Towards the national transpositions of the DSM Directive: various techniques to ... do as you please

Beach + sunbathing + copyright
= the perfect summer

As readers with an interest in EU copyright are well aware, EU Member States had time until 7 June to transpose the DSM Directive 2019/790 [Katposts here] into their own national laws.

With a few exceptions [see Communia tracker here], because of a number of reasons - ranging from COVID to the delayed Article 17 Commission's guidance [Katpost here] to some important pending rulings of the Court of Justice of the European Union (CJEU), the majority of EU Member States missed this deadline.

This said, based on what is already available, it is apparent that the provisions that the EU legislature adopted in 2019 to establish a ‘Digital Single Market’ will be implemented in different – if not altogether creative – ways across the EU.

It is true that there are provisions in the Directive that leave significant discretion to Member States. Such discretion ranges from the very option to do something in the first place to shaping the actual content of rights and rules. An example of the former is the possibility, under Article 12, to provide for collective licensing with an extended effect. Examples of the latter are the articles on authors’ and performers’ contracts (Articles 18 to 23).

This said, there are also provisions in the Directive that do not openly envisage such broad discretion.

Yet, where draft or adopted transposition laws have been issued, also in respect of those, Member States have been moving in different directions. This, in part, is due to the objective ambiguity of some of the Directive’s provisions or part thereof. In more significant part, however, this attitude is linked to a misplaced idea of great freedom enjoyed by national legislatures.

I will consider the Italian case to illustrate all this, in particular the latter aspect.

On 5 August 2021 the Italian Council of Ministers, upon proposal from the Prime Minister and the Minister of Culture, adopted the draft Legislative Decree that would transpose the Directive into Italian law. The remaining of the legislative process is likely to be a formality. The Legislative Decree is expected to be formally adopted shortly after the end of the summer recess/early Autumn 2021.

Most of the Italian draft law closely resembles the text of the Directive, but there are notable exceptions.

The proposed Italian press publishers’ right

One of most visible examples of the above is the proposed Italian transposition of Article 15 (the press publishers’ right).

It should be noted at the outset that, under Italian copyright law as pre-dating the Directive, press publishers were already in a better position than some of their EU counterparts. The Italian Copyright Act, in fact, provides that the publisher of a collective work, as is a newspaper, enjoys the right to exploit such work.

This said, the proposed Italian press publishers’ right looks rather different from Article 15 of the Directive. Correctly, some commentators have considered the proposed Italian approach out-of-sync with what the Directive allows.

‘Very short extracts’

As a first point, Article 43-bis of the Italian Copyright Act would provide a statutory definition of ‘very short extracts’ (that is extracts of a press publication that are outside the scope of protection of the right): any part of a press publication which does not remove the need for consultation of the press publication in its entirety would be regarded as ‘very short’.

Such definition does not feature in the text of the Directive. Whether something is or not a very short extract should be left to a case-by-case assessment. The European Commission correctly reasoned along these lines, though with reference to Article 17.

Obligation to negotiate licences

As a second, and possibly more concerning, point the draft Italian provision would introduce an obligation – on the side of both information society service providers (ISSPs) and press publishers – to negotiate a licensing agreement.

It seems that the intention here is to avoid replicating situations already occurred in some Member States (notably Germany and France), that is that dominant providers require press publishers to waive their right to be indexed in their services.

Standing this rationale, the ultimate result might be however paradoxical: press publishers would not enjoy a preventive right to authorize the use of their press publications; instead, they would be required to negotiate a licence with relevant ISSPs and the use of press publications could take place irrespective of whether a licence has been concluded.

Typical Italian summer

The draft Italian law speaks, in fact, of a ‘fair compensation’ (equo compenso) to which press publishers would be entitled and the possibility for the Italian Communication Authority AGCOM (whose copyright-related competences will be significantly increased further to the transposition of the Directive) to determine the amount of such fair compensation in the event that no agreement is reached between the parties.

In addition, during the negotiation of a licence, ISSPs shall not limit the visibility of their press publications. The unjustified limitation of such content visibility could be considered contrary to the obligation to negotiate a contract in good faith under the Italian Civil Code. While such obligation applies to both rightholders and ISSPs, it is also to be considered that the very content of press publications – that is news – holds most of its value in the immediate aftermath of its release. How the proposed prohibition to limit content visibility would thus protect press publishers is unclear.

The proposed obligations of OCSSPs

Insofar as the Italian transposition of Article 17 is concerned, in line with the Italian language version of the Directive, the draft law (Article 102-septies) refers to the concept of ‘best efforts’ as ‘massimi sforzi’ [Katpost here]. To be fair: if there is an issue of meaning (it might be argued that massimi sforzi is not a literal translation of 'best efforts'), that is not something that has arisen now; it rather dates back to when the various language versions of the Directive were finalized.

What is more surprising is the part of the draft law that would transpose Article 17(7). The Directive provides that:

The cooperation between online content-sharing service providers and rightholders shall not result in the prevention of the availability of works or other subject matter uploaded by users, which do not infringe copyright and related rights, including where such works or other subject matter are covered by an exception or limitation.

The proposed Italian provision (Article 102-nonies) states that such cooperation “is without prejudice” (non pregiudica) to the availability of lawful content.

The linguistic choice is interesting.

The Directive’s wording establishes a precise obligation of result (non deve impedire), while the draft Italian law seems to suggest a milder duty (if a duty at all), in the sense that the availability of exceptions and limitations under Article 17(7) is not per se compromised by the cooperation between rightholders and online content sharing service providers (OCSSPs).

Finally, unlike other Member States, the Italian solution is to allow ex ante blocking of lawful content: Article 102-decies expressly provides that. The Directive is silent on the issue of ex ante / ex post blocking, so a solution adopting ex ante blocking is not necessarily unavailable to Member States, provided that other requirements are also fulfilled (including that the complaint and redress mechanism is expeditious).

Text and data mining: reservation not necessarily appropriate

The Directive introduces two text and data mining (TDM) exceptions: one aimed at research organizations and cultural heritage institutions (Article 3) and one without particular restrictions in terms of beneficiaries (Article 4).

Unlike Article 3, the exception or limitation under Article 4 shall not be available where rightholders have expressly reserved the use of their works and other protected subject matter “in an appropriate manner”. Recital 18 in the Directive distinguishes between two different scenarios:

• In the case of content that has been made publicly available online, it should only be considered appropriate to reserve the rights in Article 4(1) by the use of machine-readable means, including metadata and terms and conditions of a website or a service. In any event, other uses shall not be affected by the reservation of rights for the purposes of TDM;
• In other cases, it appears that it might be appropriate to reserve the rights by other means, such as contractual agreements or a unilateral declaration. However, as I also wrote here, in light of the recent CJEU judgment in VG Bild-Kunst [here] it appears preferable to adopt a corrected reading of the provision, in the sense that reservation by rightholders shall be only possible if done by adopting effective technological measures within the meaning of Article 6(1) and (3) of the InfoSoc Directive.

The proposed Italian provision does not do any of the above. The draft Article 70-quarter simply allows rightholders to “expressly reserve” the use of their works or protected subject matter, without the need for such reservation to be done “in an appropriate manner”. This is not a faithful reproduction of the language of the Directive, nor of the scope of the exception/limitation under its Article 4.

Conclusion

Those discussed above are just some examples that illustrate, not just that the devil is indeed always in the details, but also that there may be different techniques to shape or – more appropriately – re-shape the content of rules adopted at the EU level. They include:

• Adding layers that do not exist at the EU level and are actually likely to be contrary to what EU law allows Member States to do (for example, the proposed transposition of Article 15);
• Using language that diverges from that of the same language version of the Directive (for example, the proposed transposition of Article 17(7));
• Omitting to transpose substantial parts of a provision (for example, the reservation modalities under Article 4).

Are national legislatures entirely to blame for this? In fairness, not.

After all, it is the very instrument chosen at the EU level to realise a Digital Single Market for copyright and related rights – that is an EU directive instead of a regulation – that lends its side to these tricks, threats and opportunities (depending on the side you’re on!) during the national transposition phase.