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On June 4, 2021, the European Commission published its anticipated guidance on article 17 of Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market  (the “DCDSM”) through a Communication to the European Parliament and the Council.

Article 17 of the DCDSM elicited great controversy when it was being processed and the transposition process is no different. It is based on a considerable number of undefined legal concepts that must be specified, either in transposition or, more likely, by the courts in each specific case.

The Commission’s guidance is not legally binding but proves particularly useful to ensure that Member States transpose this article properly and consistently, fulfilling the Directive’s harmonization objective.

Article 17 of the DCDSM is a lex specialis. It overrides Directive 2001/29 because it introduces a concept of communication to the public that only applies to acts by online content-sharing service providers (“OCSSP”) and cannot be extended to other situations. It also overrides Directive 2000/31 by introducing a liability regime for intermediaries that only applies when an OCSSP offers the public access to copyright-protected works and other protected subject matter uploaded by its users.

Requirement for exemption from liability

This special liability regime, sometimes called “new safe harbor,” is built on a series of obligations for OCSSPs. Whether the OCSSP complies with those obligations determines whether it is liable for the “public communication” of the content uploaded by its users. OCSSPs are required to show that:

  • they have made best efforts to obtain an authorization;
  • in accordance with high industry standards of professional diligence, they have made best efforts to ensure the unavailability of specific works and other subject matter for which the rightholders have provided the relevant and necessary information; and in any event
  • they have acted expeditiously, upon receiving a sufficiently substantiated notice from the rightholders, to disable access to the notified works or other subject matter or remove them from their websites, and made “the greatest efforts” to prevent them being uploaded in the future in accordance with point b).

It should be noted that the translation of “greatest efforts” in the Spanish version of the directive is questionable, so we will use “best efforts.”  The transposing regulation could correct this.

Obligations as to results

The Commission emphasizes that the concept of best efforts is an autonomous notion of EU law and must be interpreted uniformly. The Commission believes that uniform interpretation must be based on a series of rules and principles outlining the scope of the OCSSP’s obligations and that can be summarized as follows:

  • OCSSPs merely provide access to content; they do not generate or upload it themselves and it is their users who do so. Therefore, there is a certain degree of estrangement between the content and the OCSSP.
  • The OCSSP’s obligations must always be interpreted based on the general principle of proportionality, as required under section 4 of article 17.
  • Compliance with the OCSSP’s obligations cannot be interpreted in a way that impairs other obligations that the Commission considers obligations as to results (not obligations of means or effort) and that must always prevail in case of conflict:

    – It must not affect legitimate interests (sections 1 and 9 of article 17). For example, it must not block content that does not infringe copyrights or similar rights, for instance, because an exception or limitation applies, because the content is in the public domain or does not meet the originality threshold.

    – It must not lead to a general monitoring obligations (section 8 of article 17).

On this basis, the Commission devotes specific sections of its guidance to each of the OCSSP’s obligations comprising the “new safe harbor.”

Best efforts to obtain an authorization

Regarding the obligation to make best efforts to obtain an authorization [section a) above], the Commission leaves the types of authorization open to individual (or collective, but always voluntary or, as appropriate, with extended effects) negotiation. To evidence best efforts, OCSSPs must negotiate proactively with the rightholders they can easily identify and locate (for example, owners of large catalogs and collective management entities) but they should not be expected to proactively search for rightholders who are not easily identifiable by any reasonable standard. One solution proposed by the Commission is to create registries of rightholders. Once located, if a rightholder is not prepared to reach an agreement or rejects a reasonable proposal from an OCSSP, the OCSSP is considered to have made best efforts. It should be kept in mind that collective management entities also have strict obligations to negotiate under Directive 2014/26. If the parties cannot reach an agreement, the Commission proposes considering voluntary mediation.

If an agreement is reached, the authorization will cover both the OCSSP and its users not acting on a commercial basis or whose activity does not generate significant revenues. According to the Commission, Member States should not set quantitative parameters of what “significant revenues” means and should analyze this on a case-by-case basis.

Best efforts to ensure the unavailability of works and subject matter

If the rightholders and the OCSSP do not reach an agreement despite the OCSSP’s best efforts, the other two obligations come into play  [sections b) and c) above].

According to the Commission, best efforts to ensure the unavailability of specific works and other subject matter [section b) above] are based on one premise: that the rightholders have provided the OCSSPs “relevant” and “necessary” information. These concepts depend on the specific case but the Commission gives some guidance: to be relevant, the information must at least be accurate as to the ownership of the rights; to be necessary, it must be aligned with what the OCSSP needs to implement its works and other subject matter detection systems, meaning the information provided by the rightholders must be aligned with the specific reality of each OCSSP.

Regarding the way in which to ensure the availability of the works and other provisions, the Commission remains technologically neutral and refers to the practices and technologies available in the industry at any given time (e.g., fingerprinting, watermarking, hashing, metadata), which it recognizes could evolve over time. The principle of proportionality means OCSSPs cannot be required to apply the most expensive or sophisticated solutions if that is disproportionate in the specific case.

The Commission includes an additional observation: despite making best efforts to ensure unavailability, it cannot be ruled out that the protected works and subject matter might be made available to the public. It is for this reason that the third step exists: the rightholders’ substantiated notice.

Notice and takedown

The notice and takedown system [section c) above, first part] remains highly important in practice. The DCDSM requires that the notice must be “sufficiently substantiated,” leading the Commission to recommend Member States to follow Commission Recommendation (EU) 2018/334 of 1 March 2018 on measures to effectively tackle illegal content online, which lists the elements that the notices should include, when transposing the Directive.

After the works and other subject matter have been identified through the notice and takedown system, OCSSPs must make best efforts to ensure they “stay down” [section c above, second part]. The Commission refers to section b) regarding what relevant and necessary information rightholders must provide to secure that “stay down,” as the information provided in the takedown notice is not sufficient.

Doubt may be raised in any stage of the process as to whether particular content must be taken down or not. That doubt can arise from the clash between result obligations (not to remove legal content, no general monitoring obligation) and the best efforts obligations establishing the “new safe harbor.”

In this clash, the Commission believes that only content that is clearly illegal should be blocked. Otherwise, it must remain online and be subject to an ex post human review if rightholders object. According to the Commission, to determine whether content is clearly illegal, indicators such as the duration and proportion of the pre-existing content used, the level of modification of that content and the creativity in the modification can be taken into account. Content for which rightholders have not issued a blocking instruction will not be considered clearly illegal; if, on the other hand, rightholders have justifiably designated content particularly relevant and time-sensitive (e.g., pre-released movies, live broadcasts), even if it is not clearly illegal in itself, an ex ante human review may be appropriate, if it is possible and proportionate.

Complaint mechanisms

If the content is blocked following this process, users can initiate a complaint and redress procedure with the OCSSP. In that procedure, rightholders must justify their position based on the users’ arguments. If the OCSSP’s decides to keep the content blocked, Member States must offer users an out-of-court dispute resolution procedure.

Pending transposition

No official text transposing article 17 in Spanish internal law has been published to date. We will see what impact the Commission’s guidance has on it, as well as the stance taken by the Court of Justice in the case brought by the Polish government taking issue with the best efforts obligations in sections 4.b) and 4.c) of article 17 (C-401/19).

Author: Álvaro Bourkaib

This post is also available in: Español

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alvaro.bourkaib@cuatrecasas.com