Major Changes Coming to EU Copyright Law

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Major Changes Coming to EU Copyright Law

This article was originally published at page 76 of the June 2019 issue of EAN Magazine.

The Directive on Copyright in the Digital Single Market (also known as the EU Copyright Directive) was ratified by the Council of the European Union this past April.  With this approval comes a major change to copyright law in Europe.  Of particular interest to the adult industry is Article 17 (originally called Article 13 before it was renamed) of the Directive, which essentially shifts the burden of flagging copyright infringement from the copyright holders to the online content-sharing service providers.  Let’s dig in here to understand the significance to the adult industry.

A “directive” is a set of rules made by the European Parliament (and ratified by the Council of the EU), that requires EU member states to achieve a specified result – usually, by the passing of national laws.  The text of a directive sets forth the objective and an associated deadline, which is typically two years.  The EU Copyright Directive includes the typical time table, which means that member states have until 2021 to enact laws in compliance.

For the last couple of decades, laws in the EU, as well as in the US, have shielded online content-sharing service providers from liability for copyright infringement committed by third party users on their websites.  In the EU, the protection is provided by legislation passed in accordance with Article 14 of the Electronic Commerce Directive.  In the US, the protection is afforded by the provisions of the Digital Millennium Copyright Act.  In general, under these laws, an online content-sharing service provider is relinquished of liability for copyright infringement by users if, when given proper notice (usually by the copyright holder), the service provider swiftly removes the offending content.

Article 17 of the EU Copyright Directive changes the game on this principle in the EU.  Though it is not directly applicable outside of the EU, resulting legislation may still affect companies doing business in EU member states from the US and around the world.  Under the Electronic Commerce Directive, an online content-sharing service provider has a duty to react when becoming aware of copyright infringement.  Now, instead, the service provider has a duty to act to prevent any copyright infringement.  Article 17 provides, in summary:

  • Online content-sharing service providers must use “best efforts” to obtain authorization from rights-holders.
  • Where authorization is not granted, online content-sharing service providers must use “best efforts” “in accordance with “high industry standards of professional diligence,” to ensure the unavailability of specific works and other subject matter for which the rightholders have given the service providers the relevant and necessary information.
  • Online content-sharing service providers must act expeditiously upon receiving notice to disable or remove copyrighted works.
  • Online content-sharing service providers must use best efforts to prevent their future uploads after receiving such notice in (3).

[Note that the bullet points, themselves, are not in the original text of the directive, but used here for ease of explanation].

The language in bullet point (2) above means that online content-sharing service providers could potentially face liability for not using best efforts with high standards of diligence to ensure infringement absent from their websites.  Although the Directive explicitly states, “[t]he application of this Article shall not lead to any general monitoring obligation,” it quite unimaginable as to how such would be possible.  In reality, service providers will have to monitor and filter content which is uploaded or posted to their websites.

Effects on Service Providers

The filters and monitoring will be the result of online content-sharing service providers trying to protect themselves from liability.  Small companies and start-ups could struggle with the looming possibility of lawsuits, as well as additional costs of filtering technology, man-power for content review and appeals, more expensive business insurance, and added legal fees. Emerging clip sites, sexy audio sharing sites, and other new companies that host third party content will face these issues.

The survival of bigger, more established players will be favored since they have the capital to be more agile for business adjustment. Massive online content-sharing service providers can afford to implement software filters, as well as pay for additional people to implement manual monitoring.  Further, such big enterprises will have leverage to make agreements with entities that hold the rights to large numbers of works (like music or book publishers), therefore, eliminating potential liabilities in great swaths.  Article 17 encourages this in the language of bullet point (1) above.

The EU Parliament seems to have recognized the disparity.  Some exceptions are provided to the applicability of the provisions of Article 17 for small operations.  Online content-sharing service providers whose services have been available to the public in the EU for less than three years, and which have an annual turnover below EUR 10 million, must only comply with (1) and (3) above.  Where, however, the average number of monthly unique visitors of such service providers exceeds 5 million, calculated on the basis of the previous calendar year, they must also comply with (4) above.  While this will provide some relief, it will not completely remove the issue of “bigger is better” here.

Effects on Content Creators

Filtering and monitoring of content are in direct conflict with free speech principles. These filters frequently lead to consequences both inside, and outside, of the adult industry that are harmful to the dissemination of content and ideas.  Fair dealing (in the EU) and fair use (in the US) provide exceptions to copyright protection, allowing third party use of copyrighted works for certain purposes, such as for parody, comment, news-reporting, and education.  The theory behind this is that copyright law should not prevent the dissemination of information and ideas.

The Directive does recognize an exception for some fair dealings.  It provides that works for “(a) quotation, criticism, review,” or “(b) the purpose of caricature, parody or pastiche” are excluded from the provisions.  In practicality though, it is unclear how an automated filter would be able to differentiate between an unlawful infringement and, for example, a parody lawful as fair dealing.  For instance, what if a porn parody included a song?  While the words may be changed from the original, the melody may be very similar to a copyrighted song from a mainstream movie.  This could be filtered by a clip site or audio sharing site and removed even though it might be a fair use.

A removed video or other similar work means not only a loss of the creator’s ability to share his/her creativity with the world, but also very importantly, a loss of the creator’s associated revenue. If content is frequently removed by filters or overly-cautious manual monitoring, it could deeply hurt the pockets of the creators, such as individual models or small porn production companies, who rely on the dissemination of their work product for a paycheck.

On the flip side, content creators who have been the victims of their works being pirated to tube sites, clip sites, etc., may have a new recourse for acquiring damages for the infringement.  Per the Directive, online content-sharing service providers must use “best efforts” to prevent the infringing content from ever making it to their websites, and therefore, failure to do so, may result in damages being owed.  However, we’ll have to wait to see what the national laws will say in order to know: what the actual method of recourse will be, the amount of damages that will legally be available, and whether the process will be affordable for small content creators.

In due time, each EU member state will produce legislation in accordance with the Directive.  Adult-oriented online content-sharing service providers and content creators alike should keep watch in the meantime.  There is much at stake on both sides of the biz.

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