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New EU copyright - Hello upload filters? (Vienna)

Hi, some of you may have followed the news about the European copyright reform that brought many people out to demonstrate in recent weeks. I thought I might share a few insights on that for whoever may be interested:

[Executive Summary

EU copyright law will change. Internet platforms (such as YouTube) will be held more accountable for copyright infringements committed by their users. They can avoid liability by implementing comprehensive systems (especially upload filters) to prevent copyright infringing content from being uploaded by the users onto the platform. Such filters however are sometimes overly broad and raise concerns of internet censorship. It remains to be seen how EU member states will transpose the new rules into national laws.]

Long text:

On 26 March Protected content , the European parliament has approved proposed changes to the EU provisions on copyright in form of a directive. The aim of the reform was introducing a 'modern' copyright system, allowing rights holders to properly be remunerated for exploitation of their works, also on the internet.

Who is currently liable for copyright infringements on the internet?

Under the current rules, you are not liable for copyright infringements committed on a website you're hosting (say you're a host provider allowing your users to upload media, such as YouTube) in case

(i) you did not actively contribute to uploading infringing material as it was only your users; and
(ii) once you were notified of possibly infringing content being uploaded, you swiftly move to take it down (and then investigate further to reach a final determination on whether the user may have been entitled to use the copyrighted works after all).

What will change and what do 'upload filters' have to do with it?

Art 17 of the proposed reform (which has risen to public notoriety as Art 13 but the numbering was since modified) will change the rules on liability in the future:

As a host provider you will be liable if you have not taken adequate steps to prevent any infringements from being committed by your users in the first place. In order to prevent infringing content from even being uploaded, you need to screen it as early as possible. One of the solutions (maybe the only viable one) considered adequate to achieve this is an 'upload filter'. This is software that will screen and immediately compare uploaded media with works that are known to be protected by copyright (using small digital watermarks embedded in the protected works as reference).

Bigger platforms such as Facebook, Instagram, YouTube and Soundcloud already have such filters in place. But they are criticized for being hit and miss, sometimes blocking content that users were entitled to use because e.g.

(i) they have created original works, which nonetheless appeared similar to somebody else's content in the view of the upload filter; or
(ii) users may invoke one of the exceptions from copyright protection such as parody or the right to citation.

Also, implementing and maintaining such software is really expensive, constituting a barrier to the market entry of new companies. That's why, after tough negotiations the copyright reform contains a 'start up privilege': If you are a new company (less than 3 yrs on the market) with less than 5 million individual users per month and less than 10 million EUR annual revenue you will temporarily be exempt from the strict upload screening rules. Of course, start ups may find it hard to scale when fearing the costs of implementing the technology or face potential infringement claims in the future.

Are the new rules already applicable?

The reform has not yet completed the legislative process and is thus not applicable. It still needs to be be formally endorsed by the Council of the European Union and later transposed into national law by the EU member states.

However, with even many copyrights owners and their representatives critical of the reform, it is to be seen whether a EU copyright law for the digital age truly was achieved.

Vienna Forum

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