Coreper agrees common position on text of draft DSM Directive

Compromising on
copyright issues ...
a stable equilibrium?

After months of discussion, yesterday the Council’s permanent representatives committee (Coreper) agreed a common position on the text of the draft Directive on Copyright in the Digital Single Market (DSM Directive).

The text thus approved will serve as a mandate for the presidency of the Council [currently Bulgaria, but Austria as of 1 July] to start negotiations with the European Parliament, once this has also agreed its own position.

As readers may know, following the proposal for a DSM Directive by the EU Commission [on which see Katposts here] the Council and the European Parliament are now the EU institutions tasked with adopting the draft directive and making it EU law [if you wish to learn more about how the EU law-making process works, click here].

So, what are the key points of the text agreed within Coreper, particularly with regard to the provisions that have attracted the most attention?

Here’s a summary of the most notable elements, with some notations:

Text and data mining (Art 3)

• The beneficiaries would only be research organisations (the term is loose but appears to encompass those entities the primary goal of which is to conduct scientific research or to do so together with the provision of educational services: see Recital 11 and Art 2(1)) and cultural heritage institutions (as defined in Recital 11a and Art 2(3)) [Coreper has not opted for an exception without a restricted catalogue of beneficiaries; from this standpoint the EU position would be different from the one envisaged in some Member States, which have legislated using Art 5(3)(a) of the InfoSoc Directive as a basis];
• The purposes of text and data mining activities should be ‘scientific research’ (Art 3(1));
• The availability of the exception would be subject to the beneficiaries having lawful access to the content in respect of which the mining activities are to be carried out;
• Considering the ‘minimal harm’ caused by the exception to rightholders, Member States should not provide for fair compensation mechanisms;
• Member States would be free to implement also a ‘neighbouring’ exception (which, unlike the one for text and data mining, would be optional) for temporary reproductions and extractions of works and other subject-matter, insofar as these form a part of the text and data mining process and the copies made are not kept beyond that process (Art 3a);
• It appears possible for Member States to adopt their own non-commercial text and data mining exceptions for different types of beneficiaries, in line with what is stated in Recital 5 and Art 17 [already discussed here].

Press publishers’ right (Art 11)

• The right should be only available to publishers established in the EU [should this aspect be part of the final text of the directive, depending on the timeframe for national implementations, this might be a Brexit-relevant issue for the UK];
• Also The IPKat could be eligible for the right, in that its content seems to fit within the definition of ‘press publication’ as provided for in Recital 33;
• The draft Directive clarifies that the use of insubstantial parts of press publications should not fall within the scope of the right. It is left to Member States to determine the ‘insubstantial’ nature of parts of press publications: to this end they may take into account whether these parts are the expression of the intellectual creation of their authors [hence, sufficiently original as per Infopaq - Coreper's press release suggests that Member States have their own standards of originality, which is questionable after a long string of decisions of EU's highest court] or whether these parts are limited to individual words or very short excerpts, without independent economic significance, or both criteria [Recital 34a and Art 11(1) – this new rule does not appear particularly clear in that the text seems to conflate concepts that belong to copyright with concepts that are found in respect of, eg, the protection of the investment in the sui generis database right … In any case, leaving this choice to Member States might lead to a rather unharmonised framework ...];
• The duration of this new right would be 1 year [instead of 20 years, as originally proposed by the Commission] from the publication of the press publication (Art 11(4));
• The new right would not have retroactive effect (Art 11(5)).

Value gap proposal (Art 13)

• Unlike the initial Commission’s text, the Coreper version explicitly refers to the E-commerce Directive (Recital 4), clarifying that the DSM Directive is based upon and complements the rules contained also therein;
• The notion of ‘online content sharing service provider’ is one that encompasses providers whose “main or one of the main purposes … is to provide access to a large amount of copyright-protected content uploaded by their users with the purpose of obtaining profit therefrom, either directly or indirectly, by organising it and promoting it in order to attract more audiences” [this is potentially a very broad definition, and the text of the Directive does not really clarify what is to be meant as ‘profit']. One can however read that (Recital 37a):
• Organising and promoting content involves for example indexing the content, presenting it in a certain manner and categorising it, as well as using targeted promotion on it;
• The notion of ‘online content sharing service provider’ (see Art 2(5)) does not include services whose main purpose is not to provide access to copyright-protected content with the purpose of obtaining profit from this activity, eg internet access providers, cloud providers or online marketplaces. It would thus seem that The IPKat be out of the scope of the provision, in that – similarly to online non-for-profit encyclopaedias – it does “not store and give access to content for profit making purposes” [phewww, says Merpel];
• Whether an online content sharing service provider stores and gives access to a large amount of copyright-protected content needs to be made on a case-by-case basis;
• The directive is said to clarify without changing the concept of ‘communication to the public’ and ‘making available to the public’. In accordance with Art 13(1) “an online content sharing service provider performs an act of communication to the public or an act of making available to the public when it gives the public access to copyright protected works or other protected subject matter uploaded by its users.” [I wonder whether it would be more appropriate, instead of attempting a definition of what qualifies and who makes an act of communication to the public, to say that “an online content sharing service provider performs an act of communication to the public or an act of making available to the public in accordance with the case law of the Court of Justice of the European Union”].
• If an online content sharing service provider is deemed to engage in acts of communication to the public/making available to the public, then it should not enjoy the safe harbour protection within Art 14 of the E-commerce Directive in relation to copyright-relevant acts (Recital 38b and Art 13(3)) [this seems correct to me, as I discuss more at length here]. However, this subject might escape liability in a number of situations as per Art 13(4). Online content sharing service providers are in fact subject to a ‘diligent operator’ obligation (Recital 38c) [this appears in line with the L’Oréal and Ziggo judgments of the Court of Justice of the European Union]. This means that: “they should not be liable if some unauthorised content is available on their services despite their best efforts to prevent its availability by applying effective and proportionate measures based on the information provided by rightholders.” In addition, the directive refers to a duty to act expeditiously to remove or disable access to content upon being notified by rightholders, and also a subsequent obligation to “make their best efforts to prevent their future availability” (how this is to be done depends on the type of content: see Recital 38e);
• A licence granted to online content sharing service providers should also cover the copyright-relevant acts in respect of uploads by the users but only in cases where the users act in their private capacity and for non-commercial purposes (Recital 38d);
• Applicable exceptions and limitations shall remain unaffected [also note that Recital 45 mandates an interpretation and application of the Directive in accordance with the rights and principles found in the EU Charter of Fundamental Rights].

The next step will be now to see the position of the European Parliament (the JURI Committee Rapporteur has yet to issue his report) ... Stay tuned!