European Copyright Law - four megatrends

European Copyright Law - four megatrends


Author: Laurence Kaye

Applies to: European Union

With concrete proposals for amendments to European copyright law not due until this autumn, now is a good time to take stock.

Below we take a look at four 'megatrends' in European copyright law, which together with the related issues of privacy, data protection and competition law, will dominate the regulatory agenda and discourse over the next three years.

Trend 1: Territoriality in copyright - principle survives but cross-border restrictions won't

While the inherently territorial nature of copyright will survive, so that rights owners will continue to be able to exploit works on a national or regional basis, territorial restrictions like geo-blocking (both refusal to supply and automatic re-routing and geo-filtering based on a consumer's location) and restrictions on cross border access will be under increasing regulatory pressure within the EU and probably more broadly.

The focus is likely to be on restrictions against cross border audio-visual digital content; but the issue of device portability may be relevant too.

Trend 2: The rising clamour for free access

With differing motivations, needs and demands, there are many voices within educational institutions, the research community, online intermediaries and consumer groups, all pressing for free(er) access. In terms of the copyright agenda, this will focus on the area of copyright exceptions.

There is pressure to broaden certain existing exceptions for libraries and educational institutions; to introduce further exceptions, such as for text and data mining (this currently only exists in the UK) and to enable remote e-lending of e-books by libraries; to harmonise national exceptions and then, finally, to make them all mandatory.

It's a big wish list. An exception to allow remote-lending by libraries would be strongly opposed by authors and publishers for obvious reasons, who would insist either on its inclusion in a public lending scheme or via direct licensing. It is hard to see how any such exceptions could meet the three criteria in the 'Berne 3-step test'. In contrast, there is likely to be more scope for consensus around the issue of harmonisation of exceptions. Publishers leading this debate see new and innovative licensing solutions as the answer to many if not all of these demands.

Trend 3: E-commerce in digital content - the growing divergence between the treatment in law of copyright goods vs. services

There is an emerging classification and distinction in EU law between digital content as goods, services or as a hybrid. For example, the Consumer Rights Directive (now in UK law) treats copyright content supplied on fixed media as a sale of goods; the same Directive treats contracts for digital content supplied by download, streaming etc. neither as goods nor services but as something in between, but nonetheless with consumer protections such as cancellation.

This treatment of digital content as a supply of goods as against the provision of a service has significant implications for value added tax and author royalties under publisher contracts. It is also at the heart of the debate around whether the supply of digital content on 'sale like' terms 'exhausts' rights holders' rights to control subsequent redistribution. This is therefore a hot issue.

Trend 4: Continuing tensions between online platforms and rights holders

The Commission has acknowledged a sense of unfairness amongst rights holders in their relations with Internet platforms and a lack of level playing field. So in that context, it is interesting to note that in the latest instalment of the publishers/Amazon e-book distribution saga, the European Commission has opened an investigation into Amazon's e-book distribution arrangements.

Under scrutiny are the 'most favoured nation' clauses that Amazon has in its supply contracts with publishers, under which those publishers are obliged to inform Amazon if they offer other distributors better terms than those offered to Amazon and/or to offer Amazon those better terms.

Sarah Livestro, senior associate working in Shoosmiths' competition team, notes that this is interesting because 'most favoured nation' clauses aren't hard core restrictions of competition and wouldn't generally be an area of focus for competition authorities. She adds that the Commission is taking an interest because of Amazon's strong market position - the basis of the objection is (in part) abuse of dominance. So, it's important to note that, although MFN clauses will often be low risk or block exempted under the competition law rules, where a distributor has a significant market share these clauses may be problematic and a competition authority may investigate.

Whatever else, we can be assured of a busy autumn on the regulatory front.