UK: Analysing Territorial Rights Licensing In The EU

Last Updated: 12 November 2015
Article by Rebecca Swindells

IP & IT analysis: How can policy-makers mitigate the hindrance to the market caused by territorial protection of copyright? Rebecca Swindells, a partner in Fieldfisher, specialising in IP law, analyses some of the main proposals put forward in the recent European Parliamentary research service report on EU copyright reform.

Original news

Reform of EU copyright law and the principle of territoriality, LNB News 07/10/2015 89

The European Commission has identified copyright protection as an area in need of reform and has put forward plans to do so by the end of 2015. A European Parliament briefing evaluates different approaches to how the EU can mitigate the hindrance to the internal market caused by territorial protection and looks at the costs and benefits of having a single European legal framework for copyright law.

What are the key points lawyers should take from this report?

This report is the latest in a raft of papers published by the EU Parliament and Commission on the issue of copyright reform in the digital age. While this issue has been reviewed frequently over the past decade at both EU and national level, the drive for reform has gathered pace in the last year due to the launch of the EU Commission's digital single market (DSM) strategy.

The DSM strategy aims at breaking down barriers to trade in the online EU market. From a copyright perspective, this means reviewing the principle of territoriality and determining whether its impact on the online EU market is such that copyright law needs to be harmonised across the EU. 'Harmonisation' could come in various different forms, such as:

  • introduction of a single EU copyright title
  • facilitating, or perhaps requiring, EU-wide rights clearance for all online content--via the extension of collecting society regimes and/or of the country of origin principle
  • ensuring consistency in which exemptions apply to copyright infringement--and how they are to be interpreted, and
  • more limited reform, such as guaranteeing the portability of copyright content across the EU

The report adds flesh to the DSM copyright proposals and provides some indication as to the options for implementation that the EU Parliament is currently considering.

What is of particular interest to you in this report?

It is particularly interesting to see that the unitary copyright title is back on the agenda again, after seemingly being side-stepped earlier this year following comments by Copyright Commissioner Maria Martin-Prat. (There have been calls for an EU-wide copyright, but not from practitioners. There would have to be a very strong case and this is not on the EU's immediate agenda).

The paper is also noteworthy in that it brings together all of the copyright territoriality-related issues that have been the subject of numerous different reviews and consultations, not just pursuant to the DSM strategy but also to:

  • European case law
  • competition enquiries, and
  • the review of the Satellite and Cable Directive 93/83/EEC

The EU Parliament is looking at all of this holistically, which makes sense.

What is going to happen next and (realistically) when?

The framework for a draft copyright Directive to further the DSM strategy is due to be published by the end of 2015.

We are also expecting at some point in 2016 the results of the EU Commission's review of the Satellite and Cable Directive and, crucially, whether the country of origin principle will be extended to online transmissions--thereby facilitating pan-European distribution of content. In conjunction with the competition enquiry into Sky UK's distribution agreement with the six Hollywood majors, which focuses on the issue of geo-blocking, this will likely determine the thorny issue of accessibility. There is no legal deadline for the European Commission to complete inquiries into anticompetitive conduct so the duration of this investigation will depend on the complexity of the case, the extent of any cooperation and the exercise of the rights of defence.

How will reforms impact UK lawyers and their clients in the creative industries?

It remains uncertain just how wide-ranging the EU copyright reform will be in practice. Issues such as geo-blocking and accessibility of content, and the unitary copyright title obviously deeply divide opinion, so it will be interesting to see the draft DSM copyright legislative framework later in 2015.
It seems likely that the DSM copyright Directive will tackle the issue of portability, but perhaps duck the highly controversial issue of accessibility and geo-blocking on copyright grounds, leaving this to be addressed by other means such as the review of the Satellite and Cable Directive in conjunction with the relevant competition enquiries. If implemented, the reform of that Directive would in itself establish a pan-European copyright regime for online services, but this would arguably still be subject to technical and contractual provisions, the latter being the target of the competition enquiries.

It is therefore the application and impact of competition law that might, some argue, be the final nail in the coffin for territorial rights licensing in the EU, which is why the creative industry will be holding its breath until the outcome of the investigation into Sky UK is known. At the very worst, this could mean that the scaremongering that followed the Premier League and Murphy cases will turn out to be well-founded, and content owners will need to review their business models and redraft their licensing agreements so as not to prohibit passive sales into other EU territories. (See Football Association Premier League Ltd and others v QC Leisure and others: C-403/08 and Karen Murphy v Media Protection Services Ltd: C-429/08)

I expect the Copyright Directive will also include some attempt at harmonising exceptions and streamlining rights clearance across the 28 Member States in order to facilitate pan-European content distribution, which presumably is something that will be welcomed by most stakeholders.

What is now very clear, though, is that significant copyright reform of one form or another is on its way and businesses need to be prepared to adapt accordingly.

This article was first published on Lexis®PSL IP & IT analysis on 28 October 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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