides with regard to hyperlinking in the future, it seems that the French legislator will not find a way to justify Article L. 136 IPC under EU law. The only escape is through the creation of a new provision in the copyright package, which could be inspired from the private copying levy system (Article 5.2 (b) of the InfoSoc Directive).

In the absence of EU derogation, the implementation of Article L. 136 IPC, which requires agreements to be found between CMOs and referencing services operators, will likely face practical difficulties. In particular, it can be expected that search engines operators will not agree to pay a levy which is contrary to EU law.  In fact, similar initiatives regarding press content in Spain and Germany even led Google to de-reference national newspapers or even deactivate its Google news service."

Thanks so much for this great analysis Olivia!

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