Article 17 implementation: German proposal strengthens the right of user and creators

Rechtvaardigheid (Justitia)
A more balanced way to implement Article 17
Licentie

It speaks to the complexity of the discussion about Article 17 of the Copyright in the Digital Single Market directive that the new German implementation proposal is at the same time a broken promise and something that sets a positive example for the other Member States. The measures to implement Article 17 unveiled today as part of a wider proposal for implementing a second set of provisions of the directive (which we will discuss in a follow up post), do not manage to keep the earlier promise to avoid the use of upload filters and instead embrace their use within certain limits. This will almost certainly be a major point of political controversy within Germany.

But seen from the other 26 EU member states this broken promise will likely be overshadowed by the fact that the German government is setting an example for fully using the room for legislative discretion left by the directive to include a number of significant protections for users together with measures aimed at ensuring that individual creators directly benefit from the new provisions. In doing so the German implementation proposal is the first proposal that does not limit itself to (selectively) transposing the provisions of the directive into national law. As a result of this, the German implementation proposal is much closer to the legislative compromise struck by Article 17 than any of the other implementations that we have seen so far.

The implementation proposal (which represents the position of the Ministry of Justice and still needs to be endorsed by the government as a whole) proposes to implement Article 17 in a new law that is separate from the main Copyright Act. This new “Gesetz über die urheberrechtliche Verantwortlichkeit von Diensteanbietern für das Teilen von Online-Inhalten” (UrhDaG) follows the overall logic of Article 17 in making OCSSPs first liable for infringements by their users and then requiring them to either license or take measures to prevent the availability of infringing works to limit their liability.

To ensure the balance of the resulting provision the proposal adds a number of provisions aimed at safeguarding the ability of users to freely share and receive information and for creators to be remunerated for such uses of their works. These measures include:

  • A new exception covering Parody, Caricature and Pastiche in article § 51a of the Copyright Act. This new exception is not subject to remuneration.
  • An entirely new de minimis exception covering minor uses of protected works, which would allow the noncommercial use of 20 seconds of film, 20 seconds of audio, 1000 characters of text or one image in uploaded works even if their use is not covered by any of the existing exceptions. This de minimis exception is subject to a remuneration requirement to be paid by OCSSPs via collective management organisations and applies when the OCSSPs were not able to obtain permission from rightholders to cover those uses. (§ 6 UrhDaG)
  • In addition, users must be able to “pre-flag” uploads that make use of protected works covered by an exception, that are openly licensed or free from copyright. Works that are “pre-flagged” and not obviously infringing cannot be automatically filtered and may only be removed after human review by the rightholders (in the meanwhile they must remain online).

It is important to note (and this is where the aforementioned promise is broken) that the use of automatic upload filters will remain possible for works that are not pre-flagged by their uploaders and which exceed the limits established by the de minimis exception. In how far this such upload filters will become the new norm will largely depend on the breadth of licensing agreements that will be reached between platforms and rightholders (for example via extended collective licensing).

Another welcome addition is the inclusion of provisions dealing with liability for over-blocking and false copyright claims. § 6 UrhDaG specifies that rightholders that repeatedly request to block works they don’t own (including freely licensed and public domain works) can be excluded from the ability to request further removals for an “adequate duration”. In addition such “pretence rightholders” would also be liable for damage caused to the platform and/or the uploader. Furthermore, OCSSPs that repeatedly over-block user uploads can be sued for injunctive relief by consumer organisations. Similarly, uploaders who repeatedly incorrectly pre-flag their uploads as being legitimate, can also be excluded from the ability to pre-flag.

These measures are an important step towards balancing the incentives for platforms and rightholders not to over-block. While the directive did not include any sanctions for over-blocking, platforms now have a clear legal incentive to respect users rights.

Another important difference from what we have seen in other implementation proposals can be found in the definition of the services that would be affected by the new provisions. In line with what we and many others had been advocating for (and what is clearly stated in Recital 62 of the Directive) the proposal contains a narrowly targeted definition of OCSSPs. In addition to the definition in Article 2(6) of the directive the German law also clarifies that platforms are only affected if they also “compete with online service providers for the same target audience”. This would create a lot of legal certainty for a number of platforms that have never been the intended targets of Article 17 and substantially limit the number of platforms that would be required to implement filters.

A final welcome addition to the text of the directive is the fact that it requires platforms to directly remunerate creators (via collective management organisations). Under the proposals creators would get a direct remuneration claim for the use of their works on OCSSPs that also applies when they have granted the right of communication to the public for their works to a third party such as a publisher or a record label. This would ensure that Article 17 will actually achieve its stated objective of improving the income position of (European) creators. 

All in all the German proposal points in a different direction than all other proposals that we have seen to date. It is very welcome for the proposal to focus on the rights of both users and individual creators and to limit the number of platforms affected by the new requirements. This must be seen as an effort to counter the risk that Article 17 ends up strengthening the position of large platforms and large rightholders at the expense of smaller players and the users and creators at the edges of the system. 

It is also a very encouraging sign that the proposal takes up a number of suggestions that have been brought forward by users rights organisations (including COMMUNIA) and by experts from the academic community. The ability for users to pre-flag legal uses, the fact that pre-flagged uploads need to stay available until human review, the introduction of a de minimis exception and the fact that abuse of filtering measures would carry meaningful sanctions are clearly mirroring some of our previous contributions to the debate. It is a welcome surprise that the German government has taken them up. 

We will follow up this initial analysis with more in depth analysis of the Article 17 provisions as well as the other parts of the DSM directive covered by today’s proposal. We will also organize an edition of our COMMUNIA salon to discuss the proposal during the next week. Stay tuned for more details on this. 

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