Tuesday, 11 September 2018


The European Parliament Will Vote on September 12th on the Future of the Copyright Directive

Later this week (Wednesday, September 12) the European Parliament will vote on the future of the proposed legislation of the Copyright in the Digital Single Market which aims to redress the imbalance between the creators and online platforms, requiring them to obtain licences for the works that they make available. In particular, Article 11 aims to protect the content of the newspapers from the ‘snippets’, where short extracts of the publications are used by tech companies. Whereas, Article 13 puts greater responsibility on websites and online platforms by requiring them to implement "effective and proportionate measures" to "prevent the availability of specific [unlicensed] works identified by rightsholders", act "expeditiously" to remove them, and take steps to prevent their reappearance.  The new provisions which have proven to be highly controversial, in effect will change the existing liability framework for the intermediaries and will remove the E-Commerce Directive exemptions.

Ahead of the vote both creators and technology industries have increased their lobbying and coverage either to voice their support for the current version of the proposal or to encourage Members of the European Parliament (MEP) to reject the text. Among supporters who back up, the changes are over 165 leading screenwriters and directors who signed the petition calling the European Parliament to adopt the latest version of Directive on Copyright in the Digital Single Market. In their view, the new law would introduce “an unwaivable right to proportionate remuneration for authors, collected directly from the on-demand platforms by the collective management organisations representing (…) the authors”. The reform of safe harbour has been also supported by the music industry, which believes that user-upload platforms have exploited the safe harbour provisions “in order to launch on-demand content platform without paying market rate royalties to content owners”.

The music industry has also been critical of the campaign launched before the previous vote in the European Parliament, accusing the tech sector of ‘astroturfing’, a term used to describe initiatives that arise from lobbying that are presented as if they are coming from individuals. The tech sector has been particularly active in articulating their dissatisfaction with the current version of the proposal as it challenges the current ‘safe harbour’ protections enjoyed by online platforms in the EU and leaves them with a possibility of being legally accountable for all copyright-infringing material appearing on their platforms. YouTube’s Chief Business Officer, Robert Kyncl, has said that “the ability for creators and artists to find fans and build a business online is now ‘at risk’”. He continued that the outcome of the new law would not only “stifle creative freedom” but it could also have “severe, negative consequences for the fans [and] communities” by undermining the creative economy. The requirement to implement strict upload filters would also result in increased spending on compliance expenditures. The tech industry believes that although the proposal mainly targets Big Tech, such as Google and Facebook which will be able to cover these costs, smaller internet companies will not be able to afford them. The recent amendment has seen narrowing of the category of service providers required to comply with Article 13, however, concerns still remain.

Apart from the tech sector, the proposal has also raised concern among advocates of privacy and free speech, since the provisions “pose a real threat to the fundamental right to free speech online”. Mike Morel from Open Rights Group in his blogpost wrote that “the proposals within Article 13 would change the way that the Internet works, from free and creative sharing to one where anything can be removed without warning, by computers. This is far too high a price to pay for copyright enforcement”.

With an intensive lobbying campaign from both sides, the outcome of the vote and the future of the EU’s approach towards copyright enforcement is hard to predict. The Commission has encouraged the Parliament to find a compromise since if the proposal would be rejected the whole package for the Digital Single Market may not be concluded before the elections to the European Parliament next May.

UPDATE: MEPs voted to pass Article 13 of the European Copyright Directive. The EU Copyright Directive will now go to trilogue with the European Union Council, Commission and Parliament to negotiate a final text for passage into law. UPDATE: Amended versions of Articles 11 and 13 were approved in the European Parliament. The final vote was 438 in favour and 226 against.  And the Directive still faces a final vote in January 2019. After that it will need to be implemented by individual EU member states, who could very well vary significantly in how they choose to interpret the Directive’s text. However, Robert Ashcroft, Chief Executive of PRS for Music, said: "The European Parliament today took a bold step forward to ensure a functioning and sustainable digital single market for creative content. "  Julia Reda of the Pirate Party described the outcome as “catastrophic.”   More on this here

US and Mexico Agree to Changes in Copyright Protection in the New Trade Deal

As we have covered previously in CopyKat, earlier this year the US, Mexico and Canada were trying to negotiate new terms of the NAFTA Agreement during several negotiation rounds. Now it appears that things will move ahead without Canada, which has not been happy with the several of the US proposals since the US and Mexico have confirmed that they had reached agreement on key elements of a new trade deal.

One of the issues on which the parties have agreed is an agreement to enforce against piracy and counterfeiting, and implementation of criminal measures against camcording in movie theaters, as well as cable and signal piracy. As written by the US Trade Representative, the parties also decided to “extend the minimum copyright term to 75 years for works like song performances and ensure that works such as digital music, movies, and books can be protected through current technologies such as technological protection measures and rights management information”. The statement, however, has caused confusion. Some entities understood that by this agreement the US Government has extended the current US term, which is author’s life + 70 years. TorrentFreak reports that “the USTR initially told reporters that it was indeed the plan to extend the copyright term to life plus 75 years, but according to Techdirt, this was later changed to a 75-year floor”. Therefore, 75 years is a minimum which includes the author’s life.

The parties have also negotiated the ‘safe harbour’ exemptions, which according to the content industry groups should be tightened, whereas in the view of internet law experts, the US safe harbour provisions should also be implemented in Mexico and Canada. The announcement of the US Trade Representative states that the safe harbour provisions are included and that the rightsholders will also be protected at the same time. However, no details were released yet. In response to the announcement, music industry players, including RIAA, BMI and ASCAP have issued a joint statement, in which they shared their concern “by the efforts of some to use the agreement to lock in flawed interpretations of pre-internet ‘safe harbors’ perpetuating the theft of American music, creating safe havens preventing successful enforcement efforts within our trading partner nations”.

Can an artist be sued for using a photo of him during his own concert? The answer is yes. Sir Rod Stewart has been sued by Julia McLellan for breach of copyright in the photo of him with his former girlfriend. The photo, taken in 1960s, was shown as a background on the screen during the BBC2's Live in Hyde Park: A Festival in a Day concert. Although the photo was taken by Christopher Southwood, Mrs McLellan claims she acquired the copyright in 2004. BBC reports that she has asserted that Mr Southwood gave Sir Rod a copy of the photograph as a keepsake but said: "That's very different from using it commercially." In response Sir Rod Stewart’s team has argued that the court should reject the claim calling it as ‘absurd’ and claiming that the level of damages of £9,999.99 is unreasonable “for a totally innocent, brief and incidental use by Sir Rod of a personal snapshot as part of another, more substantial, artistic work”. When the matter was sent to trial District Judge Stephen Hodges urged both parties to mediate as the case had "tears written all over it". However, as Mrs McLellan claims despite efforts to ask Sir Rod Stewart for a fee, such requests were repeatedly refused.

On the other side of the Atlantic, the U.S. Court of Appeals for the Ninth Circuit has upheld the decision to dismiss the case against the owner of the IP address for the copyright infringement. The case was brought by Cobbler Nevada who filed a suit against a John Doe defendant and identified an IP address. The IP address was owned by Mr Gonzales however it was accessible to residents and visitors of an adult care home operated by him. In its first claim, Cobbler Nevada has accused Mr Gonzales as a sole defendant for copyright infringement based on the fact that the IP address was used for infringing activities of downloading and distributing the movie and he has not responded to over 400 notices. The District Court in Oregon has dismissed the claim and held that there were no facts which would connect Mr Gonzales to the infringing activity and neither his failure to stops infringement would constitute active encouragement which is required for contributory infringement. While hearing the appeal, the Ninth Court found that the District Court has rightly decided to dismiss the case since the plaintiff has not shown that the defendant violated the plaintiff’s exclusive rights under the Copyright Act himself. On the element of contributory infringement, citing previous case law the Court held that such a claim requires intentional inducing or encouragement of direct infringement. Additionally, in its argument according to the Court, Cobbler Nevada would “effectively create an affirmative duty for private internet subscribers to actively monitor their internet service for infringement”. Imposition of such duty would put any individual who purchases internet service at high risk when he “shares access with a family member or roommate, or (…) is not technologically savvy enough to secure the connection to block access by a frugal neighbor.”

Disney has seen a success in its claim against the Redbox. A Federal Judge in California has granted a motion for a preliminary injunction that would require the operator of DVD rental kiosks to stop selling digital codes that consumers can redeem at online outlets to access copies of Black Panther and other movies. With an increasing number of customers using online streaming, as reported by Hollywood Reporter, Redbox in order to attract them disassembled Disney’s ‘Combo packs’ that included Blu-Ray, DVD and a digital code, offering consumers access to download the code at a lower price. The packaging has clearly stated that "Codes are not for sale or transfer”. In the first case related to Frozen and Star Wars, Judge Pergerson analysed the restrictive nature of the licence and the issue of first sale doctrine. The Judge having observed a problematic nature of such restriction ruled that it "implicates and conflicts with public policy enshrined in the Copyright Act, and constitutes copyright misuse”.

Following the decision Disney has changed the language of it terms changing the language that the redemption of the digital code requires prior acceptance of terms and conditions and that “the digital code contained in this package may not be sold separately”. The current wording constitutes now a ‘clickwrap’ agreement with required an affirmation from the buyer. In the view of Redbox, post-purchase restrictions are unenforceable.  Additionally, it has argued that it can only be liable for contributory infringement “if it had subjective intent to be a contributory infringer”. The Judge has disagreed with Redbox and held that “it is undisputed that Redbox has actual knowledge of the redemption sites’ clickwrap terms, which do appear to create a restrictive license”. Furthermore, Redbox did not obtain any ownership right to digital content when it purchased the combo packs. With the changes made by Disney, Judge Pergerson disagreed with Redbox’s defence of copyright misuse since now “downloaders no longer need affirm that they possess the physical discs, to which first sale rights would apply”. Redbox has interpreted that the injunction only applies to certain titles which contain the new terms, such as Black Panther and still asserts the right to sell the codes to the titles where the language has not been amended yet.

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