New technologies have dramatically changed the way we create, distribute and consume content. After a very long and laborious legislative process, the new Directive on copyright and related rights in the Digital Single Market (DSM Directive) was adopted on 17 May 2019. This Directive was enacted to update copyright rules to the emergence of digital technologies. There are five main innovations in the DSM Directive:
- The adoption of additional limitations to the exclusive rights of right-holders;
- The introduction of a new licensing mechanism for out-of-commerce works;
- The creation of a new press publishers right;
- The introduction of a new liability regime for online content-sharing service providers;
- The adoption of new rules to ensure a fair remuneration in exploitation contracts of authors and performers.
First, the DSM Directive introduces in articles 3 to 6, four new mandatory limitations to the exclusive rights of right-holders in order to adapt the legal framework to the digital uses of works. The four exceptions are: text and data mining for research purposes, text and data mining for other purposes, the digital use of works for teaching and educational purposes and the preservation of cultural heritage. These new exceptions are designed to facilitate the use of digital technologies in these areas.
Second, a new licensing mechanism for out-of-commerce works is established by article 8. Out-of-commerce works are works that are still under copyright protection but cannot be bought in the commerce. This provision makes it easier for cultural heritage institutions such as museums to make such works available to the public. If there is no representative collective management organization to grant this license, cultural heritage institutions enjoy a fall-back exception that allows them to make the work available for non-commercial purposes under certain conditions.
Third, an important novelty in the DSM Directive is the new related right for press publishers provided for in article 15. This new right covers the online use of press publications by information society service providers. Very short extracts of press publications (so-called “snippets”) and hyperlinking do not fall within the scope of this new right, and individual users are also not affected. The press publishers right only targets commercial uses of press publications. In light of the Reprobel case, article 16 also introduces the possibility for Member States to allow press publishers to claim fair compensation for the use of a work made under an exception or limitation when an author has transferred or licensed a right to that publisher.
Fourth, article 17 lays down a new liability regime for online content-sharing service providers. This is certainly the most controversial provision in the DSM Directive. Article 17’s main goal is to tackle the so-called “value gap”. The value gap is the difference between the profits that online content-sharing platforms gain from the creative content that is made accessible and the revenue that the rights-holders derive from their content being available.
Pursuant to this article, when platforms provide public access to copyright-protected content uploaded by users, they perform an act of communication to the public or making available to the public. They must, therefore, obtain authorization from the concerned rights-holders. If no licensing agreement is concluded, platforms will have to meet certain requirements to avoid liability. They will need to (i) make best efforts to obtain an authorization, (ii) make best efforts to ensure the unavailability of specific unauthorized content regarding which right-holders have provided the necessary and relevant information and (iii) act expeditiously to remove any unauthorized content following receipt of a sufficiently substantiated notice and make best efforts to prevent their future uploads.
As big companies such as YouTube are mostly targeted by this article, a special (and lighter) regime for small enterprises is established.
Finally, articles 18 and following address the fair remuneration in exploitation contracts of authors and performers. Article 18 sets out a principle of appropriate and proportionate remuneration for authors and performers who license or transfer their rights. According to article 19, authors and performers must receive appropriate information about the exploitation of their work from their licensors or transferors. Article 20 allows the authors and performers to fall back on a contract adjustment mechanism and to claim additional remuneration when the remuneration originally agreed becomes disproportionately low compared to the success of their work or performance. Article 21 introduces an alternative dispute resolution procedure for authors and performers. Creators have a right of revocation under article 22 allowing them to revoke their rights that have been licensed or transferred on an exclusive basis when there is a lack of exploitation of their works.
With the DSM Directive, the European Union modernizes copyright law and tries to adapt to the digital era. Member States have until 7 June 2021 to transpose the DSM Directive into their national legislation. Time (and national transpositions) will tell us if the right choices were made to reach the European Union’s ambitious goals.
Please contact Pierre de Bandt or Karel Janssens for further information about this topic and/or for general legal advice relating to copyright law.