[Guest post] De minimis uses and the German implementation of Art 17 DSM Directive

As readers may know, Germany passed their implementation of Article 17 of the Digital Single Market (DSM) Copyright Directive on Thursday 20th May 2021. This new copyright legislation is controversial and has potentially dramatic implications for copyright users, rightsholders and platforms. As such, I am extremely grateful to our friend Ansgar Kaiser, who is a Junior Research Fellow at Max Planck Institute for Innovation and Competition, who has kindly provided us with this detailed explainer of just what exactly it all means: 

On May 20th 2021, the German Parliament passed a bill containing the most relevant copyright reform in years: the implementation of Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market (DSM Directive) into German law. Many important copyright topics including platform liability, text and data mining, caricature, pastiche, parody, contractual provisions and new related rights for publishers were addressed.

Already at the European level, the Directive was controversially debated by stakeholders, including citizens, politicians and researchers. The implementation into German law was, and still is, the equally debated sequel on a national level. From the beginning, the most controversial topic was the use of copyright protected works on certain internet platforms, now regulated in Art. 17 DSM Directive.

Art. 17 DSM Directive is a long and complicated rule. Confronted with this complexity, the German legislator decided to separate its implementation from the traditional copyright code and instead drafted a new act, the “Gesetz über die urheberrechtliche Verantwortlichkeit von Diensteanbietern für das Teilen von Online-Inhalten” (UrhDaG).

You can go your own waaayyy
Image: The Kitten Covers

On the one hand, the UrhDaG states that an online content-sharing service provider performs an act of communication to the public when it gives the public access to copyright-protected works uploaded by its users. On the other hand, the law tries to realise certain interests of the content-sharing service providers and the users. This is of course what Art. 17 DSM Directive provides and all EU member states shall do in one way or another. However, by implementing this particular structure, the German legislator created an individual path and thus formed an innovative new copyright regulation.

From the very beginning of the German legislative process, the legislator wanted to permit so called “de minimis uses” on online platforms. The idea being that such uses would not fall under the scope of automatic filter-technics. This was intensely debated in academia. Moreover, famous German musicians like Rammstein, Peter Maffay, Die Toten Hosen, and over 1200 others published an open letter, trying to stop the parliament from implementing a de minimis rule. In the end, their efforts did not reach the goal and a de minimis rule was enacted.

§ 10 UrhDaG

Sec. 10 UrhDaG itself has no direct impact on the legality of de minimis uses. In the first drafts, the norm seemed to be an exception and limitation (Sec. 6 of the first UrhDaG draft from June 24th 2020). A lot of stakeholders and researchers had reasonable doubts about whether this was compatible with EU law. In particular, recital 32 of the Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (InfoSoc Directive), which clarifies that exceptions and limitations are limited to the ones listed in Art. 5 InfoSoc Directive, was put forward to hinder national legislators to create an exception for de minimis uses. Other voices came to the conclusion that there would be no violation of European law, since Art. 17 DSM Directive (and its implementation) is, in their view, not bound to the requirements of the InfoSoc Directive. [Katpost here.]

The debate, focused on this German provision, must be seen in a bigger context, namely if Art. 17 DSM Directive is a sui generis regime or connected to Art. 3 InfoSoc Directive (and therefore bound to recital 32 InfoSoc Directive). The arguments put forward from both sides are mostly grounded on a different reading of the wording of Art. 17 DSM Directive.

However, this topic seemed to be too hot for the German legislator. It gave up its plan to create an “exception” and came up with another idea. De minimis uses are now part of a procedural regulation which is based on a presumption:

§ 9 UrhDaG

In the end, the scope of application of de minimis uses is reduced. Firstly, de minimis uses are only one possible part of a presumption for legitimate uses. A combination of less than half of a work of a third party (or several works of third parties) with other content is also required. Secondly, this presumption for legitimate uses is only valid until it is clarified in a possible complaint procedure.

But until then, online content-sharing service providers are not restricted from communicating copyright protected content listed in Sec. 9 UrhDaG to the public. The wording even says that the providers shall communicate the uploaded content to the public. Any blocking request from the right holder must not be exercised. It should also not be forgotten that the uses in Sec. 9 UrhDaG are still to be remunerated, Sec. 12(1) UrhDaG.

This construct, which enables de minimis uses as a part of user-generated content, strikes for balancing the interests which are naturally affected when using a copyright protected work and which are obviously even more relevant against the backdrop of frequent uses on internet platforms. On the one hand, the norm aims to avoid the so called “value gap” by granting a remuneration to the right holders. On the other hand, the new rule considers the interests of users and providers in the act of communication. In this vein, the German legislator simply aims at realising the proportionality principle laid down in Art. 17(5) DSM Directive as well as the demand to avoid “overblocking” in Art. 17(7) sub para.1 DSM Directive.

Sec. 9 UrhDaG in combination with Sec. 10 UrhDaG is the (preliminary) end of a long and heated debate on de minimis uses of copyright protected works on internet platforms. The law is expected to come into force on August 1st 2021. It will be interesting to see how courts deal with this rule, what impact it will have on balancing user interests and authors’ remuneration, and whether this implementation can even serve as a model for a further development of platform liability. Thus, it will not get boring!