On the other hand, we have the German approach that proposes to implement Article 17 via a separate “copyright-service-provider law” (“Urgeberrechts Diensteanbieter Gesetz”) that substantially departs from the language in an attempt to capture the structure and effet utile of the directive.

The German implementation proposal focuses on using the room for legislative discretion left by the directive to give practical meaning to the abstract requirements to protect user rights contained in the directive. It also adds measures aimed at ensuring that individual creators directly benefit from the new rules. As a result, the German implementation proposal is much closer to the legislative compromise struck by Article 17 than any of the more literal implementation proposals that have emerged so far.

Over the past few months, the German implementation proposal has come under intense pressure from exclusive rightsholders and some platforms who argue that the proposed approach does not adequately reflect the provisions of Article 17. Besides, rightsholders have also claimed that it violates national and international copyright law in multiple ways. A central argument of the opponents of the German implementation proposal is the claim that it strays too far from the text of the directive.

Given this background, it is interesting to see the first Austrian implementation proposal (that was circulated to stakeholders for feedback earlier this week) take a middle road between the two existing approaches. The Austrian implementation proposal does integrate the provisions from Article 17 directly into the text of the existing Austrian copyright act, thus deviating from the structure of Article 17, but mostly stays very close to the text of the directive. At the same time, it takes up key elements first introduced in the German approach: The non-waivable direct remuneration right for authors and performers, the protection of minor uses from automated filters, the ability for users to flag uploads as legitimate, and the ability for users’ organizations to act against platforms that engage in structural over-blocking. The result is a proposal that (similar to the German one) focuses on strengthening the position of creators and users, instead of leaving it up to platforms and large corporate rightsholders to set their own rules.

The Austrian proposal in more detail.

So let’s look at the Austrian proposal in more detail: Similar to the German proposal it introduces a direct remuneration right for authors and performers that will ensure that independent of existing contractual arrangements with publishers and other intermediaries, creators will be remunerated for the use of their works on platforms. As in the German proposal, this direct remuneration right can only be exercised via collective management organizations, which means that it will primarily benefit creators in sectors with existing collective management structures. In the German discussion this direct remuneration right has been strongly criticized by both platforms, who would prefer not to pay for obvious reasons) and by intermediary rightsholders, who prefer to control how much (or rather little) of their licensing revenue should go to the actual creators. Given that the need to make sure that creators benefit from the use of their works on platforms was the main argument for getting Article 17 in the first place, the fact that rightsholders are now trying to undermine the proposed direct remuneration right is more than a little bit hypocritical. 

On the other side of the balance, there are three main interventions that strengthen user rights. Where the German Ministry of Justice proposed a new “minor uses” exception that would ensure that minor uses of existing works cannot be automatically be blocked, the Austrian proposal takes a slightly different approach. It borrows the definition of “minor uses” from the German proposal (less than 20 seconds of audio or video, less than 1000 characters of text, images smaller than 250KB), but instead of making them subject to an exception, the Austrian proposal specifies in § 89a (1) that automatically blocking these “minor uses” without human review is not proportionate (and therefore platforms are not allowed to do this). This is an interesting use of the proportionality requirement from Article 17(5) of the directive that is based on the correct insight that measures (such as automated blocking) employed by platforms must be proportionate concerning all the objectives contained in Article 17 including the requirement not to block legitimate uses in 17(7) and 17(9). In the explanatory memorandum, the Ministry notes that “It is precisely the use of such small excerpts that will often be covered by an exception or limitation and thus be permitted”. While this may be a less controversial approach, authors and performers would be better off in the German proposal: By legalizing minor uses under an exception, the German proposal would create the possibility that they receive compensation for those uses.

Excluding minor use from automated filtering is one of two measures to ensure that the Austrian proposal complies with Article 17(7). In addition to this, the proposal also requires platforms to provide users with the ability to flag uploads as covered by an exception. § 89b (7) specifies that platforms must display uploads flagged by their uses as long as the legal nature of the use is obvious to the platform. While welcome in principle, this flagging mechanism is more limited when compared to the mechanism in the German proposal: It only applies to uses under the exceptions noted in Article 17(7) of the directive (with the notable omission of use for the purpose of citation) while it should apply to uses under all relevant exceptions. Besides, the flagging mechanism can’t be invoked if a work is used under open licenses or is not protected by copyright at all.

The third measure to protect user rights is the right for users’ organizations to file cases against platform operators that systematically fail to meet their obligations to protect legitimate uses. § 89b (7) allows user organizations to bring cases against platforms that systematically over-block user uploads in order to stop them from doing so. As noted in the explanatory memorandum the ministry sees this as an important additional safeguard to protect users against violations of their fundamental right to freedom of expression. The ability to bring collective action against platforms is further strengthened by an explicit requirement in § 89b (7) for platforms to provide users and user organizations with information on the functioning of any measures they employ to comply with Article 17. Taken together these two measures constitute an important check against over-blocking that is missing from all other implementation proposals. While the German proposal does contain the ability for users’ organizations to take platforms to court over overblocking, it lacks the necessary information rights over the functioning of blocking measures and the remedies to bring about systematic changes in the way that platforms police copyright-protected content.

A template for implementation?

In general, the Austrian example appears to fuse together some of the explicit attempts of the German Ministry of Justice to implement the directive in a way that minimizes the over-blocking of legal content, provides strong safeguards for user rights and ensures that authors and creators are directly remunerated, on the one hand, with the desire to stick as closely as possible to the text of the directive, on the other hand. The result may be the most realistic implementation proposal yet.

While the elements that we have outlined above will almost certainly come under attack from large corporate rightsholders (and possibly from the platforms as well), it is important to recall that, according to the Commission’s guidance proposal, it is simply not enough to do a literal implementation of the directive that does not specify concrete safeguards against automated blocking of legitimate content. Having closely watched the discussion on the European level and in Germany, the Austrian Ministry of Justice may just have shown us (and more importantly the other Member States still waiting to propose their implementations) a credible way for reconciling the conflicting requirements of Article 17 of the DSM directive.

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In order to achieve this objective, the German discussion draft published in June relies on the idea of “pre-flagging”: users would be allowed to flag uploads containing third party works as legitimate. Platforms would then be prevented from automatically blocking pre-flagged uploads unless they determine that the flag is incorrect because the upload is “obviously infringing”. 

By contrast, the Commission’s implementation guidance consultation proposes a “match-and-flag” mechanism: if upload filters detect the presence of a third party work in an upload and the use is not deemed to be “likely infringing”, then the uploader is notified and given the ability to state that the use is legitimate. If the user flags the upload as legitimate, the platform will have to initiate a human review of the upload, which remains available from the moment of upload until the review has been concluded. This type of mechanism was first suggested by a group of copyright academics in October of last year. It is also at the core of the proposal that we had presented during the last meeting of the stakeholder dialogue.

Both approaches provide a mechanism that limits the application of fully automated upload filters (while implicitly acknowledging the fact that many platforms will deploy upload filters). In the Commission’s proposal, filters are limited to making a pre-selection (“is the upload likely infringing?”); in the German proposal, they can only operate on unflagged content and to filter out “obviously incorrect” pre-flags.

Convergence on “match-and-flag”?

Both approaches have been criticised by rightholders, who claim that they undermine the “original objective of the directive” without providing alternative proposals on how automated filtering can be reconciled with the requirement not to block legitimate uploads. In addition, the German discussion proposal has also been criticised by platforms such as Google and Facebook. The platforms are arguing that giving users the ability to pre-flag every single upload would be impractical and would likely lead to substantial numbers of unnecessary (where the content in question is already licensed) or unjustified (users making excessive use of the pre-flagging tool) pre-flags, which would make such a system impractical to operate at scale. 

Netzpolitik.org has now published a leak of a new version (“Referentenentwurf”) of the German implementation law proposal. This version abandons the pre-flagging mechanism and replaces it with a “match-and-flag” approach similar to what the Commission has proposed (it also closely resembles a suggestion made by Google in its response to the German Consultation). However, there are also important differences between the two proposals, and based on a closer analysis it is clear that the new German proposal offers considerably less protection against unjustified blocking or removal of uploads than either the initial pre-flagging approach or the approach proposed by the Commission. To understand why we need to look at the details of the proposed mechanisms.

Both approaches clearly assume that platforms are able to identify matches between uploads and works that rightholder have requested to be blocked in (near) real time. Both the Commission’s proposal and Article § 8 of the German Referentenentwurf assume that users can be notified of a match during the upload process and thus can prevent legitimate uploads from being blocked at upload. While some technology vendors claim to have the ability to reliably match content during the upload, it is currently unclear if the ability to match in (near) real time is widely available to all platforms.

Given the uncertainty about the availability of real-time matching solutions for all types and sizes of platforms, it must be ensured that the use of automated filters is not imposed de facto by national legislators if this could be disproportionate for smaller platforms. The New German proposal does seem to require the use of real-time filters which would make it incompatible with the proportionality requirements in Art 17(5). 

The limits of “match-and-flag”

But even if we assume that platforms have the ability to match in real time during the upload, the approach still has limitations. The requirement to make best efforts to prevent the availability of works in Article 17(4)b does not apply only to new uploads: it also applies to uploads that are already on a platform. In situations where rightholders provide platforms with new blocking requests, the platforms will need to make best efforts to identify and remove them as well (this problem will be especially acute at the moment when the directive comes into force). Notifying the uploader of a match and giving her the possibility to flag the upload as legitimate does not offer the same protection here, because it cannot be assumed that the user has the ability to react immediately. This would mean that the upload in question would become unavailable until the uploader has had a chance to object. 

This problem is much more pronounced in the new German proposal. The Commission’s proposal makes it clear that platforms are only allowed to automatically remove uploads if a match is “likely infringing”. This means that already uploaded works that do not meet this requirement cannot be removed until either the user has had a chance to react to a notification or until the platform has concluded a human review of the upload in question. The German proposal does not contain such a safeguard, as it requires the automated removal of uploads unless these have been flagged as legitimate during the upload. 

This is regardless of whether the match is likely to be infringing or not. In situations where users cannot react to notifications right away, this will result in the removal of substantial amounts of legitimate uploads. Under the previous German pre-flagging mechanism this would not be an issue (with the exception of uploads already on the platform when the German implementation enters into force), because users would have had the ability to flag any legitimate upload as legitimate. The new German proposal only gives them the possibility to flag works as legitimate that are already on a blocklist at the moment of upload. 

Towards a combined approach?

As long as this blindspot persists, the new German proposal does not adequately implement the requirement in Article 17(7) that the availability of uploads that do not infringe copyright must not be prevented by measures deployed to implement Article 17(4)b. To fix this, the German legislator should add, to the mechanism provided in §8 of the new proposal, the ability to flag any upload as legitimate after it has been uploaded and that flagged upload cannot be automatically blocked. 

This combined approach would provide even stronger safeguards than the Commission’s proposal, which hinges on the idea that it is possible to automatically differentiate between likely infringing and likely legitimate content based on technical parameters.

As we have pointed out in our response to the Commission’s consultation, this approach, while viable in principle, is flawed as long as defining those technical parameters is left to platforms and rightholders without any involvement from users’ organisations. In addition, the proposed “likely infringing” standard does not set a high enough bar for preventing automated removal of potentially legitimate content. Instead, the “identical or equivalent” standard proposed in the academic statement that introduced the idea of “match-and-flag” should be a point of departure. In the case of time based media, this could be operationalised as matches that are at least 20 seconds long and where the match consists of at least 90% of the original work and at least 90% of the upload in question. In addition, matches of indivisible works (such as pictures) and short works (such as short poems) should never be assumed to be infringing, even when they correspond to 100% of an upload.

Meaningful protection for Public Domain and openly licensed works

A final advantage of such a combined approach is that it would also offer real protection from automated blocking for works that are in the public domain or available under open licenses. While such works are free to use for anybody, they are frequently blocked or removed as the result of wrongful ownership claims. In this situation it must be possible for anyone at any time to flag such works as being in the public domain or openly licensed. Given that this status will be the same across all (types of) platforms, such flags should not be recorded by individual platforms but in a public database that must be consulted by any system as part of assessing the status of an upload. 

While it may make sense for platforms to use their own private databases when it comes to matching uploads to reference files of works to be blocked, the effective protection of public domain and openly licensed works requires a fully transparent public database that reflects their status as public goods. This public database must be consulted by any system as part of assessing the status of an upload and should be maintained by an independent trusted entity that also offers a conflict resolution mechanism for resolving conflicting claims. 

Summary

At this stage, there seems to be some level of convergence towards “match-and-flag” mechanisms as a practical approach to reconciling 17(4) and 17(7). While still exhibiting shortcomings, such an approach would reflect the internal balance of Article 17 that the EU legislator arrived at. In how far a “match-and-flag” mechanism will be able to put this balance into practice depends on its practical implementation. As we have outlined above this means that: 

• There must be high thresholds to presume infringement and consequently permit fully automated blocking of uploads.
• These thresholds should be based on fully transparent criteria, which users can challenge in court.
• All matched uploads that do not meet these thresholds must be protected from blocking and flagged uploads must not be removed while under review by the platform.
• In addition there must be the ability for anyone to pre-flag works that are in the Public Domain or available under an open license via a decentralised public database that must be consulted by any (automated) measures used to comply with Article 17(4).
• National implementation must contain safeguards that ensure that already existing uploads cannot be blocked automatically.

Finally, it must also be ensured that the use of automated filters is not imposed by national legislators if this would be disproportionate for the platform in question.

The post Taming the upload filters: Pre-flagging vs. match and flag appeared first on COMMUNIA Association.

The letter expresses concerns that the proposed Article 17 guidance endorses the use of automated content blocking by online services even though it is clear that this will lead to the violation of fundamental rights. It also warns that implementations of Article 17 based on the proposed guidance will violate established principles of EU law.

In this context the letter highlights the need for meaningful safeguards for legitimate uses of content uploaded to online platforms, and stresses the need for a robust redress mechanism for users. Summarising the consultation responses submitted by the various signatories, the letter highlights the importance of ensuring that uploads that are not manifestly infringing must remain online until a human review has taken place. The letter further stresses the importance of involving users’ organisations when setting technical parameters that are used to determine if an upload is manifestly infringing or not. 

The letter further highlights the need for full transparency of (automated) content removals and the ability for users (and user organisations on their behalf) to take actions against the abuse of the measures introduced by Article 17 of the DSM directive.

Finally, the letter also expresses support for the Commission’s clarification that Article 17 constitutes a “lex specialis” to the provisions of the InfoSoc Directive which provides Member States with maximum flexibility to include user rights preserving authorisation mechanisms in their national legislation.

You can read the full letter including the list of signatories here.

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While we have been rather sceptical after the end of the six meetings of the stakeholder dialogue meetings, we are pleased to see that the initial views shared by the Commission express a genuine attempt to find a balance between the protection of user rights and the interests of creators and other rightholders, which reflects the complex balance of the provisions introduced by Article 17 after a long legislative fight.

In the remainder of this post we will take a first, high level, look at the Commission’s proposal for the Article 17 guidance, what it would mean for national implementations and how it would affect user rights.

Two welcome clarifications

With the consultation document the Commission takes a clear position on two issues that were central to the discussions in the stakeholder dialogue and that have important implications for national implementation of Article 17.

The first one concerns the nature of the right at the core of Article 17. Is Article 17 a mere clarification of the existing right of communication to the public, as rightholders have argued, or is it a special or sui generis right, as academics and civil society groups have argued? In the consultation document the Commission makes it clear that it considers Article 17 to be a special right (“lex specialis”) to the right of communication to the public, as defined in Article 3 of the 2001 InfoSoc Directive, and the limited liability regime for hosting providers of the E-commerce Directive. 

What sounds like a fairly technical discussion has wide ranging consequences for Member States implementing the Directive. As explained by João Quintais and Martin Husovec, now that it is clear that Article 17 is not a mere clarification of existing law, Member States have considerably more freedom in deciding how online platforms can obtain authorisation for making available the works uploaded by their users. This should mean that they are not constrained by the InfoSoc Directive. Therefore, mechanisms like the remunerated “de-minimis” exception proposed by the German Ministry of Justice that would legalise the use of short snippets of existing works are permitted and covered by the concept of “authorisation” introduced by Article 17.

The second clarification contained in the consultation document deals with the very core of the discussion in the stakeholder dialogue. During the stakeholder dialogue, many rightholders had argued that the user rights safeguards contained in Article 17(7) (that measures to prevent the availability of copyrighted works “shall not result in the prevention of the availability of works or other subject matter uploaded by users, which do not infringe copyright”) should not have any direct consequences as the complaint and redress mechanism introduced in Article 17(9) would provide sufficient protection of user rights. In other words, right holders have argued that, even though no-one disputes that upload filters cannot recognise user rights and would structurally block legitimate uploads, this would be fine because users have the right to complain after the fact. In the consultation document the Commission does not mince words and makes it clear that this interpretation is wrong:

The objective should be to ensure that legitimate content is not blocked when technologies are applied by online content-sharing service providers […]

Therefore the guidance would take as a premise that it is not enough for the transposition and application of Article 17 (7) to only restore legitimate content ex post, once it has been blocked. When service providers apply automated content recognition technologies under Article 17(4) [..] legitimate uses should also be considered at the upload of content.

This clarification reaffirms the core of the balance struck by Article 17: Upload filters can only be used as long as their use does not lead to the removal of legitimate content. In their contributions to the stakeholder dialogue many rightholders have sought to negate this principle and the Commission should be complimented for defending the balance achieved through the legislative process. This is even more important since this means that the Commission is also taking a clear stance against the incomplete implementation proposals currently being discussed in the French and Dutch parliaments that, in line with the position brought forward by rightholders, ignore the user rights safeguards contained in Article 17(7).

A mechanism for protecting users’ rights

Now that the Commission has made it clear that any measures introduced to comply with Article 17(4) must also comply with the safeguards established in 17(7), how does it envisage this to work?

In section IV of the consultation document the Commission is outlining a mechanism “for the practical application of Article 17(4) in compliance with Article 17(7)”. This mechanism is structurally similar to a proposal made last October by a large group of leading copyright scholars and to the mechanism we had proposed during the final meeting of the stakeholder dialogue in February of last year. At the core of the mechanism proposed by the Commission is a distinction between “likely infringing” and “likely legitimate” uploads:

… automated blocking of content identified by the rightholders should be limited to likely infringing uploads, whereas content, which is likely to be legitimate, should not be subjected to automated blocking and should be available.

The mechanism outlined by the Commission would allow that “likely infringing content” could be automatically blocked (with the ability of users to challenge the blocking afterwards). In case of uploads including works that rightholders have requested to be blocked and for which platforms are unable “to determine on a reasonable basis whether [the] upload is likely to be infringing”, platforms would have to notify the uploaders and give them the possibility to assert their rights and overrule the automated filters. In this case the upload stays online until the disputed upload has been reviewed by the platform. If after requesting information from the rightholders and after human review the platform comes to the conclusion that the upload is likely infringing, then it would still be removed. If, on the other hand, the platform comes to the conclusion that it is likely to be legitimate, then it will stay up (both rightholders and users keep the ability to further contest the outcome of the review by the platforms).

This mechanism correctly acknowledges that “content recognition technology cannot assess whether the uploaded content is infringing or covered by a legitimate use” and gives users the ability to override some decisions made by upload filters. In doing so the Commission’s proposal hinges on the differentiation between “likely infringing” and likely “legitimate” uses. Unfortunately, the consultation document fails to further specify under what conditions uploads should be considered to be “likely infringing” (both our proposal and the academic statement proposed that automatic blocking would only be acceptable in cases where infringement is “obvious”). The consultation documents provide the following three illustrative examples:

the upload of a video of 30 minutes, where 29 minutes are an exact match to a reference file provided by a rightholder, could likely be considered an infringing one, unless it is in the public domain or the use has been authorised. On the other hand, a user generated video composed by very short extracts, such as one or two minutes of different scenes from third party films, accompanied by additional content such as comments added by the user for the purpose of reviewing these scenes could be more likely to be legitimate because potentially covered by an exception such as the quotation exception.Similarly still images uploaded by users which match only partially the fingerprints of a professional picture could be legitimate uploads under the parody exception, as they could be ‘memes’, i.e. new images created by users by adding elements to an original picture to create a humoristic or parodic effect.

Although these examples are well chosen, three examples are far from enough to guarantee that the mechanism outlined by the Commission will provide sufficient protection from over-blocking.

This is made even worse by the fact that the Commission goes on to suggest that “the distinction between likely infringing and likely legitimate uploads could be carried out by service providers in cooperation with rightholders based on a number of technical characteristics of the upload, as appropriate”. From our perspective it is clear that unless user representatives also have a role in determining the technical parameters, the whole mechanism will likely be meaningless.

But in principle the approach outlined in the Commission’s consultation seems suitable to address the inherent tension between the inevitable use of automated content recognition technology to comply with the obligations created by Article 17(4) and the obligation to ensure that legitimate uses are not affected. It is a clear signal to Member States that in implementing Article 17 they need to protect user rights by legislative design and not as a mere after-thought.

And a few shortcomings

Apart from the lack of definition of “likely infringing” the consultation document contains a number of additional weak spots that we will address as part of our response to the consultation. While the mechanism outlined in the consultation document can safeguard uses that are legitimate as the result of falling within the scope of exceptions and limitations, it includes no safeguards to address other structural failures of automated content recognition systems. This includes the wrongful blocking of works that are openly licensed or in the public domain. Preventing the blocking of such works can best be prevented by giving users the ability to mark (or in the terms of the German proposal “pre-flag”) them as being legitimate from the start.

Another aspect where the Commission’s proposed guidance needs to be strengthened are sanctions for false copyright claims by rightholders. Merely stating that “Member States should be free to define sanctions” seems insufficient to prevent Article 17 from structurally being abused by parties making wrongful claims of ownership.

Similarly, while it is welcome that the consultation document highlights the benefits of transparency for users, it does not go further than considering the possibility “to encourage Member States to put in place an exchange of information on authorisations between rightholders, users and service providers” and to “recommend that Member States encourage online content- sharing service providers to publicly report on the functioning of their practices with regard to Article 17(4).”

The consultation remains open for reactions (in principle limited to organisations participating in the stakeholder dialogue) until the 12th of September. Together with other user and digital rights organisations we will continue to stress the importance of including substantial protections for user rights in the Commission’s guidance. The first views presented by the Commission as part of the consultation are an important step into this direction. They clearly show that the Commission intends to use its ability to issue guidance as a means to uphold the legislative balance of Article 17. In light of this, Member States (especially those who in their desire to implement quickly have abandoned this balance) would be well advised to wait for the final version of the Commission’s guidance before adopting their implementations.

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As we have written in our initial reaction, the German proposal is the first serious attempt by a member state to implement Article 17 of the directive in a way that preserves the precarious balance between the rights of users and creators. Where previous implementation proposals have limited themselves to (selectively) transposing the provisions of the directive, the German Ministry of Justice has presented a proposal that adds a number of interesting (and potentially controversial) additional provisions, which seem to be designed to strengthen the position of both users and individual creators. These include the addition of a remunerated de-minimis exception intended to safeguard common types of so-called “user generated content”, the ability for uploaders to “pre-flag” legitimate uses of protected works in their uploads, and the addition of a direct remuneration rights intended to ensure that individual creators benefit from the new legal regime.

With this proposal the German government presents an alternative vision for how Article 17 could work in practice, which could serve as a model for other member states when implementing the directive. During our Salon we will hear first reactions from civil society stakeholders and analyse the legal underpinnings of the more innovative elements of the proposal, such as the proposed de-minimis exception. The presentations will be followed by an informal question and answer session.

The Salon is open for everyone to attend and will be held on Zoom. Join us on Thursday, the 2 of July, at 1530 CET, by registering here. Registered participants will receive login information ahead of the event.

The post COMMUNIA Salon 2020/3: The German proposal to implement Article 17 – A broken promise or a way forward? appeared first on COMMUNIA Association.

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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The salon was kicked off by Teresa Nobre who discussed the importance of flexible copyright exceptions and highlighted the recent developments in the jurisprudence of the CJEU that has gradually started to recognise exceptions as expressions of certain fundamental rights. In the following presentation Paul Keller discussed the tension between mandatory exceptions and de-facto mandatory filters in Article 17 and highlighted that the provisions dealing with exceptions remain at the center of the discussion in the Commission’s stakeholder dialogue on the implementation of Article 17.

In the second part of the event Prof. Martin Senftleben talked about Article 17, Pastiche and Money for Creators. As part of his presentation Prof. Senftleben reminded the audience about the original objective of Article 17 to make large online platforms pay for so-called “user generated content” in order to improve the income position of creators and other rightholders. According to Prof. Senftleben, the licensing based approach introduced by Article 17 will fail to achieve this objective since it inherently favours large rightholders who have the means to negotiate with large platforms. Article 17 as such does not ensure that individual creators benefit from any additional revenues secured by creative industry intermediaries.

To fix this and to ensure that users will continue to be free to upload works that incorporate existing works Prof. Senftleben proposed a broad, remunerated use privilege based on the exception for pastiche found in Article 17(7)(b) of the directive. Similarly to the existing model of private copying levies, transformative uses that fail to meet the requirements of the quotation or parody exceptions (such as background music in home videos) would be allowed by a remunerated pastiche exception. In Prof. Senftleben’s proposal the remuneration paid by the platforms for such uses would be paid directly to individual creators via collective management organisations.

Contrasted with the implementation proposals for Article 17 that we have seen so far, Prof. Senftleben’s proposal stands out in attempting to reconcile the interests of individual creators and users with the realities created by Article 17. Watch the video recording of the entire presentation and the subsequent discussion about the feasibility of this approach.

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In the context of the discussion on the implementation of Article 17, scholars have argued that the concept of pastiche (“a musical, literary, or artistic composition made up of selections from different works“) provides a legal basis for safeguarding transformative uses that are commonly referred to as User Generated Content. During the upcoming COMMUNIA salon we will explore this possibility and discuss how Member States can best make use of the room provided by the pastiche exception when implementing Article 17 of the DSM directive.

After introductory presentations by Teresa Nobre (on the importance of flexible exceptions to copyright) and Paul Keller (on the tension between filtering obligations and the obligation to safeguard users rights in the context of Article 17), we will be joined by Professor Martin Senftleben from the Institute for Information Law, who will focus on the role of the pastiche exception. Prof. Senftleben has recently published a paper on the role of the pastiche exception in the context of institutionalised algorithmic enforcement and is one of the co-authors of the European Copyright Society’s comment on Article 17 of the DSM directive, which recommends “cultivating the concept of pastiche” to ensure that Article 17 does not limit freedom of expression.

The presentations will be followed by an informal question and answer session.

This event is open for everyone to attend and will be held on Zoom. In order to ensure smooth participation we request participants to register beforehand. Registered participants will receive login information ahead of the event.

The post COMMUNIA Salon 2020/2: protecting freedom of expression via the pastiche exception appeared first on COMMUNIA Association.

The paper authored by Prof. Dr. Rolf Schwartmann and Prof. Dr. Christian-Henner Hentsch consists of an implementation proposal in the form of concrete legislative language. The objective of the authors seems to be to stay as close as possible to the objectives formulated in the German statement to the Council. What makes this proposal remarkable is that it is the first proposal (although not an official one) for implementing the Article 17 of the new Copyright Directive that does not consist of more or less literal transposition of Article 17 into national law (as it is the case in the French, Dutch and Belgian legislative proposals). In order to achieve the stated objective of preventing over-blocking by upload filters, the concept proposes a combination of Article 17 with Article 12 of the DSM Directive (which provides Member States the option to introduce Extended Collective Licenses). 

The implementation proposal contains modifications of three different acts: the Copyright Act (Urheberrechtsgesetz – UrhG), the Tele Media Act (Telemediengesetz – TMG) and the Collective Management Organisations Act (Verwertungsgesellschaftengesetz – VGG). Specifically the authors propose the following modifications: 

In the Copyright Act, they propose to add a new section to the article (§ 19a UrhG) that defines the act of communication to the public. The purpose of this addition is to include acts of giving the public access to copyright-protected user uploaded works by Online Content Service Providers (OCSSPs) in the definition of the existing making available to the public right. This establishes that, in principle, OCSSPs need authorisation from rightholders for such acts. The added section also includes the definition of OCSSPs, which is a literal transposition of the definition used in the DSM directive. 

The second addition to the Copyright Act is a new exception covering uses for the purpose of caricature, parody or pastiche by users of OCSSPs (§ 51a UrhG). Notably, this exception only applies in the context of sharing works via OCSSPs (which is highly unusual as copyright exceptions are usually not limited to specific services) and is conditional on remuneration to rightholders via collective management organisations. 

The changes to the liability regime for OCSSPs are implemented via the addition of a new article (§ 10a TMG) to the Tele Media Act, which is the German Law that implements the general liability rules from the E-commerce Directive. The new article is a relatively straightforward transposition of the provisions contained in paragraphs (4) to (9) of the CDSM Directive, albeit with a number of important additions that significantly strengthen the position of uploaders. 

Firstly, the authors propose to add a provision (§ 10a (3) TMG) that would establish that the measures to prevent the availability of works are only proportionate if they only block evidently infringing uploads.

Secondly, the authors propose to require platforms to establish procedures for identifying trusted uploaders whose uploads cannot be blocked automatically (in § 10a (7) TMG). And finally § 10a (6) explicitly requires OCSSP not to block or remove lawful uses of protected works. It also grants uploaders whose uploads have been wrongfully blocked the ability to file injunctions and claim damages from OCSSPs. 

The final part of the proposal contains additions to the law governing the functioning of Collective Management Organisations (CMOs). These additions are based on Article 12 of the DSM Directive that gives Member States the ability to introduce so called Extended Collective Licensing arrangements in their domestic laws. The authors add a new article §49a to the Collecting Societies Act (VGG):

According to §49a (1), CMOs that grant licenses to OCSSPs covering the rights established in § 19a UrhG (2) are presumed to represent the rights of all rightholders from the same category of works. This would enable CMOs to issue licenses for the use of works by non-members and as a result would greatly increase the legal certainty that such licenses provide for OCSSPs. However the proposal stays silent on the fact that Article 12 of the DSM Directive only allows licensing covering domestic uses, which substantially limits the value of such licenses for platforms that also operate outside of Germany. 

Strong user rights protections

Taken together these legislative implementations seem to be designed to create maximum legal certainty for users of OCSSPs. A broad parody and pastiche exception combined with a requirement for platforms not to block/remove uploads unless they are evidently infringing and the ability for users to issue injunctions and claim damages in the case of unjustified blocks/removals provide strong safeguards against over-blocking by automated filtering systems. Most of the burden for this would fall on the platform providers who will face legal exposure to both users (in the case of over-blocking) and rightholders (for not blocking enough). 

In this context it is worth noting that in their focus on preventing overblocking the authors have missed one of the biggest opportunities to limit the harm that Article 17 will cause for smaller platforms. The proposed literal transposition of the definition of OCSSPs ignores Recital 62 of the directive that makes it clear that the measures introduced in Article 17 “should target only online services that play an important role on the online content market by competing with other online content services, such as online audio and video streaming services”. As we have argued before a more targeted definition of OCSSPs based on this recital would go a long way of limiting unnecessary legal risk for small European platforms. 

A key element of the proposal is the distinction between “clear infringements” on the one hand (which OCSSPs must prevent via the use of automated tools) and all other uses of protected content (which OCSSPs are not allowed to block automatically). This distinction is very similar to our own proposal that relies on a distinction between “prima-facie” infringements (which can be automatically blocked) and other uses (for which users must be given the ability to override a blocking decision, by declaring lawful use). 

In this context it is interesting to see how the authors of the Stufenkonzept define “clear infringements”. For this, they rely on jurisprudence by the German Federal Court of Justice that established that for an infringement to be “clear” it must be possible to determine the infringement without difficulty – i.e. without a detailed legal and factual examination and that no justified doubts must remain. Given the inability of filtering systems to take the context of a use into account, and given the predominance of fraudulent ownership claims this would be a very high bar for any automated filtering system to clear.  

The problems are in the details

The general approach outlined in the Stufenkonzept is a very welcome addition to the discussion. It shows that implementations of Article 17 do not need to be limited to more or less literal transpositions of the text of the directive and that there are legislative affordances to meaningfully protect user rights while maintaining a balance between users rights and the interests of creators and other rightholders.

However, this does not mean that the proposal is without its flaws. Most of these flaws are specific to the German legal context but are also interesting with an eye to implementations elsewhere. While the addition of a broad exception covering parody, satire and pastiches will go a long way to protect creative expression, the fact that the exception only applies in the context of sharing works via OCSSPs is highly problematic. Given that Germany does not have an existing exception allowing such uses more broadly (traditionally such uses were considered to fall under the “free use” (“freie benutzung”) provision that was stuck down by the CJEU in its Metall auf Metall ruling last summer), the only way to lawfully share remixes, memes and other forms of so called User Generated Content would be to share them via commercial platforms. Sharing such works on private websites or non-commercial platforms would constitute copyright infringement. Unless the authors of the stufenconcept intend to further entrench the position of commercial OCSSPs they should modify their proposal so that the new exception covers all ways of sharing content. This point applies equally to all other member states that do not have existing parody, satire and pastiche exceptions. Such exceptions need to cover such uses in all relevant contexts. 

In addition, the fact that the proposed exception would be remunerated is problematic. Existing exceptions for uses of protected works in the context of parody and satire are not remunerated and it is clear neither parodies or satires should be remunerated. When it comes to pastiches, remuneration does make sense when the concept of pastiche is interpreted broadly enough to enable forms of reuse that are less creative/transformative (e.g. music in the background of a random domestic video) and that are commonly shared via online platforms (as it seems to be the intention of the authors of the Stufenkonzept). 

Compared to relying on voluntary licenses and filtering, a remunerated exception has the added benefit that it could create a direct revenue stream for authors and performers (as opposed to licensing revenue going to intermediaries like labels, studios and publishers). 

This means that the proposal would need to be modified in such a way that parodies and satire must stay unremunerated and that only pastiches that do not qualify as quotation, parody or satire are remunerated. In a paper published in February, Prof Martin Senftleben (Institute for Information Law, University of Amsterdam) outlines such an approach. He proposes relying on a broad remunerated pastiche exception (in addition to unremunerated exceptions covering quotations, parody and satire) to enable transformative uses that don’t qualify as parody and quotation cases: 

Existing EU copyright law, thus, already contains a concept that can serve as a basis for the introduction of a new copyright limitation for UGC that goes beyond the traditional right of quotation and the traditional exemption of parody.[…] EU Member States should take a fresh look at the concept of “pastiche” when implementing the DSM Directive. They should seize the opportunity to supplement their national portfolio of copyright limitations with a pastiche exemption and clarify that this use privilege is intended to cover UGC.

From our perspective the combination of a broad remunerated UGC exception based on the concept of pastiche combined with unremunerated exceptions enabling uses for the purposes of quotation, parody and satire (and incidental inclusion) would go a long way to providing legal protection for transformative uses of copyrighted works. If implemented uniformly in all EU member states such an approach would result in a significant improvement of users rights when compared to the current situation.

The final shortcoming of the Stufenkonzept lies in the idea to require platforms to designate some users as “trusted uploaders” and to treat their uploads differently. While the general principle that uploaders should be trusted, this must apply to all uploaders. As we stress in our own proposal, all uploaders must be given the ability to exercise their rights and overrule automated filtering of their uploads. The ability to exercise one’s right cannot be made conditional on the status awarded by a platform operator as they would be incentivised to assign such a status based on their commercial interests. 

An important contribution to the discussion

In spite of these shortcomings, which can easily be fixed, the Stufenkonzept remains an important contribution to the discussion about the implementation of Article 17 in the Member States. It illustrates a path forward to implement Article 17 in such a way that would preserve online platforms as vibrant spaces for creative expression where user rights are protected, while opening up new revenue streams for authors, performers and other creatives. The combination of a broad set of exceptions, broad licenses that provide legal certainty for platforms and strong limits on the use of automated filtering technologies and a meaningful redress mechanism for users whose content has been wrongfully blocked.

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