EU Presidency proposes compromise on draft Directive on collective management of copyright

The proposal for a Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market is now awaiting first (and single) reading by the European Parliament (indicatively foreseen in November). According to the European ordinary legislative process (the Directive proposal is following the ordinary codecision procedure), the Parliament is asked for its opinion on the proposed legislation before the Council adopts it. In the framework of the inter-institutional dialogue, the Conciliation Committee of the Council of the European Union issued a compromise text (aka ‘Presidency Compromise’) aiming at reconciling the positions of the EP and of the Council.

The Compromise text was adopted in early April (to our knowledge, it has not been widely circulated but has been made available online by the Austrian Parliament). The adoption of this text at a rather early stage of the legislative procedure, suggests that a possibility of a conclusion at first reading exists. However, it does not take account of the draft reports released by the Parliamentary Committees a few weeks after. As we highlighted earlier, the opinion drafted by MEP Helga Trüpel for the CULT Committee shares some core arguments with Communia’s policy. The deadline for tabling amendments on the leading Committee’s report (JURI) is June 6th.

It is thus interesting to look more closely at the content of the Compromise text to have a better idea about what the Council would be ready to vote for at the present time of the procedure (more than the Parliament insofar as the guessing about the final parliamentary vote is very uncertain at this stage of the procedure), although new matters of discussion may arise during the amendment and ‘lobbying’ period.

Let’s focus on the main issues raised in our policy paper:

Transparency

From Communia’s perspective, the general availability of information about membership and represented repertoire is essential. The Presidency proposal considers, like the Commission, that CMOs should only be held liable for a limited obligation of information, ignoring the specific needs of a wide-range of users. As highlighted in our policy paper, users are not properly considered, whereas the categories of beneficiaries of such access to information shall be much wider than those listed in Article 18. The rearranging of the corresponding provisions (namely the removal of Art. 18.2) by the Presidency does not improve the flaws of what was originally proposed by the Commission.

It is regrettable that the Directive proposal does not properly distinguish between the needs of users and the needs of the public (as broadly stated under Article 19: ‘Disclosure of information to the public‘). As we pointed out, users have specific needs but shall also be understood widely, beyond the usual contractual parties of CMOs, so that other potential licensees, including developers or any other persons or entities needing to contract with a CMO, can rely on accurate licensing information. ‘Users’ shall also be understood by CMOs as future contractors (even if still part of the ‘public’). This being said, the Compromise text aptly suggests adding standard licensing contracts and standard applicable tariffs as a category information subject to public disclosure (Art. 19).

Open content licenses and ability of rightholders to opt-out of collective management

Although only in a (legally non-binding) Recital, the freedom of rightholders to dispose of their works is expressly stated:

Recital 9: “The rights, categories of rights or types of works and other subject matter managed by the collective management organisation should be determined by the general assembly of members, without prejudicing the right of the rightholder to make such a choice under this Directive. It is important that the rights and categories of rights are determined in a manner that maintains a balance between the freedom of rightholders to dispose of their works and other subject matter and the ability of the organisation to effectively manage the rights” (emphasis ours).

However, the choice of rightholders is bound by what is allowed under this Directive, which is … not much. Indeed, the wording of Article 5 of the proposed Directive on the rights of rightholders, notably as regards their ability to terminate the mandate for the management of their rights with a collecting society or to withdraw from a collecting society is still the same as what was proposed by the Commission. As already highlighted in our policy paper (p. 5), the Commission considers that the freedom of choice of rightholders does not concern their works – which would have allowed them to opt-out of collective management and choose alternative licensing models like open content licenses – but only relates to their ‘rights, categories of rights or types of works and other subject matter‘.

As written in the Commission’s proposal, ‘the Directive should not prejudice the possibility for rightholders to manage their rights individually, including for non-commercial uses‘ (end of Recital 9). However, it is not said how this shall concretely take place for CMO members, whose ‘opting-out’ modalities are still unclear. The strategy that collecting societies have to devise regarding open content licenses, in the face of the growing trend of non-commercial uses and of rightholders’ will to grant non-exclusive licenses on their works, is still unclarified, if not inexistent.

It is worth mentioning that the ability for CMOs members to opt for open content licenses has been recently proposed in France in a national policymaking instrument (the Lescure Report, released earlier this week: see our comments), which acknowledges the importance of allowing an harmonious legal interaction between open licenses and collective management.

Moreover, the said ‘balance’ between the free choice of rightholders for the management of their works ‘and the ability of the [collective management] organization to effectively manage the rights‘ (see Recital 9 cited above) instills the idea that CMOs may claim for the necessity for them to manage all rights for the sake of the certainty of their repertoire. The respect of this ‘balance’ may give rise to litigation between CMOs and their members, thus potentially calling for arbitration (perhaps from the EU Court of Justice which is used to decide on other kinds of ‘balances’ inside the copyright law system).

Although unchanged as regards the ability of rightholders to ‘opt-out’ from collective management, the language of Article 5 now suggests imposing on CMOs an obligation to contract with rightholders. This is most likely motivated by the concerns expressed by some (including the European Parliament) with respect to cultural diversity, to prevent collecting societies from refusing to administer rights in certain works solely on grounds of their cultural origin or limited economic value. Such obligation for CMOs is a good thing for the certainty of repertoire towards users, provided that it is complemented by an obligation to keep track of all the information about the related rights and rightholders, and by an obligation to disclose it accurately to all users and potential users (which is presently not the case as underlined above).

Furthermore, the Compromise proposes to add a reference to ‘the records kept by a collective management organisation (which) should allow for the identification and location of its members and rightholders‘ (Recital 10). If this is not to resolve the ‘orphan works’ issue, it has nonetheless the advantage of setting the responsibility of collecting societies to provide information about the identification and the location of their members.

EU policymaking on collective management of copyright has mainly focused on the need of commercial (music) services for simplified and multi-territorial licenses, which has contributed to the lack of vision on non-commercial uses. Let’s hope that the draft CULT Committee report will help the Parliament adjust its amending proposals on the Directive proposal.

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