The end of an odyssey: German law to adapt copyright to the demands of the digital single market | Hogan Lovells
The German bill to adapt copyright law to the requirements of the digital single market (see here, only available in German) was adopted by the German parliament (“Bundestag”) on May 20, 2021 and is expected to enter in force on June 7, 2021. It transposes not only the DSM directive but also the Online SatCab directive. The most impactful change in national law will be based on art. 17 DSM Directive (see our previous blogs on the controversies around download filters here, here and here).
Responsibility of the platform: the new German law on copyright service providers (“Urheberrechts-Diensteanbieter-Gesetz”)
For the transposition of art. 17 DSM Directive in national law, a brand new law – the Copyright Service Providers Act – will enter into force in Germany on August 1, 2021. A working translation of the government draft can be found here.
The essential provisions of the new bill include, among others, the direct liability of content sharing platforms for the dissemination of copyrighted content on their platforms, the claim for remuneration of authors against the platforms for the dissemination of their content and the controversy de minimis provision whereby certain uses of short extracts of copyrighted material are presumed to be permitted. Having said that, the de minimis the presumption will not apply to live video footage, meaning that downloads of short footage of live sporting or musical events would not be covered by it. The extent to which the de minimis rule will have a practical impact is questionable, as no other European country has adopted a similar rule. It is therefore entirely possible that the platforms concerned adopt a uniform approach at European level adapted to the cross-border nature of online content when adapting their workflows to regulatory changes,
The new German law on copyright service providers is still widely discussed and criticized by all stakeholders. As the rights-holder industry sees itself disadvantaged and disempowered, organizations fighting for digital civil liberties criticize reducing the barrier for a de minimis use and the expected pressure to use download filters. As we have already reported (here), some groups have already indicated that they are ready to challenge this in the German Constitutional Court.
Another contentious aspect is the question – still open – of which platforms are affected by the new bill. Larger content sharing platforms are clearly covered, but for smaller platforms or shared hosting providers, the applicability of the law remains to be determined by the courts.
Other disputes regarding the implementation of the requirements, in particular regarding sufficient download filter technology or platform licensing efforts, will also have to be decided by the CJEU. These aspects could be clearer soon. While the guidelines of the European Commission relating to art. 17 DSM-Directive should still be published “in the near future”, the opinion on the annulment procedure against Art. 17 The DSM directive filed by Poland is expected on July 15 (see here).
Neighboring rights of new press publishers
Another central aspect of the forthcoming reform of copyright law, a new neighboring right for press publishers will be added to the German law on copyright and neighboring rights. Following a statement by the German Federal Ministry of Justice and Consumer Protection, the new provisions recognize the economic, organizational and technical efforts of press editors and journalists. Publishers will also participate in compensation for “legally permitted use”. German copyright law already included corresponding provisions since 2013, but these were declared null and void by the CJEU in 2019 due to formal errors in the legislative process (see here).
The new rights of press publishers come with certain restrictions. For example, the use of hyperlinks to a press release or the use of “single words or very short excerpts from a press release” will still be permitted. So far, it is unclear what constitutes such “very short snippets”, especially after the removal of some clarifications included in previous versions of the bill.
The new bill will also contribute to a more innovative use of copyrighted content. It will include copyright exceptions for text and data mining, which allow reproduction of copyrighted works under certain conditions. Text and data mining refers to technologies used to automatically analyze digital content in order to extract information. It is therefore deployed within the framework of artificial intelligence and machine learning by research and by commercial institutions.
The implementation of the possibility of granting extended collective licenses under Art. 12 The DSM Directive is also a new tool in the German copyright toolbox. It is inspired by Scandinavian examples and can be used to facilitate extensive digitization processes. This provision could also potentially play a decisive role in platform licensing efforts.
Other changes include the removal of copyright protection for reproductions of visual works in the public domain, new regulations on the online distribution of television and radio programs, the implementation of an authorization general for the use of works protected by copyright for the purposes of caricature, and finally, the modification of national law in order to comply with the CJEU judgment in Pelham et al (see here and here) . In Pelham, the CJEU ruled on the admissibility of sampling, declaring it admissible when the original work is no longer recognizable. In doing so, the CJEU also declared a German standard incompatible with European Union law.
The law to adapt copyright law to the demands of the digital single market will lead to the biggest reform of German copyright law in the past 20 years. It is therefore not surprising that most of the new provisions have been strongly contested and are still criticized even though the legislative process is almost complete.
As June 7, 2021 is fast approaching, we are focusing on the practical implementation and real impact of the new bill. As usual, the transformation period will be accompanied by some uncertainty as to the applicability and legal consequences of the new law, with its large number of new and rather complex provisions. In addition, Poland’s appeal for the annulment of Article 17 of the DSM Directive at European level is still pending. The decision of the CJEU could – in the worst case – render all the national transpositions of art. 17 DSM-Directive obsolete and relaunch the legislative process.
Finally, on June 22, the CJEU will rule on the responsibility of platforms for illegal acts by users under the law in force. This decision will be of the utmost importance for all platforms that are not covered by the new regulation. And if the CJEU were to also declare art. 17 DSM-Directive invalid, the decision would even be decisive for all platforms.
We continue to closely monitor all ongoing developments – watch for future updates!