The legal nature of Article 17 of the Copyright DSM Directive, the (lack of) freedom of Member States, and why the German implementation proposal is not compatible with EU law

Article 17 of the Copyright DSM Directive
and the InfoSoc Directive:
a special relationship?

What is the legal nature of Article 17 of the Copyright DSM Directive? What is the relationship between that provision and the InfoSoc Directive?

These questions, which might look at first sight academic in both nature and significance, are actually of great practical relevance, including to determine the room for manoeuvre enjoyed by EU Member States during the (ongoing) national transposition phase.

In this sense, it is notable that the German Government has been moving from the idea that the freedom accorded under Article 17 is such that Member States are inter alia entitled to decide whether to introduce exceptions or limitations beyond both those specifically referred to in Article 17(7) and those listed in Article 5 of the InfoSoc Directive (see the proposed ‘de minimis’ remunerated ‘authorized use’ in §6 of the German Discussion Draft Act).

The different views

Recently, the Kluwer Copyright Blog has hosted some though-provoking analyses – both building on more extensive papers – suggesting either that approaches like the German one would not be correct (Nordemann and Waiblinger: here and here, and also here) or that, instead, they would be compatible with EU law (Husovec and Quintais: here and here, and also here). The latter would be because of the nature of Article 17 as either a special right or even a new sui generis right.

As argued by Husovec and Quintais, Article 17 could be a special right because – even if the scope of the acts it covers is within the pre-existing scope of the right of communication to the public in Article 3 InfoSoc Directive – it would follow a separate regime with its own particular rules. Article 17 could be even characterized as a new sui generis right in that it would be a wholly new right of communication to the public, which extends the concept beyond Article 3 InfoSoc Directive as interpreted by the Court of Justice of the European Union (CJEU). Either characterization, in turn, means that national legislatures would not be bound to comply with the list of exceptions and limitations in Article 5 of the InfoSoc Directive.

This commentary does not agree that Article 17 could be considered and, therefore, treated as a special or even a sui generis right. The reasons are detailed below and can be summarized as follows: Article 17 does neither provide a wholly special regime from that already envisaged under the pre-existing acquis nor does it provide a new right of communication/making available to the public.

What is special about Article 17

What is special – if anything – about Article 17 of the Copyright DSM Directive is neither the characterization that certain providers perform acts restricted by copyright (this is already the law under Article 3 of the InfoSoc Directive and CJEU case law) nor the notion of communication/making available to the public referred to therein.

Rather, what is special is the treatment that the Copyright DSM Directive reserves to the providers that qualify as online content sharing service providers (OCSSPs). To put it like Nordemann and Waiblinger, what is special about Article 17 is not the exploitation level, which is the same as inter alia Article 3 of the InfoSoc Directive. It is rather the liability level.

In this sense, it is not possible to contemplate any freedom of Member States beyond what both Article 17 of the Copyright DSM Directive and Article 5 of the InfoSoc Directive allow. As a result, exceptions or limitations – like the proposed German one – that go astray from what EU law contemplates would be incompatible with EU law if they were adopted.

The relationship between the Copyright DSM Directive and the InfoSoc Directive

Three key considerations may be provided in support of the conclusion above.

First, save for what is stated in Article 24 therein and what is provided by Article 17 itself, Article 1(2) of the Copyright DSM Directive lists the InfoSoc Directive among the EU legislation that is left intact and in no way affected by it.

Secondly, despite the reservations expressed by Advocate General Øe in his recent YouTube/Cyando Opinion [Katpost here], recital 64 is clear in saying that the Copyright DSM Directive clarifies that providers the meet the definition of OCSSP do perform copyright-restricted acts, including acts of communication/making available to the public. Of course, that recital does not in any way suggest – nor could it - that not only providers that fall under the notion of OCSSPs may perform acts of communication/making available to the public. As also correctly noted by Nordemann and Waiblinger, it is not that if one falls outside the scope of application of Article 17, there is no risk of liability whatsoever for the doing of acts of communication/making available to the public. Liability under other directives – including, but not necessarily limited to, Article 3 of the InfoSoc Directive – might be established.

Finally, still from recital 64 it appears that the concept of communication/making available to the public referred to – and not defined – in the Copyright DSM Directive does neither alter the corresponding notion in other EU legislation nor does it affect the application of Article 3 of the InfoSoc Directive (or, eg, Article 8 of the Rental and Lending Rights Directive). Indeed, the concept of communication/making available to the public in Article 17 is to be interpreted in accordance with the corresponding concept in inter alia the InfoSoc Directive. Article 3 of the InfoSoc Directive is not ‘suspended’. Settled case law indicates that identical concepts in different directives should be attributed the same meaning (for examples specifically in the copyright field, see the CJEU decisions in Luksan, FAPL, UsedSoft, Mc Fadden). It follows that the one in Article 17 is not a ‘sub-right’ of Article 3 of the InfoSoc Directive: it is the same right. Above all, attempts to provide a ‘special’ definition of communication/making available to the public – as is the case of, again, the German Discussion Draft and seemingly also the position of the Commission (which, it is worth recalling, is not the EU legislator) – are both unnecessary and incorrect.

All the above suggests that the one in Article 17 is neither a special nor a sui generis right: instead, it is a provision that is rooted within and depends on the InfoSoc Directive. To summarize, what is special about it is:

• the liability treatment envisaged therein for OCSSPs (including new OCSSPs);
• the default scope of the authorization obtained by OCSSPs also in respect of certain users of their services;
• the obligations of Member States with regard to the implementation of certain exceptions or limitations in Article 5 of the InfoSoc Directive insofar as activities covered by Article 17 are concerned. (In this sense, it would be incorrect to think that the optional character of the InfoSoc exceptions/limitations allowing quotation, criticism, review, and uses for the purpose of caricature, parody or pastiche has been turned by Article 17 into a generally mandatory one).

Based on a literal reading of Article 17, basic canons of legal interpretation and general principles of EU law (as also consistently applied in CJEU case law), what does not fall within the special liability regime of the provision shall remain subjected to the general regime, including Article 5 of the InfoSoc Directive.

The prescriptive language of Article 17 and the (lack of) freedom of Member States

Unlike other provisions in the Copyright DSM Directive, the language of Article 17 is highly prescriptive and does not leave Member States any particular freedom in the transposition phase.

With regard to exceptions and limitations, this means that Member States are, on the one hand, required to introduce of maintain national exceptions or limitations allowing quotation, criticism, review, and uses for the purpose of caricature, parody or pastiche in relation to activities within the scope of Article 17. A Member State does not enjoy the freedom to, say, introduce an exception for quotation but refrain from also introducing an exception for parody insofar as the activities referred to in Article 17 are concerned. At the same time, all those concepts (quotation, criticism, review, parody, caricature, pastiche) are autonomous concepts of EU law, which must be interpreted uniformly throughout the EU and in accordance with CJEU case law, without any possibility for Member States to alter the scope thereof.

On the other hand, Member States do not have the discretion to introduce any exceptions or limitations beyond those expressly allowed under Article 5 of the InfoSoc Directive, which maintain – save for Article 5(1) and what has been stated above – their optional character. In this sense, Article 25 of the Copyright DSM Directive means that the exceptions or limitations adopted in accordance with that directive do not trump the availability of exceptions and limitations under the InfoSoc Directive, not that exceptions and limitations to harmonized rights may be introduced beyond the InfoSoc Directive. So, for instance, a Member State may still rely on Article 5(3)(a) of the InfoSoc Directive to legislate in relation to text and data mining, without that possibility being precluded by the provisions in Articles 3 and 4 of the Copyright DSM Directive.

Just because you are not told you cannot do it, it does not mean you can

A reading that suggests that, since Article 17 does not expressly prohibit it, there is a freedom of Member States to introduce their own exceptions – even outside the catalogue of Article 5 of the InfoSoc Directive – cannot be endorsed. Such interpretation would be also contrary to the principle of EU preemption, the rationale of EU harmonization, and settled CJEU case law. Several examples could be cited in support.

If we consider the case of exclusive rights, including Article 3 of the InfoSoc Directive, it is not written anywhere in the text of that provision that Member States cannot alter the scope of the rights harmonized therein. Does it mean that they are entitled to do so? No. The CJEU spelled it out clearly in decisions such as Svensson and C More.

The same applies to exceptions and limitations. First, unless EU law expressly allows it, Member States are not entitled to introduce or maintain any copyright exceptions and limitations to harmonized rights beyond those allowed under EU law. A clearer confirmation of this could not be found than in the 2019 Grand Chamber decisions in Funke Medien and Spiegel Online. Secondly, unless EU law expressly leaves it to Member States to fine-tune the resulting national exceptions and limitations, it is not possible for them to alter the scope of the exceptions and limitations that they have decided to transpose into their national regimes. As early as in Padawan, the CJEU clarified that an interpretation according to which EU Member States that have introduced into their national law an exception pursuant to EU law are free to determine the limits in an inconsistent and un-harmonized manner, which may vary from one Member State to another, would be incompatible with the objective of EU harmonization.

Overall, those mentioned above are examples of how the principle of EU preemption works in practice and has found application in the copyright field. IP, including copyright, is an area of shared competence between the EU and its Member States. This means that, once the EU has exercised its competence in a certain field and adopted rules on a particular matter, EU Member States may no longer legislate in relation to the elements of the EU action in question and, in so doing, undermine the action of EU legislature. This is also the case of Article 17. Holding otherwise would defeat the very purpose of EU harmonization.

Conclusion

In conclusion, Article 17 of the Copyright DSM Directive is neither a special nor a sui generis right. The history of the provision, its actual content and objectives, the content of other provisions in the Copyright DSM Directive, general principles of EU law and settled CJEU case law all lead to the conclusion that the thing that is special about Article 17 is how it treats the liability of certain providers (OCSSPs) and certain users of their services. The concept of communication/making available to the public does not differ from that found in the rest of the acquis, nor do Member States have the freedom to determine what falls within the scope of such exclusive right and what does not. Furthermore, the wording and content of Article 17 is highly prescriptive. To employ language that the Court itself has used in the past in other areas of copyright, it is a measure of ‘full harmonisation’. It leaves Member States no freedom to alter the scope of the provision, including with regard to exceptions and limitations referred to therein (they are all autonomous concepts of EU law), and precludes the possibility to introduce exceptions and limitations beyond that directive and the rest of the acquis, including the InfoSoc Directive.