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Analysis of the EU Copyright Directive
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What does the vote in favour of the Copyright Directive mean for rightsholders? Taylor Wessing’s Christopher Benson interprets the news for IPG members
The European Union Parliament has voted in favour of the proposed Copyright Directive, designed to update the EU's copyright laws. The Directive, as amended by the Parliament, aims to clarify the scope of the communication to the public right, to reduce online copyright infringement, and to redress the balance of power between authors and publishers. The Directive has been polarising, pitting large parts of the tech industry against authors and rightsholders.

Article 3: Text and Data Mining

Article 3 of the Directive would allow research organisations to carry out text and data mining, defined as ‘any automated analytical technique which analyses works… in digital form in order to generate… patterns, trends and correlations’ using material to which they have lawful access only for the purposes of scientific research. This is a limited exception and does not extend to independent researchers or journalists.

Article 13: The Licence or Cooperate Regime

Article 13 addresses the liability of certain platforms for copyright infringing material uploaded by their users. Platforms ‘one of the main purposes of which is to store and give access… to a significant amount of [user uploaded copyright works and] which the service optimises and promotes for profit making purposes’ perform an act of communication to the public and therefore are required to conclude fair and appropriate licences with rightsholders. Where rightsholders do not wish to license platforms, they must ‘cooperate in good faith’ to ensure that unauthorised works are not made available on their services. Unlike the Commission's proposal, which referred to ‘effective content recognition technologies’, there is no detail on what this cooperation entails.
This regime will not apply if the platform is providing non-commercial services (such as an online encyclopaedia) or is a small-sized enterprise (fewer than 50 employees / turnover not more than EUR 10m) or a microenterprise (fewer than 10 employees and turnover not more than EUR 2m). The article is designed to alter the balance of digital copyright in favour of rightsholders away from these platforms. They will now have to make the commercial decision as to which content they wish to license and, where there are no licences, they will have to ‘cooperate’ to prevent infringements.

Articles 14 to 16: Fair and Proportionate Remuneration

The Parliament's version of the Directive also contains several proposals designed to ensure that authors are fairly remunerated for their work. Article 14 creates a ‘transparency’ obligation, which requires publishers to provide regular updates concerning how their works are being exploited, including on modes of exploitation, revenues generated and remuneration due. A new article -14 requires member states to ensure that authors receive ‘fair and proportionate remuneration’ for exploitation of their works.
Article 15 provides an adjustment mechanism so that authors can claim additional, appropriate and fair remuneration from their publishers if the agreed remuneration is disproportionately low in comparison to what the publisher is receiving. Article 16a, another addition by the Parliament, provides a right of revocation, a use it or lose it provision, whereby a creator may revoke an exclusive agreement if the work is not being exploited or if the publisher is not complying with Article 14. This right may only be used after a reasonable time and only upon written notification setting an appropriate deadline for the exploitation to restart.
These Articles are designed to adjust the balance between rightsholders and creators. They could change how the publishing industry operates its author contracts: licences may need to be renegotiated and new disclosure requirements may need to be implemented. Whilst the adjustment mechanism might not have too great an effect on royalty bearing agreements, fixed-fee contracts are more likely to be influenced. This could give authors a stronger negotiating position, although it is likely that existing arrangements already provide many of these types of arrangements.

Next Steps

Now that the Parliament has approved this version of the Directive, it must go to three-way negotiations between the Parliament, the EU Council and the EU Commission before facing a final vote of the Parliament, likely early next year. Given the differences in the three proposals, it is likely the text will be changed before then.
Whilst it is possible that this might be achieved pre-Brexit, EU Member States will be given at least a year, and the EU Parliament proposes two years, to implement the Directive into national law. If the transposition deadline is during the anticipated transition period—assuming that there is a withdrawal agreement—the new Copyright Directive will be implemented into UK law. However, if the deadline is after this period, or if there is no deal, there will be no obligation to do so. It will be up to the UK Parliament to make the political decision whether to introduce equivalent provisions to the Directive in UK law.
It will be important to continue to keep an eye on the progress of the Directive, all the while looking into existing licensing options and keeping in mind potential future renegotiations.
Christopher Benson is senior counsel at Taylor Wessing.

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