European Union: Review Of The Year: Copyright

Last Updated: 29 December 2015
Article by Beverley Potts and Rebecca Pakenham-Walsh

2015 has been another interesting and busy year for copyright law. Copyright-related cases have continued to flood the Court of Justice of the EU ("CJEU"), seeking guidance on the interpretation of EU law and we have seen some landmark judgments over the course of the year. There has been the usual raft of cases where the law has been trying to catch up with advances in technology, but on the other hand, the new UK private copying exception has been quashed, which many thought was finally reflecting the everyday reality of normal consumer behaviour. We continue to be promised reform across the EU with the launch of the Digital Single Market. However, this remains a work in progress and we will need to wait until 2016 to see if any significant change will materialise.

January started with a bang with two significant rulings from the CJEU on the same day.

Exhaustion of the distribution right - Art & Allposters

The first case concerned exhaustion of the distribution right and whether copyright infringement arose from the transfer of images of famous art works from a paper poster to a painter's canvas. The CJEU confirmed that the consent of the copyright holder to the marketing of the posters in the EU did not cover the distribution of an object incorporating his work, if that object had been altered after its initial marketing to such a degree that it constituted a new reproduction. The distribution right is exhausted only upon the first sale or transfer of ownership of that new object with the consent of the rightholder.

This judgment will assist copyright owners to control how the public views their works, even after they have been placed on the market. While this case related to the exhaustion of the distribution right in relation to tangible objects, it did not cover digital copyright – e.g. eBooks and videogames. Different principles have been established in this case (tangible object covered by InfoSoc Directive) and in UsedSoft (computer program covered by Software Directive). Currently the exhaustion regime applicable to a work appears to depend on the directive that covers the work. We would benefit from further guidance on this in the future.

Jurisdiction – Hejduk

The second ruling of the same day concerned jurisdiction for online copyright infringement. The CJEU ruled that a photographer who claimed her copyright had been infringed online was entitled to sue the alleged infringer in the courts of her home country (Austria) rather than the country where the defendant was based (Germany). In doing so, the Court accepted the so-called accessibility criterion (identifying the jurisdiction where the infringing material was accessible) rather than insisting on the causal event criterion (where the infringing material was uploaded).

This ruling confirms that a copyright owner does not have to bring proceedings in the Member State where the defendant operates and has committed the act (here, uploading). Similarly, it did not matter that the website in question was hosted in the .de ccTLD and targeted a German, not Austrian, public. The photographer was entitled to bring proceedings in Austria, although the Austrian court would only be able to award damages for the harm suffered in Austria. This approach will therefore not necessarily suit claimants who suffer damage in several jurisdictions.

Copyright protection for live broadcasts – C More Entertainment

Linking continued to be a hot topic for 2015 following last year's CJEU rulings in Svensson and Bestwater. Whilst those cases confirmed that linking to or embedding "freely accessible" content without the rightsholders permission is allowed, they left a lot of other questions unanswered. The cases did not address the question of linking to content that is not freely accessible, for example, because it sits behind a paywall. At one stage it appeared that we might get answers from the CJEU in the C More Entertainment referral, which concerned linking to live internet streams of hockey matches that were behind a paywall. Unfortunately, however, the questions referred were reduced to only one issue. The CJEU ultimately confirmed that national legislation may protect broadcasters' rights in live internet streams of sporting fixtures (there was no copyright in the streams as they lacked the required level of originality) and a deep-link that circumvents a pay-wall might infringe. The Court confirmed that EU law on this issue is not harmonised.

Private Copying – at EU and national levels

EU - Copydan

Cases on private copying and related levies designed to compensate rights holders have continued to find their way to the CJEU. Copydan looked at whether Nokia should pay a Danish collecting society a fair compensation levy when importing mobile phone memory cards. The Court confirmed (amongst other issues) that any levy compensation must be linked to the harm caused to the rightsholder according to the scale of the private copying. Multi-functionality is immaterial (i.e. multi-functional media such as phone memory cards which are capable of making private copies, but whose primary function is not to make such copies), although the ancillary nature of the copying function may affect the fair compensation payable. Member States have a wide discretion to set the minimum threshold for when a levy is payable, provided this is applied in a manner consistent with the principle of equal treatment.

EU - Hewlett-Packard Belgium v Reprobel

Very recently, the CJEU in Hewlett-Packard Belgium v Reprobel has ruled that national copyright law should not allocate a portion of the compensation levy directly to publishers when there is no obligation to pass this on to authors, directly or indirectly.

UK - Judicial Review of the UK's private copying exception

Closer to home, the UK courts spent time dealing with the judicial review of the private copying exception which came into force in October 2014. Following an expedited hearing in May, the High Court ruled in June in favour of the UK music industry, concluding that the Government's decision to enact a private copying exception without a compensatory levy scheme was unlawful. In a second judgment on 17 July the private copying exception was quashed, with immediate and prospective effect. This means that consumers need to be aware that any acts of private copying (e.g. ripping a CD onto a computer and then copying on to an MP3 player) that were covered by the exception introduced in October 2014, will no longer be exempt. However, any private copying activities carried out between 1 October 2014 and 17 July 2015 are not (yet) considered to be infringing activities. The Government is currently "considering the implications", but this does not currently look like a priority.

TV Catchup goes back to the CJEU

In April, the Court of Appeal referred more questions to the CJEU in the TV Catchup litigation, forcing the parties back to the CJEU for the second time, even though they didn't request it. Clarification has been sought on the interpretation of section 73 of the Copyright Design and Patents Act 1988 ("CDPA"), in particular, whether the defence for cable transmissions also covers the streaming of public broadcasts over the Internet. Shortly afterwards, the Department for Culture, Media and Sport (DCMS) announced that it is committed to removing the section 73 CDPA defence as it was introduced to support the development of the analogue cable infrastructure in the 1980s and 1990s and it is no longer relevant in today's multi-platform environment - another example of technology advancing quicker than the law of copyright.

Digital Single Market ("DSM")

The above rulings must be seen against the backdrop of the European Commission's plans to reform copyright. In May 2015, the European Commission with great fanfare published its Communication entitled "A Digital Single Market Strategy for Europe", which aims to break down barriers to trade in the online EU market. It covered a wide range of issues but the main copyright proposals were: (i) to clarify the role of intermediaries; (ii) to enable consumers to take legally acquired content with them across the EU – "portability"; (iii) to ensure cross-border access to legally purchased online services – "accessibility"; (iv) to harmonise exceptions for research, education, text and data mining; and (v) to modernise cross-border enforcement.

As part of the DSM agenda, the Commission has recently launched various consultations to obtain stake holders' views and to broaden its understanding in specific areas. One current consultation on the liabilities of online intermediaries aims to consider whether the E-Commerce Directive safe harbours are still fit for purpose given the broad range of activities now carried out by many online platforms.

Looking Forward to 2016

Linking

We look forward to further clarification from the CJEU on linking to unauthorised content in GS Media v Sanoma Media. This case concerns hyperlinking to third party websites, which are freely accessible, but the work has been put there without the consent of the copyright owner – in this case, photos of Dutch celebrity, Britt Dekker, had been leaked and published on a website, to which anyone could link, without her consent.

The CJEU should also confirm in Stichting Brein v Filmspeler whether a communication to the public occurs when someone sells a media player with add-ons installed, which contain hyperlinks to streaming websites that allow direct access to content without the rights-holders' consent. Interestingly, the Court will also consider whether the manufacturer of a media player could rely on the temporary copying defence in the InfoSoc Directive and more specifically whether there can be a "lawful use" when a temporary reproduction is made through streaming, if the content originates from a third-party website where it is made available without permission.

Blocking orders

It will be a busy year for Stichting Brein, the Dutch anti-piracy group, next year as they find themselves back at the CJEU for a case concerning blocking orders. The Dutch Court of Appeal rejected a blocking order against the notorious Pirate Bay, because to grant it would be ineffective as it could be circumvented. The Supreme Court did not agree and has referred various questions to the CJEU. The ruling on this could set a precedent for all 28 Member States.

Section 72 CDPA

We should hear further from the government on section 72 CDPA after the end of its consultation in October. The section 72 defence currently permits the free public showing or playing of ALL film content contained in a broadcast, whether creative (cinematographic) or non-creative (film fixation). However, EU law only permits exceptions of this type for film fixations so the government wants to narrow the defence so it no longer covers creative aspects. The government is concerned that section 72 is currently being used by commercial premises showing subscription broadcasts, with sound muted or logos masked, without a licence.

Repeal of section 52 CDPA

Section 52 of the CDPA provides an exception (or permitted use of a copyright work) which limits copyright protection for artistic works which have been industrially manufactured (more than 50 copies made) to 25 years after first marketing, rather than life of author plus 70 for other artistic works. In February 2015, the government announced that section 52 CDPA was to be repealed from April 2020 but revoked the Commencement Order in July following a claim for judicial review. A fresh consultation is underway to consider revised transitional arrangements and a new implementation date.

Custodial Sentences

We may see steps towards harmonisation of 10 year custodial sentences for physical and online infringement following the government's consultation that ended in August 2015.

EU Copyright Reforms

We expect the EU Commission to publish its Copyright Framework Communication at the end of 2015. In the short-term, we anticipate a limited commitment to ensure "portability" of online content services by Spring 2016 and a proposal for a harmonised exception to benefit people with print disabilities.

It will be interesting to see how far the further proposals for copyright reform go in 2016. We expect further harmonisation of the exceptions, particularly those relating to non-commercial text and data mining and freedom of panorama. We should also expect the results of the review of the Satellite and Cable Directive, which could crucially determine whether the "country of origin" rule should be extended to online transmissions, potentially facilitating pan-European distribution of content. If implemented, the reform 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.

Content correct as at 17 November 2015.

This article was previously published in Intellectual Property Magazine Dec 2015/ Jan 2016 edition.

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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