INSIGHT: Explaining the New EU Copyright Directive

Two aspects of the European Union’s new copyright directive are changing the operations of online news aggregation providers, like search engines, and content sharing services, like social media sites, and putting pressure on existing (and conflicting) U.S. law and practice.

The Council of the European Union voted on April 15 to adopt the Directive on Copyright and Related Rights in the Digital Single Market, after the European Commission passed it in March. Following the directive’s publication in the Official Journal of the EU, member countries will have two years to implement the directive through national-level legislation and regulations.

According to the Council of the EU’s description, the copyright directive “ensure[s] adequate protection for authors and artists, while opening up new possibilities for accessing and sharing copyright-protected content online throughout the European Union.” Aspects of the Copyright Directive are controversial, including Article 15 (formerly Article 11), the “link tax,” and Article 17 (formerly Article 13), the “filtering requirement.”

Those in favor of the link tax see it as properly compensating those who create and publish content that generates website traffic, and those against argue it will produce a net harm because of the transaction costs and administrative burdens of paying to display excerpts from news articles. For Article 17, many content creators see the filtering requirements as a way to reduce the “whack-a-mole” problem of having infringing content pop up repeatedly on the same online platforms despite sending repeated notices of infringement.

Platforms and civil liberties organizations who oppose those requirements have stressed that over-zealous notices of infringement result in censorship and free speech harms and that building and administering even imperfect filtering tools and user-appeal systems will be costly.

The ‘Link Tax’

Article 15 imposes liability on online news aggregators that link to and display more than “individual words or very short extracts” of press publications hosted on other websites without obtaining a license.

For content published after the directive enters into force, Article 15 grants publishers the rights necessary to authorize such uses for a period of two years (calculated from January 1 of the year following publication) while leaving ownership of the copyright with the original author.

The new “link tax” applies to online journalistic works, such as literary works, photographs, and videos on online news websites, but not to publications published for scientific or academic purposes, such as scientific journals. The level of disagreement surrounding Article 15 presages the possibility of inconsistent interpretations between member states, which may pressure website owners to adhere to the strictest national law—or leave certain markets altogether.

In the United States, there is currently no “link tax,” but a recent decision in Goldman v. Breitbart, 302 F. Supp. 3d 585 (S.D.N.Y. Feb. 15, 2018), posited a need for a link license under US law. In Goldman, a photographer alleged that media organizations infringed his copyright in a photograph by embedding a Twitter post containing that photograph on their websites. The court found that embedding code to make the photograph “visible without the user having to click on a hyperlink” would constitute copyright infringement absent a defense.

This case has received attention for declining to apply the leading “server test” from the Ninth Circuit, which has effectively shaped the modern internet and under which a work must be stored on a website’s servers—not just hyperlinked—to constitute copyright infringement under US law.

If the Goldman court concludes that the now-standard practice of embedding code, such as by embedding a Twitter post containing a photograph on a news website, can constitute infringement and is not otherwise excused by fair use, it may open the door to a “link tax” (or at least a market for link licenses) in the US.

The ‘Filtering Requirement’

The adoption of Article 17 ushers in a controversial (pro/con) new approach to reducing copyright infringement online that dramatically increases the obligations (and the potential liability) for sites on which users may share movies, music, and other content without authorization.

While the US safe harbors under 17 U.S.C. § 512 still limit liability for ISPs that expeditiously remove content after receiving a notice from a rightsholder, a “notice-and-takedown” approach will no longer qualify an “online content-sharing service provider” (Platform) for a safe harbor in the EU. See Art. 17(3). In the EU, national laws will now impose copyright infringement liability on Platforms for user uploads of unauthorized copyrighted content, unless the Platform has:

• Made best efforts to obtain authorization (e.g., a blanket license for music that covers non-commercial uploads from users);
• Made best efforts to ensure the unavailability of sufficiently identified works;
• Expeditiously disabled access to works upon substantiated notice from the rightsholder; and
• Made best efforts to prevent future uploads of identified work(s). See Art. 17(4).

The European Commission plans to clarify this vague language through additional guidance developed in consultation with stakeholders. Although the Commission’s guidance will focus on obligations where “no licensing agreement is concluded,” “best efforts” to obtain a platform-wide license remains poorly defined where some EU member countries have collective licensing organizations and other countries do not. See Copyright Office report summarizing examples of collective licensing in Europe.

Further, the mandatory Art. 17(7) exceptions for “quotation, criticism, review [as well as] caricature, parody, and pastiche” will complicate any attempts to implement strong upload filtering. As with Article 15, though, early-adopter countries that enact a strict interpretation of Article 17 may create a de facto standard.

The EU countries’ implementations of the requirement to block future uploads—essentially a notice and “stay down” requirement—will likely influence the Copyright Office’s recommendations to Congress about modernization of the US Section 512 safe harbor.

The Copyright Office noted in 2016 that “[t]he most frequently discussed potential legislative change [in public roundtables has been] adoption of a notice-and-stay-down requirement.” At its April 8, 2019 roundtable, the Copyright Office dedicated a session to international developments, in large part to discuss the Directive.

Still, legislative changes in the US are likely to wait until EU member countries implement and test the stay-down approach, including the exceptions that would provide continuing support for free speech.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

John A. Polito is a partner at Morgan Lewis in San Francisco. He is the co-leader of the firm’s trademark and copyright litigation practice. As an intellectual property litigator, he represents companies in disputes relating to software, mobile devices, e-commerce, and online content.

Rachel E. Fertig is an associate at Morgan Lewis in Washington, D.C. Previously at the U.S. Copyright Office, she brings government and private-industry perspective to the firm’s intellectual property practice and assists media, technology, and retail companies with copyright protection and enforcement.

Jenna K. Stokes is an associate at Morgan Lewis in San Francisco. She represents clients in intellectual property disputes and counsels clients in trademark prosecution and enforcement matters. She also assists with copyright registration and counseling, with an emphasis on software copyrights.