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IP/Entertainment Case Law Updates

EU Set to Make Sweeping Copyright Changes

The European Union is set to vote to confirm sweeping changes to its Copyright Directive in the coming weeks.  If the current proposal is confirmed, which it likely will, among other things, the Copyright Directive would (a) impose direct copyright infringement liability on large online platforms like Facebook and Google for user generated content unless the platform demonstrates, among other things, that it has technology in place to ensure that infringing materials are not uploaded (e.g., through upload filters), and (b) require aggregator websites to pay publishers to show snippets of news stories from those publishers.  Once confirmed, the member states will have 24 months to pass legislation to implement the law.

Specifically, Article 13 of the Directive provides that an online platform is directly liable for infringement based on UGC, unless it can show that (a) it has authorization for the content or (b) that it made “best efforts” to obtain the authorization, that it made, “in accordance with high industry standards of professional diligence, best efforts” to ensure that the allegedly infringing materials are made unavailable, and that it “acted expeditiously” upon receiving takedown notices and made “best efforts” to prevent any future uploads of the notified works.

Aware that this places a burden on the online platforms, the Directive provides for a soft compliance for smaller platforms.  Compliance with these obligations are to be determined “in light of the principle of proportionality,” taking into account “the type, the audience and the size of services and the type of works or other subject matter uploaded by the users,” and “the availability of suitable and effective means and their cost for service providers.” 

Thus, the Directive provides that a website that has been operating in the Union for less than 3 years and make less than EUR 10 million a year is exempt from liability if it can show that it made “best efforts” to obtain authorization, and acted “expeditiously” upon receiving takedown notices to remove the notified works.  However, if such a website has monthly unique visitors exceeding 5 million, the website must also demonstrate that it has made “best efforts” to prevent further uploads of the notified works and other subject matter for which the rights holders have provided “relevant and necessary information.”

The Directive also keeps in place full exemptions from liability for quotation, criticism or review, and for use for the purpose of caricature, parody or pastiche.  Moreover, the Directive specifically exempts from its definition of online services, services which have a main purpose other than enabling users to upload and share a large amount of copyright protected content, including, for instance, electronic communication services, cyberlockers, online retail marketplaces, open source software development and sharing platforms, and not-for-profit scientific and educational repositories and encyclopedias.

Article 11 grants a copyright to publishers of press publications for the online use of their publications by “information society service providers.”  This protection lasts for 2 years, calculated from the first day of January of the year following the date of publication.  

Exempt from liability are private or non-commercial uses carried out by individual users.  As stated in the recitals, this Article is specifically targeting “news aggregators” and “media monitoring services.”  

Article 11 also carves out exemptions for hyperlinking, “uses of individual words or very short extracts” of a publication, though it does not define what “short” means.

Legislative update prepared by Linna Chen